This is Sparta (No Jokes, I Swear).

The U.S. Ministry of Crypto had a very busy week. In a move that’s been brewing for eleven months, the SEC moved aggressively against the crypto market. (ICYMI, we covered the run-up to this series of events here and here).

As markets bleed, there are only two questions that matter:

• How did we get here?

• Where do we go from here?

The story so far…

Six weeks ago, Gary Gensler was the laughing stock of the world. Yet today, his anti-crypto crusade feels like a fever dream. The U.S. financial regulator’s onslaught left the market bleeding through the weekend.

Here’s a quick run-down of what happened this week:

• Monday, June 5: The SEC files 13 charges against Binance and its founder, Changpeng Zhao (CZ). Charges include operating unregistered exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities.

• Tuesday, June 6: The SEC files two charges against Coinbase. Allegations include operating as an unregistered securities exchange, broker, and clearing agency, as well as the unregistered offer and sale of securities via staking services.

• Wednesday, June 7: News breaks about the SEC’s latest court filings. Gary has asked a federal judge to freeze the assets of Binance.US. Any funds that get stuck on the exchange could be forfeited as damages. Traders start to panic.

• Thursday, June 8: Binance’s lawyers drop a bombshell. Back in 2019, Gensler was buddies with CZ, his new nemesis. They were so close that Gary gave CZ an early peek at his planned statement at a U.S. House Financial Services Committee hearing. Gensler also offered to be an “informal adviser” to Binance. Meanwhile, Gary makes a video manifesto on why government control of cryptocurrencies must be absolute. Here’s a little snippet 👇

• Friday, June 9: Panic intensifies as a huge wave of liquidations ripples across the market. Crypto prices plummet. And it all started from this Binance.US tweet.

TL;DR: Its banking partners are pausing dollar withdrawals.

Is this scripted?

You don’t need an active imagination to buy into “Operation Choke-Point 2.0.” But you’re going to need a shiny tin foil hat for this next part. Unless you’re a history lover.

Why history? Well, because of The Histories by Herodotus.

In Chapter 206, he describes a famous war: The battle of Thermopylae. Some of you may remember it from the last half-hour of the Hollywood blockbuster, “300.”

Gerald Butler is a cultural icon.

Ephialtes, a wannabe soldier, scorns the famous Spartan general (played by Gerald Butler). He betrays Sparta to their invading enemies, the Persians. This ultimately leads to the tragic battle of Thermopylae.

Gary Gensler is a modern-day Ephialtes. This explains why he started from:

• Teaching a course at the Massachusetts Institute of Technology called “Blockchain and Money.” (In 2018, students were taught that crypto is sufficiently decentralized that the SEC would not consider it a security).

• Interviewing CZ, who appeared on video as part of Gary’s course material.

• Hiring the general counsel of FTX US to serve as his lead counsel at the CFTC.

• Allegedly sending CZ a copy of his planned testimony before a U.S. House Committee hearing, and offering to serve as an “unofficial adviser” to Binance.

And ended up:

• Launching a failed takeover of Ethereum validators located in U.S. territory.

• Disgraced and fact-checked several times in a public hearing by the U.S. House.

• Refusing to clarify crypto industry rules after Coinbase made a formal request.

• Suing Binance, CZ, and Coinbase for the matters described above.

All of this feels way too dramatic and personal. Like the trajectory of a storybook character. Or a comically vindictive old man.

What happens next?

It’s anyone’s guess.

However, I wouldn’t put my money on Gensler. His cases seem hurriedly put together. And they are all hinged on proving one thing: at least one crypto token is a security.

In order to do this, Gary chose soft targets. By law, foundations and companies are required to go through certain processes that leave them exposed to liability on technicalities. The SEC has targeted at least 13 tokens issued by such protocols.

• Cardano (ADA)

• Solana (SOL)

• Polygon (MATIC)

• Sandbox (SAND)

• Filecoin (FIL)

• Axie Infinity (AXS)

• Chiliz (CHZ)

• Flow (FLOW)

• Internet Computer (ICP)

• Near (NEAR)

• Voyager (VGX)

• Dash (DASH)

• Nexo (NEXO)

Gensler’s career has taken some big hits since he stepped up this campaign in Q4 2022. His methods have drawn lots of attention and scrutiny. Losing this case could be the coup de grace for him. He’s only buying more time in the office, and he knows it.

Binance has focused on the giant conflict of interest at the center of Gensler’s case. Coinbase has made it clear that they’re coming in heavy too. Their campaign is simple: Update the system.

As Jeff John Roberts said, Gary can destroy the U.S. crypto industry, but he can’t kill crypto. U.S. regulators are gearing up to pull in their biggest haul since Silk Road. Meanwhile, BRICS countries are setting up clear regulatory guardrails for their Web3 industries.

So here we are again, at the battle of Thermopylae. An invasion is at our doorstep. Gensler (a.k.a. Mr. Burns, a.k.a. Ephialtes) has switched sides and is out for blood.

The next hearing is scheduled for June 13. Until then, let the drums beat…