Crypto Is Fueling the Fentanyl Crisis Now?

Plus Circle gets out of USD debt altogether

Author

Nathaniel Whittemore
June 01, 2023

The Breakdown First Five - Thursday June 1, 2023

5. Warren: Crypto funds Fentanyl trade

In possibly the most bizarre Elizabeth Warren point to date, the anti-crypto senator claimed that Crypto was funding the fentanyl crisis. Latching onto a recent report from Elliptic, the Senator grilled treasury officials on Crypto's use in purchasing precursor chemicals from China during a hearing. Warren called for a Crypto ban and asked again for colleagues to support her bill, which has been languishing for months with no sponsors.

4. Chinese stablecoin firm seized

A firm offering stablecoins pegged to offshore Yuan markets has been seized. Trust Reserve was shuttered on Monday with an ominous note left on the company’s office door giving the only clues as to what happened. The firm had previously raised $10M from KuCoin ventures. While the Hong Kong reopening gets off to a tepid start, mainland tensions with the industry continue.

3. Circle ditches US debt

Circle successfully completed their risk management strategy of cutting US debt completely out of their reserve portfolio ahead of the debt ceiling. The stablecoin issuer had committed to holding no Treasuries that mature past the end of May on fear of a potential US default. Instead, the firm is relying on the world's largest banks to pay their debt as and when due, shifting their asset mix over to Repo agreements and cash.

2. Binance conducts “talent density audit”

Binance is evaluating current staffing levels in a move that reportedly could see layoffs of up to 20%, but don’t call it a downsizing. CZ and Head of Comms beat back the rumors of cost-cutting, calling the move a periodic evaluation of talent and a “resource allocation exercise”. The exchange claims to still be profitable and seeing increasing new users.

1. Debt deal passed in House

The debt ceiling deal was passed in the House during a late night session. Only two-thirds of Republicans voted in favor, putting speaker McCarthy on thin ice. The extreme wings of both parties rejected the deal. Default now off the table with the bill expected to breeze through the Senate. Now we just have to see what massive new debt issuance does to liquidity conditions.

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Thanks for reading -NLW