 So today there was a fascinating article published in Pirate Wires. I like Pirate Wires quite a bit. It is a sub-stack, an alternative. They are positioning themselves as another alternative media source. They have reporters, they have opinion writers. They're positioning themselves as a media source coming out of Silicon Valley. So Pirate Wires is written by somebody who is a, I think, a partner, but a senior guy, a partner's fund, founder's fund, sorry, founder's fund, which is Peter Teal's venture capital arm. But they are building out, if you will, a media source and they're quite good. I don't agree with all the opinions. I don't agree with all the way in which they spin certain articles. But overall, another valuable alternative media source, together with Barry Weisers, together with a dispatch, together with a bunch of others that I follow out there. Pirate Wire is the most interesting one when it comes to tech and crypto banking and AI and other tech issues I highly recommend it. So if you're interested, PirateWires.com, you can find it, PirateWires.com, you can find it there. As to the name, it has a certain anarchist implication. I don't think that's what they're going for. Okay, so I just posted a link to the latest article. The latest article, this is the title and this is why I wanted to talk about it in post. The title of the article is, Did the government start a global financial crisis in an attempt to destroy crypto? And the author, Nick Carter, is trying to make the case that it is regulators and politicians like Elizabeth Warren who basically created this banking crisis as an unintended consequence of their attempts to shut down the crypto space and to shut down the relationship between banks and crypto. I, in a previous episode, I can't remember when, a month ago, a few weeks ago, I can't even remember, time anymore. I told you about Operation Choke Point 2.0, which is basically what this is being called and that was also from an article from Nick Carter from back then, six weeks ago. He posted that six weeks ago and I talked about it about then. That six weeks ago, I reported on a bunch of different things that the feds were doing in order to try to separate banking from crypto. First of all, they were not approving any kind of new crypto banks. It was actually a new bank that had asked for a charter and tried to get a charter, which part of its business plan was to have 100% reserve requirement. So 100% reserve so they could beat all bank runs, no problem, and yet their charter was denied. A number of banks, a number of institutions that had done any kind of financial transactions for crypto were being pressured, shut down, and heavily influenced. As part of that, you probably know, we talked about it at the time, but it became even more acute. There was heavy pressure on Silvergate and there was a lot of talk and Elizabeth Warren's office was involved in attempts to try, Silvergate is a bank that banked crypto and was known as the crypto bank. It was a small community bank from Southern California that started to get into crypto in 2014 and had a lot of crypto deposits. Now again, when you have deposits, that doesn't mean you're not investing in crypto, you're not buying crypto, you're not holding crypto. Those would be pretty unstable assets for bank to hold. They were just banking. It was just a banking relationship. If you started a crypto company, you would typically open a bank account with Silvergate. They were open to that, they also provided a platform for exchange of crypto into US dollars, so they provided services to crypto companies and they provided an easy way to get in and out. Anyway, starting in January, there was heavy pressure on Silvergate to shut down its crypto relationships, of course, shutting down the crypto relationships. Or there was heavy pressure that these relationship would gonna be investigated, that these relationship was somehow not kosher, that these relationship was somehow bad. Now remember, crypto in the United States today is a legal business. Technically, there's nothing wrong with me having a relationship with a crypto company. And as a bank, there's no reason in the world it's a legal business for me to have a banking relationship with a legal business in the United States. It's not illegal. It's not even questionable like, let's say marijuana dispensary or marijuana growers where it's legal in a state level and not legal at the federal level. No, no, crypto is legal at every level. And yet, the political class put pressure and the regulatory class put pressure on Silvergate, put pressure on the crypto community. And what happened was crypto was leaving Silvergate. Not that they have an alternative but leaving Silvergate. Ultimately leading, and I spoke about this on a previous episode, ultimately leading to Silvergate voluntarily closing in the first week of March, which is the first bank in the series now of banks that are being shuttered. But this is all an issue of, I mean, Silvergate was not bankrupt. Silvergate was not insolvent. Silvergate was pressured basically ultimately to shut down because it dealt with clients, the government, our government, American government, outside of the rule of law, ignoring the rule of law, dismissing the rule of law, decided were unacceptable. And therefore forced the financial institution to liquidate. Now there were all kinds of issues with Silvergate relating to FTX and so on, but nobody accused Silvergate of fraud. Silvergate took a hit because of FTX. FTX is the fraudulent crypto exchange. But Silvergate was not, its business model was not threatened or put it this way, the business model survived the FTX threat. And yet it was still forced ultimately to shut down. Now what is interesting is in the wake of Silicon Valley Bank being shuttered Friday morning, which again almost never happens, it's usually they wait until Friday afternoon to shutter it, thus doing it in the morning, creating panic in the market. You know, we've already talked about Silicon Valley Bank, but then regulators waited until Sunday, which is truly unprecedented, to then decide to shut down signature. Now what stands out with signature bank? Well two things, one is that it had uninsured deposits similar to what Silicon Valley Bank last, but similar to what Silicon Valley Bank had. But from all accounts, signature had withstood the one on the bank, was in okay liquidity position, given that the Federal Reserve ultimately guaranteed all its deposits. It looked like it could open Monday morning and would probably survive. What is the other thing that stands out about signature? Well, the other thing that stands out about signature is that 20% of its deposits were crypto deposits. And there is a real case to be made and Nick Carter makes this article and Bonnie Frank, a politician I despised, but who was on the board of signature bank makes in interviews that he's had since the closure of signature bank, he's made the same case. The case is that signature bank was not closed because it was bankrupt. It was not closed because of the one on the bank. Although all these things, the one on the bank gave them the excuse. It was closed indeed to send a clear additional signal to the world out there that crypto and banking did not belong together, that the feds, the regulators would not tolerate crypto even as a deposit base, would not tolerate crypto as part of the deposit base. 4.3 billion dollars of shareholder value was evaporated just puff went into smoke as a result of this. Shareholders will get zero. The bank was later sold to a newer community bank without the crypto deposits. Again, emphasizing that you cannot have crypto deposits. Why? This is money, legal business, legal enterprise. One wonders what New York regulators and the feds were thinking when they shut it signature. And I mean, the bank was not, it's over. And it clearly looks like the government overreacted, but probably overreacted on purpose to inspire the fact that they're denying it to send a signal. That here's the bottom line is because I want you to get the magnitude of this. And this happens, it happens not just in banking, it happens in other industries, certainly happening in the auto industry, the auto industry by the Obama administration in 2009. This is a complete negation of the rule of law. This is saying that politicians and regulators at their own discretion at their own whim can decide that a particular industry is unacceptable to them without going through a legislative process of banning this industry or increasing regulations in the industry or doing anything. At their own whim, whim, they can destroy, they can eliminate this industry. In this case, they've attempted crypto. I mean, the whole crypto thing is interesting because Bitcoin and a lot of other crypto stocks are way up in spite of the fact that they're clearly under assault here. I wonder if the crypto investors are fully cognizant of what is going on and the implications of it. But this is a funnel assault on what they're doing and it's a funnel assault that nobody seems to care about other than private wires. Where else are you hearing about this? But this is a complete negation of the rule of law one by going after crypto, legal industry, and not through increased regulation of crypto. You know, re-evaluating, I don't know, crypto as a security, although they're doing that again, unilaterally, without Congress, after crypto is being defined as a security and therefore falling under the SEC regulations versus being an asset or versus being something else. So massive, and you know me, I'm not exactly a crypto gung-ho about Bitcoin and crypto, but you know, again, legal industry. People are putting billions of dollars into it. There's a lot of innovation. There's a lot of stuff going on. Who knows what will come of it? And politicians and regulators unilaterally crushing this. So that's one aspect of rule of law, which is just horrific. A second aspect of the rule of law here is they can go into a bank that is solvent, but they don't like something about it. In this case, they have crypto deposits, or they didn't like the managers, and they could just shut it down with almost no repercussions. Now, I assume there's gonna be a lawsuit, Bonnie Frank implied that there would be a lawsuit, but if you read Bonnie Frank, who was on the board, I mean, he's very clear that the bank was doing the right things, that the bank was not a crypto bank. The bank, indeed, most of its bank's clients were real estate companies. The bank was primarily banking, multifamily, real estate in New York. And the reason it had an intro deposit was because these were big real estate companies holding massive deposits at the bank, and holding them liquid so they could make investments, and they could in and out, and they held more than $250,000 because they were big. And in normal times, these are stable businesses, these are big businesses, these are businesses that are unlikely to panic, unlikely to run on the bank. And there was someone on the bank on Friday before they were closed, but that had slowed down, and there was no indication that Monday was gonna be a disaster for them. And I've said this before, but the fact that signature was closed on a Sunday created unbelievable panic, and I think created the bloodbath that was Monday. Black Monday, as I think in the banking sector, at least it'll come to be known. So we have a situation where we've given unelected bureaucrats the power to, based on, really, ultimately, based on their whim, based on their preferences, shut down financial institutions, and we've given politicians and regulators the power to shut down or attempt to shut down whole industries. And this is devastating for this country. It's devastating for what we are, any kind of freedom and any kind of hope for true liberty in this country. I mean, this is a slap in the face, and it only gets worse, because if you don't deal with it, this negation of the rule of law, they'll only double up on it. They'll only take on more and more power for themselves. So I think very, very, very bad what's going on in the banking space and in the crypto space for everybody, even those of you who might not be, as you know, I do invest in this space and I have not done well in the last 10 years. It's been pretty nasty, but beyond that, anybody should be concerned about what's going on in this space given the way the government is behaving, because this is just an indication of the kind of power, just a senator like Elizabeth Warren has, by sending out letters, by threatening, by talking about this stuff, she has the power to drive markets. And that is super dangerous, particularly given her views and given her perspectives and given her viciousness and a willingness to go after people she dislikes, even at the expense of, quote, the economy. All right, I highly recommend reading if you wanna get the juicy details, reading. Did the government start a global financial crisis in an attempt to destroy crypto? I don't think it's a full story. I think we will get the full story in the months and maybe years to come. I think we'll get a much better story and signature if there's a lawsuit and as that lawsuit goes through the process, Bonnie Frank suggested there might be a lawsuit and he as a director had to be careful of what he was gonna say because of the potential lawsuit. Said might take years before we really know what happened but whatever happened, it doesn't look good and it doesn't look good for the rule of law in America, that's what I can say. Okay, so I've already posted the link to the Pirate Wire article. I will post it again in the chat and feel free and again, it's a substack that's probably worth subscribing to. Thank you for listening or watching the Iran book show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening, you get value from watching, show your appreciation. You can do that by going to iranbookshow.com slash support by going to Patreon, subscribe star locals and just making a appropriate contribution on any one of those channels. Also, if you'd like to see the Iran book show grow, please consider sharing our content and of course, subscribe, press that little bell button right down there on YouTube so that you get an announcement when we go live and for those of you who are already subscribers and those of you who are already supporters of the show, thank you, I very much appreciate it.