Murder in Paradise? How the Death of Nikolai Mushegian Opened an Epstein Level Can of Worms in Puerto Rico

Crypto contagion went wild in July, but there is a quiet war rippling under the surface of the 4th turning.

As originally reported by El Nuevo Día; on October 28th, 2022 around 9:15 AM Puerto Rico resident Nikolai Mushegian was retrieved by rescuers from the waters of Ashford Beach with no vital signs. The report was written up by Agent Rosario one of the Puerto Rico’s 11,600 police officers.

Locals indicate the spot is dangerous. Rip Current highlighted in yellow.

Looking at current Surfline data showing 3-4 ft. surf (plus the fact this spot even has Surfline data), the coastal shape, and the presences of rip currents in the photos we can say the story of someone drowning here is not only entirely plausible, but in fact highly likely. I say this as a 7 year ocean lifeguard. This is an unguarded beach (especially in a morning hour in late October), so it was unlikely the volunteer lifeguards were there to see it. El Nuevo Día did not mention who initially reported it, but Stoked Wallet has reached out for comment. So why is the internet calling for the m word like this guy got Epstein’d? This is where it gets interesting.

Nikolai Mushegian, the co-founder of Maker DAO and architect of the stablecoin $DAI, posted this on Twitter just five days after the Maker DAO community approved a custodian partnership with Coinbase in Coinbase Prime’s Custody program. This was posted the morning of his death before he was found in the water. A difference of about 4 hours.

One shot at life. Might as well try.

On the 26th of October, between Maker DAO moving assets to Coinbase Custody and his demise he was working on a litepaper for Rico (Archive in case it gets memoryholed). Rico was an algorithmic CDO balancer which could flip between positive and negative rates as needed to prevent volatility based liquidations. Not sure this is the answer to central banking, but based on his pinned tweet this was his answer to it.

Rico Matrix Chat

Okay let’s recap so far:

1.) Hates central banking and is developing a new system to replace it and current stablecoins.

2.) Had to move treasury to Coinbase Custody (for reasons I will get into).

3.) Found dead after exposing foreign and domestic agents are operating in Puerto Rico and targeting him.

So why move to Coinbase Custody?

Around July the cryptocurrency market contagion fears are in full swing with Terra USD, Celsius, and Voyager Digital all getting caught with their pants down. Kathie Wood sells 1.4 million shares of her position of Coinbase ($COIN) from $ARKK, $ARKF, and $ARKW. BlackRock (largest shareholder of most companies) saw an opportunity and bought $COIN. For those who don’t know $COIN is a half owner of Centre, the parent company of $USDC (US Dollar Coin), with its partner Circle. Centre owns roughly $38 billion of U.S. Treasuries. BlackRock since 2020 has worked in conjunction with the FED and U.S. Department of the Treasury on market issues in the bond market.

Not even one month later, the US Department of the Treasury sanctions Tornado Cash, which is alleged to have laundered over $7 billion in assets. Circle blacklisted, a function not often talked about the USDC protocol, the Tornado Cash ETH addresses which interacted with the USDC ERC-20 network. Centre’s USDC is not the only stablecoin interacting with Tornado Cash though. Maker DAO’s stablecoin $DAI is a major player in Tornado Cash since it is a decentralized protocol and can’t blacklist addresses in response to regulator requests unless the community votes and agrees on it via Maker governance. People may not know this, but $DAI uses a basket of assets to maintain stability including $USDC (to the tune of several billion). This posed a huge counterparty risk since at any time Circle could blacklist Maker vaults. Many close to the project had been critical of $USDC overexposure and believed the position should be wound down, but naysayers said you can’t decrease exposure quick enough without a serious risk of slippage.

So naturally they looked to Coinbase (the other half of Centre for an answer). Coinbase Prime offers a service called Coinbase Custody where they can insure and store your assets out of the reach of certain authorities in places like Lichtenstein.

A Coinbase Custody partner in Lichtenstein

Maker DAO’s USDC was then moved from them to a Coinbase product to buy more short term treasuries, which yields 1.5% back to the Maker protocol. The threat of US sanctions on Tornado Cash is averted for Maker, but Nikolai decides he needs to turn the decentralize knob on DeFi even further and creates the litepaper for Rico. Two days later he is never heard from again.

Without going into Operation Guard Shack and how the Maker DAO deal massively benefits Coinbase let’s just reflect on how this happens to anyone who dares make moves against central bankers.

Sources:

11/1/22 3:00 EST Correction: Muchgian changed to Mushegian

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