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GM. This is Milk Road, the crypto newsletter that pairs perfectly with a Pop-Tart.
(Except for the strawberry kind. That stuff is nasty)
Here’s what we’re serving up today:
- $1B, government bribes, and Thai prostitutes 🚨
- The psychology of a market cycle 📊
- Stolen funds: recovered! 🍪
Prices as of 10:30 AM ET. Click here for our Fear & Greed Index
$1B, GOVERNMENT BRIBES, AND THAI PROSTITUTES 🚨
Pardon my French. But…
HOLY SH*T.
The U.S. vs Sam Bankman-Fried trial just got crazier. In case you haven’t heard, yesterday’s trial included everything:
- Chinese government bribes
- The Saudi Crown Prince
- Thai prostitutes
- Price manipulation
- Collusion
Don’t worry. I spit my OJ out too…
Here’s the 120-second summary of all the action:
1/ Frozen funds, Chinese bribes, and Thai prostitutes
In 2021, the Chinese government froze $1B of Alameda’s funds on Huobi and OKX.
Uh-oh. Big problem.
So, they came up with 3 possible solutions…
OPTION 1: Hire lawyers to negotiate with Chinese officials to get the funds back. (legal solution)
OPTION 2: Use wallets that belonged to “Thai prostitutes” to try to get the money. (probably illegal, definitely frowned upon)
OPTION 3: Bribe Chinese officials with $150M. (straight-up illegal)
What did they choose?
Well actually, they tried all 3…
Lawyers. Failed.
Prostitutes. Failed.
The $150M bribe was the only one that actually worked. (go figure)
2/ The Seven Balance Sheets
Caroline created 7 alternative balance sheets.
The goal? Make Alameda look less risky to investors/lenders, so they could get more money.
And now, introducing Snow White and the 7 Dwarves…
**static noise**
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**static noise**
And now back to your regularly scheduled programming…
3/ The “things Sam is freaking out about” list
We all keep lists... To-do lists. Million-dollar-shower-idea lists.
Well, Caroline always carried around a different kind. It was called the “things Sam is freaking out about” list.
Here’s a sneak peek:
A few things to point out:
- “Getting regulators to crack down on Binance” - you know what they say… if you can’t beat them, join eliminate them.
- “Raising from MBS” - Some people go to their rich, bald uncle when they need $1B… fkSBF went to Mohammed bin Salman. (aka the Saudi Crown Prince)
- “Buying SNAP” - fkSBF was apparently trying to buy Snapchat. Phew. Crisis averted.
- “Willie being happy” - I don’t know who the hell Willie is, but I hope he’s happy after all this…
4/ fkSBF suggested they should keep selling Bitcoin if it went over $20,000.
According to Caroline, fkSBF came up with a master plan to get liquidity in time of need.
The plan: just keep selling Bitcoin if it was above $20,000.
In other words, it wasn’t short-term paper hands that were selling and keeping BTC’s price low... it was potentially fkSBF adding sell-pressure.
Milk Road Take: What. A. Day…
We’ll see if fkSBF’s defense can get him out of the (deep) hole he’s in during Caroline's cross-examination later today.
But right now, in our (totally non-expert) opinion…fkSBF is f*cked.
- Bribing government officials ✅
- Creating fake balance sheets ✅
- Asking regulators to attack your competition ✅
- Manipulating crypto prices to stay under $20k ✅
- Getting caught doing it all in 4K ✅
That’s the 5 Fingers of Legal Death right there.
THE PSYCHOLOGY OF MARKET CYCLES 📊
Check it out. You might’ve seen this graph before.
It’s Wall Street’s Psychology of a Market Cycle. It shows how investor’s feelings change throughout market cycles.
And with everything going on, we’re curious…
How are you feeling about the markets?
- Hope: A recovery is possible.
- Optimism: A rally is coming.
- Belief: Time to fully invest.
- Thrill: I'm telling everyone to buy!
- Euphoria: We're all gonna be rich.
- Anxiety: Why do prices keep dropping?
- Panic: Oh sh*t. I need to abandon ship.
- Anger: WTF!! Who let this happen?!
- Depression: Money gone. Retirement gone. What now?
- Disbelief: This is a sucker's rally.
Login or Subscribe to participate in polls.
Click on your answer above and we’ll share the results with you tomorrow!
BITE-SIZED COOKIES 🍪
Stars Arena has recovered 90% of its stolen funds. The web3 social media app was hacked for ~$3M last week. (finally, good news from a hack)
Trezor is launching three new hardware wallets. The lineup includes a limited-edition Trezor Safe 3 Bitcoin-only wallet.
The USDR stablecoin depegged and dropped 50% yesterday. USDR is backed by an illiquid real estate portfolio - causing panic among holders.
Ethereum gas fees have dropped to a new yearly low. The decline is likely due to the drop off in users on DeFi applications, NFTs, layer-2 networks, and various Telegram bots. (And for our crypto curious - learn more about gas fees here)
WisdomTree launched its “blockchain-enabled” consumer app in 11 new U.S. states. The $94B asset manager’s app is now available in 32 states across the country.
MILKY MEMES 🤣
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ROADER REVIEW OF THE DAY
VITALIK PIC OF THE DAY
My net worth is in this man's hands...
— Milk Road Images (@MilkRoadImages)3:10 PM • Oct 12, 2023
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
