That’s right, Beanie Babies are being used as a weapon in the latest struggle against the American government.

And no, people aren’t whipping them at elected officials the way you used to in the 90s with the neighbor kids.

Beanie Babies are being used exactly the way that the Ty corporation intended: as a legal defense against a securities lawsuit brought by the SEC.

Espresso Shots

☕️ Hungry Whales 🐳

Bitcoin’s biggest whales are getting even bigger as they snatch up Bitcoin at discount prices.

Since the Bitcoin Spot ETF approvals, Bitcoin has dropped around 19% to the $39,000 mark, and BTC’s largest holders are using this as an opportunity to expand their already massive holdings.

Trade-weighted average pricing or TWAP trading, is an algorithmic strategy that involves splitting up large orders. And it appears that Bitfinex BTC whales are in the midst of a TWAP frenzy.

We’re sure that this activity will inevitably inspire Carbi B’s next single, “T.W.A.P.” (Trading Wet Ass Product).

☕️ Doom on Doge 🐕

Through inscription tech similar to Bitcoin ordinals, dubbed “doginals,” one noble developer was able to permanently inscribe the 1993 shooter, “Doom”, on the Dogecoin blockchain.

As a result of this inscription process, the original Doom is now entirely playable on the Dogecoin blockchain with complete independence from any outside sources.

Now, if users would like to play emotional Doom, they can just reflect on Dogecoin’s 18% drop in the past month.

Spilling the Beans

Beanie Babies vs. The SEC

Hey, we’re not ones to gloat.

But have you ever noticed those comprehensive listicles of all the times that The Simpsons predicted the future?

You don’t see Matt Groening taking press conferences, admitting that he was able to accurately predict Trump’s presidency, Lady Gaga’s halftime show, and Florida’s faulty voting machines because he’s spiritually linked to the ether of a crystal ball?

No, it’s the sort of dumb luck that comes with taking just enough comedic swings.

And it appears that we here at Coffee & Crypto may have gotten our taste of dumb luck.

Longtime, loyal readers may remember a newsletter we ran back in August titled, “Beanie Babies: The OG Crypto”.

We thought it was a fun, timely take, inspired by last summer’s Beanie Bubble starring Elizabeth Banks and Zach Galifianakis.

But we never imagined that entire crypto legal defenses would be built around Beanie Babies in a landmark court case.

Yes, the SEC and Coinbase have been locked in a long, public legal battle over the SEC’s lawsuit against Coinbase, alleging that the exchange has violated securities laws and operated as an unlicensed broker.

The charges are similar to those that Coinbase has brought against Kraken, Ripple, or any number of exchanges, with the crucial difference that Coinbase has brought the fight back to the SEC.

Coinbase has sued the SEC, demanding regulatory clarity on the muddy guidelines that they apparently violated.

It’s certainly been an interesting legal duel from a spectator’s perspective, but none of us had Beanie Babies on our Bingo cards.

One of the central tenets of the SEC’s argument against Coinbase, one which the regulatory body feels contributes to the definition of crypto as a security, is that when you’re buying crypto you’re buying into a common enterprise with the expectation of profit. That’s the criteria for the Howey Test which deems whether or not an asset is a security.

But William Savvit, one of Coinbase’s lawyers, pointed out that following that logic, wouldn’t Beanie Babies be considered a security?

Beanie babies, like crypto but unlike stock, don’t necessarily grant users the right to a network.

There are no controlling shareholders of Princess Diana Bears, there is no board of trustees ensuring that Patti the Platypus remains profitable in Q3.

Yes, as the SEC so often does in their tireless crusade against cryptocurrency, they’ve revealed their own ignorance. You’re not necessarily buying into a network with every crypto purchase.

But if you want to tease the example out even further, yeah, the SEC could regulate Beanie Babies like securities.

But then would that have to branch out to all collectibles?

Would cigars, wine, art, even Funko Pops, be regulated by the SEC?

Part of the appeal of secondary markets is that they’re… kinda off the grid. We already have plenty of regulators in America without appointing some bureaucrat to preside over every yard sale.

And hey, we like to mock the SEC, but it’s a complicated issue. That’s why everybody’s figuring this out in court.

We don’t know what the verdict will be. But we know for sure we’ll be snagging the commemorative Coinbase vs. SEC Degen Bear Beanie Baby at our local Walmart.

The Last Sip

If we can get the marketing rights from Hasbro, we intend to market “Hungry Bitcoin Whales” as a Hungry-Hippos-style scoop ‘em up game. “C’mon, kids! While the market’s weak! Buy the dip!”

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.