May 2024 - A Glorious Month for Decentralist Victories
Highlights: Rep. Brad Sherman's admission that should lead to the dismissal of SEC crypto enforcement actions; The real benefit of an ETH ETF; Why the plans for a US CBDC may be foiled for good
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For those following my coverage of humanity’s great war between the Centralists and Decentralists, I have some big news to report.
Although it may not feel like it, the Decentralists scored some major victories this month.
In fact, I believe that when history is written, it will depict May 2024 as the Decentralists’ D-Day moment which turned the tide and laid significant foundations for the epic defeat of centralists everywhere.
The month began with a Capital Markets Subcommittee Hearing on May 7th entitled, “SEC Enforcement: Balancing Deterrence with Due Process” where Centralist sympathizer and SEC enforcement cheerleader Rep. Brad Sherman (D-CA) failed miserably in his efforts to smear decentralists.
While Sherman’s verbal attacks may have resonated with his fellow projectionists, his attempts to portray the crypto industry as “a garden of snakes” accomplished nothing except to expose the Centralist Playbook as well as his own self-serving motivations to the rest of the world.
In his hubris, Sherman may have also inadvertently made a admission that could lead to the dismissal of every SEC crypto enforcement action alleging unregistered securities offerings.
In stating that “the SEC ought to be given clear and absolute jurisdiction over crypto by Congress,” Sherman admitted what the crypto industry has been arguing all along: that without congressional approval, the SEC does not have the legal authority to oversee cryptocurrency innovation.
I hope Sherman’s concession reverberates within every crypto defendant’s pleading and throughout every judicial ruling. We simply cannot have a federal agency freezing assets, shutting down businesses and destroying livelihoods simply because it self-identifies as a regulator with proper jurisdiction.
After unwittingly saying the quiet part out loud, CeFi’s favorite congressional propagandist, save Elizabeth Warren, should have done himself a favor and stopped talking.
But he did not.
Instead, Sherman uttered the most laughable statement of all, “the crypto industry has all the money.”
Because I realize that math is hard, I created the chart below so that Rep. Sherman could visualize the size of the cryptocurrency market in proportion to other asset classes in the U.S.
That negligible red dot - that many won’t even be able to see without putting on their readers or enlarging their screen - represents the entire scope of the global cryptocurrency market. Clearly, the crypto market does not have all the money. Comparatively speaking, it barely has any of the money.
Sherman’s outlandish remarks did not stop there.
He went on to lament that the crypto industry makes “money by literally making money” - as if this was some sort of a human atrocity.
Making money by literally making money is what the government does day in and day out. The only difference is that when the crypto industry “makes money by literally making money”, it does not create rampant inflation and ensure the redistribution of we-the-people’s wealth to elitists like Rep. Sherman.
Without any basis in fact, Sherman went on to accuse the crypto industry of “spending hundreds of millions of dollars trying to influence congress.”
According to OpenSecrets, a nonpartisan political transparency group, the cryptocurrency industry spent $25 million in 2023 on its lobbying efforts, and a grand total of $56.44 million since 2019.
While that tiny red dot in the image above has not spent anywhere close to hundreds of millions of dollars trying to influence congress, can you guess what industry has?
If you guessed the Securities & Investment Industry, you would be correct. In 2023, alone, the Securities & Investment Industry spent $147,132,294 trying to influence congress - nearly six times as much as the crypto industry had spent. Math may be complicated, but it is certainly not subjective. $147 million is and will always be a lot more than $25 million.
Now, if you can, try to guess the top industry that gives money to Congressman Sherman?
If, once again, you guessed the Securities & Investment Industry, then you are batting a thousand.
According to OpenSecrets, not only is the Securities & Investment Industry Sherman’s largest contributor, most of Sherman’s donations come from PACs - not even individuals. In fact, a mere 1.86% of Sherman’s donations were from small contributors of less than $200.
Although Rep. Sherman purports his motive to be protecting retail investors, the money trail reveals that Sherman is far more financially incentivized to shield the Securities & Investment Industry from disruptive crypto innovation - at the expense of small retail investors.
Never forget what I wrote about lawmakers who decree outperforming assets like bitcoin and hot IPOs as hazardous while deeming their devaluating currency and ebbing Treasuries as “risk free.” These people are not trying to help you protect your wealth. They are trying to assure theirs.
The video of the entire hearing is embedded below. I implore everyone to watch it. In addition to Sherman’s fabrications and blatant hypocrisy, you will hear some shocking accounts of SEC overreach from Nick Morgan, Founder and President of Investor Choice Advocates Network (ICAN), a nonprofit public interest litigation organization that provides pro bono representation to small investors and entrepreneurs who could not otherwise afford counsel in SEC proceedings.
Morgan’s opening statement - chronicling how the SEC’s disregard for due process has ruined the lives of ordinary businesspeople who were not even accused of harming anyone - should awaken every single American as to how federal agencies are being weaponized against them.
Any Hearing that draws public attention to SEC abuses - such as making false statements and misrepresentations against a defendant in court as well as using its “gag rule” to restrict free speech - I consider a win for the Decentralists.
While Chairman Wagner’s Hearing will hopefully result in reining in the rogue agency, some of the Decentralists’ greatest victories occurred during the latter part of the month.
The Ethereum ETF Arrived!
In late May, the SEC bit the bullet and qualified eight spot Ethereum ETFs.
Finally, retail investors everywhere can buy ETH. Just kidding. They’ve been buying it now for 8 years via the very cryptocurrency exchanges that, lo and behold, the SEC has been aggressively trying to destroy through enforcement actions.
That said, the SEC’s approval of Ethereum ETFs should drive significant investment not only into ETH, but, more importantly, into the Web3 universe. Since funding the Web3 universe will be instrumental in enabling more individuals to build wealth outside of traditional methods, the Ethereum ETF is a huge score for the Decentralists.
A U.S. Central Bank Digital Currency (CBDC) is Looking Less and Less Likely
The best news of all is that a U.S. Central Bank Digital Currency (CBDC) is looking much less likely.
On May 23rd, by a bipartisan vote of 216 to 192, the U.S. House of Representatives passed H.R. 5403, the CBDC Anti-Surveillance State Act, sponsored by Majority Whip Tom Emmer (R-MN). This legislation will halt unelected bureaucrats from issuing a CBDC. As I’ve been writing for years, a CBDC is the greatest threat to freedom that individuals face today. Just so you are aware, here is a list of the 192 nays who deserve to be voted out of office and never let near power again.
In addition to reiterating his recent pledge to never allow the creation of a central bank digital currency, the month ended with Presidential frontrunner Donald Trump stating that he supports the right to self-custody while vowing “to keep Elizabeth Warren and her goons away from your bitcoin.”
Now, I wouldn’t lose too much sleep over Elizabeth Warren coming for your bitcoin as it looks like my January 2024 prediction that Warren will lost her re-election bid to a more crypto-friendly candidate may actually be coming to fruition.
Her challenger, Crypto Attorney John Deaton, is most definitely giving Warren a run for her money. If you look at Warren’s X feed, nearly every response to her posts is a scathing rebuke against everything she stands for. Deaton’s X feed, on the other hand, is filled with admiration and offers to donate. It’s truly remarkable.
While a Deaton upset would give the crypto industry a strong voice in the senate and one less vote for a CBDC, I believe that a Trump administration could see Commissioner Hester Peirce, aka Crypto Mom, being elevated to SEC Chair - a move that would surely help foster innovation and fuel the US economy.
Although, at times, it feels like democracy is taking one step forward and two steps back, the truth is decentralization is rapidly permeating throughout every fiber of humanity.
Keep the faith. The Centralists have already lost the war. And they know it. Here’s how you can be sure: if the Centralists were even remotely confident in their triumph, their attacks would be grounded in actual facts and their arguments substantive - not illogical and misleading. Remember, the more relentless their vilification and the more farcical their declarations, the greater their fear and the closer the Decentralists are to victory.
Indeed, what we are are witnessing today is a new spin on the Mahatma Gandhi quote: “First they ignore you, then they laugh at you, then they fight you, [then they resort to straw grasping,] then you win.”
We are at the straw grasping stage. Enjoy it.