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Sometimes, mass movements are actually signals.

When flocks of geese migrate south, it means winter is coming.

The chaotic galloping of a herd of deer means that foraging prospects are running low.

And when septum-piercing-wearing yuppies show up in your neighborhood, it means your rent is about to go way up.

But what does the transfer of over $200 million in Ripple’s XRP token mean for crypto?

Espresso Shots

☕️ Binance.US Alters Withdrawals

Binance.US has altered its terms of service, suggesting that USD withdrawals may no longer be possible.

Binance.US has been rocked by scandal following the SEC lawsuit suggesting that the U.S. branch of Binance wasn’t as U.S.-compliant as it claimed. The SEC alleged that CEO Changpeng Zhao and other high-level executives violated securities laws and were commingling customer funds.

CZ and Binance have since attempted to have this lawsuit dismissed. But Binance.US has experienced some very real turbulence with massive layoffs and the departure of its U.S. CEO.

However, Binance.US has yet to officially announce that USD withdrawal is no longer possible, this latest terms of service update indicates that future withdrawals may require customers to convert their funds to stablecoins or other digital assets.

It’s much like when I gave my cousin Ronnie a loan to start his shady import-export business. “I mean, I definitely have your money,” Ronnie said, “but wouldn’t you rather have 2,000 Razor scooters?”

☕️ Former FTX Top Exec Testifies

Nishad Singh, FTX’s former engineering director and a high school classmate of SBF, took to the witness stand on Monday.

Singh pleaded guilty to three criminal charges and could face up to 75 years in prison, but Singh has reportedly said he “hopes for no jail time” by cooperating with federal prosecutors.

On the witness stand, Singh testified that he felt “blindsided and horrified” during a conversation on the balcony of his and SBF’s penthouse apartment, during which SBF revealed that the FTX didn’t have sufficient assets to cover the $13 billion spent on investments, properties, donations, and celebrity endorsements.

According to reporting from The Associated Press, Singh also added that he felt the spending was “too large or didn’t make sense” and that “it all reeked of excess and flashiness.”

Singh is only 28 years old, but stands a solid chance of making it onto Forbes’ “30 under 30” federal witnesses.

☕️ EU Releases New Crypto Tax Rules

The European Union just released new tax rules that will require crypto firms to share their customers’ holdings so that data can be shared between tax authorities.

The new rules arrive in the form of an amendment to the Directive on Administrative Cooperation (DAC8), which is an existing law intended to prevent individuals from hiding assets overseas.

This greater transparency between crypto firms and tax authorities should work to curb crypto-related tax evasion.

Next on the docket: Tech reform that will allow EU leaders to share cringey dating app conversations directly with the group chat.

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Polled Brew

Spilling the Beans

The Token Making Late Night Moves 🌙 😘

Ripple was dominating the news cycle back in August when a federal judge ruled that Ripple did not violate federal securities laws in the sale of $1.3 billion of its native XRP token.

And, not content to just stew in its partial loss, the SEC has repeatedly tried to appeal the Ripple decision, to no avail.

Now, Ripple and XRP have certainly cultivated a swathe of loyal followers in the XRP army. But other than the press surrounding the trial and the subsequent 5% price bump following Ripple’s victory, Ripple hasn’t been a dominant presence in the public eye.

But now, Ripple’s got all of our attention.

On October 16, Ripple transferred more than $400 million in XRP, in one night.

There were two transfers: The first consisted of 75,000,000 XRP valued at $36,921,543 to an undisclosed wallet.

The second transfer was 28,600,000 XRP, worth an estimated $14,700,000, to the Bitsamp exchange.

Now, Ripple has yet to release an official statement on the reasoning behind these massive transfers.

But we have a couple of ideas.

If we’re applying Occam’s razor, which holds that the simplest solution with the greatest explanatory power is most likely the truth, Ripple may be positioning itself for a sell-off. Yes, it’s slightly cynical, but it’s possible.

Much of the crypto market has been buckling under waves of sell-off pressure and Ripple may just be the latest victim.

In fact, Ripple was down 0.32% around the time of the transfer, and, as of writing, has continued to drop.

This downturn was probably caused by the impact of the mass liquidations sparked by the fake Bitcoin spot ETF announcement.

But that’s just at a glance. The truth behind the transfers may be more complicated and positive than the initial assumption of a mass sell-off.

There is one presence in these proceedings that can’t be overlooked, and that’s Bitstamp.

Ripple and Bitstamp are long-standing partners in Ripple’s On-Demand-Liquidity (ODL) project.

The ODL consists of regular transfers and maintenance to ensure a standard of liquidity internationally.

ODL uses XRP for cross-border transactions and payments around the world. To put it simply, the higher Ripple’s liquidity, the easier it is for these transactions to take place.

And, unlike a bank or wire transfer service, these transactions can take place 24/7, with minimal delay.

Now, rather than the potential sell-off we mentioned earlier, those overnight transfers may just be the latest movements of a fintech giant reshuffling its native token as a part of larger plans it has yet to disclose.

When a company is as large as Ripple, its transfers may seem alarmingly large, but those amounts are proportional.

Ripple regularly unlocks billions of XRP tokens out of escrow to ensure healthy distribution and promote price stability.

Rather than a sign that XRP is bound for a panicked sell-off, we may want to interpret this move as just the latest effort toward price stability.

You’re not giving away your money when you buy a house — you’re repositioning your assets.

And Ripple may just be in the process of constructing a stable, powerful foundation that they can build on for years to come.

We’re not… quite in the XRP army, so we won’t be living in that house.

Yes, we’ll be cheering for the construction, but we’ll be living in the trees outside. With the other XRP partisans.

Crypto 101

Escrow: This is an older financial term, consisting of when a third party holds an asset until certain conditions are met.

You’ll usually hear it applied to real estate transactions, but it functions similarly in crypto.

When crypto is bound in escrow, it’s transferred to a third-party smart contract until certain conditions are met.

As we mentioned earlier, Ripple uses escrow for the healthy, regular stabilization of the price of XRP tokens.

The Last Sip

The Last Sip: Like we said, Nishad Singh was a high school classmate of Sam Bankman-Fried. Following Singh’s damning testimony, when SBF zooms into their 15-year reunion, it’s going to be awkward.

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.