The US government is tightening the regulatory screws. One of the biggest items on this to-do list was Binance.
CEO CZ agreed to step down, plead guilty to AML violations and agreed to pay $4.3 Billion as part of a settlement which will allow Binance to keep operating, under strict adult supervision.
The long-telegraphed move (notice date on Travis' tweet below) has been interpreted by many as necessary part of the approval process for Bitcoin ETFs
Binance was not only exchange feeling the heat though.
Surprisingly —as they'd already been fined $30 million in February for staking-as-a-service— the SEC also went after Kraken for operating as an unregistered securities exchange and engaging in poor business practices.
Ex Kraken CEO Jesse Powell tweeted a middle finger in response.
Sixteen tokens were listed as securities in the lawsuit, including Solana (SOL), Cardano (ADA), Polygon (MATIC), Cosmos (ATOM), Algorand (ALGO), Dash (DASH) and Decentraland (MANA).
It didn't stop at exchanges though. Whether explicit action was taken or not, a chilling effect rippled visibly through the industry.
Wallet of Satoshi, perhaps the most popular custodial Lighting wallet —which is non-KYC— announced they're pulling out of the US market.
Seems fairly obvious they did it over fears of the regulatory burden, as they could get charged as an unlicensed money transmitter, a Bank Secrecy Act violator and lord knows what else.
Did it end there? No.
We also found out F2Pool, one of the largest Bitcoin mining pools, was censoring transactions from wallets listed as "bad hombres" by the Office of Foreign Assets Control (OFAC). As this news broke a —technical term— "shitstorm" erupted on Twitter, leading them to back down and turn-off the filtering.
This, in my view, is the most serious issue to pay attention to.
Bitcoin is (rightly) criticized for being complicated to use with complete privacy. In my mind, the one thing that makes up for this challenge is the fact it's unstoppable. No one can prevent you from sending or receiving a transaction as long as you play by the rules. Rules that were essentially laid out with the Genesis block are slow and painful to change.
Censorship resistance, Decentralization and Self-Custody are core pillars that separates Bitcoin from Bitcoin™ (Bitcoin's sanitized, corporate-friendly, government-castrated, fractionally-reserved shitcoin twin).
People who buy the ETF will not be buying Bitcoin, they will be buying Bitcoin™. They will learn the hard way.
If we ask ourselves whether the US is done, I think the remaining undropped shoe is Tether.
Crypto “dollars” won’t collapse the world financial system, but they could disrupt the cosy greenback-based settlement system. —Financial Times
As Caitlin Long explains in this (long) thread, the US runs a risk —by being precious about having fully buttoned-down CBDC "crypto dollars"— of losing control to the market like they did with Eurodollars (don't get me started).
So all eyes on where the current foreplay between the US government and Tether —which seems to be getting hot and steamy, Tether helped the US Gov freeze $225 Million this week— will lead.
As for you my friend, remember to remain unbothered and moisturized by stacking stats and moving them to your own wallet. That way you can enjoy this regulatory circus from the sidelines.
They Get It
Do not take for granted the fact that media heads like Tucker Carlson and Joe Kernen —while still far from experts— can now talk intelligently about Bitcoin. This is a huge change compared to 2020.
And it's not just media heads. Slowly and painfully, the narrative around Bitcoin's environmental footprint has also shifted.
New adopters this cycle will face a very different media environment once they finally allow themselves to get curious about Bitcoin. This is bullish.
Joe Rogan and Dave Smith kinda / almost / sorta get Bitcoin. They're very close.
Someone mistakenly sent a transaction and paid $2.6 Million in fees. Then for some reason they did a Replace By Fee (RBF) transaction and bumped the fee up to $3.1 million. The highest ever fee paid in dollar terms.
In the recent past a transaction with a similar issue had the excess fee graciously returned by the miner.
The plot thickened on Sunday as the (verified) author of the transaction came forward. They claim to have lost their entire 140 BTC stack (83 to fees, the rest to the thief). It's unclear if the author of the transaction was thief or victim, we'll see how the story develops.
The jokes often write themselves
On Nov 28th you'll be able to watch "The Highest of Stakes" —a documentary on Richard Schueler aka. "Richard Heart" and his shitcoin Hex— on Apple TV.
Touted as "The Fastest Appreciating Asset Ever", at its peak, Hex almost hit $0.60 before going back down to sub $0.01
Reluctant as I am to fork over money to see this, I may just bite the bullet. You have to give it to Richard. "Crypto" may well be full of bullshitters, but he is a true Bullshit Artiste, one of the best to ever do it.
"No, I don't think it's a scam…
because I trust Richard Heart."
—Hexican Last Words
He is currently actively hiding from the SEC who are struggling to serve him with formal accusations of fraud and misappropriation regarding his Hex, PulseChain, and PulseX projects.
Seems Christine Lagarde's son lost a bunch of money trading crypto, it should fill her with shame that she could not teach him to simply accumulate Bitcoin instead.
Secretary Yellen said the US will borrow $1 Trillion less than it planned to over the next 10 years. At such a breathless pace the US will have eliminated the deficit in *does basic arithmetic* 340 years.
The US is currently spending $1 Trillion per year on interests alone. I'm sure Sec. Yellen is mortified about what the state of the world will be 10 years from now.
This Money Now?
Lyn Alden —author of Broken Money, which I heartily recommend— makes the point that physical bills and coins are only a small fraction of what we call "money".
Over time, the word "money" has grown to include a number financial instruments. This can make it hard to measure and understand how much money there is. Lyn's book does a great job of explaining many of the nuances here.
The urge to build alternatives to dollarized payment rails continues, still slowly for now.
Commercial Real Estate keeps showing signs of stress. Preston gathered several noteworthy examples in this thread. A must-read if you're interested in the sector.
Tether is not the only one freezing accounts. UBS did not pausing withdrawals because of enforcement issues though, but rather because of a lack of liquidity.
This came on the heels of them missing a major bond payment and the CEO issuing a "if the sh*t hits the fan" statement in which he said he didn't think the bank was "too big to fail" (meaning he doesn't think it'd be bailed out by the government)
President elect Javier Milei made it clear he stands firm in his decision to shut down Argentina's Central Bank.
Elon Musk is facing a witch hunt for antisemitism, white supremacy and all-around wrongthink after his lawsuit against Media Matters —which spent considerable effort engineering a situation in order to claim corporate ads were being displayed next to extremist content.
The woke brigade snapped to and dropped X like it was fiscal responsibility. A group cuddle will be organized for them to support each other during this difficult time.
This 1899 Menu from the Plaza Hotel looks fairly normal. Until you realize the prices are not in Dollars.
Every dip is being bought. Someone(s)' accumulating.
Bitcoin spent last week jumping in the Sand again while waiting for Water ($29.8k) and the Board ($34.4k) come up to support it.
Price has been bouncing in the $35k and $38k range, unable to break either decisively. Interesting to note aggressive buying of dips and rejections above $38k
I think we can call November Green. Three in a row.