Aug. 14, 2023
I run a crypto investment fund called Ikigai Asset Management that was launched in 2018. Before crypto, I spent a decade in traditional finance, including as a portfolio manager at Point72. I have traded many billions of dollars of crypto in the last five years. I have traded on Coinbase, FTX.com, Binance.com, BitMEX and numerous other crypto exchanges. I give you that background to frame my view as a domain expert on the matter at hand. A SSA with Coinbase is not sufficient surveillance to ensure the spot Bitcoin market is not manipulated. Coinbase only does a small fraction of total spot Bitcoin volume. The overwhelmingly dominant exchange for spot Bitcoin volume is Binance.com. Binance's founder Changpeng Zhao is a criminal with an abhorrent moral compass. He heavily manipulates the price of Bitcoin for his own purposes. According to the CFTC's own complaint against Binance, Changpeng controls more than 300 trading accounts on Binance. HE USES THESE ACCOUNTS TO MANIPULATE THE SPOT PRICE OF BITCOIN. This has been known by industry insiders for years. If a spot Bitcoin ETF is approved while Binance.com maintains its current level of dominance in crypto trading, the ETF will be exposed to the manipulations of Changpeng Zhao and this is very bad for all investors, both retail and institutional alike. The DOJ has the evidence it needs to bring heavy-handed criminal charges against Binance and Changpeng. The DOJ can bring these charges and the dominance of Binance can be significantly diminished, or even better, Binance can be shut down entirely. This is the best outcome for crypto market participants. If Binance.com were to be shut down, the landscape thereafter would likely be such that a SSA with Coinbase would THEN be sufficient to ensure the effects of market manipulation were kept to a minimum. Do not approve a spot Bitcoin ETF right now. You never should have approved a futures ETF because the futures price is beholden to the spot price and the spot price has always been, and continues to be, manipulated by bad actors. If the SEC loses its case against Grayscale, find another reason to block the spot ETF approval or rescind the futures ETF approval. Then have the DOJ drop the hammer, clear out Binance and thereafter approve a spot ETF. This is the correct order of things to ensure the safety of US investors. Please email me if you want to talk in more detail. Happy to help however I can. Thank you for your time.