Unicorns and Pandas

Good morning. Today we've got updates from the Great White North, a major exchange acquisition, KYC in crypto(?!?), Pomp railing on CBDCs, and more!

Market Update (as of 8:04am ET):

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Top 5:

1. Canadian regulator flags Kraken, Coinbase CEO tweets to law enforcement. The Ontario Securities Commission (OSC) alerted the Royal Canadian Mounted Police (Mounties) about tweets from Brian Armstrong and Jesse Powell, CEOs of crypto exchanges Coinbase and Kraken respectively. The tweets were critical of the government's response to the ‘Freedom Convoy’ protests and directed users to self-custodial wallets to avoid having their wallets frozen on exchanges. The exchanges themselves could be forced to comply with Emergencies Act invoked by the Canadian government.

SSS (sat-sized summary): The Canadian government has flagged tweets by Coinbase and Kraken CEOs that directed users to self-custodial wallets to avoid being subject to provisions in the Emergencies Act.

2. Crypto unicorn Bitpanda snaps up FCA-registered custodian. The Austrian exchange acquired Trustology, a UK-registered custody platform. The move is one of the first acquisitions by Bitpanda after a massive year of fundraising that saw the company raise $450 million across multiple deals and ultimately land at a $4.1 billion valuation. Post-acquisition, Bitpanda will be one of the largest crypto custodians globally and will be well positioned to full prime brokerage services for its institutional customers.

SSS: The big takeaway in my opinion is that crypto trading platforms globally are positioning themselves to provide services specifically to institutional investors. The infrastructure has been put in place at multiple firms (Coinbase, Gemini, now Bitpanda) that clearly outlines a focus on serving the big money players.

3. Rug pulls force Solana NFT marketplace to invoke doxing policy for creators. After two fairly high-profile rug pulls and a two week pause on activity, Magic Eden, a Solana based NFT marketplace is relaunching its “white glove minting and marketing service." In response to the rug pulls, Launchpad, as the service is known, will now require creators to adhere to know-your-customer (KYC) requirements that "privately dox" them to the company.

SSS: Scams and bad actors are bring traditional financial controls and quasi-regulations to crypto. Will KYC requirements drive creators away from the Magic Eden marketplace or bring in more users that feel safer transacting there?

4. Investors stuck in biggest bitcoin fund flood SEC with letters. The Grayscale Bitcoin Trust (GBTC), which has traded at a discount to the underlying value of its assets for months now, is pushing the SEC to allow a conversion of the trust to a spot-bitcoin ETF. Investors in the trust have now sent almost 200 letters asking the Commission to approve the conversion.

Why is this important? Well, first the trust cannot redeem shares to align with the true value of its holdings leaving investors stuck with an underperforming asset. Secondly, it could open the door for other ETF approvals and save investors from the hot garbage that is the bitcoin-futures ETF. So, we sit and wait for a response from Chairman Genlser all the while watching European investors trade crypto Exchange Traded Products with no issues.

SSS: Grayscale is pushing to have their trust converted to a spot-bitcoin ETF. Approval seems unlikely, but it would be a huge boon for not only Grayscale investors who are currently underwater, but also for the broader American investing public.

5. Central bank digital currencies will be one of the greatest violations of human rights in history. Another heater from Pomp in today's issue. This time he's teeing off on central bank digital currencies (CBDCs) and the dangers they pose to individual freedoms. Again, I highly encourage you to give it a read or listen in light of recent events. I'll hit the high points below.

What drawbacks to privacy and freedom do CBDCs present?"

Personalized inflation - currently all citizens experience impacts of monetary policy equally. While 7.5% inflation may hurt the poor more than the wealthy, it's still 7.5% inflation for everyone. CBDCs present much finer control over monetary policy and present the opportunity to tailor things like inflation to individuals based on their spending habits, where they live, their jobs, etc.

Financial censorship and social credit systems - a central bank would have complete knowledge of all transactions that occur using the CBDC and who made those transactions. If they disagree with those transactions, they could block you from say purchasing a gun, buying a car, sending money to a certain fundraising groups, etc. Just take a look at Canada to see this playing out in real time.

Expiration of money - to encourage people to spend and keep the velocity of money high, CBDCs could be programmed to expire after a certain amount of time, thus forcing users to spend that money that they might otherwise preferred to have saved

Updates and other stories:
- $250K bounty not insulting says Coinbase white hat hacker...Read More
- A former Bored Ape owner Is suing OpenSea for $1 million...Read More
- Foundation focused on UST stablecoin raises $1B in LUNA sale...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.