CFTC vs Binance - Can CZ Fend off US Regulators?
Importance of Web3 Storage | US Stance on Crypto | BTC in 2023
GM Intels, this is your Daily Bolt briefing.
Today’s research includes an explanation on Filecoin’s recent developments, and the importance of Web3 storage as a whole, as well as research on market conditions, especially around new regulatory challenges regarding the CFTC (Commodities Future Trading Commision).
Many of you may be familiar with our Project Breakdowns; 60+ page reports compiling information from project docs, answers from team members, among other sources.
But these detailed reports aren’t just for premium members: we’ve actually granted access to 3 full breakdowns on Alluo, Chainlink, and GMX available to anyone, even if you haven’t made a Revelo account!
Click your choice below to view the project breakdown in its entirety!
Stay vigilant.
Key Discussions Happening Today
1/ Blockcrunch Ep. 235 -David Choi on The Importance of Web3 Storage
Preview: In this episode of The Blockcrunch podcast, host Jason Choi is joined by David Choi, Product Manager of Protocol Labs to answer the question “How Web3.Storage and NFT.Storage allows developers to build on Filecoin.” Click here to listen to the full episode.
Length: 49 mins | OUR NOTE: 6 mins
With the power of the internet and protocols that people are used to using in the Web 2 world, they can store data somewhere else, by sending those bits to a remote server.
The InterPlanetary File System (IPFS ) does not make statements about where data is stored in Web 3 storage; instead, it makes statements about how users get data back from how they reference it.
Filecoin announced that their FVM (Filecoin Virtual Machine) is launching, which effectively transitions into a full-fledged L1 instead of just a storage network.
Some of the biggest NFT marketplaces and minting services use NFT storage to store their off-chain NFT data, such as Magic Eden, Werewolf, OpenSea, NFTport, and Metaplex Studios.
NFT storage is done without the expressivity of FVM, which allows people to write smart contracts on Filecoin.
The goal of FVM is to completely decentralize itself, aiming to be a DAO(Decentralized autonomous organization).
2/ Blockbytes - Across the Chains Ep. 27
Preview: In this episode, Clay Kilgo is joined by Buns, Mark Jeffrey, Souvlaki and Justin Silver to discuss $BTC, CFTC vs. Binance, Andre Cronje, Cooper & Kirk, MakerDAO and more. Click here to listen to the full episode.
Length: 96 mins | OUR NOTE: 4 min
Here are some key takeaways:
The masses in general still have a hangover from the events of last year.
Many citizens in the U.S. are starting to realize that the model under which the banking sector runs has been the same for many years.
An anti-crypto stance is not a great thing to take if you’re going for re-election.
$BTC isn’t a U.S. product.
There’s a lot of companies that are seemingly trying to do whatever regulatory compliance is necessary but it’s really hard to figure out what exactly they’re supposed to do.
The CFTC claimed that $BTC, $ETH and $XRP are commodities.
This represents a war between CFTC and SEC.
3/ The Scoop - Everything You Need to Know About Crypto Market Structure
Preview: In this episode of The Scoop, Frank Chaparro is joined by Larry Cermak VP of Research of The Block, and Evgeny Gaevoy Founder & CEO of Wintermute to talk about how crypto's market has evolved so far in 2023, and the broader banking crisis sweeping the market. Click here to listen to the full episode.
Length: 29 mins | OUR NOTE: 4 mins
Here are some key takeaways:
There's a new narrative that Bitcoin could once again be this hedge against bank failures.
Binance shirked its responsibilities by needing to register with the Commodity Futures Trading Commission(CFTC) agency properly.For Sergey, Tokenization is attractive because people have user-controlled ownership and privately controlled ownership.
Since the year 2019, people are seeing a pretty aggressive correlation between Bitcoin prices with equities.
With Signature and Silvergate collapsing, it impacted the Over-the-Counter (OTC) market and it became less efficient.
The OTC market is often regarded as dangerous, with weak reporting standards and less transparency connected with these assets.
Most people are mindful of the risks associated with USD Coin(USDC), causing a domino effect on Stablecoins de-pegging; USD Digital(USDD), DAI, and Frax.
Concerns regarding the potential detachment of USDC, a stablecoin backed by US dollars, are causing apprehension in the cryptocurrency sector.
On the Revelo Intel platform, we’ve summarized these 3 episodes and in total, would have saved you: 2 hours and 40 minutes!
To get access, you just have to sign up for a FREE plan.
Note of the Day
Unchained Ep. 475 - The Impact of CFTC Case Against Binance
In this episode of Unchained Podcast, Laura Shin is joined by, Austin Campbell, a professor at Columbia Business School, to discuss the recent allegations made by the CFTC against Binance, and whether or not criminal charges will be brought against company officers such as CEO Changpeng Zhao (CZ). He also sheds light on how this case could shape which agency will have regulatory authority over crypto assets.
Read our notes below to learn more.
CFTC Allegations To Binance
Austin
Fundamentally in the United States, if someone is trading certain forms of derivatives on commodities, they are required to register with the Commodity Futures Trading Commission (CFTC).
CFTC derivatives compliance was significantly more time-consuming than anything that people were doing for the Security and Exchange Commission (SEC).
CFTC is alleging Binance knowingly had U.S customers and failed to register.
The second allegation is that Binance has had a bunch of internal accounts trading against people on the platform without adequate controls around it.
Binance got into issues like front running, abusive trading, and insider trading-type behaviors.
Binance was alleged to have essentially defrauded some of their commercial partners about the controls that they had in place.
Criminal Charges
Austin
If Binance wants to defend this case they're going to open themselves up to discovery and the odds of DOJ’s (Department of Justice) action, in this case, are significant.
CFTC could put Binance in a position where it is simply impossible for them to operate in the United States going forward.
CFTC’s suit is asking to be declared that many of Binance's companies and senior officers are not legally allowed to register in the United States.
Chang Peng Zhao
Austin
If there's a sealed indictment and they want to extradite it, Austin likes the odds of getting Chang Peng Zhao, or he has to become a pseudo-captive in a nation that doesn't have an extradition treaty.
The thing people should keep in mind is judicial proceedings are slow.
CFTC is now in a federal court alleging that Bitcoin, Ethereum, and two of the major stablecoins BUSD (Binance USD) and USDT (USD Tether) are commodities; this is a direct contradiction of some of the things that the SEC or at least the chair have been saying.
Austin thinks that people should understand that there are a lot of smaller traders caught in the middle who just get crushed as the giants walk around, and that has always been a concern for the CFTC.
Future of Binance
Austin
Binance should try to find some sort of settlement with the CFTC about the issue.
The other possible thing that might happen to Binance is that it cannot operate in the United States.
The consequence will be fatal depending on the DOJ alleging more severe criminal issues.
Commodities VS. Securities
Austin
If the CFTC wanted to assert regulatory authority it is great because it's already there.
If the SEC wants to assert it, they have to contest that, and why weren't they in this case contesting that, it just starts to build a body of case law that tells you that these are not commodities
Ultimately the answer in the United States to whether something is 100% a security or not is judicial.
CFTC is a commodities regulator.
If nobody contradicts the CFTC, they kind of win by default.
Federal Regulators do not show up in federal court.
Check these important links below
To get access to Notes like this, join for free today.
Thanks for reading The Daily Bolt by Revelo Intel! Subscribe for free to receive new posts and support my work.