Joe Biden Banning Crypto.

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Below on building your wealth whether

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it check it out down below from my

perspectives now we gotta talk crypto

and holy smokes this is intense the SEC

is getting increasingly aggressive

thanks to the collapse of FTX and there

are some murmurings that the Biden

Administration might be trying to go as

far as straight up Banning crypto those

are some of the talks that are going on

right now about potentially Banning

crypto and what some people are calling

operation choke point 2.0 in this video

we're going to talk about why as some

people believe that's happening we're

also going to look at the coinbase

response to why they believe that

staking is not a security and I have to

say

I'm embarrassed about the response we'll

talk about that as well but first

understand this Regulators right now

according to Columbia University seem to

be building a wall around crypto and and

that's because you're getting more and

more

denials of crypto access to the

mainstream Financial system consider

crypto firm custodia bank that was just

denied access to the federal reserve's

fed payment system on January 27th and

the Federal Reserve also made a

statement forcing essentially that if

you want to be associated with the

regular Financial system you better have

Risk Management Systems in place you

better follow the law and you better be

in compliance with know your customer

anti-money laundering and anti-terrorist

financing laws you also have to show

whether you're insured or uninsured you

have to show that you are actually

appropriately supervised these are

basically

responses from the federal government

saying look we're pissed that FTX

happened and that Americans lost money

in FDX and FTX UF and we want to prevent

something like that from ever happening

again now there are some folks in the

crypto space saying well Banning crypto

we're preventing these these crypto on

and off ramps actually ends up making

crypto more dangerous you should be

regulating it into existence not out of

existence but this particular crypto

Venture Capital investor and journalist

Nick Carter says that you potentially

are trying or you're seeing the Biden

Administration essentially ban crypto

this is how far they're going they're

saying that there's been a widespread

Crackdown over the last few months

against the crypto industry and crypto

veterans are now nervous according to

this individual that crypto businesses

might end up completely unbanked and

shut out from the entire Financial

system because of the discouragement

that is happening from the Federal

Reserve and financial institutions

against these companies look for example

at letters sent to silvergate scolding

them for being associated with FTX and

Alameda research a lot of people got

caught up in this and just totally

destroyed uh in terms of their

association with FTX you've got

Signature Bank polling out and having

its deposits and their exposure to

crypto you've got statistica alleging in

a class action lawsuit that Signature

Bank knew there was suspicious activity

going on at FTX and still ended up being

associated with FTX

now then you have a silvergate uh

basically limiting its USD on and off

ramps and this is probably the big issue

I made a little note uh at the top of

this piece actually here remember Chase

limits on wires to crypto I remember

wanting to wire money to a crypto firm

to invest in crypto and uh and the the

headaches the banking system made you go

through to actually get your money into

the crypto ecosystem we're pretty

intense and this basically suggests that

look I mean if you kill which at the

moment you could still fund uh you know

let's say like your coinbase account

through uh debit wire or PayPal whatever

but if you eliminate those on and off

ramps you make it a lot harder to get

into the crypto and to actually invest

in crypto uh and so you're you're

noticing now look even binance

announcing that they have a policy with

Signature Bank that they're only going

to process Fiat transactions worth a

hundred thousand dollars or more uh so

you've got a whole host

of intensity and increased scrutiny

coming into crypto and it's not the good

kind of Regulation it's more like the

regulation that's squeezing crypto out

rather than trying to legitimize crypto

binance for example just suspended USD

Bank transfers to retail clients binance

us not being affected by this this is

binance international so you're seeing

this sort of squeezing out and the

question isn't how bad it is of what's

happened but it's what's going to happen

next and the next idea is that you're

going to potentially see the Banning of

just stable coins in general I mean

consider the following note I put here

at the bottom as of yesterday the SEC is

threatening paxos who's an issuer for

stable coins they are really big into

the crypto ecosystem their payment

processor as well but anyway paxos is

threatening to be sued suggesting that

uh stable coins are a security now paxos

has vowed to defend this suggesting that

no stable coins are not a security and

do not need to be registered with the

SEC however this has led to the New York

Department of Financial Services

demanding Pax to stop stop minting

binance USD which is the third uh

largest uh coin uh Card Market that

might have gone down to Fourth uh but

busd is the third largest stable coin uh

not to be confused with BNB which is the

binance token that's the fourth largest

uh coin binance's stablecoin is the

third largest stable coin and next to a

usdc in position two tether in position

one but you did see B and B fall about

10.75 percent over the last a week here

and I hate to say it but coinbase's

response to to sort of this pressure in

my opinion was a joke now I'm going to

show you coinbase's response here and

show you why right after we continue

going through here but I want you to see

what sort of the crypto argument is the

crypto argument is that hey look if you

squeeze crypto out of the mainstream

Financial system and you effectively ban

it by limiting the the access for crypto

markets to traditional Finance then what

you're really doing is you're opening

the door to crypto going to places like

the United Kingdom the UAE the

Caribbeans the Saudi what whatever right

you're going to other jurisdictions and

they suggest that by doing this and

pushing crypto to less sophisticated

jurisdictions you're actually creating

more risk and not less in the crypto

ecosystem it's an interesting argument

but it's one that I think will be wildly

unconvincing to the SEC especially since

the SEC has a very wide definition of

what a security is Listen to What a

security is here this term security

means any note stock treasury stock and

now I'm going to read you some that are

particularly relative I think to stable

coins a certificate of Interest or

participation and profit sharing okay

and stable coins you profit share when

you yield farm right or when you stake

when you have a staking coin you profit

share uh in the benefit or in the the

work of somebody else you could be

argued to potentially have something

that's similar to a stock although it

doesn't go up or down in value right

it's stable after all but some people

say well that's very similar to a CD a

certificate of deposit where you put

cash in a bank account and you expect to

receive some kind of yield and you farm

yield on a certificate of deposit right

so this the sac has this really broad

definition of what a security is

and uh a coinbase came out with this

response and coinbase's response was

basically hey here's why staking

services are not Securities and they

basically say the following they go over

here and say hey well we don't think

that staking is a security because it's

not a security

and doesn't pass the Howie test so think

about that for a moment the sac

or or coinbase rather makes the argument

that staking is not a security and the

reason it's not a security is because

number one it's not and number two it

doesn't pass the Howie test now the how

we test has to do with investment

contracts it only has to do with

investment contracts so basically you

have coinbase and they were applauded

for like standing up to the SEC on

Twitter but all coinbase did was argue

the pink part of what a security is

right here this is the definition of a

security and coinbase is like well we're

not a security because a we're not and B

we're we don't pass the Howie test which

has to do with investment contracts yeah

well what about the argument that you're

a CD or what about that you're like a

profit sharing agreement what about

those arguments no defense At All by

coinbase I personally think that

coinbase's response to the uh to this

this idea that is staking a security was

kind of embarrassing let me show you

their response they go to put it simply

no staking is not a security staking is

not a security under the U.S Securities

act nor under the Howie test which the

sac uses to determine whether an

investment contract is a security the

Howie test came from a 1946 Supreme

Court case blah blah blah blah and then

what did they do they literally only

talk about the Howie test point one

about the Howie test point two about the

Howie test point three about the Howie

test and then they they gave a

conclusion finally point four about the

Howie test and they give that's it

that's the end of the blog so I'll talk

about that how we test in just a moment

but it's crazy to me because they

literally say no staking is not a

security because a it's not a security

and B it fails the Howie test but again

the Howie test is just one of the tiny

ways you could be considered a security

and even in that test they suck they

fail so in my opinion even though

everybody on Twitter is like Yay

coinbase Brian Armstrong y'all are Gods

I'm like what lack of logic do you have

to have the chief legal counsel for

coinbase go well it's not a staking's

not a security because a we don't think

it is and B it fails the highway test

but again how we test just like maybe

like five percent of the definition of

security and you gave no argument at all

as to why it's not a security otherwise

like CDs or profit sharing or whatever

and even the argument that they make on

the Howie test in my opinion is very

weak first of all they say that when a

customer Stakes their crypto they aren't

giving something in response or or in

exchange for something else now remember

when you stake your money you are

blocking up your money unless of course

you're losing using like a Lido right

you're technically locking up your money

to get payment

but coinbase says well that's not really

giving up your money and receive payment

okay it's an argument I don't know how

strong it is then they suggest that

staking isn't a common Enterprise a

common Enterprise is defined as when

profits are combined and the success of

your return on money depends on the work

of others and basically coinbase is

saying well you're not really working on

the coin the the benefit of or you're

not really profiting on the work of

somebody else you're profiting off of

the benefit of a protocol working so

you're kind of just getting paid for

protocol working but I think the SEC

will look at this and go it sounds like

a common Enterprise to me and it sounds

like whether it's by magic or some kind

of algorithm people are making money by

putting their money into a system and

that's basically profit for common

Enterprise so again second argument

pretty weak from the SEC then the third

case or test of the how we test is that

is there a reasonable expectation of

profit and they suggest well I mean you

don't have to make money when you stake

that's an option you know it's actually

not really profit it's just payment and

I'm like okay that's interesting because

what motivation do you have to stake

other than receiving payment well

probably none I mean sure you get to

vote in the protocol but other than that

like really you're gonna do it for free

it's a tough argument I don't think

coinbase is making a good argument here

at all and then their last argument is

that well staking has nothing to do with

the effort of others because well

there's no managerial work involved and

it's not an entrepreneurial uh uh

Endeavor it's just a protocol and so

this is basically saying the effort of

others has to be entrepreneurial they're

trying to redefine what effort of others

is because it's really the effort of a

protocol or computer right which is

technically others so in my opinion

coinbase makes in a sort of bottom line

in my opinion kind of an embarrassing

case for crypto and and I think it's bad

for the crypto Community like coinbase

should have done a lot better here

because basically their argument is

we're not a security because we're not

and we're not a security because of this

extrapolated uh definition we have that

we're not an investment con uh contract

and each of their arguments are in my

opinion relatively weak now I'm curious

to know what you think but in my opinion

the coinbase letter while I don't even

think people read it on Twitter people

are cheering coinbase's efforts on

Twitter in my opinion they're really

really weak

but okay I think the crypto Community

could have come together and done a lot

better in pre-arguing the SEC that

staking is not a security but if that's

the best that crypto Community has I

think you better buckle up for a whole

lot more hell coming down from the SEC

and Regulators in the crypto Community

because that was kind of embarrassing in

my opinion not good not good at all and

I I really wish the blockchain and

crypto Community better because I'm a

big fan of blockchain tech while I don't

invest in cryptocurrencies because I

think most of them are relatively

speculative uh and that's not to say I'm

not interested in speculating you know

I'll go to a Vegas casino and I'll

speculate I'll speculate on options

because it's fun uh but but beyond that

uh is is is uh you know a very bullish

on blockchain technology but beyond that

am I optimistic by coinbase's arguments

here absolutely not if anything kind of

embarrassed I don't know let me know

what you think in the comments down

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