[00:00:01] Welcome to Crypto Talk Radio, the podcast for everyday investors like you. Visit us on the
[email protected] and now here's your host, Leister.
[00:00:13] Thank you for that Bailey. And welcome everybody out there on Crypto Talk radio.
[email protected] a bunch of crashing and burning. Falling from the sky. Burning in a ball of flames.
[00:00:25] Toast.
[00:00:26] Absolute garbage. That's what's happening. That will be today's episode. Today's episode will be easy because the subject matter is very clear, applicable specifically to these. And I think it's important I will have a brief mention for the garbage project but not specific to it simply because it's affected by it. I think it's important some may be listening at CryptoTalk FM around that subject matter. The other piece I'll just, I'll not going to talk about in the episode but an announcement.
[00:00:57] I'm debating changing some of the podcast host backend stuff. There might be a little bit of disruption. If there is, I will let you know. Meanwhile, let's go ahead and jump right into this nonsense that came up over the past couple days.
[00:01:17] Coinmarketcap.com we're going to go ahead and zoom out to the month chart for bitcoin, currently hovering just shy of the $64,000 mark with what appears to be a slight upward trend. But I will guarantee you that upward trend is not going to last given some of my updates I got here in a little bit. Ethereum had a little bit better fare. It is a stronger upward trend. People estimate it should hit the $2,000 mark before settling back down, currently at the nineteen hundred dollar mark.
[00:01:46] What really happened? That's the dominant topic for today. What really happened?
[00:01:52] Did it have an impact on the crypto space as a wide hole? No, it did not. Not yet.
[00:01:58] And is it a precursor of things to come? I think so. I don't know for sure, but I think so.
[00:02:04] What happened is that three, count them, three exchanges, all white kaputs in short order. Some people said there was two. That's just over the last three days. There were actually three. Specifically three exchanges that had a problem of some kind. One of them was lesser covered than the other two. That's why it kind of went under the radar. But there was three total.
[00:02:28] Let's start with the lesser known one. Let's start with the one that people aren't really talking about because I think what happened with that dude might have helped expose if we had paid the fuck attention, might have helped expose some of what then did happen to some of these other ones?
[00:02:50] The information just came recently, but the pattern I think is apt and appropriate.
[00:02:58] The exchange in question, and I didn't know anything about this exchange at all. They know by name, based out of Thailand and it's called bitcub, BIT K U B online.
[00:03:10] Allegedly this is all Thailand. So allegedly there was a whole bunch of money that went missing.
[00:03:18] And it went missing because allegedly the exchange was afraid there was going to be a bunch of people dumping out of it, that they were going to take their money and run. Well, obviously if you give your money to the exchange, there's an expectation that you can withdraw and you would not expect the exchange to withhold your assets from you.
[00:03:38] So the fact that this happened and allegedly months worth of COVID up, meaning denials and you know, buying time, et cetera, this kind of thing.
[00:03:52] When you talk about the unregulated space, exchanges can be regulated in whatever jurisdiction, but it still does not, it still does not stop this kind of thing from happening under the right blend of circumstances.
[00:04:07] Now the bottom line about something like this, when it happens, I struggle with, I understand it, but I struggle with the persistent desire to leave assets in the exchange.
[00:04:23] In my mind there should simply be, I'm doing it to swap to something else and it's right back out again.
[00:04:30] And I would only do that when I cannot do it on the decentralized side, which is basically to fiat. For all intents and purposes, that's the only time I would recommend doing it.
[00:04:42] I don't recommend doing it.
[00:04:44] I, I personally don't. But I understand what's ultimately happening.
[00:04:50] It's. These exchanges are floating money, okay? They're floating money. They're, they're taking money and they lend it out or they, you know, use it for stuff and then they expect to get it back on some run. But they get exposed. When there's bear markets, that's essentially what happens. This is what probed or prompted the rise of reserve checking. The idea that you have sufficient reserves sitting ready to go for the eventual people selling out and the bear runs and things.
[00:05:22] Most of the exchanges don't hold strong reserves or if they do, the reserves are based on a certain assumption. Again, they're not equipped for a deep winter bear market. They're mostly equipped for the routine and for bull run because in bull run they could just sell assets and be all good and good, ready to go.
[00:05:43] Now with BitCub, again, I didn't know anything about it, but with BitCub, allegedly this is years Ago, allegedly they were trying to do the same kind of thing that FTX was doing, which is they hit a point and they were trying to replace some of their assets, some of their reserve backing assets.
[00:06:03] So they were going out and trying to find some ways to acquire them while withholding and delaying and preventing people from dumping out while they got this all sorted out. So in their defense, their stated defense, they weren't trying to stop people from taking money out forever, they weren't trying to take it, but they were concerned that during certain periods that people would dump completely out of it and it would send them insolvent and they would shut down. And they were trying to do the best they could to avoid that. And this was the best they could come up with. And of course the Thailand government wasn't having that. But that was a statement that they made, which then leads me now, this was going on for years. So that's why I said this is a good precursor to analyze leading up to the more recent ones, the more surprising, not surprising ones.
[00:06:56] Let's start with bitmart. I didn't know very much about bitmart.
[00:06:59] They're shut down anyway. Bitmart was one of the first exchanges I had signed up for when I was. This is 2021, so one of the first ones I signed up for along with Hotbit, which is Dead Gate IO, which had at the time stopped courting us. Folks, I was on cointarget a point, I was on quite a few of them. And bitmart is one of the select few exchanges that blockdag listed on.
[00:07:26] Bitmart sent an announcement on social media basically saying we're shutting down, we're not gonna be able to make this and gave a limited time to withdraw your assets. So if you're listening to me here and it's the first time you're hearing about this because you don't follow this scrap, you may want to check your Bitmart account, get on there and get your assets out of there. Because at some point they said they're going to leave withdrawals open for a while, but deposits will be stopped. They're going to get rid of all the open positions and things, but at some point they will shut down withdrawals, but they're giving some period of time for withdrawals. Some people on social media claim that they were not able to withdraw. I don't know what's going on because I tried to log back in there but I forgot it had Multi factor. That Multi factor was tied to an old ipod touch that I've got, but I Don't feel like pulling it out just to go in to see that there may be like a 10 cent type of asset or something. I know I don't have a lot in there, so I just said screw it. But I'm sharing it as a public service announcement for people to be aware, especially if you are on the block deck side, that another one bites the dust. Just like a sendex. That's another one that crapped a sendex shut down.
[00:08:29] It's not part of my holistic coverage, but it's another one shut down a couple of weeks ago.
[00:08:35] The last exchange, which is the most infamous exchange for multiple reasons, is Bitmex.
[00:08:41] If you've heard the name Bitmex, you probably know the name Arthur Hayes, who's one of those crypto folks out there. But most importantly, the most important thing to understand about Bitmex, and this goes back years, this goes back to 2021, 2022, 2020 21, 2022, Arthur Hayes got in trouble with the United States government. Actually it was 2020 got in trouble with the United States government for violing the bank secrecy act.
[00:09:10] And allegedly, this was never proven, but allegedly, mind you, this is the Gary Gensler era.
[00:09:16] Allegedly they were, they weren't doing the, the kyc.
[00:09:23] They weren't implementing it the way that the government wanted, which is more aggressive. And so because of that they were letting people just sign up without going through the rigor of KYC gate. I always the same situation, but the other ones changed. Bitmex did not. And so for the people, Arthur Hayes, Ben Dilo, Greg Dwyer and Sam Reed, they, the government went after them.
[00:09:46] The company settled. This is 2021, the company settled.
[00:09:49] But they actually did have to serve somewhat of a prison sentence. I think Hayes, he served like six months or something. There's some, I know he served at least a little bit of something. But it was all around the kyc.
[00:10:01] And the notable story of this was that Hayes's mom actually wrote a letter on his behalf to plead, you know, leniency.
[00:10:10] The after this then so Donald Trump goes back in office, gets reelected and basically just pardoned.
[00:10:20] He pardoned all, I think he pardoned all four of them. I know he pardoned Arthur Hayes, pardoned them. Arthur Hayes said we were used to set an example and they were going after us and we were, we didn't do anything wrong. And this, that and the other. Keep in mind that Bitmex was most notable for being allegedly the originator of the derivatives in crypto, that they were one of the first to do leverage trading, which then extended, of course, the gambling that we have now. So you could argue that it's their fault. But this came back up again. The fact that Trump in 2025 basically pardoned these guys for something that was legitimately wrong, which was the failure to do kyc, because KYC is on the books. I don't think it should be, but it is. And they failed to do it. And they were letting people duck the regs. That was a legit deal. And then Trump, for giving them only to have Bitmex this month announced it was shutting down and they gave an even shorter time frame for being able to get your assets out of there. So that's what explains the thumbnail I'm sharing, which is that Arthur Hayes got a straight up golden parachute. That's literally what he got scot free on something that was legit, something takes people's money. Shutting down the exchange, the messaging around the reason for the shutdown was that they were out of money, they were insolvent, they were going to make it work.
[00:11:41] And if you think about how long Bitmex had been in operations, which was, you know, coming up close to 15 some odd years or something, if you think how long they were in operations, you think about all of these exchanges that simply cannot sustain in the bear market.
[00:11:57] That's what it exposes. Whenever there's bear markets, the exchanges just crash and burn and cannot sustain because they are not built to support when there's nothing, you know, significant price appreciation.
[00:12:10] We've seen it time and again now. It did not immediately shift the market in a downward position like some might have expected that it should have done. So at least for right now, we seem to be reasonably stable. But the key to keep in mind is that I don't think this is the end in the short term. I think there's gonna be more exchanges that announced they're shutting down. I wouldn't be surprised if like lbank for example, and some of the other ones announced some sort of a shutdown or a pullback.
[00:12:37] Because remember back when Hotbit shut down, that was an out of the left park announcement.
[00:12:43] Nobody expected that Ascendex very recently had done a ramp up and then they announced shut down. So some of the ones that are shutting down are at the same tier. It's my point. And so that's why I expect there's gonna be a lot more, because there's a lot at this tier.
[00:12:57] The simple answer of this is, in my mind, my statement, in my opinion, is, I don't, I don't know why people leave their crypto in an exchange, any exchange. I don't know why they don't just do your transaction and get it out. I understand the leverage trading, it's the gambling, right? And of course Bitmex, if it's true that they were at the front of it, they responsible for a lot of the gambling we now have.
[00:13:19] So maybe, maybe some of the more declines of crypt of crypto exchanges to, to come will help realign the market back to more standard trades and getting away from the gambling side of it. I know some don't like that. They're like, that's the way you make money. It's also the way you get the exchanges shutting down. And if we lose a significant number of these exchanges, you're not gonna be able to get out to fiat or the banks will take over and make it even harder for you.
[00:13:46] I would rather have a world where we are able to use the exchanges, but I don't want them to be glorified casinos either. And I think in my mind that these declines and these closures are a good thing.
[00:13:59] I think they're a very good thing. I want to see more of it. There's too many exchanges. I'd love to see a lot of them shut down because I think there's too many out there and many of them are just there manipulating the market for what it really could be.
[00:14:14] Bitcoin's been down for a long time. I don't know how much longer it's going to be down, but I do think that there's going to be more of a focus in this direction.
[00:14:24] People need to look at Trump because he's the one that pardoned these guys when he really shouldn't have because they did break the law.
[00:14:31] But we also have to take that in picture with the Clarity act, which people think has a harder road to pass. They're dragging their feet on it.
[00:14:39] And the risk that Trump becomes a lame duck president here soon.
[00:14:43] All of that to say if you're one of those that's expecting that because the YouTubers were telling you about a three million dollar Bitcoin, all I can say is I got a bridge to sell you somewhere down in Thailand, Sam.
