I wanted to write a note regarding the current state of crypto in the U.S. specifically about the SEC lawsuit against Coinbase and Binance. I guess I have to put this disclaimer out here to Do Your Own Research (and this is not financial advice).
The SEC is suing both Coinbase and Binance for selling unregistered securities.
Binance: https://www.sec.gov/news/press-release/2023-101
Coinbase: https://www.sec.gov/news/press-release/2023-102
Ten states, as part of a multi-state task force, Attorneys General are also suing both companies including South Carolina, California, Alabama, Illinois, Kentucky, Maryland, New Jersey, Vermont, Washington, and Wisconsin.
As part of the lawsuits, the SEC is moving to have the assets of Binance.US frozen. This means that if you have assets on Binance, you will have limited time to remove them off the exchange. Further, the US financial network is severing their connection (on-ramp/off-ramp) to Binance and you will have until June 16 to transfer your US dollars off the exchange and back to your own bank. Don’t wait until June 15th to do this.
Whatever your thoughts are on the SEC’s action, whether it is warranted, or government overreach, or politically motivated… the point here is that your assets are at risk and you need to act to protect them. If you have questions on how to do this (move them to a hardware wallet), you are welcome to reach out to me (twitter @brewsbitcoin).
Many in the Bitcoin Maxi camp applaud this move by the SEC. They argue that Binance and Coinbase are predatory exchanges running shitcoin casinos (they aren’t wrong). But applauding the SEC bringing these lawsuits against crypto exchanges merely allows for more government control and overreach into our lives. I would argue the general maxim of Buyer Beware as well as arguing for more freedom, not less freedom.
Buyer Beware – people are out there trying to get ahead in a financial system that is rigged against them succeeding. We are all subject to hidden rampant inflation not just the inflation the feds want you to believe is occurring. Our purchasing power gets devalued with every dollar that is magically created by the government. Most people know there is a problem instinctively but due to the lack of financial education in the schools, people don’t know specifically that the manipulation of the US dollar is causing this shrinkage of their buying power. And so to get ahead, people are gambling on crypto in the hopes they can make some wins to get them ahead in the rat race. Coinbase did an amazing job getting people to sign up for their services through giving out tokens after learning about a specific token. It was genius to get people to feel comfortable on buying crypto. Whether you believe Coinbase was up-front about repercussions, or if they didn’t put an in your face disclaimer that all of a customers funds were at risk, doesn’t really matter (not to me). People will gamble on stuff they don’t really know anything about hoping through research, knowledge, and luck that they will win because they got an edge or an angle. And as with any other gamble (think horse racing, the lottery, blackjack, etc..), people inherently know the system is built against their success. No different here with the crypto exchanges. It comes down to Buyer Beware – only put in what you are comfortable to lose entirely. I don’t need the nanny state to protect me from myself. And you shouldn’t either.
The free market should be deciding the winners and losers here. And there is no free market. It is all rigged and manipulated to one degree or another. The more money pumped into the system by The Fed is more manipulation of our money. This is what people should be up in arms about. Our government creates more and more money out of thin air. Corporations and government are the entities that are reaping the rewards. The government wins by printing more money to pay its bills. Corporations are winning because they have access to this money and can put into hard assets which causes hard asset prices to be artificially inflated (think Blackrock buying up real estate in such volume that housing prices may be artificially high by as much as 30%). Rumor has it that The Fed manipulates the gold market through call and put option manipulation to artificially keep the price down, as well as the various VXX markets to keep it artificially stable to keep the market from crashing if investors saw the true price of goods. The manipulation is real. The house of cards is dangerously close to falling down.
We are witnessing a failing world reserve currency. This is what a death spiral looks like. The US will prolong it as long as possible. It may be years, it may even be decades. But there is no fixing this. Humans don’t have a grasp of the concept of large numbers. 31.5 Trillion is an insanely large number. That’s the current debt level of the U.S. in 2023. This cannot be paid off. Ever. We don’t have the willpower.
Instead, we pass the buck. We raise the debt ceiling. We print more money to pay the bills which puts us ever more in debt. We prolong a recession, a needed belt-tightening. And then we take away the ways that people use to try to get ahead. And not just gambling on shitcoins, but even traditional hard assets such as home ownership are impossible goals to most.
Home ownership is out of reach for the majority of young Americans. There was a time when the cost of a home was 3X an annual salary. It is now 10X an annual salary of $50,000. That is not feasible. And now 30 year mortgage rates are 7.06% national average. That’s $2500 a month for a $400,000 mortgage (if you paid $100,000 down as a deposit (which most people CANNOT do and do not have, so their rates will be higher)). And banks are now offering 40 year mortgages – dead pledge is right.
How do we fix this? I don’t think it is fixable in the way most people think of fixing things. I believe we have to protect ourselves, our loved ones, our friends by choosing an alternative system. By investing in Bitcoin, by educating our friends on monetary theory (no matter how painful), by creating an exit strategy to protect your assets and your life. And this blog post can’t get into all that… so a topic for another day.
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