Lawsuit Filed against Musk

Elon Musk is making crypto news again, but not in a good way. He and his companies are being sued to the tune of $258M for allegedly driving up the price of DOGE, knowing full well it had no value. Not that we’re Musk apologists, but, don’t invest more than you can afford to lose, right?

Today's Topics:

• Musk charged for pumping DOGE

• Proposed Bitcoin law struck down by Panama President

• Deeper dive into Three Arrows

• Quick Links

Musk, SpaceX, and Tesla Hit with Lawsuit

Based on reports, Musk and two of his companies - Tesla and SpaceX - have been served with a lawsuit for $258B. The charges state that Musk is part of a racketeering scheme that pumped Dogecoin, despite knowing the coin was useless. Defendants argue that Musk and others “falsely and deceptively claim that Dogecoin is a legitimate investment when it has no value at all.”

Umm, what? How can anyone seriously claim they didn’t know DOGE is a meme coin? It’s plastered all over crypto websites. Its Wikipedia page literally says it started off as a joke. Sure, the project has evolved, but are we really going to blame a celebrity for poor investment advice? Can we blame Tom Brady if we lose money on Crypto.com?

The suit was filed by Keith Johnson, who is seeking $86 billion in damages and $172 billion in triple damages. He also wants Musk, SpaceX, and Tesla to cease and desist when it comes to promoting DOGE, a coin which interestingly enough, both SpaceX and Tesla will soon accept as a form of payment.

Not so useless now, is it?

Panama’s Crypto Law Bill Struck Down by President

President Laurentino Cortizo of Panama vetoed a crypto bill today that would have regulated Bitcoin and legalized DAOs (Decentralized Autonomous Organizations) in the country. While the bill isn’t dead, many within the Panamanian government believe it is a setback for financial inclusion and innovation.

Cortizo made it clear that he wants a crypto bill that will support global regulations for AML (Anti-Money Laundering). This would suggest that if the Panamanian Congress can come up with a compromise, Cortizo might be willing to sign a crypto bill. Doing so would make Panama the second Latin American country to encourage its citizens to use Bitcoin.

Of course, the first country to do so was El Salvador. However, Panama’s bill simply gives businesses the choice to accept cryptocurrencies. It wouldn’t make them legal tender.

More on Three Arrows

If you read through yesterday’s Mushroom Alpha newsletter, you are aware of what’s going on with Three Arrows Capital. If you didn’t read it, please go back and do so. Don’t worry. We’ll wait.

Good. Now that you’re all caught up, there’s more to the 3AC liquidation than meets the eye. For starters, it lost A LOT on Terra Luna. Before Terra crashed, 3AC purchased over $500 million in Luna. Those coins are now worth approximately $670.

As the market continues its downward trend, 3AC is getting margin called, which results in the liquidation of assets. If things get this far, it’s going to have a massive impact on the crypto market. One domino has already fallen in Finblox, a CeFi (Centralized Finance) company 3AC invested in. The company has started to pause reward distributions for its users and is changing withdrawal limits as well.

The problem here is that 3AC did a poor job of managing its risk. Despite making very successful investment choices, many of those tokens are locked, which means they’re illiquid, which leaves 3AC in a bad position.

We’re going to keep following the 3AC saga and keep you updated as more info comes out.

Quick Headlines

Everyone deserves a second chance - Play the “Anna Card” and get your NFTs from a convicted felon. It’s proof that things can only go up from here.

Stop blowing smoke up my, well, you know - Solana’s new fee prioritization may cause gas wars but they say it won’t make the exchange more expensive. I guess we’ll find out.

More hiring and more firing - We touched on this a couple of days ago, but it’s still shocking who is cutting back and who is beefing up, despite the bear market.

Investors are getting the cold shoulder - Crypto lender, the Celsius Network, thought it might be a good idea to freeze withdrawals this week.

Encounter of the Exchanges - Binance and Coinbase duke it out on who’s better at trading, growing, and offering the best possible features in today’s crypto market.

Hacks:

You had one job to do - Apparently, we can’t trust Inverse Finance to keep our assets safe. This is the second hack in two months. Ouch.

Stop the madness! - Now we’re dealing with hackers on Metamask stealing seed phrases.  They recommend using a password manager, but will it help? We don’t know.

Hit Reply to let us know how we are doing! We would love to hear from you.

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Disclosure: We are a newsletter for information only. We are not financial advisors nor do we claim to be. Consult your legal, investment or tax advisor. Crypto is risky. Do you own research.