In this newsletter we’re going to do some difficult math and finally get to the sum of all fears. We’ll also answer some other unanswerable questions like…

Why is the moon afraid of the sun? Why am I afraid of making eye contact? And of course, why are banks afraid of crypto?

We’re also going to do what Bernie Sanders could only dream of and hold the banks accountable. C’mon, let’s get to it!

Espresso Shots

☕️ Galois Shuts Down ❌ 📉

Crypto hedge fund, Galois, has permanently shut down after losing $40 million in the collapse of FTX.

Galois thought it would take years to recover their investor’s funds. But it turns out they didn’t have years.

Galois limped into 2023 after the catastrophic loss of $40 million before having shut down completely. Galois co-founder Kevin Zhou admitted that Galois had been struggling since the Terra collapse, but remained hopeful on crypto as a whole.

“This entire tragic saga starting from the Luna collapse to... FTX/Alameda failure has certainly set the crypto space back significantly,” said Zhou.

Zhou went on to say, “However, I, even now, remain hopeful for crypto’s long-term future.”

Zhou’s optimism is admirable and though he’s disappointed about the collapse of his hedge fund, Zhou is excited to pursue his lifelong dream of making money in a different way.

☕️ Japanese Customers Can Withdraw From FTX 🇯🇵 💴

As of this Tuesday the 21st, Japanese users of FTX Japan will be able to withdraw their funds from FTX.

The withdrawals will be hosted by Liquid Japan, a crypto trading platform that was purchased by FTX.

Fund withdrawals from FTX Japan have been frozen since last November. Customers will be notified by email when they’re eligible to withdraw.

While customers of FTX Japan may soon see an end to this debacle, FTX customers every where else in the world will have to wait for that same satisfaction.

It could still be months until US and EU-based customers have any news on the status of their lost funds.

This development represents another arena in which Japan is well ahead of the rest of the world, much like their innovations to collectible trading cards, robotic toilets, and cool ass swords.

☕️ New YouTube CEO All in on Web3 🎥 💻

Neal Mohan took the helm as Youtube CEO last week and his ascendancy could be huge for Web3.

In a blog post last year, Mohan wrote extensively about the potential for integration between Youtube and Web3 elements such as NFTs and the Metaverse.

“We believe new technologies like blockchain and NFTs can allow creators to build deeper relationships with their fans,” wrote Mohan.

“There’s a lot to consider in making sure we approach these new technologies responsibly, but we think there’s incredible potential as well.”

Having a receptive CEO may make Youtube a frontrunner for the burgeoning tech we know, love, and write extensively about as we move into 2023 and beyond.

Who knows, Web3 may become the backbone of Youtube, dethroning DIY carpentry tutorials and videos of unhinged, divorced dads ranting in their cars.

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Spilling the Beans

Crypto: A Bank's Greatest Fear 👻

Banks are afraid of a lot of things.

Power failure. Hostage situations. The Hamburglar.

That’s why they have panic buttons everywhere, silent alarms, and paint bombs hidden in stacks of money.

But why do banks seem… objectively terrified of crypto?

Well, for starters, largely because they should be.

Decentralized finance or DeFi, has arisen as an alternative to everything that’s wrong with centralized finance. Bitcoin itself was created out of frustration with the 2008 financial crisis.

And there’s no clearer arbiter of centralized finance than the big banks.

U.S. banks’ trepidation around crypto is probably how neanderthals felt when cro-magnon man first emerged from his cave, walking upright and holding his club with a dexterity that neanderthals could only dream of.

It’s evolution. When the next, better iteration arrives, the old model becomes obsolete and then, inevitably, extinct.

In short, crypto currency and DeFi at its root exist to make society and the individual less reliant on financial institutions. So it’s largely in the bank’s best interest to do away with crypto.

Cryptocurrency has existed as a concept since the 1990s, but it didn’t really burst on the scene until the introduction of Bitcoin in 2008. It took until 2014 for the big banks to take notice.

And they tried to kill crypto, immediately.

At the Davos Economic Forum in 2014, an event where the world’s puppet masters meet to decide the common man’s fate, JPMorgan’s CEO took a major swing at crypto.

Jamie Dimon took to the stage to warn the other high profile figures that Bitcoin was “a terrible store of value” and was only intended to be used for illegal purposes.

In 2017, Dimon doubled down, calling Bitcoin “a fraud.” Claiming, “It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”

Jamie Dimon has continued to double down over the years, but his bank has changed its tune.

To be fair, JP Morgan Chase certainly wasn’t alone in its anti-crypto stance.

In 2018, Brian Moynihan, the Chief Executive of Bank of America, issued a policy that none of BofA’s wealth managers could put any client money into crypto-related investments.

And in the midst of their firm anti-crypto stance, big American banks were working against lawmakers trying to pass bills that would regulate crypto.

The banks weren’t worried about crypto being safely regulated or registered as securities, they didn’t want the biggest threat to their existence legitimized by regulation.

Cut to current day, when all of these same financial institutions are criticizing American crypto policies in the wake of FTX’s collapse.

They’ve asked: “Where was the transparency? Where was the regulation?”

They were trying, but American finance was too busy trying to prevent crypto adoption to work on policies that would genuinely protect and bring value to American users.

To add another layer of frosting to that hypocrisy cake, many of the banks that were crypto’s detractors are now boasting their own cryptocurrencies.

JP Morgan now owns and distributes Onyx, bragging to be the first “bank-led blockchain platform.” While Jamie Dimon still sits as a notoriously anti-crypto Chief Executive.

JP Morgan, Goldman Sachs, Bank Of America and many others all claim to be crypto-friendly or at least crypto-compatible, all in an effort to appeal to their changing customer base.

Crypto was created as the solution to the problems of centralized finance, not to work hand-in-hand with the institutions it has sworn to defeat.

Banks are right to be frightened of crypto. Institutions of the past are always going to be swept away by modern innovation.

If horses could exert political influence, they would have been desperately trying to scare consumers away from the smoke-belching model-T.

Finance is only going to become more digital. Crypto isn’t just here to stay, it’s inevitable.

Meme of the Day

Sorry, we had to charge you for using your own money.

Crypto 101

Phishing: The fraudulent practice of sending emails or messages pretending to be from a reputable company or source in an effort to extract financial or personal information such as credit card numbers or passwords.

In crypto, a phishing scam is almost always focused on gaining access to user’s wallets.

Remember, give a cybercriminal a fish and he can take the afternoon off. Teach him how to phish and he’ll never have to work an honest day for the rest of his life.

The Last Sip

There are only three things that Banks fear more than crypto and they are:

• Normal Americans with bad credit

• Vampires

• Vampires with bad credit

Stay Caffeinated,

Coffee & Crypto Team

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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.