The Supreme Court: The highest court in the land. The United States Supreme Court sits atop the judicial branch of the US government.

The court’s job is to rule on the legality of every law across the land. They regularly strike down laws that conflict with the constitution and federal legislation.

Now, it seems the court may have their eyes on an entirely new topic. That’s right, the Supreme Court is taking on crypto. We’ll get into that and more in today’s newsletter.

Espresso Shots

☕️ Bitcoin a “Safe Haven,” Continues to Climb 📈 🛟

After a bull run, Bitcoin has reached its highest point since June of last year, now hovering around the $28,000 mark.

And because Bitcoin is behaving so differently from the banking industry, concerned investors are flocking to Bitcoin, causing some to speculate that Bitcoin may soon become a “safe haven” asset akin to gold, silver, or treasury bills.

“In the face of the U.S. and European banking crises, Bitcoin’s price appreciation suggests that lax regulatory oversight had no impact on the... crypto asset ecosystem,” said Yassine Elmandrja of ARK Invest.

“Quite the opposite, Bitcoin and other crypto assets are acting like safe havens.”

To give more credence to this theory, investors and economists plan to examine the relationship between Bitcoin and gold in the coming months.

Gold has hiked 7% since the banking crisis while Bitcoin is, of course, up a whopping 30%.

But maybe instead of examining the correlation between Bitcoin and gold, they should be examining Bitcoin and the editorial team at Coffee & Crypto.

Because we were also at our highest last June, when we accepted a bag of “sugar cookies” from a friend at a Sublime cover band concert.

☕️ IRS May Tax NFTs as Collectibles 🫳 💵

The IRS has announced that it’s “considering” taxing NFTs as collectibles.

Under these tax guidelines NFTs would be taxed with the same treatment as race horses, rare wines, or works of art.

But like an insecure middle-schooler, the IRS is waiting for public feedback until they make any major decisions. The IRS is accepting comments from taxpayers on this potential decision until April, the end of the 2022 tax season.

“Until additional guidance is issued, the IRS intends to determine when an NFT is treated as a collectible by using a ‘look-through analysis,’ read an official notice by the IRS.

Though the decision is still underway, our collectibles, such as the unopened Star Wars action figures in our Jabba’s Palace play set, still remain remarkably tax-free.

☕️ Spankpay Shut Down 👋 ❌

Spankpay, a crypto payment processor that offered secure, discreet crypto payments for “adult purchases” has been shut down by its parent company, Wyre.

“We looked for other payment processors, and no one wants to take us, or if they want to take us, their fees are insanely high,” said Allie Eve Knox, adult entertainer and one of Spankpay’s chief advisors. “We can build the tech, but it’s still a political issue.”

Knox, as well as Spankpay co-founder Ameen Soleimani and members of the Free Speech Coalition, went to D.C. last December to meet with lawmakers on both sides of the aisle to discuss the discrimination facing sex workers, but to no avail.

Their next step will be meeting with the ghost of Burt Reynolds, as this kind of prejudice was one of the biggest through-lines in Boogey Nights.

Spilling the Beans

The Supreme Court Meets Crypto 🤝

Crypto regulation has become a pretty heated debate in America.

And like the most opinionated battles in this country, (see Brown vs. Board of Education, Roe vs. Wade, Gideon vs. Wainwright, etc.) it was only a matter of time before this issue worked its way to the summit of our judicial system, the Supreme Court.

Now, the Supreme Court isn’t deciding on crypto, precisely. They are, however, currently weighing the legal processes of one of the best known crypto exchanges, Coinbase.

Coinbase has landed at the Supreme Court with something of a personal matter: to argue that some of the recent class action suits against the company should be settled in private arbitration.

Coinbase's case actually has surprisingly little to do with crypto or digital assets at all. That said, this is still the first time crypto has ever been discussed in the high court.

It’s important before we dive into this issue that we understand the difference between a lawsuit and settling in arbitration.

Arbitration has its pros and cons. For one, it’s much faster than going through traditional court proceedings. Both parties don’t have to spend money on lawyers and it’s more private.

Arbitration, specifically, is the process by which two parties go to an "arbiter" who then decides the fate of the settlement between the parties.

In Coinbase's user agreement, customers agree to settle matters in private arbitration, but in this case, a customer got permission from a court to sue Coinbase publicly.

Coinbase's appeal has now gone all the way up to the Supreme Court.

Companies tend to prefer arbitration over the courts. Again, because it’s faster, cheaper, and most importantly, it avoids bad publicity.

Now, several class actions lawsuits have been filed against Coinbase that the company feels were meant to be settled in private arbitration.

Previous judges have declined to force Coinbase’s customers to arbitrate their claims. Coinbase would like the Supreme Court to at least try arbitration.

In short, this case is essentially about whether a corporation can have customers forfeit their legal right to sue that corporation.

Ok, so why exactly is Coinbase being sued in the first place?

This is actually two class action lawsuits, one headed by Abraham Bielski, who alleges that after he was tricked by a scammer who stole $31,000 from his account.

He believes Coinbase should have credited him that money based on the Electronic Funds Transfer Act.

The other suit is in regards to a Coinbase sweepstakes for $1.2 million Dogecoin that the complaint alleges was intentionally misleading.

Hassan Zavareei, a lawyer for Bielski, the individual who was scammed, feels that Coinbase may be drawing this proceeding out because crypto is so unstable.

“That’s very real pressure,” said Zavareei, alleging Coinbase may collapse before they can ever pay his client.

“Look at this case, where Coinbase, the entire cryptocurrency market is collapsing under our feet and other exchanges, competitors with Coinbase, are going bankrupt left and right. And we’ve got a client who lost $30,000.”

Though it seems severely unlikely that Coinbase will become insolvent before this all wraps up, we suppose anything’s possible!

But no, if anything, our assessment is more in line with… Justice Brett Kavanaugh. Didn’t think we’d ever write that.

Anyway, Kavanaugh pointed out that it was really in Coinbase’s best interest to drag this dead bird to the steps of the Supreme Court.

“[Coinbase doesn’t] want to be coerced into massive settlements without having the opportunity to take advantage of the right that Congress has given them to have an appeals court decide whether arbitration is the appropriate forum.”

From our perspective? It's kind of wild to see a multi billion dollar company picking a fight over $30,000 but hey, I guess go for it?

This is absolutely a groundbreaking development: crypto is being discussed in front of the US Supreme Court. And yet, they’re not even really there to talk about crypto.

This is truly a petty arbitration case. Something you would hear more pre-law and business school students talking about than crypto bros.

And we’ll get a ruling on this sometime in June.

But in the meantime, we’re willing to bet some big-time money that while this was crypto's first supreme court case... it will absolutely not be its last.

Meme of the Day

Well... when you look at it that way, it's not so bad!

Crypto 101

Orange Pilled: This is when investors get sucked into Bitcoin.

It’s a pretty clear reference to the Matrix and instead of the blue bill representing subjugation and the red pill waking you up, the orange pill is a reference to Bitcoin's orange logo.

In this case, the orange pill represents, “freedom, monetary sovereignty,” and of course, Bitcoin.

The Last Sip

In honor of Bitcoin’s recent classification as a “safe haven” asset, here are our top three safe havens:

• Weighted Blanket (for thunderstorms)

• The Arms of a Parent or Loved One

• The Padded, Underground Panic Room in the Coffee & Crypto Office.

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.