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Why Should I Care About Bitcoin?
Published
2 years agoon
By
CG_Arman[ad_1]
The following article will provide a layman’s guide to the key concepts surrounding bitcoin and its essential value proposition. It will endeavor to supply the reader with a concise explanation as to its impact and relevance to their lives, bestowing them with a concrete understanding as to why bitcoin is the best medium for preserving and securing their wealth, value, time and future.
So, you’ve heard about bitcoin in the news and the terms “VoLaTiLe,” “ScAm,” “BuBbLe” and “PoNzI ScHeMe” come to mind no doubt. The mainstream media would have you believe that bitcoin is a temporary fad possessing no inherent value. This article will set out propositions that will debunk those claims and explain the importance of sound money and why ignoring bitcoin and the failure to grasp the significance of its impact will be to the individual’s detriment.
It’s Not Your Fault
The very first thing to understand is that it is not your fault that you do not understand bitcoin or the inner workings and complexities of the financial system. We were not taught about this in school and it requires many hours of protracted effort in your spare time in order to begin to understand how markets work and how money works.
It is my belief that the milkman, policeman, teacher and doctor along with all of the other essential professions that comprise our society should not need to have a “portfolio.” They should not need to stress and fret about which bonds or stocks to buy.
In truth they should be able to place trust in their institutions and have a simple method of saving their money free from risk and theft, free from anxiety about where to keep their money. I have great empathy for people who struggle to understand why they can never seem to get ahead and great respect for those trying to find the answers.
The financial industry is mostly smoke and mirrors; it is full of jargon which people use in order to make themselves sound smarter than they actually are and to provide the illusion that only they can do their job.
Why You Never Seem To Have Enough Money
The struggle to keep up with increasing expenses and mounting payments is a recurring theme among many people today. You seem to work harder and longer hours, but your money never seems to go far enough, with many falling into crippling debt just to stay afloat.
Sometimes, this can be ascribed to bad money management and that should not be ignored. However there is an element to money which many people do not see and fail to comprehend. This is the phenomenon known as inflation.
Inflation, as we experience it, is the increase in the cost of goods and services, i.e., nearly everything becoming more expensive. This increase in cost, as we shall see, is a result of the money you hold decreasing in its purchasing power, which is a consequence of the debasement of the currency (reduction in value). This then naturally begs the question — why does currency get debased?
What Is Money?
In order to answer this question and understand why inflation exists we must first understand what money actually is.
Money has adopted different roles throughout history, primarily being used as a medium of exchange, unit of account and store of value. Money has also taken on various forms, from seashells and glass beads to commodities and precious metals (i.e., gold, silver, etc.) to the paper money we have today.
I would direct the reader to watch this excellent series by Robert Breedlove whereby he outlines the core principles of money, providing a primer on the origins of money and its pivotal role and significance in human life.
But from a first principles perspective, money fundamentally is a tool for transferring value across space and time. More specifically, it is a technology that stores energy. Let’s break this down.
As an individual you go to work and expend energy by building a bridge, or say, teaching a class. You expend that energy in order to provide value to your community and as a result you are compensated with money. Therefore, money is a token that represents your time, energy and value provided to the market and to society as a whole. The more value one provides, the more they are rewarded by the market by satisfying wants and desires.
To receive your monetary energy, you need a token, commodity or other note to conserve and protect it — a battery to store your value. Your wealth is a product of the value you have provided, it is therefore your prerogative as an individual to keep your wealth intact and carry that value and wealth into the future without it becoming compromised and losing its worth.
We will compare the three most common types of money used today and how they compare as stores of value, or batteries, for your monetary energy, assessing their effectiveness at protecting and conserving your monetary energy across time and space.
Gold – God’s Money
For centuries human beings used metals as a form of money, particularly silver and gold. Gold ultimately became the more dominant because of the monetary metals it was the most scarce and durable. For centuries gold has been used as a store of value and served the role fairly well. However, gold has inherent weaknesses and is not a perfect money nor an optimum store of value as we shall discover.
Time
Although difficult, more gold is and can always be mined, with the process likely to become even easier as technology evolves and improves over time, allowing access to mineral-rich places. Some even speculate that it may be possible one day to mine gold from the ocean floor and even asteroids.
Its mining rate then is effectively its inflation rate, because the supply is being increased thus devaluing the existing stockpiles. There is estimated to be 244,000 tons of gold that have been discovered to date with 2,500-3,000 tons mined per year, putting gold’s inflation rate at circa 1.13%.
This may not seem like much but assume you have $100,000 worth of gold but each year it is losing its purchasing power by 1.13%, as if that being like the rate of its energy leakage as a battery. This means that 100 years into the future that $100,000 would be worth just $32,000 – meaning you have lost close to two-thirds of your stored value and energy.
Space
Gold also lacks portability; it is difficult to transport across distances. It is heavy and cumbersome, and you run the risk of theft if you simply walk through the street with a wheelbarrow full of gold. So that inevitably means you will require an escort of armed guards to protect your gold when transporting it from one place to another, as well as requiring a place to store your gold (such as a bank vault) leading to you having to custody your gold with a centralized institution.
You now have counterparty risk because you are relying on that institution to safeguard your assets and trusting that it can remain solvent into the future, which is not always the case. Just try to think of somewhere you could have safely placed your gold anywhere in the 20th century without it being confiscated or stolen.
You likely would have only been successful in three countries, namely the U.K., U.S. and Switzerland. Even in these “safe havens,” two of these aforementioned countries actually seized their citizens’ gold. In 1933, the then U.S. president Franklin D. Roosevelt confiscated his citizens’ gold with Executive Order 6102 “forbidding the hoarding of gold coin, gold bullion, and gold certificates within the continental United States.”
Similarly, in 1966 the Exchange and Control Act 1947 was amended, permitting the U.K. government to ban citizens from owning more than four gold or silver coins and blocked the private import of gold. Every other country in the 20th century at one point or another was either mired in war (and lost) or suffered from corrupt, tyrannical governments who would confiscate their citizens’ wealth on a whim.
The probability of an event like this occurring again is for the reader to assess; what cannot be denied however is that if you choose to place your gold in a bank vault, you assume counterparty risk, and as an individual you no longer have custody of your asset, but are now relying on favorable external conditions to safeguard your life’s work and wealth.
The Fragility Of Fiat
This now brings us to the present day. In order to understand why inflation exists and why money is systematically debased we have to also understand what fiat money is. The word fiat means “by decree.” Fiat currency is money that is endorsed by a central authority or government but has no inherent value in and of itself, being just paper rectangles with someone’s face on it.
Fiat currency is the most common and ubiquitous type of money used today, examples being dollars, pounds, euros, yen, etc. As mentioned above, fiat money does not have any inherent value. However, this was not always the case. Modern-day fiat currency such as dollars and pounds used to be backed by gold. Prior to 1971, before President Richard M. Nixon terminated the convertibility of U.S. dollars to gold, an individual could enter a bank and redeem their paper notes for its equivalent in gold.
Space
The reason for fiat’s initial success and popularity is that it allowed the user a better means for transporting their wealth across distances. It is wildly inefficient to have to carry gold around in order to transact with another party. Paper currency offers liquidity, portability and ease of use. In spite of this however, you still require a place to store your cash with many opting for banks as their favored choice, which again forces you to take on counterparty risk by storing your wealth with a centralized institution.
This system would be highly effective but suffers from one major flaw. Its Achilles heel? Human beings.
As mentioned above, fiat currency occurs when you can no longer redeem your paper money for gold, and you are left to trade and transact with those paper rectangles. Because of human failings however, this “legal tender” legislation opens the door to mandates which end up manipulating the currency’s value, inflating the supply and as a result debasing the purchasing power of its users’ so-called “money.”
Time And The Insidiousness Of Inflation
We now understand that inflation is a product of fiat currency. A useful metaphor for inflation would be to picture a barrel — you fill this barrel with water every month, storing it as insurance against droughts and future uncertainty.
However, unbeknownst to you, I have drilled a small hole in the side of the barrel. At first due to the barrel’s size, you don’t notice the water level having diminished. But if one were to leave the barrel for a few years and make no further contributions, upon your return you would see that the water level had decreased dramatically. Depending on the length of time you left the barrel unattended, you may return to see almost all of the water having leaked from the vessel.
Inflation is entirely avoidable, as in … entirely. I believe the reason for inflation existing is due solely to quantitative easing perpetrated by governments and the central banking cartel. This simply means that central banks print more money, which further inflates the total money supply, thus systematically devaluing the currency in order to gain access to capital and appreciate assets (which they hold for the most part) whilst simultaneously stealing from the rest of society. Quite simply it is a wealth transfer from the poor to the rich.
Whether central bank and government actions should be considered as malicious or benign is down to the individual to decide; the results however remain the same, no matter the intent. Inflation is larceny, whether it is perpetrated consciously or not, and it carries disastrous consequences.
US Dollar M1 Money Supply
To put this into perspective, 40% of all U.S. dollars in existence were printed in 2020-2021.
The act of inflating currencies is not something new nor a modern phenomenon. This systematic devaluation of the currency has occurred multiple times throughout history, the Weimar Republic of Germany and Ancient Rome being two pertinent examples.
In 1923, the Weimar Republic suffered from catastrophic hyperinflation, reaching a point where a single loaf of bread cost 4.6 million Deutsche marks. Many would also burn their marks to heat their stoves because it was less expensive than buying firewood.
The collapse of the Roman Empire was also aided by the debasement of their currency, whereby the Emperor Nero diluted the denarius into oblivion. The silver coin was initially of high purity containing approximately 4.5 grams of pure silver. However, over time the silver content was diluted from 90% silver in 64-68 AD to only 0.5% silver by 265 AD. Each coin comprised a bronze core with a thin coating of silver, with the shine quickly wearing off to reveal the poor quality underneath. As a result, Roman soldiers would no longer accept being paid in the devalued coins with the empire eventually collapsing as a consequence.
To provide an example of how inflation can impact people today, let us assume that you are an astute and accomplished saver. You “save” $10,000 in your bank account (your battery). You have done well you think. However, although you have $10,000 in nominal value, the purchasing power decreases over time, harkening back to the earlier example of the leaking barrel.
Now ask yourself what your interest rate is on your “savings” account at your bank and compare that to the reported inflation figures. In all likelihood you are making a net loss — you are losing energy and your battery is being drained at a rapid rate.
If we do the same exercise with fiat as we did with gold, starting with $100,000 sitting in your bank account, and your interest rate being effectively zero, in 100 years that $100,000 would be worth just $205 at today’s average interest rate. This equals a total loss of 99.8% of your purchasing power based on an inflation rate of 6%. This therefore highlights the folly of storing your wealth in fiat currency
You must understand that if you have not allocated your capital adequately and it remains in your bank account, you are mathematically guaranteed to lose money.
In order to avert this, one is forced to buy assets in order to “beat” inflation and retain their purchasing power. This compels the market participant to take on the risk of investing into equities, bonds, real estate, precious metals, art and other alternative investments as stores of value.
Inflation is measured via the Commercial Price Index (CPI). However, what many economists will fail to reveal is that CPI is chosen to not include specific goods and assets in order to make it seem lower:
“Though it does measure the variation in price for retail goods and other items paid by consumers, the Consumer Price Index does not include things like savings and investments and can often exclude spending by foreign visitors.” (Jason Fernando, 2021).
“Core inflation is the change in the costs of goods and services but does not include those from the food and energy sectors. This measure of inflation excludes these items because their prices are much more volatile.” (Will Kenton, 2020)
This assumes that individuals are not concerned with growing their wealth over time and are disinterested in increasing their prosperity into the future.
In order to measure the real rate of inflation, it is actually (rather comically) more reliable to measure the increase in cost of a Big Mac benchmarked against “official” CPI figures in order to gain a better picture of the situation and the real inflation rate.
Societal Implications
Inflation has many societal implications and rots a civilization from the inside out. For example, if home ownership becomes unattainable for many, then the prospects of the younger generation are severely handicapped and restricted, resulting in feelings of nihilism, desperation and hopelessness as the gap between the poor and the affluent increases.
As well as money being energy, it is also a mechanism for measuring value and worth. If you were asked to measure the width of a door, for example, but the ruler kept changing, you would have no possible way of knowing the door’s true width and measurement. Can you imagine if we had the same issue with ounces, kilos, octaves, seconds, kelvins or amperes? It would be chaos.
Low Versus High Time Preference
If you cannot secure your life force and you have no sight of change for the future then you have a higher probability of adopting a higher time preference, meaning you will be more inclined to spend your money in the here and now because the ability to buy a house or achieve financial independence fades by the year.
With that realization, many can’t help but feel despondent, derided and resentful towards a system that has been set up to ensure their failure. Therefore, many individuals might choose to numb themselves with distractions, mindless entertainment, hedonistic pursuits and drug abuse accompanied by the general loosening of morals. The manipulation of the money supply affects the quality of our lives to a significant degree.
The Bitcoin Standard
Bitcoin is the antidote to central bank poisoning. Bitcoin rewards savers rather than punishes them. It offers a symbiotic relationship with its user, as opposed to a hostile one with fiat currency, and returns sovereignty and autonomy to the individual.
It is a mistake to see bitcoin simply as an investment when it is actually a deflationary savings technology. Bitcoin is the separation of money and state — it keeps your hard-earned time and money out of the hands of perfidious politicians and larcenous central bankers.
Many often describe bitcoin as “digital gold,” which while a useful analogy, does not do justice to the magnitude of change and new possibilities which bitcoin offers to the world. Instead, it is best to think of bitcoin more as a new invention, similar to the invention of railroads, the airplane, automobiles or the telephone.
All of these inventions and new technologies when first introduced were met with suspicion and oftentimes hostility by the general public. Human beings do not typically like change, but over time when new technologies are adopted by more and more people our barriers are lowered as we come to understand its superior utility and the discovery of a better way of doing things.
In fact, it could be argued that bitcoin is both an invention and a discovery, similar to fire. It is a discovery because it is the first time that human beings have uncovered absolute scarcity — we have never had anything which had a perfectly fixed supply.
When early man first began playing with fire it might have been met with fear and trepidation by the rest of the group. Some individuals may have been burnt or scalded by the element and written it off as dangerous and a threat.
But when channeled correctly, fire can be used for heat and warmth, a method of cooking food, a way to scare off predators, a means of communication, the clearing of debris and forestry and eventually leading to the invention of electricity. It is safe to say then that the discovery of fire was a net positive for humanity and contributed greatly to man getting to where he is today.
Bitcoin’s Value Proposition
Bitcoin’s main value proposition is that it is the perfect vessel for securing your wealth across time and space. With zero inflation and zero energy loss, you can retain 100% of your purchasing power 100 years into the future. This cannot be done with any other form of money or asset.
Bitcoin satisfies and has perfected the properties of money.
Time
This is only possible because bitcoin has a supply cap — there will only ever be 21 million bitcoin in existence, with close to 4 million being already lost forever. To understand this scarcity, there are 56 million millionaires in the world, which means that not every millionaire will be able to acquire a whole bitcoin.
This supply cap cannot be altered, changed or increased by any party. It is completely decentralized, no one can ever inflate the supply or change the code.
Space
Because of its decentralized nature, bitcoin carries no counterparty risk. One can (and should) take full custody of their bitcoin holdings, meaning there is no need for the use of banks or centralized institutions. You do not have to rely on any third party to transact with bitcoin, as it works via its own peer-to-peer network, similar to conducting in-person cash transactions, yet accomplished over the internet with great distances separating the parties involved.
In terms of bitcoin security, it is far superior to any other asset due to its encryption technology and non-reliance on third parties. Because bitcoin is digital and protected behind a wall of cryptography, nobody can access your bitcoin holdings except you because you hold the cryptographic keys.
This means that you can take your wealth with you across territories and domains and have it remain 100% intact. If you are a refugee leaving your country of origin in search of a safe harbor, you cannot take your house with you. A house is immovable, and physical objects such as cash, gold or art are susceptible to theft and confiscation. With bitcoin, all of your wealth is effectively stored in your mind.
“I’m Too Late To Bitcoin”
The first thing to note is that you are not “too late” to bitcoin. Bitcoin is still in its monetization phase which means that there is still huge opportunity for growth.
This is a common misconception amongst newcomers into the space, believing that the time has elapsed for them to acquire any meaningful position in bitcoin. But this simply isn’t true.
I won’t delve too deep into the macroeconomics of bitcoin here, but one should understand that gold has a market capitalization (total value) of over $10 trillion whilst bitcoin is currently only worth less than $1 trillion. If bitcoin is to replace gold as a store of value, then it still has more than $9 trillion left to absorb in monetary energy — and that is almost a 10x from its current position.
And this is only assuming that it replaces “only” gold as a store of value — the bond market has an estimated market cap of $119 trillion, which bitcoin is also a possible threat to. Moreover, many of the bonds have negative yields, which simply means that the bondholder receives less money that what they initially purchased it for.
Satoshis And The Game Of Accumulation
Tip! You can buy a fraction of a bitcoin.
The wise approach is to focus on accumulating satoshis. Satoshis are the smaller units which comprise an entire bitcoin, similar to how pennies make up a dollar.
100,000,000 satoshis equals one whole bitcoin and at the date this article was written you can purchase 1,000,000 satoshis for just $596 or £450. The goal then becomes to acquire as many satoshis as you possibly can while their value is still increasing dramatically over time. Having some level of exposure to the asset by allocating a small portion of your net worth for the asymmetric upside would be a tactically intelligent move to make.
Conclusion
This article has aimed to provide the reader with a broad overview of the importance of bitcoin and sound money. I would direct the reader to continue reading and finding resources to find out more about the history of money and its impacts on human civilization.
This is a guest post by Beren Sutton. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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dYdX Founder Advises Crypto Industry to Abandon US Customers, Deeming Market Effort Unrewarding
Published
4 weeks agoon
August 28, 2023By
Team CG
The founder of the decentralized exchange, dYdX, asserts that individuals involved in cryptocurrency development should direct their efforts toward international markets beyond the United States for the upcoming five to ten years.
Antonio Juliano conveys to his audience of 49,400 on the social media platform X that the prevailing regulatory uncertainty within the United States does not merit the associated challenges or concessions.
Juliano contends that it would be more prudent for cryptocurrency developers to establish their products in alternative countries and subsequently re-enter the United States from a position of strength.
“Cryptocurrency developers would be well-advised to temporarily discontinue catering to the US market and instead seek re-entry in a span of 5-10 years. The complications and compromises involved do not warrant the endeavor. Moreover, a substantial portion of the market exists overseas. It is recommended to innovate in those regions, ascertain product-market fit, and then return with greater bargaining power…
The paramount objective shared among all stakeholders is to secure a significantly more potent product-market fit for cryptocurrency. The pursuit of a robust product-market fit does not necessitate flawless distribution. A multitude of substantial overseas markets present avenues for experimentation.”
Juliano articulates that advocating for more amiable cryptocurrency regulations demands time, although the process could be expedited if developers manage to introduce products that elicit consumer demand.
“However, this perspective does not undermine the importance of efforts to influence US cryptocurrency policy. On the contrary, such endeavors are absolutely vital. Given the protracted timeframe required (in anticipation of re-entry), and considering that much of the world takes cues from the United States, it becomes evident that our progress in shaping policies hinges upon achieving global-scale product usage.”
The dYdX founder proceeds to emphasize that, with time, American citizens will come to realize that cryptocurrency is inherently aligned with US values and principles.
“The tenets of cryptocurrency closely align with American values. What concept could be more quintessentially American and reflective of capitalist ideals than a financial system conceived for the people, driven by the people, and answerable to the people? This, indeed, constitutes the very essence of our endeavor.”
Read Also: Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
News
Bloomberg Analyst Mike McGlone Predicts Bitcoin Vulnerability in Economic Downturn
Published
4 weeks agoon
August 27, 2023By
Team CG
Bloomberg Intelligence’s senior macro strategist, Mike McGlone, is conveying a pessimistic outlook for Bitcoin (BTC) in the immediate future.
During a recent interview on Kitco News, McGlone underscored that Bitcoin is currently displaying bearish signals even amidst the ascent of other high-risk assets.
“In the event of a downturn, adhering to a rule prevalent in bear markets, resources across the board could witness a reduction in value, and Bitcoin will not be an exception.
A crucial observation is the necessity for Bitcoin to exhibit divergent strength at a certain juncture, akin to the behavior of treasury bonds and gold in a deflationary economic environment. Regrettably, this pattern has not materialized.
After attaining its peak towards the conclusion of Q1, reaching approximately $31,000, driven by optimism and the influence of exchange-traded funds (ETFs), Bitcoin subsequently retraced to $25,000 or approximately $26,000. Presently, it is manifesting divergent weakness in contrast to the concurrent upsurge in the stock market.”
According to McGlone’s analysis, the ongoing “economic reset” implies a continuation of Bitcoin’s recent downward trend, although he anticipates that the premier cryptocurrency will ultimately attain a six-figure valuation.
“While I believe that Bitcoin will eventually achieve a valuation of $100,000, the onset of a global economic reset, as I anticipate, characterized by a standard deflationary recession leading to a decline in the housing and stock markets, analogous to the conditions of 2008—though arguably exacerbated due to the ongoing removal of liquidity from the system—Bitcoin’s role as an influential precursor comes to the forefront.
This underscores my point that Bitcoin has recently been taking on the role of a harbinger of trends. Its value ascended briefly to around $31,000, only to subsequently trend downwards. From my perspective, it serves as a leading indicator for a majority of high-risk assets.”
As of the time of writing, Bitcoin is trading at $26,079.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
News
Lead Developer Announces Imminent Public Reopening of Shibarium
Published
1 month agoon
August 24, 2023By
Team CG
Shiba Inu’s (SHIB) Latest Layer-2 Scaling Solution Nears Public Relaunch Following Recent Technical Challenges
Shytoshi Kusama, the enigmatic lead developer behind the SHIB project, has shared in a recent blog post that significant progress has been made in addressing the technical setbacks that temporarily halted the operation of Shibarium, SHIB’s new layer-2 scaling solution. The initial release of Shibarium encountered network issues that prompted its temporary closure. However, Kusama assured the community that diligent testing and parameter adjustments have led to notable improvements.
Kusama elaborated, stating, “After extensive testing and parameter refinements aimed at achieving a ‘ready’ status, Shibarium has undergone enhancements and optimization. While still undergoing testing, it is now successfully producing blocks.” Additionally, to prevent a recurrence of the past network overload, Kusama revealed the implementation of a new monitoring system and supplementary fail-safe measures. These include rate limiting at the RPC (remote procedure call) level and an automated server reset mechanism in the event of another surge in traffic.
With these advancements in place, the team is on the verge of reopening Shibarium to the public. As part of this progression, more network validators will be integrated into the ecosystem on August 23rd. Kusama emphasized the significance of this step, remarking, “Tomorrow, additional validators will become operational, expanding the options available for staking BONE. This will allow for a distribution of rewards earned through their roles within our community. As testing concludes, we will once again prepare for public utilization.”
Shibarium’s previous technical difficulties were attributed to an overwhelming influx of users and transactions during its initial launch. As of the current writing, SHIB is trading at $0.00000798, marking a 0.4% increase over the past 24 hours.
Read Also: Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration
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Sam Bankman-Fried, Co-Founder of FTX, Files for Temporary Release from Incarceration
Published
1 month agoon
August 20, 2023By
Team CG
FTX’s co-founder, Sam Bankman-Fried, is currently seeking a temporary release from incarceration. The purpose behind this endeavor is to engage in collaborative strategizing with his legal representatives within the confines of the federal courthouse situated in Manhattan.
In a formal letter dispatched to US District Judge Lewis Kaplan on a Friday, Bankman-Fried’s legal team expounded that their client’s capacity to effectively scrutinize the extensive legal documents pertaining to his case has been significantly curtailed during his time spent incarcerated at the Metropolitan Detention Center (MDC) in Brooklyn.
Christian Everdell, the attorney representing Bankman-Fried, divulged that the government recently disseminated a voluminous three-quarters of a million pages of Slack communications. These were originally due several months prior. Expressing the urgency of the situation, Everdell articulated, “Only last week did the government furnish an aggregate of approximately seven hundred and fifty thousand pages of Slack communications that were originally stipulated for release months ago. Given the current timeline, it is a futile endeavor for Mr. Bankman-Fried to endeavor to review these materials.”
He underlined the pivotal necessity for Bankman-Fried to collaborate meticulously with his legal team, emphasizing his dire need to avail himself of an internet-enabled laptop within the courthouse premises. Such a resource would undoubtedly expedite the process of comprehensive document review, an imperative undertaking in light of his impending fraud trial scheduled for the forthcoming October.
In riposte to Bankman-Fried’s plea for reprieve, the prosecuting body voiced apprehensions regarding his adherence to the prerequisites concerning his planned defense strategy. Notably, they underscored that Bankman-Fried is yet to furnish the complete gamut of essential information regarding the counsel upon which he predicated his actions.
The prosecutors proffered caution that unless Bankman-Fried promptly discloses the minutiae regarding the counsel he received and the provenance thereof, any attempt to interject such a defense during the trial should be summarily proscribed.
Although the prosecutors extended an offer to facilitate the transfer of documents onto hard drives for Bankman-Fried’s perusal within the MDC premises, a viable laptop-based solution was deemed unattainable. Initially, the notion of relocating Bankman-Fried to a more compact, upstate correctional facility where he could access an internet-enabled laptop was contemplated by the prosecutors. However, this proposal was met with resistance from prison officials.
Regarded for its starkly onerous conditions, the Metropolitan Detention Center has cultivated a notorious reputation among its inmate population.
Bankman-Fried’s Incarceration Stemming from Unsanctioned Internet Utilization
As documented, Judge Kaplan sanctioned the re-imprisonment of the beleaguered cryptocurrency luminary, citing alleged instances of witness tampering.
In that juncture, Judge Kaplan pronounced that a strong prima facie case existed indicating that the accused had endeavored to tamper with witnesses on no fewer than two separate occasions.
The decision was additionally influenced by Bankman-Fried’s unsanctioned use of the Internet while released on bail under the guardianship of his parents at their abode located in California.
Judge Kaplan discerned that Bankman-Fried had indulged in excessive communication with various individuals via electronic correspondence, even resorting to the utilization of a virtual private network.
Concurrently, the disgraced progenitor of FTX is simultaneously grappling with novel allegations brought forth by the Department of Justice (DOJ). These allegations encompass the misappropriation of customer deposits, including the purported embezzlement of said funds.
An indictment filed on the most recent Monday delineates that Bankman-Fried stands accused of diverting and embezzling customer deposits from the FTX platform. The illicitly obtained funds were purportedly channeled towards political campaign contributions, collectively amassing a substantial sum exceeding one hundred million dollars, in advance of the 2022 US midterm elections.
The indictment further posits that despite Bankman-Fried’s intimate knowledge of FTX’s fiscal insufficiencies, he continued to channel the purloined funds into personal investments, acquisitions, and political campaign contributions.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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U.S. Securities and Exchange Commission Nearing Appeal in Ripple Lawsuit’s XRP Decision
Published
1 month agoon
August 19, 2023By
Team CG
The U.S. Securities and Exchange Commission (SEC) is taking significant steps towards pursuing an appeal in their recent legal battle against Ripple, indicating a potential shift in the course of the lawsuit.
James K. Filan, an experienced defense attorney specializing in crypto-related legal matters, has shed light on the latest developments. District Judge Analisa Torres has initiated a structured process for considering the SEC’s request to present an interlocutory appeal—a move that would allow the SEC to contest certain aspects of the ongoing case.
It’s important to note that this preliminary step does not guarantee the authorization of an interlocutory appeal; rather, it signifies that the SEC has been given the opportunity to formally request such an appeal.
Judge Torres has outlined the timeline for this process in her official order. The SEC is expected to file their motion for the appeal by August 18th. Subsequently, Ripple is given until September 1st to submit their opposition papers. If the SEC deems it necessary, they have until September 8th to file a reply.
The news of these developments had an immediate impact on the cryptocurrency market. Following the announcement of the judge’s order, the value of XRP experienced a sharp decline. The price, which had been trading at approximately $0.571, dropped to around $0.499 at the time of writing. This decrease of over 12% aligns with the broader trends observed across the cryptocurrency landscape.
The legal clash between the SEC and Ripple began when the regulatory agency filed a lawsuit against the San Francisco-based payments company in late 2020. The SEC alleged that Ripple had engaged in the sale of XRP without registering it as a security.
In a significant turn of events last month, Judge Torres issued a ruling that had mixed implications for both parties. She determined that Ripple’s automated programmatic sales of XRP, which occurred on the open market, could not be classified as securities offerings—a pivotal point of disagreement between the SEC and Ripple.
However, the judge did uphold a key aspect of the SEC’s argument. She agreed with the agency’s assertion that Ripple’s direct sales of XRP to institutional buyers indeed amounted to a securities offering, reinforcing the complexity of the case.
As the legal battle continues to unfold, the spotlight remains on the actions and responses of the SEC and Ripple, and how their ongoing dispute could shape the future regulatory landscape for cryptocurrencies and digital assets.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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