Good morning. Here’s what’s happening:

Prices: Ethereum’s Shanghai upgrade is a few days away, but this isn’t translating into selling pressure because most staked Ether is at a loss.

Insights: In his latest Money Reimagined column, CoinDesk Chief Content Officer Michael Casey argues that the recent backlash against the crypto industry stems from the alleged misdeeds of disgraced FTX CEO Sam Bankman-Fried.

Is a Sharp Move in the Offing?

Good morning Asia.

Bitcoin is opening the Asia trading week up 1.3% at $28,383, while Ether is up 0.5% to $1,863.

The CoinDesk Market Index, a measure of the overall crypto market’s performance, is up about 1%.

“The market leader has traded in a very tight range in the last week, barely moving much. Such consolidation, along with lowering volume, could indicate that a sharp move is around the corner,” Joe DiPasquale, CEO of BitBull Capital, said in a note to CoinDesk.

DiPasquale says that a correction toward $25K would not “break the bullish structure, whereas a move to $30K is likely to face resistance.”

“The market sentiment currently remains positive and we may see select altcoins perform decently if Bitcoin remains in the current range for longer,” he added.

Ether relatively flat performance may allay fears that the Shanghai upgrade, scheduled for mid-week, will bring selling pressure.

As CryptoQuant points out in a research report from February, the majority of ether staked is currently at a loss. Their research shows the average staked ether holder is experiencing an 18% loss on its staked holdings.

“Typically, selling pressure emerges when market participants are sitting on extreme profits, which is not the case right now for the ether that has been staked,” they wrote.

SBF, Revenge and the Future of Global Crypto Leadership

When watching Washington policymaking, it’s worth remembering that governments, like all human organizations, are made up of, well, humans – complicated creatures whose emotions often undermine their capacity for rational decision-making.

Last week, I warned of a dangerous politicization trend in U.S. crypto policy following a barrage of regulatory enforcement actions taken against this industry. I remain concerned about that trend but my view is now slightly more nuanced thanks to the insights of two people with very good D.C. connections. They explained how emotions – specifically anger and embarrassment – played a huge role in driving those policy actions.

It reminded me of the importance of clear, inviolable rules of governance, whether they’re baked into democratic institutions such as the U.S. Constitution, or forged into consensus mechanisms used by open-source software communities, like those attached to blockchain protocols.

Regulation-by-retribution

Among a string of “Thanks Sam” moments these past five months, this one takes the cake. You can argue that the crackdown against Kraken, Coinbase, Paxos, Binance and others was driven significantly by a desire to punish Sam Bankman-Fried, the erstwhile founder of FTX, whose mind-blowingly rapid collapse in November sent shockwaves through the crypto industry.

This is how one of my sources described the mindset of Biden Administration officials, and of lawmakers from both political parties: “You can’t come into their house, slosh that kind of money around, leave politicians with egg on their faces, and not expect to pay a huge price.” He was referring to the fact that before the FTX meltdown, politicians — mostly Democrats but also some Republicans — had been beneficiaries of more than $74 million in political donations from FTX and had forged connections with Bankman-Fried, who’d wooed progressives with his “effective altruism” commitments. (A CoinDesk investigation found that one third of Congress took money from SBF or his associates.)

Find the full story here:

International Monetary Fund meeting

1 p.m. HKT/SGT(5 a.m. UTC): Japan consumer confidence and Eco Watchers survey (March)

8:15 p.m. (UTC): New York Fed President John C. Williams speech

In case you missed it, here is the most recent episode of The Hash on CoinDesk TV:

U.S. Treasury Says DeFi Threatens National Security; MacOS Mystery Over Hidden Bitcoin White Paper

“The Hash” tackles today’s hot topics: The U.S. Treasury Department dropped its first report assessing the risks of decentralized finance (DeFi). Some crypto traders are warning about the market outlook for Shiba Inu dog-themed meme coins. India is planning to rapidly scale its central bank digital currency testing of the digital rupee. Plus, is there a secret Bitcoin maxi working at Apple?

Jump in Shiba Inu Breed-Themed Tokens Is Unsustainable, Crypto Traders Warn: Meme coins have outperformed the broader crypto markets in recent days, but some say profit-taking could reverse the rally.

Bank of England Targets 30-Strong Team for Digital Currency: Report Among the positions available: Digital Pound Security Architect and Digital Pound Solutions Architect.

Sushi DEX Approval Contract Exploited For $3.3M: Developers asked users to revoke contracts as a security measure early Sunday.

Drugs, Erratic Dismissals and Feuding Founders: Behind Bitcoin Marketplace Paxful’s Unraveling: Founded in 2015, Paxful became one of the most popular places to buy bitcoin in Africa and other emerging markets, with more than 200 employees. Behind the scenes, staff took paid trips to music festivals, bosses fought, dismissals reportedly occurred on a whim and the smell of cannabis permeated the office.