GameStop back?

Good morning. Today we've got a huge recovery of stolen Bitcoin, a stablecoin update from Caitlin Long, DAO infrastructure developments, and more!

Bonus Content Coming Soon: I'm close to having my notes out from Messari's Crypto Theses for 2022. I'll include a link to my notes in this newsletter, however, the full report is definitely worth a read. The report is now in podcast form and can be found here.

Market Update (as of 8:07am ET):

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Top 5:

1. US officials seize $3.6 billion in Bitcoin from Bitfinex Hack. A husband and wife duo were arrested in New York on Tuesday in connection with a 2016 hack of crypto exchange Bitfinex. Department of Justice agents seized 94,000 BTC or ~$3.6 billion and charged the couple for conspiring to launder funds stolen in the hack. It's a win for law enforcement, but also a win for crypto as it highlights the difficulty of laundering stolen funds on a distributed ledger.

SSS (sat-sized summary): Funds from a 2016 hack were recovered by DOJ agents in New York after arresting a couple accused of attempting to launder the stolen Bitcoin. While hacks are never good news, the fact that officials were able to track the money down after almost six years should serve as a deterrent for those considering Bitcoin as a means to launder stolen funds.

2. DAO Liquidity Provider Raises $18 million. The decentralized protocol, Rift Finance, will use the funds to to help DAOs (decentralized autonomous organizations) deploy governance tokens from their treasuries to increase token liquidity without having to give up ownership. Rift works by pairing a DAO's governance token with Ethereum from liquidity providers who receive yield in exchange for their deposits.

Superdao Founder Yury Lifshits told Blockworks about 10,000 to 20,000 DAOs operate worldwide, but his firm anticipates up to one million new DAOs by the end of 2022

SSS: DAOs are a completely new type of organizational structure and their rapid growth has led huge opportunities, but also presented some unforeseen challenges. DAO-specific support and infrastructure companies are aiming to capitalize on solving those challenges and we are seeing major investment in the space.

3. Breakdown of Fed's paper on stablecoins from Caitlin Long. As always, a great post from @CaitlinLong_ on the Fed's latest view of stablecoins. I've bulleted my key takeaways from the thread below, but encourage you read the thread and give her a follow.

- Note: the paper covers fiat-collateralized stablecoins, not algorithmic or crypto-collateralized stablecoins

Key Takeaways:
- Stablecoins tie up safe and liquid assets, eliminating them from use as collateral to help banks maintain sufficient liquidity
- These "siloes" of safe collateral could impact funding for banks and the Fed recognizes this as a risk to financial markets
- The Fed argues that stablecoins are inherently riskier and less fungible given their lack of backing from the Fed.
- Caitlin points out that stablecoins are already extremely fungible given network effects, mass integration in the crypto ecosystem, and acceptance by exchanges. She also points out that cash held at a bank is only insured up to $250K, so there is still counterparty risk there
- Caitlin and the Fed agree that tokenizing bank deposits and allowing them to circulate on a blockchain would be beneficial, because it would provide stablecoin providers with direct access to the US payments system. However, Caitlin disagrees with the idea that fractional-reserve banks should have this access as there is a higher risk of a bank run given the extremely fast settlement times of stablecoins

4. Kazakhstan floats 500% tax increase on Bitcoin miners. The country, which has been rocked by energy shortages and widespread protests over rising fuel prices, is looking to increase the tax on electricity consumed by crypto miners by 500%. This proposed tax, coupled with internet shutdowns and electricity blocks has many miners in the country looking for greener pastures. The two top candidates being the US and Russia. If miners do emigrate to other countries, the US could strengthen its position as the largest source of Bitcoin’s hashrate, while Russia could potentially move past Kazakhstan and into the number two spot.

SSS: Kazakhstan is considering imposing a major tax increase on Bitcoin miners that could drive them out of the country and into either the US or Russia. Vladimir Putin has made recent pro-Bitcoin mining statements that could draw Kazakhstani miners into the neighboring country.

5. Rumors of NFT partnership with Microsoft send GameStop stock higher. Everyone's favorite meme stock is back in the news after rumors began circulating online that GameStop and Microsoft may be partnering to "launch NFT integrations into existing games, along with creating new NFT focused games." These rumors follow GameStop's announcement last week that they would be launching their own NFT marketplace. The genesis of these rumors is broken down below by @P_MackD who's never lied to me before.

SSS: Microsoft may be partnering with GameStop to offer gaming NFTs for new and existing games. Both companies have made major pushes into the space recently and to me it's another major sign that crypto and gaming will be inseparable in the future.

Updates and other stories:
- Valkyrie Capital Bitcoin Mining ETF to Debut on Nasdaq...Read More
- Lawmaker Takes Aim at Puerto Rico as Crypto Tax Haven...Read More
- Web 3 Infrastructure Giant Alchemy Tops $10B Valuation...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.