Myth Of Money: The War on Yachts
Welcome to this week’s edition of Myth of Money, a weekly newsletter on the digital asset markets read by 12,000+ investors.
Disclaimer: The following is not intended as investment advice. Do your own research.
Greetings from Dubai 🇦🇪
It has been a hectic week of blockchain conferences and dinners. I have had the pleasure of meeting some amazing people and reconnecting with old friends. This is my last week in Dubai before heading to Lagos and Nairobi to check out the new CoinMARA offices. It’s a company dear to me that you will hear a lot more about in the coming weeks. If you are in Africa over the next month, reach out to connect.
The War on Yachts
As sanctions have been heating up against Russia amid the conflict in Ukraine, the United States, the UK, and the EU have been actively seizing yachts belonging to oligarchs to apply pressure on Vladimir Putin.
Some of the largest and most expensive superyachts in the world, including Sailing Yacht A, which is valued at over $500 million, and $120 million yacht Amore Vero, are languishing at ports and shipyards.
"We are joining with our European allies to find and seize your yachts, your luxury apartments, your private jets," US President Joe Biden said in his State of the Union address. "We are coming for your ill-begotten gains."
While it's estimated that Russian-owned superyachts account for just 7 to 10% of the global fleet, they tend to be the most high-profile due to their size and stature.
The current conflict in Ukraine has had a ripple effect on steel and aluminum prices, as well as fuel, all affecting the yacht industry, while many workers on boats are being laid off due to seizures.
Where Are the Yachts Hiding?
The Maldives has emerged as a "safe haven" for yachts in danger of being frozen, and data indicates that some well-known ships are either en route to the Indian Ocean island nation or are already there.
Axioma, a superyacht with ties to another Russian billionaire, has been detained by authorities in Gibraltar, while a group of Ukrainian sailors was seen attempting to block a yacht linked to Roman Abramovich docking in Turkey.
The $455 million 'Flying Fox' yacht linked to Russian oligarch Dmitry Kamenshchik is now stuck in the Dominican Republic after U.S. authorities requested an investigation into the vessel.
Some boats are reportedly heading to Vladivostok in Russia, where they can be fully protected from seizure.
Most notably, the UAE has taken its neutral position in world politics to a new level, with SuperYachts showing up in Dubai and Ras Al-Khaimah, some of which went as far as turning off their radars for the journey (highly illegal) and hiring ‘friendly’ Iranian military ships as escorts to the UAE 🤯 .
Other Sanctions Against Russia
Aside from the yachting industry, Russians are facing sanctions across several verticals, including crypto.
Since the start of the invasion on February 24th, BTC/RUB trading pair increased 10x, while USDT/RUB increased 7x as Mastercard and Visa pulled out of Russia. Google searches of how to convert Rubles to Tether are at an all-time high.
Crypto assets were already widely adopted in Russia, with the Russian government estimating that at least $200 billion worth of crypto and 12% of the overall crypto market are held by Russians. Hundreds of thousands of crypto addresses have been linked to sanctioned Russia-based individuals or entities, and 15 million Russian crypto addresses are involved with illicit transactions.
Switzerland was the first to adopt financial sanctions against Russia. That same day, a Swiss member of parliament filed a criminal complaint against Credit Suisse for potential sanctions violations relating to the destruction of the loan documents of Russian oligarchs, who began moving their billions worth of crypto assets from Switzerland to the United Arab Emirates.
The EU and the US quickly followed suit, freezing centralized crypto accounts belonging to several Russian individuals, many of whom are not on the official sanctions list but have notable names or potential ties to Putin.
Remember - Not your keys, not your bitcoin.
This Week By the Numbers 📈
As the traditional markets are stabilizing, crypto markets are showing no signs of slowing down. Could we see another bull run?
My top three crypto positions this week are:
(1) Bitcoin - digital gold thesis among global instability
(2) Nexo - solid foundation, growing userbase and revenue , and
(3) Fantom - my risky play that feels oversold and has an active community.
Top Stories 🗞
An Arizona city is allowing residents to pay their utility bills in bitcoin (BTC) and ether (ETH) in the latest example of municipal governments embracing cryptocurrencies. Chandler, a Phoenix suburb, on Wednesday said that residents can pay in bitcoin, ether and litecoin (LTC) held in their PayPal (PYPL) accounts. But the city won’t ever touch those coins; its utility payments processor Invoice Cloud will sell it all for fiat, a press release said. City Council member Mark Stewart said in a press release that it’s important to serve residents with the newest technology, such as crypto payments. But it was unclear at press time whether anyone in the city of 250,000 had begun using the option.
A group of U.S. lawmakers says the U.S. Treasury Department may be the right government entity to create a digital dollar – not the Federal Reserve. A new bill introduced Monday would authorize just that. Reps. Stephen Lynch (D-Mass.), Jesús Chuy Garcia (D-Ill.), Ayanna Pressley (D-Mass.) and Rashida Tlaib (D-Mich.) introduced the "Electronic Currency And Secure Hardware Act" (ECASH Act) to direct the Treasury Secretary to develop and issue an electronic version of the U.S. dollar, with an eye to preserving privacy and anonymity in transactions. The electronic dollar, as defined in the bill, would be a bearer instrument that people could hold on their phone or a card. The system would be token-based, not account-based, meaning if someone were to lose their phone or card, they would lose the funds. In other words, it would be like losing a wallet with dollar bills in it.
European Union lawmakers voted today in favor of controversial measures to outlaw anonymous crypto transactions, a move the industry said would stifle innovation and invade privacy. More than 90 lawmakers voted in favor of the proposal, according to documents seen by CoinDesk. The proposals are intended to extend anti-money laundering (AML) requirements that apply to conventional payments over EUR 1,000 ($1,114) to the crypto sector. They also scrap the floor for crypto payments, so payers and recipients of even the smallest crypto transactions would need to be identified, including for transactions with unhosted or self-hosted wallets.
Just when the Bitcoin (BTC) miners helped release the 19th millionth BTC in circulation on Friday, the BTC network’s mining difficulty reciprocated by reaching an all-time high of 28.587 trillion. Bitcoin’s network difficulty correlates to the computational power required to mine BTC blocks, which currently demands an estimated hash rate of 201.84 exahash per second (EH/s). A higher hash rate ensures resilience against double-spending attacks, which is the process of reversing BTC transactions over the blockchain by contributing to at least 51% of the Bitcoin hash rate. With just 2 million BTC left to mine as rewards and an influx of Bitcoin miners from across the world, the BTC network is expected to increasingly grow stronger as it supports the thriving community. It is estimated that the remaining 2 million BTC (out of the total supply of 21 million) will be eventually mined roughly by the year 2140 owing to factors including halving.
Thank you for reading this week’s edition of the Myth of Money.🚀
Until next week,
By Tatiana Koffman
Hi there and thanks for reading. If you stumble upon my newsletter, you will notice that I write about money, economics and technology. I hold a JD/MBA and spent my career in Capital Markets working across Mergers & Acquisitions, Derivatives, Venture Capital and Cryptocurrencies. I believe in empowerment through closing the financial education gap and creating equality of opportunity for the next generation.
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