Big week. We've got some important company news below, which, yes, the title pretty much gives away. A few reporters have been asking questions and we wanted you to hear it from us, first.
Hey Bankless Nation, David here. As you may have noticed, Ryan has been doing a lot of solo podcasts lately.
We had been trying to reevaluate our working relationship as a result of some internal disagreements — I know this might be surprising to some of our regular listeners, but the media business can be a tough environment. I'm bummed to share today that Ryan and I have decided to go our separate ways.
We ultimately have different views for what Bankless needs to become for the world. Over the past few months, we've both entrenched ourselves in what feel like opposing visions for what our audience needs in this changing macro environment and, despite trying our best to find common ground, the differences feel… irreconcilable.
This will be my very last post on Bankless – Ryan doesn’t even know I’m sharing this, and I’m sure that he will quickly respond with his own version of events, but I hope that you can read my point-of-view objectively before jumping to conclusions. (I also don't want to make this recap all about internal drama, so I'm linking out to my full post)
Is CZ an evil-genius-hyper-capitalist or a sloppy criminal? Neither? Both?
The U.S. Commodity Futures Trading Commission (CFTC) is suing Binance this week for various regulatory violations. The language from the lawsuit itself, packed with personal texts and emails from CZ, suggests Binance wasn't trying all that hard to protect itself from regulator action.
Offered unregistered crypto derivatives products against U.S. federal law
“Instructed its employees and customers to circumvent compliance controls” through the use of a VPN or off-shore shell companies
“Did not require its customers to provide any identity-verifying information before trading on the platform”
“Instructed its (VIP) customers on the best methods for evading Binance’s compliance controls”, such as setting up shell companies outside the U.S. to escape restrictions
Instructed its employees to use Signal which had an auto-delete feature, so as to “avoid leaving any evidence of their efforts to retain U.S.-based customers”
Purposefully structured “their entities and transactions to avoid registration requirements”
CZ has pushed back against the CFTC’s allegations, claiming that the lawsuit was “an unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years.” CZ also argued that Binance’s compliance controls are top-notch, holds at least 16 licenses globally, and has cooperated with law enforcement agencies faithfully for years. You can read his full response here.
Vitalik joined the Polygon launch ceremony and sent a 0.005 ETH transaction with the message “A few million constraints for man, unconstrained scalability for mankind” – a reference to Neil Armstrong’s first words on the moon.
He’s since plead not guilty to the charge of attempted bribery.
5. Lawyers defend crypto
Influential law firm Cooper & Kirk, which challenged Operation Choke Point under the Obama administration in 2013, published a report this week addressed to the U.S. Congress.
Titled Operation Choke Point 2.0: The Federal Bank Regulators Come For Crypto, the 37-page report calls attention to an illegal coordinated campaign and regulatory overreach targeted at the crypto sector.
According to the report, Operation Choke Point 2.0 unfairly stigmatizes the crypto sector by “labeling crypto businesses a threat to the financial system, a source of fraud and misinformation, and a risk to bank liquidity”. Bank regulators are also exceeding their statutory authority by persecuting banks for serving the crypto industry, while failing to “adequately explain their decisions”.
SEC Chair Gary Gensler is set to testify April 18th before the House Financial Services Committee and answer questions towards the SEC’s approach to crypto.
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Not financial or tax advice. Bankless content is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this newsletter to products we use. We may receive commission if you make a purchase through one of these links. Additionally, the Bankless team hold crypto assets. See our investment disclosures here. | Terms & Conditions – Privacy Policy
