Welcome to The Wise Guy,
Where we take cryptocurrency seriously, but we also know how to have a good time.
That’s why we’ve curated the crème de la crème from not one, not two, but FIVE newsletters.
MilkRoad, Defiant, Messari, Bankless, and CoinDesk Node.
Defiant’s Top Story
We wanted to share some news from the crypto world with you. Yuga Labs, the team behind popular NFT collections like Crypto Punks and Bored Ape Yacht Club, recently announced that they will be downsizing and refocusing their efforts.
Due to the prolonged downturn in the NFT market, the prices of many of their collections have dropped by over 90% from their peak. Yuga Labs has also faced legal battles, including some from former celebrity endorsers of Bored Ape Yacht Club.
As part of their restructuring, Yuga Labs will be prioritizing their metaverse project called Otherside. This project will now be their main focus moving forward.
In other news, Uniswap v3 has been launched on the ZkSync Era Layer 2 network. This integration was made possible through Oku, a front-end interface for Uniswap v3. Oku not only provides access to Uniswap but also offers advanced features such as order books and charting.
The integration of Uniswap v3 with ZkSync Era is expected to boost adoption for the network. Airdrop speculation has already helped position ZkSync Era as the top Layer 2 solution in terms of throughput and the fourth largest in terms of total value locked (TVL).
Unfortunately, THORSwap had to suspend trading recently. On-chain researchers raised concerns about multiple instances of stolen assets being moved through the decentralized exchange, which is based on THORChain. As a result, THORSwap made the decision to enter “maintenance mode” after consulting with legal counsel and law enforcement.
While specific details have not been shared by THORSwap at this time, researcher Tay Vano estimated that more than half of the ETH swapped to BTC via THORChain consisted of stolen funds. Vano also highlighted significant transactions from wallets associated with North Korean hackers.
Messari’s Desk
Starting with the race for Speaker of the House, it seems that the selection of a new Speaker could potentially delay the progress of crypto-related legislation in the House. However, it’s worth noting that if pro-crypto Members are elevated to leadership positions, it could ultimately benefit the advancement of crypto policies.
Two prominent candidates for Speaker are Majority Leader Steve Scalise (R-LA) and Majority Whip Tom Emmer (R-MN). Rep. Emmer has been a strong advocate for cryptocurrencies and has sponsored or co-sponsored several bills supporting the industry. Should Rep. Scalise be elected Speaker, it’s likely that Rep. Emmer would become the Majority Leader, ensuring continued support for crypto in leadership.
Meanwhile, Rep. Jim Jordan (R-OH) has also thrown his hat into the ring for Speaker. However, his stance on crypto policy remains unclear as he hasn’t sponsored any relevant legislation. On the other hand, Rep. Warren Davidson (R-OH), who is known for his support of cryptocurrencies, has endorsed Rep. Jordan.
Another significant player in this race is Speaker Pro Tempore Patrick McHenry (R-NC). While he has expressed that he doesn’t aspire to be the Speaker, his popularity among conservative and moderate Republicans could give him influence in shaping stablecoin and market structure-related legislation, especially considering his role as the Chairman of the Financial Services Committee.
Moving on to legislative news, Rep. Don Beyer (D-VA) has introduced the Off-Chain Digital Commodity Transaction Reporting Act of 2023. This bill proposes that sales and swaps of digital commodities be reported to CFTC-registered digital asset repositories.
It aims to enhance transparency in transactions occurring off exchanges as well as on exchanges. However, it’s important to note that the bill currently lacks definitions and cosponsors, making it unlikely to pass in its present form.
In terms of legal proceedings, SEC v. Ripple Labs continues to unfold. Judge Torres has denied the SEC’s motion for immediate appeal regarding her previous rulings. The trial is scheduled to commence in April 2024.
Additionally, the SEC has filed a memorandum opposing Coinbase’s motion for judgement on the pleadings, and the criminal trial of FTX’s founder, SBF, has commenced.
These ongoing legal battles could have implications for upcoming crypto legislation discussions on Capitol Hill, with proponents emphasizing the need for clear regulations to protect customers and skeptics using them to fuel their reservations.
Bankless’ Desk
Let’s dive into the latest happenings surrounding Sam Bankman-Fried (SBF) and his ongoing trial. Plus, Michael Lewis’s biography on SBF, titled “Going Infinite,” has hit the shelves, revealing some intriguing details.
Here’s your weekly recap:
1. SBF’s co-founder turns on him:
SBF had a tough start to the trial as government prosecutors presented a series of high-profile witnesses who portrayed Sam in a negative light. One of the prosecution’s key claims came from FTX co-founder Gary Wang, who testified that they had granted special privileges to Alameda Research, allowing them to withdraw unlimited funds.
Alameda had a negative balance and had withdrawn a whopping $8 billion from FTX, along with $65 billion on its line of credit. Wang accused SBF of wire fraud, securities fraud, and commodities fraud. This wasn’t surprising, considering that Wang and Alameda’s Caroline Ellison had already pleaded guilty to conspiracy charges last December.
2. Michael Lewis SBF book confounds crypto:
Crypto enthusiasts eagerly awaited Michael Lewis’s biography on SBF, but early reviews suggest that Lewis may have missed the mark. The book, titled “Going Infinite,” documents SBF’s rise and fall but apparently failed to provide many undisclosed details. It revealed that SBF was losing $500,000 daily after Alameda’s launch and shed light on why Kevin O’Leary continued to support SBF despite FTX’s collapse. O’Leary was receiving a sweet deal of $15.7 million from the firm for his services.
3. SBF’s fate hangs in jury’s hands:
Before the trial began, both the prosecution and defense spent considerable time selecting the jury, which includes a diverse range of professionals. Interestingly, three potential jurors excused themselves due to losses they incurred from crypto investments. The chosen twelve New Yorkers will determine whether SBF is guilty of each charge brought against him, and people on Twitter are already speculating on which arguments the defense may make to sway the jury.
4. Paradigm’s head says VC firm was misled:
Aside from Wang’s revealing testimony, Matt Huang, co-founder of Paradigm, another prominent figure, took the stand. Huang, an elite venture capitalist, claimed that his firm was unaware of crucial business decisions made by FTX, such as using customer funds to support Alameda Research. Not surprisingly, Paradigm has written off its $278 million investment in FTX.
5. SBF could lose private jets!
SBF’s battle isn’t limited to his court case; he might also lose his private jets. U.S. prosecutors are seeking to seize two private jets belonging to SBF as part of their asset recovery efforts. Interestingly, it appears that SBF does not personally use these jets.
MilkRoad
We’ve got a fun story to kick off the weekend. Meet Kitboga, aka The Scammer Slammer.
He’s gained quite a following for his pranks on scammers, making him the unexpected hero we all needed. In his latest video, Kitboga takes on a group of scammers attempting to steal $400K worth of crypto from his Kraken account. Trust me, it’s worth watching for a good laugh. You can find the video on YouTube.
Now, let’s talk about securing the crypto economy. Milk Road believes that some things are just meant to go together, and that’s exactly what you get when you work with Bakkt. Founded in 2018, Bakkt places a strong emphasis on security at every step in the world of crypto.
Here’s what sets Bakkt apart:
Audited: Bakkt regularly undergoes third-party audits to maintain comprehensive regulation and security.
Responsible: With a foundation in traditional finance, Bakkt brings a responsible mindset to everything they do in the crypto space.
Selective: Bakkt makes decisions with thoughtfulness, whether it’s selecting coins or building business relationships.
Licensed: Bakkt holds various licenses, including BitLicense, MSB, and MTLs, allowing them to operate in all 50 states. Additionally, Bakkt Trust Company, LLC is an NYDFS Qualified Custodian, ensuring your assets are in capable hands.
CoinDesk’s Best Story
Backed Finance expands its offering: Switzerland-based tokenization firm Backed Finance has recently announced the expansion of its blockchain-based short-term U.S. Treasury offering to Coinbase’s Base blockchain.
The offering introduces the bIB01 token, which is a tokenized version of BlackRock’s government bond-based exchange-traded fund (ETF). Investors can enjoy a 5.25% annual yield through this offering. It’s important to note that this opportunity is currently not available in the U.S. This move marks the first real-world asset token issued on Coinbase’s L2, which provides a cost-effective and developer-friendly solution for building on-chain applications, according to Backed.
Growing centralization concerns for Ethereum: According to JPMorgan analyst Nikolaos Panigirtzoglou, Ethereum has experienced increased centralization following “the Merge” and Shanghai upgrades. Furthermore, the rise in staking activity has diminished the appeal of ether from a yield perspective.
The report also highlights concentration risks associated with Ethereum’s decentralized liquid staking platform, Lido, which is currently the most popular means of validating Ethereum. A concentrated number of liquidity providers or node operators could potentially act as a single point of failure. Additionally, the rehypothecation of staked ETH across decentralized finance (DeFi) platforms could lead to a cascade of liquidations.
Twice weekly crypto goodness, coming your way! Catch us every Monday, Tuesday and Friday. And hey, don’t forget to check us out on Wednesdays for all the latest AI news – because why limit yourself to just one kind of intelligence?
