March 13, 2023

🥛 Down goes Signature Bank 👀

GM. This is Milk Road – the daily newsletter that makes crypto as fun as a weekend in Vegas. What happens here, stays here.

Here’s what we've got today:

  • Down goes Signature Bank

  • Is ETH a security?

  • A peek inside a whale’s wallet

Today's edition is brought to you by ConsenSys, our free go-to guide to the Ethereum Shanghai upgrade coming up soon.


Another week, another bank collapse. First, it was Silvergate Bank, then Silicon Valley Bank, and now…

It’s Signature Bank. The U.S. Treasury, Federal Reserve, and FDIC announced in a joint statement Sunday evening that Signature was being shut down due to “systemic risk”.

Ouch. Talk about a rough week for banks that start with S…

Here’s what you need to know about the Signature collapse:

  • Signature Bank was one of the main banks used by crypto companies. It was a big lender in the industry.

  • It had $110B in total assets and $88.6B in total deposits, according to a recent securities filing.

  • Depositors of Signature Bank will have full access to their funds this week. U.S. regulators are making sure that depositors are made whole. On the other hand, equity and bondholders are being wiped out.

But wait, there’s more… U.S. regulators also announced that all Silicon Valley Bank depositors will be made whole and will get access to funds starting today. Hallelujah.

Why this all matters: Well, there’s good news and bad news:

Good news: Thousands of companies use SVB and all of them were wondering whether they’d still have a business after it collapsed…

The crypto streets were filled with panic that caused stablecoins like USDC to depeg from $1 → $0.85.

Now the government has assured everyone that all depositors will be made whole and get access to funds this week, including Circle (the issuer for USDC).

USDC has repegged. No one loses their business. Employees will get paid. Crisis averted.

*sigh of relief*

Bad news: Silvergate, Silicon Valley Bank, and Signature were the 3 go-to banks for crypto. Major players like Coinbase, Circle, etc. used them, so these are big losses for the crypto industry.

Not only did crypto companies lose their banks, but it’s only gonna be harder to get other banks to work with them.

Ironically, crypto is unbanked right now. The very thing that was “banking the unbanked” has now joined the bankless gang.

It’s a bitter-sweet moment for crypto. Sure, some people might look toward crypto after all the trust issues with traditional banks now. Both BTC (+15%) and ETH (+12%) are up big over the last 24h.

But now the industry has lost 3 of its major fiat on-ramp/off-ramp partners, which will only make it harder for people to get into crypto in the first place.

Here’s how Twitter is reacting to all the news:

So, what’s next? It’s gonna be a big couple of weeks. Right now, it looks like the day might be saved with depositors being made whole, but everyone will be on the edge of their seats to see whether any other big banks are in trouble too.

Jerome Powell is also set to announce interest rate hikes next week, so we’ll have to wait and see whether this banking fiasco will make the U.S. government slow down the hikes or not. 

All Eyez on JPow.


A big change is coming to Ethereum. It’s called the Shanghai Upgrade. And no, it has nothing to do with China or the city of Shanghai.

Ethereum is upgrading its infrastructure to enable ETH staking withdrawals.

What does this mean for stakers? What does this mean for web3?

Our friends at ConsenSys have you covered.

They are offering a FREE Report that walks through:

  • What is the Shanghai/Capella upgrade?

  • The role of stakers in Ethereum’s governance

  • Full and partial withdrawals

  • The impact of withdrawals on the Ethereum staking and DeFi ecosystems

  • Competition and innovation in the sector

  • Visit the Shanghai/Capella Upgrade hub to learn more

In celebration of the upgrade, ConsenSys will also launch its second commemorative NFT collection. Their first collection, The Merge Regenesis, was among the largest and most distributed NFT drops of all time.

Click the button below to claim your piece of web3 history.


Security or not a security? That is the question. And it’s one that regulators are asking about a lot of cryptocurrencies.

The latest token under the microscope? ETH.

Last week, the New York Attorney General filed a lawsuit against KuCoin (a crypto exchange) for failing to register as a securities broker-dealer while still offering the sale of securities, like ETH.

Here’s what you need to know:

  • NY Attorney General argues that ETH is a speculative asset that “relies on the efforts of third-party developers in order to provide profit to the holders of ETH”.

  • The main reason is because ETH moved to proof-of-stake and now incentivizes users to stake ETH with the goal of making profits from those staked returns.

  • It’s one of the first times a regulator has publicly claimed in court that ETH is a security. Uh-oh..

Why this matters: Switching to proof-of-stake did wonders for the Ethereum network. It lowered its energy consumption by over 99% and sped up block verification. But…

Moving to PoS has muddied the legal waters for ETH. Little did Ethereum devs know that the network upgrade would merge them right into a legal sh*tstorm.

Tom (the cat from Tom & Jerry) might have 9 lives, but ETH only has one. So if it ever was legally classified as a security it could hurt mass adoption.

We’ll be keeping a close eye on this one.


We’re bringing you a new segment called “Into the Whale's Belly” – where we’ll take a peek inside a whale’s wallet to see what they’ve been eating lately.

Crypto whales have the largest wallets and have the power to move markets, so it’s always interesting to see what they’re doing with their funds.

Today’s whale is… Machi Big Brother, a well-known NFT trader. And Machi has been active lately:

  • Bought ~20% of the entire Gitcoin Presents NFTs collection last week. Our Lanky King Vitalik Buterin was one of the creators of the project.

  • Had the largest NFT sell-off of all time. Machi sold 1,000+ NFTs in the space of 48 hours – including BAYC, MAYC, Azuki, and more.

  • One of the top reward earners for Blur’s NFT marketplace. Machi received a whopping $1.8M on the first Blur airdrop last month.

But we found something else that’s interesting: Machi Big Brother has been wash trading to farm BLUR rewards. And he’s been washing trades more often than he washes his hands lately…

Check it out. (wash trading in blue)

The takeaway: Do your own research (DYOR). And always be careful copy-trading other crypto whales – you never know if they truly believe in a project or are just wash trading to farm rewards and make big profits.

If you wanna keep up with all the latest NFT action check out Unleash NFTs – an NFT analytics platform provided by our partner, bitCrunch.



That's a wrap for today. Meet us on Twitter to talk all about it. It’s kinda like a family BBQ but better – no screaming kids, awkward photos, or drunk uncles telling weird stories (@MilkRoadDaily)


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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.