Liquidations, insolvencies, and SEC investigations

Good morning. Today we've got updates on 3AC's potential insolvency, Tron fighting to hold the USDD peg, and a double dose from the SEC.

Market Update (as of 9:30am ET):

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Top 5:

1. Crypto fund Three Arrows Capital facing potential insolvency. On-chain data suggests that crypto trading and venture capital firm Three Arrows Capital (3AC) may be insolvent. The firm appears to have faced $400 million in liquidations already and is allegedly exploring how to reclaim those position with lenders and other parties. 3AC had already taken a substantial hit from their investments in Terra and is also facing pressure from the stETH price collapse. The firm began selling out of their stETH positions earlier this week. It's unclear what impacts this insolvency may have for lenders (e.g., BlockFi, Nexo, Genesis, etc.) and the broader market.

2. SEC opens investigation into insider trading on crypto exchanges. The Securities and Exchange Commission has reportedly launched an investigation into crypto exchanges to determine if they are doing enough to prevent insider trading. A report from Fox Business indicated that at least one major crypto exchange has received a letter requesting information about safeguards on the platform. SEC Chairman Gary Gensler has previously expressed concerns about the variety of services offered by crypto exchanges saying, "crypto’s got a lot of those challenges—of platforms trading ahead of their customers..."

3. Tron DAO Reserve pulls 2.5 billion TRX from Binance as USDD slips further from peg. The Tron DAO Reserve is pulling 2.5 billion tron (TRX) tokens, worth around $125 million, from Binance is an effort to keep the USDD stablecoin pegged at $1. The move was announced early Wednesday morning when the USDD stablecoin fell to around $0.958. The price has rebounded slightly to $0.975 as of this writing. The withdrawal of TRX tokens from Binance may be designed to limit short-sellers ability to open positions betting against the token. The Tron DAO Reserve has already deployed large amounts of reserve capital to fight short sellers and keep USDD pegged to $1.

4. SEC Chair Gensler: Crypto bill could ‘undermine’ existing protections. SEC Chairman Gensler is concerned that the bipartisan bill on cryptocurrency regulation (Responsible Financial Innovation Act) from Senators Lummis and Gillibrand may weaken existing consumer protections. Speaking at a Wall Street Journal event on Tuesday, Gensler said, “we don’t want to undermine the protections we have in a $100 trillion capital market.” The bill would give the CFTC jurisdiction over most tokens rather than the SEC, but is not expected to pass through Congress. However, the November mid-terms could create another opportunity to have the bill passed.

5. 3AC liquidation levels from @DylanLeClair_.

Updates and other stories:
- Ethereum flash crash sends price under $950 on Uniswap...Read More
- Coinbase to cut 18% of workforce, CEO wary of potential recession...Read More
- What happened to Cool Cats? The rise, fall, and future of the Ethereum NFTs...Read More

Top Sharers of the Crypto Top 5:
1. Donna Y. - Nashville, TN
2. Jake Y. - Greenville, SC
3. Forrest H. - Evansville, IN

External Resources:
1. Cryptopedia from Gemini - if you see a word, acronym, or phrase in this newsletter that you don't understand, there's a good chance you can find an explanation here
2. Crypto Explainer+ - intro level courses on Bitcoin, Ethereum, decentralized finance, NFTs, and more
3. Crypto Jobs! - looking for a new job? Check out this page from Anthony Pompliano with hundreds, if not thousands of listings

Disclaimer: The information contained in this newsletter shall not be understood or construed as financial advice. I am not an attorney, accountant, or financial advisor, nor am I holding myself out to be, and the information provided is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.