Is Your Crypto Really SAFE?!

Most people aren’t doing crypto correctly. By that, I mean that the vast, vast majority of people who hold crypto aren’t practising self-custody. 

When I interviewed Trezor’s CEO Matěj Žák in Amsterdam recently, he pointed out that there are around 420 million crypto holders in the world and a mere 2% of them use their own, self-hosted wallet to store their funds. We still have a long way to go.

Quite simply, if you leave your crypto on an exchange or similar third-party platform, then all you’re really ‘holding’ is an IOU from that platform for those funds. You’re trusting that platform to make good on that IOU if or when you try to move those funds. You’re also trusting that platform to hold those funds securely and not do anything untoward with them. Well, if you think that’s no biggie, then allow me to point you in the direction of a New York courtroom and the ongoing trial of a Mr Samuel Bankman-Fried.

If you’re not doing so already, you need to be using your own wallet to store your funds. There are lots of different ones out there though, so which one to go for? That’s exactly what today’s video is all about. In it, we go through the best crypto wallets on the market and give you what we think are the primary self custody options out there.

It’s about time you joined the 2% club, if you haven’t already. The first step is to watch that video, which you can do right here. 

📈 Crypto Market Forecast 📈

Since the effect of macro on crypto seems to be getting weaker by the day, we’re going to focus on crypto-specific factors this week. You can divide these crypto-specific factors into two camps: bullish and bearish. The main bullish crypto factor that comes to mind is a spot Bitcoin ETF. Apparently, the SEC is still mulling over the applications, but there don’t appear to be any delay announcements. 

Approval imminent? The market certainly thinks so! 

However, there’s been no shortage of bearish crypto factors to have emerged in recent months, and almost all of them have to do with regulations. As you might have heard, the NYAG has sued DCG, Genesis, Gemini and others. This seemed inevitable the moment Gemini shined the spotlight on DCG and co. I don’t imagine they expected to get caught up in it though. 

This begs the question of what will happen to Grayscale’s bid to convert its Bitcoin Trust into a spot Bitcoin ETF. While Grayscale was not mentioned as a defendant in the lawsuit, its GBTC trust is mentioned many times as being a major component of the allegedly illicit activity the defendants engaged in. This could dampen the prospects of a conversion in the near term. 

At the same time, the relentless reports about crypto being used to fund Hamas has resulted in the first set of related sanctions from the Treasury Department. If this anti-crypto campaign continues, then we could see more sanctions and similar actions. The likelihood of this seems high given that Elizabeth Warren and her many friends are pushing for the US government to do so. 

Meanwhile, in Europe, another top Binance executive has left the exchange. This is in addition to all the other high profile departures that you’ve probably heard about. All I’m wondering is: why now? One possibility could be SBF’s ongoing trial, which is starting to reveal things that could be bad for Binance, like FTX using customer funds to buy back Binance’s stake in the exchange. 

Remember that the FTX clean-up team has been trying to claw back these kinds of purchases. 

On that note, SBF’s trial is scheduled to continue for the next three weeks, though it seems that the court will not be in session for most of this week. The only days to watch out for will be Thursday and Friday. Chances are that we’ll get a few more concerning revelations about other big entities in the crypto industry. We suggest following Tiffany Fong on YouTube for this coverage. 

You can find her channel here

Another potentially problematic crypto-specific factor to look out for is the pending defense bill in the US. To refresh your memory, the defense bill includes a provision that could force stablecoin issuers in the US to apply KYC to all wallets holding their stablecoins. Although the bill has been stuck in the House due to partisan issues, the recent conflict in Israel could see it approved.

Seriously, watch out for that one. 

Speaking of which, if the conflict in Israel escalates, then it could be enough to affect crypto prices at a macro level. The only question is how. According to Blackrock CEO Larry Fink, the recent rally we saw in BTC was because of a ‘flight to quality’ in response to the conflict. 

It will be interesting to see if this narrative plays out. 

💯 Deal This Week 💯

Given that Bitcoin is flirting with that $30,000 level once again, new trading opportunities appear to be opening up. 

If you are looking to take advantage of them, then you are going to need an exchange to do so. One of the top choices of team Coin Bureau is Bybit. 

Not only does this exchange have some of the most extensive trading functionality, coin support and additional features, but it also regularly publishes proof of reserves

If you don’t have an account at Bybit yet, then we have an incredible deal on offer. There are up to $40,000 in signup bonuses, 0% on maker fees for 30 days as well as an ongoing trading competition of $30,000. So, not only can you bag some bonuses and discounts, but you can also beat your peers with your trading skills. 

Sounds good to you?

👉 Give Bybit a try!

🦄  Uniswap Controversy 🦄

This week, Uniswap Labs, the developer behind one of DeFi’s largest and oldest protocols, announced the implementation of a new 0.15% swap fee on select token swap orders placed through its front-end interface.

The announcement caught many by surprise, as decisions regarding fee implementation in DeFi protocols such as Uniswap are usually decided via a governance vote among token holders.

However, in this case, that did not happen – triggering an initial wave of confusion that only abated after a closer read of the announcement.

The announcement revealed two things. The first is that the new 0.15% swap fee is not a ‘protocol fee’ but rather a ‘platform fee’ on the Uniswap front-end interface, which means that the fee mechanism is only triggered for certain swaps done via that route. In other words, you don’t have to pay this fee if you initiate swaps via aggregators (1inch, Defillama) or other interfaces (Okutrade) interacting with Uniswap smart contracts.

Secondly, the fees collected go directly to ‘Uniswap Labs’ (centralised entity) and not the ‘Uniswap Protocol’ (decentralised smart contract infrastructure). This means that $UNI token holders gain no value capture via the new fee implementation.

Unsurprisingly, the community had a mixed response. In fact, a lot of big $UNI whales proceeded to completely dump their $UNI holdings following the announcement. While some saw the fee as a justified measure needed to fund the expenses of a company that has been building critical infrastructure on Ethereum for over five years, most others saw it as a betrayal of token holders and Uniswap’s early community.

The most prominent criticism of the move is that the entities that benefit the most from this are Uniswap Labs and its shareholders - which include VCs such as a16zcrypto, Paradigm and Variant. Notably, Delphi Labs general counsel Gabriel Shapiro states that these entities are unfairly rewarded through a ‘double dip’ structure, which grants them access to both equity and token share of the project.

He states that this double dip structure, combined with the uncertain regulatory treatment of tokens, disincentivises Uniswap Labs (which holds almost 21% of the UNI token supply) from providing or driving any value to $UNI token holders. Instead, it incentivises them to pursue a safer monetisation strategy focused on benefiting shareholders in Uniswap Labs.

However, Twitter user Laurence described the “dual equity/token model” naysayers as only being outraged due to not being the party benefiting from being able to extract value. While that may be so, it is important to acknowledge that a large part of this outrage also comes from a feeling of betrayal felt by $UNI token holders who have been unsuccessfully trying to switch on the protocol’s fee switch via governance proposals for quite some time now.

While these holders’ attempts have been thwarted time and time again by regulatory concerns, Uniswap Labs was able to enforce a fee unilaterally. It also doesn’t help that Uniswap’s voting system unfairly favours parties who can afford to snap up millions in UNI tokens, resulting in the biggest holders of the token often having the most say.

Twitter user Guerilla Artfare even compared the UNI token’s current value proposition to holders as being no different from those provided by publicly-traded stocks of popular tech companies such as Google, Tesla and Nvidia. They assert that investors who are okay with holding tech stocks have no right to complain about UNI’s value proposition as a governance token.

However, what this argument fails to account for is that the governance granted by Uniswap’s $UNI token, unlike traditional stocks, is not inherently or legally enforceable. In fact, the results of the governance votes still need to be implemented by Uniswap Labs. On that note, Adam Cochran’s joke about moving the $UNI token to the memecoin section of CoinGecko seems justified.

Pros and cons aside, the new fee by Uniswap Labs has brought to light a clear division between the centralised and decentralised parts of the platform. A distinction that Uniswap Labs probably wanted to make clear due to the recent spate of regulatory enforcement actions against DeFi protocols.

Some speculate that this could even see the Uniswap front end eventually being regulated as a business that needs to implement KYC, AML and tax reporting controls. Crypto lawyer Jonathan Galea even stated that this opens Uniswap up to regulation as a crypto assets service provider under the EU’s MiCA legislation.

While it remains to be seen if Uniswap will be hounded by regulators, there is no denying that Uniswap Labs is making a pretty penny out of the new fee structure – it made over $100K in revenue in just a few days. Keep your eyes peeled folks, this could turn out to be Uniswap Labs’ shrewdest move, or its worst mistake. Only time will tell.

📊 Guy’s Personal Portfolio 📊

BTC 39.70% | ETH 28.59% | USDC 17.88% | USDT 7.16% | USD 3.61% | ATOM 2.11% | DOT 0.94%

🔮 Video Pipeline 🔮

  • The Ultimate Altcoin Entry Strategy
  • Bitcoin created by NSA? Intriguing clues!
  • Digital EURO: What it means for you?
  • Pension Ponzi: The Biggest Scandal in History!
  • Shrinkflation: How Companies Are Robbing You Blind!
  • Cashless Society: Why This Should Scare You!

🏆 What's New at This Week? 🏆

Bybit Earn Program: Benefits and Risks Explored!

Top 10 Best Crypto Gifts in 2023

Coldcard Review: Safe Wallet? Features and Benefits Explored

Where to Buy Ethereum: Best Exchanges to Buy ETH!

OKX Trading Guide 2023: How to Trade on OKX

Oraichain Review: The AI Powered Oracle System

M6 Labs Crypto Market Watch October 20, 2023

How to Sign Up For Bybit: Complete Guide!

📖 Quote of the Week 📖

This week, we learned all too well the importance of checking sources. Whether it’s about war, or about a sport Bitcoin ETF, until you have verified the source of any information, treat it with suspicion. 

“All information is guilty until proven innocent” - A.D. Aliwat

Team Coin Bureau

Disclosure: Authors may own cryptoassets named in this newsletter. These are unqualified opinions, and a Coin Bureau newsletter, is meant for informational purposes only. It is not meant to serve as investment advice. Please consult with your investment, tax, or legal advisor.

Guy Turner

Guy is one of the founding members and face of the Coin Bureau. Like many of us, he is just an average joe who became “crypto curious” back in 2013. After recognising the potential of blockchain technology, Guy set off on a mission to create crypto educational content, working with others to start the Coin Bureau website and released our first video on YouTube in 2019. You can learn more about him in his Who is Guy? blogpost.

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