Friday Market Musings | 6 | 2023

And there is the SEC again!

You might prefer to forget it, but the SEC still exists! And even with all the mess going on in this world, they are out to make more mess, and they're not done with what they call "tackling crypto". When the SEC was not so involved in crypto, American crypto enthusiasts could still strike at KRAKEN, one of the larger players in the crypto world. But unfortunately for all American crypto enthusiasts, that has come to an end. The SEC has come up with their regulatory regimen, ruining the dreams of US crypto fanatics.

The SEC demanded that KRAKEN immediately stop offering staking services to US clients, and if that wasn't enough, they also have to pay a $30 million fine! Ever wondered where the SEC gets money from? Well, apparently from such actions. Anyway, a sour apple for American crypto enthusiasts to bite through because Kraken has now settled with the SEC. They are suspending their strike services effective immediately for all US customers, AND they are paying the $30 million fine!

But much to my surprise, Kraken continues to offer its staking services to all non-US customers. Through a subsidiary. Now I don't do anything with this myself, but even if that were the case, I would still remove it from there. In my opinion, it is now only a matter of time before the European branch of crypto regulators will also focus on this.

In short, they are far from done ruining the crypto experience in general.

Oh, if you thought you could still make money from this via a VPN shortcut, forget that too. Mandatory KYC verification took care of that a long time ago.

In fact, despite crypto's decentralization claims, that turns out to be untrue in many cases. Regulators still have power and control, and the US crypto community is forced to cooperate whether they like it or not. So, we will have to conclude that in this case crypto should be decentralized, but not as decentralized as we hoped.

Bitcoin fell down too of course

I would almost like to say; "Congratulations SEC, you did it again! Because of your actions, this time with Kraken but who knows what will be next, you really did it again.

The panic that only just seemed to disappear from the market is right back. This is of course also the brands in the price of Bitcoin. And well, we now know that if Bitcoin falls sharply, everything falls sharply with it. Do you think this is what crypto investors want? Being demoralized by regulators who sometimes don't even seem to understand what they are regulating.

You would almost thank them for their efforts to regulate the market and see every crypto owner time and time again see their crypto portfolio fall to new lows. So this time the message about Kraken is the cause of a new Bitcoin decline, can Bitcoin now quietly go up again without new shocking messages for the time being?

Innovation or desperation?

Waging war costs money, unfortunately we all have the burden of that now. And Russia is also feeling this in its economy. That much may be certain, the sanctions imposed from "The West" will certainly be felt. But Russia won't be Russia if they don't come up with something to get around that. And they now seem to be planning to do just that by pulling $12 million from the state coffers to subsidize a new crypto mining facility. Who would have thought that Russia would make a U-turn in their attitude towards cryptocurrency? At first they condemned it as a gateway for criminal money and black market affairs, and now they even subsidize a crypto mining facility in Siberia.

The Russian government is apparently not concerned with suffocating their economy with sanctions, no, they think it is much better to open up the state treasury to support this new venture. And to top it off, they will also employ 100 people to operate 30,000 mining machines.

But it is not just financial support, Gazprom of course has gas left now that it no longer supplies Europe, will supply flared gas to the mining center and BitRiver, another state-owned company, will supply the electricity from petroleum gas n. You would almost think that the Russian government has completely managed to make this crypto venture succeed.

How Western governments will react to this news is not yet known, but I think it shows that the Russian government has been forced into a position where they have to seriously think "out of the box" to continue financing their war. Whether you can call this a good development for the crypto industry is doubtful.

I wish you all a happy Friday!