Today is December 7th, a day that will live in infamy because President Roosevelt said it would.

That’s right, we’re talking about the anniversary of the surprise attack on Pearl Harbor. But the only Zeros being shot down these days are the ones in FTX’s bank account. Zing!

Ah, just kidding. C’mon, let’s get into it, we promise there aren’t any coordinated air raids.

Espresso Shots

☕️ Goldman Sachs's Crypto Shopping Spree 🛍 🛒

Are you struggling to stay bullish on crypto? Well Goldman Sachs sure isn’t!

One of the world’s premier investment banks is preparing to spend tens of millions to buy up crypto companies and assets while the market is in bad shape.

In an interview with Reuters, Matthew McDermott, Goldman’s Head of Digital Assets said of the FTX Collapse:

"It's definitely set the market back in terms of sentiment, there's absolutely no doubt of that… But to reiterate, the underlying technology continues to perform."

McDermott didn’t specify which companies Goldman was looking to acquire, but did say the company was currently doing due diligence on several possible targets.

Apparently, “buy the dip,” extends to purchasing entire crypto companies. David Solomon, CEO of Goldman, has already been seen removing FTX logos from mugs with an ice scraper.

☕️ From the Maker of iPods... Ledger Wallets! 📱 💰

Tony Fadell, the man who designed the iPhone, the iPod, and the Nest Thermostat (that cool, minimalist temperature control circle that looks straight out of Black Mirror) is partnering with Ledger to design their latest cold wallet.

It’s slick, white, and futuristic-looking, kinda like the other game-changing devices that Fadell has designed.

“He thought about it in two ways– the spine of the device is like the band around the stack of cash which shows you what’s inside, and you can stack them together using the magnets,” said a Ledger spokesperson.

We’re already anticipating an ad in which spokesperson Aaron Paul holds the new Ledger wallet up to the camera and screams, “Yeah, bitch! Magnets!”

☕️ FTC Cracking Down on Ads 📺 ❌

The Federal Trade Commission (FTC) is investigating several yet to be named crypto companies for deceptive or misleading advertising.

“While we can’t comment on current events in the crypto markets or the details of any ongoing investigations, we are investigating several firms for possible misconduct concerning digital assets,” said an FTC spokesperson.

This story is still developing, but we can’t help but wonder if Matt Damon, Larry David, or any of the other celebrities who have come under fire for their crypto endorsements could be implicated.

Kim Kardashian agreed to pay $1.26 million and to stop promoting crypto for the next three years after the SEC caught her failing to disclose the $250,000 she received for pushing EMAX on her Instagram.

It’s unclear if the hammer of justice will fall on Matt Damon and Crypto.com, but for now they’re just hunting for some good will. 🔨 🎓

Spilling the Beans

Is Something Wrong At Grayscale? 🐺 💰

As crypto companies take on water in the wake of the FTX tsunami, fear and doubt are everywhere as investors are on the lookout for the next billion dollar implosion.

Some think they may have found it… Enter: Grayscale.

Grayscale is a digital asset management company, the largest of its kind. The company boasts both a Bitcoin & Ethereum trust and is the world’s largest holder of Bitcoin.

The company has over $10 billion in Bitcoin. Despite that, Grayscale has made some squeamish as of late.

So why the fear? Let’s get into it.

In order to understand why some are panicking at the state of Grayscale, it’s worth looking at their parent company, Digital Currency Group (DCG.)

Digital Currency Group has their hands in nearly every crypto company - they invest in and own over 150 different companies in crypto.

Which means, just by sheer odds, DCG was likely to get at least partially hit by FTX.

That came in the form of their subsidiary, Genesis, the massive crypto lender. Genesis lost $175 million in the fall of FTX and shortly after experienced a run of deposits they couldn’t fill.

As of this moment, Genesis still exists but is very much on the brink of bankruptcy.

Now keep in mind that we’re only weeks removed from the fall of FTX, and investors are jittery. Which has led to a newly popular strategy: releasing proof of reserves.

Essentially proof of reserves is just a form of transparency. It’s a crypto company saying “hey we have 1,000 Bitcoin, here’s our wallet address, you can go verify it.”

While there are flaws to this, it’s an effective tool to help investors feel safe. And yet, just this week, Grayscale refused to release proof of their holdings, citing security concerns.

So, Grayscale is refusing to let customers look behind the curtains and DCG already has had exposure to FTX, is that enough reason to panic?

Honestly, no.

We’ll say this: despite any company’s lofty holdings, recent crypto headlines have led us to adopt a healthy dose of skepticism for companies once thought to be invincible. This is good.

But that also means we have to do real due diligence before we start pointing and calling things “the next FTX.”

So here’s why Grayscale isn’t FTX:

First of all, so much of what brought down FTX was abysmal leadership in the form of the now infamous Sam Bankman-Fried. He wasn’t just young and inexperienced, he was negligent.

Grayscale and its parent company, DCG, are led by individuals from the traditional financial sector with decades of experience. Love or hate finance bros, they do know more than SBF!

Second, FTX was run from the Bahamas and was subject to nearly no regulatory oversight whatsoever.

Grayscale and its parent company, DCG, are headquartered in the United States and are subject to US Securities laws and regulatory oversight. Both have public relationships with the SEC.

Finally, FTX’s assets were stored in a random smattering of offshore bank accounts, many of which were readily accessible to its CEO.

Grayscale’s assets are each held in individual trusts which are wholly owned by the trust's shareholders - meaning the company’s users and investors.

Which is to say: Fear is a normal part of the markets, but don’t let fear be the only driver of your investments. Research is your friend - and we’re here to help you make sense of it all.

Though you should be afraid of Grayscale’s infectious disease. Grayscale, also known as “Prince Garin’s Curse,” rots the skin, resulting in a dry, scaly appearance. Grayscale is usually fatal, but the deadliest curse in Westeros is still a badly written finale.

Meme of the Day

Yeah, that's right, we did a Lord of the Rings meme AND a Game of Thrones joke!

In the same newsletter!!!

We're sick with power.

The Last Sip

Much of this newsletter has been about failures in disclosure. The FTC refusing to say who they're investigating, Goldman refusing to say who they're buying and Grayscale failing to disclose their balance sheets.

We thought of three other instances in which individuals or entities failed to disclose important information with… interesting results.

• Jeffrey Epstein failing to disclose the tropical activities on his private island, Little St. James.

• The Catholic Church failing to disclose to which parishes they’d relocated their “spiciest” priests.

• My Labrador Retriever failing to disclose that she’d eaten an entire Christmas stocking full of Hershey’s chocolate.

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.