1/ IT'S OFFICIAL!!! Welcome to #Wyoming, @krakenfx!


What a win-win for #crypto & Wyoming! As of **NOW** Kraken has a US bank charter—a 100% reserves-required, audit required (w/ #ProofOfReserves), custody via legal bailment, no #rehypothecation type of bank!🤠
2/ The vote of #Wyoming's Banking Board just concluded & it was UNANIMOUS! It took 27 months for the first #Wyoming SPDI to obtain a charter—congrats to the dozens of people who made it happen, esp @GovGordon, @TylerLindholm & Wyoming legislators & the Wyoming Division of Banking
3/ I’ll be back w/ more analysis later. Next applicant in line for #Wyoming SPDI is @AvantiBT later this Fall (more are on the way). But today is @krakenfx's day. As a shareholder, I'm so happy for @jespow & Kraken team! Applications for this charter opened a yr ago--took longer
4/ ...than expected but the outcome is just as sweet! Congrats again @krakenfx & #Wyoming!!!

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More from @CaitlinLong_

23 Aug
1/ JUST READ opinion in latest lawsuit against #crypto exchanges/custodians over whether customers are owed forks/airdrops. As discussed on podcasts (@APompliano, @PeterMcCormack, @stephanlivera, @PrestonPysh+others), these contracts tend to be 1-sided...
2/ ...& judges generally will uphold the contract to which parties agreed, so breach of contract & conversion claims not likely to win (& they aren't). This is why these 1-sided contracts are a prob for institutional investors who owe a #fiduciary obligation to their customers...
3/ ...a fiduciary asset manager who agrees to a vague, 1-sided contract will get sued by its clients for breach of fiduciary duty if something goes wrong (& if it's an #ERISA fund, that fiduciary has PERSONAL liability & will be sued personally, not just sued professionally)...
Read 9 tweets
6 Aug
1/ MORE ANALYSIS-Goldman's new head of #digitalassets is a #repo trader based in LONDON. This is significant bc UK law basically has no limits on #rehypothecation. To be clear I'm not worried abt #bitcoin--as a system it's immune to WallSt's leverage games
2/ That doesn't mean its price won't be impacted tho--bc #rehypothecation fulfills real demand w/ artificially created supply & thereby suppresses price, all else equal. Rehypothecation works as long as there's a lender of last resort. But #bitcoin has no lender of last resort!🚧
3/ So, how many times could a #bitcoin be rehypothecated? In UK there's basically no limit bc the broker/dealer takes outright title to the customer's asset. This is why Lehman transferred so many of its assets to its UK subsidiary from its US subsidiary. kramerlevin.com/en/perspective…
Read 6 tweets
25 Jul
1/ HERE'S AN EXTREMELY DETAILED article re: all the "regulatory theater" in #crypto prime brokerage today. It's prob moot now that at least 1 national bank is entering (so non-bank regulatory structures for crypto r obsolete). @ChrisKentouris @finopsreport
2/ I'm SO GLAD native #crypto cos r close to receiving #bank licenses, so the big national banks won't entirely co-opt native crypto cos in US market. Bank licenses are far superior to existing regulatory structures used in US crypto (@APompliano about to release podcast on this)
3/ The @finopsreport article details why a #bank license is superior to trust charter or #BitLicense--banks have much higher capital & reg rqmts, r directly plumbed into Fed, much better bankruptcy treatment for customers, only banks have safe harbor as "qualified custodian"+more
Read 4 tweets
23 Jul
1/ GAME ON! The @USOCC's announcement that it's following #Wyoming by allowing national banks to custody #digitalassets is GREAT news for #crypto! Long overdue & hopefully will help U.S. regain ground it lost to other developed world countries by dilly-dallying for so long.
2/ Winners=customers & #crypto VCs. This will spur M&A boom as US banks acquire #digitalasset custodians. Most must sell bc:
a. trust co. charters now obsolete &
b. #BitLicense now obsolete 👏

bc @USOCC leapfrogged 'em. Custodians now MUST have a bank charter to be competitive.
3/ But @USOCC didn't leapfrog #Wyoming, bc we already offer a bank charter.🤠

What's the distinction? A bank license was **ALWAYS** the optimal US regulatory structure for crypto custodians--not a trust charter or #BitLicense. Bank charters are SO much better for #crypto custody
Read 25 tweets
21 Mar
1/ EPIC DOUG AGAIN TODAY☕️No one deserves a victory lap more than Doug for predicting the carnage from burst credit bubble-but he doesn't. Class act. He focuses on what's next. Reading it makes me proud of #Wyoming for enacting a 100% reserve bank charter.
2/ SORRY NEW YORK, the center of finance in US is about to decentralize to places like #Wyoming (yep🤠), which are already in process of standing up new banks w/ pristine balance sheets, carrying no legacy from prior mess. (Disclosure: I'm working to set up one & so are others.)
3/ NEVER HAS THE NEED for new banks w/ pristine balance sheets been clearer. As Doug points out, bubble finance is OVER. Deleveraging isn't done yet. There's no locomotive in the world to enable re-inflation of the prior bubble (nope, not even China-whose debt bubble also burst).
Read 14 tweets
17 Mar
INTRODUCING AVANTI's LEADERSHIP TEAM! @kanzure CTO, @zshimko COO, Chuck Thompson CLO/CCO, Britney Reddy chief of banking ops/CFO. We've seen A LOT MORE interest in what we're doing, given the environment, & many have expressed a wish that we were already in biz. We're sprinting!
2/ Many know @AvantiBT's CTO, #Bitcoin Core dev @kanzure, who has a track record of building a secure #bitcoin custody platform for @ledgerx + created Bitcoin Vaults (a pre-signed anti-theft recovery & clawback mechanism for bitcoin). He prvsly worked w/ tech partner @Blockstream
3/ Many also know @AvantiBT's Chief Legal Officer/Chief Compliance Officer, Chuck Thompson, who worked w/ @kanzure at @ledgerx. Chuck helped build reg compliance program there + has consulted since. We almost crossed paths at @MorganStanley & have known each other since 2015.
Read 5 tweets

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