Riding The Wave News Summary 100
How to Start Regulating the Crypto Markets—Immediately, Galaxy Digital Wins Auction to Buy GK8 From Bankrupt Crypto Lender Celsius, & more.
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Galaxy Digital Wins Auction to Buy GK8 From Bankrupt Crypto Lender Celsius
Crypto lender Genesis allegedly owes $900M to Gemini’s clients: Report
Alameda Research invested $1.15B in crypto miner Genesis Digital: Report
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How to Start Regulating the Crypto Markets—Immediately
Only someone who has been living under a rock could think cryptocurrency markets don’t need stronger regulation. The implosion of FTX, the collapse of the TerraUSD “stablecoin,” and the recent bankruptcy of crypto lenders and hedge funds—all causing massive losses to investors—provide ample evidence that digital assets should be regulated just like practically all other financial products and services. Yet there is continued risk that the road to compliance with basic regulatory principles, in the U.S. and globally, will be rough.
This risk is partly the result of the widely divergent and often emotional responses crypto has triggered since it began. Charlie Munger has referred to crypto tokens as “partly fraud and partly delusion,” while many successful venture investors believe tomorrow’s financial infrastructure will be based on crypto technology. Each camp believes the government should act in furtherance of their view.
Legislative proposals have recently attracted attention, but the question is whether consensus can be achieved in the wake of FTX. Crypto critics are likely to resist any legislative action that could be seen as legitimizing a sector that they distrust and wish would die of its own weight. Many crypto enthusiasts believe FTX shows the problem is “centralized entities” that aren’t faithful to crypto’s promise of decentralization and will oppose any affirmation of our traditional, rigorous approach. Some proposals in the middle—to create safe harbors in some areas and stronger regulation in others—could be tainted by association with the now disgraced Sam Bankman-Fried, the founder of FTX and a proponent of moderate changes.
We believe the SEC and the CFTC should publish a core set of standards, including (1) segregation of customer assets, (2) limits on lending, (3) restrictions on operating conflicting businesses such as trading, (4) prohibitions against fraud and manipulation including wash trading (where someone trades with themselves or an affiliate to inflate the market price or volume of a security), and (5) governance requirements.
One of the reasons for the lack of regulation in the cryptocurrency market is the slow adoption of these technologies by traditional banks. If banks begin to implement cryptocurrency and blockchain technology, regulators may be more inclined to act, as they are often influenced by the actions of major financial institutions. This could potentially lead to broader regulation of the cryptocurrency market at a faster pace than what we are currently seeing.
Galaxy Digital Wins Auction to Buy GK8 From Bankrupt Crypto Lender Celsius
Mike Novogratz's cryptocurrency-focused financial-services firm Galaxy Digital has won an auction to buy self-custody platform GK8 from bankrupt crypto lender Celsius Network, Galaxy said in a press release Friday. Terms of the deal weren't disclosed, but Galaxy spokesman Michael Wursthorn said the price was materially less than what Celsius paid a year ago. Celsius acquired GK8 in November 2021 for $115 million, as reported.
Crypto lender Genesis allegedly owes $900M to Gemini’s clients: Report
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