September 16, 2020 | Issue #135

MUST READS

Kraken Just Won Approval to Create America’s First Crypto Bank

The State of Wyoming has approved Kraken’s application to form the world’s first Special Purpose Depository Institution (SPDI), tentatively called Kraken Financial.

Kraken Financial is the first digital asset company in U.S. history to receive a bank charter.

From paying bills and receiving salaries in cryptocurrency to incorporating digital assets into investment and trading portfolios, Kraken Financial will enable Kraken clients in the U.S. to bank seamlessly between digital assets and national currencies.

So... yeah, Kraken is now a bank. How did this even happen?

Chief Legal Officer, Marco Santori, breaks it all down here.

MicroStrategy Buys More Bitcoin

MicroStrategy (MSTR) - the first large corporation to hold BTC as a cash reserve asset – announced they are buying an additional 16,796 Bitcoins (worth up to $175M).

Remember, MSTR is not a blockchain/crypto company. They make no Bitcoin or blockchain-based products and are not trying to shill average-Joe investors by adding blockchain or crypto to its name. MSTR is simply looking out for shareholder value in these unprecedented times... and buying BTC as a hedge against inflation.

It's a very, very big deal and bullish catalyst if other public companies decide to follow suit.

In total, the company now has a total of $425 million Bitcoin on their balance sheet. That’s about 1/3 of their market cap.

Check out the stock here (up ~24% since Monday's announcement). To learn more about MSTR, we suggest you watch Pomp's latest interview with Michael Saylor, MSTRs CEO. It just dropped today.

Here Comes CeFi

Binance's new centralized finance (CeFi) offerings (a wordplay on the DeFi boom) are taking off.

Here's how it works:
The CeFi venture on Binance is called Launchpool. Just like DeFi, it provides a new way for yield-thirsty customers to purportedly farm cryptocurrencies.

Launchpool’s first project is Bella Protocol, which allows users to stake BNB, BUSD, and ARPA tokens into three pools to farm BEL tokens. This initiative lasts for 30 days and began on September 9th.

Their second project, Wing (WING), launched yesterday.

CeFi or DeFi... What's the Difference?
It's pretty simple.

CeFi means you need to trust people – It allows people to earn interest or get loans on their cryptocurrency by lending or borrowing it through a centralized corporation.

DeFi means you need to trust the technology – it allows people to access a variety of financial instruments through smart contracts built mostly on the Ethereum blockchain.

Why It Matters
Binance is essentially piggybacking the booming DeFi trend. And so far, it looks like CZs efforts to disrupt the space are paying off.

BNB is up 25% since the announcement of this new "CeFi" initiative.

Doubling down on Binance's new initiative, over the weekend, CZ announced the creation of a seed fund worth $100 million for DeFi during The World of DeFi summit. This fund and other initiatives from Binance aim to further support the DeFi ecosystem and solutions to bridge DeFi and CeFi ecosystems.

DeFi projects which pass security audits and due diligence process will receive "liquidity support," a euphemism for Binance's dominant liquidity that claims to be 20X deeper than Coinbase.

Our Favorite Gold Play... Just $7 Right Now

Gold prices made history last month, breaking the $2,000 barrier. But now’s not the time to rush out and buy ANY gold bars, stocks, or coins.

While the best miners can return hundreds of percent in a gold bull market – most of them are still extremely risky.

Priced around $7 today, there's a gold play that's much, much better.

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DEEP DIVE

Eastern Europe: High Grassroots Adoption, Outsized Darknet Market and Ransomware Activity

While Eastern Europe may only have the fourth-largest cryptocurrency market by transaction volume, it also has the first and second-ranked countries on Chainalysis' Global Crypto Adoption Index: Ukraine and Russia.

But, darknet markets and ransomware are driving crypto crime in Eastern Europe as well. With 1.4% of its $41 billion in total transaction volume sent to illicit entities, Eastern Europe is second only to Latin America with 1.6% of its volume.

Here's more on Eastern Europe’s darknet market transaction activity... their leading marketplace... and how it's built on top of a complex drug delivery system that operates similar to Uber.

Coordination, Good and Bad

Co-founder of Ethereum, Vitalik Buterin, makes a case for decentralized systems in his latest blog post. Here are his latest thoughts on coordination, collusion, decentralization and forking.

Blockchain's mentioned: Bitcoin, Ethereum (of course), and Hive.

REGULATORY FRONT

This Week in Celebrities in Trouble...

⭐ The SEC has settled with Unikrn, a Seattle-headquartered crypto eSports and gambling platform, over its $31 million ICO that drew investments from Mark Cuban, Ashton Kutcher and Ethereum co-founder Anthony Di Lorio.

⭐ The SEC has charged five Atlanta-based individuals, including film producer Ryan Felton and Rapper T.I (Clifford Harris Jr.), for promoting a scam ICO.

In other celebrity news, Kiss rocker Gene Simmons has seemingly endorsed Bitcoin via Twitter.

IRS Wants to Break Privacy on Monero and Bitcoin’s Lightning Network

The IRS is seeking a tool that can be used to trace privacy coins like Monero, according to a request for proposals published by the U.S. agency last week.

The tracking tool is meant to help investigate “theft, narcotics trafficking, money laundering, terrorist financing, sex trafficking, and child prostitution.”

The IRS is offering $1 million in total for solutions with the potential to crack the security on Monero and the Bitcoin Lightning Network. It is offering up to $500,000 to contractors that provide a proof-of-concept and working system, and up to $125,000 for solutions that make it to the testing stage.