CTFC charges BitMEX / Cryptocurrency and Bitcoin update

Boxmining avatar Boxmining
7.6K views 272

Description

Latest Bitcoin and Cryptocurrency news and trends. We take a look at the key events affecting the blockchain sector and review market movements. Combining both fundamental analysis and technical analy...

AI Analysis

This episode dives deep into the major events shaking up the crypto world, particularly the bombshell charges against BitMEX, alongside a candid look at the wild ride of yield farming and the presenter's personal risk management strategies. It's a frank discussion about the current state of crypto, from regulatory crackdowns to speculative frenzies, offering insights into navigating this volatile space.

Here's a breakdown of the key discussions:

### Overall Market Mood & Speculation
* There's a general feeling of being "bloody tired" in the crypto space after a rough few days, largely due to significant news impacting the market.
* The DeFi wave feels like it's ending, leading to a shift towards new speculative interests.
* NFTs are getting a huge push, and while there's gladness for the attention, there's also skepticism about the long-term sustainability of the hype.
* A concerning trend is the focus on tokens designed purely for interesting tokenomics (like "deflationary" models or burns) without proven underlying value. This is leading to "ultra degenerate speculation," where projects are often just a few words on a help document without a solid foundation.
* This intense speculation creates a divide: some are taking a break, others are turning into "ultra degenerates." The presenter emphasizes looking for value and projects with "legs" rather than just pure speculation.
* There's frustration with aggressive shilling, especially from those potentially being paid to promote coins. This creates an "allergic reaction" and a sense of distrust when projects are pushed too hard without substance. The "many" project incident, where people were paid to shill it on the live stream, highlights this issue.
* Crypto is inherently highly speculative, but over the years, real value has been discovered (e.g., Bitcoin as a decentralized currency and value transfer).
* New projects need to be "10x better" or offer a different angle than Bitcoin or Ethereum to justify their existence, not just be created for speculation.

### BitMEX Charges & Regulatory Fallout
* The biggest news is the CTFC (Commodity Futures Trading Commission) charging BitMEX, a major leverage derivatives exchange. These aren't just civil charges; the CTO of BitMEX was arrested.
* This is a landmark case, the first of its kind with such a massive exchange being charged.
* BitMEX has been "running, running, running" from regulators for a year, banning US IPs, requiring KYC, and even banning users from Hong Kong, indicating they knew trouble was brewing.
* The charges include operating an unregistered trading platform and violating anti-money laundering (AML) operations, involving both the CTFC and the DOJ (Department of Justice) – making it a joint criminal operation, not just civil.
* The Bank Secrecy Act (BSA) is a key factor, as it aims to stop money laundering, not just protect consumers. If an entity knowingly or purposely, or even through failure to meet industry standards, supports money laundering, they can face criminal charges.
* There's a critical discussion about the hypocrisy of these charges when compared to traditional banks (like HSBC) that have been caught money laundering for billions and only received minor fines, often deemed "too big to go to jail." BitMEX, being smaller, can be "bullied" by regulators.
* The market saw an immediate dip across almost all cryptocurrencies following the BitMEX announcement, showing how interconnected the crypto market is. However, a quick recovery indicates the market quickly processed the news.
* Actionable Takeaway: If you have funds on BitMEX, consider withdrawing them immediately to a hardware wallet. There's a strong warning based on past experiences like Mt. Gox, where funds were frozen for years and, if ever recovered, were valued at the liquidation date, not current market prices. "If it's your keys, it's your crypto."
* The charges raise uncertainty (FUD) about whether similar actions will be taken against other derivative exchanges (Bybit, Deribit, FTX, Binance Futures) and even DeFi protocols, as the legal application to DeFi is a "gray area." There's no "magical peer-to-peer exemption" from these laws.
* BitMEX's initial practices of allowing two Bitcoin withdrawals without KYC for US customers could set a precedent for other exchanges that operated similarly.
* Offer Hayes (BitMEX CEO) is believed to be in Singapore, highlighting the complexities of international law enforcement.

### Hardware Wallets & Security
* Storing crypto on exchanges means it's not truly yours; a hardware wallet (like Ledger or Trezor) is the only truly safe way to keep crypto.
* Actionable Takeaway: Combine MetaMask with a Ledger or Trezor for enhanced security. While MetaMask holds your keys on your computer, making it susceptible to malware (viruses, keyloggers), a hardware wallet keeps the key on a separate, secure device, meaning it never leaves the device. Hackers can't see your key, only sign transactions once approved on the physical device. This is crucial for larger sums.

### Kucoin Hack
* Kucoin withdrawals and deposits were disabled due to a hack.
* Early investigations suggest the hack might have been a "social engineering slash inside job," a growing attack vector where hackers manipulate employees to gain access. This method was previously used in the Twitter hack.

### Yield Farming Strategies & Risk Management
* Still farming aggressively, with "crazy" rewards, but with significant caution.
* Lua Token ($LUA): Explains the dangers of highly volatile pools with huge APYs. If the token value drops significantly, a high APY won't save you from impermanent loss. Rarely enters such pools unless there's a strong belief in the project and buy pressure.
* Hedging Strategy: Describes a sophisticated strategy for volatile tokens like Tomo Chain. By buying the token (e.g., Tomo) for farming and simultaneously shorting an equal amount on a derivatives exchange (like FTX), one can effectively hold "no coins" and eliminate exposure to asset price fluctuations while still earning farming rewards. This is "ridiculously profitable" but "highly complicated" and "easy to screw up," and not available to US customers.
* Pancake Swap ($CAKE) & Binance Smart Chain (BSC): Successfully farmed CAKE on BSC.
* Strategy for Listed Tokens: A strategy for tokens listed on Binance is to farm them, but immediately sell after listing, as prices often crash due to the "hype" and subsequent selling pressure. This is a common but effective approach.
* Cream.finance ($CREAM): Still holding Cream and hasn't risk-mitigated it, calling it an "absolutely insane" decision given the market.
* Yearn.finance ($YFI) / YFL: Still holds some, believing the team is building aggressively and known for making good stuff.
* Curve / Swerve / Sushi / Sake: Still in these farms despite rewards sometimes being bad, highlighting the mental complexity and need for meticulous tracking (screenshots of farms and wallets).

### Project Evaluation & Speculation (Core, Orbs, Eminence)
* Core Vault Finance ($CORE): Views Core as "extremely speculative." The tokenomics (perpetual lock, effectively burning farmed Core) are designed to create upward pressure, but the underlying value (vault strategies, user-submitted strategies) is not yet real or proven. The presenter is uncomfortable with the "massive" amount of speculation without concrete delivery, calling it a potential "big giant ass ponzi" if promises aren't delivered.
* The presenter's personal criteria for a project worth holding medium to long-term is its ability to "generate some sort of value" beyond just being a currency.
* Orbs ($ORBS) and Eminence ($EMN): Uses these as stark warnings against rampant speculation. Orbs "got obliterated" after initial hype, dropping from 10k to 300. Eminence saw 60 million dollars deposited into a project, only for a hacker to take it all (refunding 8 million), showcasing the "insane" level of risk and lack of due diligence in highly speculative ventures.
* Emphasizes that while speculation can't be stopped, it should be called out for what it is: "over speculation."

### Personal Risk Management
* The presenter is "de-risking a lot recently" due to increased market uncertainty.
* This involves moving out of "highly speculative assets" or anything where they were overexposed.
* The goal is to extend their "runway" (financial sustainability), which is already long (8-10 years, potentially 20 years now).
* Risk profile: Prefers to "make medium and lose little" rather than risking everything for potentially huge gains. Losing everything means "game over."
* Personal portfolio allocation: Less than 1% is in "degenerate" speculative plays, while 99% is in "non-degenerate assets" – a reverse of what's common in the space. This is based on years of experience since 2012.

### Tax & Location
* Being in Hong Kong means "no capital gains tax," which is a "magic" benefit of the location.

The presenter concludes by encouraging community discussion in new Discord channels, stressing caution with overly aggressive shilling and high-risk speculative assets.

Transcript

another episode of box mining i think it's no secret here that i am just bloody tired like yeah it's it's been a rough few days uh yesterday so the biggest biggest whale news out there the biggest one the biggest elephant in the room right now is that the ctfc is charging bitmex so bitmex being the leverage derivative exchange platform offer haze platform with a lot of charges and these charges aren't just civil charges but they also arrested the cto of bitmex as well so this happened late on t...