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GM. This is Milk Road, the crypto newsletter that pairs perfectly with a Pop-Tart.

(Except for the strawberry kind. That stuff is nasty)

Here’s what we’re serving up today:

• $1B, government bribes, and Thai prostitutes 🚨

• The psychology of a market cycle 📊

• Stolen funds: recovered! 🍪

$1B, GOVERNMENT BRIBES, AND THAI PROSTITUTES 🚨

Pardon my French. But…

HOLY SH*T.

The U.S. vs Sam Bankman-Fried trial just got crazier. In case you haven’t heard, yesterday’s trial included everything:

• Chinese government bribes

• The Saudi Crown Prince

• Thai prostitutes

• Price manipulation

• Collusion

Don’t worry. I spit my OJ out too…

Here’s the 120-second summary of all the action:

1/ Frozen funds, Chinese bribes, and Thai prostitutes

In 2021, the Chinese government froze $1B of Alameda’s funds on Huobi and OKX.

Uh-oh. Big problem.

So, they came up with 3 possible solutions…

OPTION 1: Hire lawyers to negotiate with Chinese officials to get the funds back. (legal solution)

OPTION 2: Use wallets that belonged to “Thai prostitutes” to try to get the money. (probably illegal, definitely frowned upon)

OPTION 3: Bribe Chinese officials with $150M. (straight-up illegal)

What did they choose?

Well actually, they tried all 3…

Lawyers. Failed.

Prostitutes. Failed.

The $150M bribe was the only one that actually worked. (go figure)

2/ The Seven Balance Sheets

Caroline created 7 alternative balance sheets.

The goal? Make Alameda look less risky to investors/lenders, so they could get more money.

And now, introducing Snow White and the 7 Dwarves…

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**static noise**

And now back to your regularly scheduled programming…

3/ The “things Sam is freaking out about” list

We all keep lists... To-do lists. Million-dollar-shower-idea lists.

Well, Caroline always carried around a different kind. It was called the “things Sam is freaking out about” list.

Here’s a sneak peek:

A few things to point out:

• “Getting regulators to crack down on Binance” - you know what they say… if you can’t beat them, join eliminate them.

• “Raising from MBS” - Some people go to their rich, bald uncle when they need $1B… fkSBF went to Mohammed bin Salman. (aka the Saudi Crown Prince)

• “Buying SNAP” - fkSBF was apparently trying to buy Snapchat. Phew. Crisis averted.

• “Willie being happy” - I don’t know who the hell Willie is, but I hope he’s happy after all this…

4/ fkSBF suggested they should keep selling Bitcoin if it went over $20,000.

According to Caroline, fkSBF came up with a master plan to get liquidity in time of need.

The plan: just keep selling Bitcoin if it was above $20,000.

In other words, it wasn’t short-term paper hands that were selling and keeping BTC’s price low... it was potentially fkSBF adding sell-pressure.

Milk Road Take: What. A. Day…

We’ll see if fkSBF’s defense can get him out of the (deep) hole he’s in during Caroline's cross-examination later today.

But right now, in our (totally non-expert) opinion…fkSBF is f*cked.

• Bribing government officials ✅

• Creating fake balance sheets ✅

• Asking regulators to attack your competition ✅

• Manipulating crypto prices to stay under $20k ✅

• Getting caught doing it all in 4K ✅

That’s the 5 Fingers of Legal Death right there.

THE PSYCHOLOGY OF MARKET CYCLES 📊

Check it out. You might’ve seen this graph before.

It’s Wall Street’s Psychology of a Market Cycle. It shows how investor’s feelings change throughout market cycles.

And with everything going on, we’re curious…

Click on your answer above and we’ll share the results with you tomorrow!

BITE-SIZED COOKIES 🍪

Stars Arena has recovered 90% of its stolen funds. The web3 social media app was hacked for ~$3M last week. (finally, good news from a hack)

Trezor is launching three new hardware wallets. The lineup includes a limited-edition Trezor Safe 3 Bitcoin-only wallet. 

The USDR stablecoin depegged and dropped 50% yesterday. USDR is backed by an illiquid real estate portfolio - causing panic among holders.

Ethereum gas fees have dropped to a new yearly low. The decline is likely due to the drop off in users on DeFi applications, NFTs, layer-2 networks, and various Telegram bots. (And for our crypto curious - learn more about gas fees here)

WisdomTree launched its “blockchain-enabled” consumer app in 11 new U.S. states. The $94B asset manager’s app is now available in 32 states across the country.

MILKY MEMES 🤣

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.