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Newsletter: Coinbase calls the shots in the Senate, former New York City Mayor Eric Adams faces rug pull allegations, and a crypto executive is breaking up with Trump

https://www.citationneeded.news/issue-99/

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Citation Needed

Issue 99 – They’ve bought themselves a Congress

Coinbase calls the shots in the Senate, former New York City Mayor Eric Adams faces rug pull allegations, and a crypto executive is breaking up with Trump

2qx

@2qx@mastodon.social replied · yesterday

@molly0xfff

If it were technically possible to build a fully collateralized yield app on an old scalable L1 crypto project, then stablecoin issuers would be compelled to offer yield to remain competitive.

Perhaps Armstrong just understands something the Senate Banking Committee doesn't.

Molly White

@molly0xfff@hachyderm.io replied · yesterday

The crypto lobby wrote their dream bill. Senators proposed some amendments. Coinbase tweeted their disapproval, and Senate Banking Chair Tim Scott immediately canceled the markup. When you spend $130M, you expect to get exactly what you want.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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Last Wednesday afternoon, Coinbase withdrew its support for the Senate’s draft market structure bill, citing concerns about limits on tokenized stocks and stablecoin rewards, burdensome requirements for defi protocols, and excessive authority granted to the SEC.1 Within hours, Senate Banking Committee Chair Tim Scott (R-SC) canceled the markup hearing scheduled for the following day.

While mainstream news sources are often hesitant to draw cause and effect between two suspiciously timed events, it was too overt even for them, with the New York Times writing that Coinbase had “scuttled” the vote.2 Coinbase further emphasized its degree of control over the Senate when CEO Brian Armstrong stated in an interview with CNBC, “We’ve got a chance to do a new draft and hopefully get back into a markup in a few weeks” — speaking as if Coinbase, not Congress, controlled both the drafting process and legislative calendar.

This is nothing new — just the latest demonstration of the crypto industry’s power over Congress after it spent over $130 million installing allies in the 2024 election. Within weeks, House Agriculture Committee Chair GT Thompson (R-PA) made the new power dynamic explicit when he said how crypto legislation was being drafted in “tripartisan” fashion, with the crypto industry forming the new third political wing of Congress [I76].

In an alternate universe, Congress might be focused on passing laws that don’t elevate the interests of corporations and oligarchs above the everyman. Ones that ensure the stability of the American financial system, protect consumers, address officeholder ethics concerns, and prevent financial crimes. Sadly, in this universe, lawmakers are primarily concerned with satisfying the demands of their newest and most generous campaign contributors. Senate Banking Ranking Member Elizabeth Warren (D-MA) told Politico, “These are folks who think that when they’ve bought themselves a Congress, then they expect it to behave the way they say.”3 After a year of this Congress, it would be hard to argue they’re wrong.

Don Hawkins - W7DAH

@donhawkins@mastodon.social replied · 18 hours ago

@molly0xfff
Welcome to the Corporatocracy run by Tech-Bros.

Havyhh2

@havvyhh2@mas.to replied · 21 hours ago

@molly0xfff Tim Scott exemplifies the spineless, eager to capitulate to corruption while totally abandoning his oath of office to represent the interests of America and his state constituents style of MAGA-Senator

Molly White

@molly0xfff@hachyderm.io replied · yesterday

But Coinbase’s flex may have caused something of a power struggle with the White House. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” said a source close to the Trump administration.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

This brazen display seems to have caused something of a power struggle between Coinbase and President Trump, who was reportedly infuriated by Coinbase’s surprise “rug pull”. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” a source close to the Trump administration told journalist Eleanor Terrett, adding that the White House was considering yanking its support for the bill if Coinbase can’t come up with a satisfactory compromise proposal on stablecoin yield.13 Armstrong later objected to Terrett’s reporting, claiming “The White House has been super constructive here”, but confirming that the White House had directed Coinbase to “go figure out a deal with the banks”.14

Molly White

@molly0xfff@hachyderm.io replied · yesterday

Former NYC Mayor Eric Adams is fending off rug pull allegations after a wallet connected to his “NYC Token” project extracted almost $1 million in liquidity less than an hour after launch, crashing the token price.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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Former New York City Mayor Eric Adams launched “NYC Token”: half memecoin, half social experiment to determine how many glaring red flags you can stuff into one pitch and still convince people to buy. A figurehead who Trump had to rescue from federal bribery and corruption charges: check. An unidentified team running the project: check. Massive quantity of tokens to be held back in “reserve” with no details around custody, access control, or planned use: check. Pointers to documentation that doesn’t exist: check.c Lofty and numerous promises — educating kids about crypto, combatting “antisemitism” and “anti-Americanism” in NYC, and providing financial aid to students seeking higher education — with no specifics whatsoever about how they will fulfill them: check.

With all those red flags flapping in the wind, it’s perhaps no surprise that the token launch quickly turned into disaster [W3IGG]. Almost immediately after the token was launched, the project’s liquidity providerd withdrew more than $2.4 million in USDC from the one-sided liquidity pool,e causing the token price to plummet by about 85%. Though the project team later claimed they had been “rebalanc[ing]” liquidity, they only returned $1.5 million to the liquidity pool, with more than $900,000 of it left sitting in the LP wallet. That same wallet then began making automated purchases of $NYC every minute, which the team claimed is part of a TWAP (time-weighted average price) buying strategy. This is a strange explanation that doesn’t address why the third-party liquidity was withdrawn, why it was only partially returned, or why the remaining USDC is now being used in a way that seems intended to create the appearance of sustained demand without any new money actually coming in.

Since then, Adams has been fighting off allegations that he “rug pulled” the token. It seems too early to tell on that front, as the unaccounted funds are still sitting in the crypto wallet — perhaps to be restored to the liquidity pool, or perhaps to be withdrawn once whoever controls the wallet thinks attention has moved elsewhere. Some have speculated that this was all a way for Adams to surreptitiously accept belated bribes, I guess by having a would-be briber purchase a large amount of the token, and then extracting the funds as we saw. This is certainly possible, I suppose — there are some wallets that spent tens or even hundreds of thousands of dollars to purchase the token. But with Adams out of office and no longer needing to file disclosures, I don’t see why he’d go about it this way rather than just quietly creating a wallet and having people transfer crypto to him directly.

Neither Adams nor the NYC Token team responded to questions about the removal of liquidity, the automated buying strategy, or details about the token, its team, or its plans to follow through on its promises. However, shortly after I sent the questions, the automated token buys stopped. — Since then, Adams has been fighting off allegations that he “rug pulled” the token. It seems too early to tell on that front, as the unaccounted funds are still sitting in the crypto wallet — perhaps to be restored to the liquidity pool, or perhaps to be withdrawn once whoever controls the wallet thinks attention has moved elsewhere. Some have speculated that this was all a way for Adams to surreptitiously accept belated bribes, I guess by having a would-be briber purchase a large amount of the token, and then extracting the funds as we saw. This is certainly possible, I suppose — there are some wallets that spent tens or even hundreds of thousands of dollars to purchase the token. But with Adams out of office and no longer needing to file disclosures, I don’t see why he’d go about it this way rather than just quietly creating a wallet and having people transfer crypto to him directly. Neither Adams nor the NYC Token team responded to questions about the removal of liquidity, the automated buying strategy, or details about the token, its team, or its plans to follow through on its promises. However, shortly after I sent the questions, the automated token buys stopped.

Meanwhile, Edward Cullen — whose Innovate NY PAC spent nearly $100,000 on AI-generated flyers and other materials to back Andrew Cuomo last October after his last-minute crypto industry appeal — is back. Cullen claims that he pitched the NYC Token idea to Adams last year, and that Adams stole it from him, then “butchered” it for “short-term gain”. Cullen is now threatening to sue, although I’m not sure on what grounds.40

Havyhh2

@havvyhh2@mas.to replied · 21 hours ago

@molly0xfff ...this is a stunning story...the trumpo-crypto-corrupto model is widely, wildly in full gallop across America.....amazing part is that people still, as Molly points out, in the face of enormous flapping red flags, put money into these schemes....

fedithom

@fedithom@social.saarland replied · yesterday

@molly0xfff

Crypto dudes doing crypto dude things ... who'd have thunk ...

It's Pronounced DEETS

@PaulDitz@todon.eu replied · yesterday

@molly0xfff I know this is probably a dumb question, but why in the world would anyone actually invest money in these pretty obvious scams?

Molly White

@molly0xfff@hachyderm.io replied · yesterday

@PaulDitz There is a common sentiment among crypto traders of “I know this is a scam, but if I can just get in and out quickly enough, I can make some money off the other suckers”

It's Pronounced DEETS

@PaulDitz@todon.eu replied · yesterday

@molly0xfff Amazing. Thanks for answering.

Molly White

@molly0xfff@hachyderm.io replied · yesterday

Trump has claimed “the leaker” has been jailed, seemingly referring to a group of wallets that made large profits from Polymarket bets with apparent advance knowledge of US military action against Venezuela. One such wallet profited around $410,000.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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In prediction markets
After the US military kidnapped Venezuelan President Nicolás Maduro, observers were quick to notice that several Polymarket accounts had all placed large bets on a market pertaining to whether Maduro would be removed from power by the end of January, and other Venezuela-related markets. One account began placing bets in late December, and continued to add thousands of dollars to its positions right up to the day Maduro’s capture was announced, ultimately purchasing $32,000 in shares. The trader profited $410,000 when their predictions came to pass, leading many to believe they had access to inside information.29 — In prediction markets After the US military kidnapped Venezuelan President Nicolás Maduro, observers were quick to notice that several Polymarket accounts had all placed large bets on a market pertaining to whether Maduro would be removed from power by the end of January, and other Venezuela-related markets. One account began placing bets in late December, and continued to add thousands of dollars to its positions right up to the day Maduro’s capture was announced, ultimately purchasing $32,000 in shares. The trader profited $410,000 when their predictions came to pass, leading many to believe they had access to inside information.29

Table of closed Polymarket bets Maduro out by January 31, 2026? 436,759.6 Yes at 7¢ Total bet $32,537.28 Amount won $436,759.61 $404,222.33 (1,242.34%) Trump invokes War Powers against Venezuela by January 31? 5,371.7 Yes at 5¢ Total bet $249.99 Amount won $2,714.64 $2,464.65 (985.91%) Market icon Will the U.S. invade Venezuela by January 31, 2026? 17,857.9 Yes at 6¢ Total bet $999.99 Amount won $3,143.26 $2,143.27 (214.33%) US forces in Venezuela by January 31, 2026? 1,197.8 Yes at 12¢ Total bet $146.00 Amount won $1,197.77 $1,051.78 (720.4%)

Days later, Representative Ritchie Torres (D-NY) introduced a bill seeking to prohibit elected officials and other politicians and staff from participating in prediction markets connected to “government policy, government action, or political outcomes” when they possess or could obtain inside information.30

Then, on January 14, Trump said in a press conference that “The leaker [on Venezuela] has been found and is in jail right now” and would likely face a long sentence. He also noted that “there could be some others”.31 The identity of the leaker, how they gained access to sensitive information, and whether they were also the person who placed the bet has not been disclosed, nor has the charge on which they’ve been jailed. — Days later, Representative Ritchie Torres (D-NY) introduced a bill seeking to prohibit elected officials and other politicians and staff from participating in prediction markets connected to “government policy, government action, or political outcomes” when they possess or could obtain inside information.30 Then, on January 14, Trump said in a press conference that “The leaker [on Venezuela] has been found and is in jail right now” and would likely face a long sentence. He also noted that “there could be some others”.31 The identity of the leaker, how they gained access to sensitive information, and whether they were also the person who placed the bet has not been disclosed, nor has the charge on which they’ve been jailed.

Havyhh2

@havvyhh2@mas.to replied · 21 hours ago

@molly0xfff ...if it oozed from trump's mouth, assume,it is a lie, fabrication, and/or misinformation. And in these kinds of financial-crypto-trumpo-boondoggles, assume the grift put something into his pocket....
This kind of thing, just btw, should be front and center for a@real DOJ to be investigating, rather than a group of legal protestors in Minneapolis.....

Dave3307

@Dave3307@beige.party replied · yesterday

@molly0xfff I assumed the bettor was Barron

Molly White

@molly0xfff@hachyderm.io replied · yesterday

The Trump family’s World Liberty Financial crypto project has applied for a national trust bank charter. If approved, the Comptroller of the Currency — who serves at the pleasure of the President — will be expected to enforce the law against Trump’s own company and its competitors.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The Trump family’s World Liberty Financial crypto company has announced that they have applied for a national trust bank charter with the Office of the Comptroller of the Currency, through a proposed entity called World Liberty Trust Company. Senator Elizabeth Warren quickly sent a letter to Comptroller of the Currency Jonathan Gould to urge him to delay the review of World Liberty Financial’s application “until President Trump divests from WLF and eliminates all financial conflicts of interest involving himself or his family and the company.” She wrote:27

“If the application is approved, you would promulgate rules that influence the profitability of the President’s company. You would also be responsible for directly supervising and enforcing the law against the President’s company—and its competitors. You would be in charge of these functions while serving at the pleasure of the President. In effect, for the first time in history, the President of the United States would be in charge of overseeing his own financial company.” — The Trump family’s World Liberty Financial crypto company has announced that they have applied for a national trust bank charter with the Office of the Comptroller of the Currency, through a proposed entity called World Liberty Trust Company. Senator Elizabeth Warren quickly sent a letter to Comptroller of the Currency Jonathan Gould to urge him to delay the review of World Liberty Financial’s application “until President Trump divests from WLF and eliminates all financial conflicts of interest involving himself or his family and the company.” She wrote:27 “If the application is approved, you would promulgate rules that influence the profitability of the President’s company. You would also be responsible for directly supervising and enforcing the law against the President’s company—and its competitors. You would be in charge of these functions while serving at the pleasure of the President. In effect, for the first time in history, the President of the United States would be in charge of overseeing his own financial company.”

don

@donlamb_1@mastodon.online replied · yesterday

@molly0xfff Where's Thomas Becket when we need him?

FurballsNHairballs

@ChrisHolladay@mastodon.social replied · yesterday

@molly0xfff
LOL

Molly White

@molly0xfff@hachyderm.io replied · yesterday

The Senate has confirmed the CFTC’s new Chairman, Michael Selig. He has very minimal regulatory experience, and is now the only Commissioner on what is supposed to be a five-person bipartisan Commission.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The CFTC has a new Chairman now that the Senate has confirmed Michael Selig. Selig’s background is primarily in private practice representing crypto clients like Paradigm and eToro.20 In 2025, he briefly served as chief counsel for the SEC’s crypto task force, but besides that, Selig has extremely minimal regulatory experience — particularly in the many non-crypto markets the CFTC is expected to regulate.

Selig is also the only commissioner at the normally five-person CFTC, as Trump has seized control of regulators by appointing his own loyalists without appointing replacements for departing commissioners. Acting Chair Caroline Pham had previously announced she planned to leave when a chairman was appointed, and she has followed through on that promise. She immediately rocketed through the revolving door right into the lap of the crypto firm MoonPay, where she is now chief legal and administrative officer.21 You might recognize MoonPay as a frequent Trump crypto partner, helping process payments for both the $TRUMP memecoin and for Melania Trump’s 2021 NFT projects. You also might remember that they snagged that lucrative Trump memecoin partnership only weeks after attempting to make a $250,000 contribution to Trump’s inaugural committee, but got scammed instead [I88]. — The CFTC has a new Chairman now that the Senate has confirmed Michael Selig. Selig’s background is primarily in private practice representing crypto clients like Paradigm and eToro.20 In 2025, he briefly served as chief counsel for the SEC’s crypto task force, but besides that, Selig has extremely minimal regulatory experience — particularly in the many non-crypto markets the CFTC is expected to regulate. Selig is also the only commissioner at the normally five-person CFTC, as Trump has seized control of regulators by appointing his own loyalists without appointing replacements for departing commissioners. Acting Chair Caroline Pham had previously announced she planned to leave when a chairman was appointed, and she has followed through on that promise. She immediately rocketed through the revolving door right into the lap of the crypto firm MoonPay, where she is now chief legal and administrative officer.21 You might recognize MoonPay as a frequent Trump crypto partner, helping process payments for both the $TRUMP memecoin and for Melania Trump’s 2021 NFT projects. You also might remember that they snagged that lucrative Trump memecoin partnership only weeks after attempting to make a $250,000 contribution to Trump’s inaugural committee, but got scammed instead [I88].

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