 One digital asset news to get top stories in cryptocurrencies and digital assets and break them down to bite-sized pieces today. Exciting stuff. First up, SEC joins major authorities and qualifies banks as Bitcoin custodians. And this is on top of what the OCC did just recently, where they said the exact same thing. But the real question is, are the banks going to step up and do it? Are they going to fail and get the risk of being blockbustered? Also, we're going to go over a cue of the day where we take a look at the difference between iTrust Capital, IRA, and the grayscale Bitcoin IRA just to name a few. Also, we're going to talk about a dynamite article which takes a look at what happened with cred and the bankruptcy. And finally, just real quick, I want to go over what happened with Celsius. I attended their AMA, which is still going on. I kind of understand what happened, but I just want to give my two cents. So we'll go over all that, but first take a look at what's going on in the market. So today it is Friday, November 13th, and about 1.30 Texas time. And we've still got some pretty good results. So Bitcoin is holding strong at almost 16.3 and it's up 1.4 for the day. Seven day looks like it's up 4.6%. This is not surprising. If you don't know, yesterday PayPal came out and said, hey, go right ahead and start buying crypto as much as you want to. Well, as far as Bitcoin, Bitcoin Cash, Ethereum, and Litecoin is concerned, they can buy all day long, which is fantastic. Ethereum is also on a tear, 4.70 up 3.5 and 24 hours and 13 for the week. And we are waiting for that Ethereum 2.0 staking, which is going to happen on December 1st. Actually, it's going on right now. But ETH 2.0 is coming. Tether's tether, but it's almost hitting at $18 billion market cap. So that's pretty amazing. XRP, watch out, 26 cents may even hit 27 by the end of the day. Who knows? Up 4.2 and 7.5 for the week. So congratulations to all you XRP holders. Chainlink up 3% for the day, $16 for the week, $12, I like that. And then let's see, Litecoin's up majorly, which not surprising because of the PayPal incident. And what else we got? 3% for Bitcoin SV. Congratulations, Bitcoin SV holders. Good for you. 6% for EOS. Yeah, great. 2.6 for Stellar. That's nice. 3.6 for Tasos. I'll take that. Cosmos, the interoperability in Cosmos is up 15% for the week. 4, almost 5 for the day. That's pretty good. 4.5 for NEM. I don't really get a NEM. Someone needs to explain it to me, because I don't really understand what's going on with that. But it seems to be the top 25. Consistently, they must be doing something, right? Also, what else was the big one? 21% for Uniswap. Congratulations to Uniswap holders. I'm one of them. I will not sell. It's almost back to the original $4. But I like what they did as far as like getting the community involved, putting it out there and air dropping it, instead of giving it to like, you know, four or five big seed fund rounds or something like that. I'll take that. D-chain up 20% for the week. That's pretty good. Wow, 20%. Again, for Ave, they are on a tear. Good for them. 6.5 for Celsius after the hold of the Backel with their DNS propagation. It's almost going to get $2. So, you know what? And then Theta is up 3%. Let's just talk about Celsius right now. Let's just skip around, so first of all, Alex Machinsky and the team, they talked about what happened with the whole Celsius app being down and the Celsius website being down. So, first of all, I find it odd that they're going through GoDaddy. Like, I am a small business owner. I don't have billions of dollars. I am not Celsius, but I use GoDaddy. And I will tell you from experience, what they did is they, they did a transfer of DNS propagation. So, if they did an upgrade or something with their websites and their apps, I don't know exactly what their situation was, but mine was that my website couldn't handle all the different visitors that I had. So, I had to upgrade, which is fine. I said, well, we're going to need to change the DNS where it points to, and you're going to have to upgrade. I said, great, let's do it. They told me specifically, look, your website is going to be down between 24 and 72 hours, and it could even take longer than that. So, tell your members. I was like, no problem. So, I told my members, seven days out, five days out, three, two, one, day of 24 and 36 hours. I was all on top of it, and I kept notifying people like, hey, this is normal. This is what's going on. I didn't bolt on you, and no problems. But I find it odd that they went through this whole process, and they didn't tell anybody until the whole thing went down. And I'm like, either there's a failure on one of two sides, either GoDaddy didn't explain it, which I find kind of odd because they explained to me, I'm just a small business guy. And then the second thing is, is that they knew it was going to happen, or somebody just didn't, the light bulb didn't turn on, and they didn't know what's happening. There's a third option, which I'm not even going to get into, but I will just tell you this. A lot of Twitter activity, a lot of things going on. People were talking about exit scams, of course, because that's what, we always go for the worst of what's going to happen. And as far as activity levels, there was no activity levels on Celsius or the app for a good 36 hours. So everything's been resolved. The website comes up, let me pull it up real quick. And of course, this is from a Celsius network, and it says, Hey, there was a maintenance update. The Celsius website and app were offline briefly to the front end stages and da, da, da, da, which is weird because this is the first time I've seen this. So they should have put this on four or five days ago. And I will just say one thing, no one is perfect, right? I think this is a huge oversight on their part. I can't believe they did it. I mean, there looks like to be a pretty well run machine. But it is what it is. And I've checked my accounts, everything is there. So I'm going to be cautiously optimistic. And if anything changes, I will let everybody know. But if you want to know exactly the minutiae or the details of what's going on, then definitely take a look at this AMA, which I will say Alex is one of the few CEOs that does this like every couple of days, he's on there all the time asking, answering questions. I don't see Brian Armstrong doing that. Actually, I don't see any CEO doing that. So I mean, that is one good thing. All right, let me just think of the comment section. Let's move on. So first up, the SEC joins major authorities, qualifies banks as Bitcoin custodians. I'm going to tell you why this is good news, but it really doesn't matter. So what's happening? Well, the SEC said qualified custodians under the Investment Advisers Act of 1940 can provide custody of digital assets. Well, that's awesome. The regulator is also investigating the role of trust companies in providing custody of digital assets. All right. So this is what it is. The SEC now qualifies U.S. banks, broker deals and registered futures commission merchants as custodians by digital assets, including both cryptocurrencies such as Bitcoin and tokenized securities. So here's the thing. Before we had a nice little snippet of information from the OCC, which was in July, OCC or the Office of the Comptroller of the Currency, Brian Brooks, stated that U.S. national banks and cooperative banks to provide custody of crypto. So the OCC gave the, gave the green light, but the SEC was like, we don't know because, you know, that's their whole thing about securities. But now they're saying, hey, it doesn't matter if it's a crypto, if it's tokenization or if it's a security as far as a cryptocurrency or a digital asset, banks do what you want, go ahead, go gangbusters. And at first glance, you're like, well, this is awesome. Well, no, it's not. I'm going to tell you why. Because this same article, uh, or the same thing happened in July 23rd, 2020. This was an article that was written up by my man, Alex Maschioli. And that's how I met the guy. Because when I read this thing, I'm like, this guy's totally right. And pretty much what he said and the whole thing was like, yeah, they're going to get the option and they're going to pass on it because banks aren't innovators. Why would banks do this? They're making so much money on fractional reserve banking. Why would they go through the hoopla of figuring out how to custody cryptocurrency assets and learning about this new technology and upgrading their systems when they don't need to? Because not many people are going to do it. Not many people know about it. And guess what? It's just not going to happen. And I was like, damn, that's true. So only time will tell. And guess what happened? It didn't happen, just like he said. So it's one of those things where it's like, all right, well, maybe with the SEC, things will change. But I will say, before I go on, uh, the banks need to really step up and get going because this is the same thing blockbuster thought about Netflix. And blockbuster, if you look at the history, they were, they were going like huge gangbusters out the gate while Netflix was building momentum. And before you knew it, it was like the snowball that rolls downhill and it just crushed blockbuster. That's why I say banks are going to get blockbustered because they're not going to realize what happens until it actually happens. And this is what's happening with, uh, with Kraken and Avanti. They're having that special depository for banks and they're going to get a full banking license at some point. Now it's just in Wyoming, but even though they're based in Wyoming, they're going to be able to go nationwide and perhaps in global as time goes on. So, um, I'll be honest with you. I worry for banks. I used to really be ticked off at them, but now I'm just like, I kind of feel bad for them. So moving on on November 9th in the statement, the SEC clarified that it recognizes all the US banks as qualified custodians for digital assets under this advisors act. The SEC SEC's custody rule requires that registered investment advisors or RIAs have custody of their client assets, funds or securities with qualified custodians. So they're saying, look, you can do these things. We're going to give you the permission. Just make sure you have everything in place. And that's what the government's supposed to do. The government and banks aren't innovators. They're really good at just regulating and enforcing regulations. So don't have them be innovators. That's not what they're here for. God knows. I mean, the banks can't innovate. They're still using SWIFT from the 70s for Pete's sakes. Anyhow, under the rule, the SEC recognizes financial institutions that can function as qualified custodians of clients assets. This includes banks, broker dealers, and futures merchants. Such institutions meet strict compliance requirements set by the SEC. The SEC is further exploring of state chartered trust firms can provide adequate digital asset security or even better than those provided by banks. So again, it's interesting how they're looking at a third party solution type of thing for custody. And this is just one of those things where when cryptocurrency digital assets come in, it's actually people think like, oh, well, it's going to be, we're going to eliminate the middleman. We're going to lose jobs. Well, no, those jobs are going to be created from crypto that people don't even know what the heck it is yet. It hasn't even been created. It's the same thing with the internet. So let me know what you think in the comments section. Let's move on. So next up, I keep getting questions about I trust for a grayscale. So I just did a cue of the day. So let's jump right in. So everybody, welcome back to a cue of the day. And this is a question actually got as a direct message in Twitter. And it was a pretty good one. And actually, it's a question I get quite a bit about I trust capital for IRAs versus grayscale Bitcoin or the Bitcoin and theorem trust, whatever you want to call it. And this is from Ralph and Ralph kind of the good one. He says, Hey, Rob, what are your thoughts on I trust capital versus grayscale Bitcoin, the trust, the break even between the 1% plus $30 per month, which is what I trust capital charges for the IRA versus the 2% ER is pretty high. And he's talking about the 2% fee for the grayscale Bitcoin trust. He says, somebody can check my math, but Bitcoin needs to be substantially above 432,000 for I trust to surpass grayscale Bitcoin. Maybe that happens by 2025. And I'm like, Yeah, okay. So it's a good question. Because, you know, people keep asking me like, Hey, you know, with I trust it's, you know, $30 a month. And I want to do my IRA. And it's, you know, it's kind of pricey for me. My God, you know, that's that's okay. You don't have to do an IRA or do anything, obviously. But for me, I definitely feel it's going to be necessary because I think about in the future. And when I was younger, I didn't really think about that too much. I was like, I might even make it past my 40s. So who cares? But at some point, you sort of think about, Okay, what's going to happen? And I don't want to pay a ton of money in taxes. So here's the thing with IRAs, because some people got ticked off of the fact that I was like trying to minimize taxes. And I'm like, Well, you know, if you want to pay the government pay him much as you want to, I suppose, I'm not a big fan of giving my money to the government when there's going to waste it anyhow. So there are going to get taxes from me. That's just how it is. Because with IRAs, you can only contribute up to a maximum amount of usually $7,000 per calendar year. So it's not like I can take $2 million and stick it right in my IRA per year. That doesn't work like that. So that's just one of those things. So government's going to get theirs. But my job as a concerned citizen is to not pay them an absorbent amount and leave me broke. Because guess what? At some point, I just think about not just myself, but what about my wife? What about my kids? And what about my grandkids? So it's one of those things where, yeah, I'm going to play the game to the best of my abilities in a legal way. That is that is a big thing. So we're trying to look at like different IRAs that are out there, a lot of different ones that you can take a look at. But Grayscale seems to come up a lot. And the big thing about Grayscale that I found was there's an issue with their premiums. Because you have to remember, it's not just like you go to Grayscale and go, okay, Bitcoin is $20,000 today. Give me one Bitcoin for $20,000. Great. And then that's it. And then you think it's just 2%. There's also a premium on top of that. And there is a good article from Medium, which talks about interpreting Grayscale premiums. This was on August 1st of this year. And just so you know, the premium is the amount you're willing to pay to not custody your own private key and still get exposure to the underlying asset. Because you have to remember, people who are buying into Grayscale, it's a swath of people, but mostly the lion share, 84%, are institutional investors. And they can't legally custody everything for their clients. So they're going to want to offload that risk to a third party, Grayscale or whoever else. So that's additional investors. Then you have accredited investors, which if you make over $200,000 per year, you can be an accredited investor. And that's part of it. Sure. Also, you have retirement accounts, the thing we're talking about, me and you, you and I, how are you going to say it? And then of course, the last one is family offices where they can't custody anything themselves either. So you are paying a premium for Grayscale to handle the custody. Because if you really think about it, who wants to deal with, I mean, it's not just you. It's not like you're putting $100 million on your nano ledger. You're, you are controlling funds for your clients, for different people that you're loaning it out to, if that's your thing. So you don't want to deal with that headache of getting hacked. Look, exchange doesn't deal with it all the time. They have to hire big people to deal with that and they still get hacked. So it's one of those things where this isn't a probably a good idea. So that's where the premium comes into play. Also Grayscale Bitcoin trusts premium to net asset value. So premium to the nav or net asset value has seen two sharp declines in the first half of 2020. It went from 40% into the low twenties, close to tail end of the first quarter. Grayscale Bitcoin's premium declined again, a late second quarter from 20% to about 10%. And the recent Grayscale Bitcoin premium amounts look even more reduced when compared with your to date average of 18%. The highest premium has been 41 and the lowest was just three. The historical average has been 39% while Grayscale Bitcoin's highest premium recorded was 132% and lowest was negative .3. So there's a big, like I said, a wide swath and there's a website that you can check out for the most accurate. And actually Ralph gave this to me. So thanks, Ralph. It's from whitecharts, whitecharts.com. I'll link in the description. And you can see the actual amount of the premium that they are charging from the last one year. You can break down to one day, five days, one month to five to three years. So you can take a look. And right now we're sitting at around 20.38% as of November 12th. So hopefully that answers your question as far as a Grayscale. So it's not just that 2%. You have to also remember there is a premium that you have to pay. So with iTrust, that's probably the reason why I went with them. It's because it is $29.95 for $30 a month. It's $30 a month. I hate $29.95. It's a stupid thing. $30 a month. And then, you know, you have to pay a 1% for purchasing. So for me, I think like this, if you can save me a ton of taxes, then go right ahead. If you want to find out more about iTrust, I did a video. It goes over all the things as far as like a traditional, a Roth, a SEP IRA, and all the different types of accounts. If you have like a 401k, a 403b, a Thrift Savings Plan for the military or TSP. And I will link that at the very end of this video so you can give it a watch. Also, if you use the link in the description to take a look at iTrust and sign up, then you get the first month for free. And then also just as a reminder that what is very rare in these days is that you can actually go to the website and book a call with somebody and talk to a live person. That's insane, especially in these days, right? Talk to a real-life person. So go ahead and check it out if you want to. And that is it for Q&A Day. So hopefully answer your question. Let's jump back in. Let's get into story time, shall we? This is a pretty sad state of affairs for cred. And it's a really cautionary tale. And it's perfect timing for what's going on with Celsius. I'm not trying to say Celsius is like cred. It's how I'm saying. But I'm just saying that there's a lot of different things that are going on that you really need to be made aware of and just have the ever-vigilant. So this is about cred. It was written by Nathan, Nate Dogg, Dick Camillo. Dick Camillo, how you say his name. And it's a fantastic article. He's a great writer. I'm actually going to follow him on Twitter. I already did, actually. So this is the takeaways. Cred's bankruptcy has left 100 of depositors who loan the company more than 100 million worth of crypto wondering if and when they'll get their money back. Let's just start with that. And when we're going through it, I want you to think about this. The company's bankruptcy filing primarily blamed its woes on the alleged fraud by an outside investment manager whom cred entrusted with 800 Bitcoin, more than 10 million. So just remember those numbers. 10 million, 800 Bitcoin. I'll explain it a bit. So when cred filed for bankruptcy protection on Saturday, the crypto lender told the public only part of the story. According to seven former employees interviewed by Goyne Desk. And this is where you get all the information. So Nathan here, he did a lot of digging and he went to the actual source and said, what's the story behind the story? And that's why this article is so great. So the company's Charter 11 filing attributes cred's decline to former chief capital officer, James Alexander. Remember that name? James Alexander. The firm also singles out Alexander's alleged misappropriation of customers, digital assets, which the filing claims limited the company's ability to hedge against fluctuating crypto prices. But really what it comes down to is lack of transparency, say the seven different former employees for starters, cred's investment with the allegedly fraudulent asset manager was worth a little over 10 million. Yet as of number seventh, credit 67 million in assets supporting 136 million liabilities. So that doesn't make any sense. If you lose 10 million, but you got, you know, eight, 67, 136. What's the problem? I've lost 20% portfolio and it didn't crush me. I'm not going to go to the bank and say, or go and say, I need to file for bankruptcy. So things are not adding up. Quanticoin. So first of all, this guy right here, let me scroll down. Where is he? This guy is a CEO. And his last name is Shat. And every time I say it, it makes me laugh because I've never grown up. So if I giggle sometimes, you know why. So Shat here and others also approved of cred's investment in the asset managers fund, Alexander's unnamed the filing, which the former employees identified as Quanticoin, excuse me, Quanticoin. So remember that one is too, because Quanticoin is just this thing, this entity, this person that they gave a lot of money to getting now he's gone. So based in Delaware, Quanticoin was set up to generate yield on investors Bitcoin primarily through the use of derivatives. And as one of the four funds that cred's investment committee chose to invest in former employees said, so they said, okay, Quanticoin, great, we're going to give you X amount of Bitcoin. Okay. The total investment in Quanticoin was 500 Bitcoin in March. Then in April, it was 800 Bitcoin. That's a lot of money. Just to say, here you go. But I mean, if you trust me, do you do diligence, do a background check? Sure. But here's the problem. Quanticoin's manager disappeared in August and stopped returning emails. And in a meal, I said he was the like the CFO or something like that. According to multiple former employees, the FBI is looking, but they haven't found anything and they weren't available for comment. So here was the shaky start. Initially, the company places bet on a business model popularized by firms like Celsius and BlockFi, which are often crypto backed fiat loans. So traders could buy more crypto and other borrowers could make big purchases like buying a car without spending the original assets. So really, when you look at these places, Celsius being one of them in BlockFi, the question needs to be asked, who we loan this to? How transparent are you? What do I need to know? So remember that. What and who are they giving your crypto to? That's the question. So if creds 136 million liabilities, 114 million is owed to holders of cred earn notes, who number between 500,000 people? So a lot of people get screwed over. That's what it comes down to under shats direction. It's got it's no shot. Cred built a system by which credit would convert the crypto loan by depositors to yuan and funnel to a Shanghai based consumer lending platform called Mo Credit. Mo credit sounds legit. Sure. Mo credit sounds like a rapper. In turn, Mo credit use the funds to offer micro loans to Chinese borrowers with interest rates of over 40%. So first of all, if you give them loans at 40%, that to me is predatory lending. However, I don't think they have that in China. Just saying, 40% is ridiculous. According to former credit employees. Now remember, this is all information that that's a NAIT dog here got from these former employees of cred. So it is all, you know, sources and we'll see if it all turns to be true. But the Chinese lender is led by cred co-founder Lu Hua, who also did not respond to requests for comment. So this guy, I guess maybe he's a Chinese nationalist and he came over and said, Hey, I got a great idea. Let's lend it to these people in micro loans and we'll charge them 40%. We'll give the people 6 to 8%. We'll pay it back and then we'll keep the rest. That's what it sounds like to me, which is pretty ugly. There he is, chat. So according to former employees, the loans were two week micro loans less than 200 bucks. And they gave this guy who 36 day call provision meaning the lender was allowed to demand full repayment within a month or two. But that didn't happen. So this was the problem. When the whole thing with the coronavirus hit, a lot of these loan places started to go out of business because they couldn't call the loans because they were loaning out so much money and they were doing these Ponzi type of things. And this is what happened with credit. So they tried to call back 10 million from real credit, but more credit was not able to return the funds because they spend it all or gave it away or made bad investments. And this is the problem. Again, where's your money going? In mule law also credits holdings of three obscure cryptos, TAP, LBA and UPT, valued at 14 and a half in the filing, should be considered worthless because the market for each of these coins is illiquid. So I don't understand if you're a business while you go into some kind of high risk type of crypto or any kind of like investment, if it's super high risk and you put a lot of money, 14 and a half million, let's say it's 100 million, that's 14%. Why would you do that? Makes no sense. Moving down, the asset troubles made it harder for cred to honor its liabilities. For most of its history, the company has been using customer funds to pay out redemptions and interest on the earnings product, several employees said. This wouldn't be a big deal if the company had positive net assets, but they didn't. So again, almost like a Ponzi scheme, they get money in from old people or from new people, paid out to the old people. But too many bad loans and investments lay bare the hazards of operating, which was in essence a fractional reserve bank without the usual protection. So again, they would, they'd taken 100 bucks, they'd loaned 100 bucks, and then they hoped it would come back, but it didn't come back because the dish ran away with the spoon and they got screwed. Everybody got screwed, really. And like a bank, cred became vulnerable to runs. The company would not have been able to pay its debts if many customers tried to redeem all at once. So I will just say this, cred obviously was some type of scam going on, but if you think about it, aren't all banks scam? Because like if we, if any of us went to the bank right now and said, let's say everybody went to the bank right now, just a crazy thing, right? And said, we want all our money. They would never be able to repay us back because of the fractional reserve banking. That's a scam. That's a real scam. And that should be stopped. But it is what it is. And it's like a normal, you know, occurrence in our society. And that's just how it is. So trying to reboot, this is where it gets crazy on top of all the rest of it. In May, Alexander left credit to start credit capital, a separate company that would conduct Wall Street style activities without putting cred's commercial business at risk. Cred took a stake in the new entity in order to diversify its interest so it would be less dependent on mo credit and who are. But then in July, Shad fired Alexander and took over credit capital. So that makes no sense. So how did Alexander leave cred to start credit capital? And then Shad said, I'm gonna fire you, but it's a new business. I don't understand. Alexander sued cred for illegally reincorporating credit capital. And now they're going through a big lawsuit and all this stuff. So and then it talks about the aftermath and really, really, it comes out of this. This is a gentleman who had invested and he said, we weren't investing into a platform. We're investing in a crypto fund of a fund of a fund. He states they were very recklessly misrepresenting what they were doing without the same yield and not disclosing the risk because they were getting 6% and these guys are getting were supposed to get a bunch and they didn't because they couldn't manage it correctly. And the jig is up. So that's what happened to cred. So when you're looking at what's going on the background, make sure that the people and the companies you are dealing with are transparent. They're out there in the open and that you know exactly where your money is going to. So let me know what you think of the comments section. That's essentially it for today. A lot of stuff going on, a lot of stuff and expect some volatility coming up. There's going to be a lot of different problems, especially in the US and especially with our crypto market. But if you just hold on, have strong hands and everything should be okay. So if you like those types of videos, you mean too much going to pop up on your left and right, let YouTube do their magic? I will pick the one about the I trust how to minimize taxes. And that's it. So thanks for sticking with me for the whole thing. I really appreciate it and I'll see you on the next one.