It’s a veritable iron law of investing: When an asset bubble collapses, the ensuing fallout shows that financial markets are anything but race neutral. As bubbles seek to absorb the last tributaries of liquid cash, Black Americans become, in vastly disproportionate numbers, the last buyers-in—and the last holders of worthless paper after the market insiders bail out. This was the story of the 2008 subprime meltdown, which demolished Black wealth on a ruinous scale, and it’s now the saga of the great collapse in cryptocurrency.

On November 11, FTX, a cryptocurrency trading platform once valued at $32 billion, filed for Chapter 11 bankruptcy protection. Sam Bankman-Fried, founder of FTX and its hedge-fund arm, Alameda Research, who had a net worth of $16 billion on Monday, November 7, lost his entire fortune by November 11.

The fatal sell-off of FTX’s holdings came about after CoinDesk, a news site focused on digital currencies, published a leaked balance sheet from Alameda Research on November 2. The balance sheet revealed that more than $5 billion of Alameda’s $14 billion in assets were in “unlocked FTT” and “FTT collateral.” FTX created the exchange token FTT for users to purchase to receive discounts on trading fees in the FTX marketplace. After the revelation that Alameda’s solvency depended on the fabricated wealth of FTT, investors tried to take their money out of FTX, triggering a bank run of an estimated $6 billion, which FTX could not process. By December, Bankman-Fried was behind bars in the Bahamas, where he and FTX were headquartered. Now extradited to the United States, he faces an eight-count indictment on charges of fraud, money laundering, and campaign finance violations.

The Bankman-Fried saga calls to mind the downside of the “hustle” as chronicled by Jay Z—himself an ardent crypto grifter—in his 1996 song “Dead Presidents.” “One day you’re cruising in your 7,” Jay-Z rapped. “Next day you’re sweating, forgetting your lies / Alibis aren’t matching up, bullshit catching up, hit with the RICO, they repo your vehicle / Everything was all good just a week ago.”

But the parallels here run deeper than you’d expect in a standard fall-from-grace narrative. As it turns out, the title of Jay-Z’s song is rooted in the racial fissures of financial capitalism. The chorus in Jay-Z’s “Dead Presidents”—“I’m out for presidents to represent me (Get money!)”—vividly captures the anti-Black nature of chasing a currency emblazoned with the visage of white men, many of whom were enslavers who held Blacks as chattel property to build wealth. The pillaging of Black communities in pursuit of the Black dollar is part of the premise of building wealth in America. Taking part in the plunder is truly to shore up the legacies of dead presidents.

And the allure of this particularly ugly legacy of racial capitalism continues to captivate Jay-Z and other celebrity Black promoters of the crypto scam. Earlier this year, Jay-Z and Twitter cofounder Jack Dorsey joined forces to invest $23.6 million in an endowment the pair cofounded to fund Bitcoin development in Africa and India and help designate Bitcoin as “the Internet’s currency.”

FTX extensively advertised in Africa, producing a sharp increase in crypto usage in African countries. As latecomers to the market, African financial firms were hit especially hard by FTX’s demise. Yele Bademosi, CEO of Nestcoin, a crypto startup in Africa, said the events of FTX’s “had an impact on us, as we held our assets (cash and stablecoins) at FTX to manage our operational expenses.” According to the Financial Times, Nestcoin held $4 million worth of assets in FTX. After FTX’s bankruptcy, Nestcoin suffered a round of layoffs and slashed the salaries of its remaining employees by as much as 40 percent. Individual African investors likewise saw their nest eggs vanish instantly in the FTX meltdown. Reeves Wiedeman reported for New York magazine that several Nigerians lost their entire life savings. “Six figures in one case,” Wiedeman writes, “$10,500 in another, $100 someone had managed to scrape together.”

Stateside, the crypto market has followed much the same grim trajectory. Like other apostles of digital-age capitalism, Bankman-Fried has cannily harnessed the rhetoric of racial justice to make crypto appear as a first-order tool of financial liberation—when it has, like past asset bubbles, created precisely the opposite effect, exploiting Black investment resources in a last-ditch bid to keep an unsustainable bubble aloft. In August, FTX published a letter on digital asset adoption, opportunities, and risks acknowledging that “a history of discriminatory policies and practices” has led to “wealth disparities and mistrust in some aspects of traditional financial services,” and asserting that “digital assets help to address many of these issues and can contribute to the cause of advancing racial equity in financial services.”

Darrick Hamilton, Henry Cohen Professor of Economics and Urban Policy at The New School for Social Research, and the founding director of the Institute on Race, Power and Political Economy, explains that a lack of regulation and resources starkly delimit opportunities for politically, economically, and racially vulnerable groups. Hamilton says such populations “are susceptible to predation and some of the mechanisms of the seduction that is a neoliberal framework of ‘make something of yourself, do something with your life.’”

“Predatory mechanisms can exploit that narrative,” Hamilton says. “The most susceptible and vulnerable ones, ironically, are those who are really trying to change their life.” According to a class action complaint filed by counsel representing plaintiffs against FTX, “FTX’s fraudulent scheme was designed to take advantage of unsophisticated investors from across the country, who utilize mobile apps to make their investments.” Because Black Americans have been denied the ability to build wealth through more stable and conventional channels, they are more likely to be drawn to cryptocurrency and other sketchy financial instruments billed as more accessible and democratic paths to investment wealth. As Charles Schwab has reported, Black Americans are less trusting of the stock market—and thus are more apt to pull out of traditional markets and migrate to digital coin.

“Asymmetric information and distortions in power are such that individuals can never stand up against an industry,” Hamilton notes. “That occurs no matter what domain you look at. In a financial market without certain regulatory protective mechanisms, individuals don’t stand a chance.”

According to an April 2021 survey by Ariel Investments and Charles Schwab, 11 percent of Black Americans say cryptocurrency was their first investment; the corresponding number for white Americans was just 4 percent. A 2022 Ariel-Schwab Black Investor survey shows that 25 percent of Black Americans currently own cryptocurrency, while only 15 percent of whites do. Here again, Black investors’ attraction to crypto appears to be linked to their historic exclusion from other avenues of wealth creation. In this context, crypto gets ascribed with leveling virtues—and properties of market stability—that it clearly never had. According to the survey, “Black investors are less likely than white investors to think that cryptocurrency is a risky investment (68 percent vs. 73 percent), and Black investors are more likely than white investors to believe investments in cryptocurrency are both safe (33 percent vs 18 percent) and regulated by the government (30 percent vs 14 percent).”

These trends are nothing new. Throughout modern US history, Black Americans have turned to both eccentric and pragmatic avenues of wealth creation to establish economic solvency. When the overvalued markets for such assets undergo the same kind of shakeouts that are now crushing crypto, the predatory nature of racial capitalism reasserts itself with a vengeance, And what’s clearly at the heart of financial business as usual in the United States is an intergenerational regime of anti-Blackness, protected through violence and theft.

Historically, the tactics vary, but the scheme is the same: lure African Americans into the dream of wealth building, then pillage the wealth of unsuspecting Black investors on a still greater scale. The Samuel Dubois Cook Center on Social Equity at Duke University and the Nathalie P. Voorhees Center at the University of Illinois–Chicago published a study calculating the amount of wealth Black families in Chicago accumulated and lost during the 1950s. Researchers found that Black families lost between $3 billion and $4 billion in wealth because of predatory housing contracts. These restrictive agreements compelled Black families to make large down payments for home mortgages and pay monthly installments at high interest rates. The buyer never gained ownership of the property until the contract was paid in full and all its conditions were met. Contract buyers also accumulated no equity in their homes. No laws or regulations protected them.

These stark disparities foreclose even the prospect of wealth building—and they continue to render Black Americans outsiders looking in when asset bubbles initially take off. And when speculators begin courting Black investors en masse, that’s typically the moment when the bubble is poised to burst. Any dead president could tell you that.