Porn To Be Wild!!

Headline: Is cryptocurrency used in the porn industry?

Body:  OK, this one is a little kinky.   On a lark, I threw out the idea that cryptocurrency might  be a  part in the “adult entertainment” industry.    Well, as it turns out, it is involved, intimately.  I suppose this shouldn’t have been too much of a surprise because porn is often on the leading edge of many technologies.   (How do you think we began to have coinage?}  Yet, still, I was somewhat surprised.  Perhaps you will be too.

Why might the porn industry want to embrace cryptocurrency?

1.  Digital payments are difficult to stopà Sometimes there are politicians who claim to want to “clean up” this district  (Remember Larry Craig?)  Digital payments would make sex workers less dependent upon the whims of the latest politics.
2. There is already history here.  Litecoin can be used on Pornhub, and there is some evidence of other porn-related cryptocurrency like $SPANK.  On the $SPANK blockchain, one can purchase sexually-explicit NFTs.  
3. Porn is fairly specialized , so, the same guy is likely to go to the same sites.    Thus, if each site has their own coinage, this would still be practical for both the  user and the website owner.
4. Even a place like Pornhub has some sexual-related fetishes that they won’t display.  (This is difficult to fathom, but then I watched Law & Order SVU and I was then informed that I was niave.)  If a performer wanted to do these things, they could accept payment in cryptocurrency themselves, and be completely independent.
5. Use of cryptocurrency allows for a certain degree of ‘anonymity. 
6. Within a democracy, it seems to be a good thing most of the time, to “push the envelope” of what is legal v. what is not.
7. Venmo, Paypal and Square can decide suddenly not to process payments.   There was one sex worker (who is now a major cryptocurrency advocate) who was red-flagged from all 3, and she began to accept  only cryptocurrency.  In another episode, a porn actress had all of her credit cards declined.  When she called customer service, they wouldn’t reveal the problem until they received a written letter from the performer.
8. When one bank decides to stop transacting with a performer, they go to Bank #2.  Then, when Bank #2 decides to stop transactions, they go to Bank #3.   This is called “platform hopping” and gets the attention of the government FINCen computer network.
9. Porn is significantly attractive from a renumeration standpoint.   One ICU nurse (making $84,000 per year) left the profession to make $1.3 Million thru OnlyFans.
10. Recently, OnlyFans rolled out a new policy to not allow sexual content.   Due, ostensibly, to loss of business, blowback and potential loss of business, they reversed their policy a few days later.  If the performers accepted cryptocurrency, they could neatly sidestep these policy whip-lash changes.
11. One very large challenge when accepting credit card payments is “chargebacks”.  In this case, a cardholder will claim that they never received a good or service.   Given the ephemeral nature of porn, it is not surprising that many people suggest they never received services.   But, when using cryptocurrency, these transactions are on the blockchain and are immutable.
12. In 2 enigmatic tweets, Elon Musk has appeared to back one porn site that offers its’ own NFTs.

Why might the porn industry NOT want to embrace cryptocurrency?

1.  There is a rather steep learning curve for the performer to learn how to use cryptocurrency.   Interestingly, there also seems to be a wide-spread feeling that Bitcoin should not be used to pay for porn.  These are 2 major problems that the performers are facing now.
2. Coinbase cannot be used because, due to KYC restrictions, these accounts have to be associated with a real bank account, and these performers often cannot get them.

There is a kind of cryptocurrency that rewards people for both creating and  consuming porn.   This is called the Vice Industry Token.  Some might initially laugh when considering that somebody is paid for watching porn (I laughed), it kind of makes sense.  Producers of porn make less than half of their revenue from subscriptions and make the majority from in-place advertisements.  Given this reality, it makes sense that the audience might be rewarded for allowing themselves to be “exposed” to advertising.  Further, by rewarding them in this manner, keeping metrics on the consumers is much easier, and advertisers like this.

Congress passed a law in 2018, called FOSTA, largely in response to the Backpage debacle.    This is an Act that aims to minimize sex trafficking, but many performers complain that they are caught up in the restrictions too.  This is a real problem because it drives the entire industry even further underground, and makes even more abuse more possible.

 The Verdict

“They’ve attacked our banking; our ability to operate like the rest of the world,” explained DiAngelo. “You don’t exist if you can’t use the banking system.”  These are the words of a very well-known porn performer.  And, she is right.   In this country, just think of the cannabis dispensaries who have to spend so much on vaults and security largely because no bank will take their money.   For a larger example, look at Russia.  They were deleted from the SWIFT network and now, they have to look very hard to find people who will do any sort of business with them.   Point is, she is right.

It is a difficult thing to wrestle with.   Our capitalistic society can become so moralistic.    I think the point is well-taken.   If something is not illegal, it is therefore legal.   If the politicians want to outlaw something, they should.    Of what’s left, they should probably be equally accepting.  Once again, I think it comes down to fear.   Mastercard has a fear that sex work on the internet could become illegal, and they are afraid of being associated with the stigma against porn.  Personally, I think they need to take a stand.   Either you’re against porn (and willing to pass up a LOT of money), or ok with porn, and you can enjoy a large new revenue stream.   To do anything in the middle would be to trap a lot of people underwater, financially.

REFERENCES

Should Crypto and Porn Get Intimate? (coindesk.com)

What’s the Vice Industry Token—A Crypto for Porn? (investopedia.com)

Bitcoin a lifeline for sex workers, like ex-nurse making $1.3 million (cnbc.com)

Italian Cryptocurrency Project Plans to Pay Users to Watch Porn (cointelegraph.com)

REFERENCES

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Is “iot” just the ending to “idiot” or is there something here?

Headline: What is the Internet of Things?

Date:

Body:  I love the commercials with the touch screen on the fridge.   With a stylus, you can write a virtual grocery list, and then have your fridge e-mail it to you when you’re at the store.    I was reading an in-flight catalog (remember those?) and I saw a toaster that would toast the weather forecast on your bread in the morning.  A buddy of mine got an e-mail from his car reminding him that it needs an oil change.     All of these examples are the Internet of Things (IoT).  BTW, there is a fascinating history of the IoT, reaching back into the 1970s where they had dreams of the “pervasive computing.”   I encourage you to read this wonderful (brief) timeline showing that scientists have been wrestling with IoT for decades.  I have decided to not share it here for the attribute of brevity.

OK, so, what is the IoT really?

Really, the IoT is a network of devices that speak with one another.  Your fridge might notice that you are running low on margarine, but, your wearable device notices that your body mass is increasing, and it decides not to e-mail you the idea of buying more margarine.    This really encapsulates both the good and the bad.  It’s good that the fridge will e-mail you a list of things you need to buy.  But, it is sort of creepy to know that  your devices might be changing their behaviors based upon a change in your behavior.   (Remember Furby?  That was a very simple device, but, people felt very odd even holding it upside down.)  This is itself  more than just a little creepy.

This is a little crazy, can you give me some examples?

1.  Wearable devices (like Applewatches) can be worn to monitor and manage diseases.
2. At home, robotic vacuums and security systems can be used to keep our homes clean and safe.
3.  In your vehicle, there are OED codes, and this is not far removed from your car e-mailing you about your car needing service
4. Cities can use these devices to help adapt traffic (charging different rates based upon  congestion.) and monitoring of environments, like earthquake sensors.
5. Outside cities, sensors placed inside railroad tracks can tell operators what routes are most direct and clear of traffic.

So where is the line?

Many people have suggested only allowing the IoT to connect to industrial machines.  For example, there is a vending machine, and it notices that the diet Coke  is getting low.   It can e-mail you with a reminder to buy more Diet Coke.  This system would both greatly increase efficiency and cut down on waste.

What are the challenges?

There are 3 main challenges.   First, to truly embrace the concept of IoT, many devices need to be connected and speak with each other.   Because many different devices use different protocols to communicate, connecting these devices logically, is not easy.   Second, and possibly more important, any time that you introduce a set of new connections, you have many new security risks.  Multiply that by MANY and you can begin to see just how big a problem this might be.  Third, this level of surveillance on your life is really creepy, even with the opportunities it brings.   Imagine that your Applewatch could reliably tell that you are having sex?  Might it contact a nearby camera, and SEVERELY interfere with your privacy?  On the other hand, a friend of mine just bought a new Applewatch for his wife.  She started wearing it, and the next day, the watch told her to call 911.   She was in A-fib.  The Applewatch she got the night before, probably saved her life.  These are complex issues.

What dynamics could affect adoption of IoT?

Direction of Likely Effect	Description of Dynamic
Encouraging Adoption of IoT.	Adoption will be faster if the regular citizens find value in the advantages offered by IoT.
	Adoption will be faster if technology underpinning IoT is more affordable.
	Adoption will be faster if more people have access to 4G and 5G networks.
Discouraging Adoption of IoT.	Adoption could be delayed if the changes required are not managed well.  (Especially important is managing the behavior of end users.)
	Interoperability issues could delay the adoption of IoT.
	If security issues are not solved, then installation will likely be delayed, and IoT advantages will be delayed.

So, are there new standardbearers?

Yes, there are hundreds of standards being worked on, per the IEEE.  There are 2 that appear to be farther along than the rest.  First, Microsoft is working on a standard, and many of the devices running their software will abide by it.   (How much will this add to their monopoly?)  There is another, Hypercat, which is already being utilized by Intel, BAE Systems and Accenture.  Interoperability is the watchword (and currently dream) of all of these standards.

The Verdict

We have traveled a great deal down this IoT road.   So far, in fact, that we are becoming cognizant of just how much further we have to go.  I predict that IoT will be rolled out slowly.   You might see some robust “pervasive computing” at some places like doctors’ offices and universities.   But, as normal citizens begin to see that the benefits are quite impressive, and the risks are beginning to be managed, adoption of IoT will happen.   I sense it.

REFERENCES

https://www.wired.co.uk/article/internet-of-things-what-is-explained-iot

https://www.mckinsey.com/featured-insights/mckinsey-explainers/what-is-the-internet-of-things

https://www.trendmicro.com/vinfo/us/security/definition/internet-of-things

https://www.kaspersky.com/resource-center/definitions/what-is-iot

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Should Unhosted be Boasted?

Headline:  What is an unhosted wallet?

Date:

Body:  So, it should be said that in Europe, they do things differently.  Police sirens sound quite different, the approach to marijuana is often different,  and their approach to cryptocurrency and related matters is also, quite different.  Much has been made on their embrace of a “right to be forgotten” and roughly what that means, is that as time goes on, they instill safeguards to make it less and less probable that Internet surfers will uncover things from the distant past.   For instance, if you went to the 2022 office Christmas party and drank a little too much egg nog, I fear to say that the footage of you sitting on the Xerox machine will likely be quite easy to get to.   But, let’s say, that 5 years before, you got soused again at that party and did an acapella version of “When I think about you, I touch myself,” you might very well be protected by a law requiring content hosts to  make this MUCH harder to find.   Now, if only we could figure out how to erase it from our buddy’s cellphone…

So, in general terms, the Europeans tend to be fairly progressive.   And, in line with that, there was a piece of legislation that was recently rushed into Parliament that would require a certain set of disclosures with respect to any cryptocurrency ICO.  The stated reasons for these disclosure requirements is largely to avoid money laundering, and these regulations could make it impossible to have an “unhosted wallet.”  (In other news, there is a new bill that is looking for support, to not allow the U.S. government to issue a Central Bank Digital Currency (CBDC).)

So, what is an unhosted wallet?

OK, let’s approach this from the other direction.   Let’s say I went to Coinbase and setup an online wallet with them, this would be a hosted wallet, as they are, for a fee, holding my digital assets.  But, let’s say that we didn’t trust Coinbase or any other, and we wanted to keep all of our digital assets in a cold wallet that we had possession of.  This cold wallet would be an example of an “unhosted wallet” and they are easily used for money laundering activities.    You can think of unhosted wallets as being the same as anonymous bank accounts.  The regulation being considered would force an intermediary to report when there is a significant transaction using cryptocurrency entering or leaving an unhosted wallet.  This is not without precedent.  When there is a cash transaction over $10,000, the Bank has to report this transaction..

If not for money laundering or other nefarious purpose, why would one use an unhosted wallet?

One might be totally unconvinced of the safety of online storage of your digital assets and instead, prefer holding them in a cold wallet, locked away in your fireproof safe at home.  One might just feel it important not to flash one’s identity all over the internet.  That said, cryptocurrency is perfectly situated to be an ideal vehicle for money laundering, so, this fear is understandable.

In other regulatory news…

Options allow the investor to bet on the direction and timing of a security’s valuation change.  For instance, if you think that Stock A will have a large swing up soon, you might purchase an option that gives you the right to buy a quantity of this stock at the current price.  If executed, the difference between the strike price and the market price would be profit to you.  Some very smart bankers have even developed options on cryptocurrency.   Some have tried to offer their options for purchase on the well-known Chicago Board of Trade.  Regulators just said that they couldn’t do this because there isn’t a properly surveilled market for the underlying asset.     It seems that the Grayscale Bitcoin Trust is trying to offer its own set of options, meanwhile, arming themselves for what might an epic legal battle.

Meanwhile, in the U.K., there is a similar battle brewing.  The Exchequer  (roughly equivalent to our Treasury Department) commissioned a report, and in this report, the conclusion was that unhosted wallets were not a problem.   To quote the report, “The government does not agree that unhosted wallet transactions should automatically be viewed as higher risk… and there is not good evidence that unhosted wallets present a disproportionate risk of being used in illicit finance.”   Nobody likes the IRS which represents the bulk of our Treasury Department, but, I have to think that they and the Exchequer across the Pond are probably fairly credible independent sources, and these reasonable sources seem to disagree at some level.  The boil-out seems to be that anything could happen.   So, grab some popcorn, and then buckle up because this is going to be interesting.

The Verdict

So, we have a fundamentally different understanding of the potential of cryptocurrency as compared to the U.K.  The question of why must be raised.   Of all of the articles I have read, the U.K. is on a rather extensive campaign to enforce policies to entice cryptocurrency firms to their shores.  In view of this, I think it’s quite possible to see why their internal report turned out so differently than our understanding of cryptocurrency.  The question remains, who holds the more profitable position as it relates to cryptocurrency?   We shall find out.

REFERENCES

https://cointelegraph.com/news/law-decoded-unhosted-wallets-are-just-wallets-march-28-april-4

https://home.treasury.gov/system/files/136/2020-12-18-FAQs.pdf

HM Treasury rolls back proposal to collect data from unhosted digital currency wallets

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Unhosted is the Most Best?

Headline:  What is an unhosted wallet?

Date:

Body:  So, it should be said that in Europe, they do things differently.  Police sirens sound quite different, the approach to marijuana is often different,  and their approach to cryptocurrency and related matters is also, quite different.  Much has been made on their embrace of a “right to be forgotten” and roughly what that means, is that as time goes on, they instill safeguards to make it less and less probable that Internet surfers will uncover things from the distant past.   For instance, if you went to the 2022 office Christmas party and drank a little too much egg nog, I fear to say that the footage of you sitting on the Xerox machine will likely be quite easy to get to.   But, let’s say, that 5 years before, you got soused again at that party and did an acapella version of “When I think about you, I touch myself,” you might very well be protected by a law requiring content hosts to  make this MUCH harder to find.   Now, if only we could figure out how to erase it from our buddy’s cellphone…

So, in general terms, the Europeans tend to be fairly progressive.   And, in line with that, there was a piece of legislation that was recently rushed into Parliament that would require a certain set of disclosures with respect to any cryptocurrency ICO.  The stated reasons for these disclosure requirements is largely to avoid money laundering, and these regulations could make it impossible to have an “unhosted wallet.”  (In other news, there is a new bill that is looking for support, to not allow the U.S. government to issue a Central Bank Digital Currency (CBDC).)

So, what is an unhosted wallet?

OK, let’s approach this from the other direction.   Let’s say I went to Coinbase and setup an online wallet with them, this would be a hosted wallet, as they are, for a fee, holding my digital assets.  But, let’s say that we didn’t trust Coinbase or any other, and we wanted to keep all of our digital assets in a cold wallet that we had possession of.  This cold wallet would be an example of an “unhosted wallet” and they are easily used for money laundering activities.    You can think of unhosted wallets as being the same as anonymous bank accounts.  The regulation being considered would force an intermediary to report when there is a significant transaction using cryptocurrency entering or leaving an unhosted wallet.  This is not without precedent.  When there is a cash transaction over $10,000, the Bank has to report this transaction..

If not for money laundering or other nefarious purpose, why would one use an unhosted wallet?

One might be totally unconvinced of the safety of online storage of your digital assets and instead, prefer holding them in a cold wallet, locked away in your fireproof safe at home.  One might just feel it important not to flash one’s identity all over the internet.  That said, cryptocurrency is perfectly situated to be an ideal vehicle for money laundering, so, this fear is understandable.

In other regulatory news…

Options allow the investor to bet on the direction and timing of a security’s valuation change.  For instance, if you think that Stock A will have a large swing up soon, you might purchase an option that gives you the right to buy a quantity of this stock at the current price.  If executed, the difference between the strike price and the market price would be profit to you.  Some very smart bankers have even developed options on cryptocurrency.   Some have tried to offer their options for purchase on the well-known Chicago Board of Trade.  Regulators just said that they couldn’t do this because there isn’t a properly surveilled market for the underlying asset.     It seems that the Grayscale Bitcoin Trust is trying to offer its own set of options, meanwhile, arming themselves for what might an epic legal battle.

Meanwhile, in the U.K., there is a similar battle brewing.  The Exchequer  (roughly equivalent to our Treasury Department) commissioned a report, and in this report, the conclusion was that unhosted wallets were not a problem.   To quote the report, “The government does not agree that unhosted wallet transactions should automatically be viewed as higher risk… and there is not good evidence that unhosted wallets present a disproportionate risk of being used in illicit finance.”   Nobody likes the IRS which represents the bulk of our Treasury Department, but, I have to think that they and the Exchequer across the Pond are probably fairly credible independent sources, and these reasonable sources seem to disagree at some level.  The boil-out seems to be that anything could happen.   So, grab some popcorn, and then buckle up because this is going to be interesting.

The Verdict

So, we have a fundamentally different understanding of the potential of cryptocurrency as compared to the U.K.  The question of why must be raised.   Of all of the articles I have read, the U.K. is on a rather extensive campaign to enforce policies to entice cryptocurrency firms to their shores.  In view of this, I think it’s quite possible to see why their internal report turned out so differently than our understanding of cryptocurrency.  The question remains, who holds the more profitable position as it relates to cryptocurrency?   We shall find out.

REFERENCES

https://cointelegraph.com/news/law-decoded-unhosted-wallets-are-just-wallets-march-28-april-4

https://home.treasury.gov/system/files/136/2020-12-18-FAQs.pdf

HM Treasury rolls back proposal to collect data from unhosted digital currency wallets

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

NFTs in Healthcare

Headline: How are NFTs used in healthcare?

Date:

Body: 

Not too long ago, I found myself in the hospital with pneumonia.   While there, they had me constantly hooked up to a 12-lead EKG and all manner of other machinery.   Mainly for this reason, I was interested to read that they are now using NFTs in the healthcare area.  I thought this was worth a deeper dive, so, here it is.

Basic Training

Many might profitably ask, “What is an NFT?”  This stands for “non-fungible token” but that’s not too much help.  Have you ever purchased a gold or silver coin?  Probably commemorative of some occasion?   I have one of the Wright Bothers flying their “kite” in South Carolina, and in case you doubted it was silver, it came with a Certificate of Authenticity.  The NFT is like a digital representation of this certificate, along with some limited rights attached.   Given this understanding, I was curious what it might have to do with healthcare.

Can you provide some examples of how NFTs are used?

In one example, each person who donates blood gets assigned an NFT that represents them.  This is important because with this NFT applied, that blood can be tracked from donor to hospital to done.  So, if there is a problem found later with that blood, the people affected can be easily tracked down and consulted, and the damage  controlled.   This is sometimes called tokenized blood.   Further, a digital “twin” to an organ could be created, leading to less rejection and a much greater sense of safety.  

Both of these foregoing examples are pretty straightforward as positive.  The widespread use of NFTs is allowing patients to monetize their own health data.   Each year, there are $1.2 Billion USD of clinical documents produced, and 80% is still vulnerable to misuse and theft.  This is a great opportunity for drug companies AND patients because it represents a fantastic pool of trackable research subjects (AI is in heavy use here), and it could be easily used as an income stream for the patients, as they could see where their data went, and demand royalties at the appropriate institutions.  Clearly, that information is valuable. “In the era of big data, health information is its own currency; it has become commodified and profitable,” says Dr. Amy McGuire.

It has also been suggested that NFTs could make it more likely that people share lifesaving research.   These days, when people publish their work, they really give up a lot of control over it.  If an NFT could be applied to this research, ownership could be easily demonstrated, and people might be more likely to share research that could be used to save or extend lives.

It appears that the applications could be legion.

Not all people feel positively about NFTs in healthcare.

NFTs can be vulnerable to data security issues and disputes over intellectual property rights.  What if somebody claims that the incorrect NFT was paired with some blood donation?   There might be so much faith, that the sample is not appropriately tested.  Further, we mentioned in the beginning that the NFT was a Certificate of Authenticity.   This means that certain rights attach, and yet, some don’t.  The particularity of which rights attach is something that will, no doubt, be litigated.

And, they’re right, there are challenges using NFTs in healthcare.

The smart contracts related to Ethereum have to be carefully engineered to be interoperable from blockchain to blockchain and work in other systems.   To mitigate this risk, each NFT (and an NFT is at root, just a smart contract) needs to be tested within multiple environments.  Constant auditing of results is also necessary.

There are also privacy concerns.  The smart contracts aren’t always compliant with HIPAA or the E.U. legislation, GDPR.    Vastly oversimplifying, GDPR encodes a “right to be forgotten,” and these smart contracts are on the blockchain, so, they are indelible.   It is still unclear how the smart contracts should be written to accommodate the GDPR.

The final problem facing NFTs in healthcare is a human resources problem.  Frankly, experts are very thin on the ground.   As a result,  there is little to no knowledge transfer to the people who would have to run this program.  The fix will likely be provided by the market.   As NFTs become central to healthcare, there will be firms formed that will specialize in setting up workshops and implementing pilot programs.

The Verdict

I think NFTs within the Healthcare industry is interesting.   There could be many benefits, and most of the problems could be mitigated.     As of right now, I think it’s still a bit early.  But, I think it’s nearly inevitable that this is where it’s going.  The potential benefits are just too much to pass up.

REFERENCES

Tokenized Blood? How NFTs Are Transforming Healthcare (forbes.com)

NFTs in healthcare: Is it a hype or hope? | Netscribes

NFTs could revolutionize healthcare, bioethicists say (fastcompany.com)

NFT in Healthcare: Know Its 8 Game-changing Applications (thescientifictriangle.com)

 Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

 

3AC is Not AOK.

Headline: What is 3-Arrows Capital and what happened to it?

Date:

Body:    Three arrows sounds like a very complicated intersection you might drive through.   But in this case, Three Arrows was a Singapore-based hedge fund that invested in cryptocurrency.  Their’s is an interesting story…

OK, what’s the bottom line anyway?

They went bankrupt, leaving $3.5 Billion in debts behind them.    Now that the Courts are involved, $35.6 Million have been seized from various  accounts associated with Three Arrows.  Earlier in the summer, the top 2 executives involved were actively helping the Court find assets, but, ever since they have remained largely silent.

Thanks for not burying the Lead.   So, now I’m curious.   What happened?

March 2022à 3 AC is now managing more than $10 Billion.

May 11-12, 2022 Lenders inquire about exposure to Luna and Terra, and 3AC reported no problems.

May 18^th 2022 Co-founder tries to minimize margin calls

June 3^rd 2022 Interest rates increased due to “market.

June 7^th 2022 3AC pitches investors a series of methods to  re-capitalize the firm.

June 10^th 2022 3AC receives first margin call

June 13^th 2022 Founder tries to get a new loan from Genesis.

Mid-June 2022à 3AC engages the services of a Security firm with the  intent to make communications more secure and able to entirely delete.

Late June 2022à Filed for Bankruptcy in British Virgin Islands.

July 1, 2022à Three Arrows Capital, (3AC) filed for  bankruptcy in the U.S.

July 6, 2022à Zoom call with liquidators.   The 2 executives were listening, but mic and video were turned off.

Sometime between July and Decemberà Liquidators were permitted to enter the facilities and look for evidence of assets.   It appears that the offices had been “ransacked” and the vast majority of useful information was missing.

December 2, 2022à Liquidators for bankrupt crypto hedge fund Three Arrows Capital(3AC) said on Friday that the company’s founders are refusing to cooperate with asset recovery efforts, hindering the company’s ability to return funds to creditors.  The amount due to creditors totals about $3 Billion.

Well, that’s pretty  bad.   Anything else?

Well, as a matter of fact… One of the executives did purchase a $50 Million boat called Much Wow with company funds.   But later in the financing plan, funds from the firm dried up and the boat went back on the market.  As a result of the sharp decrease in valuation for Bitcoin and Ethereum, there were significant losses for firms that lent money to 3AC.   Blockchain.com claims a loss of $270 Million due to these loans.  Voyager Digital filed for bankruptcy protection after it couldn’t recover $670 Million lent to 3AC.  Genesis (in severe trouble) and Block Fi (bankrupt) also had significant losses on their loans to 3AC.  Court filings indicate that there is no cash left to pay off creditors.  In turn, it would appear that a substantial chunk of the losses that 3AC suffered were attributable to investment in a stablecoin called Terra.  (There is some fingerpointing here, as investors in the stablecoin were promised 20% return, which many others pointed out was not feasible in the long term.)  Many investors sold Terra( and Luna, related) and in the chaotic process, lost $60 Billion.

In response to this loss, the co-founders both received death threats, forcing them to disappear off the grid and stay in hiding.

Has this ever happened before, outside of the cryptocurrency area?

Yes, it has happened before, or something very much like it.   Several decades ago, there was a firm called Long-Term Capital Management.   This firm had a roster of the “Who’s Who” in economics, computer modeling and trading.  In essence, they used computer modeling to find out what securities were mis-priced.  Then, they would purchase the securities that were “too cheap” and wait for them to come back up to where they “should be.”   Selling them would then provide the profits they were looking for.  (Conversely, they could find securities that were “too expensive” sell them short, and then short cover when the securities fell to their correct value.   They could then pocket the difference in price.)   For a while, this system worked wonderfully.  But, over several decades, the market changed, their models didn’t correct for this, and they made a few disastrous trades.  The firm collapsed in 1998.

One reason for the downfall of LTCM was its use of leverage (read as “debt”).   They would know the trade they wanted to make, but, they wanted to make a trade based upon a larger  amount of securities than they currently had money for.  So, to make a bigger profit (hopefully) they borrowed money, lots of money.   Well, when the markets turned against them, this borrowed money amplified their losses as well… and they went into bankruptcy.  3AC seems to have followed a very similar path, but the extent is difficult to gauge as they were very secretive in their dealings.

The Verdict

Jonathan Zeppettini, international operations lead at decentralized autonomous currency platform Decred, believes market conditions played a bare minimum in the 3AC saga and only helped in preventing the fraud further. He told Cointelegraph:

“In reality, they were just participating in other scams such as Terra and acting as a middleman between questionable investments and lenders who thought their record was so impeccable it absolved them from having to do any due diligence. Cascading liquidations caused by the market correcting forced the end of the game. However, in reality, their model was always a ticking time bomb and would have imploded eventually no matter what.”

This is interesting because it is quite akin to what happened with LTCM.   They were so crammed with talent, and their track record was so good for a long time, that many of the backers failed to continue asking if their assumptions about the market still held true.   In a similar manner, people saw 3AC as the “adults in the room” and off-loaded their responsibility to do their own research, in favor of trusting 3AC.   For a while, it worked beautifully… until it didn’t.  (Are we sensing a theme here?)  This is likely a cautionary tale.

One more cautionary tale here, I think.    Many of these players who get into trouble in the cryptocurrency area seem to be there largely because of their ownership of a cryptocurrency exchange AND a hedge fund that invests in cryptocurrency projects.  FTX had Alameda Research, and allowed them to use credit more liberally than other firms, and allowed them faster execution times than any other firm.    Now, FTX is QRT, and bankrupt, and people have been arrested.  I found a Reuter’s article that the owner of another major exchange has started a hedge fund of his own, and it makes me quite curious to  see if he follows in a similar path.  I certainly hope not.

REFERENCES

https://www.coindesk.com/business/2022/12/02/three-arrows-capital-liquidators-seize-356m-from-singaporean-banks/

https://www.reuters.com/technology/bankrupt-hedge-fund-three-arrows-liquidator-begins-taking-control-assets-block-2022-12-02/

https://www.cnbc.com/2022/07/11/how-the-fall-of-three-arrows-or-3ac-dragged-down-crypto-investors.html

https://cointelegraph.com/news/3ac-a-10b-hedge-fund-gone-bust-with-founders-on-the-run

https://www.forbes.com/sites/jacobwolinsky/2022/08/24/how-hedge-fund-three-arrows-capital-was-cryptos-long-term-capital-management/?sh=70bd704a633e

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Who got Voted “off the island” this week?

Body: Ever seen one of those Survivor shows on TV?  Over a series of weeks people are “voted off the island” until there are only a very few?   Yeah, what’s happening to cryptocurrency exchanges appears to have approached that level of drama.  Let’s start from the beginning.

I am confused.  Who is the OG here?

Ok, let’s start by introducing the players.    First, there is Gemeni, which is a cryptocurrency exchange and digital asset custodian.  They offered their customers an opportunity to make up to 8% in their Gemini Earn program, the assets of which were propping up Genesis Global Capital (they seem to be acting as a normal hedge fund, but this one focuses upon digital assets.)   Normally this is OK, but, Gemini did not register these loans with the SEC, which would’ve triggered many responsibilities to  provide disclosures to the customers.  Gemini is claiming that these are not securities, so the disclosure done was sufficient.  As a result, the SEC is suing Gemini for supposedly violating investor-protection laws.  Disclosure of the risks was not the only problem, for the honor of earning this amount of interest, Gemini collected a fee that climbed to over 4%.  Now that much of the cryptocurrency world is tanking, there were many consumers asking for their money back (think of an olde-fashioned Bank run here.)  Genesis stopped filling withdrawal requests on November 16^th  and is blaming this inabiliht to pay upon the fall of FTX.

At nearly the same time, the Commodity Futures Trading Commission has also sued Gemini.  (In case you missed it like I did, suit was filed last week.)  In June, the Commodity Futures Trading Commission filed a civil case against Gemini that claimed the crypto firm misled regulators in 2017 about its plans for a Bitcoin futures product. The CFTC said Gemini “made false or misleading” statements during the regulatory review process for the bitcoin futures product.

Is this really a big deal?

Yes.  The loans being made to Genesis amounted to over $900 million.   In its suit, the SEC is suing Gemini for the revenue earned illegally and for a variety of fines.

OK, but in the Court of Public opinion…

Eggs and rotten tomatoes are also being thrown.    The famous Winklevoss twins are the co-founders of Gemini and they have written 2 open letters (shared on Twitter)  to the CEO of the parent company that owns Genesis.   They refer to his “bad faith stall tactics” and urge the removal of the current CEO, Mr. Barry Silbert.   In return, Mr. Silbert referred to the tweets as a “deperate and unconstructive pubilicity stunt.”  For its part, Genesis has laid off over 30% of its personnel and is considering filing for Bankruptcy.

At the same time, Gemini Earn customers who had their assets frozen are suing Gemini.   For their part, Gemini is claiming that the customers have a valid claim against Genesis, aand DCG, not Gemini.  The founder of Gemini issued a letter denying any responsibility for the outcomes of this deal.  In an interview this week, Tyler Winklevoss said Gemini believed customers could be made whole. “There’s a path to getting a deal done that’s a resolution for Earn users,” he said.  We shall see.

Wait a minute, didn’t we see this movie before?

The lawsuit against Genesis and Gemini resembles another case that the SEC and several states filed over BlockFi Lending LLC’s product, which allowed crypto traders to earn a yield for lending their digital assets. The SEC alleged that BlockFi’s interest-bearing accounts were securities and that the firm should have registered the product. BlockFi paid a $100 million fine to settle the allegations. The company didn’t admit or deny wrongdoing.   I don’t forsee any materially different outcome in the cases against Gemini and Genesis.

In another recent legal blockbuster, Genesis itself had a starring role.  Stay with me here.   Genesis loaned money (a lot of money) to Three Arrows Capital (3AC) which, in turn, purchased shares in the Grayscale Bitcoin Trust, creating collateral for the loan, as the shares were trading at a premium to the Bitcoin they represent.   However, in 2021, the bottom started to fall out from under cryptocurrency, and the collateral lost value.  There were many margin calls from nervous investors, and Genesis itself lost at least $1.2 Billion, and 3AC went into Bankruptcy.

The Verdict

A spokesman for DCG added in a statement emailed to Forbes: “This is another desperate and unconstructive publicity stunt from Cameron Winklevoss to deflect blame from himself and Gemini, who are solely responsible for operating Gemini Earn and marketing the program to its customers. We are preserving all legal remedies in response to these malicious, false, and defamatory attacks.”  This is the problem I have with cryptocurrency firms.    There is a lack of leadership.   Don’t be fooled, these executives  have the business credentials, for sure.   But, so few of them have the emotional  intelligence needed to be a corporate leader over the long term.  And this long-term scotoma in their vision is what makes me very leery  of 99% of cryptocurrency projects.  So, I guess the lesson here is this.   When you read the whitepaper, by all means, feel free to diagram out the capital flows and understand all that.   But, at the same time, please also understand that plans for the long term should also be visible.   If this long-term planning is not in evidence, I think you must wonder about how they plan to stay in business.

REFERENCES

SEC Sues Crypto Firms Genesis and Gemini Over Lending Product – WSJ

SEC sues Gemini and Genesis over crypto asset-lending programme | Financial Times (ft.com)

SEC Charges Crypto Companies With Offering Unregistered Securities – The New York Times (nytimes.com)

As Gemini And Genesis Trade Barbs Over Failed Product, SEC Sues Them Both For Selling It (forbes.com)

 Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Binance or Buynance (or Byenance?)

Headline: Why is Binance being removed from the SWIFT network?

Body:  OK, buckle up because this one is an interesting one.   Several months ago, I published an entry about the SWIFT network.   To summarize a summary, SWIFT is an international network between banks, and what is sent back and forth is information about transactions.  Now, cryptocurrency is not fiat currency, and Binance was able to use this network as a reliable way to make all of their transactions, large and small.  The trick is, they needed an actual bank to act as their partner.   That partner is Signature Bank.

What are we talking about?

SWIFT is a network that acts as an on-ramp and off-ramp for cryptocurrency transactions.  Up to now, Signature Bank would get a commission every time they turned around a transaction using the SWIFT network, no matter how large or small.  Now, it appears that Signature Bank is refusing to do any transactions for less than $100,000.  This change is effective February 1^st.  Corporate entities are also unaffected.

When and how was this change announced?

Binance announced the news via a January 21^st e-mail to its customers.   In the letter, Binance emphasized a few things:

1.  Binance was not the only one affected.  Signature Bank is applying this decision to all cryptocurrency exchanges with which they do business.
2. Changing cryptocurrencies into other fiat currencies (e.g. Euros) are unaffected by this event.
3. Binance is actively looking for a new partner bank.
4. Binance said that customers would still be able to use a credit or debit card to buy and sell cryptocurrencies.

Interestingly, ETH was also temporarily barred from transactions, pending the outcome of The Merge.   (The 2 chains of ETH transactions will be merged.)

Why is Signature Bank doing this?

In a previous entry, I suggested that the FTX blow-up and several other exchanges  declaring Bankruptcy were making retail investors anxious and so they were often selling off their cryptocurrency positions, leading to a slide in valuations.  In a very similar manner, many financial intermediaries have also been  cutting back on their exposure to cryptocurrency.    (Signature Bank is cutting back by about half, to $10 Billion.)  Silvergate is a similar financial intermediary, and reported a billion dollar loss in the final quarter of 2022, and 90% of that loss was attributed to investment in cryptocurrency firms.   But, there are some transactions that are too juicy to pass up, and these are the corporate ones and the individual transactions over $100,000. (Interestingly, this was an important topic at a New York conference hosted by Goldman Sachs.  This is interesting because Goldman has already invested in 11 digital currency firms, and plans to spend millions more in this area.)

Is this at all related to the efforts of Russia?

The short answer is I don’t know.   What I do know is that in April 2021, Russian finance officials met with Binance and tried to get names and other information related to transactions by political dissidents.  Binance did decide to share this client data.  Binance has continued to operate in Russia since Putin ordered his troops into Ukraine on Feb. 24, despite requests from the government in Kyiv to Binance and other exchanges to ban Russian users. Other major payment and fintech companies, such as PayPal and American Express, have halted services in Russia since the Kremlin launched what it calls a “special operation” to demilitarise and “denazify” Ukraine. One of Binance’s main rivals in Russia, EXMO.com, said on Monday it would no longer serve Russian and Belarusian clients.

So, let’s review.     The government of Russia persuaded Binance to turn over a lot of their customer data.   Binance turned over this client data to the Russian government, ostensibly to ensure future business within the massive markets of Russia.  President Putin then asked the government agencies to come to “unanimous opinion” on cryptocurrency regulation, because they want to encourage firms to do business in Russia.   Toward this end, he cited their “certain competitive advantages” like a very healthy supply of electricity, vital to cryptocurrency firms.  Then, Putin invaded Ukraine.   Many western nations decided to freeze assets.  Six days later, the rouble trading increased 400%.

The Verdict

Binance is in a delicate situation here.   One hallmark of decentralized finance is that there is no central authority.   However, when doing business with an authoritarian-controlled country, this is likely an impossibility.  But, Russia is an exceedingly tempting target for expansion of such a business because of their exclusion from some of the Wester-based banking networks; As a result of this exclusion, the government and businesses are salivating over any way to get money to international  locations.  Binance has apparently made their stand, shoulder to shoulder with any regulators.   I guess what we all have to ask is do we feel comfortable doing business with this exchange, given their track record.   There is no right or wrong answer here, and since we are in the U.S., the sharing of information with regulators is not nearly as frightening.    But, it does violate the prime directive of decentralized finance, so one must be very clear about one’s objectives, and the red lines one is unwilling to cross.

REFERENCES

https://cointelegraph.com/news/binance-s-swift-banking-partner-set-to-ban-usd-transfers-below-100k

https://www.coindesk.com/business/2023/01/23/binance-says-signature-bank-wont-support-transactions-for-crypto-exchange-customers-of-less-than-100k/

https://fortune.com/crypto/2023/01/23/crypto-industry-losing-banking-partners-heres-why-it-matters/

https://www.reuters.com/technology/how-crypto-giant-binance-built-ties-russian-fsb-linked-agency-2022-04-22/

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Did Gronk get Zonked?

Headline: Is Gronk being zonked by cryptocurrency?

Body:  Ok, usually, I really don’t think about sports at all, and I certainly don’t write about it.  I might catch the odd portion of a football game, maybe a few innings of a baseball game, I really don’t care.  (Sumo wrestling, though?    Yes!!  2 500-Lb. guys in diapers wrestling in mud, with matches scripted a la WWE?    Yes, please)  But I digress.   Usually I won’t write about sports.  That said, this is the exception.  Cryptocurrency has collided head on (almost a targeting call here) with sport.  Rob Gronkowski (hereinafter, Gronk) has been subpoenaed  in a class action suit against owner of the Mavericks, Mark Cuban.

What?

Good question, actually.   It seems that a whole class of people have sued Mark Cuban for promoting a, now bankrupt, cryptocurrency brokerage, Voyager Digital.  They are following in the footsteps of the class who sued a number of celebrities (think Shaquille O’Neal, Larry David and others) for their promotion of FTX.    The suit against Cuban and the Mavericks will follow much of the same logic.    Essentially tying their famous personalities to the  opaque business practices perpetrated a fraud upon investors.  For right now, Gronk has been served a subpoena as a third party and not a defendant, but that could change.  Gronk was a “brand ambassador” for Voyager Digital, and arguably, an important portion of the alleged fraud.  As of July 1, 2022, Voyager has stopped all withdrawals and very soon after, filed for bankruptcy protections.

Why did Gronk get into cryptocurrency?

He was following the lead of long-time friend Tom Brady, who also began to promote cryptocurrency.    Companies in the space are hoping to use Gronk to promote the idea that cryptocurrency is for everybody.  To this end, he will make a series of commercials featuring Gronk working out with a dog on his back (a la many TikTok videos.)  Eventually, Gronk will be selling off some NFTs to help support his children’s charity.  Previously, Gronk has offered NFTs to memorialize his greatest SuperBowl moments.  Events continue, as Tom Brady has started a company to mint NFTs related to other world-known athletes.  Even Coinbase is getting in the action, as they partner with the NBA to be the “exclusive cryptocurrency platform partner” of the NBA.

OK, but is it just the U.S.?

No, the craze appears to have gone worldwide.    After one particularly significant bout, English boxer, Tyson Fury minted an NFT and sold it for just less than one million dollars.  In Europe, there are several  soccer players who have their own NFTs.   But, even more interesting, even the fantasy sports “atheletes” have NFTs.  Adidas began minting their own NFTs and buyers will be able to use proprietary wearables.   Some soccer clubs in Europe have even offered NFTs that allow the buyer to vote on issues important to that club.  This binge has even stretched to Africa.   South Africa is beginning to mint NFTs related to their rugby players.

This all sounds GREAT!!

Yeah, no.  This mass-adoption of NFTs is not without issue.  Several large soccer teams in Europe have had to cancel agreements with cryptocurrency firms.   Meanwhile, Spanish soccer star Andre’s Iniesta was warned online by Spanish officials that there are risks when people promote unregulated products.

The Verdict

The first to fly through the air in a powered conveyance were the Wright Brothers.  Just a few decades later, there were some rather substantial companies offering flights that went between continents.  But, a significant issue that these young airlines faced was marketing.  Flying was seen by many as very risky  Even though that airplane could deliver you to California in less than 6 hours, it could also conceivably blow up on landing, or have an engine flame out midflight, according to the public  The airlines had to launch a very diligent and deliberate marketing campaign to explain to the public that their airplanes were very safe, and were even safer than the cars that they loved so much.  To be warmly embraced by the public, cryptocurrency firms and groups minting NFTs  really have to explain to members of the public the value of their products.   This is especially tricky for cryptocurrency and N/FTs.   An airplane you can see, touch even (If you can outrun Security.)  Cryptocurrency and NFTs are nothing but ones and zeros, so they have a much more comprehensive task of explaining to investors how their “product” has value.  A case has to be made forcefully, and I don’t think anybody has gotten closer than NBA TopShot.  All others might learn a thing or two from their example.   Just don’t watch the NBA representatives eat.   They are always dribbling.

REFERENCES

https://www.si.com/nfl/2023/01/17/rob-gronkowski-issued-subpoena-cryptocurrency-lawsuit-mavericks-mark-cuban

https://www.coindesk.com/business/2021/09/08/rob-gronkowski-follows-tom-brady-into-crypto-in-ambassadors-role-with-voyager-digital/

https://cointelegraph.com/news/touchdown-goal-knockout-crypto-and-sports-collide-in-2021

https://cryptonews.com/news/super-bowl-champion-gronk-set-to-auction-his-own-nft-collect-9480.htm

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.

Is Coinbase in Treble?

Headline: What just happened to Coinbase?

Full Disclosure: In full disclosure, I do own a small volume of shares in Coinbase.   The value of this equity is not significant with respect to my net worth and is in no way significant to the corporation.

Body:  A little while ago, I outlined ways to invest in crypto without investing in crypto.   Buying shares in Coinbase was one of the ways I spoke of as a method to participate in the hot craze without being excessively endangered by cryptocurrency shenanigans.  So, I took my own counsel… and have lost a moderate amount.   (My first purchase was in May of last year, and I just placed an order.  In May, I paid over $125 per share, and at the end of December, I paid just $34 per share.)  I am staying in mainly because I have a firm belief in the (what’s the word?) craziness of gamers.   In short, Bitcoin and Ethereum are not perfect, but, they do remain financial “on-ramps” to other cryptocurrencies.     Each game seems to have its own native currency, and can usually only be purchased using ETH.   The easiest way for the lay person to obtain ETH is to purchase it.   And, likely the easiest place to purchase it is at Coinbase.  My time horizon is pretty long and I view the current very low valuation as being able to purchase stock on sale.  Of course, this might be self-delusion or just WRONG.   Do your own research, always.

Sorry, got off on a little tangent.   Coinbase stock has been going steady, in the downward direction for the majority of its existence.    I have to wonder what’s prompting this?

So, don’t bury the lead.   What’s happening?

Pure and simple, investors are afraid.   Not long ago, they witnessed the bankruptcy of FTX (remember them?) and the arrest of the executives of that company.  Further stoking the fire of fear, Coinbase is closely related to USD Coin, and now, rival Binance is encouraging investors to re-think investment in USD Coin after the joint venture (between Coinbase and USD Coin ) decided not to go public..  This makes investors quite nervous about Coinbase. 

That sounds reasonable… so why do you own stock here?

I very much like their first-mover advantage in this space.  I also like the future prospects in the gaming space as mentioned above.  But, even right now, Coinbase is no FTX for a few reasons:

1.  Its books are audited by Deloitte
2. Coinbase is  capitalized with $5 Billion in cash.
3. They advertise that they hold 90% or more of their cryptocurrency deposits in cold wallets, offline.   This suggests a very clear mindset to security and safety.

But, didn’t I just read about huge workforce reductions?

Yes, you did.   Coinbase is firing about 20% of its workers in an effort to “rightsize” the organization.  Certainly, for the people who are laid off, this is nothing less than a tragedy.  But, if you are a heartless investor, this adherence to a lean organization might indeed be a  good thing.  This has happened in many nascent industries before, like the railroads and the utilities.  One critic pointed out that companies in new industries often have a similar employment pattern.

So, what was the response in the market?

Coinbase’s stock price increased  about 9%, just after the news of the layoffs struck the general public.   Oppenheimer still gives Coinbase an evaluation of “outperform” for its prospects.  Further, their partnership with USDC is seen to be a potential boon, as USDC just became the 4^th largest cryptocurrency with a market capitalization of $44 Billion. 

The Verdict

“We are encouraged by this morning’s news, as it shows the company is taking financial discipline seriously in a very challenging crypto/macro environment,” analysts from Barclays wrote. However, they said the layoffs could also be a sign the crypto exchange company is preparing for a tough year ahead.  I chose to put this quote in the wrap-up section because I think it neatly summarizes some of the problems and opportunities with the cryptocurrency investment industry.  Many analysts are looking at this shedding of employees as potentially good in the long run.  Please focus upon the last 4 words, “in the long run.”   Look at the stock chart for Coinbase on 1/10/2023, and you will see a large increase in value, over the course of the day.   But, look at it in the broader (5 year) frame and the pattern quickly becomes an obvious downward curve.   Now think about how you think about a new car.    At first, you are ever so careful about who rides in it, what you haul with it, and you probably park it in the far corners of the Wal-Mart lot.  As time goes on, it becomes your vehicle to get from A to B, and the fact that you used it to haul mulch for the Church really doesn’t bother you.  Near the end, you get pretty numb when you get the very low estimate from CarMax or a ridiculously low value from a private buyer.  I think cryptocurrency is pretty similar.   At the beginning, it went way up (when people were extremely excited), and then relatively slowly went pretty far back down (like the “new” car after 3 years.)   Before the inherent value of Coinbase can be widely seen, I think that cryptocurrency needs to become like that “new “ car, at the end of Year 6.  Said another way, before Coinbase can go up a lot, I think people need to begin to see cryptocurrency as just another investment.  I don’t know if we’re there yet; I think we might be 2-3 years out from a transition to that point.  So, in the parlance of the finance bros, I am going to HODL (Hold Onto Dis Long-term.)  But, I promise you that my investment here won’t exceed 5% of my portfolio.

REFERENCES

https://www.fool.com/investing/2022/12/13/why-coinbase-stock-plunged-to-an-all-time-low-toda/

https://www.cnbc.com/2023/01/10/coinbase-to-slash-20percent-of-workforce-in-second-major-round-of-job-cuts.html

https://www.coindesk.com/business/2023/01/10/analysts-encouraged-by-coinbase-layoffs-as-they-show-company-is-being-financially-disciplined/

https://www.nerdwallet.com/article/investing/coinbase-vs-coinbase-pro

Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice.   Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor or CPA.