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GM. This is Milk Road, where we slice and dice crypto trends like a hibachi chef.*

(*Fancy hat and onion volcano trick included)

Here’s what we’re serving up today:

• The SEC filed a secret sealed motion 👀

• Crypto gets another big win in court ⚖️

• There’s a 75% chance a Bitcoin ETF will launch this year 🍪 

THE SEC FILED A SECRET SEALED MOTION 👀

There’s been a lot to celebrate this week…

• The SEC lost in court.

• The chances for a Bitcoin spot ETF getting approved have gone up to 75%.

• I found my missing AirPod.

It’s been a good week.

But while we were all busy popping champagne bottles, a big move was made…

It was quiet, subtle - but full of stink. Kinda like when you’re riding in the elevator and suddenly get hit with the Smell of 1000 Deaths. (aka a silent fart)

So, what happened? The U.S. Securities and Exchange Commission filed a secret “sealed” motion against Binance.

This motion lets the SEC file sensitive and confidential information with a court, but it’s kept off any public record.

Why this matters: This caught a lot of crypto’s attention because it’s highly unusual…

• The SEC is a civil enforcement agency that typically files everything in the open.

• The agency usually wants its messages heard loud and clear to scare others from committing the same violations.

The SEC is like your mom at family gatherings - they tell everyone all your deepest darkest secrets.

So, why keep the motion under seal? Well, who better to answer than a former SEC official…

Meet John Reed Stark. He’s spent 20 years in the SEC Enforcement Division, including 11 years as Chief of the SEC’s Office of Internet Enforcement.

There are 2 reasons John thinks the SEC made this move:

1/ The sealed motion could have secret details about an ongoing investigation by the U.S. Department of Justice (DOJ).

• The DOJ could be working with whistleblowers, have wires or other listening devices in place, or have an active arrest warrant or undercover operation in the works.

• The SEC’s new motion could have info that potentially jeopardizes the investigation.

2/ To protect a witness or company from risk. (But John mentioned this usually involves redactions vs. full-court sealings)

John’s Take: In his 20 years at the SEC, he says he can’t recall ever seeking to file a motion, or any other court document, under seal…

Which is why he thinks the secret SEC filing likely relates to an ongoing DOJ investigation of Binance - which the DOJ would prefer to keep a secret.

In other words, get your popcorn ready.

Even though crypto has gotten a few legal wins recently, the battle between the U.S. government and Binance is just beginning…

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CRYPTO GETS ANOTHER BIG WIN IN COURT ⚖️

**sniff sniff**

You smell that?

It’s the sweet, sweet smell of another legal win for crypto.

This time, the winner was Uniswap - one of the most popular decentralized exchanges.

Here’s what you need to know:

• A handful of users lost money to scam tokens (like Matrix Samurai, Rocket Bunny, and Alphawolf Finance) on Uniswap last year

• The users sued Uniswap and argued the decentralized exchange should be liable for the scams

Yesterday, a judge from the U.S. District Court for the Southern District of New York (SDNY) dismissed the class-action suit.

(btw - SDNY is nicknamed “The Mother Court” due to its age and influence over other federal courts. Weird, I always thought that was Judge Judy.)

The main reason the court dismissed the lawsuit? “It defies logic that computer code underlying a particular software could be liable under Section 29(b) [of the Exchange Act] for a third party’s misuse of that platform.”

Now I’ll be honest. I have no clue what Section 29(b) of the Exchange Act says.

But I do know Section 30(a) of the Survival of the Fittest Act says: “Those who play with fire, will get burned.”

That’s exactly what happened here.

A few users decided to invest in tokens with names like Matrix Samurai (wtf) and Rocket Bunny (wtf x2), then got burned and tried to blame Uniswap for it.

It’s like if criminals robbed a bank while using a self-driving car, and then the bank tried to go after the developers of the car, instead of the robbers.

It just doesn’t make sense. And it seems the U.S. courts agree.

Big win for the future of DeFi.

BITE-SIZED COOKIES 🍪

The European Blockchain Convention kicks off on October 24th. The largest blockchain event in Europe takes place in Barcelona, with one day left to get a discounted price on tickets.*

“There’s a 75% chance a Bitcoin spot ETF will launch this year” - Bloomberg analysts. There’s a 95% chance it will happen by the end of 2024. It’s not if, it’s when.

According to the latest Coinshares crypto fund report, institutional funds sold off $168M in crypto last week. It’s the highest week of outflows since March. Ouch.

Circle is teaming up with Mercado Pago to offer USDC as a payment option. Mercado Pago is one of the largest fintech companies in Latin America.

Robinhood has added support for Bitcoin and Dogecoin to its crypto wallet. It’s slowly also rolling out swap features that let users trade ETH for 200+ different assets.

Bitcoin’s average trade size has jumped to its highest point since June. According to data from Kaiko, the average trade size for BTC on exchanges increased from $850 → $2000+ after the Grayscale ruling.

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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.