Creative Destruction: 9/11, Enron, and American Bitcoin

“The process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event — like a new Pearl Harbor.”
— REBUILDING AMERICA’S DEFENSES: Strategy, Forces and Resources for a New Century by The Project For The New American Century, September 2000

Controlled demolition is a phrase often used in some circles when discussing the events of September 11, 2001. However, this is usually reserved for theories regarding the collapse of the World Trade Center towers, and is less often applied to the political, economic, and technological pillars that upheld the world before these attacks. As this piece will attempt to outline, both the physical and “creative destruction” that occurred on that day have had cascading and compounding effects on society as we knew it then, and especially as we know it today.

While the term creative destruction is typically associated with the Marxist school of thought, specifically based on analyses of Karl Marx’s work via Joseph Schumpeter and Werner Sombart, in the context of conspiracy, the phrase refers to the intentional demolition of markets, technological structures and regulations due to a deliberately triggered event. The goal of that event is to intentionally and purposefully bring about a specific, wanted change to the aforementioned pillars of the status quo — leading to an advantaged consolidation by the very conspirators of the event.

The players in this act of creative destruction that occurred at the onset of the new millennia are hardly limited to the usual cast of characters often brought up when discussing September 11, 2001 (9/11). They include members of the various businesses affected and crucially involved in the events surrounding the terrorist attacks; notably, security broker giant Cantor Fitzgerald, led by Howard Lutnick; the infamous American energy pioneer Enron, led by Ken Lay; investment bank and underwriter Alexander Brown & Sons, led by Alvin “Buzzy” Krongard and his deputy Mayo Shattuck III; and stalwarts of the public-private “revolving door” such as Dick Cheney and James Baker, as well as the lesser known Thomas Barnett.

Thomas Barnett, a former strategist, professor and researcher at the Warfare Analysis & Research Department at the U.S. Naval War College in Newport, RI, was selected to join members of the government, Cantor Fitzgerald, and various other public, private and intelligence sector partners atop the World Trade Center to “war game” in the years that preceded the 9/11 attacks. Specifically, these war games were part of the “New Rule Sets Project,” which “explore[d] how the spread of globalization alters the basic ‘rules of the road’ in the international security environment” with a focus on “how these changes redefine the US Military’s historic role as ‘security enabler’ of America’s commercial network ties with the world.”

The aforementioned concept of creative destruction is immaculately laid out by Barnett in his post-“war game” book, The Pentagon’s New Map. Barnett posits that the American national security state properly understood that there was a very real and looming danger downstream from the 1990’s Clinton-era, which saw a booming economy due to the “Information Revolution.” The country could not simply rest on its laurels, despite their immense success in distributing their state-funded technological developments across the globe. As Barnett and his national security state benefactors saw it, both globalization and digitalization must be achieved on their geopolitical terms, not just on their technology stacks.

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Swiss Financial Regulator Gives Green Light to Country’s First Bitcoin ETF

Swiss financial regulator FINMA has approved the country’s first bitcoin exchange-traded fund for retail investors.

The watchdog said Tuesday that the approval comes as people in Switzerland express a growing interest in crypto — particularly bitcoin.

Bitcoin ETFs — particularly in the U.S. — have widened the scope of investors who can buy and sell the leading cryptocurrency. Via shares that trade on the stock exchange, investors can buy exposure to the biggest cryptocurrency in a safe and regulated way.

“As early as 2021, FINMA authorised a fund for qualified investors that invests primarily in a basket of cryptocurrencies,” the announcement read.

“As Bitcoin has a long trading history and a particularly high trading volume compared with other cryptocurrencies, FINMA has approved an exemption from the applicable risk diversification rules in this case.”

It added: “At the same time, FINMA emphasises that investments in Bitcoin — even through an approved ETF — remain highly risky.”

The announcement did not reveal which asset manager or bank would debut the product. Switzerland already has crypto ETFs limited to institutional or qualified investors on the market.

In the U.S., bitcoin ETFs had the most successful debut in the history of investment vehicles when approved in 2024.

Now, traders, institutions, and retail investors can quickly buy shares that track the price of the leading cryptocurrency and not worry about exchanges or storage of the digital coin.

The funds, managed by Wall Street giants like BlackRock, Fidelity, and Morgan Stanley, manage over $97 billion in assets, according to CoinGlass data.

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FBI Says North Korea Behind $6 Billion Binance Heist

It’s official – for what it’s worth: North Korea “was responsible for the theft of more than $6 billion USD in virtual assets” from Binance on Thursday, according to a Saturday FBI cyber alert. The agency says says Kim Jong Un’s ‘TraderTraitor’ hacking operation was responsible.

As we reported Thursday, TRM Labs and Chainalysis blamed N. Korea within a day, while Tether and Circle froze billions in stolen stablecoins. TRM puts the haul at $6.36 billion and calls it the largest hack in history; Chainalysis said its investigators concluded that the Binance loot was “commingling” with funds North Korea from last month’s Bitget exploit.

Working in conjunction with US Secret Service and IRS Criminal Investigation, the FBI says it has “observed TraderTraitor actors converting stolen assets primarily into Ethereum (ETH),” and that “it is expected these assets will then be further laundered by converting them using DeFi and instant swap services.” It published 628 addresses it says “are holding or have held assets from the theft” – 608 on Ethereum, 19 on Bitcoin and one on Solana.

The agencies are urging “THORNode operators, RPC node operators, instant exchanges, DeFi services, blockchain analytics firms, and other virtual asset service providers to block transactions with or derived from” those addresses. The list may already be falling behind: Chainalysis CEO Jonathan Levin told CoinDesk the attackers have used “thousands of addresses,” adding, “We anticipate this will become tens of thousands over the coming weeks.”

Binance, meanwhile, insists its customers won’t eat the loss. As we reported last night, the exchange said it had replaced 90% of the roughly $6.3 billion with its own funds, and on Sunday it began reopening withdrawals in phases, starting with the Bitcoin network. Co-CEO Richard Teng put the replenished share at about 95% on Sunday, according to crypto.news.

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The Largest Heist in History: Hackers Steal $6 Billion in Crypto from Binance

Binance, the world’s largest cryptocurrency exchange, suspended withdrawals  after hackers stole $6 billion from its digital wallets in what is being described as the biggest financial heist on record.

Axios reports that Binance co-founder Yi He announced on X that the exchange had suspended deposits and withdrawals following the suspected breach. “User funds are safe,” she wrote, adding, “Binance will cover all hacking losses.” Multiple reports put the amount stolen from the exchange at $6 billion in cryptocurrency.

Co-CEO Richard Teng also commented on the issue, saying, “Bottom Line — your money is safe, and we’re covering every loss.”

Binance published an official disclosure of the incident in a post on X. According to the exchange, “Binance’s initial investigation suggests that the security incident may involve a compromised DevOps engineer’s laptop, which allowed an attacker to gain access to a service container and submit unauthorized withdrawal transactions.”

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Netanyahu’s Crypto Plan to Bypass Sanctions Sparks Political Firestorm in Israel

Israel’s prime minister has proposed developing an alternative economic system using cryptocurrency and blockchain technology to circumvent potential international banking sanctions. The announcement has triggered fierce opposition from the Bank of Israel, economists, high-tech executives and political rivals, raising questions about Israel’s economic future and its relationship with Western financial institutions.

Netanyahu’s Proposal: Preparing for an Economy Under Sanctions

Israeli Prime Minister Benjamin Netanyahu has ignited a major political and economic controversy after announcing that his government is exploring the use of cryptocurrency and blockchain technology to circumvent potential international banking sanctions.

In an interview broadcast a couple of days ago, Netanyahu warned that Israel could face increasingly restrictive financial measures and said he had already instructed officials to prepare a plan for an alternative economic system.

“You need to prepare an economy that can circumvent them,” Netanyahu said, referring to possible banking sanctions. When asked whether blockchain technology could provide a solution, he responded that it was one of the options being considered and confirmed that he had requested a plan.

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Dark web drug market operator sentenced to 40 years, forfeits $101 million in bitcoin

A man from Virginia, who facilitated millions of drug transactions worth roughly $430 million, agreed to give up $100 million worth of BTC. His partner forfeited nearly 1,600 BTC.

A co-creator of dark web drug enterprise Empire Market agreed to forfeit 1,230 bitcoin ($101 million), after receiving a 40-year federal prison sentence for his role in operating the site.

His co-conspirator Thomas Pavey forfeited 1,584 bitcoin last year.

Raheim Hamilton, 30, of Suffolk, Virginia, also agreed to forfeit 24.4 ether worth about $60,000 and three properties, according to the U.S. Attorney’s Office for the Northern District of Illinois. A federal judge in Chicago sentenced Hamilton on Monday and imposed a $5 million fine.

Hamilton and Pavey operated Empire Market from 2018 to 2020. Their site facilitated more than 4 million drug transactions worth upwards of $430 million, prosecutors said. They also said Hamilton and Pavey sold stolen account credentials, personal data, counterfeit currency and hacking tools.

Pavey, 41, of Ormond Beach, Florida, pleaded guilty last year to a federal drug conspiracy charge and admitted his role in creating and operating Empire Market. He also gave up his rights to two boxes containing 25-ounce gold bars, three automobiles, and two properties in Florida. Pavey is set to be sentenced later this month.

The pair required customers to use cryptocurrency and encouraged them to use mixing services to obscure the movement of funds, the Justice Department said. Prosecutors said drug sales accounted for nearly $375 million of the site’s total activity.

Ruis-Sian Lin, the alleged operator of the dark web narcotics marketplace Incognito Market, was sentenced to 30 years in U.S. federal prison in February.

A month earlier, the U.S. government seized $400 million worth of cryptocurrency, real estate and cash linked to the once-popular darknet bitcoin mixing service Helix, which, according to the Department of Justice, was used by drug traffickers and other criminals to launder money at the tune of at least 354,468 bitcoin worth $29 billion today.

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‘We Know Where It Is’: Treasury Secretary Threatens To Freeze $1B of Iran’s Crypto

The U.S. will seize $1 billion of Iran’s crypto this week, U.S. Treasury Secretary Scott Bessent has said. It isn’t clear which asset though.

U.S. Treasury Secretary Scott Bessent has said the American authorities will soon seize $1 billion in crypto from Iran.

Speaking on Newsmax’s NPolicy Summit in Washington, D.C. on Thursday, Bessent added that economic sanctions on the Middle Eastern country were working.

Iran has been using bitcoin — and other cryptocurrencies — to skirt around U.S. sanctions. The U.S. in April started targeting crypto wallets linked to the Iranian regime, Bessent said at the time.

“What we have done has never been seen before,” Bessent said Thursday on Iranian sanctions.

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EBA designates Circle’s USDC as the EU’s first ‘significant’ e-money token

The European Banking Authority said Wednesday that it has classified USDC as a “significant” e-money token under the Markets in Crypto Assets Regulation, making it the first of the 45 EMTs notified in the bloc to meet that threshold.

According to an official statement, the EBA will now take direct responsibility for supervising USDC’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans from Nov. 12. These areas are currently overseen by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), but the regulator will still handle governance, qualifying holdings, fit and proper assessment, and conflicts of interest after the EBA takes over.

The EBA also said it signed a memorandum of understanding with the New York State Department of Financial Services, which oversees Circle’s New York-regulated operations. The MoU will facilitate cross-border oversight and information exchanges between the two authorities.

USDC is the world’s second-largest stablecoin, with a supply of nearly $73 billion, according to The Block’s data dashboard. Tether’s USDT leads the market with $184 billion in circulation, against a total supply of $294 billion for dollar-pegged stablecoins.

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Belarus Approves the Country’s First Crypto Banks: Report

Belarus earlier this year signed a legal framework for crypto banks in the country.

The first crypto banks have opened in Belarus, according to reports, after the European country earlier this year created a legal framework for Bitcoin banks.

While not yet named, the crypto banks will start operations after obtaining accreditation from the National Bank of Belarus, Russian news agency Interfax reported Monday.

Back in January, Belarusian President Alexander Lukashenko signed Decree No. 19 “On Cryptobanks and Certain Issues of Control in the Field of Digital Tokens,” officially creating a legal framework for bitcoin and crypto banks in the country.

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EBA designates Circle’s USDC as the EU’s first ‘significant’ e-money token

The European Banking Authority said Wednesday that it has classified USDC as a “significant” e-money token under the Markets in Crypto Assets Regulation, making it the first of the 45 EMTs notified in the bloc to meet that threshold.

According to an official statement, the EBA will now take direct responsibility for supervising USDC’s own funds, reserve assets, liquidity requirements, and recovery and redemption plans from Nov. 12. These areas are currently overseen by France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), but the regulator will still handle governance, qualifying holdings, fit and proper assessment, and conflicts of interest after the EBA takes over.

The EBA also said it signed a memorandum of understanding with the New York State Department of Financial Services, which oversees Circle’s New York-regulated operations. The MoU will facilitate cross-border oversight and information exchanges between the two authorities.

USDC is the world’s second-largest stablecoin, with a supply of nearly $73 billion, according to The Block’s data dashboard. Tether’s USDT leads the market with $184 billion in circulation, against a total supply of $294 billion for dollar-pegged stablecoins.

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