Things are getting antsy here in the U.S. We’ve got two days till the election, and I’m stocking up on food and alcohol, just in case all hell breaks loose.
Meanwhile, here’s the crypto news for the week, starting with…
“Libra Shrugged” is here!
David Gerard’s book “Libra Shrugged” is available on Amazon starting Monday. I bought a copy, and you should, too.
The book covers everything from how Facebook was lured into blockchain in the first place—even that part is crazy—to how its plans for a world cryptocurrency were slammed down by regulators. There’s even a section on central bank digital currencies, or CBDCs.
You would think that a company as large as Facebook would be savvy enough to know how to prep for regulators, but sadly, no. Read the book. It is fabulous. (I helped edit an early draft.)
Virgil tries to get charges dropped
Virgil Griffith, the former Ethereum developer who was arrested last Thanksgiving and charged with one count of conspiracy to violate the International Emergency Economic Powers Act, is trying to get the charges dropped. Griffith, a U.S. citizen who was living in Singapore at the time, flew to North Korea in 2019 to give a talk at a conference. (The IEEPA prohibits U.S. citizens from exporting goods, services, or technology to North Korea without approval from the Treasury Department.)
The motion, filed by attorney Brian Klein, is moving to dismiss based on grounds the indictment was unconstitutional. Essentially the motion claims Griffith didn’t do anything that horrible, like actually teach the DPRK how to evade sanctions. He simply went to a conference there and gave a general speech based on publicly available information, “like he does almost monthly at conferences throughout the world,” Klein wrote. (Coindesk, Cointelegraph, Decrypt)
I’m no lawyer, but I think trying to get the charges dismissed is a long-shot. Griffith was pretty in-your-face about traveling to the sanctioned country, going so far as posting his visa for North Korea on Twitter and encouraging others to come to the conference with him.
The U.S. takes sanctions “very seriously,” Stephen Rutenberg, an attorney at Polsinelli law firm, told Coindesk in January. “It wasn’t like he was going there to play music.”
Bitcoin hits $14,000
The price of Bitcoin hit $14,000 (briefly) on October 31—for the first time since January 2018, when it was in free fall from the biggest bitcoin bubble to date. Bitcoiners (people who are invested in the popular virtual currency and want you to invest, too) are convinced we’ll have another bull run like 2017, so buy now before it goes to the moon!
It is really, really hard to ignore the correlation between bitcoin’s price and the latest fresh supply of tethers (USDT). Tether issued $500 million worth of tethers in one week and is fast on its way to a total of $17 billion worth of tethers in circulation. Take a look at this graph:
Most of those tethers, by the way, go straight to crypto exchanges Bitfinex, Binance, and Huobi, according to Whale Alert.
MicroStrategy’s bitcoin bet
In its Q3 earnings call, business analytics firm MicroStrategy said it was putting its excess stockpiles of cash into stock buybacks and bitcoin—but mostly bitcoin.
Bitcoin is mentioned 52 times in the call by MicroStrategy President Phong Le and CEO Michael Saylor, who spoke to investors. The publicly traded company purchased approximately 38,250 bitcoins for $425 million during the quarter, for an average of around $11,111.
Saylor also disclosed in a recent tweet that he personally “hodls” 17,732 BTC, which he bought at $9,882 each on average for a total of $175 million. He claims MicroStrategy knew of his personal investments before the company went ahead and bought BTC on its own.
As Wall Street Journal columnist Jason Zweig notes, MicroStrategy stock was hot during the dot-com bubble of the late 90s, but after the SEC accused the firm of accounting fraud in December 2000, its stock never recovered.
To settle the charges at the time, Saylor paid $350,000 in civil penalties to the SEC and disgorged $8.3 million. Two other executives also paid $350,000 to the SEC and returned $1.6 million and $1.4 million to shareholders. They did not admit or deny the charges. (SEC litigation release)
Now, after complaining to the WSJ about the low returns on cash, Saylor said he is willing to take a risk on bitcoin. But what about the company’s stockholders? Is this why they are buying a publicly traded stock? So they can gamble on bitcoin?
“Investors who wish to buy bitcoin could always do so themselves with the proceeds of a dividend or share buybacks,” Zweig writes. “The point of buying a stock is to get a stake in a business, not to take a flier on cryptocurrency.”
Keto dietary hazards
Bitcoiners are famous for their weird dietary habits. Last week, I mentioned Soylent, the dreadful drink that is a meal replacement substitute, which some bitcoiners were investing in—and drinking. And a lot of bitcoiners follow a strict all-meat diet. But at least one has ended up in the hospital.
“After about a month of a 90% strict carnivore diet, and years of a mostly [low carb, high fat] diet before that, I have now been hospitalized since Sunday morning for diverticulitis of the large intestine. I won’t be able to eat anything but soups and mashed things for a while,” bitcoin advocate Knut Svanholm tweeted from his hospital bed.
You would think a cryptocurrency wallet—meant to help you safely store your bitcoin—would be big on security right? Think again.
After a hack resulted in a leak of Ledger’s customer emails (and phone numbers, too, apparently), owners of the hardware crypto wallet are being targeted by a phishing attack.
A third-party is sending them emails and text messages that appear to come from Ledger support telling them to download the latest version of the Ledger app. (The Block)
One Ledger customer posted on Reddit a confusing email from Ledger explaining the situation.
Customers are upset because they say Ledger hasn’t been transparent about the breach and what exactly was stolen.
So, if you want to buy bitcoin, but you’re worried about how to safely manage your keys, invest in a hardware wallet—but preferably not one that will lose your emails.