SEC Staking Krakdown | $BLUR Airdrop | SBF’s Bailout Money Source | Ordinals Still Growing

sign up for the eat Denver Meetup free beer free beer I get I get pretty loose about 1.5 ipas in uh and so it doesn't take much huh when you've been fasted for 36 hours Bank location it is the third Friday of February where after Valentine's Day now and uh David what are we getting ready to do Gary Gensler not showing us any love busy this week no not this week not this week at all but there's so much other cool stuff uh apart from the SEC

bana Hammer that came to uh to hit us on the head this last week so we're going to cover all of that Weekly news and more because Ryan like you asked it's the Friday weekly roll-up where we cover all the weekly news and more which is always an ambitious Endeavor yeah we persevere nonetheless it is uh okay the SEC versus crypto right after we recorded last week Gary smacks us upside the head like three times I think literally one hour after we're done recording the biggest news of the week dropped I was like ah he was waiting he was he was waiting for us to finish yeah

he was afraid that the roll-up was going to capture all of this yeah and uh yeah yeah it's not gonna work Yankee Gary let's talk about that stinky Gary the SEC versus crypto we'll talk about that also David the blur token dropped got some details that don't we big drop yep that's a bunch of numbers uh we also found the source of spf's bailout money really so we're going to talk yeah we're going to talk about who actually paid for SPS bailout um the name Stanford comes to mind uh ordinals Bitcoin ordinals not dead yet

still growing in energy third week in a row where we can still talk about Bitcoin ordinals so glad that that's not turning into a fad this is the most Bitcoin content in years like we have this section in the weekly roll up called Bitcoin stuff it's empty 90 of the time but like the last three weeks in a row it's all been ordinals uh so or more ordinal stuff continues uh Celsius customers might get their money back kind of some of it maybe maybe Ryan maybe tell me there's hope David you can tell me it's a little bit

of hope uh and then also the zkevm wars are heating up once again uh so we'll cover all this and more David before we get in we gotta talk about something we don't usually talk about or chill and that is a bankless citizenship we used to call this bankless premium we're rebranding Rebrand a citizen of the bankless nation and uh what is a bankless citizenship and by the way what are we looking at here because this looks like an event for the bankless nation at um a conference that's coming up what are we looking at yeah exactly so bankless citizens uh get all of the

extras that comes in the bankless ecosystem there's an extra free podcast uh there are in real life events uh there's a podcast weekly podcast yeah exactly the debriefs yeah there's just a bunch of extra perks and and we've uh hired out uh like two quarters ago and continued to hire out and now a lot of this stuff is coming into fruition uh so the perks of being a bankless citizen are up only one of these perks is the bank list Nation and Meetup we so much of the bank list team I think nine of us not including me are showing up to East

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happy this week Chad Chad levels of happiness uh started the week at 22 600 uh ending the week just shy of 25 000 we did touch 25 000 we are currently at twenty four thousand eight hundred dollars so is that a ten percent ten percent nice job Bitcoin dang nice crushing it is taking off the rest yes nft fervor I don't think this is nft forever can we say it is like can we just make up it happened in the same week so yes it is absolutely nft Forever on bitcoin that's why this happened yeah

okay yeah and we called it too we predicted it we knew it would be ten percent how's eth doing eth uh started the week at 16 30 up six percent to 1710. uh we're breaking through that 1700 Mark if we can keep our head there's a resistance line a meme line at Seventeen hundred dollars and we are currently ten dollars above that uh if we can hold that and we have B above the mean line that means we have broken through some resistance and hopefully that means you get continuation uh if you believe in

this kind of thing this view chart magic Pop Quiz so when bitcoin price goes up more than each price what happens to the ratio David uh the ratio uh between ether and Bitcoin goes down from an ethereum perspective so we are down 4.5 which is a big move for the ratio on the week so Bitcoin definitely won the week this week definitely uh won the week and David what would we do without Kraken Who provided us these glorious charts allows us to on a weekly basis tell you the price of eth tell you the price of Bitcoin otherwise how would you know

it's not like how you check the prices yeah you can still you can still tell that Ryan's still using uh his old tabs method even though that these uh Kraken charts have tabs inside of the tabs you don't have to use your browser tabs you can just use all right sold BTC up yeah right it's looking at the soul BTC ratio how's that doing can you zoom out on that uh over on the top left left you can go to the four hour candles instead of four hours candles yeah yeah how's the soul BTC doing oh not great yeah total market cap for crypto I know we're

above Australian right what's the number we are almost at 1.2 trillion we got 1.17 trillion dollars in total crypto market cap uh bullish bullish traffic I feel embarrassed right now I'm not I'm not bearish at all um should that concern me I mean it's been like what 260 some days 250 days or something since um all-time lows on ether uh it's not that long in the scheme of things yeah well so ether bottomed back in last like April or May in dollar terms

Bitcoin bottomed recently in November so ether in the FTX crash Bitcoin hit a new low ethers did not hit a new low so ether's been like uh having higher lows for a long time now it's actually it's because like no one really expected the 2022 bear Market to be as bad as it was and so we were like halfway through 2022 oh is this bear Market happening or not and then all the way through 2022 like oh this is definitely happening now we're into February we're like almost a year and a half into a bear market and that's not a short amount of time so like people like how this bear Market is

going to be so brutal we're a year and a half into it it hasn't been brutal has it like I I just for from an ether has had a better time this bear Market than okay and ether and Bitcoin has had a better time this bear Market than every other asset we'll talk about why that might be true when we get to uh the ultrasound money charts a little bit later but first we gotta do our inflation watch David so the inflation report came out this week and uh how are we doing I'll read the headline and you tell me what this means David inflation Rose 0.5 in January more than expected and up

6.4 percent from a year ago that's up 6.4 percent but overall down in annualized inflation numbers but it grows point five percent in January which as I understand it was a bit higher than most people in the market was expecting so what what do you take from this uh yeah so um the markets really liked this so I think even though it's higher than expectations I think the downtrend the market is starting to believe in this downtrend uh it's interesting it's like

a kind of counter-intuitive but the markets are liking it and I think people are the market is overall accounting for the fact that inflation has definitely peaked it's funny to me because I I don't like this is a little higher than I expected right so just to give you context in just January alone is 0.5 increase in inflation December was only a point one percent increase in inflation so the annualized number covers a lot because it's a trailing uh 12 months even though that was down on the month we were like 5x up I don't know if that makes sense I I do think

that this means we're guaranteed to get more rate increases from the FED at least another 0.25 increase I was already on the table but that was already on the table and this just uh this just guarantees tease it I I saw um some headlines from The New York Times uh one of the subtitles was evidence is mounting that it could be a long road back to normal which also begs the question David of what is normal yeah I don't two percent is no longer the normal number I don't think will like I don't think that should be considered

the The New Normal and I'm not kind of making excuses for the for the FED obviously I mean we we talk a lot about the problem of of money imprinting here but for everyone to just expect inflation to go back to two percent and for it to reset um after we kind of get through this you know covid supply chain thing that we've gone through over the past 24 months I think that is Fantasyland I don't think we're going uh quite there and maybe this um proves that inflation is going to be a bit more pernicious than some

people thought yeah well inflation conspiracy theorists which I don't think is an actually conspiracy but uh has is you know is only reported to be at this level the actual real inflation uh is likely always going to be higher than was reported and people who are familiar with this are the citizens of Argentina and this is a tweet that we're looking at from Dylan LeClaire where annualized Argentine inflation hits 99 basically 100 hundred percent inflation level which means that the value of the Argentine peso loses 50 percent of its

value over an annualized basis uh at the current monthly inflation levels measured in January highest since 1991. can you imagine that so think about that so you're making a hundred thousand dollars last year right um your salary let's say now it's only worth fifty thousand dollars so you hadn't gotten a pay raise at all you just cut in half your um price adjusted earnings right but then you'll go to your employer and be like well because of inflation you have to pay me more and the employer's like yeah I have to pay you more and so in wages

go up which means spending goes up which means inflation in further so which is why this spirals out of control so like we talked about like though I wanted to put this in the agenda because we always talk about like oh inflation's at seven percent oh it's going down to six and a half percent we are so privileged in America to be talking about single-digit inflation Argentine Argentina and many many other countries have been dealing with 20 30 inflation for like decades now and so like the difference between what is the official reported inflation numbers which is always suppressed because it makes governments look better versus

what actual real inflation is like this is this is like new to a lot of American listeners this is a part of life and culture in so many countries around the world yeah you look at this chart um in 2019 Argentina was hitting over 50 inflation almost 60 percent inflation some months right this is um increased but it's not like 50 is uh is the easy Road here um speaking of inflation David this is about the opposite of inflation this is called what they call deflation

deflation my friend this is eth Supply and it's a dip a chart that's only going One Direction that direction is down we talked about this the last couple of times in the roll up but I can't can't believe it we are down almost a full 25 000 ether yeah down 25 000 ether since the merge happened yep which is uh pretty crazy that was 154 days ago this must mean that gas fees are up this must mean that block space demand is uh being demanded

yeah um yeah I I guess maybe tell us what this means gas yeah so we've hit a new 24-hour eath burn record 3 800 this was a result of the blur token airdrop uh gas prices hit something like five it sustained 500 way for almost an hour dude and we haven't seen that since D5 summer days it peaked out at 750 gray the new 24-hour burn record is about 3 800 ether burned inside of 24 hours I

think we almost burned a thousand ether inside of one hour at the very very Peak the monthly inflation rate for ether is negative one quarter of one percent which is pretty cool it's pretty cool gases are back can I ask you so I I mean this is incredible and it's incredible to see this staring in in a bear Market so-called right that's a block space demand being so off the charts why isn't somebody like a Michael Saylor all over ether as NASA like why are some of these people thinking if you could answer that question you get like a Nobel Prize I

don't know I mean but I I this is um is this not sound to money I mean is that this is deflationary I know bitcoiners will Define sound money a little bit differently and they'll say because they don't like disagree with the monetary Supply yeah right but the human control over the monetary this is not human control this is all like code driven at this point right but humans tinkered with it too recently so you have to wait 10 years until you buy it some of the the hardest hard course bitcoiners were like well they humans tinkered with it once therefore it's tainted for forever

but this is an argument we'll never accept it it's just an argument we made going back as as far as the 2018 which is like there's really no incentive to Tinker it in the inflationary direction is there right right not only wants it to become more deflationary yeah if you think about all the evil eth people um like and they have the dials of the monitor even if you think that which is which is totally not true but like even if you think that yeah well all the evil Eve people probably hold a lot of ether don't they right and so why in the world would they be incented to increase the

supply of ether I guess because it's just two different philosophies bitcoiners are like if you never ever touch the monetary policy people will will grow to trust it and then the ethereum philosophy is like if you only make changes that benefit the holder base then people become start to trust it and like if you see every single ethereum monetary policy change ever it has always been towards the more scarce Direction and now recently with the combination of eip1559 improve of stake the supply of ether is becoming more

scarce than Bitcoin judged by inflationary issuance and so it's just a matter of what what do you what are your values and what do you appreciate do you appreciate something that never ever ever changes ever but still perhaps inflates more or do you uh appreciate something that even while there is human input that human input is always into the more scarce Direction like when you want what do you want and also I think the human input into the you know monetary policy of ethers is kind of almost fully ossified I mean there might be some other changes to to gas fee

consumption but we're kind of there yet and also the conversation is like well okay bitcoiners and the Bitcoin philosophy has never ever touch it but then you run yourself into the dead end of like well then your security budget runs out and then you're forced to change it later after you've already like created this culture of never ever touching it and so you run into a dead end that's the ethereum uh perspective on it yeah exactly well let's talk let's talk about uh some Bitcoin stuff because Bitcoin blocks based revenue is up as well yeah what are we looking at though this is the Bitcoin happening Cycles

yeah so uh this is an arbitrary chart that is uh four years in length uh day since happening uh and then they're inside of this four years of time there's this arbitrary lines of hype disillusionment Enlightenment um but it's pretty obvious that the first one-ish year of one and a half years after a having Bitcoin has only gone up three out of three times how many happenings have you had three either three or four uh and so Bitcoin has only gone up in the one and a half years post happening in the second half uh after that one and a half

to like two and a half years after a happening Bitcoin only has gone down and we have continued that pattern and then in the what is the last phase the perhaps one to one and a half years before the next happening Bitcoin is flat to up-ish Flat to up-ish more on the upside I'd say and so we are now in that last phase uh and the idea here is that if this trend continues the approach to the having the one to one and a half years up to the happening is definitely a upwards Trend in bitcoin

price that is what this chart shows this is uh three happenings over time and the red line is is the most recent right so we're getting ready to enter in the fourth and so it does predict this Enlightenment period where bitcoin's just gonna go go on a terror go on a run David no I would say it goes up and then it hits the happening and then exactly that's right then then it goes into after Enlightenment then we can do yeah and then that's when it restarts uh let me ask you though I mean this has been true of previous Cycles but do you still think King Bitcoin controls the crypto

markets in such a way do you do you think that it has I mean first of all the happenings are much smaller than previously so in terms of um like Bitcoin 6. 6.25 Bitcoins issue per block now in about a year and a half it'll be uh one 3.125 yeah and and so that's one argument I make that the second argument I'd make is like well um I I don't think the Bitcoin has the narrative any longer in crypto I mean I I think that

um ethereum for example or web3 in general or other crypto assets has more of the narrative capture than than Bitcoin at this point that that wasn't true in previous happening Cycles but I think it is true now do you think Bitcoin still can control the market in this way uh yeah I think that might be an ethereum like inside of the ethereum world perspective um I think from the outside perspective Bitcoin is still Bitcoin and still dominates uh I I think what you are saying will be true when the flipping

happens almost by definition um I think that like what is culturally web 3 is far more culturally relevant than Bitcoin but Bitcoin is like a financial asset and it's also the biggest financial asset so it still is in the driver's seat but every single how every single year that this goes on I think that that is less and less true as time goes on yeah well we will see what happens this time I do think directionally this will prove to be uh correct one other thing that we'll leave folks with in the market section David is chain analysis came out with their

annual report on illicit cryptocurrency activity David do you want to guess the percentage of crypto transactions that are so-called illicit uh as reported by the last time this report came out from channelis it was something like one percent ish I think it was less than one percent I think it was something I point eight or point nine percent what is it now I I by the way I appreciate you not looking at the answer and actually uh doing a good faith guess because it is on screen right now 0.24 percent

Ah that's really low really low uh elicit inactivity and these guys are pretty close to zero right these guys capture it all it's not just like um you know terrorist financing although that is one category this includes ransomware this includes scams this includes cyber criminal administrators this includes fraud shops and dark net markets and stolen funds and everything that um ofac has has sanctioned includes all of that and it comes in at a whopping .24 percent

um what do you think the illicit activity of like Cash Money real life physical caches approaching 100 I'm guessing it's a lot more than uh 0.24 um yeah and by the way these are the guys I joke with uh my friends like the only time I use cash nowadays is to uh for drugs and laundry and not even drugs these days [Laughter] that's great um yeah so look at this man I anyway point this stat out next time someone tells you that all cryptocurrencies just

like for criminal criminals and drug lords you'd think that Meme would die it but you know back 10 years ago when it stopped being true but it's still alive somehow in our Halls of Congress um David what do we got coming up next coming up next the SEC comes with a band hammer on Kraken on paxos on all the things so we're going to cover the news that dropped right after we recorded the weekly roll up last week um there's also plenty of cool stuff to talk about the blur airdrop uh we also found out the source of SPS bailout money Bitcoin ordinals a lot more than

another the zkevm wars uh a lot of lots of cool stuff so stick around but first a moment to talk about some of these fantastic sponsors especially Kraken who's helping Ryan become a charter these days here we go Kraken has been a leader in the crypto industry for the last 12 years dedicated to accelerating the global adoption of crypto Kraken puts an emphasis on security transparency and client support which is why over 9 million clients have come to love kraken's products whether you're a beginner or a pro the Kraken ux is simple intuitive and frictionless making the kraken app a great place for all to

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Kraken has agreed to shutter its crypto staking services to settle with the SEC they've paid a 30 million dollar fine to settle out of court the SEC has accused cracker of offering unregistered Securities in their staking products so the SEC claims that Kraken sold staking services to the public they pulled crypto assets and staked them on their behalf but did some extra things as well beyond just simply staking that created a unregistered security and so Kraken

has agreed to shutter that service and wind down that that program um yeah what's your take on this run oh that that is of course when you said steak you mean s-t-a-k-e not okay a part of this story this is gonna be a reoccurring theme every enforcement action that we get first with Kraken and with paxos and one other we get this influencer video influencer video from Gary genzer which is extremely infantilizing it's like talking about proof of stake and Gary genser goes that's

s-t-a-k-a-e-e not s t who is the target market for this children what kind of child that's what he's talking like should we should we play this let's play this line all right let's let's play a clip of this what does steak have to do with our Securities laws that's s-t-a-k-e not s-t-e-a-k thanks Gary

yeah but the music office hours you ready in the crypto markets there are various ways to validate data stored on crypto there we go oh my God yeah that's what we're dealing with right now um okay so why I'm sure Gary had a justifiable reason for ending staking at Kraken did he not so there is there are differences between uh like just taking customers ether staking on their behalf

and passing along their rewards so Kraken actually advertised a fixed yield not a dynamic yield and so of course the the yield that you get from staking your assets is dynamic but Kraken advertise like you will get this percentage and then they did some other things that they could do because of the economies of scale to make the product a better product but because they were doing some extra things they were finessing this if you will that went from just being like a software as a security provider I guess to being an unregistered security

so like technically I'm not a Securities lawyer uh technically that what they did change their product from just being a service provider to being an unregistered security but I'll ask the question to what risk was there right and so like yeah they're doing some extra things that change the nature of the product but is what's the risk well I'm confused my argument is this right like all of the things that you mentioned are pretty freaking easy tweaks to make right if Gensler and the SEC if they had a

problem like this product has existed for a very very long time and suddenly now the SEC is giving it the band Hammer why not just have a conversation with Kraken I mean they could have done something like tighter mandates around proof of reserves which I think the entire industry supports with respect to staking more more transparency into where the funds are going like lots of detail there this could have been a productive conversation yeah but it but it wasn't they could have also said something about decentralized staking

options and maybe that being another path but instead we just got the Gary G ban Hammer smacked across their head and by the way Kraken uh in the EU they're still offering staking Services of course yep because this is only for U.S citizens thinking is still up and running totally fine except for US citizens yeah oh but but why is this being banned in the US then I mean like maybe because Gary Gensler wants to trap us in his financial prison exactly because of Care Bear I so I don't

understand exactly why they went with the approach of uh pay us 30 million dollars and you know there's no remediation around shut down your services pay us money and shut down your service yeah uh it's absolutely like it's almost like extortion I'm like it's um it's brutal the way that this is playing out now our friend commissioner Hester purse had something to say about it so of course she dissented is this like the the second week in a row we've talked about one of Hester purse's descents because I think we have two descents Hester person descends in

today's agenda but this is the first one on the SEC Kraken shutdown what does she say uh I'm gonna Skip to My favorite quote uh Hester says a paternalistic and lazy regulator settles on a solution like the one in this settlement do not initiate a public process to develop a workable registration process that provides valuable information to investors just they just shut it down the SEC just shut it down like it's I have to you have to give a tip of the hat to Hester purse who's operating inside of an agency that is not doing

things that are aligned with what she personally believes yes she's still there fighting the fight that she believes in like that's hard calling the agency that she works in a paternalistic and lazy regulator she's basically calling her boss they like Gary Gensler is not her boss I guess not but he's like in the bigger chair and she's calling him a paternalistic and lazy right I am so impressed I'm just so impressed by it it's awesome it is incredible um and

look she it's not it's not just the word she's using which are impressive but like she's raising lots of substance here we've known about crypto staking programs for a long time she also says although it may not have made a difference in this case I should have called for us to put out guidance on staking long before now this is what a leader does too is is take some accountability in this like it's just so refreshing and uh look this is this is a model for how all Regulators should approach this space and approach their jobs in general I'm told we say first principles too often on the podcast we

do not say first principle you cannot say the word first principles this is a first principles regulator I'm gonna say it yes she's doing her job right here and it's incredible to watch in the in the in the contrast of those that aren't doing their job yeah uh this is also coming out so Hester's not the only person who's identified this uh this is representative Bill whozienga pretty sick who's anger yeah uh who tweets out since Gary Gensler won't abide by his own policies to quote come in and talk the House GOP will hold him accountable today as promised our oversight of the

SEC begins with a request for documents surrounding their interactions with SPF FTX and the justice department kind of adjacent to the topic at hand being uh staking but uh definitely relevant to the topic of what the hell is Gary's deal uh and so I guess maybe Kraken made the mistake of not like bribing the right people not scratching Gary gensler's back I mean is that the contrast here like I maybe Jesse Powell should have um been sucking up to Gary a