ROLLUP: Silvergate Liquidate?! | Elizabeth Warren vs. Binance | Bankless 2.0 Announcement | SEC Taking Ls?

we got something called bankless 2.0 that's just dropping at 12 p.m today Eastern on March the 10th 2023 a whole new website a whole new experience for members a whole new bank list a whole new era my God it's a whole new everything Whole New Media Company what else David the bull market starts today bankless Nation it is the second Friday of March David what time is it Ryan it's the bank this Friday weekly roll-up where we cover the entire Weekly News in

crypto which is always an ambitious Endeavor especially in this economy yet we persevere nonetheless because we've got coffee with us we have coffee we've got news we've got crypto what more could you ask for this morning we've got some topics of the week too the silvergate liquidation event I'm going to cover that this is kryptos Trad Five bank did the politicians cause a bank run here we're gonna get into that story what else we got David uh Elizabeth Warren versus binance also on the table uh Liz Warren on the Rampage it's not

Gary Gensler this week it's Elizabeth Warren uh and then after that the SEC taking an L so as as Elizabeth Warren comes into the main character Gary Gensler taking a back seat maybe two L's is it too good to be true we'll talk about all of that and more and perhaps the biggest news of the week Ryan which I know you're excited about uh what tell me tell me about it tell me what's the biggest news of the week we got something called banklist 2.0 that's just dropping at 12 p.m today Eastern All right so listen to this on a Friday

morning maybe later if it's later this thing has dropped already 12 p.m Eastern on March the 10th 2023 a whole new website a whole new experience for members a whole new bank list a whole new era my God it's a whole new everything Whole New Media Company what else David the bull market starts today we're calling it The dropping Bank list 2.0 guys we're super excited about this because we've been working on this for for a while uh this is a new experience

for our free members and then for those of you who are bankless citizens to upgrade so go check it out bankless.com we'll talk about a little bit more in the episode David before we get in here gotta talk about our friends at rhino5 tell us about the Rhino David Rhino it is the One Stop defy app to do all of your layer two things so if you don't want to do any more bridging if you don't want to do any more Network switching if you don't want to deal with Native gas tokens but you still like doing defy things like trading swapping investing pooling and generally earning

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all D5 chains without all of the uh the surface area for you know having to deal with what train you're on all the chaininess zero of the machinskyness we gotta work on this all right markets what are the markets this week Bitcoin Bitcoin down it's a it's a sad week and we're going to talk about why shortly okay uh started the week at 23 500 down 8.7 percent oof uh down to twenty one thousand five did the

FED do this is this why the FED did this one yeah the FED did yes we were like uh I'm not some sort of Market Guru but my sentiments were like bully bully bully and then the FED came it was like No No Bully no you can't have that not this week not yet not yet you tell me Powell doesn't care that eat Denver was going on and he was just strike us down anyway he's not coming off the high of each Denver and he's just like pushing down crypto prices can you do that to us we were just having way too much fun out there he's like that is an illegal amount of fun so I'm going to raise

rates that's what happened how about youth price also sad uh started the week at 16.50 down 7.3 to where we are now at 15.25. well you know what we had what did we have three four good weeks in a row we had a good we had a good attempt it was it was fun while we were well it lasted now we're back down to Goblin Town down we go this isn't goblet this isn't Goblin well like what is Goblin Town tea right now this phase of the market uh I mean if we get down to 1200 maybe below 1300

I will say we are have a Bitcoin uh no ether price 1200 not 12 000. okay oh God if we're at 12 000.99 circle we did something wrong uh yeah right so this is maybe this is the run up to like 1700 that ether had and like whatever Bitcoin got to 25 000. um maybe that was the mid the year high maybe look man maybe it's the same people it's still the same people that

are in so like if you were holding three weeks ago you're holding last week you're holding the week before you're still holding now I feel like this is the same crowd it's not like yeah yeah right A minor run up and we're like oh krypto's back that has not happened yet anyway so we're just grabbing with the same people in the market uh and I'm not surprised I think this is just part of the build Market that we're in this is a here's my take is that um I'm always I'm the purple Bowl we're both permeables here uh I think that there's like regulatory fud that keeps

on hammering oh yeah and crypto is scared of that and it's always been scared of regulatory flood like regulatory flood comes in crypto dumps and it dumps for like a day or a week but it never is sustained it's always a short-term blip my bold case is that that is also true of this uh Rising interest rate fears is like yeah crypto's like oh no interest rates still not over yet and then we'll like we're right we're ready to move on from all of the shenanigans and so it's gonna we're gonna keep on taking these blows but

they're not systemic blows they are short-term blows and so so long as the blows keep on coming the prices are are going to be suppressed as soon as they stop coming Ryan I think it's bullish so like there's yeah Chris bernitski put out the sweet not too long goes like it's a Bitcoin is a beach ball that's trying to like rise to the surface as soon as the fed and soon as Elizabeth Warren goes away that ball is poking right up but right now they're doing a pretty good job of pushing it down but it's like beach ball underwater underwater excuse me yeah the beach ball is underwater yeah and so crypto wants

to rise it just keeps getting pummeled but the the point is that equilibrium is that crypto wants to rise it needs external forces to keep it suppressed that's my take right now good take good take I I support that take David I made that one up just now how about the Bitcoin Ethan price what do you think uh we are up 1.5 on the week above 0.07 for the first time in a while we are at .071 I want to thank Kraken for providing these incredible charts this is all by way of Kraken Pro and let me remind you Kraken was a crypto exchange and a

crypto platform that did not fail you mm-hmm in 2022 these are one of the good guys one of the ogs that been with us from the beginning doing things the right way uh and uh putting out some great charts yeah history like go back to go back a year from and now on the weekly roll up like go to a 2021 weekly roll up and see just Ryan floundering on the charts sorry right and now look at him now look at me now Look at how good these charts I got candles I got uh ratios

at the end man that's just great yeah I got the sole Bitcoin uh ratio if I want that how's that doing oh it's down still not great it's still not great no I don't but I like to keep it there just for fun because I can uh crypto market cap are we above a trillion well yeah but not by much we are at 1.02 trillion just starting to get holding it there yeah below a trillion is starting to feel embarrassed it's starting to feel not Goblin Town Goblin Town for me is like yes yeah I don't think we got down

to 600 million 800 million's Goblin Town what did we do let's let's look at it I think we got down to seven High the high 700 million what do I have to do Max see this is not a nice um charts let me see their charts are not charts I can't see it here yeah you're oh actually whatever I've given up on this chart Kraken can you guys do a total crypto market cap chart please crack in please um let's get into some market news okay so we alluded to this but here's a Reuters headline the FED Pals preview

the fed's Powell previous tougher rate hike path starting soon um here's a quote from Fed chair Powell who controls all things Marcus of course we know is he is um the god the god dollars and Powell is the word of high priest how is the post yeah uh the the pope um nothing about the data suggests to me that we've tightened too much indeed it's just that we still have work to do it's getting uh getting hawkish on the rate hikes there it's hard to make the

case that we've with that we've over tightened means we need to continue to tighten that's what he said there was a I saw this clip David I want to play it for you I don't know if you've seen this but this was a Warren versus Powell on this very point and as we get into this clip oh busy Powell is saying hey we need to fix inflation here's how we have to do it you you keep tightening until inflation is fixed and Warren is saying but what about a recession what about the jobs what about my voters right so

uh let's play this I want to get your reaction to this you ready I haven't seen this okay putting two million people out of work is just part of the cost and they just have to bear it well they will will working people be better off if if we just walk away from our jobs and and inflation remains five six percent let me ask you about what happens if you do this since the end of World War II there have been 12 times in which the unemployment rate has increased by one percentage Point within one year exactly what you're aiming to do right now how many of those times did

the U.S economy avoid falling into a recession you know it's it's not as black and white as it varies written a book on this and there's been 12 times that we've been a one point increase in the unemployed in the unemployment rate in a year that's exactly what your fed report has put out is the projection and the plan based on how you're going to keep raising these interest rates how many times did the

economy fail to fall into a recession after doing that out of 12 times I think the number is zero I think the number is zero that's exactly right so there you go she's like trying to do a Checkmate on on on Powell gotcha we're gonna lose jobs you're gonna send us into a recession and Powell's responses inflation is worse inflation is also not good for American citizens nor workers nor there's two million people it erodes

and and Warren is saying but you're going to cause a recession this way what's interesting and then he says yeah you're right and she's like gotcha and he's like you idiot read a book like I I feel for him because he's like trying to explain himself but she won't let him and when I see this clip I just see like this is the politician playing the politician game yes and it's so cringe man it's so cringe let's remember that politicians are definitely influencers and they are happy to throw anyone under

the bus including Central Bankers right uh if it if it scores them influencer clout points right this is this is the the state trying to politicize the money this is the the fact that obviously this is working because we just played the clip like it was just that's the exchange but I do think that there is a pressure from Congress coming to Powell saying you can't cause a recession but Pal's going like well what are you guys going to do about inflation right what's interesting to me David is Congress doesn't they don't have answers to what we're going to do about inflation in

fact I would argue that a lot of the consumer CPI inflation is actually not Powell's fault you guys know we are not Powell simps at Banquets right there's a lot of things that Central Bankers do that are not awesome for like all sorts of things right they definitely have their their hands on the money printer but you know who else does fiscal policy right Congress our executive branch they can also print money and they did a lot of that fiscal spending during during only print money that is I've been to

the right chart I think you can say Central Bankers are largely responsible for massive wealth inequality Masset asset price inflation since like the bailouts of 2008 it's been up since like policies in the beginning but I don't think you can point to them and say Hey you are the sole reason for the last two to three years of CPI inflation you can't you have to take responsibility for fiscal policy and the fact that countries are overspending relative to the tax earnings and you so you have to either increase taxes or you have to not

spend as much and there is no accountability on Congress to actually do so I feel like they're kind of throwing Powell under the bus and I can't believe I'm defending battle right now but I said the same things like wow I'm on Powell's side on this Elizabeth versus Powell debate oh my gosh uh anyway like what what does this mean for crypto look battles back and forth um it means that fiscal policy and the money printer will continue to like Gober like I I think no matter what I think some of that's going to come from Congress some of that's going to come

from Central Bankers right and political influence of aggregate Congressional members is significantly more than what the FED can probably withstand probably and no one wants to pay like we don't want to swallow the difficult medicine we don't want to get off the morphine trip we don't want to reduce our quality of life because that's ultimately what this means it's like do we want to pay back our debts do we want to increase interest rates well we all need to stop start consuming less we all need to start being more efficient we all need to stop having this extravagant American lifestyle that we're used to over the last 50 years and no one wants to hear

that especially not the Boomers let's talk about that um what about the debt here read the suite out uh the US now has a record 16.5 trillion in household debt a record 11.9 trillion in mortgages a record 1.6 trillion in auto loans a record 986 billion in credit card debt this is what I was talking about this is the extravagant lifestyle we're beyond our means as a country we have been for my entire life all of probably all these listeners entires lives total Mortgage

Debt is on double the 2006 Peak right before the 2008 crash meanwhile 30 of Americans have more credit card debt than savings with balances rising at the fastest Pace since 1999. this is what all while mortgages rates just hit 7.1 percent and credit card debt hit a record 25 we are fighting inflation with debt this cannot end well wow that's a long tweet yeah okay but by the way how oftu like how long can tweets be now oh my gosh like you can keep going it's not only what oh yeah you can they're

almost Limitless dude Limitless tweets I don't know if I like that but yeah we're inflating if inflation is the name of the game these days got inflate tweets yeah inflating our tweets the Twitter money printer keeps uh going forward stable coin check-in let's talk about crypto markets for a second though um usdt is on the rise it's the highest level in 15 months that is of course tether David why is tether going up this has got to be as a result of outflows from busd right so busd going down USD

going up right that's got to be the conclusion here I think that's what's happening yeah um tether's gain came mostly at the expense of busd after the Pax announcement we talked about that last week announcing they were halting new minting of busd and it's grown 5.3 billion to a total of 71 billion dollars in tether which um is tether fully backed we think so kind of mostly I don't know that's not that's not tether's product brother tether's products is being an awful offshore

stable coin that's right and that's what busd was maybe filling part of and tether is just going to take that so the U.S system has no ability to go find hunt down tether um can they do that I mean this is outside of the the bounds of U.S jurisdiction right but the US does have jurisdiction over some other things we're going to talk about that when we come back David what are we cover next Silver Gate liquidate it's the only true words I'll say about that uh Elizabeth Warren Returns versus binance and the

SEC taking an L perhaps two is the tide turning against uh the SEC and we'll probably talk about some youth Denver chatter as well among other things also of course beyond all of that the biggest news of the week bankless 2.0 you know that's coming so we're going to get to all that and more right after we talk to some of these fantastic sponsors that makes this show possible especially Kraken our strategic sponsor for 2023 who supplies this Market section of the bankless weekly roll up with the most beautiful charts that you've ever seen here we go Kraken has been a leader in

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so bad that you don't see any viable paths forward and so crypto friendly silvergate Bank of course has said that is going to unwind its assets and wind down operations of silvergate Capital Corporation a quote from silvergate in light of recent industry and Regulatory developments silver it believes that an orderly wind down of Bank operations in a voluntary voluntary liquidation of the bank is the best path forward the banks wind down and liquidation plan includes full repayment of all deposits so that's

good news all deposits will be fully overpaid according to the liquidation plan the company did not say how it plans to resolve claims against its businesses um silvergate is a crypto bank is one of the two main banks for serving crypto companies along with new york-based Signature Bank is the other main one um just as a size comparison silvergate had over 11 billion dollars in assets compared with uh 114 billion dollars at signature I didn't know that so signature that's much bigger yeah okay the FDIC was in Urgent talks with

silvergate to find ways to save the crypto friendly Bank from shutdown uh FDIC examiners arrived at the firm's headquarters last week and have been since reviewing the firm's books and Records the department is evaluating compliance with all Financial laws as well as safety and soundness obligations and is working close with relevant Federal counterparts so I think there's probably a big question out there is like was it silvergate's fault or was it external forces that have caused this um I don't will have to find out I don't know if there's any reason to suspect

silvergate of anything but I guess we're going to find out either way what do you have a take on this round well a lot of people in crypto are saying that this is basically a run on the bank sure perpetrated by people in power those regulators and politicians going on the megaphone and saying like the operation choke point sorts of sorts of measures people like Elizabeth Warren for example broadcasting this and saying withdrawal withdraw funds from these crypto banks these crypto companies and I would say the broader point is like remember guys

we live in a fractional Reserve banking system right that means any Bank whether it's Wells Fargo Bank of them any Commercial Bank that that you use operates on faith operates it's on faith and so if there was a run on the bank and you decided to withdraw all of us decide to withdraw all of our money at once that's it we can't all get it it doesn't exist guys it doesn't existence that's how the system works yes it's a figment of our imagination it's all kind of on

The Ledger and it all works as long as everyone trusts it and the FDIC has a you know 250k guarantee in all of these things so there is some element David where um yes they probably were sloppy in areas is kind of my my take right now based on the evidence I've seen yes silvery gate could have done additional AML kyc in places um they could have had some you know tighter uh risk policies but I don't think it this is not an FTX type situation right I don't think that there was anything incredibly nefarious going

on at least the evidence hasn't uh borne that out yet but what I do know is there has absolutely been a run on this bank and perpetuated in in some in some cases by regulatory Congressional influencers who are pushing silvergate towards the edge and to that extent I mean I would say that is extremely irresponsible right just just to start this from from the beginning of like a run on the bank is a fear and emotion based phenomenon from all Bank from all customers clients

depositors of that bank and so if there is this run on the bank that's happening and the reason why silvergate is shutting down is because there's just so much net outflow out of the bank because everyone is fearful that silvergate is going under and that fear perpetuates right like turns into a mind virus we have to ask ourselves why did that fear happen in the first place yeah what what's what is the the patient zero or the the trigger of that fear do you have an answer for me Ryan I mean I I think

obviously the entire Market is incredibly jittery coming off of um FTX um I'm not sure who exactly the patient zero is or what um I do know that uh the White House is making some comments on the back of this this is the presser secretary at the White House in recent weeks banking Regulators have released guidelines and how Banks should protect themselves from risks associated with crypto as you know this is a president that is repeatedly called on Congress to take action to protect everyday Americans from the risk posed by digital assets and he will

continue to do so the risk by digital assets so that's what's being thrown under the bus here is uh is crypto it's digital assets this is Senate Banking Committee friend of banks I might say sherard Brown saying as the impact of ftx's collapse continues to Ripple outward today we are seeing what can happen when a bank is over reliant on a risky volatile sector like cryptocurrencies so whatever is happening David whether this is a bank run and kind of silvergate is somewhat a victim in the situation or whether

silvergate did some things that were irresponsible and they're not a victim they are responsible we do know that that politicians are definitely ready and eager to throw crypto under the bus and throw crypto banking under the bus and to me this is just like the continuation of the operation choke point we've been talking about for the last like since the beginning of this year right yeah this is such a nefarious line uh as the impact of ftx's collapse continue to Ripple outwards today we are seeing what can happen when a bank is over rely on risky volatile sector like

cryptocurrencies FTX was not cryptocurrencies FTX was a bank that was pushed offshore and in the and with all of those quality products that drove people into FTX not enabled to be held held onshore by onshore Banks this was on a cryptocurrencies problem as we know as we've reported on Bank list for quarters now every single defy app in the crypto World held up completely solvently FTX which is a bank which was ignored by the SEC and all of

the onshore regulated entities were hamstrung by onshore regulation and so the Ft FTX incident explodes comes back to hit this is a banking crisis this is it happens that there are crypto rails it is a banking crisis that is the the center of this the public opinion The public's not going to understand the details maybe people in the crypto Community will but like they're going to paint this as a problem with crypto I mean Sherrod Brown continues I've been concerned that when Banks get involved in crypto it spreads risk across the

financial system and it will be taxpayers and consumers who pay the price when Banks get involved in crypto what do you think that means they're going to continue to choke the banking sector from touching this whole asset class of crypto that's very disturbing to me David we have a Elizabeth Warren tweet here what does this say oh boy my favorite uh Elizabeth Warren says as the bank of choice for crypto silvergates bank's failure is disappointing but predictable I warned of silvergate's risky if not illegal activity and identified severe due diligence failures

now customers must be made whole and Regulators should step up against crypto risk so in my mind Ryan I'm just saying regulators putting undue burdens upon the crypto banking sector and then as a result of those burdens and perhaps you know also other things FTX and interest rates but also as a result of what Elizabeth Warren is doing here in this tweet putting undue burdens upon the crypto banking sector then the big crypto banking sector fails and then she's like I told you so even though she's part of the problem that caused it to not be a

well-service industry in the first place remember Tyler Cowan's caution uh he wrote an editorial about this came out our podcast he was like Hey I'm most worried that regulators and those in Congress will backlash far too far and yes there was problems with FTX but you're really going to try to choke United States citizens U.S citizens from this entire asset class I worry about that that's what's going on I think Nick Carter had a fantastic take here on celery gate he said this about silvergate about the situation we're just talking about the politicians are

now telling us that because a single Bank peaking at 16 billion in assets that's silvergate wound down in an orderly manner making depositors whole no one lost money here David no deposit or lost money affecting no one but shareholders causing no knock-on effects that crypto firms must be shut out of the banking system right those holding Equity the shareholders of silvergate lost in this that's how it should be that's how this works it's a risk asset holding Equity is a risk asset that the the company is

going to go bankrupt of course so in that sort of situation Equity holders get liquidated no one that deposited funds in silvergate has lost anything so like a bank wound down in a correct and orderly fashion and Elizabeth Warren is like grave dancing yeah is that is that what's going on I think so I mean Nick Carter Nick goes on and says they cry out safety and soundness will will chipping away at the foundation and then act Vindicated when the structure starts to crumble I think that's what's going on here

um yeah here's another thing yeah so this is a take from Mike from blockworks Liz Warren has a 67 million dollar net worth even though her salary is 285 000 per year either she saved 100 of her earnings for 235 years or she's making money another way I love this why do you love this well this just calls into question the legitimacy of what she's doing right she's an influencer who is talking against other people's bags our bags are

crypto bags and then she's uh what Mike is implying here is making money in ways that we don't understand and so as an influencer of the State uh he is calling into question the legitimacy of where she has made her money I think that's a good thing to call into question yeah I get it I think if if and if people think that that's below the belt I think that what Elizabeth Warren is doing is I don't necessarily think it's below the belt I do worry a little bit about the kind of the just because someone's wealthy doesn't mean they made

it in like nefarious ways and we don't know the source of of her wealth but um yeah I 67 million dollars brother it's a lot that's a lot of wealth um let's talk about this Finance under scrutiny as well that is happening this week this is a letter sent yesterday by well Senator Warren I guess this is the senator Warren episode Senator Warren is the main character this week Van Hollen and Marshall to binance and binance us it's absolutely devastating this this tweet says they are flat out accusing binance of Fraud and money laundering

this is not good for CZ have you read this letter what's the tldr D here David yeah basically well it's a pretty damning accusation of CZ and binance's operations basically saying that binance has uh knowingly enabled money laundering reduced kyc compliance checks allows allowed for higher and higher limits of non-kyc accounts in order to trade on binance in order to just like make Revenue right like that's that's their business model uh It also says that accuses them of