The SEC Arrives Late - Again
And Is This Crypto Rally Sustainable?
The SEC has charged Genesis and Gemini for offering and selling unregistered securities through the Gemini Earn program.
If you’d like to learn more, you can read the SEC’s press release regarding the issue.
I shared my thoughts on the situation with The Street yesterday:
Frank Corva, senior analyst for digital assets with Finder, criticized the SEC's actions as "too little, too late."
"What we are seeing from SEC Chair Gensler and the SEC is yet another instance of their regulating by enforcement," Corva said. "Gensler has become well known for not providing a proper regulatory framework under which crypto companies should operate and then arbitrarily charging companies with violating the law."
He noted that the Earn program has existed since February 2021, meaning the SEC "had almost two years to assess the product and to request that Gemini and Genesis shut the product down."
"Gensler and the SEC want to swoop in now, though, after 340,000 unsecured creditors for Gemini’s Earn program are out a total of $900 million," Corva said. "The SEC’s job is to protect American investors, but said investors have already been hurt due to a lack of proper oversight from the SEC."
You can read the full piece here.
A little later in the day, I received a request to do an on-air interview with NTD News about the SEC’s actions regarding Gemini and Genesis.
The interview was scheduled last minute, so I didn’t have much time to pretty myself up. Otherwise, I might have chosen to wear something other than my best Champion sweatshirt.
Below is a link to the news program on which my segment was aired. I speak from about 4:27 to 5:00.
I’m not sure NTD chose my most profound comments from the approximately 15-minute interview one of their journalists conducted with me, but I guess it could have been worse.
To sum this section up: If you’ve been reading this newsletter for some time now, you know my thoughts and feelings about Gensler.
My thoughts about Gensler are mostly in line with those of the CEO of Messari Ryan Selkis’.
Gensler has done very little to protect retail crypto investors.
And though he could still actually do certain things to make things better for said investors (see below), I highly doubt he will.
If you’d like to learn more about the failures of the SEC, I highly recommend you watch the Madoff documentary in Netflix. Truly, truly mind-blowing.
The SEC has mastered the art of arriving to the disaster site long after the affected structure has been reduced to ashes — despite they tips they receive. And this tendency of the institution seems to be fully at play with Gensler at its helm.
Binance v. Coinbase
I also spoke with the The Street this week about Binance announcing it was looking to hire more staff in the wake of Coinbase announcing it would cut more of its staff.
Below is what I shared:
"The team at Binance loves to drive home the point that they are constantly building and expanding their team – especially when other major exchanges are downsizing or spending money elsewhere," said Frank Corva, senior analyst for digital assets with Finder.
Corva said that a very similar dynamic played out in June when Coinbase announced layoffs and, within hours, Zhao tweeted that Binance was looking to hire 2,000 employees.
"In that same tweet, CZ took a shot at the then operational FTX, stating 'it was not easy saying no to Super Bowl ads, stadium naming rights, large sponsor deals a few months ago, but we did'," Corva said.
You can read the full article here.
I don’t really trust Binance, and I don’t use it.
I’m more a fan of platforms like Coinbase and Kraken.
Is This Crypto Rally Sustainable?
We saw a pretty significant rally in crypto markets in the last 7 days. It hasn’t been too surprising to see, considering that the US Dollar continues to weaken.
Will the crypto rally continue? I don’t know.
I tend to agree with a friend of mine who said that this pump feels like it was manufactured by market makers.
I don’t really trust it, as macroeconomic forces don’t seem to have changed drastically enough for a full-on bull market to resume.
This is just my two cents, though. It isn’t financial advice — nor is anything I write in this newsletter.
Bitcoin Is Optimism
The heading above might seem like a bit of a contradictory statement given what I shared in the previous section.
However, I got goosebumps listening to the following interview:
In it, Alex Gladstein recaps what he experienced at the first every Afro Bitcoin conference in Ghana, which took place just last month.
I loved hearing Gladstein use words like “Somali” and “entrepreneur” in conjunction with one another.
I’d been planning to attend this conference, but didn’t end up going due to a few issues. (I ended up getting COVID right before the conference anyway, so I guess it’s for the better that I didn’t buy the tickets and book the flights.)
As I’ve said many times, residents of “developed” countries tend to have a very myopic view of Bitcoin.
If you are one of said residents, I highly advise you to listen to this interview and that you open your mind to the potential of the Bitcoin network and its native asset — bitcoin (BTC).
Happy Dr. Martin Luther King, Jr. Day!
Tomorrow is Dr. Martin Luther King, Jr. Day in the US.
Instead of sharing an inspirational MLK quote here (I’ll leave that to your friends to do via their Instagram accounts tomorrow), I’ll share a fact I learned about Dr. King a few years back that blew my mind…
Dr. King died at age 39, but with a heart that resembled that of an 80-year-old. That is, he took on so much stress as the leader of the Civil Rights Movement that it aged his heart exponentially.
Here’s to the work that Dr. King did and the amount of himself that he gave to help enact such positive change in the world. It’s hard to find words adequate enough to honor this man.
Check out the Work of Jonathan Peralta
I used to teach in the public university system in New York City — the CUNY system — and during my tenure as a lecturer at CUNY, I had the distinct pleasure and honor of working with some exceptionally brilliant minds and luminous souls.
Jonathan Peralta was one of these brilliant minds/luminous souls.
He was a student of mine in 2019-2020, and he wrote a piece in one my classes that he published via Refract, a web publication at Baruch College (CUNY), that won an award the school gives to only three students each year.
I recommend you check out said piece: “America: Land of Unequal Opportunity”
Jonathan recently reached out to me to let me know that he would be starting a Substack publication of his own.
In the publication, he plans to write about ways to mitigate and cope with mental health challenges.
The publication will be called Chrysalis Chronicles and you can subscribe to it here:
Jonathan has quite a powerful voice, and I believe that you will find his work to be quite insightful and heartfelt.
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And that’s where I’ll leave off today.
Big hugs and big love.
Best,
Frank
Twitter: @frankcorva
Currently listening to: The audiobook for Can’t Hurt Me, by David Goggins
Currently reading: Becoming Supernatural: How Common People Are Doing the Uncommon, by Dr. Joe Dispenza and Steering by Starlight, by Martha Beck
