Bitcoin, Blockchain, Battlestar Galactica

Well, THAT makes perfect sense.[emoji848]

 

Another one bites the dust.

https://www.yahoo.com/entertainment/second-bank-fails-spreading-crisis-233010794.html

 

This is such a massive blow to crypto liquidity in the US. There are still a couple of banks that deal with crypto companies, but they are small time and will probably be under pressure to stop. Who is going to open a new account for exchanges? Who is going to want to hold Circle's billions? No one. If they go offshore, then retail customers will have a hard time explaining to a bank why they want to send their investment money out of the country, especially if it's going to the Caribbean or Eastern Europe.

US retail customers are a fairly small percent of money in crypto, but they lend legitimacy and provide hard money exit liquidity to money launderers. This whole thing doesn't really work without us.

 

One of those is First Republic, which isn't doing so hot today.

https://www.reuters.com/business/fi...ails-soothe-deposit-outflow-fears-2023-03-13/

 

So, one bank essentially folds due to increased interest rates and the other because of crypto?

I thought the first rule of investing was to diversify your portfolio.

 

That's so 20th century. You clearly don't understand how hedging liquidity can recapitalize securitisation yield on monetary assets that don't even exist.

 

So now that Silvergate and Signature banks are no more, crypto companies have to find other banks to do their asset holding and allow onboarding of new suckers. At the moment it's small and poorly run Cross River Bank. There isn't much to note about the bank. Well, maybe one thing.

They did more PPP Covid loans than any other US bank except JP Morgan. To say this is shady is an understatement. They are under Congressional investigation, and the government is not paying back $300 million it says were fraudulent. Most of the loans they originated were later sold on. And although most of its loans were in these alternate categories, they also did some really far out real estate stuff, backing proposals to put luxury high-rises in some very poor areas of New York and New Jersey. I don't know when, but this looks like it's going to explode.

 

So the CFTC has charged largest-exchange-by-quite-a-bit Binance for securities violations. The thing is, they did it in an affidavit full of evidence for much worse crimes, including purposefully helping people launder money and dealing with terrorist organizations. The guess by smarter people than me is that they want to stop Binances trading as much as possible as soon as possible, and deal with the criminality of CZ later (not easy, as he's in his nice home in Dubai).

Besides losing their banking, now debit cards, Apple Pay, and Google Pay don't work on Binance for people in America. It's not impossible to trade with Binance, but it's getting cumbersome. The percent of Binance activity originating in the US is pretty much zero now.

 

And now Americans can't wire money to and from Binance. Binance also stopped redemptions of their BUSD stablecoin on their blockchains, but that probably has more to do with BUSD being backed by nothing. Looks like France also shut down their nation's on and off ramps as well.

Binance has made a living from circumventing regulations and they became the biggest by being the best way to launder large amounts of money, at first from China, later everywhere. We'll have to see their next play, but they have to be aware that the US Government is tired of their crap.

 

Hasn't every cryptocurrency "made a living from circumventing regulations"?!?

 

Yes, but there's levels. There's the slightly wealthy individual trying to avoid taxes, scammers running coin / DAO / NFT operation level that's common. Binance is oligarch trying to funnel money out of China/Russia/whereverstan, drug money, Russia sanctions avoiding, and money to terrorists level.

And they run fairly complicated schemes to move money around without tripping wires within the various nations' enforcement arms or having to deal with KYC rules.

The reason we know about some of Binance's internals now is that it appears the Federales have tapped into CZ's phone. As I said, tired of his crap.

 

The White House is proposing a new tax on all crypto miners in the US to pay for all the externalities of their industry. Part of their argument was this amazing graph:



Crypto mining in the US roughly equal to all the electricity use by all televisions in the US. Possibly as much as all lighting in the US. I've posted before some estimates of world-wide crypto compared to the size of national energy use, but I think this is more effective.

 

So this was bumped to say everything is fixed?

 

Don't they already pay for the electricity?