The Crypto / Blockchain / Venture Capital Vacuum

This is a concept integration page, not a company profile. It examines the structural conditions that make crypto, blockchain, and venture capital the default infrastructure for the patterns documented in this investigation — and why the same people creating societal vacuums are often the same people building tools to fill them.

This page is a scaffolding. At the end of the investigation, we revisit with significantly more examples to work from. Nothing here is deleted; new examples and refinements are added in subsequent passes.

The Core Problem

When legitimate systems fail to serve a population — whether through exclusion, cost, distrust, or regulatory gaps — a vacuum forms. Something will fill that vacuum. In the 21st century, the tools that fill it most quickly are cryptocurrency, blockchain-based systems, and venture-capital-funded startups that operate faster than regulation can follow.

This is not inherently predatory. Crypto genuinely serves populations excluded from traditional banking. VC genuinely funds innovations that established institutions won’t touch. Blockchain genuinely enables transparency in systems that resist it.

The problem arises when the same entities creating the vacuum are also the ones selling the solution. When the people displacing workers with AI are also selling them UBI tokens. When the people pricing patients out of healthcare are also running the clinical trials that offer “free” treatment. When the people who can’t get SEC oversight for a decade are also the ones building the financial infrastructure that bypasses the SEC entirely.

The vacuum isn’t an accident. It’s a business model.

The Seven Vacuums

1. The Financial Inclusion Vacuum

The gap: 1.7 billion adults globally are unbanked. In the US, 5.9 million households lack bank accounts. Traditional banking requires documentation, minimum balances, credit history, and physical proximity to branches — all barriers that disproportionately exclude low-income, immigrant, and rural populations. [1] [2]

What fills it: Cryptocurrency is marketed as democratizing finance — “anyone can participate without permission from any centralized authority.” Mobile money, DeFi lending, crypto remittances. [3]

The reality: Brookings (2023) found “a mismatch between what crypto can actually provide and the needs of the groups it purports to serve.” Unbanked households are actually LESS likely to use crypto than banked households. The underbanked — people with some banking access but not enough — are the primary crypto adopters, and they face heightened financial risk because crypto is not federally insured. [2]

The investigation parallel: Worldcoin markets iris scanning in developing nations as “financial inclusion” — giving $50 in crypto tokens to people who scan their eyeballs. The framing is humanitarian. The product is biometric data collection from populations who don’t have the regulatory infrastructure to evaluate what they’re consenting to. Kenya raided Worldcoin’s warehouse and ordered deletion of 300,000+ iris scans. France, UK, South Korea, Spain, Portugal, and Hong Kong regulated or banned it. [4]

The vacuum was real (billions of unbanked people). The tool that filled it extracted something more permanent than money — biometric identity data that cannot be changed, from populations who traded it for the equivalent of a meal.

2. The Regulatory Oversight Vacuum

The gap: Securities regulation in the US requires companies to file Form D disclosures when raising capital through private placements. The SEC exists to ensure investors and the public have access to material information about financial transactions.

What fills it: When companies don’t file, there is no enforcement until someone complains or a journalist asks questions. The regulatory vacuum isn’t the absence of rules — it’s the absence of enforcement resources.

The investigation parallel: Formation Bio (formerly TrialSpark) raised over $250 million across seed, Series A, Series B, and Series C rounds with ZERO SEC Form D filings. The first Form D was filed in July 2024 — after a TechCrunch article raised conflict-of-interest questions about Sam Altman’s simultaneous roles as OpenAI CEO and Formation Bio investor. The regulatory vacuum wasn’t that filing was impossible; it’s that nobody checked until media scrutiny forced it. [5]

The same entity that operated for a decade without SEC disclosure is now building AI-powered clinical trial recruitment tools (Muse) that will determine which patients are invited into drug trials. The company that couldn’t be bothered to file a securities form is now making decisions about who gets access to experimental medicine.

3. The “Create the Problem, Sell the Solution” Vacuum

The gap: This vacuum is manufactured. It doesn’t exist until someone creates it.

The pattern:

AI displaces workers → the same person who built the AI (Altman/OpenAI) → funds research on compensating displaced workers (OpenResearch/UBI) → builds the token system for distributing compensation (Worldcoin) → profits from all three stages
Pharmaceutical companies price patients out of treatment → the same network that prices them out → creates “accessible” clinical trial sites in underserved communities (TrialSpark) → recruits patients who couldn’t afford treatment into trials for drugs they wouldn’t otherwise access → collects their data → sells the drugs to pharma companies who will price the treatments out of reach again

The self-reinforcing cycle: Altman builds AI that displaces human workers (OpenAI/ChatGPT). He promotes concerns about dead internet and bot proliferation. He builds the human verification system (Worldcoin/World ID). He invests in Reddit where bot concerns drive verification demand. His affiliated organizations quietly fund legislation requiring age/ID verification. He owns the entire pipeline — disruption, displacement, verification, compensation. He profits at every stage. [4]

This isn’t a vacuum that existed and was filled. It’s a vacuum that was created so it could be filled — by the same people who created it.

4. The Data Extraction Vacuum

The gap: People need healthcare, genetic information, financial services, and identity verification. Legitimate systems either don’t provide these or provide them at costs that exclude large populations.

What fills it: “Free” services funded by venture capital, where the product is the user’s data.

The investigation parallel — data collection across the network:

Entity	What They Collect	From Whom	What They Get
Worldcoin	Iris scans, biometrics	Developing-nation populations for $50 crypto	Permanent biometric identity database
23andMe	Genetic/DNA data	Consumers paying $99-$199 for ancestry	15M genotyped profiles, 80% opted into research
TrialSpark/Formation Bio	Clinical trial data, health outcomes	Patients in drug trials (33% in low-income areas)	Drug efficacy data sold to pharma companies
Speedy Sticks	Blood samples	At-home patients nationwide	Clinical research data for CROs
Muse (AI tool)	Patient demographics, recruitment profiles	Clinical trial targeting	AI training data for pharma recruitment
OpenResearch	Economic behavior, survey responses	UBI recipients in rural WV, NC, MS Delta	Policy research justifying AI displacement
Lemonaid Health	Prescription records, telehealth data	Patients paying $25/visit for online care	Healthcare utilization patterns

Every entity collects sensitive personal data from populations with limited power to refuse. The vacuum is the absence of affordable healthcare, financial services, or economic opportunity. The tool that fills it extracts data that becomes more valuable than the service provided.

5. The Venture Capital Compression Vacuum

The gap: When too much capital chases too few opportunities, ethical standards compress. Returns must come from somewhere.

The pattern: Venture capital deployed globally reached $348 billion in 2021 (PitchBook). When money floods in faster than legitimate opportunities can absorb it, VCs begin funding increasingly marginal ventures — companies with questionable unit economics, unclear regulatory compliance, or business models that depend on regulatory arbitrage.

The investigation parallel: Formation Bio’s investor list reads like a who’s-who of Silicon Valley: Sequoia, Thrive, a16z, Felicis, Sound Ventures (Ashton Kutcher), TQ Ventures (Scooter Braun). Celebrity VCs and entertainment money flowing into a clinical trial company. The compression means capital sources that would normally invest in consumer tech or media are now investing in pharmaceutical development — an industry with entirely different regulatory requirements, ethical obligations, and patient safety stakes.

When Ashton Kutcher’s investment fund puts money into a company that recruits nursing home patients for clinical trials, the VC compression vacuum has produced a misalignment between the investors’ expertise and the product’s consequences.

6. The Nonprofit Shell Vacuum

The gap: Nonprofit status provides tax exemption, public trust, and reduced regulatory scrutiny. When the distinction between nonprofit mission and for-profit extraction blurs, a vacuum forms in accountability.

The pattern:

OpenAI: Founded as 501(c)(3) nonprofit → created for-profit subsidiary → pursuing full PBC conversion → Altman has no direct equity but $19M in a portfolio company (Formation Bio) with OpenAI commercial relationships
23andMe/TTAM: For-profit → bankruptcy → founder creates nonprofit → nonprofit reacquires all assets for 91% discount → “same business, same employees, familiar leaders, and the same privacy policies” (bankruptcy judge)
OpenResearch: 501(c)(3) nonprofit → entire annual grant-making = $1M to TrialSpark, a for-profit where the nonprofit’s founder was already an investor → founder later co-led $156M investment in same company

Public Citizen used the word “self-dealing” to describe both the OpenAI and 23andMe/TTAM transitions independently. The vacuum is the gap between nonprofit accountability structures and the actual flow of value. [6]

The crypto connection: Worldcoin’s token distribution is framed as a form of universal basic income — the same mission that OpenResearch (a nonprofit) studies. The nonprofit researches the problem. The for-profit builds the AI that creates the problem. The crypto project sells the solution. Tax-exempt research validates the for-profit product.

7. The Geographic Arbitrage Vacuum

The gap: Regulations vary by country and jurisdiction. What’s illegal in one place may be unregulated in another.

The pattern:

Worldcoin: Not offered in the US due to regulatory scrutiny. Operating primarily in developing nations with weaker data protection frameworks. Banned or restricted in 7+ countries. [4]
Retro Biosciences: Anti-aging drug trial conducted in AUSTRALIA, not the US. The company’s own media coverage notes Australia was chosen because “the regulations there are just more flexible.” [7]
Formation Bio/TrialSpark: 33% of clinical trial sites in poverty or low-income US communities. TrialSpark’s mission was “unlocking the 98% of patients who have never been exposed to trials” — framing access to experimental medicine as a benefit rather than acknowledging that the “98%” are often populations with the fewest alternatives.
Sanofi: $25M bribery settlement for paying healthcare professionals in 10 Middle East/African countries to sell pharmaceutical products (2007-2015). [8]

The vacuum is the difference in regulatory capacity between jurisdictions. The tool that fills it is geographic arbitrage — conducting activities where oversight is weakest, then selling the results where markets are richest.

The Eighth Vacuum: Over-Regulation and the Piecemeal Legislation Trap

The seven vacuums above describe gaps where legitimate systems fail to serve populations. But there is an eighth vacuum that operates in the opposite direction — one created not by the absence of regulation but by the accumulation of too much regulation, designed piecemeal, never reconciled with itself, until the system becomes impossible to navigate legally and transparently.

How Good Laws Create Bad Outcomes

Each individual regulation typically has sound intent. KYC (Know Your Customer) prevents money laundering. HIPAA protects patient health data. The Bank Secrecy Act tracks illicit financial flows. State business registration ensures corporate accountability. Form D filings give investors transparency. Clinical trial oversight protects human subjects.

The problem is that lawmakers have limited floor time and a singular problem they’re trying to prevent from recurring. Each law is written in response to a specific failure — a fraud, a breach, a harm. The lawmaker’s job is to prevent that specific harm from happening again. But this creates legislation that addresses one node in a system without examining how that node connects to every other node.

The result is a regulatory organism assembled from parts that were never designed to work together:

A company operating in healthcare needs to comply with HIPAA (federal), state privacy laws (50 different versions), GDPR (if any European data is involved), FDA regulations (if any health claims are made), SEC regulations (if raising capital), state business registration (in every state it operates), IRS requirements (if using nonprofit structures), and clinical trial regulations (if conducting research). Each of these was written by a different body, at a different time, in response to a different crisis.
A startup founder navigating this landscape has two options: hire an army of lawyers to ensure compliance across every jurisdiction and regulatory body (cost: hundreds of thousands to millions annually), or just… don’t file. Operate in the gaps. Move fast and hope nobody checks until you’re big enough that enforcement becomes a negotiation rather than a shutdown.

Formation Bio chose option two for a decade. $250M+ raised across four rounds with zero Form D filings. Not because filing was technically impossible, but because the system makes non-filing easier than filing, and enforcement is resource-starved enough that years pass before anyone notices.

The Debanking Phenomenon

In December 2025, congressional committees released reports concluding that federal banking regulators’ policies had “contributed to the unlawful debanking of digital asset and other lawful businesses.” The OCC’s own review found that ALL reviewed institutions had engaged in debanking activity — closing accounts of legal businesses because the regulatory burden of serving them exceeded the revenue they generated. [9]

This is the over-regulation trap in action: Anti-money laundering rules require banks to conduct expensive due diligence on every customer. If a customer operates in a sector that regulators view as “high risk” — cannabis, crypto, money services, international remittances — the compliance cost exceeds the account’s value. Banks rationally close those accounts rather than bear the cost.

The debanked businesses don’t disappear. They move to crypto. They find alternative payment processors. They operate in cash. The regulation designed to prevent illicit finance instead pushes legitimate businesses into less-regulated channels where illicit finance is harder to detect.

The investigation parallel: When the banking system makes it expensive and risky for a small healthcare startup to maintain compliant accounts, and when the SEC makes it complex to file Form D for a private placement, and when each state requires separate business registration with separate fees and filing requirements — the rational response for a capital-constrained startup is to minimize compliance and operate in the gaps until forced to do otherwise.

This doesn’t excuse Formation Bio’s decade of non-filing. But it explains the system that made non-filing the path of least resistance.

The Patchwork Problem

The US operates under a dual banking system (federal and state charters), 50 different state privacy laws, a federal health data framework (HIPAA) that was written before smartphones existed, securities regulations designed for 20th-century capital markets, and clinical trial oversight distributed across FDA, NIH, and state medical boards. Each piece of the patchwork was designed independently. None were reconciled with the others.

The result for good actors: Compliance becomes a full-time job. Small clinics, startups, and nonprofits spend more on lawyers than on their actual mission. The cost of doing things right is so high that only well-capitalized entities can afford compliance — which concentrates power in exactly the large institutions the regulations were often designed to check.

The result for bad actors: The complexity becomes camouflage. When the regulatory landscape is so fragmented that no single regulator has visibility across the entire system, it becomes possible to operate across jurisdictions without anyone seeing the full picture. TrialSpark was registered in Delaware, Pennsylvania, New York, New Jersey, DC, Texas, Maryland, Indiana, and Massachusetts — each with its own filing requirements, its own enforcement capacity, and its own information silo. No single state saw the complete entity.

The result for the vacuum: The piecemeal system creates a regulatory surface so complex that legitimate actors under-comply (because full compliance is prohibitively expensive) and illegitimate actors over-exploit (because the gaps between jurisdictions are wide enough to operate in). Both outcomes push activity toward less-regulated channels — crypto, offshore structures, nonprofit shells, and the kind of address-swapping, entity-proliferating, SEO-manipulating infrastructure documented in the daisy chain.

The Floor-Time Problem

When a lawmaker brings a bill to the floor, they have one shot to address one harm. The Dodd-Frank Act responded to the 2008 financial crisis. HIPAA responded to health data portability concerns. The JOBS Act responded to capital formation barriers for startups. Each was debated in the context of its specific trigger event, not in the context of the full regulatory organism.

No mechanism exists for lawmakers to systematically ask: “If we pass this law, how does it interact with the 47 other laws this company has to comply with? Does our new requirement create a contradiction with an existing one? Does it create a gap between itself and adjacent regulation that bad actors can exploit?”

The consequence is that each new law makes the system more complex without making it more coherent. Good actors face more requirements. Bad actors face more gaps. The vacuum grows in both directions.

What This Means for the Investigation

The entities in this investigation are not operating in a regulatory vacuum because regulations don’t exist. They’re operating in a regulatory vacuum because the regulations are so numerous, fragmented, and uncoordinated that:

Formation Bio could raise $250M+ without SEC filings because enforcement resources can’t match filing volumes
Speedy Sticks could show up on Google Maps at Formation Bio’s address without either company flagging it because no regulator monitors Google Maps for clinical trial co-location claims
23andMe could operate for five years with health claims before the FDA acted because the regulatory category for direct-to-consumer genetic tests didn’t clearly exist
Worldcoin could scan millions of eyeballs across 40 countries before any single country’s regulator could respond because the technology moved faster than the patchwork of national data protection laws
OpenResearch could grant $1M to a company where its founder was personally invested because IRS enforcement of private benefit rules in 501(c)(3) organizations is complaint-driven, not proactive

The over-regulation problem is not that there are too many rules. It’s that there are too many rules that don’t talk to each other, enforced by too many agencies that don’t coordinate, creating a system that punishes compliance and rewards arbitrage.

The Altman Pipeline: A Case Study in Owning Every Stage

No single actor in this investigation illustrates the vacuum phenomenon more completely than Sam Altman. His portfolio spans every stage of the displacement-to-compensation pipeline:

STAGE 1: CREATE DISPLACEMENT
  └──→ OpenAI (ChatGPT displaces knowledge workers, content creators, coders)

STAGE 2: STUDY THE DISPLACEMENT
  └──→ OpenResearch (UBI study: what happens when AI takes jobs?)

STAGE 3: COLLECT DATA FROM THE DISPLACED
  └──→ TrialSpark/Formation Bio (clinical trials in underserved communities)
  └──→ Worldcoin (iris scans from developing nations)
  └──→ 23andMe partnership (genetic data from consumers)

STAGE 4: BUILD THE COMPENSATION MECHANISM
  └──→ Worldcoin (crypto tokens as UBI substitute)
  └──→ OpenResearch (policy research justifying UBI)

STAGE 5: BUILD THE VERIFICATION LAYER
  └──→ Worldcoin/World ID ("proof of personhood" for a post-AI world)

STAGE 6: MONETIZE THE TREATMENT
  └──→ Formation Bio → Sanofi (drugs developed from trial data sold to pharma)
  └──→ Retro Biosciences (anti-aging drugs trialed in Australia)
  └──→ Muse AI (recruitment optimization for more trials)

At every stage, the vacuum is real. People genuinely need jobs, healthcare, identity verification, and economic support. The tools that fill these vacuums genuinely provide something. But the same person (or the same small network) controls the entity creating the need AND the entity meeting it — and extracts value at every transition point.

Why Crypto Specifically?

Crypto becomes the default infrastructure for these patterns because it provides three things that traditional finance cannot:

1. Opacity with plausible neutrality. Blockchain is technically transparent — every transaction is recorded. But the identity behind each wallet is not. This creates a system where the movement of value is visible but the movement of accountability is not. Ransomware payments ($2M Bitcoin for Sony/Insomniac data), dark web sales of genetic data ($1-$10 per 23andMe profile in crypto), and Worldcoin token distribution to iris-scanned villagers all use the same infrastructure.

2. Speed that outpaces regulation. A VC-funded crypto project can launch, distribute tokens, collect data, and operate across 40 countries before regulators in any single country can respond. Worldcoin scanned millions of eyeballs before Kenya, France, or South Korea could act. By the time enforcement arrives, the data is already collected.

3. The “inclusion” narrative. Crypto’s marketing language — democratization, inclusion, access, empowerment — provides ethical cover for extraction. Worldcoin isn’t “buying biometric data from poor people.” It’s “providing financial inclusion to the unbanked.” TrialSpark isn’t “recruiting vulnerable patients who have no alternatives.” It’s “unlocking the 98% who’ve never been exposed to trials.” The language of inclusion disguises the economics of extraction.

What This Page Is Not

This is not an argument that crypto, blockchain, or venture capital are inherently predatory. All three have legitimate applications and have genuinely improved access to financial services, funded important innovations, and enabled transparency in previously opaque systems.

This page documents the specific structural conditions under which these tools become extraction mechanisms rather than inclusion tools — and the specific patterns in this investigation where the same actors create the vacuum and sell the filler.

The ethical question is not whether crypto should exist. It’s whether the people building the systems that displace workers, exclude patients, and collect biometric data from the world’s poorest populations should also be the ones building the tools that claim to compensate for that displacement.

Nodes and Open Questions

Buitrago’s crypto background: Daniel Buitrago (CEO of Speedy Sticks, the clinical phlebotomy company at Formation Bio’s address) was previously CEO of Coinedge, a crypto company. A crypto executive running a clinical blood-draw company that serves pharmaceutical trial organizations. What was Coinedge? What did it do? Is there a blockchain/data component to Speedy Sticks’ “proprietary platform”?
FTX/SBF and Worldcoin: Sam Bankman-Fried (convicted of multi-billion dollar FTX fraud) was an early Worldcoin investor. Three Arrows Capital (collapsed crypto fund, major fraud) also invested. The co-investor roster for Worldcoin includes a disproportionate number of subsequently disgraced entities. What does this say about the due diligence standards in the crypto VC ecosystem?
The ransomware economy: Two of the 28 Hardcore Tech X posts covered ransomware attacks (Sony/Insomniac $2M Bitcoin, LoanDepot $26.9M cost). The LoanDepot post asked “Do you know anyone who is a customer?” — framed as intelligence gathering. Is there a connection between the SEO/data infrastructure documented in the daisy chain and the ransomware economy?
Crypto as clinical trial compensation: Are any clinical trial companies using crypto tokens as participant compensation? If Worldcoin distributes tokens for iris scans, could a similar model compensate clinical trial participants — creating a tokenized pipeline from blood draw to drug approval?
The unbanked overlap: The populations most likely to participate in clinical trials for access to healthcare (low-income, underserved) are the same populations most likely to be unbanked. Crypto fills the banking vacuum. Clinical trials fill the healthcare vacuum. Are these vacuums being filled by the same network simultaneously?
SEC enforcement capacity: Formation Bio operated for a decade without Form D filings. The SEC’s FCPA unit acknowledged that “pharma bribes remain a significant problem despite numerous prior enforcement actions.” When regulatory agencies acknowledge the problem but lack enforcement capacity, the vacuum persists by design.

Sources

[1] [Archive] (https://www.sciencedirect.com/science/article/pii/S1059056026003461)

[2] [Archive] (https://www.brookings.edu/articles/debunking-the-narratives-about-cryptocurrency-and-financial-inclusion/)

[3] [Archive] (https://www.sciencedirect.com/science/article/pii/S2949694224000269)

[4] Prior investigation sessions — Worldcoin documentation (Kenya raids, iris scan collection, country bans)

[5] Formation Bio Timeline — this investigation (no Form D until July 2024 after TechCrunch article)

[6] [Archive] (https://www.citizen.org/article/house-must-update-bankruptcy-code-in-wake-of-23andme-dna-data-sale/)

[7] [Archive] (https://medium.com/@koan.bogiatto/sam-altmans-brain-youth-pill-the-science-behind-rtr242-and-how-to-prepare-your-mind-for-9d225603a2be)

[8] [Archive] (https://www.fiercepharma.com/pharma/sanofi-to-pay-25m-to-resolve-middle-east-bribery-allegations)

[9] [Archive] (https://blog.freshfields.us/post/102lymd/2025-bank-regulatory-roundup-and-what-to-look-for-in-2026)

[10] [Archive] (https://www.congress.gov/crs-product/R48430)