BDO is the 5th largest firm
African-Americans Outpace Whites & Hispanics In Cryptocurrency Investments, A New Avenue to Wealth
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BDO is the 5th largest firm
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Relevant article from Brookings...
Debunking the narratives about cryptocurrency and financial inclusion by Tonantzin Carmona
" Numerous narratives exist regarding crypto and financial inclusion, each addressing a different set of needs or group of individuals. But a closer examination of these narratives reveals a mismatch between what crypto can actually provide and the needs of the groups it purports to serve. This piece will explore crypto’s potential to exacerbate unequal financial services to historically excluded groups, and how policymakers and regulators can protect retail investors and consumers while addressing financial inclusion in ways that do not require crypto.
Analyzing the narratives regarding crypto and financial inclusion
When it comes to cryptocurrencies and financial inclusion, the unbanked, underbanked, Black, and Latino or Hispanic communities often get lumped together in reporting, survey results, or even the crypto industry’s marketing.[3] Often, this is done without acknowledging that while some of these groups may occasionally overlap, they may also have entirely different crypto usage rates and, more importantly, markedly distinct financial needs and objectives.
According to a recent survey by NORC at the University of Chicago, nearly 44% of Americans who own and are trading crypto are people of color.[4] A recent Federal Reserve report also noted that a small but growing number of underbanked individuals were trying their hand at crypto.[5]
Additionally, the 2022 Ariel-Schwab Black Investor Survey found that 25% of Black Americans surveyed owned cryptocurrencies; that number jumps to 38% for Black investors under 40. Black survey respondents were also less trusting of the stock market and financial institutions, perceive the stock market as more risky and less fair, and have less trust in people and more trust in technology than white survey respondents. It is important to note that this survey compares Black and white survey respondents with average household incomes of $99,000 and $106,000, respectively, which is a far different level of income than a typical unbanked or underbanked household.[6]
What these groups—the unbanked, underbanked, and Black and Latino or Hispanic communities—may have in common is that historically, they, their families, and their communities have been denied access to traditional financial institutions and their services.[7] Therefore, it is understandable that they seek alternative financial service providers for making transactions and generating wealth.[8] Nevertheless, it is important to clarify what groups, problems, or pain points crypto is striving to address, particularly if we aim to examine the industry’s claims and narratives pertaining to financial inclusion.
There are many narratives about financial inclusion related to crypto, but two stand out:
- Crypto proponents’ first narrative says that cryptocurrencies will provide easy access to financial services and, specifically, offer unbanked or underbanked populations a mechanism for making financial transactions. This narrative suggests that a predominant reason unbanked households may have difficulty accessing banking services is because they are far from a bank, the bank is open at inconvenient hours, or they cannot use digital payment methods. In this case, crypto would be used as a currency, available 24 hours a day, and able to be spent on everyday goods and services.[9]
- Proponents of the second narrative argue that rather than using crypto simply as a means for making financial transactions, it should instead be viewed as an avenue to build wealth.[10] According to this narrative, crypto can be viewed as an investment, so people need to hold on to cryptocurrencies rather than spend them on daily transactions. By emphasizing low barriers to entry and promises of high returns, this narrative targets Black and Latino or Hispanic individuals who seek upward mobility.[11]
The different risk profiles between Black and Latino crypto investors vs White investors:
" Crypto would need to address barriers to asset-building activities and products in order to serve the needs of historically excluded groups and account for the fact that people will enter the crypto ecosystem at different wealth levels. According to the 2019 Survey of Consumer Finances, white families have the highest level of median wealth, at $188,200. Latino or Hispanic and Black families have considerably less, with median wealth levels of $36,100 and $24,100, respectively.[37] Thus, while the access to and risks of cryptocurrencies may be the same for all individuals, the impacts of those risks would be felt differently. That is, should Black and Latino or Hispanic crypto-holders incur losses, their financial well-being would feel an outsized negative impact compared to white crypto-holders.[38] Yet crypto narratives do not consider the discriminatory impact of historical policies and practices on present disparities, instead focusing on a surface-level understanding of wealth-building barriers for Black and Latino or Hispanic communities.
Despite the vast amount of money poured into crypto and related products over the years, crypto has not developed past the use case as a speculative asset.[39] Thus, the narrative of using crypto for wealth-building for Black and Latino or Hispanic communities assumes that it can serve as an appreciative asset that can generate wealth. Here too, cryptocurrencies are a vulnerable option, because they have no intrinsic value and are not backed by anything; they are simply grounded in speculation. Cryptocurrencies derive their value from other people believing they are good investments, but if that changes, the value can quickly drop to nothing, which can be particularly risky for populations that do not have existing or inherited wealth to fall back on.[40]
Furthermore, while some may say that crypto’s decentralization is what makes it accessible to all and thus suitable for Black and Latino or Hispanic communities aiming to generate wealth, the growing concentration of the wealthy in these spaces demonstrates that not all cryptocurrency holders are created equal.[41] For example, ownership of bitcoin is becoming increasingly concentrated in a small group of investors, with 0.01% of holders controlling 27% of the currency in circulation.[42] In addition, cryptocurrency mining has become so expensive that only a small group of companies and people can afford to do it, with approximately 10% of miners controlling 90% of bitcoin mining capacity.[43] And, in the wake of ethereum’s “Merge,” recent reporting indicates that the new method for approving transactions—proof of stake—may already be concentrating wealth and power, with only two IP addresses seemingly approving 46% of transactions.[44] Given the concentration of wealthy investors and miners, new entrants and retail investors cannot be confident the crypto market will not be manipulated to benefit only a few."
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How crypto acts in a similar manner to check cashing places and other types of predatory inclusion:
"Given the technology’s risks, drawbacks, and overall limitations, we can think about cryptocurrencies as part of the legacy of “predatory inclusion.” Sociologists and other scholars, including Keeanga-Yamahtta Taylor, Louise Seamster, Raphaël Charron-Chénier, and Tressie McMillan Cottom, have examined the concept of predatory inclusion extensively in other areas.[52] [53] [54] It refers to marginalized communities gaining access to goods, services, or opportunities that they were historically excluded from—but this access comes with conditions that undermine its long-term benefits and may reproduce insecurity for these same communities. Payday loans are an example, as they provide access to credit but come with high costs and risks.[55] Subprime mortgages, which provide access to homeownership but come with high risks, are another.[56] Similarly, crypto may offer access to financial services (according to the industry’s narratives), but with the caveats of high risks and insufficient consumer protections.
Similar to how proponents depict cryptocurrencies as a way to “democratize finance,” payday loans were once described as a way to promote the “democratization” of credit.[57] [58] Subprime mortgages were also heralded as “innovations” that would open doors for excluded communities, but ultimately decimated the wealth of Black and Latino or Hispanic communities during the 2008 financial crisis and its aftermath.[59] [60]
Bank branch closures in low-income neighborhoods and communities of color over the years have correlated with the emergence and expansion of alternative financial services such as payday loans, title loans, and check-cashing services to meet the needs of the communities left out of traditional banking services and products.[61] Crypto proponents also make claims about crypto products and services filling gaps left by traditional financial institutions’ exclusionary practices.[62] Policymakers should therefore consider viewing crypto’s purported benefits as a parallel to those of alternative financial services.
Indeed, just as we see check cashing and payday lender storefronts concentrated in Black, Latino or Hispanic, and immigrant communities, we are soon likely to see bitcoin ATMs in Latino or Hispanic grocery stores, according to recent crypto industry announcements.[63] [64] In major metropolitan areas such as Miami, Dallas-Fort Worth, and Los Angeles, bitcoin ATMs are already clustering in Salvadoran, Colombian, and Mexican neighborhoods.[65] These ATMs are notorious for charging high fees, ranging from 7% to 20% per transaction.[66]
Thus, in addition to prioritizing the establishment of basic consumer protections, policymakers should also ask whether, in their efforts to boost financial inclusion, they may unintentionally offer more of the same exclusionary banking practices by supporting crypto as a substitute. That is, instead of providing banking products and services for historically excluded groups the way we do for the wealthy, we are offering crypto as an alternative to what we know already works. By doing so, we may well be incentivizing the perpetuation of exclusionary and stratified banking services by monetizing the inequities and failing to address their root causes.[67]"
The entire article is good and worth a read:
www.brookings.edu /research/debunking-the-narratives-about-cryptocurrency-and-financial-inclusion/
"Given the technology’s risks, drawbacks, and overall limitations, we can think about cryptocurrencies as part of the legacy of “predatory inclusion.” Sociologists and other scholars, including Keeanga-Yamahtta Taylor, Louise Seamster, Raphaël Charron-Chénier, and Tressie McMillan Cottom, have examined the concept of predatory inclusion extensively in other areas.[52] [53] [54] It refers to marginalized communities gaining access to goods, services, or opportunities that they were historically excluded from—but this access comes with conditions that undermine its long-term benefits and may reproduce insecurity for these same communities. Payday loans are an example, as they provide access to credit but come with high costs and risks.[55] Subprime mortgages, which provide access to homeownership but come with high risks, are another.[56] Similarly, crypto may offer access to financial services (according to the industry’s narratives), but with the caveats of high risks and insufficient consumer protections.
Similar to how proponents depict cryptocurrencies as a way to “democratize finance,” payday loans were once described as a way to promote the “democratization” of credit.[57] [58] Subprime mortgages were also heralded as “innovations” that would open doors for excluded communities, but ultimately decimated the wealth of Black and Latino or Hispanic communities during the 2008 financial crisis and its aftermath.[59] [60]
Bank branch closures in low-income neighborhoods and communities of color over the years have correlated with the emergence and expansion of alternative financial services such as payday loans, title loans, and check-cashing services to meet the needs of the communities left out of traditional banking services and products.[61] Crypto proponents also make claims about crypto products and services filling gaps left by traditional financial institutions’ exclusionary practices.[62] Policymakers should therefore consider viewing crypto’s purported benefits as a parallel to those of alternative financial services.
Indeed, just as we see check cashing and payday lender storefronts concentrated in Black, Latino or Hispanic, and immigrant communities, we are soon likely to see bitcoin ATMs in Latino or Hispanic grocery stores, according to recent crypto industry announcements.[63] [64] In major metropolitan areas such as Miami, Dallas-Fort Worth, and Los Angeles, bitcoin ATMs are already clustering in Salvadoran, Colombian, and Mexican neighborhoods.[65] These ATMs are notorious for charging high fees, ranging from 7% to 20% per transaction.[66]
Thus, in addition to prioritizing the establishment of basic consumer protections, policymakers should also ask whether, in their efforts to boost financial inclusion, they may unintentionally offer more of the same exclusionary banking practices by supporting crypto as a substitute. That is, instead of providing banking products and services for historically excluded groups the way we do for the wealthy, we are offering crypto as an alternative to what we know already works. By doing so, we may well be incentivizing the perpetuation of exclusionary and stratified banking services by monetizing the inequities and failing to address their root causes.[67]"
The entire article is good and worth a read:
www.brookings.edu /research/debunking-the-narratives-about-cryptocurrency-and-financial-inclusion/
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How Did SBF Convince West Africans Crypto Was Their Future?
At least Madoff’s clients were rich.
By Reeves Wiedeman
On November 3, days before his cryptocurrency empire collapsed, Sam Bankman-Fried tweeted a hearty FTX welcome to a promising new customer base. “Hello, West Africa!” he wrote, sharing the news that FTX was accepting a new currency, West African francs, and that anyone in the region looking for somewhere to park their money, and trade a bit of crypto, could now open an account with his company. Sub-Saharan Africa accounts for just 2 percent of global cryptocurrency trading, but adoption has picked up in recent years, and crypto enthusiasts have long seen the continent as a proving ground for some of crypto’s practical applications, like facilitating remittances. Many FTX users in Africa didn’t trade bitcoin or ethereum and instead used the platform to simply convert local currencies into less volatile U.S. dollars that they could store while collecting the 8 percent annual interest rate FTX was advertising right up to its demise. The deal seemed almost too good to be true, and a Twitter user who went by BeerLife — “Lover of Beer, Blockchain, and Bull Dog” — responded to SBF’s greeting that day with a warning: “Beware West Africa, just like every other westerners you’ve dealt with this one is only looking to steal your money.”
SBF’s vision was always global in scope, and FTX’s marketing operation in Africa was a localized version of the company’s U.S. playbook. Rather than Tom Brady and Larry David, several famous Nollywood actresses and local influencers appeared in a commercial filmed by FTX Africa; instead of giving $500 in crypto to fans at a Miami Heat game in the venue now formerly known as FTX Arena, FTX Africa ran a promotion giving away $5 to Ghanaian users willing to open a new account.
Much of FTX Africa’s marketing energy was directed through dozens of campus ambassadors conscripted to recruit others to use the exchange. Most ambassadors were university students who worked for free, hoping to earn referral commissions based on how many people they recruited or to one day land a job. (Parts of the crypto world have always looked like multilevel marketing, and virtually every other major crypto player employs similar networks in Africa—one was already eagerly offering gigs to FTX Africa ambassadors now looking for work.) “To be paid, you must have hosted a successful event,” Godson Joseph, an FTX campus ambassador in Nigeria, told me. Having the privilege to host an event required being a regular presence on FTX Africa’s social-media networks, getting people to deposit money into FTX accounts, and convincing FTX Africa’s marketing team that you could get a few hundred people to show up to a pitch. Lunch was usually provided. Ambassadors could receive a commission on anyone who signed up for an account, and a decent turnout might earn an ambassador $200. Joseph, who told me he had worked for the company since February, had been expecting to host his first event in December and finally collect a paycheck.
The swift collapse of FTX devastated the people who had trusted FTX’s local promoters. Several Nigerians I spoke with told me that they, or their friends, had lost their entire life savings: six figures in one case, $10,500 in another, $100 someone had managed to scrape together. Nestcoin, a Nigerian crypto company, was forced to lay off at least 30 people after losing millions in an FTX account, and many expected the contagion to spread to other African crypto companies. “I should start by saying that I’m currently in hiding,” Harrison Obiefule, a Nigerian who ran FTX Africa’s marketing efforts, said on Twitter the day FTX declared bankruptcy. “I’ve been getting threats and calls nonstop from celebrities, family, friends, and strangers. The repercussions have only just begun.” He put a laptop up for sale on Twitter and pinned a peace-sign emoji to his account.
I also spoke to Emmanuel Godswill, a 34-year-old Nigerian who was a founding member of an unusual organization called FTT DAO, a “community dedicated to FTT, the native token of cryptocurrency exchange FTX.” (A DAO, or decentralized autonomous organization, is a sort of cryptographically enabled club.) Members proudly referred to themselves as BFFs, short for “Bankman-Fried Fans.” Godswill and other BFFs, many of whom were in Africa, held events to promote the benefits of blockchain technology and the good they could do together—donating books to schools, helping flood victims in Nigeria—if they all signed up for FTX and pooled their money. At one event, during which Godswill stood onstage in front of a ten-foot-tall banner displaying SBF’s face, he said he hoped everyone would be able to go home afterward and tell their loved ones that attending had marked “the turning point for my life.”
Godswill told me he lost some cash in the FTX collapse—“Not much, but for me it was a lot”—though even more distressing to him was the time and energy he had put into supporting SBF’s vision. Before he started working with FTX and a few other crypto companies, Godswill said he was supporting his family on $20 a month. “In the crypto space, if you put your skill to work properly, you could earn $10,000 in a month or two months,” he said, insisting it was possible to trade your way to such amounts. But how to get started? That, Godswill explained, was where FTT DAO came in. “This organization is bringing that education to your doorstep for free,” he said. “It was like salvation came.” When we spoke, he was at his home in Uyo, and the youngest of his three children was crying in the background. He was still trying to make sense of what had just happened. “It was like we were carrying that guy on our head and going into the streets—it was like evangelism,” Godswill said. “We did it passionately, selflessly. We had hope. And he crushed it.”
How Did SBF Convince West Africans Crypto Was Their Future?
At least Madoff’s clients were rich.
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Wearing Lions gear when it wasn't cool
Currency not backed by a real security was always doomed to fail. Good fortune for the people that got in and got out quickly but others. Too bad you are the one still standing when the game of musical chairs ended. but that shyt is on you at the end of the day.
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So is this ongoing dump in preparation for central bank crypto?
Where are the whales putting their money into now?
Where are the whales putting their money into now?
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lmao house of cards
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