SEC’S IS CHANGING TACTICS - AND IT’S MERCILESS
This could give another punch to stomach for crypto…
Hoooooo! A big thunder echoes through the crypto jungle this morning. I’ve got news for you which will probably make some token issuers hide under the palm trees!
On Today’s Menu:
🌶 CHILLI CON CARNE: Coinbase’s case is not really about its 3 employees
🌯 SUPER SPICY MEXICAN BURRITO: Three Arrows speak after 5 weeks of deafening silence
🌽 SALTY GRILLED CORN: Elon dumps 75% Bitcoin in worries of lockdowns in China
🥵 BURNING CANNED PEPPERS: More crypto news around the web
🥃 A SHOT OF TEQUILA: Get To Know The Genius Behind The Massive Ethereum Upgrade
🥫 BLACK BEANS
COINBASE’S CASE IS NOT REALLY ABOUT ITS 3 EMPLOYEES
SEC is getting crypto bull strategies at their horns. A separate filing (yes, 62 pages) on the case with Coinbase signals the beginning of a major legal battle with crypto firms on… what should be seen as security.
Brrr, I know, this sounds scary. If the SEC succeeds with this case, this could be a major precedent in crypto.
The front pages told all about how happy three friends - Coinbase’s three employees from India - had been doing insider trading by buying tokens in perfect timing, just before they would be listed on the major exchange. But collectively, they made only over… a million. So the Owl’s take is that… this case is not about them.
After years of gray zone hide-and-seek, the SEC (The U.S. Securities and Exchange Commission) found a way to go after every little token that won’t be able to hire expensive lawyers to bail them out of a token-as-a-security classification dispute.
You see… It’s much easier to file a case for three individuals most likely incapable of defending themselves rather than a crypto project or something so impossible to regulate as Bitcoin.
Chasing separate crypto projects has been a long but unsuccessful strategy of SEC. But now… It changed, and if the classification of tokens as a security kicks in, this could bring another smash below the bottom for the crypto industry. Tense news again, I know…
Most of them are American companies, so it shows clearly that tokens are not welcomed in the US exchanges.
On a bright note, Coinbase announced a filed petition to develop new frameworks for crypto security rules. Perhaps some industry clarity can come up from that?...
THREE ARROWS SPEAK AFTER DEAFENING 5 WEEKS OF SILENCE
The founders of Three Arrows Capital, aka 3AC - one of the largest crypto industry funds - finally came out of the bush. Sometimes talking in remorse, and sometimes in defense from an unknown location, they admitted the horrific pain they caused for creditors and the industry. Their failures at risk management unleashed cascading margin calls on loans that should never have been made…
But hey… “Zhu and Kyle suffered deep losses and did not take any money from the fund before it collapsed we added them! - they claimed. Deflecting blame professionally – is what all this humble self-pity means.
3AC now owes $3.5 billion to about 27 crypto firms. So far, liquidators have reportedly managed to seize assets only worth $40 million.
Death threats from the crazy ones in crypto had forced Zhu and Kyle to move to another hot stop for crypto - the United Arab Emirates, according to one lawyer. It will be the final destination in which… they hope to liquidate in peace.
Owl hopes that Zhu and Kyle are honest… But I must say, no more “mistakes” like this, please. Actual risk management works much better than many sorry once the game ends.
ELON DUMPS 75% BITCOIN IN WORRIES OF LOCKDOWNS IN CHINA
So Elon continues to change his mind on Bitcoin. Or does he? Promises were made as Elon told he would not sell any Bitcoin from Tesla. But he did, as officially claimed, in fear of Covid lockdowns in China continuing and the poor environmental impact of Bitcoin.
But we know we cannot count on Elon’s tweets… So what’s happening?
Let me give you a theory. Maybe this is all just going to have a positive cash flow quarter - otherwise, it would be bad for Tesla stocks. The 75% sale of the company's Bitcoin added $936 million in cash to its balance sheet, and nothing forbids buying Bitcoin further once the new quarter arrives.
Or maybe… Elon doesn’t believe in Bitcoin as a treasury reserve asset - that would be sad. I wouldn’t believe it!
It’s mind-boggling to hear things like Bitcoin is “a sideshow to a sideshow” and “This should not be taken as some verdict on bitcoin” simultaneously. The man keeps his options open… And I cannot blame it on him.
Luckily to holders of Bitcoin, its price didn’t suffer as much as one could have thought it would with every Elon-rhetoric move on Twitter. It managed to hold up pretty well. Yay for Bitcoin!
MORE CRYPTO NEWS AROUND THE WEB
Luxembourg-Based Crypto Exchange Blockchain.com Lays Off 25% of Employees
Bitcoin Mining Difficulty Sees Largest Drop Since July 2021 as Miners Feel the Texas Heat
6 Key Points in Vitalik Buterin's Vision for Ethereum Presented at EthCC
🥃 A SHOT OF TEQUILA
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Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your research and act responsibly with your profits.