Knives Out For Gensler

6 min readApr 21, 2023

The News From Planet Ruby — Friday, April 21, 2023

There is hope yet for the apes. A subsection of this submissive and easily-distracted species have evolved backbones and are marshaling forces against their oppressors: A cabal of powerful elites who have imposed their religion, the worship of the “dollar”, across their planet.

The priesthood of this elite, however, will not go down without a fight, and continue to inflict damage wherever they can. On Planet Ruby, we note with interest that one of the leaders of the resistance movement — an orange Canid, aided by a socially-awkward technologist — is also spearheading efforts to decentralize humanity’s habitat, seeking to move away from the single point of failure represented by reliance solely on Planet Earth.

Inflation Mixed, Risk-On/Off

The macro outlook doesn’t seem quite as rosy as it did a couple of weeks back. Headline inflation appears to be falling, at least in the US, but core inflation remains stubbornly high.

The major indices are all close to their highs for this year, while the DXY is bumping around at a year-long low, now that the market has priced in the worst of the rate rises. In addition, more and more countries are recognizing the downsides of relying on USD for international trade, and are exploring whether and how to bypass it.

In the UK, inflation came in above forecasts (over 10%, with food inflation at 19%), and in the Eurozone, high core inflation is also giving the ECB cause for concern. Across the board, central banks are still raising interest rates in their attempts to wrest inflation back under control.

Bitcoin, of course, fixes this.

Away from the markets, Elon Musk has been in the news even more than usual. Launch of the Falcon Super Heavy — the largest rocket ever built — was delayed on Monday but went ahead on Thursday (yes, that’s 4/20). The Super Heavy cleared the launch pad and achieved several minutes of flight but experienced a “rapid unscheduled disassembly” before stage separation.

In an interview with Tucker Carlson, we also learned from Elon that until recently, US government agencies effectively had full access to Twitter’s data. Carlson reflexively asked whether that included DMs (answer: Yes), which raises many questions, including about the nature of Tucker Carlson’s DMs.

Alts Season Follows SpaceX

The wider market uncertainty has impacted BTC, which closed last week at $30,300 but immediately dipped below the $30k mark as the new week opened. Midweek volatility driven by a large BTC sell and cascading long liquidations pushed it back below $29k. At the time of publication, BTC sits at the bottom of the support/resistance band, at $28k.

A promising outlook for Alts Season — when bitcoin dominance pulls back and altcoins consistently outperform BTC — was scratched, as alts went the way of the Falcon Super Heavy and abruptly turned downwards after failing to decouple. Having posted strong gains early in the week, alts retraced with deep red candles.

ETH has remained relatively strong, rising slightly in BTC terms since the landmark Shapella upgrade. After warnings that this would lead to a tsunami of unstaking and sells, the damage has so far been limited. A large tranche of withdrawals began on April 12, but quickly stabilized. Staked ETH fell from 19.15 million to 18.2 million ETH, a drop of around 5%. However, since staking ETH no longer requires locking up tokens indefinitely, more holders are taking the opportunity to earn a return. The unstaking process can take several days, depending on demand, so the market impact of this will not immediately be clear.

ETH withdrawals appear to have stabilized.

Gary Gensler Gets Grilled

On Monday, the SEC filed charges against Bittrex for failing to register with the agency. It named six tokens traded on Bittrex as securities, including Algorand and Dash. Bittrex had already announced it will wind down operations in the US by the end of April.

But the troops are rallying against the forces of darkness. There’s both internal and external opposition to SEC Chair and Douche-In-Chief Gary Gensler, who (along with Luddite Liz Warren) has deservingly become the face of America’s anti-crypto crusade.

Coinbase CEO Brian Armstrong suggested the firm could move overseas if US agencies were not able to start working together and provide the regulatory clarity the exchange needs. Coinbase is currently gearing up for a lengthy legal battle with the SEC.

More significantly, the SEC is at war with itself, as well as with the CFTC and crypto-loving public. SEC Commissioner Hester “Crypto Mom” Pierce took aim at her agency’s failure to adapt its stance to new technologies, instead either forcing them into the existing framework or serving companies with enforcement notices.

And then there were Tuesday’s hearings.

Gary Gensler during the House Financial Services Committee hearings.

As awareness of the SEC’s overreach and Operation Choke Point 2.0 have grown, momentum against Gensler has also increased. Gensler, remember, has led a “regulation by enforcement” approach: Crypto companies have repeatedly complained that they don’t know what the rules are until they learn they’ve broken them. Unlike the CFTC, it’s Gensler’s view that most cryptos are securities, and he’d like to see DeFi protocols subject to the same rules as centralized financial services companies.

Last weekend, Republican Representative Warren Davidson responded to a tweet by Coinbase’s Chief Legal Officer, stating his intention to attempt to remove Gensler from office — indicating that crypto has support as well as opposition in the US’s legislative machinery.

Gensler received a rough ride in his appearance before the House Financial Services Committee on April 18, when he was questioned about (among other things) the SEC’s heavy-handed approach to crypto. There’s a helpful summary here.

While we are hardly impartial observers, Gensler did not acquit himself well. One low point was repeatedly refusing to clarify whether ETH is a security, while simultaneously claiming there was sufficient clarity overall.

Tom Emmer, Majority Whip of the United States House of Representatives, has provided a thread of his own greatest hits as he repeatedly eviscerates Gensler. It’s definitely worth a look. Similarly, Davidson catalogs an impressive litany of Gensler/SEC failings in his closing remarks.


In more concerning news, a “massive wallet draining operation” has seen over 5,000 ETH stolen over the past few months. While crypto hacks are nothing new, this one is a real puzzle, in that it specifically appears to target OGs and crypto natives who have reasonably good security, and there are no obvious clues as to how the perpetrators are going about it.

Finally, perhaps the week’s strangest story is that the tiny Himalayan kingdom of Bhutan (population c. 780,000) appears to have been quietly investing in crypto, perhaps for its sovereign wealth fund.

That’s all for this week!

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