Grayscale Investments is exploring options to return up to 20% of outstanding Grayscale Bitcoin (GBTC) shares if the Securities and Exchange Commission (SEC) refuses to approve a conversion of the investment trust into an exchange-traded fund (ETF), according to a letter to investors. GBTC shares, the company’s flagship product, are currently trading at a 49% discount to its underlying bitcoin holdings. Earlier this month, the SEC, which is being sued by Grayscale, reiterated that its denial is consistent with standing conversion policies. Grayscale and CoinDesk are both owned by the Digital Currency Group.
Crime Spree
FTX founder Sam Bankman-Fried may be extradited to the U.S. as soon as today, after spending less than a week in a Bahamian prison known to be overcrowded and inhumane. The U.S. Department of Justice, Securities and Exchange Commission and Commodity Futures Trading Commission have filed separate criminal and civil cases against Bankman-Fried, alleging he misused customer funds and misled investors. Meanwhile, one of the co-founders of the $4 billion OneCoin pyramid scheme pleaded guilty to federal U.S. charges on Friday, while Ruja Ignatova (aka the “CryptoQueen”) remains on the FBI’s Most Wanted list. Finally, former BitMEX CEO Alexander Hoeptner is suing the crypto derivatives platform for $3.4 million for breach of contract and wrongful termination.
Binance Buy
Binance.US has reportedly agreed to buy bankrupt crypto lender Voyager Digital’s remaining crypto assets for $1.022 billion. Voyager announced the deal on Monday, adding the deal “aims to return crypto to customers in kind” if approved by the bankruptcy court in January. Earlier this year, now defunct crypto exchange FTX agreed to pay $1.4 billion to acquire Voyager’s assets, beating out rivals Wave Financial and Binance in an auction. Separately, the parent Binance finalized its acquisition of Indonesian crypto trading firm Tokocrypto, the first crypto asset trader that is regulated by the country’s commodity regulator.
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When Elon Musk initially took over daily operations at Twitter he said the world would know he’s doing the right thing if both sides of the political aisle were ticked off. Well, people are upset, but not because the billionaire technocrat is doing a good job. On Sunday evening, Musk put out a Twitter poll asking if he should remain at Twitter’s helm. The votes are in, and 57.5% of respondants think he should step down.
If this sounds like an odd way to set the course of what is arguably the internet’s “town square” it’s at least consistent with Musk’s erratic and seemingly self-destructive management style since overbidding for the microblogging platform. Last week alone, Twitter suspended multiple journalists’ accounts, moved to block off-site linking to competitor social media platforms and set a policy banning discussions of publicly-available flight data. All of this, of course, belies Musk’s stated commitment to free speech.
The self-contractictions are funny in the Shakespearean tragicomic sense. Brutus turned tyrannical after trying to prevent Rome from slipping into a dictatorship. Musk banned a fan of his that tracked his private jet after specifically saying he’d protect for the sake of a higher principle.
For perhaps all but Musk’s peers this disastrous leadership has come as no surprise. Y-Combinator founder Paul Graham, who had supported Musk’s takeover, called his latest tantrum “the last straw” and linked to his Mastodon profile. His account was briefly suspended.
Still, the situation could be worse. Especially for crypto, the source of many of Twitter’s woes, Musks erratic example has only proved the importance of democratically-managed and open source platforms. As Ethereum co-creator Vitalik Buterin put it, Twitter under Musk is on the path to “authoritarianism.” It’s worth noting that Musk has dissolved the company’s board, pushed out many of its executives and paid non-alligned employees to leave.
Putting aside overzealous obituaries to Twitter, the possible collapse of the platform only helps reaffirm the belief that alternatives should exist. Social media, a relatively new phenomenon in the scheme of things, has been captured by mindvirus that monopolies are good. It’s true that network effects matter – having an overabundance of friends and foes on a website makes things fun. But the idea that software has to be captured by financial interests, that even publicly-traded firms should be controlled by supermajority stockholders is insane.
No one knows if it’s lights out for Twitter. The “vibes are off” and users and advertisers are leaving in droves. Musk himself claims the company is heading to bankruptcy. Things could also miraculously turn around, or the site could drag on for decades like debt-ladden, private-equity owned radio conglomerates. But the damage is done. Egoism is out, communities are in. Centralism is flawed, public goods are great. What Web3 makes of the moment is up to YOU, dear reader.
When discussing the optimization of blockchains, many will look to improve on the three pillars of blockchain technology: security, scalability and decentralization. While improvements to these blockchain fundamentals may improve the capabilities of the network, it falls short of making improvements for its users.
While Ethereum recently moved to proof-of-stake (PoS) to work on its fundamentals, NEAR protocol has already set itself on a strong foundation, 10 years ahead of Ethereum’s roadmap. Continue here.
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Off-Chain Signals
U.S. Scrutinizes Political Donations by Sam Bankman-Fried and Allies (NYT – paywalled)
Unlike Washington, Andreessen Horowitz has a plan to push forward crypto legislation (Fortune)
Hedge funds raise bets against bitcoin miners (FT – paywalled)
