Bankless - LIVE: Trump Pardons Ross Ulbrict, TRUMP Offical Memecoin, SEC's Pro-Crypto Pivot | Alex Thorn

Episode Date: January 22, 2025

Alex Thorn, Head of Research at Galaxy Digital, joins us to unpack all the craziness that's gone down this week around the inauguration. Alex had the opportunity to attend the Crypto Ball and spend the weekend in DC so he gives us the inside scoop among all the other exciting developments. Alex on X - https://x.com/intangiblecoins   ------ BANKLESS SPONSOR TOOLS: 🪙 FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax  🦄UNISWAP | BUG BOUNTY PROGRAM https://bankless.cc/Uniswap-Bug-Bounty  ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum  🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle  🌐 CELO | BUILD TOGETHER AND PROSPER https://bankless.cc/Celo  🎮RONIN | THE FUTURE OF WEB3 GAMING https://bankless.cc/Ronin  ----- TIMESTAMPS 00:00 Inaugration Recap 04:23 Ross Ulbricht Is Free 20:42 TRUMP Token Launch 37:27 The Crypto Ball 44:00 Pro Crypto SEC 50:05 Tornado Cash Updates ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ 

We have a Trump meme coin almost at $50 billion. There was a crypto ball in Washington, D.C, and there's already movement out of the SEC and CFTC. To help me cover through all of this news is Alex Thorne, who is the head of firm-wide research at Galaxy Digital. He's a proud Bitcoin-flavored patriot, a New Yorker, and a regular patron at Pubkey, the beloved Bitcoin Pub located in Manhattan. Alex, welcome back to bankless. Yeah, David, great to be here. A lot to talk about. What a weekend. Yeah, dude, I have never, like every once in a while, something happens where there's just so much news consolidated into just a few days. And Alex, you've kind of been at the center of all of it. You are down in Washington, D.C. at the crypto, the crypto ball. Also just kind of watching all the shenanigans going on down there. I know you've been commenting on the Ross Ulbric pardon. Overall, kind of just give me a vibe, a summary of your sentiments and thoughts over the last like four days of activity out of the Trump administration in crypto. Yeah. It's been a whirlwind.

And we were a sponsor of the crypto ball and we were there in four. So that was a celebration, I would say, of buy crypto, for crypto, for Bitcoin and crypto, right? It was put on by David Bailey and David Sachs and with a bunch of industry sponsors like Galaxy and Metamask and Sue and Coinbase and Exodus wallet, Anchorage, I think, and others, micro strategy, others that I mean, I think in the end, it was many sponsors. That just started the weekend, right? because the entire weekend was filled with events related to the inaugural, some of them official.

Many companies, regardless of who was elected president, give money to the presidential inaugural committee, which then funds the celebrations and events all around the parade, security, all that type of stuff. And an enormous amount of the money that was raised for President Trump's inaugural committee committee also came from crypto firms. So throughout the weekend, there were events. that we and others attended that were filled with executives from crypto firms. I mean, Brian Armstrongs, Jesse Powell's, Michael Saylor was all over the place.

Obviously, David Sachs, who's the incoming crypto and AIs are, tons of others, folks from Bitcoin Inc. and Sergei Nazarov, Altcoin founders were all over the place. I mean, it was really very visible crypto throughout the weekend. And I think overall the weekend was very celebratory. Not, you know, some minor protests in D.C. But nothing like what it was expected. You know, you saw like local shop owners putting up because they've gone through this before. And by the way, in many past inaugural, one side or the other is, you know, upset.

And they put up, you know, put wood on their glass windows. Didn't see any real issues while I was there except for the fact that it was extremely cold. I know in New York it was extremely cold as well. Really high security, really fun time, and just a lot of anticipation about what is to come for the digital assets industry in this administration. The last time we had you on was right after the election. And I remember you calling this the golden age for crypto, at least the golden age for crypto in America, because of what the crypto industry was anticipating might be coming. And like I said in the intro, we're under 48 hours in. there's already been a presidential pardon of Ross Obrecht. This SEC is already making moves.

Is this what this looks like? Or are we imagining things? Or is this the actually, you said it was the golden age of crypto. Is this just what this looks like coming down the pipe? Yeah, I think, I think we're off to a great start. I mean, it's funny watching like Bitcoin Twitter, crypto, Twitter broadly, sort of like think that the president was going to, you know, take the oath of office on like on a copy a pocket copy of satoshi's white paper right and that you would get like within you know minutes or hours like action on on our issues um even people were saying that you know the president then nominee at one point later president elect now president had promised to free ross on day one and because it wasn't in one of like the first like seven executive orders

that he signed literally the in the first like eight hours of his presidency on January 20th on Monday, people were already saying that he didn't keep his promise. Of course, he did pardon Ross during the first full day of his presidency. That was last night on January 21st. Look, the president, even in the first campaign, he campaign on two primary slogans, make America great again, and promises made, promises kept. And he's been, I think, already very, he stayed very true to what he has said so far. I mean, some of his promises, don't matter anymore. He said he would fire Gary Gensler.

Well, Gary Gensler resigned, right? He said he would free Ross Day 1. I count that. Yeah, I count it. We'll take it. And not just at the Bitcoin conference, but also even before that at the Libertarian National Party Convention, President Trump pledged to free Ross Oldbrook on day one.

And he did. I think, by the way, that was an extremely for crypto. Obviously, look, I'm a supporter of getting Ross out of jail. He obviously broke the law. I think a double life sentence plus 40 years is an extreme and egregious sentence for what he did. I think, and certainly what he was convicted of, I should say, which did not include things like ordering assassinations. He was never convicted of that. As far as I know, they never found victims of those alleged crimes.

So I'm supportive of it, but also I think it's quite bullish for the promises made promises kept. Now, I think it doesn't mean that he's going to do everything that he said, but I think if he didn't do this, you'd really have to wonder. you know, really have to wonder if he was going to follow through. But of course, he did it and was quite proud to say it, as you showed here on the screen. So yeah, and off to, I think we're just off to a good start. You've got Mark Ua as the acting chair of the SEC. You've got Esther Purse who will chair the crypto tax force at the SEC, which I view as just a normal, strong first step to figuring out what they're going to do and sort of getting

the ball rolling. That's already happened. So I view it as we're off to a great start. I think this is what it looks like. Yeah, we have a Donald Trump, Jr., tweeting out a picture of Donald Trump, tweeting on truth social, just saying, I called the mother of Ross William Ulbrook to let her know that in honor of her and the libertarian movement, which supported me so strongly,

that it was my pleasure to just have signed a full and unconditional pardon of her son, Ross. I could not imagine receiving that call of the mother of a son who has been in jail for 13 years, who was going to be in jail for a double life sentence plus 40 years. The free Ross Twitter account, which has been relentlessly trying to garner support for the pardoning of Ross Ulbric tweeted out. Ross has just been granted a full and unconditional pardoned by Donald Trump. Words cannot express how grateful for how grateful we are. President Trump is a man of his word, and he just saved Ross's life. Ross is a free man.

And this has 62,000 likes, which is a very big tweet. We got this picture of Ross walking out in a parking lot, a free man with a bag of his stuff and a little tiny plant with a big old smile on his face. And I actually kind of want to just draw the attention to Lynn Ulbricht, who I wouldn't be surprised if you have met her in your travels. Alex, I met her at Bitcoin 2019, where she was close.

collecting signatures for the pardoning for the release of her son. And she has just been pushing this movement forward. One of the best moms that there ever was. I cannot imagine. I know Ross is happy, but I also cannot imagine how incredibly relieved Lynn Oldbrick was. How would you place this into history as the legacy of, for the legacy of Bitcoin and the legacy of crypto. Ross. Obrickt, of course, founder of the Silk Road dark market, which was known for selling illegal drugs and other paraphernalia and other things that would not be savory or legal to buy or sell in any other capacity. And he went to jail for a big saga. We actually had the FBI agent who kind of led the arrest of Ross Waldrick on the podcast to hear his side of the story, which I thought

was pretty interesting. Was that Chris Tarbell? That was Chris Tarbell. Yeah. Yeah. So how would you frame this in the context of the legacy of Bitcoin? It's a really, I think, poignant. bookend to what, I mean, think about this. The Silk Road at the time was quite responsible for years of, well, oh, that blockchain. We love the blockchain. Great, really cool distributed ledgers. They're great, but Bitcoin. No, no, no, no. That's for criminals, right? Like, that's largely because of the Silk Road that that narrative and, you mean the blockchain not big. Blockchain, not Bitcoin was largely due to the Silk Road in sort of the early days of institutions looking at Bitcoin and crypto.

Banks used to say this. This was like, I mean, you could even argue like the creation of RW3 and like these bank, those bank consortia from the pre-2017 era, the promotion of platforms like hyperledger by companies was largely a reaction to this, right? And so look, I mean, in one way, it incredibly hindered the widespread adoption of Bitcoin and digital assets because of the idea that it was associated with the Silk Road. On the other hand, look, I mean, the Silk Road, regardless, you know, and it didn't just, it is widely known, as you said, for facilitating the trading of nefarious items.

But it also, you could buy anything on there. It was a permissionless eBay, right? Legal stuff. I think legal stuff was also able to be bought. Absolutely. Tons of legal stuff. People were buying and selling memorabilia and collectibles, cars. I remember seeing.

this was a lot of people's introduction, a lot of long-term Bitcoiners introduction to Bitcoin. And this was keep in mind, too, the Silk Road was also in an era when people were still pirating a lot of movies. There was a lot of use of BitTorrent, IRC, right? This is the early days of like encrypted chat. This was an important part of what we thought the new sovereign internet could look like. And I think Ross just took took it to the extreme, which is like, we're just going to make a marketplace that has anything on it, literally. And it also showcased the sort of unstoppable, permissible, censorship-resistant nature of Bitcoin.

So it's a mixed bag. Like, it's, I think a lot of people first learned about Bitcoin in a good way from the Silk Road, even if they didn't go on it or use it, but reading about it. And I mean, in many ways, it was the first application to ever really use Bitcoin at scale. I did also meet Lynn briefly at Bitcoin 2019. That was the conference when Ross, they played a recorded interview with Ross that he had sent in from jail, which later apparently the fact that he had done that, I don't know with like a cell phone in jail, I guess. You can presumably get a hold of one periodically. They put him in the hole in solitary confinement for doing that at the time. Wow.

I just think like regardless of what you think about what Ross did. you know, to me, a double life sentence with effectively never being convicted of any violent crime, like, is just egregious overall. So I think that is people's general take about Ross is that they admit that there was law, there were laws that were broken by Ross. But the double life sentence plus 40 years represents something else about the case against him that triggered the ire of the libertarian movement and, you know, even more moderate people like myself, where I just like look at that. And like the outcome here doesn't make any sense. I know many people like just think like the Silk Road. We just fostered illegal activity and we allowed crime to happen.

And it was like a bastion of nefariousness on the internet. But myself and I think most of the crypto industry sees this as Ross created a free marketplace to actually safely do activities, safely buy drugs, safely do illegal things, but just because the state deems them illegal doesn't mean that they are morally negative, and he actually created a safe place, a safe haven, to

engage in activities. And I think that was Ross's motivation, and that's what the libertarian movement sees in it as well. Yeah, it's kind of like a digital version of Hamsterdam in the wire, right? It's it, I think in the wire, the TV show, right, one of the police captains says

like, you know, our corners are destroyed by drug dealers. They're on there with guns. It's dangerous. Regular citizens can't go out and feel safe. So if we push it all into one zone, let them freely sell their drugs there and then try to, and then you can give them needle exchange or whatever else to try to make it a little safer for them. But in the meantime, you've moved it out of the public sphere. It's a great part of the wire, I think, in season three, I think in the wire. Fenomenal thing. Of course, it doesn't work. There's huge backlash. And then it goes back to the same way it is. But I think, This is sort of the idea that like if you can create a safe place to do things that although illegal, everyone knows they're already being done.

So if you know you can't stop it, maybe there's a way to this, it sort of falls into this idea of like unenforceable prohibition, right? The war on drugs broadly as an example, right? It didn't stop people from doing drugs. It hasn't stopped people from buying and selling drugs. But it has put generations of people in jail. and it has also forced this activity back out into the public square where everybody else has to live. And we don't want to have to deal with this stuff either. I'm not saying he did it out of altruism or that like this is even necessarily the right policy approach to dealing with drugs.

But I think a lot of libertarians believe that like a doing in a way that was safer and private and that didn't involve, it doesn't need to involve guns and gangs on streets was perhaps a net positive in the scheme of things. Yeah, and it does align with the philosophy to me that Bitcoin is a money of peace. Unlike the U.S. dollar, which is defended by the United States military and the military industrial complex, Bitcoin is defended by proof of work minors. And that philosophy extends, this is kind of some deep bitcoinerism, but that philosophy extends to the downstream effects of what Bitcoin does to the world. One question I have for you, Alex, is like, do you think Ross has any bitcoins left over? there's this one tweet from Connor Joe Connor Rogan saying,

I found 430 Bitcoin across dozens of wallets associated with Ross Oldbrook that were not confiscated by the U.S. government and has been untouched for 13 years. I know that there are Bitcoins that the government does have that Ross, in theory, might have a claim on, maybe not. Do you think, what do you think about this? Do you think Ross Oldberg has a difference? Man, that's a good question. I don't know.

I don't recall the specifics of what he had to. to agree to hand over at the time. Look, I mean, it's possible we may never know. It's possible he or someone else who has the keys to these coins might not move them for 20 years and then eventually they might move, right? So, I mean, there's no real way to know. I, you know, I did tweet yesterday that I was wondering about there is a sizable chunk of Bitcoin still held by the U.S. government.

It's not exactly, right? There was a bunch of debate a couple weeks ago about whether they were selling some of their remaining Silk Road Bitcoin. Yeah, this one. And, you know, the individual X, the government has never said who that person is. They did a civil forfeiture. A legal case, there was a, I don't know, an activist or a person, Barnbridge, maybe Barn.

I think maybe Barnbridge that was trying to sue the government saying that individual X's coins were theirs, but all of that was finalized as no evidence that, They were theirs and then all legal proceedings finished at the end of the year. That resulted in that tweet from DB 10K that got everybody nervous in early January about whether they were selling. Those coins still haven't moved on chain, so we don't know. And then you look at this other pile that's DOJ held Silk Road. I think those might be the last remaining coins from Jimmy Zong, the guy that was arrested in like Atlanta, Georgia area. And he had just like clicked withdrawal a whole bunch of times.

And I guess there was a bug on the Silk Road website. site and he massed like 50 or 60,000 coins. In my mind, like maybe like if those were stolen from the Silk Road, they might, Ross might have a claim on them if he has a full and unconditional pardon. That means it's it's as if the crimes never occurred is my understanding. A lawyer who I think highly of Joe Carlisar on Twitter pointed out a Supreme Court ruling, which I believe was related to a blanket amnesty for after the Civil War. saying that the general pardon and amnesty granted did not allow individuals to get their

the proceeds back, right? But if those were previously condemned and sold under confiscation act. But again, you know, Joe's a smart lawyer, but this is a pretty specific ruling. It specifically says under that act. It also refers to a general pardon and amnesty, not a full and unconditional pardon of a specific person. So I don't think anybody really knows. And I think this ruling or not doesn't wouldn't maybe prevent um ross from claiming some some of them i don't know it's to me it seems unlikely and don't get me wrong i think he's probably very happy to be out of prison yeah he might not be concerned that might not be enough yeah might be enough but i i only raise it because outside of the these remaining silk road coins the largest pile of coins at the u.s government

is this Bitfinex recovery resulting from the Ilya and Razel Khan theft of Bikinfx. That's the largest. Government says that IFinex, the owner of Bitfinex is the only, they think is the only claimant. They're running a process now to see if anybody else is going to claim access to them. We assume that those will be returned in kind of Bitfinex. So those cannot probably be part of a stockpile. The largest chunk of, you know, coins seized as the result.

of crime that we know is crime was the Silk Road coins, both the individual X and these. And so you wonder if they give the Biff and X coins back, if somehow Ross claims those coins, and even if he doesn't get them, they become part of a legal thing that takes several years. Like, you're now looking at a pretty small chunk of coins to never be sold, as the president said in Nashville to form that national Bitcoin stockpile. So just an interesting wrinkle here. Yeah. Yeah, it's just an interesting part of the story.

Again, I think you're totally right. Ross is just very happy to be free. probably not concerned about the bitcoins that he owns. To my knowledge, he's a pretty meditative Zen type individual who has, like, learned to separate themselves from like tangible objects. But I think just the overall arc of the story of Ross being able to be free, a free man 13 years later and come back to a pile of bitcoins is a pretty good part of that story. Yeah.

Who knows if it will happen. But, I mean, yeah, just what a legendary saga, honestly. And the man, the man was in jail for a long time. think what about 12 years if I did math correctly. And, um, you know, I, I think he looked great though. You see that picture of him coming out of jail? I thought he looked really good. He had a, he had a plant.

Yeah, I mean, look at this. He looks, he looks healthy and walking out with a tiny little plant is I don't know Ross well, but I have watched plenty of interviews and videos of him and him walking out with a plant is just incredibly on brand for what I know of. Yeah. It just, it, it also, I think it's really poetic, right? It's, uh, you know, we, you have this vision of him locked. way and yet he's still growing and fostering new life. And it's very emblematic, I think, of

the life he has ahead of him. I mean, is he 40 years old? I think he's 40 years old. He walks away at 40 years old, which he has plenty of life left. Yeah, he does. Yeah, he does. All right, Alex, let's turn to the Trump meme coin. The official tweet out of the Donald J. Trump Twitter account tweeted out on January 17th. My new official Trump meme is here. It's time to celebrate everything we stand for winning. Join my very special Trump community. Get your ticker sign Trump now. Go to get Trump memes.com, which is a page that looks like this, which is a very skinny, fit looking Trump. It's with the only official Trump meme. Buy with debit card, buy now with crypto, and a Solana contract address, which leads to this Trump token on Solana that came in at the day of

launch coming in at a, let's see, about a $1 billion. market cap and then they immediately went up to $26 billion market cap. It also came in at something like an $80 billion fully diluted valuation at the peak. At the peak, people thought it was crazy. It was going up 11,000 percent in 24 hours. And I think this was one of the most astounding things I've seen in crypto. People were going back and forth and processing this. This additionally caused Solana, the Solana token, to pump almost 50 percent on the week.

simply because the president, incoming president at the time, chose Solana to issue his Trump coin. So Solana went from $175 to $286. The sole price fell off down to $230, along with Trump, which lost almost 50% of its market cap, when the Melania meme coin was announced. Also from a tweet from Melania's Twitter account, Melania launched at a $2 billion market cap,

13.3 billion fully diluted. And then it quickly fell off to a $6.5. $600 million market cap where it is today. That's a $4 billion fully diluted. The launch of Melania was not really received very well and kind of really changed the tune around people's perception of the Trump meme coin, especially when Donald Trump made no crypto-related statements or executive orders in his first day of office or in his inaugural speech. It's also worth noting that a Trump-owned company owns 80% of the supply of the relevant meme coin. So I think people are still processing this, Alex, the existence of an official Trump meme coin, along with a

Bologna coin? What are your initial thoughts and sentiments? When you saw this tweet, what did you think? Well, the funny thing is, is that he tweeted it. What time did he tweet that? 9.44 p.m. right during the crypto ball. Yeah. So did not see this until the next morning. I know Nick O'Neill was there with some cringe videos laughing at people for not having seen it. I saw some of those on Twitter. I think that was one of the first things that people were surprised about the next morning was he released this while we were all at the crypto ball. I mean, we all, but like a lot. I mean, no one really knew about this.

I mean, I left the crypto ball at the end of the night and still hadn't heard about this and was talking with a lot of crypto people all night. Like, nobody knew about this. So that was an interesting surprise. Look, I think throughout the weekend, people went through almost the stages of grief on this. And you could see it on Twitter. It was at first, it was disbelief.

And then, you know, anger. And then I think acceptance, I think once you got to Monday, Tuesday, which is, you know, surprising, right? Because the president had already released, what, four separate collections of NFTs. Yeah. They'd already launched a DFI protocol on Ethereum called World Liberty Financial. Which is currently buying a bunch of crypto, including a lot of ETH. Yeah. I mean, basically that you can see they're on chain wall.

It's like Trump is famous for selling memorabilia and collectibles of all times. types, right? I mean, steaks and choo-choo trains and whatever else, right? So I think the surprise, especially in an industry that he has embraced, where Pump. Dot Fun and Solana meme coins were a huge part of the 2024 market narrative. I think the surprise is, was surprising to see, frankly, the fact that people were so, you know, surprised by this. Because again, like, this fits, I think it's consistent with not only Trump's broader, you know, past of issuing branded memorabilia, but also his activities in crypto, right? Like to me, this is relatively consistent.

I think, look, and the tech is permissionless. It's, you think about this as an industry that's been calling for the creation of creator tokens and fan tokens as a new way, people to monetize and interact with their communities and audiences. Like, that's this. So me, like, I'm not surprised. And, and, and, but it, you know, it was a, it was a really, really surprise. It was a really, I don't even want to say, um, it caught the industry by surprise. And that was clear.

I think it took most of the weekend for people to sort of come to terms with this. And, um, and then he commented on it. Uh, I think last night. Yes, he did. He commented on it. He said, um, they asked him during a press conference, I think last night. And he was like, uh, yeah, I don't really know anything. I think he said, I remember.

And the DB or somebody, one of those squawk accounts, clipped the quote and said that Trump said, I don't really know about it. And that caused it to go down a lot. Naturally. But the full quote was, yeah, I don't really know much about it except that it, that I launched it. And then he said, where's it at right now? And they were like, I don't know, billions of dollars. And, but he was in the room with, I think he was maybe with Masso's when they were talking about soft banks investment.

And he was like, a couple billion dollars. That's nothing of these. That's peanuts to these guys. That's what he said. So I mean, I just think you have to look at the whole thing with humor and say that, you know, that these are these are permissionless protocols. I mean, I think that's what we've been building across crypto. So I don't think anyone should be surprised when people use them. Yeah.

I think that's right. The, I will say my sentiments and I think the broader market reflects this is when Trump launched the meme coin, I was astounded. And it's like the income. A president of the United States is launching a meme coin. This kind of is along the lines of, you know, Trump loves business. He loves business opportunities. This is clearly a business profit-making opportunity for him. And it's also highly aligned with the crypto industry.

I think if anyone in the crypto industry launched a meme coin like this, the crypto industry would likely reject it and call it a grift. But when it's incentive compatible with what we need, which is legitimacy, adoption, and support, by the crypto president that he calls himself. It's a little bit of a different tone. We can accept that. But then when the launch of the Melania coin came out, you can see that reflected in the price. And the price of the meme coin has,

of the Donald Trump meme coin has really not, it lost its momentum and it hasn't really been able to recapture its own momentum. We'll see if it can get some momentum. I think they kind of hands off nature that Donald Trump is treating his own meme coin is, I guess, appropriate, because it is truly just a meme at this point. But wow, I kind of would like to imagine a world where the Melania meme coin was never launched because why did they, why did they do that?

Like Melania, I'm sure, is a great, fantastic lady, but everyone cares about Donald Trump. No one really cares about Melania. Trump is the meme. He is the meme. And now it's highly dilutive. And it kind of rips off the mask of the intent. It kind of removes some of the deniability of the intent around the Donald Trump meme coin. At least that's my perspective.

Yeah, well, I mean, I think, you know, you don't want to compete with yourself, I think, in general, if you're issuing anything, right? You don't want to have two. It should be dilutive, you think. Yeah, I don't know. Look, that it was surprising also. I don't have much on this. I will say yes, if you're talking about the sort of the allocation schedule when you mentioned that, you know, it might be seen negatively if a normal sort of crypto people launch this. I think that's probably true. I think there's no. world in which people in you know like where i came out of in crypto and my bitcoin friends would think that this wasn't um that this was a fair allocation you know compare 80% of a however we call this it's i guess it's a it's not a pre-mine it's a it's just a pre-launch allocation yeah versus bitcoin's fair launch right is is there's a wide discrepancy there um but i would also say like there's a lot of i mean they they i'm looking at this disclosure page here on on trump's website and um there's a fairly large amount of disclosure. I think in general, um, this may be, maybe a good way to say this is that it will make

consumer protection more important for Democrats in these various legislative discussions, uh, on the market structure bill stuff because I think one thing that crypto, Democrats in particular, I think will be raising this, but I think broadly people agree with this that, um, no one is asking for a free pass for digital assets in America. I don't think anyone wants to go back to the totally unregulated and Wild West ICO era of the 2017s. But I do think that, and I believe this, like you should be able to issue a digital asset as long as you meet the requirements, particularly disclosure requirements. That's how securities work, right?

The entire process of taking a company public in America doing an IPO or direct listing is one of disclosures, right? All those documents, same thing with the E. Yes. Remember looking at those S-1s over and over again as they were amended. Like those are disclosure documents so that investors have information. If you, yeah, so this is what I'm talking about. I think, you know, I haven't verified if these allocation schedule that you're showing here is actually hard-coded into the contract or if it's like we just promise to do it this way. I don't know.

But I do think we need to get to a place in the industry where disclosure is not only the norm and it's gotten better as being the norm. but perhaps is the requirement and, and, um, and can be verified. So I, I think, look, this is good that it has this, very good.

Um, it would be a lot worse if it didn't have this. I think if you know what you're buying, you know you're buying the Trump meme coin, you know, right? The other thing is I would say, we don't really want to get to,

we, I personally think we should get somewhere away from the nanny state where, um, you know, only, you know, rich people can speculate as much as they want, but,

you know, but the average person, yeah, right. Mm-hmm. And, um, And so again, with stronger disclosure rules that still, you know,

make sure that at least the information is available to all types of investors. I think it still was still a shock, but I think, you know, it's consistent with what, you know, he's done in the past. And at least we've got some disclosures here. Let's get those disclosures. Let's make a pathway for the people to do it with the disclosures. Yeah. What I would say about the launch is that it was not a botched launch.

It was a pretty acceptable launch. At least when I go to get Trump memes.com, what Alex is referencing here is this information about the allocation, along with a pie chart and these different groups that have different allocations. And there's these big text that says there are 200 million Trump available on day one and will grow to a total of one billion Trump over three years. Each group's allocations are released on their own schedule over three years. And there's a bunch of groups labeled here,

which I would like a little bit more information about what and who these groups are. creators in CIC Digital 1s and 2 and 3, public distribution, creators in CIC Digital 4, 5, and 6. So different groups. And I don't know if there's too much information about what these groups are, but I think that would be like the missing component of information that I would like. But other ones, it's a fully transparent supply schedule that has a little bit of missing information in it. But otherwise, I'm relatively happy with the information that as a consumer, as a potential

investor, not financial advice, I'm not buying. But there's information here that is interesting as a potential Trump owner at the very least. There was some public commentary from Dave Portnoy. He tweeted out, I have a dumb two-part question. What's the difference between the Hawk toa coin and the Trump coin besides nothing? Second question, can I string up my own

coin now and tell people it's a Ponzi scheme from the jump and I'm going to rugpole at some point and you better just hope you're out when I do, and that will make the entire thing legal. And then he finishes with ticker sign Trump. I think these are hyper, hypothetical questions. And then even the event of the Trump meme coin made it sway into mainstream media. The political article saying a horrible look, crypto lobby reels from Trump's meme coin, which includes a quote from our friend Nick Carter, who said,

it's absolutely preposterous that he would do this, who is a founding partner at the crypto investment firm, Castline Ventures, who describes himself as an avowed and explicit Trump supporter. In another quote, they're plumbing new depths of idiocy with the meme coin launch. So even inside of the crypto industry, mixed reaction to the launch of the Trump meme coin. Alex, any final comments before we move on?

Yeah, I mean, I think Nick is reflecting what a lot of people were thinking when it happened early. But look, again, they have done pretty much everything in crypto. They're speed running their crypto world. The Trump family is, right? They were pro-Bitcoin minor, I think was the first thing that they said about Bitcoin, about in crypto. Then, well, I actually think they had launched NFTs.

They'd launched ordinals. I think one of the collections is on ordinals. So they did NFTs, ordinals, defy, talked about Bitcoin miners, one to the Bitcoin conference, talk about the stockpile. So they love Bitcoin. Then they say, never sell your Bitcoin. Then they, and the idea that they would do a meme coin, I think is just totally on brand. I mean, it's also, you know, we talked about this on bankless before you and I, David,

but like last year was largely this barbell market of Bitcoin on one end and the institutionalization and maturation of Bitcoin adoption on one end and meme coins on the other. I mean, really from like February through the end of the year, maybe with the AI agent coins coming in sort of later at the end of the year, which themselves are kind of meme coins also. So it doesn't surprise me. And I don't think people should be that surprise given. I think it's pretty consistent with what the Trump family is done in memorabilia collectibles, but also in crypto. I also got a couple more things I want to talk to you about. You were at the crypto ball in Washington, D.C, but then there's also been some movement out of the SEC and the CFTC. Mark Ayuda is the new SEC chair. And then the

CFTC just lifted the sanctions on tornado cash. I know you're not a lawyer, but I'm going to ask you some, you know, maybe related questions. But before we get to all of these topics and more, first, a moment to talk about some of these fantastic sponsors that make the show possible. Are you ready to swap smarter? Uniswop apps are simple, secure, and seamless tools that crypto users trust. The Uniswap protocol has processed more than $2.5 trillion in all-time swap volume, proving it's the go-to liquidity hub for swaps.

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me a little bit about that. But what was the crypto ball? What was the purpose of it? Why did it happen? Uh, tried a little context on the whole event for us. Yeah. I mean, I think this was, it was put on primarily by David Sacks and David Bailey from Bitcoin Inc. Right? Bitcoin conference. Um, I think David and his team, my guess, I don't actually know, but I think, think they probably, they organized it and ran the event, given that they are a big events company as well. But so you had, you had companies from across the industry both sponsor it. I mean, I think this is a shot that shows in with crypto is one of the sponsors. And this says exitous wallet and, and, and Cracken and Anchorage. And I think, maybe one other that I can't see.

There's a bunch on the left. There's Galaxy. There's you guys on Docto, Lana, MicroSratadig, Coinbase, Metamask. I'm going to mask. Mistin Labs, the Bitcoin layer two. Wow. They sponsored. Wow. So yeah. I mean, I think, so it was a celebration for crypto.

This was not an official inauguration event. I was there. I did not see the president there. Donald Trump Jr. was there. I think other members of the incoming cabinet were there. So there were people there from sort of the administration. And so, you know, I think it was. a celebration put on by crypto, the crypto industry broadly, the Bitcoin and crypto industries broadly.

And I think it was well deserved because it's been a, I mean, it was pretty surreal, you know, having gone through the, you know, ranging from total ignoring us on one end to directly attacking us. I mean, a whole, I mean, it wasn't just crypto that was under attack. I mean, they proposed a 30% value added tax on Bitcoin mining at one point in a federal budget, right? It was the stuff at OFAC and FinCEN on the Bank Secrecy Act, things like Elizabeth Warren's proposed digital asset anti-money laundering act. That would affect all of crypto, not just, you know, it's not just about issuance and defy at the SEC, right? There was broad attacks on Bitcoin, Bitcoin developers, you know, the sort of the most vanilla. Anything adjacent, anything

relative. Yeah, truly. And so to then be in the heart of Washington, D.C., on inauguration weekend, And surrounded by people who either individually or their companies had been in the trenches, you know, fighting that fight for the last four years and be able to celebrate and know that, I mean, I would say at a minimum we expect, at a minimum we expect a much more open-minded and hands-off approach from the new administration at a minimum. So it was pretty surreal. It was a great celebration. Snoop Dog performed. Soldier boy performed.

No way. performed yeah um and which were funny and good i mean they were they were and and it was just a yeah it was a fun time it was a lot it was sort of it became sort of a meeting place i mean individuals could buy tickets they were quite pricey i think um what i was seven thousand dollars for an individual i think it started at 2500 oh gosh five k then it went to hire i mean as it as you got as the supply of tickets right now it was absolutely packed to be clear like it wasn't packed you were like shoulder to shoulder in some parts of that room. But I think a lot of the money will go to, I believe some large portion of it will go to

Bitcoin developer nonprofits. And so I think it was just, it was a fun time to get everybody there together. And this is how we kicked off the weekend. I mean, if you were there for the whole weekend, this was Friday night. We were joking the next week. Like this is, this was actually from the Starlight Ball, these are the you're showing here, which was Trump's inauguration ball on Monday night. after taking the oath and going to the Oval and sign it,

after becoming president, there were things like this all weekend long. And we were thinking back on like Sunday afternoon, we were like, God, the crypto ball was like a month ago. Like we did a lot of stuff. Was it like a sometimes going to a crypto conference feels like a marathon of just

events, events, events. It kind of sounds like it was. That's what it was. Except it was in Washington, D.C. And a crypto president was getting elected. Yeah. And I'm sure other crypto firms that were there like we were.

did similar things like we met with members of Congress and and regulatory officials and people that we know in general to, you know, check in, say hi, like figure out like how we can help with information. I mean, one of the things I think that I'm so excited about with a new administration with a more open-minded and open-door approach to digital assets in general, regardless of where policies land is they're asking for help. They want to know more about the space. They want to be educate on the space when something new comes out they want they need help learning what it is and how it works and finding how do we find data on it right like that's where you know the industry has a lot of expertise and so it's just nice to know that if you go in you know think about robin hood

pretty famously said that they met with the SEC like 12 I think it was 12 or 13 times or maybe Vlad had said it was a it was a dozen times gave a bunch of information about what they wanted to do what they were doing information about it. And then the SEC sued them with that information, right? They, or I don't know if they actually ended up filing suit. I can't remember, but they definitely sent them a Wells notice, which is intent to sue them. And they complained Robin Hood that this was unfair because it was on the back of them coming in, being very transparent, trying to help them understand, providing information.

It feels like from the statements that the new guy who's taking over the FDIC said that they want an open-minded approach to innovation and technology. including FinTech digital assets and tokenization. Obviously with the crypto task force that's now being established, been established at the SEC, it feels similar. Again, not saying they're going to come out with rules that are exactly what the digital assets industry wants, but they're very, very clearly signaling that the doors open. So it wasn't just these celebratory balls. It was also a lot of meetings and, you know, breakfasts and catching up with people that you know and coffees.

And it was a lot, but it was a lot of fun. Yeah, and that does kind of lead us into something that's going on at the SEC. Mark Uaida, who is the pro-Crypto compatriot to Hester Perce. I think more bankless listeners are familiar with Hester Perce, but Mark Ueda and Heser Perce are really been leading the dissents against the SEC, SEC chairs that are lead, commissioners that are leading the dissents against Gary Gensler and his anti-crypto campaign. And he, Mark Ueda, has been named the SEC chair,

while a real, while the official Trump appointee is, we're still waiting for that, for that appointee, that name. So in the interim, Mark Eweida is the SEC chair. And there has been some movements going on. The SEC has announced a new crypto task force announced by Mark Ueda, along with Hester Perce. Apparently he's going to lead this task force. And then a tweet from you, Alex, that I read this morning,

SEC schedules closed-door meetings for Thursday, January 23rd. that's in tomorrow. The topics include institution and settlement of injunction actions, institution and settlement of administrative proceedings, resolution of litigation claims, and other matters relating to examinations and enforcement proceedings. Alex, can you just, like, read between the lines for me here? Like, spell this out clearly.

This one on over here. Yeah, so Commissioner UADA is a great supporter of digital assets in general. Again, when we say that, we don't mean that they're, like, let us do whatever we want and have no rules at all. But, you know, he very strongly and clearly favors a more progressive approach to regulating in general that includes working with industry to find something that is possible, right? So I think it's a great choice. I think, and by the way, I know some of his staff, they're also very smart on crypto, actually, real crypto. So, yeah, with that meeting, I should have been a little clearer.

that meeting is a recurring, well, it's, they do that meeting a lot, right? That's part of the normal business of the SEC. However, this will be the first one that has Mark and Hester as the majority, right? I think the other two have already resigned. So, right, Gensler has resigned, and I think Crenshaw has resigned. Caroline Crenshaw, yeah. So they do have a two to one majority. So they can actually move, even without Paul Atkins, who's been named as Trump's chair of the SEC, he probably won't take, be confirmed by the Senate until, I mean, I don't know, April or May. I think Gensler was confirmed in April.

Jay Clayton before him was confirmed in May. So like it, it's not like the, you know, Treasury's, you know, Marco Rubio was confirmed for state, Secretary of State, like a night and a half ago, right? They're going to move. There's only so much floor time available in the Senate to actually do these confirmations. and there are certainly other positions that are more important to urgently do than the SEC chair. So we expect that Paul will come into office sometime in April or May. In the interim, though, with the establishment of this crypto task force, which will be led by Hester Perth,

the other Republican appointed commissioner, and which by the way will include Rich Gabbert, who is a senior advisor to Marqueda and Taylor Asher, also a senior advisor to Marquita, both very smart on crypto. With the establishment of that task force, I think you're going to start to see them move on things like halting enforcements or at least pausing to review them, right? This group that now controls the SEC was not in the majority that decided on bringing a lot of these court cases or high profile enforcement. So I- Yeah, they dissented against them. Yeah. So this meeting, which is specifically about reviewing the current state of litigation and enforcements, is now being run by a majority that is opposed to the prior approach.

So I think you will start to see them get to work here. And I mean, when we talk right after the election, the election, and I said this, and we published a report called the Digital Golden Era, which is all about what to expect. And one of the first things we wrote was that we expect to see a widespread halting of enforcement and crypto pending further review and possibly the pausing or withdrawing of major litigation. I think it's very likely that in the next month, you'll see, month or two, you'll see the SEC file in court in major cases like with Coinbase. It leads something to the effect of, hey, your honor, we may actually be reevaluating our approach to this entire case.

I think it doesn't mean they're going to immediately file to, but right, I think the task force is sort of the first step to them figuring out like, you know, where do we want to go? Yeah, we know where point A is. That's where we are now. But where do we want point B to be? And then what is the actual process to get there? I think they're going to, it's not going to happen right away. But I think I would be shocked. I mean, that's a, the meeting tomorrow is a closed door meeting. That's why it's published under the Sunshine Act, meaning it's internal SEC meeting. So I don't know whether we'll learn anything about what is actually said there. But I mean, if this group is here talking about what to do with enforcements and litigations, I think. this is the start of them changing their approach. Yeah, and like you said, we're not expecting nor asking for just a blank check from these more pro-crypto SEC commissioners. I think what, you know, reading between the lines, they are going to go case by case of individual enforcement actions and evaluating each individual one to see if they,

what they want to do with each individual one. They disagreed with many of them, but they're not just going to throw every single one out the door. They're going to evaluate each one by its merits and decide what's right. and what's best and what's fair for the mandate of the SEC, which is fair and orderly markets, which is something that I think the crypto industry feels that the SEC has not been doing. They had some undisclosed secret mandate.

And I think we all kind of have faith that Hester Perth and Marqueheda will act in accordance with the actual mandate of the SEC. At least that's what I'm hopeful for, which is fair and orderly capital markets. Something that came out this morning, which I mistakenly called the CFTC, but this is actually OFAC. this was breaking this morning. Court lifts O-FAC sanctions on tornado cash, marking a major win for crypto privacy advocates. So it turns out this is actually not anything to do with Donald Trump,

but the timing of this is just, you know, another good cherry on top for crypto industry wins. This is part of the arc of crypto wins in the court. This is the Joseph Van Loon, Preston Van Loon, Alex Fisher, Kevin Vitale, and a few others. Their court case, the Coinbase sponsored court case, against OFAC about the illegality of tornado cash. This tweet, which is a coin telegraph, reads, court lifts OFAC sanctions, which to me makes it seem that going and using tornado cash is legal. I am going to wait for multiple lawyers' confirmations on this on Twitter

before I even go anywhere near tornado cash. But Alex, have you processed any of this? What's your reaction here? Yeah, so the ruling, this is a publishing of the ruling that came out in November which is great. It's remanded back to the district court to figure out what to do with it. And my understanding is either it will become legal for the plaintiffs in the case like Van Loon and others to use tornado cash or it will become legal for everyone to use tornado cash in general. I think the ruling explicitly said that tornado cash smart contracts are not property.

And that's important because the authorizing legislation. that allows OFAC to sanction foreign individuals and entities, meaning things, doesn't have an exception for whatever a smart contract is, which is why OFAC said, well, smart contract is property. And that's what allowed them to do the sanctions. And so I think this is this is a big deal. I think there was plenty of also language in the ruling that was supportive of was, it wasn't just a niche like, well, it's not property.

And we don't care what it is. But since it's not property, send it back. That's sort of the legal justification for the ruling, but there was a lot of language that, I mean, they looked, they said the fact that the smart contracts didn't have upgradeability was a big feature, couldn't be controlled by any party, makes it impossible for it to be property if nobody actually controls it. It was a well-reasoned argument, and I think it's very positive. I think this is one of the most important issues, by the way, that the administration is, I would say, less likely to sort of give the industry. what it wants, which is some relief from the stuff at Treasury, right? So FinCEN, what we call TFI, terrorism and financial intelligence, wing of the Treasury Department, which oversees FinCEN and OFAC. It's not, and not saying because maybe they don't want to or might not try, but

think about in a post-9-11 world, it's very difficult to justify, maybe easier to justify, very difficult to argue about relaxing things that involve illicit finance, right? And it's just very tough to argue that, you know, you should be able out. I mean, let's face it, North Korea did use tornado cash a lot. Like it's, right? So, like, it's, it's hard to make that case. So it's great to see the courts here because politically it's going to be more difficult, I think, to get, you know, elected officials and appointed officials to support a more libertarian view of how this should, should go. But on the other hand, you know, to me, I think it's, it is the right thing. If it can't be upgraded, it is literally the internet, you know, the, you don't put Microsoft, Microsoft CEO in jail

because a Al-Qaeda manifesto was typed in Microsoft Word. Like, it's not, if it is truly a decentralized tool, which is what the court has basically said tornado cash is, then it really doesn't make sense to criminalize the people that merely authored it, right? You should, you should, you should really focus on the people that used it for illegal activities. The other thing I want to point out, too, that gets lost a lot. Privacy in finance is not illegal at all. It's not even intentionally obfuscating the origin of funds is not money laundering. Right.

For it to be money laundering, the funds themselves have to also emanate and be proceeds of crime, right? So Vitalik sending donations to Ukraine through tornado cash, which I believe he said he did. that's not money laundering, even though he is obfuscating that it came from him. Right, right. You're totally allowed to use private, be private, wealthy people in particular do this all the time, right? Corporations, even in Delaware and in the Dakotas where they have strong corporate privacy, right, like are structured to give people privacy. It's merely illegal if you also are doing it to hide the origin of illicit funds.

So people deserve privacy. I hope that will, and by the way, I hope the same ruling or outcome will eventually happen for something like samurai wallet as well and coin join providers that. I don't know if the legal facts are exactly, you know, comparable or whatever, but in general, I think we're supportive of tools for privacy and we're also supportive of tools to help law enforcement catch bad guys. And that's what the court and the government are going to have to figure out the way forward. I am happy that it seems like the court here, possibly also the government now will be at least slightly tilted a little closer to our view of this. Yes. Yeah. Yeah.

And I think that kind of brings me to maybe the last question I have for you, Alex, is just we have momentum right now. We have the courts, which are consistently giving wins to the crypto industry. We have Donald Trump pardoning crypto people, crypto supporters like Ross Ulbricht. and also just generally just we have a lot of momentum across the board. Maybe if you could just, you know, think for a moment and come up with a wish list of what we want. I know Vitalik Buterin tweeted out, no man left behind after talking about the pardoning of Ross Oldbrook. He tweeted out Roman Storm and Alexei Pertsev are next. These are the two developers behind Tornado Cash.

Tornado Cash, again, with the announcement that we just read that a court has lifted a ban on Tornado Cash, Does it make sense that the tornado cash developers are in jail? Roman Storm and Alexei Persev. I believe Alexi Persev is in jail in the Netherlands, but Roman Storm is potentially going to jail in the United States. He is living in Seattle, Washington as of right now. And so maybe a wish list of future things that you would be hopeful for as it relates to OFAC and tornado cash or just Bitcoin,

Bitcoin mining, anything. What comes to mine first for you, Alex? Well, I, you know, I think when it, when it comes to Roman and Alexi or the samurai wallet guys or, well, let's stick with them as two relatively similar examples. You know, they're not charged by the federal prosecutor specifically with having deployed the smart contracts, right? They have the charges are involved, I think, primarily the front end and specifically not banning the IPs of the North Korean actors even after they knew. So there are some facts, I think, that are a little, you know, that are harmful to them and that relate more specifically to the charges they're actually being charged with. That doesn't mean that I support, you know, pointing that out just to be very clear, that doesn't mean I'm not supportive of them having some relief here in one way or another. I mean, you could also, for all we know, see a different approach taken in their criminal case, specifically Romans in the U.S.

I really can't speak to the Netherlands. I did see. It seemed like he was being treated terribly. was held for months, Alexi, without, I think, being even charged. So, I mean, I'm opposed to that. I want due process. It's possible you could get a better approach from the prosecutor in Roman's case anyway, maybe. I do think this is a great fact for his case, right?

I mean, if it's not illegal, then on its face, then, I mean, the case is definitely, I would say it's pretty safe to say it's probably weakened the federal prosecutor's case against Roman. would love to see some resolution here overall that's positive. I think either way, you're going to have the ability to, it looks like, we have to wait and see what this district court says with this remanding back to them. But it looks like we could be at a place where you can deploy immutable, non-upgradable privacy contracts and have that not be illegal.

It's possible. Now, maybe you can't profit out them. Maybe if there is something you control like a front end, by the way, Defi also broadly, I think you've talked about this in the past, but regardless of who's president and regardless of who's in the regulatory seats, Defi needs to get to locally run front ends because the operator of a front end is always going to be somewhat responsible and they should be. It's why Uniswap doesn't show like a whole bunch of tokens they don't show. Right. I mean, because that is, they're hosting. They are effectively like Coinbase wallet is to the rest of defy.

Like they are, they may not be a broker, but they certainly can limit what you can go to things. Yeah. Yeah. So I think it falls under the category that we like at bankless, which is if it can be regulated, then it perhaps ought to be regulated. And if it can't be regulated because it's decentralized, then it shouldn't. I mean, it's the same thing. Like, why we don't think about like an open source, uh, locally run wallet and, you know, take like Bitcoin core or geth or something, right?

Like, that can't be regulated. It's literally a piece of code. right, but a front end website where I log in, you ask me for information, then it's like, well, I mean, maybe you could be regulated. So, which by the way is also okay, but I just mean, I hope that for Defi to become more resilient for founders to not, you know, face this kind of threat, whether in the U.S. or abroad, I mean, if you don't clip a fee and you don't store data and you don't host a front end, that should be okay.

Now you're looking a lot like Satoshi, to be honest, right? Like so I hope we get more of that. I think to your question, I mean, I think we want to see. I think you just got to chill and let this play out. I mean, right? I think crypto, Twitter has relaxed a little bit since Ross's pardon, which is right. I think everybody needs to take a little bit of a chill pill. Everything appears to be happening so far as promised.

And I think you, you know, there's just a lot of priorities. You can't expect the president, but you don't even realize if there's a debt ceiling limit debate that has to happen. U.S. government is about to run out of money. So Congress is going to be all tied up dealing with that, right? And negotiations around that for a while. So a couple weeks and stuff. So like there's a lot of high priority stuff that although the digital assets industry

gave a lot of support to the president, so did a lot of other people and a lot of other important industry in America. It is not literally a crypto Congress. Sure, there is a lot of crypto support in Congress, but it is America's Congress. They've got other issues to work on. So I think people just relax and chill and, and, you know, wait and see what's going to happen. I think so far at FDIC and SEC and CFDC where Carolyn Pham was elevated to acting chair, too, you've got in three of the most important Fin reg seats, much more open-minded, possibly supportive people in charge.

And you've still got, I mean, even Scott Besson, who's very likely to be confirmed soon. I mean, the Treasury sector is very important. I mean, in terms of the government operating. He's signaled plenty of support for digital assets in the past. So I think you're looking at everything looks like ready to go here. So it's hard to know. You don't want to speculate too much, but I'll do one specific. I'm hoping that, you know, a good friend of mine, Omid Malekon, who's a professor at Columbia

Business School. We had him on the pod not too long ago. Oh, great. I love Omead. He was saying something really interesting about tokenization, which was that we all used to we all who were in crypto. a long time used to think that it would help bring liquidity to illiquid assets. And I looked at dozens of platforms when I did VC at Fidelity to tokenize stuff. And like some of them were

explicitly for real estate, right? And remember there was the St. Regis and an ass band that was partially tokenized and all this stuff. None of that ended up being true, right? Illiquid, it turned out that, you know, you don't want liquidity sometimes or other, like, you know, you don't want to wake up and find that for some reason someone dumped your house's token overnight. Now your house is. Like, and also there's other. And also there's other. advantageous reasons why things might not want to be marked to market, right? Venture investors, as an example, like, they don't have to mark their stuff to market. Maybe they do it quarterly or annually, but like they don't want it to be live, right? So there were other reasons why

that wasn't true that it didn't, its primary reason for tokenization was not bringing liquidity to illiquid assets. And in fact, what we found over the years is that the biggest product market fit for tokenization has been stable coins so far, which is expressly the opposite. It's tokenizing the most liquid asset, which is the U.S. dollar. And I would say the second, and he pointed this out, Omid, the second was that we've seen traction on a sovereign debt, right? Treasuries, right? The second, you've got Franklin Templeton and Black Rock and others that are tokenizing,

creating on-chain money market funds. Money market funds own national debt. They own treasuries, right? And so then you say to yourself, well, what's the third? Okay, now it looks like it's more about giving access to existing highly liquid. Those seem to be working. One and two are the most liquid in the world. what's three U.S. equities, right?

So maybe, and just today I saw at Davos, Larry Flink, was Larry Fink, BlackRock CEO, was explicitly talking about tokenizing bonds and equities. Wow. I think you're likely to get. He would not say that unless he was already cooking on something. Yeah, I think you're likely, and they, and they've already been tokenizing bonds, too, with Biddle. So I think you're likely to get at a minimum some sandbox environments and proof of

concept, state, you know, areas. at the SEC where say a tokenization company and an issuer as in like a company who issues stock and maybe like a major national securities exchange sort of all come in and they say we want to tokenize a thousand shares of you know ticker xyz or whatever it is and um and just like you know okay how can we do that and maybe they'll say the SEC will we know I'm pretty sure the SEC is going to say let's figure out how we can do that in a limited way and then we'll study it all together and figure out the path forward and so you'll get things like, oh, well, you can only do it for a thousand shares and they have to be to an

accredited investor. So you're great. You go find like some high net worth person or a family office that also wants to be part of the experiment, right? And then you sort of try things like, okay, well, how's FINRA going to get, Finra gets from all the brokerage firms like a daily reporting called Blue Sheet Reporting, which is just like all the trades the brokerage firm did. Okay, well, how do we get that to FINRA, the SEC might ask? And literally, there's some guy at FINRA who has to receive these every day. How can he get it in the exact same format? that he currently gets it from Fidelity from Ethereum, right? So then it would be like, okay, like help set them up with a node and like, we'll create an

index or form. We can pull the data. Forget every day. You just see it in real time if he wants to, right, or export under any timeframe. You go through all those stages and I think eventually you do get to a place where you can, in some way, NISI can adopt a decentralized trading infrastructure if they might want to and issuers could choose to either dual issue both on a blockchain or not. I think it's very likely that over the next four years we see significant movement on that.

Wow, Alex, that is as bullish as it comes, thinking that some of our regulators are going to actually start to become crypto-native and run some local infra in order to do their jobs. That says, I think it's bullish and optimistic as it comes, and I'm absolutely here for it. Alex, thank you so much for joining me on Bankless today and helping me work through all this news. Yeah, thank you, David. Alex, if people want to just hear more from you, maybe they liked your takes, maybe they like the sound of your voice. Where should they go to get more of it? Yeah, check me out on Twitter or on X.com, a great website, X.com.

Intangible Coins is my handle there. And check our content. We publish a lot of research at galaxy.com slash research. Awesome. We'll get all those links in the show notes of the podcast and on the YouTube. Bankless Nation. Thank you so much for tuning in. If you're watching on the YouTube, make sure to give us a like and subscribe where we cover.

Any time Trump talks about crypto, we're probably going to cover it. So if you want more of that content, make sure you subscribe to the YouTube and give us a five-star review in your podcast app. We really appreciate it. Bankless Nation, you guys know the deal. Crypto is risky. You can lose what you put in. But nonetheless, we are headed west. This is the frontier.

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