🧠CeFi is the problem. DeFi will prevail.

GM Seedphrase Daily Nation 👋 The storm is here and we're ready to be your Canada Goose: we help you flex AND stay safe.

Today's Agenda 📓:

• 🧠 Current state of crypto

• 🌊 FTX developments

• 🔒 Who is safe and who was exposed to FTX?

• ⭐️ Free Alpha: a solid project through the fire.

Will FTX lead to Lehman-style crypto collapse?

R. Kelley and Lehman Brothers have a lot in common: they both rose to fame, then took a huge piss.

By 2007, the Lehman Brothers were the fourth largest investment firm in the U.S. With 25,000 employees worldwide and a total of $639B in assets. They were a humpback whale.

Shock & Outrage: During the 2008 financial crisis, Lehman stock plunged 77% in the first week of September, and as a result, caused a chain reaction that destroyed companies and equity markets.

The only reason this industry survived the Lehman contagion was because of government bail outs. Too many were hurt by the Lehman insolvency to ignore. Sound familiar?

Add FTX to the pissing contest.

FTX is the 3rd largest exchange that just went insolvent, taking down a huge, complicated web of crypto players and investors.

The difference: we don't see government coming to bail out crypto in our magic 8-ball.

History doesn't repeat, it rhymes.

The government is still coming, though, even if they're not coming to bail us out.

Incoming: The US Treasury Secretary has announced it is clear crypto needs regulation, and it needs it ASAP.

Bad News: Regulation could really curb the innovation of blockchain and crypto technology. We already saw this happen with the code written for Tornado Cash.

Good News: Regulation creates stabilization. Full stop. This will attract institutional investors like a newly divorced man at a strip club in Vegas. That means a huuuuuuuuuuge pump for your bags and could create the next bull run. Institutions flooding in = billions sloshing in the market.

⚜️Golden Nugget: Do you see the pattern? From 3AC, Luna, Celsius, and now FTX, it's clear the biggest losers in crypto are the centralized players. FTX is CeFi (centralized finance). However, if you look at DeFi: it is the only thing in crypto that has remained liquid, secure, unaltered, and running efficiently and uncorrupted.

CEXs aren't helping the average investor in any way.

The space needs time to recover and rebuild. Learn from these errors and signs that come across now as red flags—making changes to make a safer future with more transparency.

The crazy part? Investors like Kevin O'Leary, Tom Brady, Steph Curry, and the largest asset manager in the world, BlackRock, did not see the FTX red flags.

6 months ago, YouTuber and full time scam investigator, Coffeezilla, had warned us all:

SBF lied and took user funds to fund other projects in the crypto ecosystem. Giving crypto a lousy name and opening the door to heavy and strict regulation by congress.

Ironically, two exchanges that got major stadium rights (FTX Arena and Crypto.com arena) are the ones to be going under.

These tactics were to put crypto in front of the masses to create mass awareness and branding for these exchanges.

We see that this advertisement and marketing approach simply created false pumping of price and never indeed brought retail investors and mass-scale investment.

We're all a part of history here, blessed with the good fortune of witnessing one of the largest scams in history.

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The ripples of the FTX crash. 🌊

Bahama Police are conducting a criminal investigation into FTX.

• SBF attempted to flee the Bahamas to go to Dubai, where no extradition laws exist so that he would be "safe" from authorities.

• SBF is under custody in the Bahamas and is not allowed to leave the country.

• SBF's jet has been grounded

On Friday night, $650M in funds left FTX in suspicious transactions and were deemed unauthorized.

• Several wallets were rapidly drained, and FTX called it a hack.

• Much of these funds were in Tether, stablecoin DAI, and converting staked ETH (stETH) into ETH.

• FTX also filed for chapter 11 bankruptcy.

• There's a rumour that SBF created a secret "back door" built into the exchange to funnel funds. This appears to be a "hack," according to FTX. But many are crying for an inside job, a ploy by FTX to funnel funds out.

• $280,726,365 in ETH,, $99,276,088 in BNB, $3,970,099 in AVAX were sent to one receiving wallet.

• FTX announced not to go onto FTX sites or use FTX apps, as they have been hijacked by malware.

• This is all very suspicious when on the same day, they declared bankruptcy. It screams fraud and shady illegal activity.

Elon tweeted that the FTX meltdown was being tracked in real-time on Twitter.

• Elon was a skeptic of SBF.

• SBF wanted to deploy capital into Elon's acquisition of Twitter. But Elon was suspicious when SBF offered to invest $3B.

• "This dude is bullshit; that was my impression."

More money coming out?! 😲

This shows millions of dollars flowing from FTX wallets and the receiving wallet. The receiving wallet was moving everything and was swapping USDT for DAI (more censorship-resistant), exchanging $44 stETH for ETH, and took massive slippage.

Slippage refers to the difference between the expected price and the price at which the trade is executed.

Meaning they were not selling at their desired price and were accepting a loss in market price and selling for a loss due to liquidating their funds exceptionally quickly.

Which exchange will get annihilated next?

Crypto.com is the next exchange to go insolvent.

They are claiming to do proof of reserves but might be front-running money to make the accounts appear full and correct, but actually are just taking a fast loan for the audit, then returning the funds right away.

Same with:

• Huobi

• Kucoin

Get out of all centralized exchanges while you can. Yes, even Binance. You will not lose money taking your money off of a centralized exchange, but you do have the potential to lose it sitting there.

Red Flag: Crypto.com holdings. ✋

• Crypto.com holds 20% of its reserves in shit coin SHIB. $SHIB. Yikes,

• According to Nansen, the platform has 31% of its assets in $BTC, followed by 20% in $SHIB.

• $ETH makes up 17%.

• $USDC and Tether hold about 5% of exchange reserves.

• Various other coins make up 5%.

• The CEO of crypto.com took to Twitter to verify this information was correct.

They hold 20% of their reserves in a shitcoin and 5% in stables. What incredible risk management!

It's almost as if a third grader is running the company—pure idiocracy.

They need proper devs and are just another house of cards ready to collapse.

To add onto this, crypto.com also sent $400M in ETH to the wrong address, and the CEO called concerns "FUD."

Another liar. This is the time to withdraw crypto into self-custody!

We don't know what the next exchange will do or if it will fail.

Crypto.com screams fraud.

They sent 80% of their total ETH reserves to rival exchange Gate.io just before Gate.io provided "proof of reserves" to users on Oct 28 as part of a new push for 'transparency.'

They claim the funds were accidentally sent there, and the Gate.io team returned them to their cold storage.

Cronos token is now down 50% for the week. (Similar sign and story to FTX)

It's highly likely Crypto.com sent these tokens to Gate.io to help them pass the audit. This is because these exchanges are colluding with each other to give the appearance that all is well.

The shit is genuinely about to hit the fan.

🧠 Final thoughts

• The price of crypto is going to continue to plummet and collapse. $10k BTC seems likely, and altcoins will follow.

• Not all altcoins will survive. Most will die.

• There will be coins that do survive this bloody bear market.

• The coins that survive will see a nice pump and price increase in the next bull market.

• MOVE ALL YOUR MONEY TO A COLD WALLET.

OUR ALPHA TRACKER

Our first premium newsletter back in October shared five tokens we're bullish on & why.

One is Maple Finance. A company that was not exposed to Almeda Research, and all their loans made to them were closed in September 2022.

While their token value will decrease because of overall market conditions, they dodged the kiss of death. They are actually one of the few players in crypto unscathed by FTX.

In this week's premium, we cover the dozens of players tied up in the FTX mess. We tell you what to avoid, and who is safe. If you're trying to come out of this storm on top, you should give our premium a free two-week trial.

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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