A weekly recap of the most insightful news, analysis, and capital flows in the wild west we call crypto.

Hello and welcome back to the Web3 Rewind! Per usual in this industry, lots has happened this past week. Here's what we have in store for you:

• Stablecoins & US debt

• Metis incentives

• Binance US stumbles

• CBOE CEO out

• Sue the parents

The Latest

Taking the temperature of Tezos

Keen insights dept.

Stablecoins and the U.S. debt

 Does anyone actually know how many crypto conferences are going on right now, or have just ended? It seems limitless — Permissionless, TOKEN2049, Mainnet, CoinFest Asia. Alas, editors in chief rarely get to travel and are chained to their laptops when not raising their two kids, so I couldn’t make it to NYC or Bali this time around.

But that doesn’t mean I’m missing the occasional wisdom dished at some soulless conference-center ballroom. A great example of this was Nic Carter speaking at Mainnet this week about the purchasing power of stablecoin issuers. Carter, always well dressed, estimated that issuers are sitting on $120 billion in U.S. Treasury debt. (This is a classic, almost risk-free, way to make money from money — take excess cash buy Treasuries are collect the yield as profit.) For those counting at home, that would make stablecoins the 16th largest holders of U.S. debt if they were treated as a sovereign nation. Carter’s framing of the issue is brilliant and a great reminder of the financial power backing crypto.

As China continues to pull back from buying U.S. debt as it seeks to challenge the dollar as the global reserve currency, it would be good for leaders in Washington to stop attacking decentralized finance and blockchain-backed enterprises. Tether, the issuer of the world’s most-used stablecoin which has made a habit of not doing anything in the open, collects more than $2 billion in yearly profit. That’s interest income that U.S. firms or banks would love to challenge. Circle and USDC are doing this, but the murk surrounding crypto regulation is keeping more-established firms on the sidelines. How long can all these billions of dollars be kept at bay by Congress not doing its job and U.S. regulators over-doing theirs? — ML

Quick Bits

Metis $50m incentive program

• The newish L1 protocol Metis, which counts Vitalik Buterin’s mother Natalia Ameline among its ranks, announced a $50 million incentive program on the decentralized lending protocol Aave.

• Metis is hoping to follow the playbook of Polygon, Avalanche and Optimism which used Aave to boost growth of their platforms. It’ll need it to compete with Ethereum in the long run, unless Vitalik has made a deal with his mom.

Binance US stumbling

• Is Binance US the next exchange to go bye bye? Trading volume has plummeted as the U.S. arm of the world’s largest crypto market faces lawsuits from the Commodity Futures Trading Commission and the Securities and Exchange Commission? What? Is the IRS busy? Can we get Commerce in here too?

• I kid. It would be no shock however if Binance’s modus operandi doesn’t fly with regulators in Washington DC. I can almost smell the desire of legit exchanges — let’s say in Chicago — that would kill to expand in spot crypto trading as the potential profits are huge. But instead of writing rules that would give bona fide exchanges assurity that they’re following the rules, the CFTC and SEC are taking people and companies to court.

CBOE CEO out

• Speaking of the Windy City, the CEO of the Chicago Board Options Exchange resigned under a personal cloud. CBOE of course offered the first Bitcoin futures contract in December 2017, followed a week later by the CME Group’s contract.

• It would be hard to imagine CBOE’s embrace of crypto to wane with a new CEO in charge, but it’s not impossible. Beyond the BTC futures contract, CBOE bought crypto-exchange ErisX and has applied to list several spot Bitcoin ETFs. Crypto needs all the advocates it can get right now, and make no mistake, the support from legacy financial institutions is key.

And last but not least

Sue the parents

The apple doesn’t fall far from the tree, it appears. The bankruptcy manager for the dumpster fire that is FTX sued the parents of co-founder and CEO Sam Bankman-Fried this week. The suit claims SBF gave his parents $10 million in cash and bought them a $16.4 million property in the Bahamas — most likely with FTX customer money. Barbara Fried, a law professor at Stanford who specializes in ethics, was “the ‘single most influential advisor’ over her son and FTX’s political contributions. As evidence of that, she had Bankman-Fried give millions to a political action group that she co-founded, court papers show,” as Bloomberg News put it.

Joe Bankman allegedly arranged for hundreds of millions of dollars in loans to be given to FTX employees, got all pissy about making $200k a year instead of the $1 million he thought he deserved and soon after received the $10 million in cash from Junior.

Bankman and Fried deny all the charges, which their lawyers said were “completely false.” Sure, have at it, a court will sort this all out. My hope is that the more details that emerge about how SBF ran his exchange, along with his parents, the more the public will see it as the type of corporate fleecing done on Wall Street all the time. The bankruptcy manager, John Jay Ray III, has been beating this drum, simply referring to the FTX disaster as “old-fashioned embezzlement.” So Bankman and Fried — and of course SBF himself — will have their day in court. But it just gets stinkier and stinkier, doesn’t it? — ML

Have you read the definitive history of Ethereum? No? Well then get your copy of Out of the Ether while you can.