Hey Guys,

Just a short update and it needs to be said.

The fiasco of FTX will lead to stricter regulation all around including Binance. With Binance withdrawals hitting $1.9 bln in 24 hours, data firm says - Binance and Coinbase could both see contagion both in terms of consumer reactions in the space and regulators getting more tough.

Binance, the largest global crypto exchange, has been hit by a raft of regulatory challenges worldwide that only seem to increase. U.S. prosecutors may charge Binance, the largest cryptocurrency exchange, and its top executives with money laundering and sanctions violations, the latest twist in a probe that began in 2018 and gained traction during the FTX collapse that shocked the industry.

If tighter regulations is what CZ wants, that’s what he will get.

Sam on Eight Counts

I don’t really care about SBF, the drama has been pretty standard as far as fraud at this scale goes. Save that he didn’t admit to any wrong-doing. Former FTX CEO Sam Bankman-Fried was denied bail on Tuesday by a magistrate judge in the Bahamas who said the former billionaire is a heightened flight risk. Earlier in the day, federal prosecutors in New York City unsealed a federal indictment charging Bankman-Fried with eight criminal counts, including wire and securities fraud, money laundering and conspiracy to defraud the U.S. Bankman-Fried was arrested in the Bahamas on Monday and is expected to be extradited to the U.S.

The FTX debacle, however, created at least one winner: Changpeng Zhao and his Binance group, the largest cryptocurrency exchange. However Binance has been incredibly evasive with global authorities since its rise to power. We have to consider the possibility that China is really behind CZ and Binance, and not some startup success story like we have been told.

If I was China banning crypto I would have developed Binance as a kind of back door into the crypto world. There’s no reason to suppose that’s not how Binance operates today as the world’s largest cryptocurrency trading platform.

Founder Changpeng "CZ" Zhao is among executives who may be targeted, Reuters reported, citing people familiar with the matter. Department of Justice officials are split, however, about whether to proceed, and some want more time to review evidence. CZ is actually responsible for the downfall of SBF, who is himself responsible for the downfall of many others. Competition in the crypto bro culture is not always fair.

Coinbase, Debt and Bonds

Coinbase’s financial woes should continue into 2023, as teh crypto winter continues and potentially spirals to new lows. Coinbase bonds, which have been on a steady decline this year, took a big hit last month after FTX’s collapse sent the crypto industry into a panic.

Coinbase has $3.4 billion in long-term debt, with bonds that start maturing in 2026.

The company’s cash position has dwindled from $7.1 billion at the start of the year to around $5 billion at the end of the third quarter.

We might be witnessing the last era of centralized exchanges in crypto and a big hit on mainstream adoption of cryptocurrencies, even without a major Bitcoin price drop that we should have seen in the FTX meltdown. Bitcoin’s price shows no signs of a rebound just a steady decrease the longer the crypto winter continues.

Binance’s Legal Regulatory Woes By Country

Binance has for a crypto empire been incredibly much like a bad actor skirting regulations globally as evidenced by its many issues internationally.

The U.S.

• Regulators at the Commodity Futures Trading Commission are looking at whether Binance engaged in insider trading or market manipulation by "trading on customer orders before executing them", according to Bloomberg. Binance denied any misconduct.

• The Justice Department and the IRS are also reportedly examining Binance's role in money laundering and tax evasion.

The U.K.

• The Financial Conduct Authority said Binance's U.K. affiliate was operating without approval.

Japan

• Japan's financial agency warned the company for operating without permission.

The EU

• Binance in July said it would suspend deposits from the European Union's Single Euro Payments Area network.

Germany

• Binance earlier this year launched stock tokens, a sort of synthetic instrument that gives commission-free exposure to traditional stocks such as Apple and Tesla. The tokens were being offered through CM-Equity AG, an established company that would hold the underlying stocks.
  
  Germany's financial regulator said the tokens would violate European Union securities laws. In July, Binance said it would no longer offer the tokens, though CM-Equity's CEO told the Block that it was a "business decision" and Binance wasn't forced to stop.

Thailand

• Thailand's financial agency in July filed a criminal complaint against Binance, accusing it of operating a digital asset exchange without a license.

South Korea

• South Korean regulators did not publicly come after Binance, but they did warn crypto exchanges to register. Binance shut down Korean language support and Korean-currency trading pairs in August.

Malaysia

• Malaysia's financial regulator took an enforcement action against Binance and ordered it to stop operating in the country. In August, Binance shut down access in the country.

China

• Though Binance has largely moved itself out of Beijing's reach, China's continued tightening of crypto trading rules inevitably affects customers in the country who might try to use the exchange.

Binance is a Crypto Monopoly

According to the Protocol, Binance is the largest global exchange, doing $27 billion in spot exchange volume over 24 hours as of Tuesday, on a down day in the market, making it much larger than rivals such as Coinbase.

With FTX down, and Coinbase in free-fall, Binance is even more powerful today than it was last year.

We have to never forget that Binance was originally founded in China, and remember what that likely means. Originally founded in China, Binance reportedly pulled its employees and any official presence out of the Chinese market in 2017 after China banned ICOs. It is claimed that it’s founder it just a Canadian entrepreneur. More likely is Binance is the Huawei of crypto.

Binance has launched quickly around the world in many countries. Regulators in many of those countries have said Binance is operating without permission. It’s a bit like China setting up secret police stations and this sort of rogue behavior is what leads me to the conclusion that Binance is actually a Chinese State controlled entity.

The company has long said it doesn't have a headquarters, preferring to be a decentralized company, a structure inspired by the headless nature of cryptocurrencies. But its founder is Chinese Canadian and the company was started in China. The official story is that CZ moved to Canada when he was 12 years old and that he just somehow managed to outsmart the rest of the world founding Binance. Not a likely story.

Binance will face its own reckoning with regulations, even as a single tweet by its founder sent FTX into ruins. Everyone will remember that fateful day and the crypto mafia that fight like thugs over criminal money laundering plagued territory.

Binance has had an elaborate plan to avoid U.S. regulation through a U.S. based entity and evasion of "geographical restrictions" through "technical workarounds", which sounds a lot like the Chinese Government modus operandi. That CZ talks about decentralization is ideological pandering of the worst kind. He has a net worth of at least $20 Billion by now, likely a lot more.

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Sometimes the headlines really tell the story. With low confidence in the future of Genesis, exchanges like Coinbase and Kraken are seeing very limited services amid market turbulence.

It’s nearly peak crypto winter.

$BTC Bitcoin is still hovering around $16,000, but likely not for long. It’s lost 65% of its value so far in 2022.

50,000 Bitcoin were withdrawn from Coinbase on Nov. 24 and 25, marking the third-largest withdrawal from the exchange. This is an incredible amount of funds as speculation on the future of Coinbase mounts. I covered this recently in my investing Newsletter.

Stock Quest

Will Coinbase go Bankrupt?

Hey Everyone, Since the downfall of SBF and FTX, and likely Genesis, we have to consider the real stress Coinbase might be under Mentioning this even a few weeks ago would have sounded crazy! Not so crazy anymore! Incredible how silent the crypto media gets when crypto tokens are in the dog house. That’s proof of a corrupt media industry…

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3 years ago · 2 likes · Michael Spencer

I think what we are seeing is Bitcoin whales putting their Bitcoin in safer places. A total of 100,000 Bitcoin (BTC) were withdrawn from Coinbase in the past two days, marking the third-largest BTC withdrawal in Coinbase’s history.

Just what crypto contagion will do to Genesis and others like Coinbase is a matter of speculation but is on-going and worsening, according to reports. Bitcoin fell to a week-and-a-half low on Monday and other major cryptocurrencies fell sharply, as the impact from the dramatic collapse of FTX continues to ripple through the market.

Crypto Crisis Shrinks ETF Assets in Market That Embraced Them

Everything points to the crypto winter getting worse in 2023, as recession, inflation and crypto startups running out of money all come to head.

El Salvador’s presidency dispatched a digital-securities bill to lawmakers, taking the nation a step closer to raising $1 billion via the world’s first sovereign blockchain bond. It strikes me as extremely risky considering Bitcoin’s inherent volatility.

That crypto tokens are good assets seems to be under the microscope even as their prices dissolve under the pressure of the FTX scandal and the over 1 million creditors involved. The web of deceit is worthy of crypto bros going mainstream in the most bizarre way yet.

Exodus from Coinbase?

What do the whales know that we do not? On Nov.24, 50,000 BTC were withdrawn from Coinbase. The amount equated to over $800 million at the time, which marked the second-largest BTC withdrawal from Coinbase in 2022. The next day, on Nov. 25, another 50,000 BTC withdrawal took place, which equates to over $825 million.

The chart below represents Coinbase’s BTC deposits and withdrawals since the exchange was launched in 2014.

For Coinbase this is a real crisis.

It seems to represent a real shift in where retail investors and big whales are comfortable keeping their Bitcoin. I’ve been speaking more about a shift from centralized exchanges to DEXs in 2023 speeding up. Binance is also playing tycoon gains behind the scenes.

All of this drama is putting a new test of faith for the Bitcoin believers and cult of crypto. These assets are not correlated to anything tangible but a manipulated supply-and-demand tokenomics of the ponzi-scheme variety.

If there was anything revolutionary about the tech, we would have seen more utility after a decade. Rumors of how great blockchain and DeFi are may have been grossly exaggerated for profit. I’m seeing the same thing happen of course in A.I. and Quantum hype trends which I cover.

Coinbase is not the only one though, crypto contagion is most damaging on user trust. The data shows that Coinbase is not the only exchange experiencing large BTC withdrawals. The chart below demonstrates the BTC balance on all exchanges since January 2018, and a significant downfall can be seen since January 2022.

Crypto bulls will just argue this is natural for a crypto winter. As FOMO turns to real fear. Death, taxes and oh yes, crypto FUD.

Cathie Wood is still trying to prop up Coinbase, even though its Earnings showed just how much its losing per quarter in the crypto winter. Depending on how long it lasts, the company could face financial pressures in 2023 or 2024.

As for the impact of FTX contagion on the sector, it’s likely only just begun.

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Hey Guys,

So the crypto winter is looking like a valley of death. It’s self-inflicted really for SBF and friends. With government investigations and court proceedings in their earliest stages, SBF’s fate remains unclear.

Cryptocurrency exchange FTX said it owes $3.1 billion to its top 50 creditors, according to documents filed Saturday in Delaware bankruptcy court.

The story gets really strange at times, I’ll be frank, I’ve never seen anything like this or the meltdown at Twitter. Even though the filing did not disclose the names of the parties wrapped up in the swift demise of FTX, the document makes clear the scope of the potential losses its clients face. 

For an industry that is supposed to be based on decentralization, trust and transparency, the twits and turns are like a B movie. So that “$500 Million hack” against FTX turn out to be the Behamas' regulator seizing assets? You have to to be kidding me.

If this is how to commit crypto suicide, the Ontario Teachers', one of Canada's largest pension funds with nearly $250 billion in assets under management (AUM), will write down the entirety of its $95 million investment in FTX after the troubled crypto exchange filed for bankruptcy protection. Can you imagine Teachers investing in crypto? That’s grim.

FTX, the cryptocurrency-trading site he’d founded and turned into a global behemoth, went insolvent. It’s understandable if you are feeling a bit sour on the fake coins. Assets that basically go up and down in dramatic fashion according to the demand for Bitcoin, whose supply is artificially halving at a staggering rate.

The revelations in the wake of FTX’s demise have been filled with red flags for prosecutors who specialize in financial crimes. You cannot fine this stuff, it’s prison terms and regulations for the seriousness of these crimes. One would hope?

In a 2020 FTX podcast, former Alameda Research CEO said she "took a blind leap into the unknown" when she joined Sam Bankman-Fried. While some of us were indoors during a pandemic, others were getting rich fast and buying their employees houses in the Bahamas. Under 30, I can imagine the appeal Caroline.

But what happens when the cult of Bitcoin goes down? Bitcoin if anything is the volatile digital gold for a reason.

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Hey Guys,

The consensu in the industry is that there will be more contagion due to FTX exposure. The lending arm of the crypto investment bank Genesis Global Trading is pausing new loan originations and redemptions.

So what is the crypto competition world really like? After causing the downfall of FTX and SBF, CZ And Binance are calling him a psychopath. During a conversation with Binance CEO Changpeng Zhao (CZ) and the Milken Institute, the exchange executive called the former FTX CEO Sam Bankman-Fried (SBF) a “psychopath” for one of the tweets SBF wrote last week.

The problem is the exposure of so many firms and individuals to the downfall of FTX. The crypto exchange’s collapse is stoking fears of contagion across the industry. And I agree with analysts who say the worst is yet to come.

The total crypto market cap mostly tethered to the price of Bitcoin $BTC never made a whole lot of sense. Whether it’s $1 Trillion or less or triple, doesn’t really matter, it’s just so small compared to real money and the way the world still works today. Web 3 and crypto is not showing much impact on the financial system outside of crypto token trading, which is clearly not only volatile, but very dangerous.

Meanwhile, FTX’s founder, Sam Bankman-Fried, is still speaking out. His Twitter DM over-sharing was difficult to read. SBF on Twitter and with the media has clearly gone a bit off the rails. Blaming regulators and saying entering bankruptcy is a major regret already, is just really dumb. He’s not taking responsibility or even showing remorse for screwing so many people over, it’s a bit scary.

So what really happened at FTX? (a 55 min podcast)

In some respects we have seen “contagion” of FTX on some more volatile coins like Solana. Bitcoin that was stable around $20,000 is now at the $16,000 level.

Crypto industry executives are not too pleased with the former FTX CEO Sam Bankman-Fried (SBF) and in recent times SBF has been getting a lot of criticism. It’s hard to tell how real this is though, since the crypto media and twitter cryptosphere is so choreographed and mostly self-serving.

In response to the collapse of FTX, Binance, the world’s largest cryptocurrency exchange, has released details of its cold wallet reserves, disclosing proof of digital asset holdings worth more than $69 billion. It’s all a bit nefarious if you ask me, centralized crypto trading platforms shouldn’t really exist. They have no business existing.

The co-founder of the now-defunct Three Arrows Capital (3AC) crypto hedge fund, Kyle Davies, accused FTX and Alameda of colluding against the firm. There seems to be a lot of politics and bad blood in the “crypto bro” brotherhood. The revelations over FTX, FTT and Alameda have been a bit disconcerting. We knew behaviors like those were happening but usually the industry is too busy hyping something to care. But now in the heart of the crypto winter, a story like this leads to significant new behaviors of mistrust by crypto holders, traders and even whales that are selling Bitcoin.

Crypto Winter Turns to SBF Freeze

It’s chilly among the crypto bro culture.

We’re currently in the middle of the industry contagion and market panic taking shape.

• Multicoin Capital, one of the top crypto venture firms, told investors in a letter on Thursday that FTX’s collapse will cause additional failures.

• “Many trading firms will be wiped out and shut down,” the letter said.

I personally think the likes of crypto.com are vulnerable. In theory depending on how long the crypto winter lasts, even the likes of Coinbase could run out of money. A big fall like FTX will have ripple effects that will take months to play out. Realistically I think we are looking at many more players across funds, market makers, exchanges, miners and other businesses will follow suit.

We don’t know exactly how it will play out. But I think that’s the status-quo consensus expectations at this point, even amid insiders.

Because of its writedown of assets on FTX and the broader drop in crypto, Multicoin said its net performance is down 55% this month. Startups in the crypto winter were already struggling and on life-support before the FTX and SBF saga.

Contagion has a way of spreading in unexpected ways. Think about this: Plan C insisted that after Celsius fled, Alameda and FTX got stuck holding locked LUNA and UST bags.

To the Moon - Luna and FTX Compounds Contagion Worries

This is a similar playbook to what we’ve seen before in the previous crash sparked by Luna, except that this one will be more impactful to the market. Luna and FTX could just be the beginning.

130 entities within FTX, likely up to 1 million creditors.

It’s hard to even fathom the damage this will cause the future of tokens, crypto and trust in trading platforms.

On Thursday, November 10th, Changpeng “CZ” Zhao, the Founder and CEO of Binance, announced that his exchange remains committed to transparency, especially in light of the liquidity crunch faced by beleaguered crypto exchange FTX.

But given that by telegraphing the sale of FTT tokens by Binance, CZ “caused” the downfall of FTX, it’s a bit worrisome in the ruthless game of thrones we are seeing in the crypto bro culture. They talk in memes of ideology, but their actions are like the cut-throat Tycoons of a new mafia system.

How are we going to trust crypto and these brands again? I just don’t get it.

Twitter itself feels like a crypto echo bubble. These crypto tycoons have millions of followers, but where are they? Are they bots, it’s very bizarre.

The Journal (WSJ), citing people familiar with the matter, added that BlockFi is also planning to lay off more of its workers as it braces for a possible Chapter 11 filing, though the firm stopped short of saying a majority of its assets are custodied by FTX.

I can’t fully get my head around the contagion story, but it feels like there are several mini chapters ahead extending the crypto winter into the year of the global recession, namely a looming 2023.

Huobi token (HT) follows the same path, down nearly 60% in the last two weeks. Huobi recently provided their list of assets on the platform, showing around $900 million in HT owned by both Huobi Global and Huobi users. So many brands and crypto companies will get hurt, if not go extinct.

In the FTX Chapter 11, approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX.us, the company’s U.S. subsidiary. The web of deceit of crypto tokens is a labyrinth of a stark lack of financial guardrails and ethical oversight. These is real criminal intent here, not just negligence. That much is clear.

The rumours are weird. Buying homes in the Bahamas with the money of customers? Is that even possible. What is real and what is half-truth? Crypto media has never been transparent or one with much journalistic integrity.

Mafia, tycoons and incredible centralization in an alternative asset that is supposed to be decentralized? It’s beyond belief. The boss of the world's largest cryptocurrency trading company has warned there will be "some cascading contagion effects" from the collapse of $32bn exchange FTX. Thanks CZ, but you are the authoritarian figure who caused this! Even if the foundations of FTX were vulnerable with deceit. The corruption runs deep in the crypto brotherhood of the cult of Bitcoin.

It’s upsetting because it’s now reached a scale of fraud that’s quite damaging to the life-savings of thousands perhaps even millions of people and America refused to even try to regulate crypto. It’s a huge absence of rule of law. If you don’t regulate a ponzi scheme that leads to thousands of tokens, what does that say about your society of free-market capitalism? It’s arguably worse than an over-regulated state. Because it erodes trust on every level. The entire point of Bitcoin and decentralization was about a mistrust of banks, governments and politicians.

Mr “CZ” Zhao pulled out of last minute talks to rescue FTX last week before it imploded, warning of "reports regarding mishandled customer funds and alleged US agency investigations". This after he caused the demise of FTT and FTX to go under, who was a significant “competitor”. So why aren’t we investigating Binance as well? I don’t get it. Nobody is in charge and nobody is taking responsibility.

Advocates of Bitcoin just say the crypto winters and the Bitcoin cycle are normal. But what is normal about this situation of FTX?

They will call the damaging results of “contagion” part of the natural consolidation, so it’s bullet proof misinformation of traders that just prey upon the hype and consumers whose behavior can be manipulated by the FOMO motive. Young people are so screwed in Capitalism, getting rich fast is attractive to them it turns out. The U.S. can’t even regulate inflation or QE with moderation.

Now Binance claims it’s “too big to fail”. As of November 10th, 2022 Binance says it held 475,000 BTC, 4.8 million Ether, 17.6 billion USDT, 601 million USDC, 58 million BNB. and approximately 21.7 billion of its own stablecoin, BUSD. The total reserves held by Binance, as of Thursday, stand at an approximate worth of $69 billion. Should we be impressed or horrified? CZ’s total net worth is likely near or over $20 billion.

Leaders of LUNA and FTX are very young and immature. Crypto as a youth movement is failing the cult of Bitcoin.

Multicoin said there’s a chance the firm will recover some of its funds from FTX, but because those assets are now wrapped up in bankruptcy proceedings, it anticipates marking them down to zero. The question is how many others are having to do the same? Welcome to the next chapter of the crypto winter.

But Crypto Contagion of this magnitude, well it could be the crypto apocalypse. That risk is not being fully explored by either the MSM or the crypto hype media. Ironic isn’t it.

Crypto historians might argue the counterintuitive Bitcoin performance will continue. Since a low in 2018, Bitcoin has posted a weekly loss of at least 20% six times apart from the recent slide. Is this normal for crypto? Does that excuse the corruption?

Why Bitcoin isn’t “lower than current levels is a big question” is a big question for many of us. What’s propping it up? So little transparency by the distributed ledger technology that’s supposed to make things more open and trustworthy.

My own tracking of Bitcoin’s price suggests Bitcoin will drop to between $5,000 and $10,000 before the token bottoms out. I’ve been a long believer in this cycle that $8,500 is closer to the bottom. If that guess-estimate is true, then we have another 50% at least to go. What do you think?

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Full disclosure, I do not invest or hold any crypto as of November 18th, 2022. If you want to support my contrarian rants you can do so:

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Hey Guys,

Cryptocurrency has a long history of fraud and hype that turned out to be exploitive of FOMO hooks and greed. Everyone in the space seems to want to get rich fast, since they know the window is always closing.

From ICOs to NFTs it’s been an astounding ponzi scheme on so many levels as well as Bitcoin’s inherent and manipulated volatility.

The FTX saga really is potentially the beginning of the end of crypto. The kids are not okay, or they were having too much fun in the Bahamas.

There’s been a lot of sober articles that expose our collective reaction to what’s coming out. Reuters did a tremendous job covering breaking news. A lot of FTX sources came forward. The coindesk article and Binance selling FTT triggered a cascade that they must have known would be the downfall of SBF. So little loyalty among the Crypto bro culture. Another huge red flag for the sector.

Futhermore FTX founder Bankman-Fried secretly moved $10 billion in funds to trading firm Alameda - sources. Now we are to believe that FTX got hacked? Not just another back-door withdrawal? FTX and Sam Bankman-Fried just experienced a shocking downfall. It hurts because so many investors, companies and lifetime savings are caught up in the scam.

Contagion is a real concern to the trust and credibility of the sector. The lack of regulation is very shocking after all these years. The amount of lobbying and marketing SBF spend and how political he was in his financial leverage from crypto is pretty much a sign of how corrupt American Democracy has become.

Silicon Valley, venture capitalists and cryptocurrencies have for years used hype in an illegal manner to drive up their business interests in an algorithmic system very prone to misinformation. The internet is not only toxic, it’s very prone to this sort of hype to trash bin syndrome. Cryptocurrencies aren’t a movement, they are a massive re-distribution of wealth. These tokens have never provided much utility.

The lack of risk mitigation at FTX or any firm that leverages its own crypto token (even as Binance does), is both a serious conflict of interest and a sign of significant poor business practices.

Reuters reports that at least $1 billion worth of customer funds have vanished from the failed crypto exchange. It’s actually closer to $1.7 billion. FTX was a black box that was not just not transparent, it was using its users money in ways that mean this entire team should go to prison for a very long time.

The Contagion effect of FTX on Bitcoin hasn’t been so significant. Bitcoin’s price only went down to around $16 thousand. This means in the last month Bitcoin’s price has gone down just 16%. But the damage it has done to the public and mainstream is relatively high. This “crypto winter” fiasco just put crypto back about 4 years. It was already an immature marketplace for frauds, money laundering and ponzi-schemes.

The problem is this keeps happening, from ICOs to NFTs, to SBF - crypto is made for unhealthy projects. Projects that have zero chance to be sustainable. Companies based on misinformation, preying upon a youthful generation’s lack of hope in their future. It’s very disturbing. This is not innovation, this is profiteering of the worst kind, pretending to be something else.

When Binance telegraphed that it would sell FTT, FTX was doomed. How to rid yourself of a competitor that was growing too fast? CZ knew a thing or two about SBF’s weakness. If a company like Binance is capable of plunging the crypto winter even deeper just for greed, what else is the crypto community capable of doing?

Two sources familiar with the matter told Reuters that ex-CEO Sam Bankman-Fried transferred $10 billion of customer funds from FTX to the digital asset trading house, Alameda Research. How SBF used FTT and Almeda for his shady interests is just really upsetting.

There is no feeling sorry for someone that was clearly a puppet of others, it’s a bit like Elon Musk’s Billionaire peers convincing him to purchase Twitter, a move that might ruin him. Sam wasn’t just over his head, he was likely just the pawn of elicit and powerful entities.

FTX, one of the world’s largest cryptocurrency exchange platforms, is in major financial turmoil. The contagion from the downfall is going to impact the future of crypto, see my Poll here.

Revelations about FTX shows how the crypto community really operates and works and it will spur a massive amount of regulation. You cannot let this continue as it is given these losses for so many entities, shareholders, traders and major financers involved. FTX grew too fast and too big and that in itself was suspicious.

Earlier this year, the exchange was valued at $32 billion, and Bankman-Fried was billed as crypto’s white knight as he bailed out multiple digital asset companies. When we live on an internet where the “good guys are the bad guys”, something is deeply wrong about American internet culture and business practices. When FSD faces literation over safety and Elon Musk is worshipped in a cult of personality scenario, something is wrong. We are manufacturing male leaders who become famous without accountability.

SBF is a symptom of crypto culture. FTX is a sprawling entity symbolic of its corruption. You can change your name to “Web 3”, it doesn’t change the fact that you prey upon a FOMO narrative, at every turn. There is no law, no regulation, no accountability so ruthless risk-takers can thrive in a mafia type scenario.

Sam Bankman-Fried — better known as SBF is now a symbol of the growing Millennial mistrust in crypto and what kind of repercussions might it have on the ecosystem and its future? When Coinbase is itself bleeding so much money in the crypto winter is itself worrisome. It doesn’t even have that many users. Binance exists on such a grey area of global regulations nearly outside the jurisdiction of any regulatory entity. It could be controlled by the CCP for all that we know and that scenario is somewhat probable given its historic ties to Singapore. If this is true, it would also explain its behavior towards FTX, a huge democratic donor.

You have to understand the incentive network of crypto to understand why it does the things it does. It’s not enough to rant up about what Twitter is saying. That’s not journalism and you won’t find the truth on Twitter. A lot of posts have leveraged SBF’s downfall for their personal gain. It’s fun to talk about FTX’s collapse and scary to think of what it could do to an ecosystem that’s never easily or well above a $1 trillion market cap as a whole. All crypto tokens basically “tethered” to the price of Bitcoin, that has no inherent value and a manipulated supply-demand dynamics.

People are not good actors when it comes to incredible amounts of money, it makes them a bit crazy and that includes the best among us. SBF is liable or is he? With so many regulations lacking and not even existing, there are grey areas of crypto beyond the law where they become like cartels and tycoons in their own dirty playground. Is this really a younger generation’s attempt to remake and democratize finance? You have to be an idiot to believe that. Misinformation is leveraged by bad actors and Twitter’s ecosystem has mafia boss leaders entrenched like a dystopia of false symbols of power.

Power is not decentralized in crypto. Whales and tycoons exist more than ever in its ponzi-schemes. Companies operate beyond the law and behind the veil with no transparency. If you you are dumb enough to leverage behind your own internal token like FTX was with FTT or Binance is to some extent, you deserve to blow up.

SBF was such an evil genius he has "back doors" that thwarted red flags and auditors. That’s some short-time thinking and crypto incentivizes the kind of errors young men are most prone to make among us all.

Now, its ex-CEO is reportedly facing probes by the Department of Justice, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. The American regulators and Congress have been dragging their feet in regulation for years, likely receiving kickbacks and lobbying from entities that are against it. It’s a very corrupt situation. There’s a reason why crypto is banned in some countries. After the FTX downfall I’m not sure crypto is “even worth saving”. Perhaps you do and own NFTs, I do not know.

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Both Reuters and The Wall Street Journal found that Bankman-Fried, now the ex-CEO of FTX, transferred $10 billion of customer funds from his crypto exchange to the digital asset trading house, Alameda Research. To what amounts to his ex-girlfriend. The lack of fundamental best business practices here is astounding.

SBF was already squirrely eyed and looked like a villain in training.

But in the hype of cryptocurrency, everything goes, and FTX truly demonstrates this. The crypto bro culture has elements of the worst of society. FTX’s decline at least brings some of this to light yet once again.

John J. Ray III, who has been tapped as FTX’s new CEO, said in a statement on Friday that Chapter 11 is “appropriate to provide FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders.” If you have backdoors and are using your client’s money in your own private schemes, you basically deserve to go to prison.

Crypto Tokens are a Scam

Newsflash crypto tokens typically don’t have utility or value outside of their own ecosystem. Did you see how far Solana’s token fell on the FTX news? This isn’t just contagion its rumor. Solana is losing value consistently based on the presumption that Alameda could dump millions of SOL tokens. Now how much will you lose personally due to FTX’s downfall? Perhaps you put more than 10% of your net wealth in things like crypto and Tesla. The younger you are, the most likely the case that you actually did this. Bravo but that’s not financial literacy at work.

Solana turned out to lose the most among all other cryptos after the rumors of its entanglement in the insolvency of the FTX spread. As a consequence, SOL prices fell below 20% in just 24 hours.

• On the 5th of November SOL was worth nearly $38, today it’s closer to $12. That’s just one week.

has also been a place for crypto writers to celebrate the Ecosystem in hype and education. The Twitter bias continues, so where is the accountability journalism about the reality of crypto on today's internet?

I’m starting to feel a bit disappointed by ecosystems, communities and products that attempt to use ideology as part of their value prepositions. This typically means they don’t have real product-market fit. They are faking it and over-compensating. Crypto has always been worrisome in that regard.

There are millions of real people impacted by FTX’s downfall, caused by Binance’s actions of telegraphing the sale of FTT. Approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and FTX.us, the company’s U.S. subsidiary. Binance should be under investigation as well. As should some of the statement of Coinbase related to this case.

Crypto’s Enron Moment

In the 23-page bankruptcy filing obtained by CNBC, FTX indicates it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, as well as liabilities in the range of $10 billion to $50 billion. By comparison, Lehman had more than $600 billion in assets and Enron had $60 billion.

Crypto was nascent but now this crypto winter feels different. A crypto winter heading into a global recession amid a stagflationary and zero-covid atmosphere.

• Crypto Winter + Global Recession + Enron moment for Crypto (FTX)

• Venture Capital with higher interest rates is permanently changed in a new normal

• American productivity is plummeting with a lower labor participation rate in the next two decades

• Silicon Valley innovation has grinded to a halt in a seasonal Advertising slowdown in late 2022 and 2023

All good things must come to an end if they fail hard and long enough.

Crypto is not immune to failure, in spite of Bitcoin’s cult like following.

Trust is breaking down on multiple levels in society including for capitalism, banks and democracy - but also the youth culture movements around things like crypto, TikTok, etc… People begin to grow up and mature and see the world differently.

The reality is Telegram, Twitter and Discord have de-evolved into crypto clans and their progeny. Discord was a pretty good product before this unfortunate turn of events. Reddit is experimenting with NFTs. Like ICOs before them, NFTs are the new meme-like explosion of fraudulent practices in crypto. The ecosystem continues to lose credibility, trust and a sense of basic lack of viability and real products continues. Yet we continue to play the games.

When Twitter told you that banks are evil and on Discord you get mind-melded into a cult or tribe, no wonder you are putting 10% of your total worth into gamified misinformation like crypto tokens and projects. Bitcoin’s influence on our institutions and financial systems is getting dangerous.

Whether you are bullish or bearish on Bitcoin or crypto, it is causing a lot of chaos and spreading misinformation with serious consequences on people’s lives without adequate regulation. Where the U.S. already is suffering from a lack of trust in democracy, capitalism and its institutions, this is a big problem. With inflation, it’s a trigger for civil war, revolution or some kind of reckoning. Crypto is likely to be a major instrument in this foreign interference. The Binance founding story does not make sense at all. Nor do I think Coinbase is viable in this volatility. Bitcoin’s cycle is likely artificial and its bubble will one day pop and never return to life. We just don’t know when that will occur.

Crypto’s Influence on Politics & Crypto’s Influence on Ethics

Presumably even Bitcoin will have to be regulated out of existence for National Security and civil order reasons. Worse downfalls could occur than the rapid rise and fall of FTX. There will be more SBFs in this society of crypto obsession and the cult of the profit motive. To say that Binance is a monopoly with bad intentions to its rivals would be a fact, according to recent revelations and history. Binance has systematically thwarted regulators and national rule of law in many districts. What is their incentive to behave this way?

We haven’t been asking the right questions in this fiasco.

Alameda, also founded by Bankman-Fried, was considered to be a sister company to FTX. Those cozy ties are now under investigation by multiple regulators, including the Department of Justice, as well as the Securities and Exchange Commission, which is probing how FTX handled customer funds, according to multiple reports. Firms should not be allowed to have “their own” tokens. It just creates too many conflicts of interests, especially when they use it as collateral.

Chapter 11 bankruptcy means the company can keep operations going as it figures out how to pay creditors. Some 130 entities, including FTX, FTX US, and Alameda Research, are involved in the proceedings. The bigger impact on crypto and the future of token could taken many months and several years to fully play out as we learn more.

The entire Crypto community is accountable for creating leaders like SBF, it’s not in any way an isolated incident. There are thousands of young men who would have done the same in his shoes. Everyone how meets Sam say what a likeable young character he is. But what he has done for trust in crypto may be the end of tokens and cause irreparable damage to the ecosystem. That CZ caused this directly by selling FTT tokens is pretty hilarious as Tycoons advocate for their industry.

The most logical conclusion is that he was ordered by the CCP to do this. The FTX founder has reportedly spent almost $40 million mainly supporting Democrats during the current political cycle, according to Open Secrets. He planned on donating $1 billion to the 2024 elections, not something that China or Russia would like. The FTX founder has reportedly spent almost $40 million mainly supporting Democrats during the current political cycle, according to Open Secrets.

According to Open Secrets, a platform following the money in politics, SBF is the sixth largest political contributor. The platform reports that he has made a total contribution of $39.8 million for the 2021-2022 cycle. This reported by Cointelegraph.

Of that total, 92% has gone to the Democrats, with the remainder going to Republican candidates and campaigns.

End of Crypto and Failure of the Internet

The fall of FTX points to any number of things wrong with crypto and the incentives of anything remotely related to Bitcoin’s technological cult. Silicon Valley, venture capitalists and Bitcoin are turning our civilization into a dystopia with an internet that is failing and needs to be entirely dismantled and redone. Nothing now can save it. There’s been a massive failure in leadership, good architecture and ethics in American free market capitalism in how the internet evolved and has been managed for humanity.

Internet money did not save us all. Heck, tokens aren't even used as a legit means of exchange. If the Bitcoin bubble popped due to more strict regulation, it would be business as usual in a world with less ponzi schemes and less risk.

That would not be such a bad thing after all!

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Hey Guys,

Long live Binance, the eluders of the law and national regulations.

Cryptocurrency exchange Binance temporarily suspended its blockchain network after hackers made off with around $570 million worth of its BNB token.

Another major DeFi bridge has been exploited, and Binance’s Ethereum-compatible blockchain is the target. 

The vulnerability in the BSC Token Hub bridge allowed the attacker to forge messages, enabling them to mint new BNB tokens. Since the stolen tokens were not preexisting tokens taken from wallets, no user funds were impacted.

When our most powerful coins or cryptos or tokens are vulnerable like this, it’s hard to trust the Web3 movement as a whole, that is supposed to be more secure due to being on blockchain distributed ledger technology.

In a blog post on Friday, the BNB Chain team said that a total of 2 million BNB — worth approximately $568 million — were initially withdrawn by the hacker. But blockchain security company

SlowMist says the attacker only managed to take about $110 million because the majority of the stolen tokens, worth about $430 million, couldn’t be transferred following the suspension of the BNB Chain.

Covering Crypto is like looking into the lens of how easily entire generations can be scammed into thinking crypto is better than what it seeks to replace. I’m not buying it. Apparently less Millennials are as well.

Are we ready to say no to get rich schemes like Bitcoin or scammy debt schemes like Buy Now Pay Later? Time will tell, but I wouldn’t want to be American in my relationship to debt and consumerism.

The popularity of cryptocurrencies such as Bitcoin has plummeted in 2022, particularly among their most fervent supporters – millennial investors – according to a recent Bankrate survey. Americans of all ages have seen their comfort level with cryptocurrency sink sharply over the last year, as these digital currencies have plunged in value at a dizzying pace.

But these are pennies for Binance, it’s that big. Binance chief executive Changpeng Zhao said in a tweet that the company estimates the impact of the breach to be between $100 million and $110 million.

The Crypto Tycoons of FTX and Binance and Coinbase are coming. When even Silicon Valley elites are selling their souls for the crypto dance, you know the scam is real.

Long live the hype train, the one thing the Western internet is finally really good at besides advertising.

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There have been some rather bizarre rumors regarding Coinbase late last week. I’m no expert but these rumors of Coinbase having a liquidity crisis have been refuting by the community as outflows vary in a nervous crypto market.

Business Insider reported that they received emails stating;

“This has not been an easy decision, nor was it made lightly, but, due to crypto market conditions and the outlook for the remainder of 2022, Coinbase is unable to continue supporting incentivized traffic to its platform.”

Coinbase had a shiny coat of paint but since the pandemic my research suggests Binance and FTX were the real winners.

Coinbase announced a suspension of its affiliate program effective July 19. The had to let go of a lot of staff. Coinbase has already rescinded job offers and suspended Coinbase Pro this year. What else could they be forced to do as Bitcoin’s crash in 2022 continues?

As the largest publicly traded crypto exchange in the United States, Coinbase has become something of a household name. But the stock has slipped 80% and that’s just the opening act.

According to CryptoSlate and others:

Coinbase outflows

On July 15, around 50% of stablecoins on Coinbase Pro left the exchange, according to on-chain data from CryptoQuant; the total value came to approximately $248 million. The percentage stablecoin outflow was significantly higher on Coinbase than on other exchanges such as Binance. Only around 1% of stablecoin reserves left Binance over the same period, but the tokens had a similar value at just under $300 million.

The rumors and these developments are not a good sign for Coinbase.

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Hey guys,

What’s new in the Crypto Winter?

Bitcoin in June, 2022 officially had its worst month on record. All that means is it dropped a lot. The headlines kind of boast about this. Bitcoin just finished its worst month in the 12 years that it’s been available on exchanges, losing more than 38% of its value in June as of Thursday afternoon, June 30th.

Coinbase Tracer, the analytics arm of the cryptocurrency exchange Coinbase, has signed a contract with U.S. Immigrations and Customs Enforcement that would allow the agency access to a variety of features and data caches, including “historical geo tracking data.” That is quite unsettling! Coinbase already did massive layoffs but this data sharing means it’s not very appealing.

ICE is now able to track transactions made through nearly a dozen different digital currencies, including Bitcoin, Ether, and Tether. Watchdog group Tech Inquiry reported the new details about the three-year contract with the U.S. Department of Homeland Security. Crypto, no justice!

In the EU they might be taking crypto regulation a bit more seriously though. The European Commission, EU lawmakers and member states hammered out an agreement on reforms Thursday.

What is MiCA?

The new law, known as Markets in Crypto-Assets (MiCA), is the first attempt at creating a comprehensive regulatory framework for digital assets in the region. EU lawmaker Stefan Berger said the rules will “put order in the Wild West of crypto assets.”

When Silicon Valley companies like Coinbase, think they can displace Binance or FTX, it’s funny. So admittedly is watching their stock tank. Binance can burn its coin, but what can Coinbase realistically do? Sell our data apparently. The Intercept initially reported the news.

Crypto is still a great place for money laundering and pump-and-dump frauds like ICOs or NFTs. EU officials on Thursday secured an agreement on what is likely to be the first major regulatory framework for the cryptocurrency industry. That’s what China said when it launched its CPDC, although a “first” in the world.

So even as FTX swoops in to likely buy BlockFi for as low as $25 million, In August 2021, Coinbase sold a single analytics software license to ICE for $29,000, followed by a software purchase potentially worth $1.36 million the next month, but details of exactly what capabilities would be offered to the agency’s controversial Homeland Security Investigations division of were unclear.

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