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📉 The real reason BTC tanked

📉 The real reason BTC tanked

PLUS: should you buy the dip?

Alex M.
June 06, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: Yesterday, the SEC sued Binance, Apple announced its VR headset and the CIA confirmed being in possession of alien aircraft.

Jeez. What a day. Let’s look at the crypto piece first.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

Yesterday, the SEC sued Binance US and its founder, Changpeng Zhao (CZ).

Binance is the largest crypto exchange in the world. And so, like it always does on these kinds of news - the crypto market tanked.

charts with lots of red in them are our least favorite charts

The lawsuit essentially claims that:

1/ Binance US has been selling unregistered securities to US citizens.

Specifically, they claim that $SOL, $ADA, $MATIC, $FIL, $ATOM, $SAND, $MANA, $ALGO, $AXS, and $COTI are unregistered securities.

(Don’t worry, I’d never heard of $COTI either)

The SEC even published this quote from CZ, allegedly from an internal conversation with the compliance officer of Binance:

Not a great look

2/ Binance commingled funds with other ventures and potentially used them for personal expenses.

That includes up to $145 MILLION transferred to CZ himself and the purchase of an $11M yacht.

That’s a good chunk of change.

Binance also allegedly used another company to trade against their own clients… using their clients’ money.

Now - if:

commingling funds and
trading against your own clients using a hedge fund

… rings a bell to you, that’s because it’s exactly what Sam Bankman-Fried did.

He used FTX’s customer deposits to trade in his personal hedge fund that blew up.

Alright, so what’s next?

Naturally, Binance is telling us that all is good in the hood.

But we’ve heard that line before…

just reading these bring shills to my spine… PTSD

And this could indeed end up being a complete nothing burger. Big whales are buying the dip. And Binance US makes up just 2% of Binance’s global revenue.

If that’s true, the only question you need to think about is this: