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A Chinese national, charged with fraud by the SEC, just sent Donald Trump $18 million Judd Legum

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Justin Sun, founder of Tron and CEO of BitTorrent, speaks on November 4, 2015 in Beijing, China. (Getty Images/Visual China Group)

Chinese Crypto entrepreneur Justin Sun paid $6.2 million for a banana — sold by Sotheby’s as conceptual art — and then ate it last Friday.

The banana is not Sun’s most notable recent purchase.

On November 25, Sun purchased $30 million in crypto tokens from World Liberty Financial, a new crypto venture backed by President-elect Donald Trump. Sun said his company, TRON, was committed to “making America great again.”

World Liberty Financial planned to sell $300 million worth of crypto tokens, known as WLF, which would value the new company at $1.5 billion. But, before Sun’s $30 million purchase, it appeared to be a bust, with only $22 million in tokens sold. Sun now owns more than 55% of purchased tokens.

Sun’s decision to buy $30 million in WLF tokens has direct and immediate financial benefits for Trump. A filing by the company in October revealed that “$30 million of initial net protocol revenues” will be “held in a reserve… to cover operating expenses, indemnities, and obligations.” After the reserve is met, a company owned by Donald Trump, DT Marks DEFI LLC, will receive “75% of the net protocol revenues.”

So before Sun’s purchase, Trump was entitled to nothing because the reserve had not been met. But Sun’s purchase covered the entire reserve, so now Trump is entitled to 75% of the revenues from all other tokens purchased. As of December 1, there have been $24 million WLF tokens sold, netting Trump $18 million.

Sun is also joining World Liberty Financial as an advisor, making Sun and the incoming president business partners.

While Trump has the cash, Sun’s tokens are effectively worthless. To comply with U.S. securities law, WLF tokens are “non-transferable and locked indefinitely in a wallet or smart contract until such time, if ever, [WLF tokens] are unlocked through protocol governance procedures in a fashion that does not contravene applicable law.” The only thing that Sun can do with his tokens is participate in the “governance” of World Liberty Financial. Right now, the only thing World Liberty Financial does is sell tokens.

Any foreign national paying an incoming president $18 million weeks before entering the White House should raise red flags. Sun’s purchase is even more alarming because the Securities and Exchange Commission (SEC) is currently prosecuting him for fraud.

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The SEC’s ongoing prosecution of Sun

On March 22, 2023, the SEC charged Sun and three companies he owns. The SEC accused Sun of marketing unregistered securities and “fraudulently manipulating the secondary market” for a crypto token “through extensive wash trading.” Wash trading involves “the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.” In other words, according to the SEC, Sun made it seem like there was a lot of interest in crypto tokens he issued when much of the trading was fraudulent and manufactured by Sun.

The SEC also charged Sun with “orchestrating a scheme to pay celebrities to tout” his crypto tokens “without disclosing their compensation.” Federal law requires people who endorse securities to “disclose whether they received compensation for the promotion, and to specify the amount.” The celebrities involved included Lindsay Lohan, Jake Paul, and Soulja Boy.

Lohan paid $40,000, and Paul paid about $100,000 to settle the charges against them without admitting liability. Soulja Boy did not respond to the lawsuit, and a default judgment was issued against him.

Sun posted on X that he believes the SEC “complaint lacks merit” and complained that “the SEC’s regulatory framework for digital assets is still in its infancy and is in need of further development.”

The litigation against Sun is ongoing, with a federal judge considering a motion by Sun’s attorneys to dismiss the charges. The current SEC Chairman, Gary Gensler, who announced the charges against Sun, will step down when Trump takes office in January. A new SEC commissioner appointed by Trump could settle or dismiss the charges against Sun.

How Trump can use the power of the presidency to unlock hundreds of millions in profits for himself

Through World Liberty Financial, Trump can reap massive personal profits from creating a more permissive regulatory environment for crypto ventures.

In addition to his 75% share of revenues over $30 million, Trump’s company was also awarded 22.5 billion WLF tokens. At the current sale price, these tokens are worth more than $300 million. That is more than 20 billion tokens being offered for sale publicly. (This makes the “governance” value of WLF tokens, which was already questionable, effectively worthless. No matter how many tokens you own, Trump will always be able to outvote other token holders.)

Right now, Trump’s tokens — like those purchased by Sun — are worthless because they cannot be transferred. But Trump could appoint a new SEC chairman who is friendly to the crypto industry and who would create new rules allowing the WLF tokens and similar crypto assets to be legally traded. If the price of the tokens increases when they hit the open market, which is a possibility for a crypto token backed by the President of the United States, the value of Trump’s tokens could be in the billions.

That appears to be exactly the path Trump is taking. WIRED reports that Trump is “asking the crypto industry to weigh in on potential picks.” Among the leading contenders is Paul Atkins, a former SEC Commissioner, who, since leaving the agency in 2008, has run a consulting firm that works with crypto companies. Atkins is also co-chair of the Token Alliance, an initiative of the Chamber of Digital Commerce, the lobbying group for the crypto industry. He is also a member of the Chamber of Digital Commerce’s Board of Directors.

Another top contender, former SEC General Counsel Robert Stebbins, has said that the SEC should “pause most of its crypto lawsuits while clearing a path for the firms to do business without the overhang of litigation.” But Stebbins’ candidacy underscores the need for Sun to forge a favorable relationship with Trump. Stebbins acknowledged that, even if it takes a more permissive view toward the crypto industry, it may want to consider continuing to pursue litigation involving fraud.

Major media outlets obsessed with banana, ignore Sun’s payment to Trump

A foreign national under federal fraud prosecution making a purchase that results in $18 million cash payment to the president-elect has all the makings of a major scandal. But it has been virtually ignored by several major media outlets.

The New York Times, for example, has published five articles about Sun’s purchase of the banana but none about Sun’s $30 million purchase of WLF tokens and his business partnership with Trump. The Washington Post has published three articles about the banana, but its coverage of Sun’s purchase of WLF tokens was limited to one short paragraph in a larger editorial about the crypto industry. (The paragraph does not explain how Trump personally profits from Sun’s token purchase.) The Wall Street Journal did publish a short piece about Sun’s token purchase on its “Live Update” blog, but the piece was not viewed as significant enough to be included in the print edition. The paper published two articles, plus a video, focused on the banana. One of the Wall Street Journal articles about the banana was published on the front page of the paper.

 

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January 14, 2025 Heather Cox Richardson

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Shortly after midnight last night, the Justice Department released special counsel Jack Smith’s final report on former president Donald Trump’s attempt to overturn the results of the 2020 presidential election. The 137-page report concludes that “substantial evidence demonstrates that Mr. Trump…engaged in an unprecedented criminal effort to overturn the legitimate results of the election in order to retain power.”

The report explains the case Smith and his team compiled against Trump. It outlines the ways in which evidence proved Trump broke laws, and it lays out the federal interests served by prosecuting Trump. It explains how the team investigated Trump, interviewing more than 250 people and obtaining the testimony of more than 55 witnesses before a grand jury, and how Justice Department policy governed that investigation. It also explains how Trump’s litigation and the U.S. Supreme Court’s surprising determination that Trump enjoyed immunity from prosecution for breaking laws as part of his official duties dramatically slowed the prosecution.

There is little in the part of the report covering Trump’s behavior that was not already public information. The report explains how Trump lied that he won the 2020 presidential election and continued to lie even when his own appointees and employees told him he had lost. It lays out how he pressured state officials to throw out votes for his opponent, then-president-elect Joe Biden, and how he and his cronies recruited false electors in key states Trump lost to create slates of false electoral votes.

It explains how Trump tried to force Justice Department officials to support his lie and to trick states into rescinding their electoral votes for Biden and how, finally, he pressured his vice president, Mike Pence, to either throw out votes for Biden or send state counts back to the states. When Pence refused, correctly asserting that he had no such power, Trump urged his supporters to attack the U.S. Capitol. He refused to call them off for hours.

Smith explained that the Justice Department concluded that Trump was guilty on four counts, including conspiracy to defraud the United States by trying “to interfere with or obstruct one of its lawful governmental functions by deceit, craft or trickery, or at least by means that are dishonest”; obstruction and conspiracy to obstruct by creating false evidence; and conspiracy against rights by trying to take away people’s right to vote for president.

The report explains why the Justice Department did not bring charges against Trump for insurrection, noting that such cases are rare and definitions of “insurrection” are unclear, raising concerns that such a charge would endanger the larger case.

The report explained that prosecuting Trump served important national interests. The government has an interest in the integrity of the country’s process for “collecting, counting, and certifying presidential elections.” It cares about “a peaceful and orderly transition of presidential power.” It cares that “every citizen’s vote is counted” and about “protecting public officials and government workers from violence.” Finally, it cares about “the fair and even-handed enforcement of the law.”

While the report contained little new information, what jumped out from its stark recitation of the events of late 2020 and early 2021 was the power of Trump’s lies. There was no evidence that he won the 2020 election; to the contrary, all evidence showed he lost it. Even he didn’t appear to believe he had won. And yet, by the sheer power of repeating the lie that he had won and getting his cronies to repeat it, along with embellishments that were also lies—about suitcases of ballots, and thumb drives, and voting machines, and so on—he induced his followers to try to overthrow a free and fair election and install him in the presidency.

He continued this disinformation after he left office, and then engaged in lawfare, with both him and friendly witnesses slowing down his cases by challenging subpoenas until there were no more avenues to challenge them. And then the U.S. Supreme Court stepped in.

The report calls out the extraordinary July 2024 decision of the U.S. Supreme Court in Trump v. United States declaring that presidents cannot be prosecuted for official acts. “Before this case,” the report reads, “no court had ever found that Presidents are immune from criminal responsibility for their official acts, and no text in the Constitution explicitly confers such criminal immunity on the President.” It continued: “[N]o President whose conduct was investigated (other than Mr. Trump) ever claimed absolute criminal immunity for all official acts.”

The report quoted the dissent of Justice Sonia Sotomayor, joined by Justices Elena Kagan and Ketanji Brown Jackson, noting that the decision of the Republican-appointed justices “effectively creates a law-free zone around the President, upsetting the status quo that has existed since the Founding.”

That observation hits hard today, as January 14 is officially Ratification Day, the anniversary of the day in 1784 when members of the Confederation Congress ratified the Treaty of Paris that ended the Revolutionary War and formally recognized the independence of the United States from Great Britain. The colonists had thrown off monarchy and determined to have a government of laws, not of men.

But Trump threw off that bedrock principle with a lie. His success recalls how Confederates who lost the Civil War resurrected their cause by claiming that the lenience of General Ulysses S. Grant of the United States toward officers and soldiers who surrendered at Appomattox Court House in April 1865 showed not the mercy of a victor but rather an understanding that the Confederates’ defense of human slavery was superior to the ideas of those trying to preserve the United States as a land based in the idea that all men were created equal.

When no punishment was forthcoming for those who had tried to destroy the United States, that story of Appomattox became the myth of the Lost Cause, defending the racial hierarchies of the Old South and attacking the federal government that tried to make opportunity and equal rights available for everyone. In response to federal protection of Black rights after 1948, when President Harry Truman desegregated the U.S. military, Confederate symbols and Confederate ideology began their return to the front of American culture, where they fed the reactionary right. The myth of the Lost Cause and Trump’s lie came together in the rioters who carried the Confederate battle flag when they breached the U.S. Capitol on January 6, 2021.

Trump’s nominee for Secretary of Defense, Fox News Channel host Pete Hegseth, is adamant about restoring the names of Confederate generals to U.S. military installations. His confirmation hearing before the Senate Armed Services Committee began today.

The defense secretary oversees about 1.3 million active-duty troops and another 1.4 million in the National Guard and employed in Reserves and civilian positions, as well as a budget of more than $800 billion. Hegseth has none of the usual qualifications of defense secretaries. As Benjamin Wittes of Lawfare pointed out today, he has “never held a policy role…never run anything larger than a company of 200 soldiers…never been elected to anything.”

Hegseth suggested his lack of qualifications was a strength, saying in his opening statement that while “[i]t is true that I don’t have a similar biography to Defense Secretaries of the last 30 years…as President Trump…told me, we’ve repeatedly placed people atop the Pentagon with supposedly ‘the right credentials’…and where has it gotten us? He believes, and I humbly agree, that it’s time to give someone with dust on his boots the helm.”

The “dust on his boots” claim was designed to make Hegseth’s authenticity outweigh his lack of credentials, but former Marine pilot Amy McGrath pointed out that Trump’s defense secretary James Mattis and Biden’s defense secretary Lloyd Austin, both of whom reached the top ranks of the military, each came from the infantry.

Hegseth has settled an accusation of sexual assault, appears to have a history of alcohol abuse, and has been accused of financial mismanagement at two small veterans’ nonprofits. But he appears to embody the sort of strongman ethos Trump craves. Jonathan Chait of The Atlantic did a deep dive into Hegseth’s recent books and concluded that Hegseth “considers himself to be at war with basically everybody to Trump’s left, and it is by no means clear that he means war metaphorically.” Hegseth’s books suggest he thinks that everything that does not support the MAGA worldview is “Marxist,” including voters choosing Democrats at the voting booth. He calls for the “categorical defeat of the Left” and says that without its “utter annihilation,” “America cannot, and will not, survive.”

When Hegseth was in the Army National Guard, a fellow service member who was the unit’s security guard and on an anti-terrorism team flagged Hegseth to their unit’s leadership because one of his tattoos is used by white supremacists. Extremist tattoos are prohibited by army regulations. Hegseth lobbied Trump to intervene in the cases of service members accused of war crimes, and he cheered on Trump’s January 6, 2021, rally. Hegseth has said women do not belong in combat and has been vocal about his opposition to the equity and inclusion measures in the military that he calls “woke.”

Wittes noted after today’s hearing that “[t]he words ‘Russia’ and ‘Ukraine’ barely came up. The words ‘China’ and ‘Taiwan’ made only marginally more conspicuous an appearance. The defense of Europe? One would hardly know such a place as Europe even existed. By contrast, the words ‘lethality,’ ‘woke,’ and ‘DEI’ came up repeatedly. The nominee sparred with members of the committee over the difference between ‘equality’ and ‘equity.’”

Senate Armed Services Committee chair Roger Wicker (R-MS) spoke today in favor of Hegseth, and Republicans initially uncomfortable with the nominee appear to be coming around to supporting him. But Hegseth refused to meet with Democrats on the committee, and they made it clear that they will not make the vote easy for Republicans.

The top Democrat on the committee, Senator Jack Reed (D-RI) said he did not believe Hegseth was qualified for the position. Senator Tammy Duckworth (D-IL) exposed his lack of knowledge about U.S. allies and bluntly told him he was unqualified, later telling MSNBC that Hegseth will be an easy target for adversaries with blackmail material.

Hegseth told the armed services committee that all the negative information about him was part of a “smear campaign,” at the same time that he refused to say he would refuse to shoot peaceful protesters in the legs or refuse an unconstitutional order.

After the release of Jack Smith’s report, Trump posted on his social media channel that regardless of what he had done to the country, voters had exonerated him: “Jack is a lamebrain prosecutor who was unable to get his case tried before the Election, which I won in a landslide,” he wrote, lying about a victory in which more voters chose someone other than him. “THE VOTERS HAVE SPOKEN!!!”

It’s as if the Confederates’ descendants have captured the government of the United States.

Notes:

https://www.documentcloud.org/documents/25486132-report-of-special-counsel-smith-volume-1-january-2025/

https://founders.archives.gov/documents/Adams/06-04-02-0026-0004

https://www.wsj.com/livecoverage/pete-hegseth-confirmation-hearing/card/what-are-the-financial-mismanagement-allegations-surrounding-hegseth–W06NChwmoFjJlciYjNOD

https://www.lawfaremedia.org/article/the-situation–the-cult-of-unqualified-authenticity

Civil Discourse with Joyce Vance
Jack Smith’s Report & Beyond
We’ve now seen Volume 1 of Jack Smith’s report, released just after midnight when Judge Aileen Cannon’s order prohibiting DOJ from making it public lapsed. We already knew a lot of the information in Volume 1, which covered the January 6/election fraud case Smith charged Donald Trump with in Washington, D.C. We know less about the classified documents c…
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https://www.theatlantic.com/politics/archive/2024/11/pete-hegseth-books-trump/680744/

https://www.cnn.com/2025/01/13/politics/pete-hegseth-confederate-generals-military-bases/index.html

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Pete Hegseth Shows His Hand Eli Lake

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If you want to know what a post-woke military might look like, Donald Trump’s nominee to head the Pentagon just gave America a preview.

At his nomination hearing before the Senate Armed Services Committee, Pete Hegseth pledged that he would direct his secretary of the Navy to focus on rebuilding the fleet instead of climate change. His secretary of the Army would focus on making war more lethal and effective, instead of figuring out how to build tanks that don’t run on gasoline. And the standards for military promotion would be based on merit, not a person’s skin color, sexuality, or gender.

Hegseth said that under his leadership, he would take steps to reverse the Pentagon’s decision to fire tens of thousands of service members who refused to take the Covid vaccine. “In President Trump’s Defense Department they will be apologized to. They will be reinstituted with pay and rank,” the nominee said.

It was a contentious hearing, as Democrats attacked Hegseth for everything from allegations of his marital infidelity and sexual assault to his lack of experience managing an organization as large and complex as the Pentagon. But the Republicans made Hegseth out to be the real victim, and by the time the hearing ended, it seemed like a near lock that he’ll be confirmed.


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Porn Is Inevitable River Page

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American lawmakers are about to determine the future of pornography, or they’re trying, at least. In recent years, nineteen states—most of them Republican-led—have passed legislation that requires any site with a significant amount of adult content to prove all its users are over 18. Most recently, on New Year’s Day, a new law called HB 3 took effect in my home state of Florida, where porn sites now face fines of up to $50,000 for every violation. But this week, such laws could be found unconstitutional.

This is all thanks to the Free Speech Coalition, a sort of NRA for pornographers, which has sued Texas attorney general Ken Paxton, a religious hard-liner, over that state’s age verification law. On Wednesday, the Supreme Court will hear FSC’s case, which argues that these porn laws undermine free speech, infringe on privacy, and hurt American companies, while doing nothing to block foreign and fringe sites that don’t comply with U.S. laws.

The rationale behind the laws is understandable: Studies have shown that pornography consumption by teenagers can lead to misogynistic attitudes and increased sexual aggression. It’s also linked to mental health problems and increased rates of unsafe sex. More to the point, most parents are uncomfortable with the idea of their children having access to terabytes worth of hardcore pornography at the touch of a button.

But these laws are fundamentally pointless. First etched into mammoth tusks 40,000 years ago, porn predates the written word. It is inevitable—and in the internet age, infinitely accessible—even in places where so-called “porn bans” have been enacted.


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