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May 24, 2023

🥛Did Binance commingle funds? 😯

GM. This is Milk Road. We’re like a buoy in the crypto sea. We keep you afloat through the waves of the market.

It’s Wednesday. Let’s get after it:

  • Did Binance commingle funds? 😯

  • One chart’s going up 👀

  • Web3 Wednesday 📝

  • Ledger talks subpoenas 🍪

Prices as of 8 am EDT

Today's edition is brought to you by ChainVine – the easiest way to grow your Web3 business with referrals.

BINANCE REPORTEDLY COMMINGLED FUNDS 😯

Crypto’s a lot like high school – you KNOW drama’s always gonna drop.

The latest drama? According to a recent Reuters report, Binance allegedly mixed customers’ funds with company revenue.  

That’s right, Binance got caught “commingling” in the bathroom.

Here’s what Reuters is alleging:

  • Binance commingled users’ money with corporate accounts held at Silvergate Bank (now-bankrupt.)

  • Binance commingled funds daily in 2020 & 2021.

  • The total sums were in the billions. $20M from a corporate account was mixed with $15M in an account that received people’s money in just one day.

  • The good news: no funds were lost or stolen. Phew

So what did Binance say? User funds & corporate money are kept on “separate ledgers.” Binance pulled an “I didn’t do anything wrong, Teach”

And those accounts weren’t intaking people’s money – they were used to process user purchases (like BUSD, Binance’s stablecoin.)

Binance’s communication chief posted a long-ass Twitter post calling the whole report a conspiracy.

Milk Road Take: Reuters cited three anonymous sources in their findings. So who knows.

But where there’s smoke, there’s fire. And the last time we heard about the commingling of funds was with FTX.

We all know how that turned out…

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STOCKS & BONDS MEET BLOCKCHAIN 👀

Ladies and gents, a new crypto record has been broken. (*queue DJ Khaled’s “Anotha one”*)

This time, the market cap of tokenized stocks & bonds just broke $225M.

While most charts are down, this one is moving up that way ↗.

Dune Analytics

Dune Analytics

So, wtf is a securities token? It’s just like stocks, ETFs, T-Bills, etc – except on-chain.

We call them real-world assets: they allow investors to get exposure to tangible assets like gold and real estate. But instead of taking on the physical asset, you just own a tokenized receipt.

Why tokenize stocks and bonds?

  • Access: More people are able to participate in the market, improving liquidity

  • Efficiency: The blockchain provides faster settlement times and lower costs

  • Transparency: All data associated with these assets is easier to track, more secure, and can’t be changed

So what? Two things:

1/ People are rotating out of stablecoins and they’re rolling into tokenized assets. It makes sense when you look at where the rates are.

They’ve been driven up on the back of the Fed’s aggressive fight with inflation, with the US 1-yr Treasury paying over 5%.

And investing in tokenized assets allows you to earn yield directly, instead of Circle (USDC) or Tether (USDT) taking a cut of the interest.

2/ In 2022, the global bond market totaled $133T. And the market cap of the U.S. stock market alone was $40T.

Meanwhile, the total amount of money currently locked on-chain is only sitting at ~$50B at this time. That’s a lot of room to grow 👀

Check out the full Milk Road breakdown of tokenized securities here!

WEB3 WEDNESDAY 📝

Happy Hump Day, Roadies.

And welcome back to another Web3 Wednesday, when we find all the cool Web3 job openings out there for you.

Check out this week’s:

P.S. – Are you trying to hire in Web3? Learn how to get your open jobs in front of 250K+ crypto enthusiasts here.

MILK & COOKIES 🍪

Ledger’s CEO confirmed they’d hand over sharded private keys if subpoenaed. There are more Trust Issues than Drake back in 2011.

Solana integrates a ChatGPT plugin that reads on-chain data. Crypto 🤝 A.I.

Bitcoin Conference attendance fell 50% this year. There were more people at your local spelling bee…

Bitcoin passes SOL to become the 2nd most popular blockchain for NFTs over the last 30 days. Bitcoin Inscriptions have really left their mark.

MILKY MEMES 🤣

HIT THE INBOX OF 250K+ CRYPTO INVESTORS

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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.