The Commoner

Friday, October 16, 2026

Sup, freaks.

Bank of America made $8.1 billion last quarter before a $1.2 billion fine, and the OCC admits the biggest banks used money laundering rules as a pretext to debank lawful businesses.

WHAT TO EXPECT IN THIS NEWSLETTER

• The OCC documented the debanking and can't promise banks won't return to it, while the banks fund their lobby with the yield on your deposits.
• Token prices are falling while GPU rental prices climb, and Nous Research's Tommy Eastman says nobody has capacity.
• Goodfire's Nick Cammarata says neural networks are far easier to read than the field assumed, which would be very bullish for alignment if it holds.
• LayerTree would fit a million users in one UTXO if bitcoin gets covenants, and the WSJ reports Tether paid Bo Hines' firm while he worked on the GENIUS Act.
• Tesla put compressed-air thrusters on the Roadster, and Amber patches three security holes.

Marty's Bent

The Banks Above the Law

The large commercial banks in this country live above the law. On Wednesday we covered the $1.2 billion Bank of America paid for willfully violating the Bank Secrecy Act for seven years, and this week the bank also reported $8.1 billion of third quarter profit before the settlement. A fine that size is nothing more than a cost of doing business. That same day the Office of the Comptroller of the Currency released the findings of its review of debanking at the nine biggest banks in the country, and if you've tried to run a bitcoin company at any point over the last six years, nothing in it will surprise you.

Thomas and I spent a lot of time on Rabbit Hole Recap yesterday talking about where this power comes from, and I think it's the most important part of the story. The banks take your deposits, park them at the Fed and in short-term government paper, and keep the yield for themselves. Bank of America earned 4.61% on the $363 billion it had sitting in fed funds and reverse repos last quarter, while more than half a trillion dollars of its customers' deposits sat in accounts that paid nothing at all. That's how you book $16.4 billion of net interest income in a single quarter. If your cash is sitting in a checking account at one of these banks, you're funding the machine and getting nothing for it. And the machine funds their war chest.

We watched them spend it this year. When stablecoin yield language was floated for the Clarity Act, the American Bankers Association and four other bank lobbies put out a joint statement declaring that "the correct policy goal" was "prohibiting the payment of yield and interest on stablecoins." Read that again. According to the people paying you nothing on your deposits, the correct policy goal is making sure nobody else can pay you something either. They fought it tooth and nail, the bill failed a procedural vote 49 to 50 on September 15, and that same day eight banking groups asked Congress to "adopt targeted changes to stablecoin yield policy." I'm no stablecoin stan, but giving people the choice between a bank account that pays them nothing and a dollar product that passes some of the Treasury yield back to them is objectively good for the consumer. The banks know that, which is exactly why they fought it.

The OCC report shows what else they do with that power. All nine banks had policies restricting access for lawful businesses, and bitcoin and crypto companies were lumped in with coal, firearms and tobacco, with the restrictions "often attributed to financial crime considerations." The regulator says outright that money laundering compliance "could be used as a pretext for other grounds." Is that really surprising though? The law the banks hid behind to shut the door on bitcoin companies is the very same law Bank of America ignored for seven years while it failed to report more than $5 billion of suspicious transactions on time. The rules apply to you. They don't apply to them.

The small banks that were actually willing to serve this industry got a very different kind of justice. In March 2023 Silvergate announced it was winding down, and Alan Lane, its former CEO, wrote last month that the bank had "satisfied customer withdrawals totaling 70% of demand deposits over a few weeks" at the end of 2022, only to liquidate "in the face of political pressure from the Biden Administration." Two days later Silicon Valley Bank was seized with $3.3 billion of Circle's USDC reserves inside it. Signature was shut down by New York regulators on a Sunday, and Barney Frank, who sat on its board, said regulators wanted to send a "very strong anti-crypto message." First Republic was seized seven weeks later and handed to JPMorgan. Silvergate later settled SEC charges that it misled investors about how well it monitored customers like FTX, and Alan took a five-year bar from serving as an officer or director. Silvergate is gone. Bank of America willfully broke the same law for seven years, wrote a check for a fraction of one quarter's profit and went right back to business.

And the regulator can't promise any of this won't happen again. Per the report, "no bank has fully and publicly acknowledged its past debanking decisions or implemented a comprehensive program to provide remediation to affected customers," and the OCC "is unable to say with confidence that current policies preclude banks returning to the harmful practices discussed in this report." Your access to the banking system lasts exactly as long as the people in charge want it to. Notice who's missing from the report, too. The regulators who sent the pause letters telling banks to stay away from crypto in the first place aren't in it.

This is why I focus on bitcoin. Anyone who feels compelled to can download the software, hold their own keys and send value to anyone else on the planet without asking a bank, a regulator or a lobbyist for permission. Nobody can debank a private key, and it doesn't matter who's sitting in the White House. If your savings are sitting in an account that pays you nothing while your bank lobbies to keep it that way, take the hint.

SIGNAL

Tokens down, compute up

"The price of tokens is down, but the price of compute is up," Campbell posted last night, quoting a chart showing GPU rental prices up 17 days in a row. Ornn's indexes tell the same story. Its Anthropic token index is down 45.6% over 30 days to $0.84 per million tokens, while its B200 rental index is up 9.8% over the same stretch to $7.92 an hour, from a low of $5.68 in mid July. The token index is a blended price, so shifts in which models people use move it too.

Tommy Eastman of Nous Research said it plainly when he came on the show: "It's unbelievable how squeezed the HPC industry is right now." He went from ten providers bidding for his business to nobody having capacity, and he blames land, power, regulation and a parabolic jump in inference demand. Intelligence is getting cheaper to buy while the machines that produce it get scarcer. Guess who's sitting on the power, the land and the interconnects? Bitcoin miners.

Goodfire says neural networks are already clean

Nick Cammarata of Goodfire published "Neural Networks Are Already Clean" on Wednesday, arguing that models were never as tangled as the interpretability field assumed. By his count, about 90% of the neurons he audited in Qwen3-32B do one main job, about 7% do two related jobs and 2% to 4% aren't understood, and he says the picture holds "in models up to trillions of parameters, like Kimi K3." The paper isn't out yet and Goodfire sells interpretability, so these are claims to check.

But if he's right, this is incredibly bullish for alignment. The Skynet scenario, a runaway swarm of agents nobody can understand or control, depends on these models staying black boxes. If we can read what's happening inside them at scale, that scenario gets a lot less likely. As Cammarata puts it, "Deception might hide from someone reading a model's outputs, but it has no reason to hide from the model's own circuitry." Notice he could only look inside Qwen and Kimi because they're open weight. You can't read the neurons of a model you can't download.

LayerTree puts a million users in one UTXO, if bitcoin gets covenants

Lightning Labs announced LayerTree yesterday, a design where a single UTXO holds the balances of many users as an off-chain Merkle-sum tree. Any user can leave alone in one transaction, users don't need to be online to receive and funds never time out. The catch is on the project site: "None of LayerTree runs on Bitcoin today: the covenant needs opcodes that have been proposed but not activated." The team built the same system against four sets of proposed opcodes, including OP_CAT, OP_CHECKSIGFROMSTACK and OP_CHECKCONTRACTVERIFY, and measured what each one costs.

In the version the team recommends, a solo exit is about 1,020 vbytes in one transaction. Leaving an Ark-style transaction tree of the same 65,536 members costs about 2,511 vbytes across 17 transactions. With one more purpose-built opcode that nobody has formally proposed yet, the exit drops to about 540 vbytes and grows only to about 700 at four billion members. It's only a design spec today. But it's the most concrete case I've seen for what covenants could buy self-custody at scale.

Tether's money reached Bo Hines' firm while he worked on the GENIUS Act

The Wall Street Journal reports, via Fortune, that Nxum, a consulting firm Bo Hines cofounded and kept a one-third stake in, was paid $6.3 million under a deal to develop a "strategic brand and public affairs plan" for Tether. Payments reportedly started while Hines was leading the White House push on the GENIUS Act. He left weeks after the bill was signed in July 2025, and Tether hired him the next month to run its new U.S. division. The Journal also reports the final contract went through an intermediary agency and dropped earlier references to lobbying. Nxum denies the allegations, and Tether declined to comment.

These are the Journal's allegations. But it's the same lesson as the lead. Whoever issues the money has every incentive to buy a seat in the room where the rules get written. Bitcoin has no issuer to buy anyone.

Tesla put SpaceX-style thrusters on the Roadster

Tesla finally unveiled the new Roadster last night, and the livestream showed it flipping in midair and landing on thrusters. Tesla engineering VP Lars Moravy said the car carries 10 thrusters fed by 600 liters of compressed air. Musk says it does zero to 60 in under a second. It comes in three versions, Performance, Thrust and Rocket, with a $250,000 deposit for the Thrust and production targeted for 2028.

It isn't really flying, it was first promised for 2020 and I don't expect to see one launching off a stoplight anytime soon. But whether you love Elon or hate him, it's undeniable that the companies he builds are incredibly impressive and, more importantly, they're striving for big, inspirational goals. A little optimism and human ingenuity heading into the weekend never hurt anybody.

⚡ FREEDOM TECH CORNER

DATA SNAPSHOT

Spot price, block height and hashrate estimate: October 16, 2026, 9:26 a.m. ET. Bitcoin Lab daily series: October 15, 2026. U.S. spot ETF flows: October 15, 2026.

Sources: Kraken spot quote, mempool.space block height and hashrate, Bitcoin Lab daily metrics, and TFTC ETF flows. Daily metrics use the provider’s October 15 observation, not live intraday estimates.

Have a great weekend, freaks.

Marty Bent · TFTC · Nostr

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