Sauron Remains Undefeated

I'm delighted to co-author this note with my friend Brent Donnelly, president of Spectra Markets and FX trader extraordinaire.

Brent is a senior risk-taker and FX market maker. His latest book, Alpha Trader, was published last summer to great acclaim (by me, among others!) and can be found at your favorite bookseller. I think it’s an outstanding read, and not just for professional traders. He publishes a daily (!) note on FX, which you can subscribe to here, and a weekly note on crypto, which you can subscribe to here.

You can contact Brent at bdonnelly@spectramarkets.com and on Twitter at @donnelly_brent. As with all of our guest contributors, Brent’s post may not represent the views of Epsilon Theory or Second Foundation Partners, and should not be construed as advice to purchase or sell any security.

Last April I wrote a note titled In Praise of Bitcoin, which got a fair amount of attention for the first of its two assertions, that Wall Street was transforming Bitcoin into Bitcoin! _TM — just another securitized and sanitized game in the Wall Street casino, with all the revolutionary potential of a bumper sticker.

Bitcoin!_TM doesn’t stick it to the Man … Bitcoin!_TM IS the Man.

But the second of that note's assertions didn't get nearly as much attention, even though I think it's the more important of the two.

The US Treasury is the Eye of Sauron — a gigantic panopticon tower that sweeps the world with its unblinking gaze, seeking out the owners of power, i.e. money.

The US Treasury can’t see Bitcoin. It can, however, see Bitcoin!_TM, and it will not rest until all of crypto has been transformed into Wall Street's securitized and sanitized casino game.

What Treasury did to Tornado Cash and its developers is just the beginning.

Here's Brent to explain ...

The US Treasury sanctioned Tornado Cash on August 8. This has triggered a massive wave of concern, outrage, anger, navel-gazing, disbelief, fear, beard-scratching and scrambling from the crypto community, even as the historic move garners minimal coverage outside the crypto media. The US Treasury press release is here.

Here are some key points: