sooly on Nostr: The End of Banking As We Know It: preston Pysh Exposes Wall Street's Bitcoin Trojan ...
The End of Banking As We Know It: preston (npub1s5y…6q7z) Pysh Exposes Wall Street's Bitcoin Trojan Horse.
This is just a summary but the juicy stuff is in his article (enclosed below).
"The days of 'robbing everyone to offset the poor decisions of a few' must be brought to an unequivocal close." - preston (npub1s5y…6q7z)
The SEC's repeal of SAB 121 is a Trojan horse. While masquerading as mainstream acceptance of Bitcoin, it invites catastrophic systemic risk by allowing traditional banks to apply their fractional reserve alchemy to an asset explicitly designed to resist such manipulation.
These Too-Big-To-Fail institutions, drunk on decades of government bailouts, are now eyeing Bitcoin custody. But their habitual practices of rehypothecation - the financial sleight-of-hand where one Bitcoin backs multiple loans - fundamentally clashes with Bitcoin's immutable 21 million supply cap.
We've already witnessed this movie's dress rehearsal: FTX, BlockFi, Genesis. Each collapsed when their rehypothecation house of cards crumbled. Yet traditional banks, operating at far larger scale, threaten to replay this tragedy with systemic consequences.
The solution is brutally simple: Congress must outlaw Bitcoin rehypothecation entirely. No exceptions, no loopholes. Customer Bitcoin must remain segregated, fully-backed, and untouchable by banks' proprietary trading desks. Regular proof-of-reserve audits must be mandatory, with severe penalties for violations.
This isn't about stifling innovation - Bitcoin itself is the innovation. This is about preventing predatory banking practices from corrupting its fundamental properties. Countries that grasp this reality first will thrive. Those that allow banks to treat Bitcoin like their fractional reserve plaything will learn a harsh lesson in mathematical inevitability.
The choice is clear: embrace #bitcoin 's inherent properties or suffer the consequences of trying to force it into the very system it was designed to replace.
Read preston (npub1s5y…6q7z) ‘s article it’s by far the richest article I’ve read on the topic so far. The link is in his note below.
This is just a summary but the juicy stuff is in his article (enclosed below).
"The days of 'robbing everyone to offset the poor decisions of a few' must be brought to an unequivocal close." - preston (npub1s5y…6q7z)
The SEC's repeal of SAB 121 is a Trojan horse. While masquerading as mainstream acceptance of Bitcoin, it invites catastrophic systemic risk by allowing traditional banks to apply their fractional reserve alchemy to an asset explicitly designed to resist such manipulation.
These Too-Big-To-Fail institutions, drunk on decades of government bailouts, are now eyeing Bitcoin custody. But their habitual practices of rehypothecation - the financial sleight-of-hand where one Bitcoin backs multiple loans - fundamentally clashes with Bitcoin's immutable 21 million supply cap.
We've already witnessed this movie's dress rehearsal: FTX, BlockFi, Genesis. Each collapsed when their rehypothecation house of cards crumbled. Yet traditional banks, operating at far larger scale, threaten to replay this tragedy with systemic consequences.
The solution is brutally simple: Congress must outlaw Bitcoin rehypothecation entirely. No exceptions, no loopholes. Customer Bitcoin must remain segregated, fully-backed, and untouchable by banks' proprietary trading desks. Regular proof-of-reserve audits must be mandatory, with severe penalties for violations.
This isn't about stifling innovation - Bitcoin itself is the innovation. This is about preventing predatory banking practices from corrupting its fundamental properties. Countries that grasp this reality first will thrive. Those that allow banks to treat Bitcoin like their fractional reserve plaything will learn a harsh lesson in mathematical inevitability.
The choice is clear: embrace #bitcoin 's inherent properties or suffer the consequences of trying to force it into the very system it was designed to replace.
Read preston (npub1s5y…6q7z) ‘s article it’s by far the richest article I’ve read on the topic so far. The link is in his note below.
quoting note10gn…eu0fAn article I wrote on why Bitcoin rehypothecation should be illegal for TBTF banks now that SAB 121 was rescinded. And yes, I know, Bitcoin doesn't need laws. But I also know that all your grandmas will probably have exposure to Bitcoin through an ETF. So this is for all your grandmas.
https://egodeath.capital/blog/too-big-to-fail-banks-amp-bitcoin-custody