Crypto shadow banks rise ☕️

TL;DR:

Crypto shadow banks rise: New shadow banks are filling the gap left by traditional banks in the crypto market, offering quick financing for 24/7 trades.

Young crypto voters in 2024: Pro-crypto young voters could swing the 2024 election, especially in key battleground states.

$100K Coinbase scam: A user lost $100K to scammers posing as Coinbase support through a fake Google ad. Be vigilant against such scams.

The rise of crypto’s shadow banks

The collapse of key crypto-friendly banks has given rise to a new breed of shadow banks in the crypto world. Firms like FalconX, GSR, and B2C2 are stepping in to provide short-term financing, ensuring that trades can settle immediately even when traditional banks can’t keep up.

Why it matters: Crypto markets operate 24/7, but the cash needed for trades often takes days to move through traditional banking systems. With the shutdown of Silvergate Bank and Signature Bank, there’s a growing gap that these crypto brokerages are now filling, offering quick credit lines with interest rates reaching as high as 25%.

By the numbers: FalconX reports that the amount of credit it extends to clients has tripled this year compared to last. These loans are short-term, usually just a few days, which limits the risk and differentiates them from the more speculative lending that led to high-profile crypto failures like BlockFi and Celsius.

Zoom in: The rise of these shadow banks shows how the collapse of traditional crypto-friendly banks has reshaped the market. While these brokerages are making trades smoother for hedge funds and other investors, they’re also profiting from the timing mismatches in the market.

The bottom line: As crypto continues to clash with traditional finance, these shadow banks are becoming crucial players, ensuring that the market’s 24/7 nature can operate seamlessly, even when traditional banking hours don’t align.

Why young crypto voters could decide the 2024 election

Young voters were crucial in the 2020 U.S. elections and are poised to be a decisive force again in 2024. Gen Z and Millennials, who now make up 40% of eligible voters, are increasingly pro-crypto and eager for change. By 2028, they'll be the majority of the electorate, and in 2024, their votes could swing key battleground states.

Why it matters: This young, pro-crypto constituency is dissatisfied with the current financial system and is looking for candidates who support innovation and digital assets. Any candidate hoping to win in 2024 must consider the influence of these voters, especially in states where elections are often decided by a small margin.

The bottom line: As crypto becomes a top political issue, young voters in swing states could tip the scales in favor of candidates who align with their vision for a more innovative financial future.

Scammers steal $100K from Coinbase user via fake customer support call

A Coinbase user lost $100,000 in minutes after calling a fake customer support number from a Google ad.

Why it matters: As crypto scams become more sophisticated, even experienced users are at risk. Fred's case shows how quickly a simple mistake can lead to significant financial loss.

By the numbers: Google suspended 12.7 million advertiser accounts in 2023, but scammers are still slipping through with tactics like cloaking.

Zoom in: Scammers posing as Coinbase support convinced Fred to share his password and banking details, draining his accounts before he realized the con.

The bottom line: Crypto investors must be vigilant. Verify URLs and avoid clicking on ads to prevent falling victim to similar scams.