Every Friday, Law Decoded provides an analysis of the week’s critical political, regulatory and legal stories.
Someday in the not too distant future, the strange experience of episodic television with its weekly gaps will be a strange thing that old people make an effort not to talk about about the youngsters until they finally get like this: really old and listen up to worry and turn all the logistical inconveniences of their early memories into little moral parables. And by “she” I mean myself. And I look forward.
It is possible that the constant availability of entertainment on demand is a pipeline for the obsession with the news (and possibly professional sports). It’s the last stories that keep us waiting. Where else can you find a cliffhanger these days?
For example, today is also the day we learn that the person who the world believed ordered the torture and death of Jamal Khashoggi actually ordered the torture and death of Jamal Khashoggi.
The big political stories in Crypto this week are also long-awaited events, must-see episodes, and drawn-out dramas. And although after a while all of the major events look linked, Crypto has seen a number of particularly fascinating plot points that have led to conclusions.
Coinbase is on its way to public listing
It’s been one of the most hotly debated potential events in cryptography for years: Coinbase, the giant of US crypto exchanges, is going public.
An S-1 form, also known as an initial registration, filed with the SEC yesterday is an important step along the way. It is the first proper disclosure a company makes prior to public trading.
As a result, a Venn diagram of separate but interconnected worlds – crypto, technology, and Wall Street – huddled together to inundate information on Coinbase that is publicly available for the first time. We all knew the company was big, but how big?
Quite large. Founder and CEO Brian Armstrong grossed a cool $ 60 million last year. Revenue was over $ 1.1 billion last year. And based on the backstage roar of private stocks, a valuation of just over $ 100 billion is expected, making it the largest tech IPO to ever take place in American markets – a record Facebook currently holds. Type of.
This is where speculation begins. We’re seeing a backtrack in the crypto markets after record swings that were in sync with a massive inflow of revenue to Coinbase late last year. What if this is a long term withdrawal? Coinbase’s net valuations have shifted a lot, and it’s pretty clear that they are heavily linked to crypto markets in general, and the price of Bitcoin in particular. The specific characteristics of its always tricky trading platform? Not as much. Extreme: What if Coinbase puts its public vehicles back on the blocks?
While the company hasn’t released a date for its IPO yet, it actually appears to be going past the point of no return. In terms of valuation and BTC price, there is little doubt that a public coinbase will serve as some sort of barometer of public interest in crypto, which actually correlates with bull markets. While radical valuation shifts are likely both before and after going public, this is hardly new to anyone used to holding crypto.
The story of BitFinex, Tether, and the New York Attorney General
To spoil the ending, no, they never lived happily ever again.
That said, despite the wave of public opinion from Crypto, which called the recent settlement between the IFinex clan and New York regulators a discharge, a rejection of longstanding allegations that Tether printed stablecoins with no dollar reserves because those reserves were BitFinex’s capital problems would not have solved. It’s a settlement, and although tolerable, quite an expensive one. However, the agreement not to bring criminal charges is a license to life.
In fact, the Attorney General has banned the IFinex family, which houses Tether and BitFinex and is run from New York by the perhaps fictional Jan Ludovicus van der Velde. The AG also claimed that the reserves that were supposed to be there were in fact far over, offshore, and inaccessible. According to the AG, Tether was not or insufficiently secured for the majority of the 2017 bull run.
IFinex managed to avoid admitting guilt as part of the deal, but that is far from innocent. The optimism we see from the crypto industry is likely a sigh of relief that IFinex is unlikely to surrender, an event that would ultimately be catastrophic for all corners of the crypto industry. Daily tether volume continues to overshadow everyone else as it is the preferred transaction medium to or from all other cryptocurrencies on exchanges around the world.
It will be interesting to see what impact this deal has on the huge Manhattan class-action market manipulation suit that dwarfs Tether’s size by claiming he rigged the market for the 2017 bull run. But what will be really interesting is what the effect of the decision for future requirements is that stablecoins have to report and review their reserves.
The recent technical problems at the Federal Reserve were not as decent due to the concentric rings of hell as an hour-long breakdown of the fundamentals of the American payment system. Still, they were their own kind of divine comedy.
The central infrastructures of American money are no longer as dependent on armored truckloads of cash and gold bars as they used to be. They are networks, and every time two banks attempt to transfer value, those Fed systems are their trusted third party.
While it’s good that the outage was as brief as it was, the crypto community has had quite a bit of fun pointing out the weakness of even the most revered third parties – a central bank is just another key point of failure.
Is this crash in systems likely to change anything in federal policy toward crypto? Eh, probably not. But crypto stakeholders will surely be able to put it in their books as a cool little parable to preach the sincere resilience of strong peer-to-peer systems.
Osbourne Clark attorneys explain the latest developments in UK law that are legally protecting crypto possession.
Wall Street Journal’s Alexander Gladstone writes on the role Reddit-enhanced commerce played in saving AMC cinemas that closed during the pandemic.
DeFi developers are considering the legal implications of their projects in new ways, but are continuing to push the industry, argues Anthony Tu-Sekine of Seward & Kissel.