E10: The state of crypto affairs in 2023: market recovery and regulation

Episode 13: Whataboutism and illegal activities

Episode Highlights * Crypto does “present opportunities for the downright criminal” but those can be limited and law enforcement’s ability to tackle crypto crime has improved. * In certain countries and among certain populations, crypto is an alternative to fiat––it is a store of value, used to conduct cross-border transfers, and serves as a medium of exchange. * Most illicit crypto transactions involve centralized crypto entities or exchanges that lack strong know-your-customer (KYC) and anti-money laundering (AML) policies. * The decentralized nature of the crypto space necessitates innovative approaches to combat illegal activities. However, its open nature could also limit criminal activity. Helpful links * https://decrypt.co/96822/bank-of-england-governor-bailey-sounds-alarm-on-crypto-scams [https://decrypt.co/96822/bank-of-england-governor-bailey-sounds-alarm-on-crypto-scams] * https://www.reuters.com/markets/europe/deutsche-bank-263-mln-shareholder-settlement-over-epstein-russian-oligarch-ties-2022-09-23/ [https://www.reuters.com/markets/europe/deutsche-bank-263-mln-shareholder-settlement-over-epstein-russian-oligarch-ties-2022-09-23/] * https://beincrypto.com/tethers-2022-settlement-volume-flips-visa-and-mastercard/ [https://beincrypto.com/tethers-2022-settlement-volume-flips-visa-and-mastercard/] * https://go.chainalysis.com/rs/503-FAP-074/images/Crypto-Crime-Report-2022.pdf [https://go.chainalysis.com/rs/503-FAP-074/images/Crypto-Crime-Report-2022.pdf] * https://www.bou.or.ug/bou/bouwebsite/bouwebsitecontent/MonetaryPolicy/Monetary_Policy_Statements/Monetary-Policy-Statement-for-February-2023.pdf [https://www.bou.or.ug/bou/bouwebsite/bouwebsitecontent/MonetaryPolicy/Monetary_Policy_Statements/Monetary-Policy-Statement-for-February-2023.pdf] * https://www.reuters.com/business/argentinas-economic-crisis-whack-a-mole-goes-into-overdrive-2022-06-28/ [https://www.reuters.com/business/argentinas-economic-crisis-whack-a-mole-goes-into-overdrive-2022-06-28/] * https://www.nytimes.com/2022/08/20/world/americas/argentina-cryptocurrency-value.html [https://www.nytimes.com/2022/08/20/world/americas/argentina-cryptocurrency-value.html]

Episode 12: The fragility of stable coins: SVB’s failure and the depegging of USDC

Episode Highlights Stable coins were created to provide stability to crypto assets by being pegged to a stable asset like the US dollar.  Stable coins are integral to the crypto space, and transactions involving them accounted for $1 trillion in 2022. The failure of SVB caused the value of USDC, the second largest stable coin, to drop to $0.82 on certain protocols, as $ 3 billion of Circle's cash reserves were held by SVB, and only $250,000 was insured. This led to panic among USDC holders, which led to USDC’s drop in value. Stable coins are subject to the vagaries of human nature and counterparty risks, and their success is dependent on the confidence people have in them.  There is a need for more robust stable coins, because their usage and adoption is based on their perceived stability. Additional reading * https://www.coindesk.com/learn/why-stablecoin-usdcs-unstable-weekend-matters/ [https://www.coindesk.com/learn/why-stablecoin-usdcs-unstable-weekend-matters/] * https://cointelegraph.com/news/usdc-depegged-but-it-s-not-going-to-default [https://cointelegraph.com/news/usdc-depegged-but-it-s-not-going-to-default] Fiat-backed stable coins * https://www.coindesk.com/learn/fiat-backed-stablecoins-what-you-need-to-know-about-tether-usd-coin-and-others/ [https://www.coindesk.com/learn/fiat-backed-stablecoins-what-you-need-to-know-about-tether-usd-coin-and-others/] * https://www.coindesk.com/learn/whats-the-point-of-stablecoins-understanding-why-they-exist/ [https://www.coindesk.com/learn/whats-the-point-of-stablecoins-understanding-why-they-exist/] Stable coin usage and adoption * https://thedefiant.io/stablecoin-volume-hits-record-high-of-7-4t-in-2022 [https://thedefiant.io/stablecoin-volume-hits-record-high-of-7-4t-in-2022] * https://www.bloomberg.com/news/articles/2022-05-29/moneygram-ceo-sees-a-future-in-stablecoin-remittances [https://www.bloomberg.com/news/articles/2022-05-29/moneygram-ceo-sees-a-future-in-stablecoin-remittances] Crypto-specific news websites * Coinmarketcap: https://coinmarketcap.com [https://coinmarketcap.com] * Coindesk: https://www.coindesk.com [https://www.coindesk.com] * Cointelegraph: https://cointelegraph.com [https://cointelegraph.com] * The Block: https://www.theblock.co [https://www.theblock.co] * Decrypt: https://decrypt.co [https://decrypt.co]

Episode 11: A banking crisis that was not fueled by crypto.

Episode Highlights Three US banks, Silvergate Bank, Signature Bank, and Silicon Valley Bank, failed days apart. Although all banks were crypto friendly,  crypto was not to blame for their collapse. Bank runs, dwindling deposits, and losses sustained following the sale of long-date government bonds contributed significantly to their failure.  Other banks serving disparate customers have experienced similar headwinds. The number of banks willing to serve crypto banks has reduced.USDC and other stable coins lost their $1 peg following the collapse of SVB but have since recovered.  Additional reading Collapse of SVB, Signature, and Silvergate * https://www.theguardian.com/business/2023/mar/13/silicon-valley-bank-why-did-it-collapse-and-is-this-the-start-of-a-banking-crisis [https://www.theguardian.com/business/2023/mar/13/silicon-valley-bank-why-did-it-collapse-and-is-this-the-start-of-a-banking-crisis] * https://www.investopedia.com/signature-ny-real-estatefor-real-estate-7367631 [https://www.investopedia.com/signature-ny-real-estatefor-real-estate-7367631] * https://cointelegraph.com/news/silvergate-silicon-valley-bank-collapses-represent-a-big-challenge-for-crypto [https://cointelegraph.com/news/silvergate-silicon-valley-bank-collapses-represent-a-big-challenge-for-crypto] https://www.reuters.com/technology/crypto-focused-bank-silvergate-plans-wind-down-operations-2023-03-08/ [https://www.reuters.com/technology/crypto-focused-bank-silvergate-plans-wind-down-operations-2023-03-08/] Stable coins depeg * https://decrypt.co/123211/usdc-stablecoin-depegs-90-cents-circle-exposure-silicon-valley-bank [https://decrypt.co/123211/usdc-stablecoin-depegs-90-cents-circle-exposure-silicon-valley-bank] * https://www.coindesk.com/markets/2023/03/11/usdc-stablecoin-and-crypto-market-go-haywire-after-silicon-valley-bank-collapses/ [https://www.coindesk.com/markets/2023/03/11/usdc-stablecoin-and-crypto-market-go-haywire-after-silicon-valley-bank-collapses/] * https://www.coindesk.com/business/2023/03/11/circle-confirms-33b-of-usdcs-cash-reserves-stuck-at-failed-silicon-valley-bank/ [https://www.coindesk.com/business/2023/03/11/circle-confirms-33b-of-usdcs-cash-reserves-stuck-at-failed-silicon-valley-bank/] * https://www.coindesk.com/markets/2023/03/11/dai-depegs-as-stablecoin-rout-plagues-crypto/ [https://www.coindesk.com/markets/2023/03/11/dai-depegs-as-stablecoin-rout-plagues-crypto/] Crypto-specific news websites * Coinmarketcap: https://coinmarketcap.com [https://coinmarketcap.com] * Coindesk: https://www.coindesk.com [https://www.coindesk.com] * Cointelegraph: https://cointelegraph.com [https://cointelegraph.com] * The Block: https://www.theblock.co [https://www.theblock.co] * Decrypt: https://decrypt.co [https://decrypt.co]

E10: The state of crypto affairs in 2023: market recovery and regulation

SBF is awaiting trial after being indicted on eight counts, including securities fraud.  The prices of cryptocurrencies seem to be recovering from their 2022 lows. Tokens and coins associated with layer 2 solutions have outperformed Bitcoin and Ether over the last two months There have been louder calls for crypto regulation. Japan’s stringent crypto regulation prevented the collapse of FTX Japan; as  a result, FTX Japan’s users will be able to withdraw their crypto assets, unlike those of FTX.com Crypto regulation should be thoughtful and not stifle innovation. Additional reading Link to newsletter FTX, Genesis, and Gemini * https://blockworks.co/news/new-ftx-ceo-says-exchange-commingled-assets [https://blockworks.co/news/new-ftx-ceo-says-exchange-commingled-assets] * https://www.coindesk.com/business/2023/01/20/genesis-global-files-for-bankruptcy-protection/ [https://www.coindesk.com/business/2023/01/20/genesis-global-files-for-bankruptcy-protection/] * https://www.reuters.com/business/finance/geminis-winklevoss-calls-removal-dcg-chief-barry-silbert-2023-01-10/ [https://www.reuters.com/business/finance/geminis-winklevoss-calls-removal-dcg-chief-barry-silbert-2023-01-10/] Crypto Regulation * https://www.japantimes.co.jp/news/2023/01/04/business/tech/japan-crypto-2022-review-regulation-future/ [https://www.japantimes.co.jp/news/2023/01/04/business/tech/japan-crypto-2022-review-regulation-future/] * https://beincrypto.com/hong-kong-open-door-crypto-efforts-bitcoin-high/ [https://beincrypto.com/hong-kong-open-door-crypto-efforts-bitcoin-high/] * https://www.coindesk.com/policy/2022/08/19/south-africas-monetary-authority-greenlights-banks-to-serve-crypto-clients/ [https://www.coindesk.com/policy/2022/08/19/south-africas-monetary-authority-greenlights-banks-to-serve-crypto-clients/] Crypto-specific news websites * Coinmarketcap: https://coinmarketcap.com * Coindesk: https:/ [https://www.coindesk.com]/ [https://www.coindesk.com]www.coindesk.com [https://www.coindesk.com] * Cointelegraph: https://cointelegraph.com [https://cointelegraph.com] * The Block: https://www.theblock.co [https://www.theblock.co] * Decrypt: https://decrypt.co [https://decrypt.co]

E9: Crypto News: The Ethereum Merge, collapse of FTX and Alameda research, soul searching in the centralized crypto space.

Episode Highlights * Ethereum has transitioned to the more energy-efficient proof of stake consensus mechanism. * This transition will lead to lower transaction fees, faster transactions, and a 99.5% reduction in energy consumed by the Ethereum network. * FTX faced a liquidity crunch in November that eventually led to its collapse, as well as the collapse of its sister company Alameda Research. * It appears FTX funneled funds, including user deposits, to Alameda Research to prop it up earlier this year as other centralized entities were failing. * Centralized crypto entities have started publishing proof of reserves to reassure customers * DeFi protocols have continued to work as programmed.  Helpful links Ethereum Merge and Proof of Stake * https://www.google.com/search?client=safari&rls=en&q=ethereum+merge&ie=UTF-8&oe=UTF-8 [https://www.google.com/search?client=safari&rls=en&q=ethereum+merge&ie=UTF-8&oe=UTF-8] * https://www.coinbase.com/learn/crypto-basics/what-is-mining [https://www.coinbase.com/learn/crypto-basics/what-is-mining] * https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume [https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume] * https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html [https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html] * https://ark-invest.com/articles/analyst-research/bitcoin-myths/ [https://ark-invest.com/articles/analyst-research/bitcoin-myths/] The FTX Collapse * https://www.coindesk.com/ftx-news-coverage/ [https://www.coindesk.com/ftx-news-coverage/] * https://www.coindesk.com/markets/2022/11/15/defi-protocols-are-winning-users-as-centralized-crypto-exchanges-suffer-ether-outflows/ [https://www.coindesk.com/markets/2022/11/15/defi-protocols-are-winning-users-as-centralized-crypto-exchanges-suffer-ether-outflows/] Proof of Reserves and Centralized Exchange Transparency * https://www.kraken.com/proof-of-reserves [https://www.kraken.com/proof-of-reserves] * https://www.investopedia.com/proof-of-reserves-6830204 [https://www.investopedia.com/proof-of-reserves-6830204] * https://niccarter.info/proof-of-reserves/ [https://niccarter.info/proof-of-reserves/]