📖 1 big thing: Markets come before the rules do

🐛 2. When a Pokémon evolves into a security 

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🏃 3. Catch up quick 

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Top coins

🎩 4. Culture hash: The efforts of others

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New markets, new rules. Plus, when a Pokémon evolves into a security.

🚨 Situational awareness: SBF will remain in custody while his trial in Manhattan proceeds, the judge presiding over his case ruled today. Based on statements by the defense and prosecution this morning, it should start next week and end a little before Thanksgiving.

Today's newsletter is 1,242 words, a 4.5-minute read.

This newsletter was edited by Pete Gannon and copy edited by Chris Speckhard.

🃏 How many of y'all dabble in Magic? What about Pokémon? —C & B. 

Crypto

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Follow how cryptocurrency and blockchain are upending markets and the regulatory shifts. With Brady Dale.

Axios Crypto

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🇬🇧 1 big thing: Chase UK's declining crypto 

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🏆 2. Valkyrie first to offer ether futures ETF

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👋 3. Letters of intent aren't deals

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🏃‍♂️ 4. Catch up quick 

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🗓 5. SBF's tentative trial schedule

A screenshot of the schedule for SBF's trial.

A look at one U.K. bank's new crypto policy. Plus, takesies backsies.

🚨 Situational awareness: Yesterday's market gains have basically held, with ETH trading $70 to $80 higher today than yesterday.

Is your bank declining crypto transactions? Tell us: crypto@axios.com

Today's newsletter is 1,128 words, a 4.5-minute read.

Next week is going to be a week. —C & B

⚠️ 1 big thing: The Crypto Risk Assessment Matrix

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📉 2. Charted: When FTX left

👨‍👨‍👦‍👦 3. Charted: The Samglomerate tokens

🚴 4. Catch up quick

🙀 5. The intrigue: Shade on the judge

Sam Bankman-Fried's criminal trial has kicked off with jury selection. We'll have the latest from the courtroom each day, right here. If you missed us yesterday, here's our trial preview.

Until then, a little about Sam and the world after FTX. And the Matrix.

📭 Questions, comments? crypto@axios.com

Today's newsletter is 1,028 words, a 4-minute read.

This newsletter was edited by Pete Gannon and copy edited by Carolyn DiPaolo.

CK is at SBF's trial this morning in New York. Stay tuned! —B & C. 

🥸 1 big thing: Unregulated ramps

🍰 2. Charted: Arbitrum leftovers

🎁 3. Celsius bankruptcy's end

Illustration of the Celsius logo frozen, with icicles.

🚴 4. Catch-up quick 

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5. 🥫 Culture hash: Kick the can

Bloomberg ETF analyst tweets about SEC's delayed decision on spot bitcoin ETFs

Wednesday is about taking the shirt off your back and getting a loan off it. Plus, wen spot bitcoin ETF. 

Today's newsletter is 1,112 words, a 4-minute read.

So how many of y'all are watching the Gary hearing? Maybe you caught the crypto policy advertising blitz. —B & C. 

👨‍⚖️ 1 big thing: And away we go

Photo illustration of Sam Bankman-Fried behind a wall of falling pixelated coins colored dark green

💼 2. Update: Advice of counsel defense

Photo illustration of Sam Bankman Fried with gavels.

🎙 3. We now know about who

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🐬 4. Catch up quick

Do you have burning questions about the trial? Maybe something that seems obvious to us but we haven't expressly dealt with here? Let us know: crypto@axios.com

Today's newsletter is 976 words, a 4-minute read.

Look forward to a lot of SBF in this space. —C & B

National

Vivek Ramaswamy, a presidential candidate seeking the Republican nomination, appeared at the Messari Mainnet conference in New York Wednesday to woo the blockchain faithful. 

Why it matters: He used his time on stage to reiterate what he called his main campaign priority, to reduce the Federal regulatory workforce using the authority of the chief executive.

Between the lines: Ramaswamy crafted his message in a way especially suited to an audience of cryptocurrency investors and entrepreneurs.

In the live interview conducted by Messari CEO Ryan Selkis, Ramaswamy echoed industry talking points in calling out "regulation by enforcement," particularly by the SEC under Gensler.

He referenced the SEC chair's refusal to answer a question in Congress about whether or not the second largest cryptocurrency in the world, Ethereum's ether, is a security.

Ramaswamy argued that it's in the interest of Federal agencies and their staff to avoid laying out specific rules, and instead undertake enforcement actions that allow them to keep the regulated community guessing.

What they're saying: "Ambiguity is the friend of the tyrant," Ramaswamy said from stage.

"The good news is this is something that a U.S. president can fix."

Calling Federal employees an unelected fourth branch of the government, Ramaswamy said, "The people we elect to run the government, those are not the ones who actually run the government."

Civil service protections don't extend to mass layoffs, he said. It's under that authority that he plans to remove approximately two thirds of the Federal workforce.

Separately, Selkis, asked him his take on legislation about cryptocurrency that's been voted out of committee this legislative session.

Ramaswamy focused on the House Financial Services Committee's vote to move HR 4841, Rep. Warren Davidson's (R., OH) "Keep Your Coins Act of 2023," to the House floor. The bill would protect the right to self-custody cryptocurrency.

Ramaswamy drew a connection to another of his policy bugbears, the third-party doctrine, which presumes a citizen gives up their right to privacy when information is shared with a third party.

Flashback: In 2021, Ramaswamy stepped down from his roll as CEO of Roivant Sciences, a company he had founded in 2014. During the discussion on stage, he said the decision pertained to political pressure on business leaders during the pandemic era of national protests to take stands on issues outside their core mission as businesses.

The decision was meant to distance his "increasing public engagement from Roivant's day-to-day operations," he said in a letter to shareholders. 

Worth noting: Under similar pressures, Coinbase, the leading U.S. crypto exchange, told employees that political discourse would be stricken from the workplace. It offered buyouts to employees who objected. 

What we're watching: Ramaswamy said his campaign will release a crypto policy framework in November. 

The candidate is currently polling at 7% among GOP hopefuls.

Editor's note: This story has been corrected to reflect the name of bill HR 4841 as the "Keep Your Coins Act of 2023," not the "Keep Your Keys Act of 2024."

Go deeper: Crypto gets down to work in D.C.

Ramaswamy goes after regulators at crypto event

He appeared at the Messari Mainnet conference in New York to woo the blockchain faithful.

Two men on stage at a crypto conference in New York City.

Republican presidential candidate Vivek Ramaswamy speaks with Messari founder Ryan Selkis at the Messari Mainnet conference in New York Wednesday. Photo: Brady Dale/Axios

Cryptocurrencies

Vivek Ramaswamy, a presidential candidate seeking the Republican nomination, appeared at the Messari Mainnet conference in New York Wednesday to woo the blockchain faithful. Why it matters: He used his time on stage <a class="gtmContentClick" data-vars-link-text="to reiterate" data-vars-click-url="https://www.axios.com/2023/09/13/wants-to-cut-1-million-government-jobs" data-vars-content-id="50017c39-389b-494b-8b2c-c35eddbae8e4" data-vars-headline="Ramaswamy goes after regulators at crypto event" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/09/13/wants-to-cut-1-million-government-jobs" target="_self">to reiterate</a> what he called his main campaign priority, to reduce the Federal regulatory workforce using the authority of the chief executive.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

The criminal trial of Sam Bankman-Fried, the fallen founder of the cryptocurrency exchange FTX, begins Tuesday in Manhattan.

Why it matters: The trial will decide whether or not one of the greatest financial boondoggles in history was, in fact, a fraud.

The 31-year old founder, known widely as SBF, faces seven counts — two of wire fraud and multiple counts of conspiracy — in connection with events that caused $8.7 billion of customer money to go missing.

Catch up fast: Bankman-Fried has been in state custody since his bail was revoked over witness tampering in August.

All of his key lieutenants at his two companies (FTX and sister trading firm Alameda Research) have pled guilty and turned against him.

Quick take: Their testimony, if it happens, is likely to be the most interesting parts of the case.

SBF has previously claimed he was unaware of the depth of the company's financial troubles, and those at Alameda — framing the collapse as a result of poor risk management.

The big picture: The high-profile trial is set to bring another wave of negative attention to an already battered industry, but it could also be helpful for the industry to move on.

"We can't psychologically recover as an industry until we have catharsis," Nic Carter of Castle Island Ventures tells Axios. "This applies to all of the scoundrels from 2022."

What to expect: At a pre-trial hearing Thursday, the prosecution estimated they would need four or five weeks to present their case. The defense said it would need no more than a week and a half.

If all goes according to plan, the judge in the case, The Hon. Lewis Kaplan, estimated a judgement a week or so before Thanksgiving.

What we're watching: SBF's parents. More and more it seems possible that charges could be brought against the family. If that happens, it could be to leverage SBF for a guilty plea.

At the hearing Thursday, the defense floated the possibility that it may not even make a case at all, depending on how the trial goes.

Or, one suspects, if their client makes a late-stage decision to change his plea.

Yes, but: A plea change is unlikely to change much for SBF at this point, with the trial underway, a former criminal lawyer tells Axios. He can change his plea, but he would be unlikely to get a deal with the state.

If he did though, the trial would end and the judge would move to schedule sentencing. 

The bottom line: The judge raised the possibility Thursday that the proceedings might leave the defendant feeling very bleak about his future — not a line of speculation his defense team wants to hear.

For the crypto industry, there are the important goals of making customers whole and holding bad actors accountable, but there's also restoring the public's trust in markets.

Go deeper: Sam Bankman-Fried faces his day in court

What to expect from SBF's trial — and after

The trial will decide whether or not one of the greatest financial boondoggles in history was, in fact, a fraud.

Sam Bankman-Fried, wearing a suit, exits a courthouse with cameramen taking shots behind him.

Former FTX chief Sam Bankman-Fried following his bail hearing in July. Photo: Angela Weiss/AFP via Getty Images

Sam Bankman-Fried

The criminal <a class="gtmContentClick" data-vars-link-text="trial of Sam Bankman-Fried" data-vars-click-url="https://www.axios.com/2023/10/01/sam-bankman-fried-ftx-fraud-whos-who" data-vars-content-id="540b8957-4c36-4ae0-bace-f51ae5f1a18e" data-vars-headline="What to expect from SBF&#x27;s trial — and after" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/10/01/sam-bankman-fried-ftx-fraud-whos-who" target="_self">trial of Sam Bankman-Fried</a>, the fallen founder of the cryptocurrency exchange <a class="gtmContentClick" data-vars-link-text="FTX" data-vars-click-url="https://www.axios.com/economy-business/ftx" data-vars-content-id="540b8957-4c36-4ae0-bace-f51ae5f1a18e" data-vars-headline="What to expect from SBF&#x27;s trial — and after" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/economy-business/ftx" target="_self">FTX</a>, begins Tuesday in Manhattan.Why it matters: The trial will decide whether or not one of the <a class="gtmContentClick" data-vars-link-text="greatest financial boondoggles" data-vars-click-url="https://www.axios.com/2022/11/17/ftx-bankruptcy-sbf-john-ray-declaration" data-vars-content-id="540b8957-4c36-4ae0-bace-f51ae5f1a18e" data-vars-headline="What to expect from SBF&#x27;s trial — and after" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2022/11/17/ftx-bankruptcy-sbf-john-ray-declaration" target="_self">greatest financial boondoggles</a> in history was, in fact, a fraud.

Sam Bankman-Fried will not be released while his trial takes place, Judge Lewis Kaplan ruled this morning at the U.S. Southern District Court in Manhattan. 

Driving the news: SBF's attorneys made one last push to get their client released so that they would have real-time access to him over the course of the trial, which is expected to run until just before Thanksgiving.

What they're saying: "The issues in this case are pretty straightforward: Was there fraud or wasn't there," Judge Kaplan said as he rendered his ruling. 

"I actually see precious little that has changed." 

That said, he did order a new accommodation for the defense. He's asking that the Department of Prisons make the defendant available most weekday mornings at 7 a.m.

SBF was previously accommodated with a laptop without an internet connection, so that his attorney can give him documents and he can make notes and comment.

"I'm committed to a fair trial," the judge told the defense team.

Of note: The government argued that the conditions for release had not been met, but the judge explicitly noted that he wasn't ruling either way on that argument. 

Context: The defense noted that there are 1,300 documents that the government has indicated will be discussed in its prosecution. 

While they have had access to all those documents previously, they were 1,300 among thousands and thousands of others. They have only recently been made aware of just which ones the prosecution will consider. 

The intrigue: Defense attorney Mark Cohen, of Cohen & Gresser, said there was no good reason not to release the defendant for trial, in particular because he's never shown any evidence of being a flight risk.

"I've been thinking about that," Judge Kaplan said in court. "Your client, in the event of a conviction, could be looking at a very long sentence." 

He said that the defendant might take a different view on flight if his prospects for exoneration looked grim and conditions permitted for him to get away.

Go deeper: FTX lawsuit accuses Sam Bankman-Fried's parents of siphoning millions

FTX lawsuit accuses Sam Bankman-Fried's parents of siphoning millions

Sam Bankman-Fried denied release for trial

SBF's attorneys made one last push to get their client released for the course of the trial, expected to run up to Thanksgiving.

A young man entering a building, passing through glass doors. 

Sam Bankman-Fried entering federal court on August 11, 2023. Photo: Michael M. Santiago/Getty

Sam Bankman-Fried will <a class="gtmContentClick" data-vars-link-text="not be released" data-vars-click-url="https://www.axios.com/2023/08/11/sam-bankman-fried-news-ftx" data-vars-content-id="a93ef49d-e283-480c-a38c-8aff11a4ed89" data-vars-headline="Sam Bankman-Fried denied release for trial" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/08/11/sam-bankman-fried-news-ftx" target="_self">not be released</a> while his trial takes place, Judge Lewis Kaplan ruled this morning at the U.S. Southern District Court in Manhattan. Driving the news: SBF&#x27;s attorneys made <a class="gtmContentClick" data-vars-link-text="one last push" data-vars-click-url="https://www.courtlistener.com/docket/66631291/288/united-states-v-bankman-fried/" data-vars-content-id="a93ef49d-e283-480c-a38c-8aff11a4ed89" data-vars-headline="Sam Bankman-Fried denied release for trial" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.courtlistener.com/docket/66631291/288/united-states-v-bankman-fried/" target="_blank">one last push</a> to get their client released so that they would have real-time access to him over the course of the trial, which is expected to run until just before Thanksgiving.

The International Monetary Fund has a working paper out on a "Crypto Risk Assessment Matrix," aimed at helping countries strengthen their policy frameworks.

Why it matters: The paper notes that the use of cryptocurrency is growing around the world, but unevenly so, with increasing links to the real economy.

Because of that, they recommend a country-by-country assessment of how much it should be monitored.

Zoom out: The matrix, called the C-RAM by the the pair of IMF senior economists who authored the paper, is the beginning of a method to assess how important cryptocurrency is in any given nation. 

The authors note that it's nascent still, in particular, because there's not enough data gathering going on to be systematic. 

In fact, they acknowledge that one key point of assessment, whether or not digital assets are macro-critical in a given nation, should be done qualitatively.

How it works: The first decision to make is whether or not to engage in official crypto monitoring. 

If any cryptocurrency is legal tender (such as in El Salvador) then the answer is "yes." The only question is whether or not to monitor financial institutions (answer: not so much if their exposure is capped). 

If it's not legal tender, then the question becomes whether or not it's macro-critical to the country, which is a question of how big it is there and how interwoven it is with society.

After that, what officials should do gets fuzzier.

The paper seems to be aimed simply at getting policymakers to begin refining their thinking. They ask that folks consider issues like credit risk for different assets, liquidity for assets like stablecoins, if there's concentration in an important cryptocurrency or service provider, et cetera. 

By multiple levels of analysis, the authors argue that officials can do a better job of writing policy that mitigates the salient risks in a particular country. 

Case in point: In a case study on Vietnam, the authors note that it's a nation with one of the highest market penetrations of cryptocurrency in the world, and yet the assets are not acknowledged in the law. 

By going through the C-RAM process, the authors note, "There is no strong evidence that [the country's] financial sector is exposed to crypto," in part because digital assets are not permitted as a means of payment (for example). 

Yes, but: Because cryptocurrencies are self-custodied and permissionless, the authors note that people are using them with each other, and there are no rules around doing so to protect civilians in the space.

The authors project Vietnam will see $150 billion in gross transactions in cryptocurrency by 2025.

The bottom line: "Over the last few years, the private crypto asset industry has experienced rapid growth and is becoming increasingly more integrated into the global economy," the authors write in the conclusion.

Go deeper: Where "cryptoization" could thrive

IMF floats "matrix" on crypto risk as use grows around the world

The paper notes that the use of cryptocurrency is growing around the world, but unevenly so, with increasing links to the real economy.

Treasurys tokenized on Ethereum bring the real world to crypto

Tapping into yields will be key to keeping crypto's biggest DAOs operational until the industry gets busy again.

Photo illustration of Sébastien Derivaux surrounded by the Steakhouse FInancial logo, falling coins, and abstract patterns. 

Sébastien Derivaux, co-founder and chef at Steakhouse Financial. Photo illustration: Aïda Amer/Axios. Photo: Brady Dale/Axios

Illustration of Benjamin Franklin peering out from behind a pile of crypto coins.

Tapping into yields from U.S. Treasurys will be key to keeping crypto&#x27;s biggest decentralized autonomous organizations (DAOs) operational until the industry gets busy again.Why it matters: In theory, decentralized finance projects can build through the downturn and come out better when the market comes back, but only if they steward resources well.

Brady Dale

Stories

IMF floats "matrix" on crypto risk as use grows around the world

What to expect from SBF's trial — and after

Sam Bankman-Fried denied release for trial

Treasurys tokenized on Ethereum bring the real world to crypto

Ramaswamy goes after regulators at crypto event

Newsletter editions

Calm before the Sam storm

⚖️ SBF trial preview

Chase UK's ban on crypto

New markets, new rules

👕 Supreme tees