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- 💀 SEC Hunts Down CEXs, 🇺🇸 Binance.US Cut Off From US, 🆘 BitGo Saves Prime Core
💀 SEC Hunts Down CEXs, 🇺🇸 Binance.US Cut Off From US, 🆘 BitGo Saves Prime Core
12 June 2023 Update
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Headlines
The US Securities and Exchange Commission woke up last week and chose blood, suing Centralized Exchanges Binance and Coinbase for their “blatant disregard” of federal securities laws. The US government has made a clear distinction between Bitcoin and “crypto” as asset classes (the former deemed to be a commodity, and the latter, securities). Essentially, all “cryptos” are unregistered securities introduced by centralized groups of people pretending they are not corporations, while Bitcoin conversely has an anonymous founder, no CEO, no board of directors, no “product road map”, no promise of profits, and no single entity capable of changing the protocol.
Binance.US is being cut off from the US banking system in the fallout from the SEC lawsuit. The company suspended US dollar deposits and announced an upcoming pause for fiat withdrawals as early as June 13. According to the centralized exchange, it was forced to take action amid “extremely aggressive and intimidating tactics” from American regulators. Binance.US, faces significant challenges as its banking partners plan to withdraw support, leading to a loss of liquidity and customer asset withdrawals. [Editor: While the SEC's crackdown on cryptos can indeed focus more attention on what truly matters (i.e., Bitcoin), these measures also pose significant liquidity challenges for Bitcoin and restrict retail investors' access to it].
BitGo is set to acquire Prime Core Technologies, the parent company of financially-struggling Prime Trust. The acquisition is expected to bring business continuity and long-term stability. While the terms remain undisclosed, the acquisition involves Prime Trust’s Nevada-based trust company integrating into BitGo's own regulated crypto-oriented trusts. BitGo will also gain access to Prime Trust's banking partners, payment rails, and wealth management offerings. The deal is still pending regulatory approval, and specific details regarding the transaction have not yet been disclosed. Recent announcements from bitcoin-only exchanges Strike and Swan, stating their move away from custody through Prime Trust, raised questions about the company's financial situation.
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Top Stories
(3 min read)
There is an increasing regulatory push for Know Your Customer (KYC) requirements when obtaining a new phone number. This highlights the importance of companies like Silent.link, which offers services that do not require KYC information, unlike other operators that collect such data for advertising and surveillance purposes. Silent.link's service plans exclude out-band calls to prevent abuse and user tracking, suggesting the use of separate VoIP services for calling traditional phone networks. Its use of roaming further makes it difficult for local operators to surveil SIM/eSIM cards. Telecoms are lagging behind in technology, including payment services, and are not yet comfortable with Bitcoin payments. Silent.link offers anonymous eSIMS decoupled from official identities with two plans: internet data only and internet data with a phone number. Features further include global mobile 4G/5G internet access, pay-as-you-go international roaming in 200+ countries, worldwide coverage at low prices, and payment options with Bitcoin or Lightning.
[Get $2 off of your purchase when you use the coupon code bitcoinbreakdown].
(2 min read)
CoinBeast's Luke Mikic posits in a Twitter thread that El Salvador's president, Nayib Bukele, may have initiated a 'nation-state Bitcoin hash race' with his announcement on June 5th, 2021, that the country was officially adopting Bitcoin. This decision could, for instance, explain the all-time high hash rates in the midst of a bear market, and the massive withdrawal of one million bitcoin from exchanges since 2020, as it may have encouraged other nations around the world to begin accumulating and covertly mining Bitcoin. Despite China's ban on Bitcoin, it remains a major player in the mining sector, with increased uptake also observed among its neighbors. As a result, this surge in national interest and participation in Bitcoin could potentially exhaust the available supply on exchanges by 2028, marking a significant milestone in its global adoption.
(6 min read)
Emile Phaneuf III writes about how the origins of Bitcoin reveal the influence of the Cypherpunks, a group of crypto-anarchists aiming to create a digital society with protected property rights, enforceable contracts, and its own digital currency. Economist David D. Friedman explored the concept of anarcho-capitalism in his book "The Machinery of Freedom," highlighting how societies can protect property, enforce contracts, and provide defense without the need for state intervention. Friedman's ideas were influenced by Robert Heinlein's fictional novel "The Moon is a Harsh Mistress," which depicted a society with internal law and law enforcement mechanisms. Furthermore, F.A. Hayek's distinction between organization and spontaneously generated order influenced Friedman's thinking about the coordination of activities in a market economy. Timothy C. May, a fervent advocate for a crypto-anarchist society, referenced Friedman's ideas in his own writings. Friedman, in turn, became interested in the convergence of ideas between cryptography and anarchy, giving a talk on the subject and crediting May as a significant influence. Friedman's ideas about internal law and law enforcement within a market system, as well as the coordination of plans among individuals with diverse goals, were influential in the development of Bitcoin by the Cypherpunks. These concepts also impacted other projects such as Tor, anonymous remailers, PGP for email encryption, BitTorrent, Wikileaks, and the Silk Road market.
(4 min read)
Acclaimed investigative journalist and Bitcoin enthusiast, Jordan Schachtel writes that crypto is not Bitcoin, but fiat on steroids. Schachtel supports the SEC's recent actions against Binance and Coinbase, saying that the crypto industry is a scammer's paradise built on deceitful practices, preying on desperate and naive retail buyers.He argues that the SEC's actions are actually beneficial as the crypto industry lacks real innovation and only benefits a few deceitful venture capital fund swindlers. Schachtel argues that most crypto tokens are centralized and have little in common with Bitcoin, which is globally distributed and resilient. He criticizes major exchanges for using retail customers as liquidity for venture capital partners and engaging in fraudulent marketing practices. Schachtel believes the industry deserves the SEC's scrutiny and that the negative reputation of crypto is well-deserved. While he supports the mission of separating money from state, he does not believe the crypto industry deserves sympathy as they have exploited retail investors for their own gain.
(30 min read)
Harris Irfan, Chairman of the UK Islamic FinTech Panel, shares on LinkedIn a version of a lecture that addresses whether there is room for Bitcoin in the future of Islamic (and Judeo-Christian) finance. He concludes that Bitcoin is the most sharīʿa compliant form of money ever invented. It is not just ḥalāl (permissible), it is positively tayyib (wholesome). Muslims believe in a spiritual investment in the dunya (this world) for their akhīra (hereafter). Bitcoin represents a worldly form of long-term sabr (patience), an investment in the future in the dunya. In contrast to fiat money, Bitcoin is further a monetary system that is inherently anti-ribā (unjust or exploitative gains). Proof of work does not allow for easy money creation and therefore eliminates most modern forms of ribā at the source. Irfan also addresses environmental FUD as a key propaganda technique to discredit Bitcoin. He has written extensively on the claims of many scholars claiming that Bitcoin represents rampant, unfettered speculation and is supposedly the worst excesses of modern capitalism. Irfan particularly cautions against the plethora of socially dubious crypto projects with “ḥalāl” labels. All-in-all, Bitcoin is the most disruptive event in financial history and the only widely adopted innovation that aligns fully with the Islamic economic model.
(9:35 min watch)
Matthew R. Kratter in this video discusses the various ways in which crypto is an attack on both Bitcoin and freedom. Crypto projects like Ethereum and Ripple are actively soliciting and collaborating with governments to build government surveillance coins like CBDCs that can be used to control individuals and turn off their money based on their political views or other factors. There are also concerns about crypto funding bogus research programs, lobbying efforts by VC firms and exchanges, and attempts to change Bitcoin's code. Specifically, Ripple is responsible for funding much of the baseless energy FUD against Bitcoin. Kratter urges people to support Bitcoin as "Freedom money" and avoid funding opposition by holding other cryptocurrencies. If you support or own any crypto besides Bitcoin, you are actively helping to fund the opposition and slow down the Bitcoin revolution.
(4 min read)
This thread from Fidelity’s Jurrien Timmer explains how Bitcoin, likened to an unproven form of money, has experienced a boom-bust cycle similar to the dot-com bubble of the late 1990s, and has been compared to both gold and Apple in terms of its potential to become a long-term winner. Bitcoin has the supply characteristics of gold and the adoption curve of a disruptive technology, and despite the volatile cycles Bitcoin has seen, its correlation with real rates suggests that it is indeed a store of value.
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Guides & Explainers
(8 min read)
The Bitcoin Manual writes that the recent Atomic Wallet breach has sparked concerns about the security of multi-coin wallets. While these wallets offer convenience by supporting various cryptocurrencies, they also become attractive targets for hackers due to the potential for accessing a diverse pool of digital assets. The history of multi-coin wallets reveals a track record of security breaches and vulnerabilities resulting from subpar coding practices and reliance on external APIs and extensions. The illusion of diversification in cryptocurrency investments is debunked in this article, as spreading assets across different coins does not reduce risk but shifts it to the assumption of security in wallet software. Multi-coin wallets, often relying on centralized infrastructure and requiring frequent updates, may compromise user control and privacy. The article also advises users to carefully consider the trade-offs between convenience and security, suggesting alternative approaches such as quarantining Bitcoin in a separate wallet or consolidating funds into Bitcoin for better security. The true spirit of Bitcoin lies in self-custody, where users maintain control of their keys and connection to the chain.
(12 min read)
Achieving hyperbitcoinization, a state where Bitcoin is the world's dominant form of currency, is broken down by Jon Hodl into eight necessary steps everyone is suggested to complete or achieve: 1) 'Stay Humble. Stack Sats': This involves acquiring bitcoins, either through manual purchase or auto-stacking. Regular purchasing of bitcoins helps maintain the currency's value and prevent manipulation of its price. 2) 'Accepting Bitcoin': Merchants can boost Bitcoin's circular economy by accepting the digital currency as a valid form of payment. 3) 'Mining Bitcoin': This involves converting electricity into Bitcoin, serving as another method to stack bitcoins without surrendering personal information. 4) 'Earning Miscellaneous Bitcoin': Services, tools, and apps can help individuals earn bitcoins by performing certain tasks or actions. 5) 'Secure Your Seed Phrase': Safeguarding your seed phrase - your private key in a human-readable format - is crucial as it gives access to the bitcoins in your wallet. 6) 'Control Your Private Keys': Users need to maintain control over their private keys to ensure complete control over their bitcoins. They should withdraw bitcoins from exchanges to personal wallets and avoid vendors that do not provide private keys. 7) 'Run Your Own Node': This ensures that users have a complete copy of the entire timechain and can verify their wallet balance and transactions. An extra step would be 'Practicing Good Privacy', which entails preserving the privacy-enhancing feature of Bitcoin and 'Avoid Selling to KYC Exchanges' to prevent chain analysis companies from monitoring Bitcoin activity. The final step is to 'Orange Pill Your Friends & Family' - that is, educating others about Bitcoin and guiding them through these steps.
(6 min read)
KYC (Know Your Customer) is a requirement imposed by financial institutions and crypto exchanges to verify user identities for security and regulatory purposes. However, using KYC exchanges poses serious risks to privacy and security, while also being slower and costlier. Satoshi Nakamoto designed Bitcoin to eliminate trusted third parties, but exchanges holding users' funds now necessitate KYC. KYC allows tracking of transactions, taxation, and potential leaks of private data. Additionally, it excludes billions of people without proper identification from accessing financial services and enables authoritarian control. Those supporting KYC make misleading claims, but non-KYC exchanges offer safer, faster, and more private options. Bitcoin maximalists should consider alternatives to protect their investments and privacy. This piece by Athena also contains a link were they rate different non-KYC exchanges.
(7 min read)
Vince van Dough writes that learning about Bitcoin isn't the same as learning from Bitcoin and offers several pieces of advice for those interested in Bitcoin. Firstly, understanding Bitcoin fully is essential, as it strengthens your resolve to hodl despite market fluctuations. Investment in Bitcoin should also be seen as a marathon, not a race. Follow a dollar cost average approach to manage volatility. Bitcoin is also not meant for day-trading; it calls for patience, discipline, and long-term thinking. The market price of Bitcoin is what it is, and it's not recommended to time tops and bottoms. Though Bitcoin may be dismissed by some, its impact will gradually be acknowledged. Despite its revolutionary aspects, Bitcoin should not dominate your life; it's a tool, not a master. Leveraging in Bitcoin is risky; van Dough recommends simply stacking sats and storing them for the long term. Humility is key, particularly in a space as unpredictable as Bitcoin. It's unwise to follow any one person blindly in the Bitcoin space; instead, gather information from diverse sources. Bitcoin encourages personal responsibility; owning your private keys is crucial. Although many people currently don't care about Bitcoin, they eventually will as they realize its value against the backdrop of an increasingly unstable fiat system.
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Quick Bits
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announces alpha for new social layer powered by Nostr (join the wait list
to be among the first to experience the platform and to secure an entry for a chance to win a Meta Quest 2 or Bitcoin).
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is a new Lighting-supported, privacy-aware url shortener and redirect service.
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introduced their mobile wallet app at BTC Prague last week.
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is a Bitcoin-denominated Life Insurer that has set up shop with $19 million funding from Sam Altman and Google's VC Fund.
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introduces LINER, an index designed to measure Bitcoin returns on the Lightning Network and showcase its potential for low-risk enterprise yield.
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releases short video (10:03 min) titled, Encryption Is Speech: Why Banning Encryption Is Dumb (And Impossible).
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plots to use EU vaccine passport tech to form global digital health certificates.
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Bitcoin's creator has become an educational AI chatbot, trained on a limited data set, including Nakamoto’s public emails and forum posts, as well as other Bitcoin sources.
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embraces Bitcoin payments via Lightning Network for instant transactions through secure messaging.
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buys Coinbase shares worth $21 Million, despite SEC lawsuit.
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open-sourced their Greenlight client repository.
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has built their own Bitcoin infrastructure to reduce dependencies on third parties.
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announced that there are now over 18,000 nodes on the Lightning Network, a number that has been consistently rising over the last year.
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introduces Musig playground: send BTC with many people while looking like just one person.
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is a Nostr fork of Amethyst motivated by Amethyst's non-configurable crowd source censorship rules.
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suspects identity verification on Twitter will slip into a social credit scoring system, aka a Blue Check Manifesto.
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Study calls for additional invasive regulation via 'Euro Wallet' and still idiotically refers Bitcoin's Proof-of-Work outdated tech (pdf download).
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will no longer be offering its services to institutional clients in the United States, effective June 21.
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announces delisting of unregulated securities ADA, SOL, and MATIC on June 27, 2023.
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releases new Ethereum roadmap just to remind everyone how centralized his company is.
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releases video (16:20 min) on CBDS - “Surveillance Coins Are Coming”.
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introduces the Bitcoin Business Kit: everything you need to get a local business to accept Bitcoin payments.
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introduces Bitcoin-centric AI at BTC Prague – a language model that contains the collective knowledge-base and ethos of Bitcoin.
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the makers of Trezor hardware wallet, launches KYC-Free P2P Bitcoin App called Vexl at BTC Prague.
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also introduces the Financial Tyranny Index (FTI), which measures the extent of statist interventions in the financial space.
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does short video (7:40 min) on Michael Saylor's origin story.
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teams up with Coinkite for SATSCHIP Integration.
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says Bitcoin will soon hit $500,000.
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charges Russian nationals with laundering bitcoin in 2011 Mt. Gox hack.
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releases new “clans” feature.
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comes back to life, moves $38 million after making 13,500% gain.
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becoming more popular payment option for elite Dutch sex workers.
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soars, indicating capital flight from crypto into Bitcoin.
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invests in startup that's building a $1 billion Bitcoin volcano mining operation in El Salvador.
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teams up with six major Indian banks to test out a new blockchain-based platform to enable interbank settlement of U.S. dollar transactions.
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presented new project: Crack The Orange: an online learning platform that empowers curious learners searching for trusted Bitcoin content.
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delivers epic rant of the year against Coinbase’s sh!tcoinery.
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ponders whether or not the US government has enough Bitcoin.
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is a new app that enables businesses in Philippines to accept Bitcoin.
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courts controversy by observing that ETH is a security.
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to launch digital currency “in likeness of Bitcoin”.
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prepares to establish 'trusted' exchanges.
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accuses ‘Laser-Eyed Maxis’ of turning Bitcoin into a ‘secular cult’ while ostensibly preparing to raise his next sh!tcoin fund.
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beats odds to mine BTC despite record high difficulty.
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accused of accepting record 1,032 bitcoin bribe.
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will partially restrict payments to crypto exchanges.
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pledges $180K to fund Bitcoin development.
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witness global surge in numbers for the first time in 2023.
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