Bankless - How the FTX Meltdown Happened—explained by Castle Island's Matt Walsh

Episode Date: November 16, 2022

Where were the adults? How did SBF manage to get away with so much (thus far)? We brought on Castle Island's Matt Walsh to explain. We're pissed. How are you feeling? Matt gives us a breath of fresh air as he outlines the timeline of the rest of the contagion, how long the healing process will take, what happens next, and how we rebuild this industry we've all come to know and love. ------ Earnifi | Check For Your Unclaimed Airdrops, POAPs, & NFTs https://bankless.cc/earnifi  ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt  ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across  BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  LEDGER | NANO HARDWARE WALLETS https://bankless.cc/Ledger  ️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod  ------ Timestamps: 0:00 Intro 4:52 We're Pissed 9:52 Alameda Leveraged Data 13:34 Why Did We Accept This? 15:19 Regulators & Regulation? 21:55 Where Did the Money Come From? 24:42 The Human Destruction 26:35 Who Can You Trust? 30:51 What Will Regulators Do? 35:35 Will the Contagion Continue? 38:42 BlockFi 40:44 What Caused This? 45:10 Ego 47:50 What Should We Do Going Forward? 56:26 Who & Where Are the Adults? 58:33 How Long to Heal? 1:02:05 Is the Worst Behind Us? 1:03:55 Closing & Disclaimers ------ Resources: Matt Walsh https://twitter.com/MattWalshInBos  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Hey, Bankless Nation, here's a big question on our minds. Where were the adults? And all of this FTX stuff was going down. SBF seemed to get away with murder. This happened under a lot of people's noses. David, that's going to be the subject today. I think we're on a mini theme this week. I guess back with a vengeance as crypto gets its breath a little bit. And we're asking this very important question in the aftermath of the FTX collapse. How did this happen? Where were the adults? Who do we have on today? And what are we about to discuss? Yeah, we're bringing on Matt Walsh from Castle Island Ventures, the Castle Island podcast. And a little known fact, a little known secret. The bankless Friday weekly roll-up was actually inspired by the Castle Island's podcast Friday Weekly Roundup. David means stole.

We stole that from you, Matt. Sorry. Yeah. But like Matt and Nick over at that podcast, it's like a breath of fresh air quite frequently. It's just informed, experienced people talking like. adults and adult things. Matt used to work at Fidelity. Yeah, Matt.

Yeah, yeah. Crypta fidelity fidelity for a while. Right. And so the broader question is like, yeah, where the hell? Why did we as an industry just allow Sam to use FTCS as a slush fund? And I think Matt just brings some really just seasoned and experienced perspective to the table. And in crypto, when things are just insane all of the time, I think we lose sight of how

insane some of the stuff we do is. And so, I mean, Matt's pissed. He wrote an article that I was pretty sure titled, I'm pissed and what we're going to do about it. And so I want to just bring Matt on to get his perspective as to like how crazy some of this stuff was and how we go move on from here. Yeah, that's the big question. How do we let these drug adult children mismanaged 10 billion worth of funds, right? And become friends with our senators represent crypto, present us, yeah. DC and give us a major black eye

and what can we learn from this episode. So I'm hopeful, Matt, as always gives us a breath of fresh air as we talk to him. Guys,

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and Earnify will tell you if you have any unclaimed airdrops that you can get. And it also does POAPs and mintable NFTs. Any kind of money that your wallet can claim. Earnify will tell you about it. And you should probably do it now because some air drops expire. And if you sign up for Earnify, they'll email you anytime one of your wallets has a new air drop for it to make sure that you never lose an air drop ever again. You can also upgrade to Earnify premium to unlock access to airdrops that are beyond the basics and are able to set reminders for more wallets. And for just under $21 a month, it probably pays for itself with just one air drop. So plug in your wallets at Earnify and see what you get. That's E-A-R-N-I.F-I. Welcome Bankless Nation. Today we're bringing

on Matt Walsh. Matt Walsh is a GP at Castle Island, V-C, and also like a said in the intro, the co-host of the On the Brink podcast. And I would once again consider Matt an adult, which is apparently something this industry is in a short supply of. Matt, welcome to bankless, my man. Thanks for having me, David and Ryan. It's great to be on. Big fan. Cheers, man. Dude, are you pissed? You angry? I am pissed. I mean, I've gone through so many levels of being upset about this over the past few days. I mean, I'm pissed from a lot of different reasons. I mean, I spend my entire day listening to entrepreneurs that are trying to build great things that protect people's sovereignty over their money, protect people's sovereignty over their data. And I just feel like this is a black eye for everyone.

You know, I run a business in the space. I'm getting questions from people that think the whole industry is over. So I'm pissed that we allowed it to get to this point, frankly. Who are you most mad at? Like, who's at fault for this? I think clearly the Sam and the extended group of people that perpetrated this fraud. are to blame. I mean, there was a critical decision here along the way to take money from FTX, from the customers, and put it into his own prop shop. And so whenever that decision was made,

there was a line that can't be crossed and it was crossed. You know, and unfortunately, it's one of how many, how many of these are we going to do? Like, this is just the latest and greatest exchange heist. It's the biggest one we've ever had. But, you know, we're not immune to this in the crypto industry. And I just can't believe we're still doing it. Do you think that the social layers to blame it all? Like beyond Sam, which is, an obvious villain. I mean, not all stories have obvious villains, but I think it's pretty safe to see as to say, after everything that's been revealed so far, we have an obvious villain in the story. But how about maybe those that let it happen? Does the entire crypto industry have a role here?

Are there other parties more responsible than, you know, are there some more responsible than others? I think, look, there's blame everywhere. And there's a lot of different. from pockets. I think you can, let's talk about the investors, though, you know, to start. And I think the investors that are in this deal are going to get a lot of heat. And I think some of that is going to be unwarranted, but some of that is going to be certainly warranted. It's not, it's unfortunately not uncommon to have fraudulent things happen in the venture capital industry. You know, you invest in a company and CEO ends up embezzling money or CEO ends up having an affair and it's a scandal. I mean, that type of stuff happens. Unfortunately, in this,

industry, there's been sort of this temptation to say, well, crypto is different. Like, we just need to trust this new market structure and go with it. And so that has led to things that just would never happen in the world of financial services. And so where I think a lot of blame has to be laid is the people that allowed this market structure to grow. If you look at traditional financial services, we learned in the late 1920s that owning a prop shop and owning an exchange was a massive conflict of interest that would result in taking capital from one entity and putting it in the other. We learned this in the 1920s? Is that what you said? I mean, the Great Depression was a great learning experience for the way financial markets work. And so there's been a bifurcation of roles

in traditional financial services such that by now you cannot have a proprietary trading arm owning an exchange. It's a blatant conflict of interest. This was happening during the 1920s? There are bucket shops. And if you read this book, uh, reminiscences of a stock operator, I think it's a really interesting parallel to read in the context of FTX, just all of these conflicts, really, that existed. And so we got things like the Securities Act of 1933 and the Exchange Act of 34. And so a lot of these conflicts were actually just taken out of the financial services space then. And over time, we've had additional regulation. So, you know, you can pull that back and you say, okay, so Alameda raises venture capital dollars.

We talk about that way or how crazy that pitch deck was and the fact that people funded that. But then they decided, right, we're going to start an exchange and people just say, our great idea guys, like you own Citadel and now you're starting the New York Stock Exchange. It doesn't compute for me how people thought that this was a good idea. And almost just from a selfish perspective, it's like, okay, how are you going to take this company public? Your venture capital investor, these companies need to go public, right? So you can't take a company public in the United States if it's an exchange that owns

prop shop. It just doesn't happen. And so, you know, we had, is there a specific rule that says that can't happen? Like, why can't that happen? I mean, I know it's insane, but why? Well, there's conflicts there, right? So your prop shop, so Alameda traded on the FTCX exchange. And so they had visibility into very granular participation on that exchange. So they would have been able to see if a large market participant had just moved assets onto the exchange, for instance. They would have been able to position themselves against that. So Alameda was able to, the claim is that Alameda was able to take in data that only FTX as a privileged entity, the exchange, had, and Alameda was able to leverage that data.

Is that an assumption? I mean, I'm sure it's true. But is there no world there, but where there could have been like a firewall between those two things? Sam has public tweets that say that Alameda trades on the FTC exchange. That in and of itself is a conflict that actually cannot exist in the equity world. Okay. And so why did we think that this was, A, going to work in the crypto world, and B, good for customers? Like, why is that good for a retail customer to have Alameda sniping orders on their own exchange? It's just, it's a predatory market structure to begin with. And we just sort of all turned a blind eye because Sam's got a chia pad haircut and sitting in that chair and it's got a cute story. And I think it's, so I'm pissed about that. I think it's an absolute joke. You know,

you talk to people that are managing, you know, billions of dollars, pool as a capital in the equity world up here in Boston, and they're like, hold on a second, let me get this straight. So this guy owned a prop shop. It traded on the exchange. And they stole all the customer products. Of course he was going to do. So obviously. Well, just to make that clear for folks.

So Alameda was basically set up structurally to front run its own customers. You're just like, like just the base of the thing. Prop shop and exchange. And prop shop gets. special treatment, that means front running. That means a percentage of slippage of front run rather than go to customers goes to Alameda. It's already insider dealing just from the get-go, not to mention everything we find out, just the structure is rotten. We're going to discover a lot of things. So the Department of Justice is going to be all over this. They're going to be flying subpoenas

all over the place in terms of market participants who are on these platforms. And you're going to get chat history. And you're going to see chat history where it was FTX employees and Alameda employees sitting in the same office on the same chats together. Sometimes they had email addresses that were at, you know, one place. Sometimes they had email address at the other. So, you know, it's, it's really an in-your-face conflict. And, you know, my, I never knew that FDX was a fraud. Obviously, I had no way of knowing that. But I could look at it from the outside and saying that this thing is set up for failure from a conflict perspective. Like, what are you going to do? How are going to get this thing into compliance. Maybe that's part of this conversation here around what was

happening in Washington around the digital commodities protection act. But it was really structurally unsound from the get-go, is my opinion. Did you guys hear that SBF had like a sort of a route around in kind of the backdoor books in the backdoor in the accounting system so that he could kind of move money back and forth from FDX and Alameda? Like his own purpose. His own personal just I guess tunnel to to to to move funds without anyone else knowing is it is I mean that's got to be well that's that's who goes from conflict to fraud right yeah yeah I mean you get into things like that and now you're starting to expand the surface area of people at alameda and FTX who really obviously knew about this right I mean I don't know how you run a product

organization and don't ask where the cold wallets are I don't know how you run, you know, venture capital or corporate development investing, and you start to optimize around non-FTX deals in some of these transactions that happened. So locking in the Alameda borrow on these lending platforms. So I think the net is a lot wider than Caroline and Sam on this one, for sure. And like, Matt, when I was listening to you and Nick, like, reflect on this, like, it just made so much sense. Oh, yeah. There shouldn't be a trading firm and exchange have a relationship. That is intuitive. As an industry, why did we let it go on for so long? Why did we just accept it? So, look, part of this is on the market participants, like the investors and the trading firms

and frankly, the large retail, you know, people that are trading in this environment. There were a lot of trading shops that in the early days said, we're not going to touch this exchange because Alameda is there and they're just going to be sniping us. But they got more comfortable over time, you know, for whatever reason. There was a lot of liquidity. I think, yeah, some of that was manufactured. You know, I think the VC investors planned to it, but frankly, it's a regulatory issue in large part. You know, the fact that this was set up in Hong Kong from the get-go, it was offshore, made it have this feel that, okay, well, it's offshore, you can do this type of stuff. And I think we are going to spend a lot of time in the coming weeks trying to figure out

what this plan forward here was that he had in terms of coming into the United States, what sort of no action letter was discussed at this meeting with the SEC, was the master plan here to get fully compliant in the U.S. in some way with FTX, the offshore entity, to bring that onshore. There's a lot of chatter that he's trying to launch a stable coin. I mean, you just think about if he was successful in pulling this off, this con that he was pulling with the regulators, could this thing have been two, three, four times bigger with,

you know, much more institutional capital, much more U.S. retail on the platform if he actually got greenlit. So I think that's outrageous, frankly. I'm pissed about that. I mean, I mean, just I shudder at the fact that, you know, FTX having its own stable coin. I just shudder at the fact that that could be called into existence and be backed by possibly nothing. FUSD, I guess. with the biggest stable coin. Okay, so where were the regulators at the table? And what parts were regulated? Because, I mean, they were having meetings with regulators, obviously.

And FTCS and FTCS, to some extent, were regulated entities. Is this just, what slipped through the cracks? Maybe talk about the regulators. And also, I mean, weren't they audited? Didn't they have auditors who are checking the books and making sure that everything was sound? Wasn't that part of the process? The regulatory question is a really difficult one, I would say. So FTX, U.S. obviously regulated, has MTLs, was pursuing a New York trust license, is my understanding.

And MTF for people is what? Money transmission licenses. So in the United States, a lot of these exchanges, historically, Coinbase included, has had to go state by state to get money transmission licenses because there has been no federal regulator to oversee things like cryptocurrency exchanges. Now we're starting to have companies set up in New York under trust licenses that can service the country from there. FTX started offshore. And so we're talking about a market structure that was really interesting from an investor standpoint for a long time because you had companies like Coinbase and Cracken that were playing by the rules

in the United States, but had frankly just inferior products because they couldn't offer leverage. They couldn't offer the derivatives that were offered on FTX. FTX was not regulated by anyone. I mean, I've seen Sam's tweets that, hey, we're a regulated entity. FTC, the offshore entity was really not. I mean, they were operating in a wild west for a very, very long time. They were trying to come under a CFTC umbrella, trying to get repatriated to the United States, but they had not done that. And, you know, we'll see, I think, how far along. that path they were. But this really created this bad environment if you're Coinbase and Cracken, because you have all eyes on you. Cracken and Coinbase were getting dinged left and right for

seemingly like pretty minor things, but the CFTC, you know, offering margin on spot, like things that, okay, you're not supposed to do, but hey, take a look at FTX and they're servicing U.S. customers. Tons of U.S. retail is on FTX offshore. Meanwhile, Coinbase and Cracken are getting slapped everything they do. It's a very difficult environment. I give a lot of credit to Jesse Powell and Brian Armstrong for building their businesses as strongly as they did in that environment. The ERSX team, you know, give them a lot of credit for building a regulated exchange that played by the rules in the face of just a kind of a Wild West offshore entity that, meanwhile, was getting investment from SoftBank and Sequoia and was having meetings with Gary Gensler, apparently. It's just, it's really crazy. So would these regulations have prevented the issue, do you think?

There's a lot of things that would have prevented it, right? So it was known that U.S. customers were on FTX. And so regulators in the United States could have taken action against them on that basis that they were knowingly servicing U.S. customers. They issued a token, FTT, which is an unregistered security. And so you would think that that would be kind of the heart of an examination here around what the SEC could have done better. You're allowing an entity that, okay, it's not registered in the United States.

It's offshore, but it's mostly U.S. people, mostly servicing U.S. people and institutions, and they just issued this unregistered securities offering, and they were able to go out to a number of financial services firms and use that as a form of collateral to get U.S. dollar and stable coin loans against. So the surface area here for things that regulators should have been paying attention to is really large. meanwhile, they're going after library credits and Kim Kardashian. It's really hard to reconcile.

So were we not supposed to be able to trade on FTCS as U.S. citizens? Like, was FTCS. supposed to block us in the same way finance does? Yes. What? Yes. The hell? Yeah, you're not supposed to be able to trade on FTCs, the primary venue, as a U.S. human. And why is that?

You're saying not just spot trading, but you can't do it. anything. It's a, it's really, it's an unlicensed derivatives exchange. It's, um, it's what BitMex got in trouble for being. Yeah. I mean, and they had, to be clear, I think FtX had geo-blocked the US at various points. And so I think people were accessing largely via VPN, that is my understanding. And, you know, in the later years, you wouldn't be able to get onboarded there unless you had an offshore sub, which I get, you know, it's fine. Like, that's, that's how people were doing it. But, um, yeah, they were servicing U.S. customers and, you know, a lot of them. Honestly, I just thought that there was FTX, U.S., and normal FTX, and everyone in the United States was like, I'll just go use the FTX normal version because it's better and more powerful.

And for some reason that that was just legal, I never really thought that they were actually supposed to ban U.S. customers in the same way, I guess, like Binance and all the other exchanges were. But now in hindsight, it makes total sense. It just seems like the regulators just turned the biggest blind eye of all time. I think they did. I think they did a judgment that it would be difficult to go after FTX. They had a huge war chest. They had some really large backers. And they said, this is going to be a tough fight to win.

We already have a fight going with Ripple, which, you know, Ripple seemingly has endless amounts of capital to spend on lawyers and their defense. They have a big case there. And it's a lot easier to go out and take down a fraudulent ICU. look, the list of fraudulent ICOs that still haven't been prosecuted in the United States, what, there's four or five hundred of them probably. And so you could spend the next three years just going after them and never picking the big fight with FTX. And then you had Sam who was donating a lot of money to Democratic causes. And then you had someone who works for him donating to Republicans. So they're sort of greasing both sides.

And they're saying the right things or saying they wanted to be compliant. And so my guess is that there was a decision that, look, there's just easier cases. to win right now. Like, let's go take down library credits. So the conclusion that I've kind of taken as a result of this, and I was listening to Brian Armstrong on the All In podcast talk about how he was like kind of measuring up Coinbase to FTX, and he knew that Coinbase had some amount of revenue, and FTX had that amount of revenue, yet FTX and like Sam were able to like buy anything and everything under the sun and also donate $7 million, $70 million to Democrats and slapped their name on like the arena in Miami and like

try and buy Twitter, help Elon Musk buy Twitter. And Brian from Coinbase was like, I just couldn't, the math didn't check out as to like where all these funds were coming from. And now that we're like starting to see some of the size of the hole that FTX had, as far as I'm concerned, Matt, and I want you to check me on this is like, FTX was just Sam Bankman's freed slush fund to score points and do cool things that he was like he was treating the world as a video game and he was treating FTX as like his inventory to navigate that world and it was just his slush fund to do whatever the hell he wanted. So that's what I think. I mean, I think there's clear on-chain proof that coin metrics and Lucas Nuzzi discovered in Q2 around the transfer of FTT tokens between the

entities. And so at minimum, we know that that's when it started. I think it's a very strong possibility that it was run off of customer funds even before that. But I think on chain, you can see in Q2, and I feel pretty confident about that. I think the question of where was Sam getting all this money is going to get a lot of scrutiny in the years to come. And so he made a $500 million investment into Robin Hood out of an entity that he controls. And so if you're an investor in FTCS, you know, I guess we'll find out. Did Sam sell common stock? Like, did he take a secondary and take money off the table? Was it $500 million? Was it a billion? And if he did not, then where did you think the money was coming from? And my guess is that a lot of people thought that it was coming from Alameda. So he owns

90% of Alameda and he's probably taking big distributions off of the prop shop, which raises two questions. One, what's the potential conflict there? And do we like that as investors in FTA? do we like the fact that this guy is making way more money off of a business that we're not even investors in and is he going to optimize for that? And the second question it raises is, what the hell is our exit strategy? Obviously, we can't go public if we have this structure. So how are we going to get liquid liquid on this thing? Is it going to be FTT tokens? Can this company go public? So it raises a lot of questions. I mean, he had a $500 million LP Fentra Capital book, Sequoia, Altimeter, Multi-Coin. I mean,

And there's a lot of money being shown. The more we find out about this, it just makes me realize, like, we literally gave billions of dollars to a degenerate gambler. And somebody, for somebody, I mean, for him, it was pathological. You just kind of look at the decisions he's made and the types of risks he was engaging in and the speed at which he was trying to level up in the Sam 5 video game. And it's just like, it's pathological. and the different face, like the lies that he told. He's still tweeting this morning, Matt. Like, what is he talking about?

What happened was the tweet? The study of Sam Bankman-Fried, I'm like, I'm sure there were some filmmakers trying to make documentaries early this year and like doing the Doquan documentary or maybe the Three Arsou documentary, but like all of that is now overshadowed by this. This is even crazier. And I can't believe it. Like, I can't believe our industry is like this. right now. I've spent a lot of time and I've been speaking to a lot of people that knew him. And I just

can't get over the human being side of this. How do you, I know, how do you bring yourself to this level where you're taking customer deposits and you're just going this far beyond the pale? And it's FTCS employees too, right? I mean, he had FTX employees that had not only all of their crypto, all of their money on the platform. We're starting to hear some of these stories. And so just, the human destruction that this is caused. It's just, it's really hard to wrap your head around. You're, I mean, you're obviously dealing with someone that does not have emotions that can not connect to people on a human level. It's a true sociopath that we're talking about here. And so I don't even know if it's worth analyzing the human, you know, he's not experiencing the world in the same way

that three of us are experiencing the world. There's not a human there. No. It's crazy. Okay. So how do we protect our, so here's kind of a question, right? Is people like this exist. All right, we know this. We have a few cases this year. Maybe SBF being the most blatant case. It's unbelievable to the lengths he was going and how far the empathology would lead him. But how do we know who to trust? And here's a question I think in everyone's mind. I was telling David yesterday, my dad called me over the week and he's like, I have some funds in Coinbase. Should I get them out? And I can't actually even though Brian Armstrong, Coinbase is an OGE, Brian Armstrong or Coinbase is regulated institution, I personally trust Coinbase. I can't say I know for sure. Like at this point in time,

I think this sort of thing is going through everyone's mind. Like you mentioned the FTT token. Well, Binance has the B&B token, right? So like what's that? Is there leverage against that? How safe is Binance? How safe is Cracken? How safe is Coinbase? How safe is Coinbase? how do we know? Do you have any insight into this, Matt? I mean, the knee-jerk reaction and panic, which because the show is called bankless, I don't want to discourage this in the least, is withdraw your money from exchanges. Use it like a public bathroom. You get in, do your business, you get out. You convert the fiat to crypto, and then you self-custy, right? Not everyone can do that. We don't have the tools ready. Which crypto banks can we trust right now? And how do we actually

know. Look, so I think there's a lot to that question and there's a lot that we should be doing. One of the bigger disappointments about this is that public blockchains give you a tool set that we're just not taking advantage of right now. And so the first thing is self-custody. So I think we need to redouble our efforts and our investments into making self-custody easier. I want to live in a world where I hold a key, fidelity holds a key, and another trusted party hold a key. And we have a very safe multi-signature or MPC-based custody scheme. I think at scale, the whole definition of custody needs to change for crypto assets. I don't want to live in a world where I'm storing anything with a central administrator that can move on their own. And so I think we need to invest in product

management experiences. So that's one thing. Can we just pause on that for a second, Matt? Because you run a fund too, right? And we've seen some funds get blown up. Ikegaid, Travis Kling, get a whole bunch of his fund on FDX. You're saying that should not be the strategy moving forward. There should be sort of some multi-sig, some on-chain type of wallet used for funds, and we should no longer trust in exchange as the model moving forward. Is that right? Look, so right now that infrastructure doesn't exist.

So you can't point to it and say, look, Travis, you shouldn't have been doing it this way because he had a strategy and he was executing that strategy. I think in the future, what we're going to have, exchanges will be bifurcated from custodians. And so you could imagine tri-party relationships enabled by MPC custody solutions that allow you to trade on venues but not move your crypto assets there to keep them in the possession of a custodian and even potentially at some point in the future with a key arrangement where you hold a key, the custodian holds a key, and someone else holds a key. And so you don't live in a world where someone can run off with that.

We need to invest much more in that. And so we're investing in the retail side of this. we're investing in the institutional side of this. We need to get these things to the point where funds like Castle Island can use them in production soon. And so that's the first thing I would say on the self-custody. The other question, Ryan, is kind of around proving reserves, I think. I mean, I've heard you guys talk about this, and it's more than just proving the reserve. It's proving the liability. And I think so you need to have some accounting and audit firm involved in the liability side. But we should really be demanding out of our custodians and exchanges that they implement a proof of reserve policy. It is great to see some of these

competitors come out and say that they will do this. So I'm very encouraged by that. But we need to really speak with our capital. And so if you have funds on a platform and they're not doing this and you want them to do it, there will be alternatives, I think, in the very near future. What do you think the regulators are going to take coming out of this? Are they going to be the ones to institute the types of reforms that you're talking about? Or are they going to be the ones to have a complete knee-jerk reaction to this and take steps to further encumber, further trap, further harm crypto, further drive it outside of, at least in the U.S.'s cases, outside of the borders of the United States of America? What do you think their reaction is going to be in the aftermath?

I'm going to be really interested to see what the blowback is. So we've had a shifting of the tides in the House Financial Services Committee. And so we're going to live in a world where McKenry and Emmer have more power. They've both been very pro-Crypto. We'll see if they still are, frankly. I think a lot of damage has been done. The first thing we very clearly need is just clarity on who regulates the spot market for these things in the United States. And the second thing we need is just a way for a token project to raise capital and eventually be fully decentralized.

And so Hester Purse, I know you guys have had her. on the podcast. I think her proposal is the most viable option. So this token safe harbor proposal would get you to a point where you have clarity on whether or not these things are securities or commodities. And then if you have the further clarity on who the regulator is, then I think we just kind of fall into line. The third thing I would say is that, you know, the defy part of this is kind of wide open. And none of what I just said applies to defy. My view is that these networks should not be regulated at the protocol level. And, you know, I hope that that continues. I think Sam, frankly, had a lot different view on that. And that was going to be very, very harmful, I think,

to the industry if he was successful. Matt, there's a few more topics I want to touch base with you on. I think there's some more silver linings out of this event that I think we could unpack a little bit. Also, there are some other cast of characters that have revisited the scene like Doquan and Suu and Kyle Davies have chosen this moment of all moments to come back and say hi. So I want to kind of get your takes on that and a few other things. But first we got to cut for a second sponsor break to thank all these sponsors that makes the show possible. In all of my years in crypto, I've never been hacked, scammed, or lost money to a thief. And a lot of that credit goes to my ledger hardware wallet.

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You can be a part of Across's story by joining their Discord and using Across for all of your layer 2 transferring needs. So go to across.tto to quickly and securely bridge your assets between Ethereum, Optimism, Polygon, Arbitrum, or Boba networks. And we are back. I think we were talking during the commercial break about there's a number of different topics that we want to get through. And one of those is, I think, is this as what we're watching happen right now, sorry about this fire truck, is the logical, continuation of the May contagion. First we had Tara Luna, which trigger the contagion with

Three Ro's Capital, which triggered the contagion of a lot of things. And then Alameda really had the show of strength during that one moment, which, and we were talking about this, me and Ryan were as like, yo, like, FTX and Sam Bankman Freed, they're buying everything. They're saving the industry. Like, when Sam tweeted out

that he was saving BlockFi, like the market's pumped a little bit. I remember like that was a plus 10% day. But little did we know that the reason why that worked was because of the fake plugging of the hole between Alameda and FTCS. And so, like, my question to you, Matt, is like, this is the same contagion, right? Like, this is the same event. It just happened to be like, we got like a six-month break out of it, right? I think that's right.

I mean, it's funny. I look back on all my text messages and, you know, telegram chats. And I just put it in Alameda and see when I started talking about it. And, you know, early days and like looking at pitch decks and things like that, but then there's a lot of chatter around the COVID crash. So what was that like March of 2020 when the market's nuked? There's a lot of chatter that Alameda had blown up then. We never really heard anything about it. So I put a pin in that one. I'm interested to see if that comes out in a forensic analysis, if they actually took customer funds as early as 2020 and moved over. But I think I feel a lot more confident to say that Luna played a big. role in this. And so I think the way to think about that is we've already established that Alameda trades on the FTX exchange and they're kind of a backstop liquidity provider. And so, you know, imagine a world where Luna blows up and people are just chucking Luna as fast as they can into that two, three day period. Is it possible that Alameda was blowing up because they were on the other side of all of that

and they were just backed up liquidity on the FTX platform. I'm speculating, but that would make sense. If you look at this through the lens of how could you lose that much money, yeah, the Robin Hood deal and Tom Brady and Giselle and, you know, but it doesn't really add up. And so I think what's likely is that Alameda took a massive hit on the Luna trade and that they just allowed the Alameda balance to run negative equity on the platform. And so they just started to, you know, they basically couldn't lose.

Almeida could not get blown out on FTX. And so then it became really like a Ponzi dynamic from there where they just needed to get net new retail flows and institutional flows onto the platform to continue to operate the exchange because they had such a huge hole. So I'd be really curious if that's what it ended up being because you could imagine that's the case, right?

They didn't come out and say that they had a huge loss to three hours capital. They didn't come out with a big Luna loss. It's possible they just ate all of it. Some of the chat is asking, can you talk about what you believe will happen to those who have coins in BlockFi? What do you think, Matt? I don't know. And I should disclose that I'm a Castle Island is an investor in BlockFi. The way that I looked at that deal at the time, so Zach, I have the utmost respect for, I'll stand behind Zach Prince in Florida. I think they're highly ethical management team. The three arrows situation resulted in basically an untenable situation where they're dangerously low net equity capital. And Sam came to the table with a deal that would result in a very bad outcome for the equity holders, but it would allow the customer deposits to be made whole.

And so there was a discussion around taking that deal. They took the deal. And I was ultimately supportive of that deal, even though it resulted in us writing our equity position down to zero. And I thought that Zach and Flore behaved highly ethically in that standpoint. And they truly believed that that would save the business. where that stands right now, you know, I think I don't have any insider knowledge, but certainly their lack of ability to pull down on that credit facility is not good. I'll give you my take.

So I have a small bit of funds in BlockFi. I like to test these things. It's really fun to test crypto banks like BlockFi and Celsius. Yeah, it's been really fun, right? I personally, this is just Ryan's opinion. I personally am, I've discounted everything in BlockFi to zero, basically. and if something falls out of that that's above zero, I'm happy with that. But given the way I'm kind of reading the tea leaves, I don't have a lot of hope where I have

similar levels of hope as maybe I had with Celsius. Although I will note, I agree with you in your assessment, Matt, this is a different situation than Celsius, which, I mean, Celsius is very clearly machin skewed. It was completely mismanaged. And this is a different case of that. It's not a degenerate gambler at the helm. they just got caught up in some risks that they didn't anticipate with some of these events here. So you think that back to kind of what popped the balloon here, you think maybe behind the scenes,

it was sort of Luna. I'm just fascinated that SBF and Alameda were able to run this thing for like five more months, because no one really knew. In fact, here's the insidious thing coming out of that is like, as David was saying, all of these funds get wiped out through his capital, Trader Gods of 2021. one. Wiped out through his capital. Who's left standing? It's Sam Bankman-Fried. It's FTCS. It's Alameda. And they came out of this event actually looking stronger. And really, the whole thing was hollow. The whole thing was rotten all the way down. There was something else that actually ended up popping

the balloon here. And I'm wondering what you think that was. Was it really CZ's tweet on that that boring Sunday afternoon, it was afternoon in East Coast time anyway, where he tweets out about FTT, was that the final pinprick? A week before that, we had, of course, SBF giving his regulatory takes with Eric Voorhees not very well received by the community. That seemed to be like if you were charting Sam's, I guess, influence in the crypto community or the fondness of crypto, that started to hit like his fondness meter by all time to all time lows. I'm not sure that was the prick. Maybe it was the CZ tweet. What do you think? I think you guys might be in the movie here because I think what you guys had with the boyies and him, I think that played a role in it.

So I think sentiment had really started to turn against SBF on some of this defy stuff that we're talking about, the fact that he was really trying to nuke defy to the advantage of his own company. And so you started to see people get pretty upset about that. And the price of FTT started to slip a little bit, started to see kind of a little bit of a bank run effect where people were not comfortable. Vorhees wiped the floor with him in that debate. It was unlike anything I've ever seen. So it started to get a little bit precarious. Keep in mind, he has FTT on collateral with a bunch of places. And so he's probably getting margin called as the price starts to adjust. People are calling and saying, are you good? And then CZ gets window. it. CZ is like, you think CZ didn't see this on chain in Q2? I mean, he's one of the sharpest guys in the industry. I bet that he knew that they had been moving FTT between the entities. You know, he has access to the stuff that, you know, coin metrics is putting out there. So my guess is that he knew that something was up. He probably didn't think it was a complete fraud that it ended up being. He probably thought, hey, look, they're running fractional.

And he decided to just test the waters a little bit. You know, who knows, you guys should try to have him back on, but I doubt that he knew it was this bad. I think we will one day. I almost wonder if the CZ maybe saw some of this on chain, but the final straw from him was finding out that SBF and FDX was working behind the industry's back in D.C. And when CZ saw that sentiment drop, right, he decided to fire an arrow into this thing. And maybe that was the final arrow. But I just reflecting...

The shot across the bow actually crumbled the whole entire ship. Yeah, just the wind from the cannonball. That tweet around is CZ allowed in Washington, D.C., ends up being one of the most costly tweets of all time. This is what I'm saying. I hate to keep going back to the psychology of the man, but the utter hubris, imagine, like, thinking, coming out of that episode with Forhees, that you had won the debate, or he wasn't even prepared, quite frankly.

I mean, everyone knows what Vorhees is going to say. He wrote a freaking post, basically, his entire opinion, and SBF was just ill-equipped. It was as if he had not been in this industry for the past four years, had not heard the arguments of the crypto ethos-aligned people, and was completely inadequately prepared to meet those arguments in any coherent way. And yet he still chose to have a debate with Eric Voorhees on this subject. object. It, like, why? It's just dumb. Why would you tweet that about CZ? Like, dumb. I can't believe it. It's the hubris of the person, which is, which is why part of the things coming out lately.

I mean, we talk about the children running things where they're adults, I kind of wonder, like, to what degree, like, I don't know, amphetamines were in play, like drugs? Like, there's something that has really pushed a personality towards all in Icarus, hubris, hubris, gambling with depositors money level of schemery here. I think that'll be part of the defense. I think that's probably what we're seeing with the tweets is that some sort of an insanity or, you know, purged on amphetamines type of a defense. You're right, Ryan.

I mean, when you read that, when you go back and you look at that debate and I've watched it a few times, what I kind of think is, who would give money to this guy? I know. And I would give money to Eric Voorhees, but he's smart enough not to take it. He wants to deal with me in a non-custodial way. And it's kind of crazy. I think when the movie is written, that'll be kind of the last chapter here,

where he's just kind of falling apart and, you know, addled and just, you know, physically, like, falling apart too. Yeah. But also, like, the whole, like, hubris and psychology part of the angle, I think is worth, like, diving into a little bit because, like, we as an industry, like, I was talking around on a stream yesterday. like when FTX like rugs their customers and their investors or something in the crypto industry

happens that it gets out of crypto and like my mom calls me up and be like, Dave, what's going on in the crypto world? I'm like, that's my responsibility. That's on me. Those are my shoulders that like this rests on because that's how I like treat my, my relationship with crypto. And like we had this was the like third or fourth thing like this in a long year of 2022 where the same patterns happened over and over again.

And we had these egotistical, like, maniacs who loved to, so why did SPF take this debate with Eric Forgeys? Because his ego had to do it. Why did he not let Alameda fall when he could have just let Elamita go to zero and keep his darling exchange, which was printing hundreds of thousands of dollars every single day because of his goddamn ego? Why did Doquan, like, tweet out steady lad deploying capital while like all that stuff? Ego. Like Suzu and Kyle Davies, ego. And like we as an industry keep on enabling these people. We love the egos.

We're like, yeah, say funnier tweets. Yay, like do something on Twitter. And like we promote these people and we put them there. And so like this is like the reflection I've been having is like, man, we really take these crazy maniacs and like make a farce out of them for our own enjoyment. And then they rug us and we're like surprised. Like what the hell, man? we've enabled a lot of eccentric sociopaths in the history of this industry. And I think, look, there's always going to be some idolization of public figures.

Elon Musk is a great example of that. But what we need to do is just put better scaffolding behind this industry so that the real builders can actually be successful here. And this doesn't happen again. And so there's some super obvious things that we should be doing. We should be insisting on proof of reserves and liabilities. We should be enabling, we should tell these exchanges that they need to get into full compliance with how other financial assets work.

Why do they not have market manipulation, surveillance sharing agreements between themselves? Why are they not enacting the travel rule? It's like whether you like those rules or not, they work in other markets. They're the law of the land in equities. They're going to be the law of the land, whether you like it or not in crypto.

So just get into compliance. It protects your customers. Token investing schedules is another good example there. And so we better get our act together as an industry and stop dumping on retail from insiders and from, you know, the venture fund, and the crypto hedge funds, there's a lot of things that we should just take this opportunity to just burn it all to the ground and come back in a better way. And it's not that we need to just

lean in and say, hey, regulate us. It's what to do things that protect the users of these networks. That's really what it amounts to. What a crazy thought. Damn. Who would have thought? And I think there's some wisdom there, Matt, because like, I think what I hear you saying is don't expect human beings to behave any better next time around. Right. If anything, that crypto's taught me it's that. We're going to make the same damn mistakes every three to four years, aren't we, with a new generation of people. And we feel the lesson now, right, as we did with Mount Cox in 2013. Now here we are less than 10 years later. And it's happening again. So rather than depend on people, we have to push this down a layer into the protocols. We have to

put proof of reserves into the stack. We have to use bankless money systems. We have to use multi-sigs. We have to use all of the on-chain cryptographic resources that this industry is supposed to be based on and not leave this all at the social layer. And yes, I think where there is centralization, there needs to be a coherent, well-thought-through regulation to plug some of those holes. But we can't rest on the people, the masses. You know, we can't, like, discipline them or scorn them into propping up, you know, the next egotomaniac, the next, you know, the next, you know, mega lemayical character that crypto brings because I know they're coming back and even now like today I was looking at you know tweets from suzoo and Kyle Davies formerly of three hours capital I'm like you guys

are planning to come back aren't you there's like blame shifting there's a little bit of like we're not as bad as like you know this happened because of bad bad SBF like I already see the seeds of the shit happening like I can we've seen the playbook enough you've seen it I've seen it. David's seen it. We can already call it. And like the fact that these people, not only are they not in prison, not only are they not in court, okay, they're still tweeting and planning their comeback story is absolutely maddening. Meanwhile, we have Alex Perthsef, is an open source developer. No one knows his name, not a stupid star coder. He's in a prison somewhere. He's in a jail. What was his crime? He wrote open source,

privacy software in code. That's what he did. We have all of these people. No charges laid against him. We have all of these other people walking free. It's like the injustice of it just starts to pile on you, Matt. It just starts to like, you started your post. You started this conversation, I'm pissed.

I'm pissed too. Like I'm pissed. We need to do better. Regulators need to do better. Our justice system needs to do better. Like we need, I don't even know what to say at this. point. It's absolutely maddening that we are in this spot and it's embarrassing. I'm with David. Like every conversation you have with an outsider, it's like, I don't want to have to keep

justifying crypto's existence. I want us to do the right thing and stand by our principles. And why does this keep happening? I couldn't agree more. I think we need to take the parts of this industry that are rotten and we just need to burn them to the ground and purge these people from the industry forever. Who cares if they're tweeting? Justice takes months to catch up. I'm not worried about whether or not these people will be brought to justice in the least. There's been gross negligence and highly obvious frauds that have happened. And I think all of this will take care of itself in due time. Took Madoff like 24 hours to be arrested. It's going to take a little bit while longer for some of the people that blew up in the Q2 time period. Looks like it's going to take a little bit

while longer with SPF. But ultimately, these people will be brought to justice. I think right now what we can be doing is just building a better foundation. And I think it is also at the social layer. It's let's put, let's put frameworks in place for disclosing who the investors are in some of these projects. When do their tokens come off of lockup? You know, what information does the team have? What information does the retail have? Common sense stuff. So I think we can build this back, but I think eventually, look, we're going to get past this time period. We're going to get all of our anger out. I'm still pissed. There's going to come a time here where, We're just going to need to focus on what's left here.

And we just need to make sure, let's just take this opportunity to just burn the stuff to the ground that needs to be burned to the ground. There's a lot of zombies out there still. Let's just wait for the dust to settle. Do you know the other thing that I feel like failed is, I don't know what if I call it the credentialism? Have you guys seen the clip of Kevin O'Leary talking on stage where he's talking about, and by the way, Kevin O'Leary's been in the podcast. You know, we've talked to him. and I you know he's done things in Washington that sort of thing but he was just out and out claiming that FDX was the safest spot on the planet to put your crypto why because it's regulated

because Sam Begman-Fried you know is the son of um Stanford professors who are just like know what they're doing like just the credentialism we that that's the social layer honestly that came in this cycle that's a little bit different than the social layer that you know and that we know from the OGs, which is like, F your credentialism. Like what? No, on chain cryptographic guarantees. That's the basis of this. It's not who, like, where'd you go to school?

It's not, you know, which senator do you know? Who can you get in a room with? It's not what celebrities endorsing your product. It's on chain cryptographic guarantees. That's how we know you're not lying. And we lost that in this whole credentialism. Part of it is, I think, a dilution of the social layer, Matt. with this whole like influx of finance.

I'm from finance. I love finance. But you know what I mean when I'm saying this new crop of individual that didn't get to the root level and appreciate the values through which this ecosystem was built. You can hear from SBF. Why did they start Alameda? Well, we were either going to go into sports gambling

or trading commodities. I don't know what the hell, whatever makes the most money. Oh, crypto, that's why. That's not why I'm here. I know that's not why you're here. I hope bankless listener, it's not why you are here. We used to be in touch with these missions, the mission, and we lost some of that the previous year.

So maybe there's a reform that we can make on the social layer there, too, Matt. I think that's well said. I mean, look, this has happened in public markets. There have been big frauds. There have been people that have put their names on that. I'm big Tom Brady fan. That doesn't change my opinion of Tom Brady. He's down bad.

He suffered through this. Enron had Fields in Houston, right? And like, you know, you just need to put better scaffolding in place. We have public blockchains now. We can do some of this stuff. We can prove reserves on chain. We can demand that our centralized institutions do more stuff. Nothing about this is about public blockchain and the protocols.

You know, like nothing about what we've talked about this entire episode is about more than a fraudulent guy and a cast of characters that were fraudulent building a centralized business that was completely wild west. So, you know, I think, look, some of that's going to be solved through regulation, but we can influence a lot of this stuff as an industry just by using the tools that are now available on public blockchains. So, Matt, I think at times like this, there's a tendency, obviously, to magnify the bad actors, right?

We're seeing, like, maybe the worst actors as crypto's ever seen. Maybe the anti-Satoshi or something like this has come for our industry and is wreaking havoc and it's you know is now leaving is now gone we do want to put these people behind us but um are there any adults left and who are the adults like where are they i mean you could name names if you'd like um you know i've got a list in my head of people that um are building this industry for the for the long run and whom um i actually do trust uh to do the right thing um but like what do you see from your vantage point are there still some adults left in this industry that that that that that and are going to work to clean up the mess from the crazy party that SBF just threw.

I mean, look at it through this lens. I spend most of my time talking to early stage startups and a lot of developers. And so the real talent, the real all-stars in this industry are the open-source development communities. And so I don't see any of that being impacted by this, right? And that's across whatever chain you like, you've got open-source developers, maybe not in like Ripple. But like there's open source developers everywhere that are the real heroes here.

And who, you know, who ends up winning on the centralized side? I think you're just going to see a capital is going to flow to the regulated entities right now. So if there was ever a time for, you know, Fidelity, Bank of New York, Mellon, Coinbase, all these regulated players, CBOE, which CBOE Erasax, like all these businesses that have been just set up to disclose conflicts and not have proprietary trading firms attached to exchanges. and like seemingly obvious things like audits and proving reserves. I think the market will flow towards those type of market participants. But look, it'll take time. I think right now there's going to be a lot of people on the allocation side that are just super gun-shy. And, you know, we'll have some contagion here, I think.

But coming out of it, it's the developers and it's the players that, you know, put regulation aside. It's the ones that do things to protect their customers and that are not predatory towards them. Put a timeline on this. How long is it going to take to heal? A lot of this is going to be interest rate driven too. And so I think you can put imagine if we were still living in a zero rate environment. It's a shudder to think that maybe FTX would have been able to, they would have been continuing the fraud if we're zero rate. So I think we're going to get a pivot at some point.

We're going to have the Fed pull back. Appetite for risk will increase. And I think the other thing is very positive is that a lot of these institutional custody audited platforms in the U.S. are now coming online. So, you know, Fidelity has been at this for years, and now that product's in a position to launch for retail. Bank of New York Mellon's been working on this. Do you know how many people use Bank of New York Mellon for custody in other assets? It's a lot. I mean, it's the largest custodian in the world. And so they have, you know, 100 people there that know what they're doing, building out MPC custody. I think that's unbelievably bullish for the industry. MPC custody,

Casey Cussie. Wow. That's awesome. So this, you know, and I think it's been public that they're working with fireblocks on that. So, you know, they know what they're doing over there. So I think that's reason for optimism. But, you know, ultimately, a lot of this is going to be rates driven, I think. I think that's going to be the big legacy of this whole event is the polarization of some people are going to be like the middle ground between pure decentralized protocols and highly regulated, trusted onshore centralized entities. The middle ground's gone. It's like pick one or the other.

Like you hold your own assets on your ledger on the chain or you are in an onshore regulated U.S. entity that looks and feels legit and has been around for 100 years. I think that's right. I mean, I think the defy space will be interesting to see because I do like this idea of, you know, on-chain lending and defy and some of the things that you could potentially do at the intersection of regulated financial services and public blockchain. So I think there's something there. I think we'll have a blending.

It's quite possible to me at some point in the future that centralized institutions in the U.S. are offering a lot of interest in creative products that right now are only available to individuals on like by Damascus and messing around personally. But I'll be here for it. I'm excited about it. I mean, on your point in Fidelity, I know it's for the first time in a Fidelity account that I've seen you can actually buy ETH. I think that was just added pretty recently, which is really.

which is really cool to see, and definitely you trust Fidelity more than you trust an FTCS right now. And I think your other point about interest rates, right, we would have never had the blowups that we had this year unless the Fed actually raised rates. And so there was all sorts of risk-on shenanigans that were happening as a result of low zero, almost negative cost of capital, right? And so this is like from a macro perspective, this is very healthy. The most unhealthy thing would have been to your point, Matt, if we had 0% interest rates for a while. And the charade and the Ponzi got larger and larger. Imagine Sam like accruing ultimate power.

David and I in a live stream yesterday compared him to like Emperor Palpatine like, you know, episode one. He didn't know he was a Sith lord, right? He's accruing power and pulling the strings in the background. And it turns out he's a pretty bad dude. who's bent on controlling the entire galaxy. Zero percent interest rates could have given him that leverage. I guess maybe a question for you again on timing is, do you think the worst is behind us,

or do you think there are more blow-ups that we're going to see? And I'm not so much, you know, there's more contagion coming from this event, very probably. I don't know how much more is ahead. I'm more talking about another months down the road, massive event like this. is that in the in the cards for us or have we really burned off all of the all of the mold from the space i think you'll have some second order effects here around market participants whether they

be trading firms or hedge funds that that go under i think some of these rumors that we've seen around the third tier exchanges i would be running for the hills if i had assets on some of these platforms so i think some of that will happen what type of an impact that would have i would think it would be a lot less than what we just went through with FTX. The interesting thing about FTCS is that they don't have a lot of Bitcoin and Eath left on the balance sheet either. And so, you know, from a market impact, we're not a trading firm. You know, we don't take these positions, but it'll be interesting to see what happens to just the price of cryptocurrencies, because it's, it's unlike past blowups in the sense that there's not a ton of cell pressure just sitting

on the sideline for some of these large-cap assets. There was a, there's a theory that the worst actually hit us in the summer of this year. when we saw, you know, the Three O's Capital massive liquidations of all of that Bitcoin and all of that ether. And this is a different type of event that might not hit those large cap assets as much. Of course, the macro is still as uncertain as ever. As we're streaming this, I guess there was a missile from Russia that hit Poland. Yeah, I'm not ready to go unpack that. Right?

Like, so there's that whole backdrop as well. But yeah, it's interesting times for sure. Matt, thanks so much for spending time with us and for being one of the adults in the room. We need people like you, Castle Island. Very refreshing. Yeah, to help us through some of these things, particularly with your institutional experience. It's super valuable. So we appreciate you.

Thanks for having me on, guys. Keep up the great work. Action items for you today. I don't know if we have any. Do we, David? We have so much content on the FTX, SBF front that, you know, you can go download some of that. If you want, we'll be talking about it a bit more along with our regular scheduled program, which is next Monday.

We have an episode coming out about the Fed, about Jerome Powell and friends, don't we? People should look forward to it. I'm going to listen to that one. It's great. It's really great. And I'll leave it there. Risks and disclaimers, of course. Crypto is risky.

So is Eith. So is Bitcoin. All of DeFi is you could lose what you put in. But we're headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.