🦧 Gensler Goes After Kraken & Umami in Ruins

Plus OP's surprise airdrop, 3AC's Open Exchange, and CryptoCondom to the rescue!

GM legends,

What a week in crypto it's been. J Powell's short-lived pump has faded, we're all asking if the AI pump was fuelled… by AI?! And Umami is in ruins, while we all patiently wait for the Ethereum Shanghai Update next month.

What does this weekend have in store for us as Bitcoin hovers around $21,700 while Ethereum sits at $1,550?

In other news. The SEC is "Kraken" down on US staking, China gets bullish on crypto and 3AC rename GTX.. Let's get stuck in.

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Here's what's inside today.

🔥 The big topic. Gensler Goes After Kraken & Umami in Ruins🗞 Hot crypto news. Elon gets trolled on Twitter after an outage, Kraken gets slammed by the SEC, 3AC rename GTX to Open Exchange, AND MORE.👀 Updates across the bloc. Aave's GHO stablecoin goes live on testnet, Optimism hit us with a surprise airdrop, Umami's left in ruins but Crypto Condom has stepped in, AND MORE.🛡 Chart of the day. Will $DXY break hearts?

🧵 Thread of the day. Crypto legend 0xFitz is back and digs into IPOR labs.  

🔥 The big topic.

Gensler Goes After Kraken & Umami in Ruins

So let me get this straight.

The SEC (U.S. Securities and Exchange Commission) gets chummy with SBF and lets him off the hook while mounting a full-on FUD campaign against two of the most compliant crypto exchanges.

Ok, ok… makes complete sense.

Late Wednesday evening CoinBase CEO Brian Armstrong posted that the SEC wants to ban crypto staking for retail customers in the once great US of A.

This seems like an outlandish, but not incomprehensible, statement to make as the SEC Chair Gary Gensler has been on a savage war path against crypto long before Cardano started its failed ascent to $5. He stated: “Cryptocurrencies that allow staking could be classified as securities under the Howey test.”

Security falls under regulation as a tradeable asset and fundamentally can be taxed. So it makes sense why the SEC is on the warpath, right?!

(Secretly I think Gary is FUDing for entry)

And if there’s one thing we have learned over the past few years is that there’s usually substance behind rumours, especially when a top-level CEO is Tweeting about it.

Staking makes up a MASSIVE part of the crypto industry and generates a lot of real yield for a lot of people.

Defi Llamma shows that there is close to $50bn of Total Value Locked (TVL) across all chains with $30bn being held on Ethereum.

While Gensler hasn’t stated which assets should be classified as a “security” we can assume that Ethereum is in the firing line, as Ethereum whales are making too many dollar bills for his liking without paying tax.

Let’s be honest, it’s almost always about tax. A quick note to not forget to do your taxes, by the way!

Are the rumours true?

When first writing this article on Thursday, this Tweet from Fintech Frank summed it up perfectly.

Fast forward 24 hours and Kraken is forced to shut down its US staking services and pay a whopping $30m fine, while Brian is ready to duke it out in the name of freedom!

Gensler loves a "steak" having just charged Kraken with a $30m fine and forced them to shut down US staking as a service...service. Hate to say it but Gary's video is actually on point...dam you Gary!!

It looks like the rumours were, to some degree, true.

Does this push innovation away from the US? Probably, which isn’t a bad thing for the crypto innovation curve as there are a number of big-brain devs in other parts of the world building big-brain tech that, now banned US customers, can begin to explore.

Unpopular Opinion… BUT

Does this protect retailers?

The same retailers as you and I who lost their life savings, their kids' college funds and the little pot of gold used to keep the family happy.

Remember the Celsius, Blockfi, Nexo, Voyager, and Terra, ‘staking’ debacles?

Didn’t J Cole once say: “fool me five times shame on you… fool me six and shame on me”?

Heyyyy… don't look at me like that I’m just saying…

…but imagine if Cardano was the real winner in all of this.

Our Take

TLDR: DeFi wins.

And even if it doesn't, DeFi still wins because this again highlights the issues that centralised entities are facing from the regulatory FUD.

In the meantime... Kraken BONK?

🗞 Hot crypto news.

🐮 Bullish News

Binance deploy zk-Snarks on proof of reserve systems allowing users to verify that the funds held on the crypto exchange are backed 1:1.

China gets bullish on crypto as the National Blockchain Research Center gets approved in Beijing, a local media outlet reported.

Elon gets trolled after Twitter goes down on Wednesday along with a long line of other issues that the Chief Twit needs to sort out including the bots, the algorithm and my main feed please!

🐻 Bearish News

Kraken shuts down US staking service as the SEC cracks the whip. Kraken is fined $30m and has to shut down its staking services to US customers. In an official blog post, Kraken stated it: "will automatically unstake all U.S. client assets enrolled." The IRS are seeking court approval to reveal the identity of Kraken customers

Paxos is under investigation by the New York Department of Financial Services. The stablecoin provider issues Pax Dollar (USDP) and Binance's BUSD. No details have been revealed but it looks like another attack on Binance.

3AC rename GTX to Open Exchange. The 3AC founders are set to launch the crypto exchange to "atone for their past mistakes." This one tweet from BitMex founder Arthur Hayes sums it all up.

👀 Updates across the bloc.

Project Updates

Aave's GHO stablecoin has arrived on Ethereums Goreli Testnet. Has the battle of the decentralised stablecoins begun?!

Altered State Machine is an AI NFT style future-verse project that lets you train and trade unique Artificial Intelligence via digital ASM Brains.

Camelot DEX is set to launch money market perp dex Onchain Trade on February 27th.

Cryptex Finance had a successful token launch and trading goes live on Bebop Dex.

GigaDAO had a successful Giga Dex launch on Solana and highlight their micro 4-week road map in discord including a sneak peek update to their NerdsNFT collection.

MakerDAO integrates oracle Chainlink to maintain the DAI stability.

Optimism shows its hand first with part 2 of its airdrop being sent out. Follow the official Tweet for more information and be careful of fake airdrop scams. Arbitrum... it's your turn next.

Silo Finance goes live on Arbitrum and to celebrate has added 337 $ETH and 305k $XAI available to borrow against $wstETH

Zeta Labs drop some discord only alpha as Aptos perps go live on mainnet.

Governance Updates

Aave. Another week and even more AAVE developments as a $MATIC proposal was passed to reduce borrowing costs goes live making the borrowing of $wMATIC cheaper. Head of Polygon DeFi Tweeted a readacted image of "the plan with e-mode and [REDACTED]"

Pancake Swap. Never a dull day in Pancake Swap land as $CAKE owner proposes: "Need some Cake to Stake and Start Earning." Sadly... no one has donated.

UniSwap. A recent earthquake has crippled Turkey and a proposal to send $1.4m worth of Uni Tokens to help has been put forward.

Umami Finance. It's been a drama filled 48 hours for the Umami community as the former CEO dumped his bags and sent price down to $3.71. But community participant Crypto Condom has led the charge with a proposal to rehire the old team as Umami DAO Contractors and reinstatement of treasury revenue distribution for stakers.

🛡 Chart of the day.

Will $DXY break hearts?

Will she break our hearts this upcoming Valentine's Day? The strength of the dollar has been rising and the broader markets have been dumping as investors take profits after a strong January ahead of next week's CPI figures.

Currently testing and rejecting the 50 EMA (light blue line) will we see the downtrend continue to recover the green vector candles and ultimately break below the 100 mark? Or will $DXY shatter dreams en route back to 105?

Bull case. Strong rejection off the 50 EMA to continue the down trend towards 100 to see a continued bear market rally. 

Bear case. CPI isn't what we hoped for on February 14th as we see investors seek the safety of the dollar once again pushing it towards the 105 mark.

Coming up next week:

Will there be romance in the air on Tuesday as Core CPI and CPI numbers are released?!

🧵 Thread of the day.

0xFitz is back in the game and kicks it off with a thread on IPOR Labs, a first-of-its-kind DeFi Protocol set to be the heart beat of DeFi allowing users to fix their interest rates or hedge their exposure.

And on that note, thanks for reading, catcha apes in the next edition!

grant, jedi & dan 🫡

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