Earlier this week it was announced that the largest crypto currency exchange in the world, Binance, was under investigation by the U.S. Securities and Exchange Commission (SEC) due to allegations that the CEO of the company known as CZ has been commingling investor assets together and sending them over to a company controlled by Changpeng Zhao the owner of Binance.  The company the commingled assets are reportedly being sent to is Merit Peak Limited which is located in the British Virgin Islands, meaning the assets are being sent outside the United States to avoid prying eyes like the SEC.  This coming on the tail of an announcement by Binance that a feature had been put in place within the exchange that barred investors from withdrawing their crypto currency until after a 10-day holding period that kicks in after purchase has expired.  It did not take long for investors within Binance to become enraged as we have seen how quickly crypto exchanges and commercial banks alike can go belly up, causing their depositors to lose nearly everything if assets are held on an exchange or in a commercial bank.  It would only make sense that investors were displeased to find out that any asset they purchased through Binance would need to be held captive for 10 days before they could pull it out and secure it in a hardware wallet that stays offline.

The reason so many crypto investors are now fearful of what may happen with their assets on Binance after finding out they are potentially being shipped off the exchange and over to a completely unrelated company is because of what happened in December of 2022 with the then largest crypto exchange in the United States, FTX, and how eerily similar this situation sounds to what the CEO of Binance is now doing.  To refresh reader’s memories – in December of 2022 it was found out that Sam Bankman-Fried, the CEO of FTX, had taken nearly all of the $1.8 billion USD investments the exchange received along with user assets and began funnelling the funds to Alameda Research LLC, a company that was controlled by his girlfriend Caroline Ellison.  This money was used to enrich himself, his family, and many of those in his inner circle, while after the scandal broke, a majority of the investors that held crypto currency on FTX lost everything, with Sam Bankman-Fried then fleeing the country to avoid prosecution.

Where this is different from citizens holding fiat currency in the bank is that at least the banking system has been regulated to allow for depositors to be potentially protected by the Federal Deposit Insurance Corporation (FDIC) in the event of a banking collapse.  Albeit, as we have previously covered the FDIC has no where close to enough funds on hand to protect all depositors in the event of a widespread banking failure.  It is reported that the FDIC has around $200 billion in reserves to backstop a banking system with trillions of dollars in deposits – the most resent numbers point to the FDIC having enough funds in reserve to cover just 1.27% OF ALL INSURED DEPOSITS.  Adding to the worry, the FDIC is not transparent about how much money they hold in reserve, leading many to believe it is far less than anticipated.  It is also leads Canadians to believe their version of the FDIC, the CDIC, is in the same position.

All that said, this newsletter is not all doom and gloom as there is a light in the darkness shining bright ready to provide the protection investors on crypto exchanges and depositors within commercial banks are looking for.  That being physical precious metals like gold, silver, and platinum.  Through all the global financial chaos, as we have seen many central banks across the world do the past decade, holding physical precious metals in reserve kept in your own possession provides insurance to your wealth you cannot find with any other asset.  As once you have purchased precious metals and you receive them in-hand, there is NO WAY for any one entity to commingle your metals with those held by another citizen or corporation, meaning you have full control over any wealth held in physical form.  It should come as no surprise that in a world that is quickly moving digital more and more each day, that countries and central banks looking to avoid weaponized USD sanctions or scandal (namely those countries in and looking to join BRICS) are moving to secure gold and silver at an ever-increasing rate.  The beautiful thing about precious metals, is like countries and central banks, everyday citizens have the ability to secure precious metals of their own and hold them wherever the owner so chooses.

If you are someone looking to ensure your wealth has a tangible backstop that is sure to protect the purchasing power you have worked hard to secure, look no further than precious metals coming out of one of the most well-respected and trusted mints in the world today; that being the Royal Canadian Mint.  Below you will find silver in various sizes ranging from 1 to 100 ounces depending on how much fiat currency you are looking to protect.

1oz Canadian Silver Maple Tubes

10oz RCM Silver Bars

100oz Silver Bars