Outside of Washington, consensus was the pecking order is merit-based.

If you worked hard and kept your integrity, you’d rise to the highest ranks of the federal government.

Because you’re a really smart and ultra-moral person who knows things most people couldn’t imagine.

…If you’ve paid attention, you know that’s simply not the case.

And the future of crypto might be in the hands of the slimiest, most career-oriented American bureaucrats in the country.

Could the world be so awful?

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Espresso Shots

☕️ Gemini Sues Barry Gilbert and Digital Currency Group 🏛 🪙

Gemini, the exchange captained by the Winkelvoss twins, and Genesis, the firm backed by Barry Silbert’s Digital Currency Group, became strange bedfellows when they were both hit by an SEC lawsuit regarding the disastrous Gemini Earn Program.

Now, Gemini is suing Genesis for fraud. This lawsuit is just the latest maneuver in a long, public battle between the two companies.

The lawsuit alleges that Genesis willfully misled Gemini through "false, misleading, and incomplete representations and omissions to Gemini”.

As with any legal action brought by the Winkelvoss twins, Barry Silbert will have to solve a riddle to defeat them. There are two doors. One Winkelvoss twin is guarding each. One twin can only tell the truth and one twin can only tell lies…

☕️ SBF Broke Up With Taylor Swift ❌💔

Some people believe Taylor Swift refused to serve as an FTX spokesperson because of due diligence. But new information suggests it was SBF who refused to sign a contract with her.

Swift had actually already signed a $100 million sponsorship deal with FTX, according to sources familiar with the issue, in a report from The New York Times.

But the signed contract languished unanswered in SBF’s inbox for weeks before a team of FTX executives convinced him to walk away from the deal, according to CNBC.

Though details are still emerging, we’ll probably hear the emotional side of their failed relationship in Swift’s next Grammy-winning single.

☕️ Sega Pulls Out of Web3 👾 🦔

Video game company Sega, has announced its plans to withdraw from Web3 gaming for the immediate future.

“The action in play-to-earn games is boring,” said Shuji Utsumi, Sega’s COO, in an interview with Bloomberg. “What’s the point if games are no fun?”

This decision comes despite the company registering Sega NFTs and beginning licensing last November to focus on blockchain-based gaming.

Sega was initially all-in on Oasys-chain, a Japanese blockchain technology, but now has adopted a more “wait-and-see” approach.

Will Web3 gaming one day be a reality for Sega? Or is it all just a foolish Dreamcast?

Spilling the Beans

Lies, Damned Lies About the Supreme Court 🏛️ 👀

The SEC is in the midst of a very public and ongoing war on crypto, a war with no end in sight.

But we shouldn’t be hearing this much about a minor regulatory body that’s supposed to handle securities.

It’s more like crypto fell under the SEC’s crosshairs thanks to the misconception of crypto as a security.

Crypto’s a big deal. We certainly think so, or we wouldn’t be writing this newsletter every day.

And shouldn’t an innovative young industry that could potentially change the entire American financial landscape be regulated by a higher power?

Like the Supreme Court, perhaps?

Having the SEC decide the fate of crypto seems like a classic case of overreach, and the American government has doctrines in place to handle just such cases.

For example, when the FDA sought harsher regulation on the tobacco industry, citing nicotine as a drug that fell under the agency’s jurisdiction, the Supreme Court shut down those efforts.

It’s a similar case here. In short, it shouldn’t be up to the SEC to decide whether we can smoke our crypto, or not.

Look, the crypto debate is becoming a partisan issue. Democrats want more regulation while Republicans want less.

In this case, less crypto regulation seems to mean more innovation and better businesses.

And with six of the nine supreme courts occupied by conservatives, the Supreme Court stepping in feels more like a when than an if. And that points to a sure-fire win for crypto.

It’s well within the Supreme Court’s power to countermand the SEC’s authority and put a definitive end to the SEC’s major offensive of lawsuits against crypto exchanges.

But even if the Supreme Court comes down like the hand of God to deliver crypto from evil, it’s never that simple.

The American government is notoriously a series of houses divided. Just because one arm of the government is united doesn’t mean anything will actually get done.

Just ask the Obama administration how many years it took to eke out the Affordable Care Act.

The only real change in the state of crypto — its singular saving grace — is macro-level cultural changes marching toward acceptance, innovation, and common-sense regulation.

Don’t get me wrong, we’re still cautious about the blooming presence of TradFi in crypto. After all, placing Bitcoin in Macy’s Thanksgiving Day parade could do wonders for crypto’s domestic reputation.

And that reputational change couldn’t come soon enough. Because if the SEC’s regulation continues on its current path, soon we won’t even be allowed to trade crypto on airplanes or in hospital waiting rooms.

Meme of the Day

Sonic decided to stick with gold rings. They may not be on-chain, but at least they don't require a private key. 🤷🏼‍♂️

Crypto 101

Major Questions Doctrine: This is the statute that is called into play when an issue seems too large for a governmental agency to decide.

If a case is deemed to have “major national significance,” it will be wrested from the grip of a regulatory body and placed in the hands of the Supreme Court.

The FDA’s regulation of nicotine was one such example, and if America’s finally had enough of the SEC’s unclear crypto stance, this is the doctrine that will be enacted.

The Last Sip

Crypto is still, unfortunately, in the hands of the SEC. We took some time to imagine what crypto would be like in the hands of other, American regulatory bodies.

3. The Center for Disease Control: After a global hacking pandemic, a health notice is distributed that warns users to never cough their recovery phrase into another person’s mouth.

2. The Environmental Protection Agency: They actually, uh, have a lot of opinions on crypto’s potential environmental impact. Never mind.

1. The Food and Drug Administration: A targeted ad campaign is launched to get teenagers to stop eating cold wallets, regardless of the new TikTok trend.

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.