Binance Tokenized Stock Program Raises Red Flags

What you need to know today in crypto and beyond

April 22, 2021

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Today's must-reads

Top Shelf

DON’T LIKE THE STOCK? How Binance marketed its new tokenized stock offering, which enables users to trade tokens pegged to public stocks like TSLA or COIN, has raised regulatory red flags in Hong Kong.

BANKING DIFFERENCES: Signature Bank will provide crypto clients bitcoin-backed cash loans, in competition with Silvergate Bank’s similar offering, execs said on an earnings call. It also reported $4.4 billion in new deposits from crypto customers in Q1. Meanwhile, U.K. bank NatWest said it has “no appetite for dealing with customers” in the crypto industry.

COIN MOVES: Ether (ETH) rallied to a lifetime high Thursday on speculation a coming upgrade could result in supply drop. The MKR token climbed above $4,000 following a MakerDAO community vote allowing a real estate-backed ERC-20 token as collateral. Meanwhile, Grayscale Investments, the world’s largest digital asset manager (and CoinDesk sister company), acquired nearly $1 billion worth BTC, ETH and a number of altcoins. Finally, BTC's market dominance relative to other coins fell below 50%.

BTC RESILIENCE: Morgan Stanley’s new bitcoin product brought in $29.4 million in two weeks, making it one of the largest funds of its kind by investor count. Separately, a JPMorgan analyst report found bitcoin liquidity is “likely to remain resilient” after last weekend’s volatility shock.

– Daniel Kuhn

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Overheard on CoinDesk TV

Sound Bite

"The next big movement after ethereum is probably litecoin and bitcoin cash. You can access them on Robinhood and Venmo. We’re already seeing those tokens get a lift."

– Steven McClurg, Chief Investment Officer at Valkyrie Investments, on CoinDesk TV's "First Mover."

A message from CoinDesk

CoinDesk Research: Does Bitcoin Have an Energy Problem?

Is Bitcoin bad for the environment? This CoinDesk Research report looks at the data behind the most common critiques and shows that, while Bitcoin uses a lot of energy, the mix is evolving toward renewables. Bitcoin also incentivizes investment in clean energy sources, can convert pollution into value, and redistributes wasted power production. Download the free report.

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BOSAGORA Launches on Binance Smart Chain To Improve on DeFi

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Putting the news in perspective

The Takeaway

Bitcoiners Should Go Vegan to Save Bitcoin

Hi, Daniel here. This Earth Day, I propose a simple solution to bitcoin’s massive ecological footprint (only half-jokingly): Bitcoiners should go vegan en masse.

Bitcoin isn’t switching to proof-of-stake. (Sorry, New York Times.) And a pathway towards a fully sustainable mining ecosystem is anything but clear. (Sorry, Ripple, CoinShares and ConsenSys.) But there is one thing you can change: your diet.

Proof-of-work mining is a powerful cryptographic technique that’s necessary for the Bitcoin system to achieve its ends of providing a free and open alternative monetary base. Without it, Bitcoin would lose its strong finality and decentralization, meaning transactions are more likely to be rolled back. It burns energy (a lot of energy) to create a peculiar type of trust.

In doing away with centralized parties in money, Bitcoin has generated a new class of individuals willing to question hierarchies everywhere they are encountered. The most ardent supporters think from first principles, embrace anarchy and distrust any received wisdom. This attitude can have peculiar effects, including the rise of highly restrictive, carnivorous diets, thought to be closer to the ideal state of nature.

“To get to a place where you are interested in Bitcoin, you have to sort of go against the grain and come to your own conclusions,” Neeraj Agrawal, director of communications at Coin Center and budding food influencer, said in a phone call. “If you don't trust established dogma on money, then you wouldn’t on nutrition.”

It’s easy to dismiss crypto carnivory as little more than a meme – it’s certainly an ironic position for some – but there are true believers. Many of the most vocal Bitcoin advocates can also be heard championing diets rich in animal protein.

There’s Saifedean Ammous and Pierre Rochard, who hold court over steak-and-bitcoin dinners. There’s Nic Carter, whose 10 rules for life include “eat meat” and “reject seed oil.” Some, like legendary coder Zooko Wilcox, have long embraced a carnivorous ketogenic diet, seemingly before Bitcoin was around.

The list goes on.

Just as Bitcoin is highly energy intensive, so, too, is modern industrial production of edible flesh. And if you scratch the surface, there’s way less justification for it. Bitcoin provides a public good in the form of an uncensorable, pseudo-anonymous digital currency. Factory farming provides a cheap source of energy-dense food. A chicken in every pot!

However, intensive "animal farming," the industry’s term, has also led to some of the world’s highest carbon and methane emissions, poisoned rivers, the collapse of the family farm, widespread animal cruelty and abuse, exploited workers, cancerous meals, lagoons of feces, clouds of stink and the conditions that could lead to next global pandemic. (Sorry, COVID-19.)

It’s for those reasons, and more, that billionaire crypto entrepreneur Sam Bankman-Fried has gone vegan.

“You can think of it from a utilitarian perspective,” Bankman-Fried said over Zoom. It divides down to a lifetime of abuse of sentient creatures for a single pleasant meal. “Factory farming is a source of suffering in the world and a man‑made one.”

There’s a genuine debate whether animals feel pain the way humans do. It’s a subject too large to tackle here, though there are plenty of reasons to assume that many animals (especially mammals) have cognition and complicated emotions.

Even if you take the line that animals are nothing but machines for people to use, there’s an ideologically aligned reason bitcoiners should go meatless: It’s an industry propped up by debt financing.

Some bitcoiners like to argue that modern carbo-rich diets are an expression of the “fiat mindset,” that the over-abundance of corn sugars and other “body pollutants” stem from government intervention in the food chain, but that’s also the case for the majority of what hangs in your butcher’s window.

Agrawal, who thinks bitcoiners should eat as they please, personally avoids “industrially produced” meat. He spends the extra money to buy the nice, organic, locally or family farmed choice cuts, in bulk, to practice the art of at-home butchery. “It brings you a little bit closer to the source of your food,” he said.

I often do the same. But that’s not a solution available to everyone. And frankly, it’s a lifestyle that’s hard to maintain even for those who can afford it. But it’s also missing the point.

If bitcoiners are committed to combating climate change, what better way to show it than a public declaration to sacrifice meat to protect their sacred cow. It’s a public show of defiance, which they love, and a more believable form of industry activism than pretending mining can be wholly and reliably powered with solar or wind energy.

To be sure, Agrawal thinks the idea that bitcoiners “need to atone for using electricity to run data centers” is wrong on the surface. Further, practically, “It’s not going to change anyone's mind.”

All I can say is, if Bitcoin opened your mind, let it also open your heart.

The Chaser...

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