| | TOGETHER WITH | | While the SEC continues its reign of terror across the crypto industry, a secret batch of emails has been released making them out to look like hypocrites. | Todayβs Big Stories: πΈ What the SEC lawsuits mean for your money π¦ A first look at Uniswap V4 π© A secret batch of emails from the SEC has been released | Today's newsletter is 1,574 words, a 7-minute read. |
| |
|
|
π MUST READS |
Answering Reader Questions About the SEC Lawsuits and What It Means For Your Money |
After last week's article discussing the SEC lawsuits against Binance and Coinbase, we received a lot of questions from you, our dear readers. |
Understandably, many of you are concerned about what this means for our beloved digital money. Whether it was hacks, blowups, or a natural boom and bust cycle, the crypto industry has weathered many-a-storm. |
But now, with the regulators at the SEC coming down on exchanges, and thought-leaders claiming that the US government will do anything they can to βdestroy cryptoβ to save fiat, you are probably asking yourself what to do. |
So, in this issue, weβre answering some of the most common questions we received over the last week. |
What does the SEC lawsuit mean for BTC? Itβs definitely not great, but itβs not the end of the world either. |
The regulatory crackdown has created stress in the industry with market-making giants, professional investors, and retail investors beginning to pull away from crypto. |
But while it has impacted some other tokens, BTCβs price hasnβt moved all that much throughout this entire crackdown. What price movement there was, looked to be mostly due to selling pressure from crypto moving off of Binance. |
Remember, BTC is a global asset and it behooves the US government to support it, get left behind, or as Peter Thiel has put it, be dethroned. |
Bitcoinβs entire value proposition rests on being decentralized, permissionless, and censorship-resistant. The SEC targeting crypto will have an impact on bitcoinβs price without a doubt, but in the long run it will be fine. |
What does this mean for Coinbase and other Western exchanges as a user? In the short run, not much. Coinbase has already said they will continue to operate their exchange as usual, and will continue to do so until the case is resolved one way or the other. |
In the long run, potentially a lot. If the SEC wins, it means the legal system determined that Coinbase is an unregistered securities exchange. Thatβs when all hell would break loose. Does Coinbase pay a fine? Get shut down? Is crypto legal in the US? At that point, itβs anybodyβs guess. |
But, there are a lot of steps and most likely many years before we get to that point. Rippleβs SEC lawsuit began in 2020, for example, and they are still litigating it today. So, thereβs not much reason to get too worked up about this right now. |
Furthermore, user assets on Coinbase are fully backed and exchanges such as Kraken publish a proof of reserves. |
While we do believe assets on these exchanges are safe, it still may make sense to self custody your assets. |
What does this mean for Coinbaseβs stock price? Coinbaseβs (COIN) stock already took a big hit after the lawsuit announcement, but other than that, the likely answer is the same as above: not much. |
At this point, thereβs most likely nothing in the case that will move the stock much in either direction, and everybody who was going to sell because of the lawsuit has probably already sold. So, in relation to COINβs stock price, the case probably wonβt affect volatility much further until we know what the end result will be. |
Taking it a step further though, we have to work under the assumption that Coinbase may settle or even lose against the SEC. If that is to be the case, Coinbase will have to pay a large fine. But you have to ask yourself, what is the fine worth with the potential of finally getting regulatory clarity? |
One could argue that having regulatory clarity around what the exchange can and cannot do is worth more than any hundreds of millions of dollars in potential fines, in which case the stock may even rise. |
As for other exchanges that were looking to go public soon including Kraken and Blockchain, thatβs not going to happen. |
What does this mean for ETH and other crypto assets? Weβre going to sound like a broken record here, but for assets that werenβt called out by the SEC as securities, not much until the case is decided. |
In reality, this might be a good opportunity to scoop up tokens that you like on the cheap. |
But, for the assets that were called out by the SEC as securities, we would probably steer clear for now. |
So, what should I do? Donβt panic and ask yourself why you are here in the first place. |
If you are participating in the crypto economy to gamble on small assets hoping they 100x tomorrow, then the SEC lawsuits might be reason for concern and we suggest checking out the latest AI hype plays. |
But if you are in this economy to take back control from corruption, to hedge against government overreach and overspending, and to support the new and emerging decentralized economy, then now is the time to stay strong and vote with your wallet. |
|
SPONSORED |
Banking collapse next phase |
The Silicon Valley Bank collapse was no accident β it was engineered. Deep state actors in D.C. blocked a private bailout of SVB so the U.S. government would be forced to step in and save the bank. |
Why? Thatβs what this shocking new documentary exposes. Itβs all part of a larger plan to reset America. And the fall of Silicon Valley Bank and First Republic was just the beginning. Whatβs coming next is far more terrifying and could impact trillions of dollars. Click here to learn more. |
|
π DEEP DIVES |
Uniswap Gives First Look at V4 |
Uniswap is one of the largest and most popular decentralized exchanges (DEXs) that crypto has to offer. It regularly handles billions of dollars in transactions each week, and it frequently has greater trading volume than even Coinbase. |
Beyond its dominant position among DEXs, Uniswap is also usually on the cutting edge of DeFi. The original Uniswap exchange basically invented the DEX, while the third version, Uniswap V3, introduced the now-popular βconcentrated-liquidityβ function, which allowed participants to provide liquidity within a custom price range. |
Now, the DEX king is due for its next big upgrade. |
Enter V4 That upgrade is the fourth iteration of the exchange, the creatively named Uniswap V4. |
The big addition in V4 is βhooksβ, a βpowerful new way to customize liquidity poolsβ. Simply put, hooks are plugins that allow users to customize how pools, swaps, fees, and liquidity providers interact. For example, hooks will enable the development of a time-weighted average market maker and on-chain limit orders β things that were previously impossible to do in Uniswap V3. |
The other big improvement coming from V4 is the βsingletonβ. The singleton is a single smart contract that contains all of the liquidity pools deployed on V4. Because the singleton provides a single point for all trades to be routed through, gas fees for swaps and creating a pool should be dramatically reduced. |
A Decentralized Improvement Process These are already massive upgrades, but it very well could be just the beginning for V4. Keeping with their decentralized principles, Uniswap is building V4 in public and is actively considering community feedback before officially deploying V4. |
In other words, anybody in crypto can come and suggest improvements to V4. |
Couple this with the fact that the centralized exchanges are currently at war with the SEC, and it suddenly becomes very easy to picture a world in which Uniswap and other DEXes dominate the exchange landscape. |
|
SPONSORED |
Donβt just read the newsβmake the news. |
|
Looking for a competitive edge in the world of tech and finance? |
The Information offers access to exclusive insights from the industry's top journalists. |
Founded in 2013, The Information has built the biggest dedicated newsroom in tech and finance journalism and count many of the worldβs most powerful business and tech executives as subscribers. |
Their reporters focus on reporting the people, trends, and forces that are defining the future of technology and business. |
As a subscriber, you'll get access to award-winning reporting, exclusive interviews, community conversations, and subscriber events and more, so you can make informed decisions anywhere, anytime. |
For a limited time, CoinSnacks subscribers can save 25% on their first year. |
|
|
ποΈ REGULATORY FRONT |
Secret SEC Emails Released |
In 2018, SEC Director of Corporation Finance William Hinman gave a speech in which he expressed his view that Ether is not a security due to being a decentralized asset without any controlling party. |
It sounds good, but that same speech also created years of confusion over what cryptocurrencies do count as securities. Itβs a question that still doesnβt have an answer, and is now the focus of SEC lawsuits against Coinbase and Binance. |
But, somehow, thereβs even more surrounding this infamous speech. |
The Emails That more is a set of emails tied to the speech. The SEC fought for years to keep these emails secret, but thanks to Rippleβs own-battle with the SEC, we now finally know what is in them. |
The emails show a back and forth between Hinman and SEC officials over the language in his speech. They debated over the facts of the cases Hinman cited. They debated over his declarations surrounding Etherβs security status. And, most importantly, they debated over his interpretation of the Howey Test and how it applies to digital assets. |
Sufficiently Decentralized Hinman believes that cryptocurrencies arenβt a security if they are sufficiently decentralized. Not only that, but he believes that a crypto could start as a security and morph into a non-security once it reaches sufficient decentralization. |
As the SEC officials pointed out in the emails, thatβs an issue for the SEC, as it creates a βregulatory gapβ between digital assets and securities law. In other words, there are many digital assets that might not technically be a security, but could benefit from regulation. In other other words, exactly what Coinbase has been saying for years. |
However, thatβs not the only thing the SEC expressed concern about in these emails. |
Morphing The SEC was very concerned about the concept of morphing (an asset going from security to non-security), and for good reason. For one, it opens up the door to arguments that other crypto assets are no longer securities. That could expose them to a massive headache. And for another, it possibly paints them as hypocrites. Let us explain. |
The speech and the emails clearly show that at one point the SEC believed Ether was not a security. So, if the SEC was to argue differently today, they have to make the case that Ether has morphed from not a security to a security, thereby acknowledging the idea of morphing. |
That is something SEC Chair Gary Gensler desperately wants to avoid, but now looks increasingly impossible to do. |
The bottom line is this: the combination of sufficient decentralization and morphing opens the door to a new legal argument in defense of cryptocurrencies against the SEC. |
|
TWEET OF THE WEEK |
| Middle of a bear market, and BTC is still beating gold on every multi-year timeframe except 2yr: https://t.co/IF1PheLhhI | | | Jun 13, 2023 | | | | 40 Likes 2 Retweets 5 Replies |
|
|
|
| Redefining Passive Income | Nervous about market volatility? We've found a solution that thrives no matter which way the market sways: high-yielding dividends. Ditch the risk and find comfort in the steady, reliable income these dividends provide. We've put together a list of our Top 5 Dividend Stocks Paying 10%+ Yields. | Sponsored |
| |
|
|
Other Content You Might Enjoy |
Their Crypto Company Collapsed. They Went to Bali. House Republicans introduce bill to remove SEC Chair Gary Gensler, restructure agency Bitcoin and ether reserves fall below 50% on US exchanges amid regulatory crackdown Bankrupt Crypto Exchange Bittrex U.S. Set to Allow Withdrawals Starting Thursday |
|
How did you like today's email? |
β‘β‘β‘β‘β‘ Love itβ‘β‘β‘ Ehh, could be betterβ‘ Do better next time |
|
ABOUT COINSNACKS |
Launched in December 2017, CoinSnacks is home to the longest continuously running crypto newsletter. Each week, we publish our cryptoasset musings to an audience of ~60,000 crypto enthusiasts and investors. |
In a space flooded with new projects, research, and narratives, the average investor may feel overwhelmed or confused. CoinSnacks offers a solution by doing the digging for you, so you don't have to spend hundreds of hours sifting through the noise. |
|
REACH OUR AUDIENCE |
If youβre a brand interested in partnering with CoinSnacks to find your next customers, parter, or ally, weβd love to hear from you. Learn more here |
|
From bitcoin to bullion, we've got you covered. Dive into Gold Playbook, our other venture, for daily gold investing insights. | | Gold Playbook All Your Gold News In A Single Email. | Subscribe |
|
|
|