This Week in Alternative Investments - June 9th, 2023

Author

Adam Katz
June 09, 2023

The SEC sued crypto exchanges Coinbase and Binance (Coinbase CEO Brian Armstrong and Binance CEO Changpeng “CZ” Zhao)

Headlines

Bite sized market updates

The SEC sued Coinbase and Binance. The two largest crypto exchanges in the world are being accused of securities law violations.

Venture capital giant Sequoia is splitting into three firms. The company is breaking into separate firms for the U.S./Europe, China and India/Southeast Asia.

Two precious gemstones sold for $34.8 million each. The “Eternal Pink” diamond and the “Estrela de Fura” Ruby fetched identical amounts at a Sotheby’s auction.

Janet Yellen foresees “issues” with commercial real estate. The Treasury Secretary does think that banks “will be able to handle the strain”.

Portfolio Spotlight

A weekly look behind the scenes of an investment in the Vincent portfolio.

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Smart Humans Podcast

Smart Humans explores the world of alternative investments. From Venture to Collectibles, NFTs to Real Estate, Art to Debt and beyond - we discuss a new world of investment opportunities and the catalysts that impact their demand.

In this episode, Slava Rubin talks with The Riverside Company's Stewart Kohl about managing $15B AUM, doing 900 transactions in Private Equity, and scaling globally.

Market Updates

Major crypto exchanges Coinbase and Binance were sued by the SEC. Coinbase was accused of operating an unregistered securities exchange, with the SEC naming 13 crypto tokens that they believe are securities, and also taking issue with Coinbase’s “staking” program. Binance, and its CEO CZ Zhao are facing similar charges, but are being accused of additional misconduct by the SEC, saying they “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law”. Both exchanges are operating as usual, and after initially falling in the days after the news, Bitcoin’s price has mostly rebounded to last week’s levels.

Sequoia, the most well-known VC firm in the world, is breaking into three parts. The company, best known for its early investments in companies like Apple and Google, will separate into three entirely independent entities. Sequoia Capital will remain in the U.S. and Europe, with new companies HongShan covering China and Peak XV Partners covering India and Southeast Asia. The split is expected to happen no later than March 2024.

Sotheby’s “Magnificent Jewels” auction saw two gems sell for $34.8 million each. The 55.22 carat “Estrela de Fura” ruby set an all-time record for the high auction sale for a ruby and colored gemstone and exceeded its $30 million estimate. Meanwhile, the 10.57 carat “Eternal Pink” diamond fell just short of its pre-auction estimate of $35 million.

Treasury Secretary Janet Yellen thinks there could be “issues” in the commercial real estate market. In an appearance on CNBC, Yellen mentioned declining demand for office space and higher interest rates as potential factors for a drop in values. She did say “while there will be some pain associated with this, that banks should be able to handle the strain.”