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On October 24, 2022, Coinbase Prime announced entering into a partnership with MakerDao to become a custodian of USD1.6 billion worth of USDC, of which MakerDao is the largest holder. In return, MakerDao will earn a 1.5% reward on its USDC holdings while holding funds with a “trustworthy” institutional custodian. Through this deal, Coinbase regained control of the tokens held by its investors and utilized the tokens for re-lending


Contrary to popular belief, Coinbase is a crypto asset broker/dealer, not an actual exchange. This misunderstanding is not through duplicitous actions of Coinbase, though. The term “cryptocurrency exchange” was most likely originally used by a software developer/tech enthusiast who did not understand the actual meaning of the parlance, and its usage has simply stuck over time.

Broker/Dealer: A broker is an individual or financial services company that enables the trading of assets for other individuals. A dealer is an individual or financial services company that enables the trading of assets for themselves. Coinbase does both of these:

3.21 Coinbase, Inc., which owns and operates Coinbase Pro and Exchange, also trades its own corporate funds on Coinbase Pro and Exchange – Coinbase help site.

Exchange: Exchanges and brokerages are different types of markets with unique functionality. Exchanges match traders, allowing them to execute orders with each other. Brokerages transact with their clients directly.

See  pdf Coinbase/MakerDao USDC Rehypothecation Analysis (1.45 MB) for the full report.

In light of the current events surrounding FTX, Voyager, 2 Arrows Capital, Celsius and BlockFi (among many other centralised trading entities), trust in the crypto market has been deeply affected, and based on our initial understanding of the following factors, the coins BNB and BUSD are considered risky, and the credit quality of Binance cannot be confidently ascertained:

  • It should be noted that the top 10 holders for both coins account for more than 94% of the holding, which suggests that the demand for the coin is low. Notably, of the top 10 biggest holders, Binance holds 97.5% and 93.5% of BNB and BUSB, respectively; This reflects huge concentration risk. Again, Binance mints both of these coins, similarly to FTX and the FTT token.
  • Of USD69.3 billion of the coins held by Binance in total (as far as we were able to ascertain from public sources), coins that they actually mint themselves account for 54.7% (USD37.9 billion), i.e., BNB and BUSD. And considering the concentration risk combined with the fact that they are the world’s largest crypto exchange, they can effectively control the price and hence the (mark-to-market) value
  • Analyzing the recent few transfers made for BNB, astonishingly, Binance made 99.96% of the purchase on significant volume. One more time – the entity that:
    • mints the BNB,
    • controls the largest share of the global crypto trading market,
    • and holds ~98% of the minted BNB (with no backing other than the promise of discounted trading fees on their platform),

likely carries these tokens as assets on its balance sheet to be used as collateral for loans and hypothecation. Think about it! And you thought FTX was bad???

Download our free report to finish reading.  pdf Binance Cursory Forensic Analysis Considering the FTX Collapse…. Uh Oh! (1.77 MB)


Thursday, 08 September 2022 20:42

Enter: The DeFi Leader!

Written by

I'm talking to award winning (i.e., Sundance) Director(s) about what is apparently a captivating story about one man's underdog struggle in finance, technology and crypto against entrenched special interests, both public and private.

In the mean time, please enjoy this feature article from Executive Global.


The Coinbase Global Forensic Analysis is available for free download. Extremely comprehensive at 114 pages, and written in plain English. There are things here that even the company's CEO likely does not know.

Download the  pdf Coinbase Forensic Analysis (5.32 MB)

We have recently produced an addendum our updated views on Coinbase's profitability. We expect both operating and net income losses, as well as the potential for material patent infringement liability. Reference  pdf Coinbase Analysis Addendum July 2022 (350 KB)

TL;DR You can skip past all of this and just Download the full Circle report here-  pdf Circle's USDC Stablecoin Analysis (1.12 MB) .

Bloomberg reports in its Technology section, ‘Terra $45 Billion Face Plant Creates Crowd of Crypto Losers’ and “ ‘Everything Broke’: Terra Goes From DeFi Darling to Death Spiral” wherein they detail the failure of what they (as an old school concern) say are shortcomings in crypto and DeFi. Terra’s problem was very, very simple, yet many either ignore it or fail to understand it. They based their entire system on a methodology that has not proven to work over time, since inception – at least not yet. That methodology is stabilizing digital assets in a “centralized” decentralized market (ex. fractured pricing and liquidity) around a traditional asset that does not exist natively on the blockchain. A shorter way of saying that is algorithmic stablecoin. To my knowledge, and I may be wrong here, every stablecoin that has had significant volume has broken the buck under pressure. Now, physically backed stablecoins have broken the buck as well, but you always have good ole fashion human greed manifested through arbitrage to save the day there. This greed factor works in the opposite direction when it comes to algo coins. This is not a secret hence no one should have been surprised about what happened over there at Terra Labs.

My name is Reggie Middleton, and I’m the storied, founder and patented (US11196566 and JP6813477) creator of DeFi.

I’m here to truly educate you…

Bloomberg also reported in its “Finance” section: “The Crisis at Celsius Is Rocking DeFi and Crypto”. I mention the sections because nuance is actually very important here. Crypto, and more to the point, DeFi, is nearly purely technology and IP driven. It is not finance, it is technology – a technology that can be used to dramatically improve finance, but technology, nonetheless. Those that fail to understand this are quite likely toing to get their $sses handed to them over time. Further to the title of the article, this has nothing to with DeFi. It is CeFi (centralized finance, yes – that traditional stuff) which is rocked by this scandal, and it is CeFi which funds, operates and is most effected by the profligate consumption of risk over reward that is common between all three of the aforementioned articles, the extant and current news cycle and unfortunately, this report as well.

The media is not anxious to report the truth and facts, for if it was you would have heard of me a long time ago. The negative and unproven allegations against me actually do catch wind in the media, but the proven and positive accomplishments haven’t been covered since 2014, write about the time I invented DeFi - which is also quite unfortunate, Draw from that what you may. I digress, thus back to the topic at hand and the tenor of the Bloomberg articles…

Reference the latest funding rounding Circle Internet Financial – a prominent crypto company that issues the number two stablecoin in the industry, above that of the recently demised UST from Terra labs They are similar in operations to Celsius, BlockFi, Genesis Trading, etc. in that they use the products of DeFi technology to conduct CeFi and TradFi (traditional finance) business. What’s wrong with that? Well, imagine tacking a high-powered Tesla Plaid motor onto a horseshoe, then writing articles about the shortcomings of electric care technology when the horse breaks its leg! Yep!

Now, note that DeFi protocols, which are purely (or at least, they’re supposed to be) smart contract driven, are humming along just fine.

This goes to show that the media, the management and above all, the regulators, still have no clue as to what this space is about.

It is about technology and IP, just like the internet in 1995. No one should be trying to make IP packets securities and tradeable, speculative SEC-bait, and doing so now will not work any better than doing so then.

Download the full Circle report - pdf Circle's USDC Stablecoin Analysis (1.12 MB) .

Note, this report was researched and completed in around 24 hours. If you think it is hard hitting, wait until you see our upcoming Coinbase report. Brrrr....

Here are some timely tidbits for those who simply can't wait to read good stuff!


As pdf  per Veritaseum’s earlier report prediction (1.68 MB)  that the margins would decrease and the Company would incur losses, the Company incurred a loss of USD114 million even after excluding all supposedly non-recurring the above items.  pdf here for the original (1.68 MB) , full forensic analysis, and click here for  pdf Block Financial Highlights Q1 2022 Analysis (597 KB) .


This is out inaugural public company crypto analysis. Many do not realize that Block, Inc, formerly Square, is a full fledged crypto company with 57% of its 2021 revenues coming from Bitcoin. Its bitcoin contribution to revenues is rapidly increasing, and is likely to be around 70% within a quarter or two barring a dramatic correction. You can download the report here:   pdf Block, Inc, Forensic Analysis, w/ Patent & IP Deep Dive (1.68 MB)

Here are some snippets that I think you will find of interest. 


The patent “Devices, Systems and Methods for Low Trust and Zero Trust Transfers”, was recently issued by the USPTO (patent number US11196566 in the world’s largest economy) and the JPO (patent number JP6813477B2 in the (world’s 3rd largest economy).

Reggie Middleton was first in enabling the conditional transfer of value over any arbitrary distance using nearly any network connected computing device, without a middleman or authoritative 3rd party, and without the need to trust your transaction party. Further, due to this invention, counterparty risk and credit risk has been either eliminated or minimized via use of the immutable attributes of blockchain and DLT technology.

These patents represent foundational technology in the realm of value transfer through a distributed ledger. Mr. Middleton and his team look forward to using these technologies to expedite the entrance of the age of Peer-to-Peer Capital markets where anyone can trade nearly anything in any amount directly with anyone else, anywhere, without middlemen and rent seekers.

The aboriginal name of this invention was “Peer-to-Peer Capital Markets”, but it is better known today by the moniker of its most popular subset, “DeFi” – or “decentralized finance”, which was discovered in 2013 by Reggie Middleton, the primary inventor.

In the globally leading economies, where patents have been attained, as well as those entities that operate using the invention with and through them, it is Mr. Middleton’s opinion that patent protection now exists over:

  • devices used to transfer conditional value through distributed ledgers, i.e., blockchains (such as certain uses of the ubiquitous virtual machine, or VM)
  • systems used to transfer conditional value through distributed ledgers, i.e., sidechain implementations to platforms such as Bitcoin and similar scaling improvements to Ethereum (which the invention predates) and other blockchains; and
  • methods used to transfer conditional value through distributed ledgers, such as certain implementations of On-Demand Liquidity (ODL), swaps and lending facilities, certain asset-backed and stable tokens, letters of credit and DLT insurance schemes.

Reggie Middleton, the inventor and founder of the technology in question, states, “It has been a long road since 2013 - fraught with accusations of fraud regarding the validity of our IP, regulatory ambiguity, rampant discrimination and extremely inequitable treatment of the Veritaseum project and its principal(s). We ran into new versions of an old paradigm - the old boy’s network, as well as lacking equitable access to capital and distribution. None of this prevented the inevitable - the next evolutionary step in commerce and business – the development of the foundational technology known as P2P Capital markets and DeFi. I am uber-excited! We’re pulling off an American success story, despite the odds!”

“How did we get this far? Embracing – versus fearing – a massively disruptive, value creating, progressively disintermediating vision combined with good old hard work, perseverance and integrity. Looking back at our marketing documents from 8 and 9 years ago, we are delivering on our promises, despite the odds and immensely powerful naysayers. Where Wall Street and Silicon Valley view success in the world 90 days at a time, we look at world progress in terms of decades.”

Middleton continues, “Case in point – P2P capital markets encompasses so much more than mere finance. Transferable capital has three major components:

  • Financial capital, i.e., stocks, bonds and currencies
  • Human capital, i.e., intellectual property, such as the patents in question, human capital or political capital
  • Natural capital, i.e., commodities, forestry and land”

P2P Capital Markets facilitate the ability to trade and distribute all of these pillars of the economy on the most sophisticated, yet most direct, platform the world has seen. Humankind Is essentially being reintroduced to the concept of direct barter, but for the digital age.

VERI tokens are in consideration as a discount mechanism for the licensing of the use of the IP. There are only 2 million left in circulation after adverse litigation.

The VERI community has been active in the support of Veritaseum, forming (independently from Veritaseum and Reggie Middleton) a DAO (distributed autonomous organization) tasked with researching IP licensure prospects from around the world.

For more information on the community, visit Veritaseum Community Telegram group

Tweets of interest"


Friday, 23 April 2021 09:22

Hex Forensic Analysis and Valuation

Written by

Hex is easily, the most controversial crypto analysis project the Veritaseum research team has performed to date. This analysis is sure to make some waves. It contains a project overview, detailed project description, a strengths section, risks and liabilities and a token valuation. The "Risks and Liabilities" section is sure to turn some heads.

Here's a preview of the contents...

 You may download the full document for free here:  default HEX FORENSIC ANALYSIS and VALUATION


Importantly, it should be noted that we are not declaring HEX a Ponzi scheme. We are not lawyers, and such a declaration requires a legal conclusion better suited to be resolved by the courts. However, from a forensically analytical investor’s perspective, this issue is deserving of very careful consideration to avoid unanticipated events that can severely affect an investment. Below, please find an illustration of a hybrid Ponzi/Pyramid scheme, with characteristics of a typical Ponzi scheme on the right and the characteristics we perceive to be inherent in HEX on the left.

 It is common for many to conflate the terms “Ponzi scheme” and “pyramid scheme”. A Ponzi scheme, as noted above, involves a promoter who has no real investment opportunity. The promoter simply collects payments from a stream of investors, promising them all the same high rate of return on their investment.

People have been asking me, "How did you manage to score such a monumental crypto patent before all of these billion and  trillion dollar companies?". The answer is actually quite simple. I understood what crypto and blockchain were, early on.

These videos were all made in the first week of 2014 - over 7 years ago - before the birth of Ethereum!

Foresight and understanding enabled me to see what many others couldn't or didn't. That was back in 2013. Fast forward to 2021, and some of the biggest names on Wall Street still don't have a clue. This means that I still have a distinct advantage!

Reuters reports: Bitcoin is 'economic side show' and poor hedge against stocks: JP Morga

For one, you know there's a problem if someone is trying to value a paradigm shifting, inter-industry protocol by using its "production costs"! 

It shows a blatant misunderstanding of how platform-based, paradigm shifts behave - or even of what they are.

Let's take a look at using that logic as applied to the last protocol-based paradigm shift.

What is the "production cost" of the Internet? We can back into that by quantifying the complete operating costs of those entities that actually supply the Internet.

  1. The Blended Telecomm net profit margin is 8%
  2. Global broadband revenues are $395B (alternative source).
  3. Thus, rough, all-in cost of production is about $363B ((199% - 8%) * $395B).

This is the Internet Protocol's applied production cost (the cost to actually use the value of the protocol in real life) - $395B.

Now, how much is the Internet worth? A common sense view...

At a glance

  • The value of the internet is difficult to assess, but economists believe its services are worth much more than the cost of internet subscriptions.
  • It presents a significant consumer surplus, which is the gap between how much something is worth to us and how much we pay for it.
  • Deeply ingrained in society, it is almost impossible to put a monetary value on the internet.

The internet became a global commercial network in the 1990s. Less than three decades later, it is everywhere. Now that we’ve created it and come to rely on it, we inevitably wonder: what is it worth?

Well some studies say in excess of $10 trillion, others $7.8 trillion - all account for.... just the US! As the US is roughly 20% of global GDP, multiply that by 5, and.... you will find that $40 to $50 trillion is a lot more than the cost of production at $395 billion. But wait...

As excerpted from "How Much is the Internet Worth?"

... Most recently, yet more economists – this time Erik Brynjolfsson, Avanish Collis and Felix Eggers – tried yet another tack: in 2017, they asked people already on the internet whether they would give up a particular internet service in return for money.

On average, respondents said they would forgo services such as search engines for US$17,530, email for US$8414 and maps for US$3648.

This study tells us a lot about what people value most about the internet. It also gives us a figure for internet consumer surplus across the US: almost US$8 trillion a year in an economy with a US$20.5 trillion economy.

Source: Internet Association data from BEA.

Source: Internet Association data from BEA.

 Indeed, a real-world example now shows what happens when you remove internet access. India’s government turned off internet access in Muslim majority Kashmir in August 2019 in a bid to reduce public protest. The effect even in this poor region was immediate: pharmacies quickly began to run out of medicine; students could not study; news about the region dried up, even within the region itself. The New York Times quoted one local as saying: “There is no life without internet, even in Kashmir.”

At this point, Greenstein says, valuing the internet is a task for which economics lacks the tools.

“It’s no longer a partial equilibrium,” he explains. Or in plainer English: “It’s not a well-grounded question anymore.”

The internet, it seems, is now too deeply ingrained in our society to be assessed with mere money.

Why am I comparing the Internet to Bitcoin? Because I truly understand what Bitcoin, distributed ledger protocols, and the crypto industry are really about. It's the underpinnings of a global value transfer network that has the real potential to easily dwarf the Internet Very much like the Internet exists as the result of its underpinnings in information transfer protocols (IP, or Internet protocol), it is a utility with unprecedented global reach and ability.

It is not a commodity, nor an investment or a security. It is much too monumental to be measured in mere materialistic, one-dimensional Wall Street parlance. Big banks, regulators, investors, the media - many have this all wrong. This is how I was able to score the patent. I knew what it was that I was patenting., while nearly everyone else was looking at price charts and thinking money remittances. Granted, that was almost 8 years ago. Fast forward to today, have the big investment houses learned their lesson?

The Ultimate Flip Flop: JP Morgan Validates Cryptocurrency › i-told-you-jp-morgan-phil-nagy
Feb 21, 2019 — I hate to say, “I told you so”, but JP Morgan…I told you so. They just announced that they're creating their own cryptocurrency to use in house ...

JP Morgan Continues Crypto Flip-flop Amidst Square's $50M ... › 2020/10/16 › jp-morgan-continues-cry...
Oct 16, 2020 — The latest statement by JP Morgan on the price of Bitcoin has left multiple in dilemma. But is this something to worry about?

JPMorgan Completes Surprise Bitcoin Flip—And Calls A Price ... › sites › billybambrough › 2020/06/13
Jun 13, 2020 — JPMorgan, one of Wall Street's biggest banks and up until recently an outspoken bitcoin critic, has changed its tune on the world's number one ...
Missing: flipflop ‎| Must include: flipflop

JPMorgan Flip-Flops Again, Says Bitcoin May Hit ... - LaptrinhX › jpmorgan-flip-flops-again-says-bitcoin...
Jan 5, 2021 — Back at the start of November, JPMorgan quant NIck Panigirtzoglou - perhaps tasked with being the skeptic in-house bitcoin strategist ...

zerohedge على تويتر: "JPMorgan Flip-Flops Again, Says ... › zerohedge › status
Jan 4, 2021 — JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 "But Such Price Levels Would Be Unsustainable" ...

Bitcoin May Never Go Above $ 40,000 Again, JP Morgan ... › CryptoCurrency › comments › bitco...
Jan 27, 2021 — 1.7m members in the CryptoCurrency community. The official source for CryptoCurrency News, Discussion & Analysis.


JPMorgan Flip-Flops Again, Says Bitcoin May Hit $100,000 ... › jpmorgan-flip-flops-again-says-bitc...
Back at the start of November, JPMorgan quant NIck Panigirtzoglou - perhaps tasked with being the skeptic in-house bitcoin strategist - predicted that based on ...


In the meantime, JP Morgan advisory customers, with friends like these, who needs enemies???.


Now, I'm not a Bitcoin maximalist, nor do I even think that Bitcoin is the most valuable crypto, but that doesn't mean that I will just sit back and ignore the spread of misinformation! If you want to know what I'm into, then just Imagine having the keys to the internet back in 1995. Well, that's where I feel we are in 2021, with the same Luddite movement acting the role o f the naysayer! For my take, read "A Most Powerful Invention Comes to Life"


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