Some fortunes are shrouded in mystery, like the vast wealth belonging to Jay Gatsby or Lando Calrissian.

But some secret paths to getting rich… aren’t so secret.

In today’s newsletter, we’re going to blast the lid off the hidden method that two crypto execs employed to make incredible sums in the blink of an eye.

Answers await in the deep dive!

Espresso Shots

☕️ Centralized Banking? ⭕ 🏛

This weekend, Canton, a new blockchain was announced backed by… the giants of old finance?

That’s right, Microsoft, Goldman Sachs, Deloitte, S&P Global and more are joining together to create a network utilizing Web3 tech.

The Canton Blockchain will provide these companies with a decentralized infrastructure that will allow users to interact with the company’s various financial systems in a more seamless, integrated way.

This is sort of a win for crypto in that it shows that even the old guard can’t ignore the potential of Web3 tech, but on an ethical level, that’s exactly why Web3 was created, to wrest power from financial giants like these.

But it’s still an exciting precedent. The last time this many Fortune 500 companies worked together it was to create the Great Depression.

☕️ SEC Reduces LBRY Fine 🏛 🔻

The SEC intends to reduce a $22 million fine against crypto exchange LBRY for violating securities laws to just $111,614.

And no, this isn’t coming from a recognition of overreaction on their part but more like something closer to… mercy?

The SEC decided to reduce the fine based on LRBY’s “lack of funds and near defunct status.”

The suit was brought about last year, alleging that LBRY violated U.S. securities laws in the sale of their native tokens, LBRY Credits (LBC), by failing to ever register with the SEC.

Though only a fraction of the initial sum, $111,614 is still the largest ever LBRY fine on record.

The runner up of course being the time I had to pay $23 to my local library for a copy of Catcher in the Rye that was destroyed by our sprinkler.

☕️ AI and the Writer's Guild Strike 🤖 📚

In addition to better pay and more residuals, the presence of AI in Hollywood is high up on the docket of the list of grievances for the Writers Guild’s current strike.

Writers want assurance from the Alliance of Motion Picture and Television Producers that they won’t be replaced or their work won’t be rewritten by AI. And that’s assurance they’re not getting.

Justine Bateman, a WGA member most famous for her role in Family Ties and being Jason Bateman’s older sister, aired her grievances against AI in a twitter thread.

Though admittedly that Lord of the Rings Wes Anderson AI looks… kinda dope?

When the Writers Guild were asked if they would be less worried about AI if they were writing more original, less formulaic material that couldn’t be so easily reproduced, the WGA proudly stated that they wouldn’t have to write up a response to that until after the strike was over.

Spilling the Beans

How They Got Rich Quick 💵 💰

Yes, some people can make it big overnight.

Maybe Rome wasn’t built in a day, but sometimes massive wealth can be generated so fast that it almost seems instantaneous.

And is luck involved?

Certainly, nothing in this world happens without a little luck.

But with these two individuals, it was more than just luck, technical know-how, or industry expertise.

They had a little something extra on their side.

Without further ado, let me introduce you to these enterprising businessmen.

First, there was Nathaniel Chastain, an executive at OpenSea, the NFT marketplace.

As an employee at OpenSea, Chastain knew which NFTs were going to be featured on their homepage before they were posted.

Chastain used this information to buy the chosen NFTs ahead of schedule and then sold them when the price kicked up.

Chastain uses this strategy to make $57,000 in just a few days.

Sounds pretty good, right?

Let’s go through another example.

Ishan Wahi, a manager at Coinbase, knew which cryptocurrencies that Coinbase was going to list ahead of time.

Naturally, those listed currencies, like the NFTs in the prior example, would surge in value.

So, Wahi tipped off both his brother and a friend as to which crypto to buy.

And the trio used this method to net hundreds of thousands in just a few short months.

You’re probably thinking that this all sounds too good to be true.

Why wouldn’t everybody just get a job at a major corporation and then invest according to upcoming events that only they have knowledge of?

Well, because all of these examples constitute insider trading, and it’s fully illegal.

Ishan Wahi, his brother, and his friend, are all headed to two-ish years in jail for crypto’s first instance of insider trading.

And Nathaniel Chastain? His sentencing will take place this August and he may face up to twenty years in federal prison for wire fraud and insider trading.

Remember, in the world of finance, whether that’s traditional or DeFi, when something sounds too good to be true, it probably is.

As crypto explores and reinvents our relationships to money, old, bad behaviors are still coming with us into this brave new world.

Just because you’re doing insider trading on a discord server instead of by a coffee machine, smoking cigarettes inside with Martin Sheen, it doesn’t change the crime.

And yes, crypto is volatile. Investors sometimes stand to make a lot of money in very little time.

But if someone approaches you with a method that seems totally guaranteed, very quick, and boasts some “insider information,” it’s probably illegal.

Meme of the Day

It was only a matter of time.. 👻

Crypto 101

Insider Trading: Just in case our deep dive didn’t give you enough context, here’s the legal definition.

• Insider Trading is the trading of a company’s securities by individuals with privileged or private access to that company’s information.

And we know we’ve been particularly bullish on the point that crypto should not be labeled as a security, but when it comes to abusing trade secrets, cryptocurrency and NFTs function very much the same way as stocks.

So be careful, and as your Dad always says, “Don’t do anything I wouldn’t do!”

The Last Sip

Other than Insider Trading, here are the top three white-collar crimes:

• Healthcare Fraud: That tag in your car isn’t for a disability, it’s a “Park Anywhere!” permit.

• Money Laundering: The real secret to your favorite deli’s success isn’t the fresh bread they bake inside, it’s that it’s where money changes hands and mafia friendships are formed.

• Public Corruption: Why is a Republican Donor paying for Supreme Court Justice Clarence Thomas’s grandnephew’s boarding school tuition? And what are Clarence Thomas and his family doing on that donor’s yacht and private jet?

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.