Judge Jed Rakoff’s essay “It’s a Racket!” reads less like analysis than confession.
He opens with a dictionary definition of cryptocurrency and proceeds to explain why systems that operate outside government control are dangerous. This framing reveals the core assumption beneath the essay: money is legitimate only when sanctioned, supervised, and reversible at the discretion of the state.
Bitcoin exists because that assumption failed.
The Genesis Block of the Bitcoin blockchain contains a timestamp referencing the 2008 bank bailouts. It marks the moment the modern financial system exposed itself as a closed hierarchy enforced by regulation, complexity, and rescue. Losses were socialized. Accountability vanished. Courts enforced the aftermath.
Bitcoin was created to exit that system.
Rakoff repeatedly treats “crypto” as a monolith, collapsing decentralized networks, centralized frauds, meme tokens, and algorithmic stablecoins into a single object of derision. This is not analysis; it is rhetorical convenience. The Terraform Labs fraud he describes depended on secrecy, centralization, and false representations — the very features Bitcoin was designed to eliminate.
Rakoff describes Bitcoin as gambling “untethered to economic reality.” But his definition of economic reality is faith-based: central bank discretion, elastic supply, and institutional trust. Bitcoin rejects those premises. It imposes a fixed supply. It makes monetary debasement impossible. It exposes failure instead of masking it.
That is why central planners hate it.
I watched the regulated financial system collapse in 2008 from inside a New York law firm. The catastrophe occurred not in unregulated back alleys but in the most supervised institutions on earth. When it ended, almost no one responsible was punished. Courts enforced the settlements. Central banks created money to paper over the wreckage.
Bitcoin refuses that bargain.
Rakoff leans heavily on blockchain surveillance claims asserting vast criminality. These claims rest on inference, not proof. The surveillance industry is unregulated, unvalidated, and commercially motivated. Yet courts increasingly treat its output as scientific fact. This is junk science with a badge.
The Silk Road prosecutions revealed the real anxiety. Ross Ulbricht proved Bitcoin was money. Goods and services could be exchanged without permission from banks or governments. His punishment was exemplary, not proportional. It was meant to deter autonomy.
Courts have always played this role. They enforced slavery. They upheld internment. They validated sterilization. They ratified segregation. Judicial neutrality is a myth told by the winners of each era.
Rakoff laments that regulation of cryptocurrency is being scaled back. What he calls deregulation, others call recognition: that Bitcoin cannot be regulated into submission without destroying the liberties it restores.
Tens of millions of Americans now hold Bitcoin. Institutions that once mocked it now custody it. A political constituency has formed around monetary sovereignty. That constituency is done asking for permission.
Rakoff calls Bitcoin a racket because it escapes the racket he knows: discretionary money, regulatory capture, and judicial enforcement of economic orthodoxy.
Bitcoin does not ask courts for legitimacy. It derives legitimacy from use.
The Genesis Block was not a marketing flourish. It was a declaration. The old system failed. A new one appeared. Courts can sneer, but code does not care.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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