Ten31 Timestamp 777,428
The regulatory vice continued to tighten around the “crypto” industry this week, as the SEC and NYDFS stepped up enforcement and investigative actions against Paxos and Binance. Meanwhile, the Illinois Senate introduced a bill filled with overreaching and unrealistic requirements that would compel miners and node operators to comply with fundamentally impossible court orders. That said, bitcoin scored a win in Wyoming, where the state legislature passed a bill to prohibit the forced disclosure of private key information in most circumstances. While that law still needs to be signed by the state’s governor, these developments align with Ten31’s expectation that localities will continue to compete and diverge in their attitude toward digital freedom and that jurisdictional arbitrage will thus become increasingly important for those who value bitcoin, privacy, and civil liberties (a theme we’ve already seen playing out very clearly in the mining space).
Around the world, the value proposition of absolutely scarce, politically neutral, internet-native money was once again on display this week. Argentina, Nigeria, and Lebanon all continued to suffer from various inevitable consequences of centrally planned monetary systems, with regular people sadly bearing the brunt of the impact. Activist Farida Bemba Nabourema published an article in Forbes this week that nicely summarizes what’s at stake for billions of real people around the world while “crypto” promoters in the West gear up to fend off looming regulations of their Rube Goldberg machines:
“Receiving and sending money can put [refugees’] lives in jeopardy, as transactions via both the banking system and traditional remittance services are recorded. The recipient could be accused of being a foreign mercenary and sentenced to prison. Bitcoin [has offered] a golden solution…as a way to convey financial resources to refugees, particularly those who were unable to utilize government-issued identification to receive money via traditional remittance systems.”
Selected Portfolio News
Strike released its Sending API docs to allow businesses and developers to easily send USD over the Lightning Network without directly interacting with bitcoin:
Peach announced their app’s open beta will begin on March 6th:
Mempool.space added a variety of features to its interface, including block audits and block health trackers, an improved search bar, and much more:
Bitpanda switched its user-facing block explorer data provider to Mempool for all bitcoin data in its apps:
Start9 rolled out a package to their main marketplace for users to operate private and public Nostr relays:
Bitnob introduced virtual dollar cards for online purchases, which users can generate from the Bitnob app without any card creation or maintenance fees:
Popular desktop wallet Sparrow added support for Tapsigner and Satscard, Coinkite’s NFC-enabled cards:
Media
Bitcoin Magazine released the third episode of Freedom Money with Matt Odell.
Matt also wrote a piece summarizing the privacy and security risks bitcoiners face when transacting through centralized exchanges that require KYC / AML information.
Coinkite co-founder Rodolfo Novak returned to Stephan Livera’s podcast to discuss the recently announced Coldcard Q1.
Ten31 Partner Michael Tanguma appeared on TFTC to discuss the launch of Bitcoin Talent Co, a recruiting services platform tailored to bitcoiners and bitcoin companies.
Unchained Capital co-founder Dhruv Bansal joined the Kevin Rooke Show to discuss a wide variety of topics.
Unchained’s Head of Client Solutions Trey Sellers joined the Blockware Solutions podcast to chat Lightning, Nostr, and bitcoin self-custody.
Zaprite founder John recorded a conversation with Dinny Collins on the path of bitcoin adoption and its broader implications.
Sam Wouters, a Research Analyst at River Financial, made an appearance on What Bitcoin Did to discuss the future of bitcoin mining.
Unchained posted a thread updating their popular “HODL Waves” analysis, which currently shows a record-high 67% of UTXOs have not moved in over a year.
Unchained also published an article taking a closer look at ordinals and inscriptions, the latest source of controversy among very online bitcoiners.
Market Updates
January’s CPI reading came in at +6.4% Y/Y, another slight deceleration from the prior month; however, CPI rose M/M by 50bps, up from the 10bps M/M increase seen in December.
Meanwhile, the consumer credit picture continues to look troubled, as consumer debt across all categories reached a record $16.9 trillion and delinquencies across mortgages, auto loans, and credit cards increased.
Bitcoin network hashrate reached an all-time high of over 300 EH/s as the recent uptrend in bitcoin’s price brought marginal machines back online.
After recovering some from December lows, GBTC’s discount to NAV has begun to widen and is again approaching record levels.
The two largest creditors in the Mt Gox bankruptcy proceeding elected to receive payouts for their claims in bitcoin, allaying some (likely overblown) fears of dramatic liquidation pressure on bitcoin following the payouts.
Regulatory Update
Regulators increased pressure on stablecoin issuer Paxos this week, as the SEC issued a Wells notice against the company for minting Binance USD (BUSD) as an unregistered security and the NYDFS directed Paxos to stop minting BUSD tokens.
The Wall Street Journal reported that the SEC is also probing trading firms associated with Binance.US and that Binance expects to pay penalties in the US as a result of these investigations.
Reuters also reported that more than $400 million were transferred from Binance.US’s bank account to a trading firm tied to Binance CEO Changpeng Zhao (“CZ”), one of the two firms at issue in the SEC investigation.
As a result, Binance is considering severing ties with US partners and delisting US-linked assets like Circle’s USDC stablecoin, though CZ disputed the latter point.
The Illinois Senate introduced a bill filled with a variety of overreaching and likely unenforceable dictates for cryptocurrency miners and node operators.
Meanwhile, the Wyoming state legislature passed a bill prohibiting forced disclosure of private keys, except in cases where information relevant to a case is unavailable through any alternative means.
El Salvador announced plans to open a “Bitcoin Embassy” in Texas, the country’s second such embassy after the one it opened in Switzerland last year.
The SEC sued Do Kwon for misleading investors about aspects of the TerraUSD stablecoin and associated Luna tokens, which it referred to as “crypto asset securities.”
The Bank of Russia announced plans for the pilot rollout of its digital ruble CBDC later this year.
Bitcoin Miner Hive Blockchain filed to delay reporting of its year-end financial statements due to an unforeseen tax notice related to a European subsidiary.
Noteworthy
Inflation in Argentina reached 99% Y/Y and 6% M/M, surpassing consensus expectations despite (or aggravated by) price controls.
Riots and protests broke out in Nigeria this week in response to long-running shortages of physical cash resulting from the country’s mandate to swap old naira bills with new ones.
Lebanese depositors continued to stage protests at local banks as a result of the free fall of the Lebanese pound and years of restrictions on cash withdrawals.
African activist Farida Bemba Nabourema published a well-timed piece in Forbes noting accelerating uptake of bitcoin in Africa in response to entrenched financial censorship and the needs of refugees.
Developer James O’Beirne posted a draft of his BIP for the OP_VAULT opcodes, which would allow for new security fail-safes for bitcoin custody.
Popular Nostr client Damus added “Zap” functionality to its latest release, allowing users to make easy, in-app lightning micropayments for any post.
Several airports are now piloting a new TSA program leveraging facial recognition technology in place of traditional ID checks.
Travel
Austin Ten31 Tribe event, March 16
Austin BitDevs, March 16
Austin Bitcoin Takeover, March 17
Bitcoin 2023, May 18-20
Nashville Ten31 Tribe event, June 14
Nashville Lightning Summit, July 13-14
This is the best weekly newsletter thanks so much for putting it out.
Thank you for keeping all the tech news up and in our dashboard. its hard to follow 'everything btc' related on the web. I appreciate you consolidating it in a single column.