DTCC puts Wall St. tokenization into production, Kalshi founders face felony charges in Utah

The DTCC, which settles quadrillions in volume, just launched its tokenization service. Meanwhile, we obviously have a lot to talk about in macro with the Fed and GDP and some other big stories in the crypto world. Let's go.

What is up everybody? Welcome to the Daily Wolf on Yahoo Finance. I am your host, Scott Melker, also known as The Wolf of All Streets. Now, this first story is one that seemed unimaginable, literally, two years ago, but we've seen it progressing and it is finally here. Here it is right here.

DTCC tokenization service goes live, marking major milestone in the adoption of digital assets. The DTCC settles all of your stock trades. These are the people famous for greatest hits like T+2 settlement and T+1 settlement. But now, in theory, we will be able to settle our trades, institutions will, uh, in nearly real time because of blockchain and tokenization. So this was announced at the end of last year.

You'll remember, the DTCC got a no-action letter from the SEC that allowed them to move forward with tokenization. They made announcements about working with Canton Network and then later others. Well, this is launching on Canton and their own private B E SU, Besu.

Besu. Besame Mucho. Besu. Besu. It's the name of their network. They're launching that on their network and on Canton, which will start with 34 securities and about 20 partners, but it's the biggest names. JP Morgan, City, Morgan Stanley, Fidelity, and Bank of America. When we talk about adoption

of blockchain, there is no bigger example than the DTCC. Quadrillions. Quadrillions in volume. That's a real number.

Quadrillions, right? It's all coming to blockchain. The question still remains in my mind whether this is the co-option of our technology by Wall Street in a very boring way where it becomes their plumbing and we don't generally benefit from it. But, I think that this obviously is just a massive signal that everything will be tokenized and there will be plenty of ways for us as retail investors to eventually

be able to capitalize from that. I guess if you're a Canton token holder, that would be one way, but we know that the world is going to also tokenize on Ethereum and Solana and that it already is. Now, maybe the biggest story of the day is not necessarily a crypto story, but we know that macro does affect crypto. And the story is that the Fed paused, but apparently nobody told GDP. Here's a series of stories. Fed holds rates steady,

but two officials sought another increase. So we did not have consensus, no unanimous vote this time. There are two Fed chair people who still think that rates should be going up. Now, obviously we got this announcement from the FOMC meeting yesterday, and Fed chairman not Powell, Warsh gave his speech. And then right after that, uh, we got PCE numbers, right? Inflation surges, PCE shows Fed pause on rate hikes unlikely to last while with prices still rising. Last I checked on Kalshi,

Uh, the December meeting, I think was about 90, 80 or 90%. It was wavering on whether we would still see a hike. So clearly just because they paused now does not mean that we are going to get a rate cutting cycle that Trump and others want in the future. It's very likely that we're still going to see rate hikes. Uh if you're wondering for the actual numbers here, PCE core rose 0.3% monthly and 3.1% annually. Annual headline PC inflation was 3.6% versus 3.7% expected. And meanwhile,

while all of that was happening, we got some more economic numbers, if you believe them, cause I don't generally. US economic growth accelerates in third quarter. So we had GDP grew growing 3.4% annualized versus 3.1% expected. So massive growth still even uh in the face of all these other negative numbers. Q2 growth was only 2.2%, which you remember was a huge disappointment. It makes me just nuts.

Like we parse all these numbers daily, quarterly, hourly, monthly, and then you zoom out and none of it ever seems to matter. We were panicking about 2.2% growth last quarter and now we're celebrating 3.4% growth. and that's all because we expected 3.1% growth. and the natural question is, who is we? Who expected that, right? A bunch of economists forecast something, then we see if it's good or if it's bad versus the forecast and that's what the markets determine. Well, guess what?

Inflation's supposed to be 2%, which is also arbitrary by the way. But in theory, if you listen to them, they want inflation to be 2%. So, 3.4%, whether the expectation was 3.1% or whatever. Uh, excuse me, that's the GDP numbers. So inflation at 3.6% versus an expectation of 3.7%, who cares? It's not 2%. It's high. and people are feeling it, and the price of groceries is going up. and by the way, when the price of things go up, they don't generally come back down, even if inflation does. So I'd say that your average person looks at these numbers and goes, I don't care, my steak is really expensive.

And that's what actually matters to them and probably what is going to matter when we come to the uh, midterm elections in just a few days. And by the way, spammers, scammers, politicians, stop texting me! How many spam texts do you guys get a day about elections if you're in the United States? So I have to be up to 50 right now. I don't care, I don't want them. Also, I get texts about guys uh doing tree cutting services in my neighborhood and wondering if I'd like a quote.

By the way, we've been doing lighting at your neighbor's house. Would you like lights? I have lights. Leave me alone. The next story though, is that your bank account now comes with a monthly crypto allowance. Check this out. This is in Australia, which is a real place. Westpac set to $10,000 monthly crypto payment cap from December. Can you imagine?

This is one of the biggest banks in Australia, which is a real place. Um that is telling you that you can only send 10,000 bucks a month to a crypto exchange. 10,000 bucks. What is this? A trading budget for ants? said $10,000. The good news, you can, you can take back as much as you want.

So the bank will only let you send a little bit out because they want to keep the money, but you can send as much back to the bank as you want. So the good news is, when you turn that $10,000 inevitably into a million dollars overnight trading Trump-themed meme coins, you could redeposit that money right back into Westpac. I think this is absolutely absurd. Like who wants a bank that tells them what they can do with their own money, right? Like,

who cares? Like is this bank gonna stop you from taking out 10,000 or $20,000 and buying lottery tickets or taking it to Vegas or whatever the Vegas equivalent is in Australia? Do you guys have a Vegas in Australia? Do you gamble? Is Australia real?

Questions that I have on a morning where I'm tired because I went to the World Series last night. Yeah, but this is an absolutely absurd that a bank should be able to tell you what you can do with your money, where you can send it and how much of it you can do. I would immediately if I was a crypto person, I would boycott that bank, which is in Australia. It's a real country. Westpac is, it's also a continent. Westpac is restricting payments to exchanges here. Uh, back in the United States, Utah is challenging whether Kalshi

can operate there at all. and man, every day I tell you a story like this, this one is banana balls. What are banana balls? Utah files 14 criminal charges against Kalshi and its founders. Says the site breaks the state's gambling laws. Dude, felony charges against the founders of the company for offering Kalshi in Utah. Now, I've told you, right? We have Kalshi and Polymarket and Robinhood, everybody's doing prediction markets.

There's a battle between multiple states and the federal government as to what those contracts entail and whether they're allowed to have them. But now, just because you're the guy who was brilliant enough, who I know, Tarek, shout out, for creating a company, you're now getting charged with a felony for operating in the state when the federal government is telling you to go operate in the state because you're allowed. 12 counts allege online gambling promotion, third-degree felonies. The case contains 14 total counts and specifically names CEO Tarek Mansour and COO Luana Lopez Lara. That's three L's in her name.

Alliterative. Laura Lopez Lara. Great name. Shout out to Laura and her three Ls. Uh, this is just dude, this is, this just breaks my brain. Like, you know, these people created a platform, it's wildly popular and they're just caught up in a massive battle between the states and the federal government. Listen, there's no way these people get charged for felonies because their platform is operating in Utah, which also, also apparently is a real place.

Um, you can ski there. Mormons. Um, sports. But uh, this is just nuts. Like, you know, it's bananas. I remember when the FBI raided Shane, the CEO of Polymarket's house and nothing came of it. Like these things, it's, it's just so broken. Okay, now we're gonna get into very exciting stories that you definitely want to hear about, uh, custody and crypto and AI and hacks and all the fun things that we get to talk about every day. First one.

Google to preview crypto custody security system as AI threats grow. AI threats are growing. We all know it. We all know that self-custody has been broken. Well, this is Google's multi-party compute. It's in private preview and this is for companies. But this is really interesting. So you all know about multi-signature, right? Which is where you store your private keys in multiple places and you need to sign from multiple wallets. That has never been hacked. It's a great solution, but very difficult.

Well, this port, this platform manages signing keys for digital assets, but independent signing parties hold separate key shares, so parts of the key. So it takes multiple parties to come together and sign to create the entire private key to make it secure. But this is backed by Google. This is actually huge news that this has become such a big problem or such a big market, I should say, that Google is focused on this. Parties will jointly produce signatures without assembling the complete private key in one location. Institutions choose how many signing parties must approve a transaction.

Very, very cool. Its documentation list signing support used by Bitcoin, Ethereum. Solana signing support is marked as coming soon. This is not generally available, but this may be the future solution that we've been looking for for custody of Bitcoin safely. Speaking of with Bitcoin, speaking of which, Bitcoin Core themselves are patching weaknesses AI helped uncover in the network software.

AI found a way to crash Bitcoin nodes on Windows and Macs. It's now public. That sounds bad. What happened here is this is that push and pull that we've been talking about where there's the good guys and the bad guys. And the good guys are using AI to patch bugs that they see in advance, and they have that hard decision each time of deciding whether to make that public so people can patch it, but that gives you that window of time when, in theory, hackers could probably exploit you. Uh, nothing burger here because nothing's happened of it, but great to see that they are catching these things that could become problems in advance and sending out the patch.

The next story is our favorite segment. It's called How Not to Invest. Hit it. I'm going to give all That's not it. to invest. How not to invest. The best part is that was a video of Trump saying he's going to give everyone $5,000 that we didn't totally accidentally trigger right there, and I also wouldn't invest in the belief that Trump is going to give you $5,000. He's not. Okay, but here's the actual story. About $3.5 million lost in Singapore. I read that as S'mores.

Singapore due to tampered Ledger crypto hardware wallets. Just a continuation of the story that I've been telling you here about Ledger wallets. But now the Singaporean authorities and police have issued a hardware wallet advisory reporting at least two cases. This is actual on the ground evidence that people walked into stores, bought Ledger devices that had the spyware on them and lost approximately 3.5 million Singapore dollars, which apparently is a real thing. Just call them Singapore something else. Why you gotta call them dollars? Those are ours.

America's the best. Go America. Um, so on the ground evidence that this has been a real issue, that this is happening. I would once again say when it comes to how not to invest, don't, don't buy a ledger right now and put all your money on it. Sorry guys, love you, but don't do it. Don't do it. And now, I have an honorable mention story that I have to tell you because this just happened and it's blowing my brain mind. It's crazy. Here you go.

NYZE owner ICE to bring Hyperliquid perps to the US through trade.xyz partnership. So that's one, right? I told you on Tuesday that Kraken parent payward, uh was going to onshore Hyperliquid and talked about the fact that the president had talked about this all that. Well, we already have a competitor first of all, which is coming from the New York Stock Exchange to bring Hyperliquid perps to the US, but here is the actual story. As you see there, Stan Druckenmiller is also investing. Stan Druckenmiller, to my knowledge, has never tweeted.

This is real. I'm excited to be an investor in trade.xyz as they partner with ICE to bring 24/7 perpetual futures on Hyperliquid to the United States. As a market participant, looking forward to using their innovative product to enhance my investment. They got Stan Druckenmiller to tweet about Hyperliquid. This is almost as crazy evidence of the simulation as when Donald Trump talked about Hyperliquid as well. I'm definitely in a goo battery with a tube, we're in the matrix.

It's a simulation. And tomorrow we'll be reporting on more news from the simulation, because that's all I got today. Peace.