Bankless - ROLLUP: SEC Announces "Project Crypto." This Changes Everything.

Episode Date: August 1, 2025

We’re joined by Haseeb Qureshi from Dragonfly Capital to discusses the SEC's Project Crypto and its impact on the crypto landscape. We celebrate Ethereum's 10th birthday, reflect on its growth, and analyze the ongoing trial of Roman Storm linked to Tornado Cash. The episode also covers the launch of Ethereum treasury company ETH Zilla and advancements in crypto ETF regulations. Haseeb: https://x.com/hosseeb —- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🪙FRAX | SELF SUFFICIENT DeFi https://bankless.cc/Frax 🦄UNISWAP | SWAP ON UNICHAIN https://bankless.cc/unichain 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle —- TIMESTAMPS 0:00 Ethereum's 10th Birthday https://www.cnbc.com/2025/07/30/at-10-years-old-ethereums-future-is-brighter-than-ever-despite-recent-setbacks.html?taid=688a2118974852000113ad9a https://x.com/TimBeiko/status/1950578090108993904 https://x.com/ethereumfndn/status/1950179673872510997 7:47 Analyzing SEC's Project Crypto https://www.sec.gov/newsroom/press-releases/2025-101-sec-permits-kind-creations-redemptions-crypto-etps https://www.sec.gov/newsroom/speeches-statements/atkins-digital-finance-revolution-073125 26:56 Exploring Token Launchpad Wars https://x.com/smyyguy/status/1949657674003431788 https://x.com/smyyguy/status/1949790587877515697 https://x.com/0xMert_/status/1950324576204050752 48:41 The Roman Storm Verdict Discussion https://x.com/innercitypress/status/1950586483955626129 1:03:39 Closing Thoughts and Reflections --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

Bangles Nation, it's the Friday weekly roll-up, and I'm tapping in Haseeb Qureshi from Dragonfly. Ryan is out and about having a vacation this week. Haseeb, how you doing, my man? Doing okay. It's been a long week, but happy to spend it with you. It has been a long week. It was starting decently quiet, but I think today, specifically, it got pretty loud with this SEC speech. The SEC is introducing Project Crypto. I thought it was just absolutely incredible. Definitely a capstone for everything that's been going on in this administration.

Yeah. Before we get into the project crypto, we're going to talk about Ethereum's birthday. We'll talk about some of the ETH treasury companies that are coming online. The Roman Storm case as well. We are all waited with baiting breath, but we just learned that the verdict is not going to be heard until at least Monday at the earliest. There's pump versus Zora things to talk about. But let's go ahead and start with Ethereum's birthday. Happy 10th birthday to Ethereum.

There was just a flurry of activity going around Ethereum Twitter, just all of these different people talking about their lore with Ethereum. Because now that Ethereum is 10 years old, all these different Ethereum community members have different walks of life, different stories to tell. I said like how Ethereum has impacted their life. Something I thought was pretty cool was this Believe in Something campaign, which was a marketing campaign, which I thought was organized by the Ethereum Foundation.

I was like, sick. This is the first ever Ethereum Foundation marketing push. Turns out it was actually just an engaged community member who just thought of like, hey, let's get a few companies. to do this believe in something, but the ETH in something is replaced by the ETH logo. Everyone can brand it as their respective company.

And on the 10th birthday, we'll just get people to tweet this out. And I think maybe like 10 organizations were in there, like with a 10 quarter or in order to kickstart this thing. But the brand itself, the graphic itself was simple enough that, you know, the designers of respective companies could all kind of get together.

And it turned out, it turned it to be like, I think Ethereum's best marketing push ever. Anyways, happy your 10th birthday to Ethereum, Hissie. What were your thoughts? Anything you did that was special? What did you think? It was really heartwarming to see all the stories about Ethereum early days and looking at

some of the core devs who were reflecting on the journey that Ethereum has been on. I got to be honest, though, like, one, I hate these, like anniversary-type things. I think it's just kind of the way that I'm built. Anniversary of the big white paper, anniversary. Yeah, these kinds of things. Like, you always get journalists hitting you up. You like, do you have comments on the fact that X has just turned X many years? old. And I'm kind of, no, I don't have any comments. I didn't have any last year. I don't have any this

year. So I, you know, I got like an LLM to write something that somebody asked me to like give a statement. But I, to be honest, like, I think the, the fact that I don't mean to be a buzzkill, but the fact that the Roman Storm case was going to closing arguments yesterday made it hard for me to feel very celebratory. There was actually a tweet that David Morris highlighted yesterday that he just learned that the beacon chain for Ethereum was actually deployed from the Tornado Cash contracts. And so Tornado Cash itself is kind of forever enshrined in the history of Ethereum. And so there's a lot that rise on this trial. And I was thinking like it's hard to celebrate when there's such a big question kind of weighing over the industry.

Because the cypherpunk movement that led to Ethereum, the. the encapsulation of that really is the case of Roman Storm. Yeah, here's said tweet. Y'all, I was just notified of something mind-boggling. In the current context, the beacon chain contract for all-staked Eath was deployed by an address, funded by tornado cash. And Roman was just one of the many developers who would otherwise be celebrating ETH's 10th birthday with a story of his own about how Ethereum changed his life and how he decided to become an open-source contract developer. I remember there was a recent tweet from Vitalik Buteran who donated a bunch of money to Roman Storm's case and said something to the effect of, oh, I actually like encouraged you to go create this application, this privacy application. And so I would be dishonorable if I did not support you in your time of need and then came with like a weighty donation to Roman Storm. So yeah, like there's a bunch of mixed feelings I would say going around. We're going to be bullish in a second talking about the SEC's Project crypto. We're reminiscent and nostalgic. talking about Ethereum's 10th birthday, but like, I would agree with you. There is this big cloud

overhanging us. As Roman's, Roman's jury goes home for the weekend, they're going to take Friday off, which means Roman doesn't know the outcome of his case for the next three days, 72 hours. So I can't imagine just the pressure that is that is weighing on him right now. Yeah, there's a, there's a storm in New York. I hope everybody who's in New York is going to be staying safe. But it was in a way almost poetic. that at the same time that, you know, Roman Storm's trial is undergoing, there's a storm that's battering New York. In different words, well, I guess it's part of the birthday. It was pretty cool to see Ethereum being celebrated at the NASDAQ. So Joseph Lubin and S-Bet and Consensus and a bunch of other people

I was there included. We were all down there at the NASDAQ ringing the closing belt. And so it's pretty cool to see 10 years of Ethereum being broadcasted in the center of Times Square. And so if the sentiment was in crypto, how it was two years ago, three years ago with the Gary Gensler administration, I don't think the 10 years of Ethereum would have been that powerful for TradFi, but it is now a story that Tradfai can like kind of lean into, right? After the Coinbase has done particularly well, Robin, who's issuing a layer two on Ethereum, the Circle IPO has been gangbusters and Wall Street is just into Ethereum right now, into crypto. The 10-year anniversary of Ethereum has a better halo around it and tradfied terms. And I'm grateful for that at the very

least. Getting into double digits, I think, is special. One thing that I often tell people when I'm telling them why crypto is now kind of inevitable for the next generation of people thinking about their capital allocations is that people who are entering in college today, if you're 19, 20, 21, you don't remember a time before Bitcoin existed. Bitcoin was created 18 years ago. Ethereum now is 10 years old. That means in five years, Ethereum is going to be 15 years old,

and Bitcoin is going to be, you know, I guess that would be 23. And really what that means is that there's going to be generation that doesn't remember time before Ethereum was created. And the way in which we think about, wow, you know, Bitcoin was this immaculate conception.

It's the first, you know, it's never going to have, everything is always going to be less Lindy than Bitcoin. And I think that to some extent, obviously that's true. But it's also true that the, the delta between these assets gets smaller and smaller, the older they are. Right? And so right now, we think of like, oh, you know, Solana is like this new thing and Ethereum's the old thing and,

you know, can the new thing ever displace the old thing? Because the old thing is more Lindy. You know, right now, Solana is what, call it five years old? Ethereum's 10 years old. So, you know, Ethereum is twice as old as Solana. And that feels right now, like, wow, that's so much more history and it's so much more august by the fact that it's been around for 10 years. But at the same time, like, you know, give it another 10 years, and Solana will be 15 years old, Ethereum will be 20 years old, and they're not going to feel so different in enough time. So in addition to it being Ethereum's 10 year birthday, and it's 10 years old, it's also got 10 years of consecutive uptime. And when you contrast that with Solana's

1.5 years of consecutive up time, that feels a little bit of a different story. And so I will Brought to you by bankless. A little bit on brought to you by banks list. That's right. That's right. Nice. Nice. It's not entirely equivalent.

All right. Let's give you into the project crypto. Here's a tweet out of Haseeb saying the SEC's new project crypto is the most bullish thing I've seen in a long time from a regulator. Read the speed. It's incredible. Almost all tokens are not securities. They want to discourage decentralization. Kubaki theater.

I don't know that word, Hibb. Kabuki. Kabuki theater. Excuse me. Excuse me. American should not get excluded. by IP and VPN blocks. Let me just get into some of the details here.

So this is a speech from Paul Atkins. It's on the website. There's a link in the show notes so you can go read it. And there are five things, five main points that the SEC, that Paul specifically wants to lay down. And I want to take some time actually with you, Haseeb, and go one by one through those things. Before he gets to those five things,

he lays up, the context, and a little bit of the history of the SEC. And he really just does a very good job going through a little bit of the history. I actually enjoy this kind of as just a history lesson. He talks about before the electronification of the American stock market, these paper certificates had to be physically shipped up and down Wall Street. And that's how they were being traded. They were buying and selling them. They had to be shipped around physically by people with little like baskets running around Wall Street. And apparently, I didn't know this, but on Wednesday, the stock market would close so that these like paper pushers could catch up with the trades being. And, you know,

made. And so the stock market on Monday and Tuesday would trade and there's enough volume that all of a sudden there's a lag of all of these stock certificates being traded. And so they had to shut down the stock market on a Wednesday so they could catch up. And Paul, Paul Atkins highlights this. Here's a, here's a quote. The breakdown over an antiquated system was described by the SEC chairman at the time as the most prolonged and severe crisis in the securities industry in 40 years. Firms failed. Investor confidence plummeted. He uses this metaphor to demonstrate why America's financial markets need to move on-chain proactively rather than retroactively. At least that's my interpretation. Here's another quote from Paul. So today, I would like the world to go on notice that under my

leadership, the SEC will not stand by idly and watch innovations develop overseas while our capital markets remain stagnant to achieve President Trump's vision of making America the crypto capital of the world. The SEC must holistically consider the potential benefits and risks of moving our markets from an on-chain, off-chain environment to an on-chain one. We are at the threshold of a new era in the history of our markets. As I mentioned earlier today, do you hear that storm? Do you hear that lightning hit, Steve? Yeah, that's crazy. The coming through my microphone. Yeah, there's a storm you're talking about. Finishing the quote. As I mentioned earlier today, I'm announcing the launch of Project crypto, a commission-wide initiative to modernize the securities rules and regulations to

enable America's financial markets to move on chain. Okay, so like I said, before we get into the five things, vibe check about the setup and the speech as a whole. I mean, it's pretty dramatic. It's very clear that Paul Atkins, like, he's, he's been brought in to the SEC, and his whole job is to do this massive overhaul from the Gensler era. And he immediately opens with giving some historical context, but also distancing himself from his predecessor and making very clear, this is a new day for the SEC. I thought it was a very, very powerful setup for what is really, I think probably the first really substantial policy setting speech that Atkins has given for the new SEC since he's come in. Let's get into the first big highlight that he says. So, quote, first,

we will bring crypto asset distributions back to America. My interpretation of this is when crypto assets are created when they're minted, when they're, you know, air dropped or whatever. We want to do that onshore in a way that makes everyone feel good. And the capital, you know, stays onshore. So this is trying to move away from like the foundation model, allowing startups themselves to be the asset issuers and those startups be inside the United States.

That's my takeaway from this section. What's your big takeaway here? Yeah, I agree with that. I think, you know, when I say the decentralization kabuki theater, that's what I'm referring to is like people setting up a labs locally and then getting a Singapore or a Swiss foundation that has a separate board that has a this or that. And he's like, look, why are we wasting so much time and energy on that stuff? Remember, Paul Atkins is an advisor to reserve protocol, which is a stable coin. So he's seen this firsthand. He knows what that's like. He sees the amount of just kind of stupid wheel turning that people have to do. in order to have some nominal compliance with the law. Well, to hell with that law, then. Let's just make sure that entrepreneurs are doing the right thing. So he gets it.

The second one. Second, to achieve the president's goals, it is incumbent on the SEC to ensure the market participants have maximum choice when and where to custody and trade crypto assets. I've said before the right to self-custody of one's private property is a core American value. I think this one is just a further nail on the coffin of Operation chokepoint 2.0. Is that kind of the main reasoning here?

That's a part of it. It's also the president has stated many times that he wants to protect the rights of self-custody. So there was some guidance, if you remember, from the SEC, SAB-121, which got very famously litigated last year about allowing banks to custody crypto. And basically what I think what he's saying here is that, look, custody, we're not going to get in the way of custody. Whether it's self-custody or whether it's custody on behalf of banks, like, let's just get the right answers. Let's not be prescriptive about it. Yeah, so we're getting rid of the whole hosted versus unhosted wallet, like issue. And we're just saying, hey, like individuals can host crypto assets. Stop talking about it. And that's just going to be the way that it is. Exactly. I'm a huge fan, obviously, as somebody with a podcast called Bankless. Third, a key priority of my chairmanship is to allow market participants to innovate with, quote, super apps.

I am often asked, what do you mean by a super app, plain and simple, securities intermediaries, should be able to offer a broad range of products and services under one roof with a single license. A broker-dealer with an alternative trading system should be able to offer trading in a non-security crypto assets alongside crypto asset securities, traditional securities, and other services like crypto asset staking and lending without requiring 50 plus state licenses and multiple federal licenses. Reading between the lines, I'm guessing this is whatever Coinbase is doing is like a big benefit to them because they want to do securities. I'm assuming Robin Hood is also, what's the vibe of this particular thing? To me, that's simplifying licenses. So everybody in crypto has always been

very worried about do I have the right licenses to offer the product I'm offering. And the answer from the SEC historically has been, don't ask us. We'll tell you later when we sue you, whether or not you got the right licenses. So this has also caused a lot of financial institutions and a lot of fintechs to be very careful about offering crypto. And we know why. Robin Hood got sued, Coinbase got sued. What they're saying here very clearly is that we're going to make it really easy to understand what licenses you need and we're going to make it as few as possible and we are going to make it difficult for individual states to bring suits against you.

Because of course, one of the difficulties of building the next Coinbase and competing with Coinbase is competing with Coinbase is that how are you going to get licenses in all the states that Coinbase is licensed operated in. That's a really important part of doing business in America. When you build federal-wide licensing, it makes it really easy to just say, look, I got the one license. Now I can operate in America. End of story.

Amazing. Okay. Yeah. So there's, I live in New York. There's a number of crypto like services that I just don't have access to because New York is apparently really hard to get a license. So that would be gone, I would assume.

I mean, the SEC can't do that in one fell swoop, but they can certainly try and start pushing in that direction. Okay. And then the fourth one. Fourth, I have directed the commission staff to update integrated agency rules and regulations to unleash the potential.

of on-chain software systems in our securities markets. On-chain software comes in many shapes and sizes. Some of these systems are truly decentralized and not operated by any intermediary. Other on-chain software systems have an operator. Both types of on-chain software should have a place within our financial markets. What's the impact of this one? So this is all about the idea that you do not need to pretend to be running a decentralized system in order to be able to operate in crypto.

If it's centralized or if it has points of centralization, that's okay. You can operate on equal footing. There might be different regulatory requirements, but it's not a no. It's a, okay, here are the rules for this side, here are the rules for that side.

But we want to make very clear is that under the previous administration, it was very unclear if uniswap is allowed to exist. And everything the previous SEC was doing was looking at something like uniswap, which is fully on chain, fully decentralized, and said, either one,

this is breaking the, the rules, or two, we're going to find individual vectors of centralization and say, oh, you run a website, you run a VPN, you run a this thing, you run a that thing, you have, you have indexers. This is a point of centralization, and that's how we're going to got to you. Here, he's saying very clearly, we're done with that. You tell us clearly what you're doing. We'll tell you what rules you have to follow, but both get to exist.

And I would imagine that this is particularly relevant to, like, layer, for example, just one example is layer two is with a centralized sequencer. There's been conversations of a layer two with a centralized sequencer. It's never going to be Wall Street ready. Well, Robin Hood's definitely going to have a centralized sequencer. And Robin Hood is trying to use their chain to benefit their own products, probably just straight in the Robin Hood app. Same thing with Coinbase using Morpho on base, which again, Mase has a centralized sequencer,

and they're using it on the Coinbase front end. Something like this, where the existence of a centralized sequencer is just an irrelevant detail for whether it's compliant or not for integration into some front end somewhere. Well, so it's not an irrelevant detail. And at the end of the day, this is a policy speech. So we don't have a lot of detail here about what exactly he means. But it does mean that, look, there's probably going to be some framework into which something like base fits.

One could have imagined, you know, a couple of years ago that maybe what base is doing is just illegal. And why is it just illegal? Like, well, you know, base is running, coin base is running the sequencer. They could decide to stop the transactions if they were. wanted. Therefore, this is a broker dealer or a money transmitter or something. It's doing all sorts of things that are somehow falling under the other financial laws. I think what he's signaling here is that that's not our intention. We want to allow for there to be these kind of mixed levels of centralization

that are not going to make you under some extremely onerous regime. We're going to figure it out. Give us some time, but we're going to figure it out. But this is the spirit of what we're moving towards. And then the fifth, the last one. Finally, innovation and entrepreneurialism are the engines of the American economy, President Trump has described America as a nation of builders. Under my leadership, the commission will encourage our nation's builders rather than constrain them with red tape and one-size-fits-all rules. While the commission is actively considering industry requests that could jumpstart innovation actively, we are also contemplating an innovation exemption that would allow registrants and

non-registrants to quickly go to market with new businesses, business models, and services that do not neatly fit within our existing rules and regulations. What does this mean? So this is huge. Yeah, this is like very pro-start-up. I don't think anyone knows what it means. It sounds like some kind of sandbox. It sounds like you built a startup.

So you remember Hester Perce had this proposal for like a sandbox of sort of pre-decentralization. You're building a new crypto product. It's not progressive decentralization. They get it. They know these terms. It's not ready to be decentralized. It doesn't make sense for the dev to really take a step back or to lose admin key control. That's okay.

We're going to give you two years or three years to, to show that you can build this into decentralized product, if you can't or if it doesn't make sense to make a decentralized, there will be a regime under which you can get licensed or follow certain rules or make certain disclosures and operate in this semi-centralized fashion that is still permissionless and still open. Or if you can be fully decentralized, you don't go to do anything. You can be in this much, much lighter touch regime. But either path is open to you, but we're not going to make it such that you have to wait a year and get licenses and pay millions of dollars in order to go build a proof of concept as a crypto startup, right?

The idea that you had to be pseudonymous, or you had to hide or you had to go to overseas and block Americans in order to go try out a new startup idea, that is over. That is what Paul Atkins is signaling here. So each of these five things that we went through, I'm going to call them the trees. I want to zoom out and talk about the forest.

There are some early ideas in crypto. Like even on Bitcoin talk forums, you could go and find ideas about, you know, tokenized securities, you know, securities becoming tokens on a blockchain one day or or blockchain using, using blockchain technology to settle security transactions. And that's always been the grand vision, you know. Shout out to Anthony Pompliano in like 2017 talking about tokenizing everything. Like this is, this is that kind of stuff. And the initial bit of the speech from Paul Atkins, he really talks about what happened when the financial technology

lagged the financial needs of the industry in, you know, in the pre-electronification era. of American stock market. What I'm seeing here is these five things, these five trees, when you zoom out and look at the forest, he's trying to push American capital markets on chain. That's my big takeaway. Would you agree?

I think that's absolutely right. He also makes very clear the break from his predecessor. He says early on in the speech, most tokens are not securities, basically saying that this idea that we all have to constantly live under fear and recite the how we test under our breath, that's over.

And so that means if he's saying that most tokens are not securities, of course there are many tokens that have revenue. There are many tokens that have earnings, right? We have done so much

as an industry to try to just, you know, contort these protocols and hide the ways in which they are economically valuable. And he's saying,

look, you don't need to do that anymore. It's over, right? The idea that you need to hide the team, you need to hide the economics, you need to hide the way in which

obviously things that go on chain are valuable and value accruing. I think that to me is one of the biggest takeaways that really changes the way you should be thinking about tokens is that we don't need to play pretend anymore. Yeah, which is just, I think, bullish for all of our, like sanity, our peace of mind.

We can talk about these things as they are and not, like you said, not having to contort our ways of just like operating as an industry so we can just be more transparent and maybe a little bit less confusing to, you know, investors in capital markets. What happens next? So we got this speech.

So what? It's just a speech? What happens next? How does this become, you know, real? Well, so in order for this speech to become real, there's two things we need. Either one, we need rulemaking. And two, there's obviously enforcement is the other avenue through which policy becomes instantiated. And we've already seen them dropping a lot of cases.

So most of the big cases that the industry want to drop have already been dropped by the SEC. So there's nothing really more for them to do other than to show through enforcement actions what they like and what they don't like, right? So we're going to see when they go after bad actors, that shows like, hey, these are the things that we're still punishing. And when they, you know, have something that happens in broad daylight of, you know, let's say hyperliquid doing bybacks, if they don't go after hyperliquid for doing buybacks, they're saying, it's fine, you can do buybacks. Like, it's okay for a token to be valuable. Like, that does not, in and of itself hit all the prongs of the Howie test and thus make this thing in unregistered security.

The other thing, of course, is that we need to see rulemaking. rulemaking is not taken place yet. A lot of that rulemaking is informal. So a lot of that is just vibes, right? So a speech is vibes. You see some, you know, SEC commissioner says something in a speech. You can say like, look, he said this in a speech. Therefore, you know, you can't, you know, that's a kind of defense if you actually are

in a lawsuit with the SEC. But it is not actually a formal defense. A formal defense is there was a rule. The SEC made. It was a formal rule. Here's the rule. I followed the rule. So the SEC's job is to create those rules and to, of course, get feedback from

the industry as they do so. And that's when we're going to have real clarity, short of the Clarity Act itself getting passed and making these laws that the SEC then has to enforce. Do you worry that there's going to be some timidness about people being bold and starting to actually live by this, the vibe? Because, you know, in three years, there could be, you know, a Elizabeth Warren coded Democrat administration in power. And then all of a sudden, all of these vibes are just gone. So maybe it's a little bit less like, you know, companies are kind of like waiting for other companies to go first. It would take a while for this to kind of become the rules of the road or like literally the rules of the road, but just really instilled as a culture in the

crypto industry. I think it depends on the particulars. So if you're talking about foundations, right, the reason why people do these overseas foundations is not just for the SEC. There are a lot of agencies involved in the way that you think about your exposure if you're building a crypto protocol. And if not every, you know, if the IRS is not saying the same thing that the SEC is saying, you might not be so quick to decide, hey, I'm just going to launch a token out of a USC corp. Right. At the same time, the other thing I think you want to take into consideration is that crypto projects historically are very, very risk-taking in general. So I think mostly the answer is yes, they will. For most of these things, if it's like, hey, you can just start talking about your

token and accruing value, or you can start, you know, just launching projects with less progressive decentralization and worrying not so much about whether or not you have admin key control in order to protect your users. Yeah, people will start doing that right now. People will start doing that yesterday. So I think in general, one of the big questions I've always asked myself is why is it that even before Paul Atkins came in, even before Trump got elected, even in the Gensler era, why were there so many crypto projects in New York, in America, right? Why were they even here to get sued in the first place? And the answer, I think, comes from a very deep part of entrepreneurship and of crypto itself, is that entrepreneurs

are just optimistic. They're kind of irrationally optimistic, right? They just sort of think, like, yeah, you know, Gensar's going after all these guys. But when I get, when Gensler talks to me, he's going to realize that, like, my thing is actually okay. And Gensler never saw a project he thought was okay. Everything he thought deserved a lawsuit. But people like, they sort of believe like, okay, even if Gensler doesn't get it, the judge will get it. The judge is going to see that. I'm in the right. I'm doing the right thing. Somebody in New York will believe my case. Exactly. Exactly. So I actually think that, yeah, entrepreneurs were on a dime. They are going to start just taking a lot more risk and being a lot more aggressive on seeing

this speak. Hey, I'm kind of into it. I've got another bankless take to get you to check on and check me on Hizib. So again, another take brought to you by bankless. All of this stuff that Paul Atkins has talked about is uniquely bullish Ethereum because of all the things that we've seen over the last six months, again, I'll make some claims here. The Circle IPO, Ethereum coded because Ethereum is a stable coin chain. This is Tom Lee's line. Circle got born on Ethereum. Coinbase, the world's largest crypto company that's public in the American stock market, really Ethereum coded, has that Circle partnership, has a base layer too. Robin Hood launching its Ethereum layer two,

just explicitly Ethereum coded. And so when Paul Atkins is like, yes, without saying any particular name of any blockchain in particular, we're going to move Americans financial markets from being off-chain to being on-chain. Yeah, like which blockchain ecosystem is going to be the main beneficiary of this speech? I claim it's Ethereum.

Do you believe with my claim? Would you like to check me on that claim? What do you think about that? You're not wrong in the sense that like, Wall Street mostly thinks of Ethereum as the chain where they're going to do their shit. At the same time, I'm remembering, as you're telling me this, the debate that we had in New York, where I think you took the anti-etherim position, and I took the pro-theirn position. For the sake of the exercise.

For the sake of the exercise. Yeah, yeah, yeah. Of course, for the sake of the exercise. What was this like January or something? It wasn't that long ago already. Maybe not. Maybe it was like March. But I think that was when I was saying I thought Ethereum had bottomed and that the turnover

in the Ethereum. I think the EF had just turned over. And my view is that, like, this is the beginning of the, this is the bottom. This is the beginning of the change. And Ethereum is, you know, basically architecting their rebound now. And you were embarrassed. You thought it was too late. You thought they had given up too much. Again, for the sake of the exercise. For the sake of the exercise, obviously. But I, honestly, when you were reading the beginning of that, like the history of the SEC and how they took Wednesdays off in order to catch up on the records. I thought that was going to be your jab against Salana. So I'm glad to see that you pull your punch there. I think, I think, look, here's the right thing. I think the fight is on.

I think Ethereum does have an advantage because they're 10 years old. They've hit the double digits, and that's really special. And Wall Street cares about that. Wall Street absolutely cares about that. They care about uptime. They care about consistency. And they care about, I want to be where the money is. It's that old joke about the bank robber. You know, why do you rob the bank? That's where the money is. Today, Ethereum is where the money is. It's where the majority of stable coins are, majority of TVL, majority of other institutions have issued their assets there, majority of RWAs. So I think that it's Ethereum's game to lose. But look, you and I have known Ethereum for a long time.

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And for bankless listeners, you can use frax.com slash r slash bankless when bridging to fraxil for exclusive fraxil perks and boosted rewards. That's a touch on our last Ethereum subject. This is another ETH treasury company that got announced this week. Heathzilla, the company formerly known as 180 Life Sciences, I think technically it still is. It's a shell company that got purchased effectively through. This is a combination of electric capital, Avichel's VC firm, along with people from Ethereumize,

but then a bunch of other just Ethereum community members as well, you know, Ethereum leaders. Robert Leshner and Turun are in this one as well. $425 million is the starting place for ETHZILA. Now, when I, see, when I suck my nose for the winds on crypto Twitter to catch a sense, this was the first time an ETH treasury company got launched, and there was a little bit of fatigue that I felt that I noticed on discourse. People were like, okay, like, I'm tired of these announcements.

like what, show me something new. I don't know if you also got that sense of fatigue in the air, but what was your reaction to this announcement? So I think the team behind this is very credible. So obviously, you know, electric capital, you saw a bunch of like Ethereum entrepreneurs who are on the board and who are going to be assisting with some of the year generation. That's right.

That's right. So a lot of the who's who of Ethereum are on this. If you compare that to, you know, S-Bet is basically just consensus and Joe Lubin behind it. And then, you know, the other one is kind of more of a, you know, Peter Thiel and then Tom Lee. It's kind of a finance put together cohort. So I thought this was interesting to see a very different kind of team behind this. I thought that was compelling.

And the way in which they're positioning this, right? So the storytelling around each of these vehicles is always a little bit different. And the storytelling here is that, okay, it's not just about staking. They're telling you, okay, we want to beat the staking rate. The staking rate is like the bogey that we're trying to get above. And the answer, okay, how are you going to do that? You're going to go on chain. You're going to do yield farming.

You're going to do resaking. You're going to do all this other stuff. And it's like, okay, now it's not only that there's going to be more staking demand. So a lot of these vehicles is like, okay, everything in it's going to be staked. Now there's going to be defy demand. And defy yields are going to get competed down from all the capital that goes into this vehicle. That's really interesting. It now means that, like, you are going to be competed with on-chain.

through public markets vehicles for your yield. It's going to drive yields down across the board on chain. I don't know what the knock-on effects of that are going to be. I think that, in a way, is kind of be one of the most interesting things is, like, this is basically going to be a giga-sized, like, yearn-type thing, just competing down yields and making them more competitive. So I thought that was interesting. Now, is it fundamentally new?

No, it's another treasury company. But is it bullish Ethereum that there's more of these? Absolutely. Yeah. Yeah. They're not the only ones leveraging. Defi yields and whatever orange chain arbitrage they can acquire to increase your. I know Andrew Keyes is the ether machine is explicitly trying to do this as well.

My understanding is there's just going to be just a wealth effect of, maybe not wealth effect, but there's just going to be an influx of capital into defy, and devi TVs are going to go up. And, you know, maybe that pushes people out onto the risk curve because, you know, I have my ether in Ave and maybe if I just get a little bit less of rates, strong rates, I'll start to be a little bit more aggressive with my yield surgery.

that pushes people like me out in search of more aggressive returns. But remains to be seen. We haven't really seen that defy TVL numbers expand. It's coming in theory. And I think it's kind of, I think maybe VCs will like reprioritize layer one, Ethereum layer one, defy deals as a knock-on effect of this. I think it's cool. I think it's bullish for what I think is kind of the core story of crypto, which is defy.

but I think a lot of these details kind of remain to be seen. Right. Yeah. Let's get into this. I might need some help on this one. SEC permits in-kind creation and redemptions for crypto ETPs. This is a technical thing. I think all of this means like if you have Bitcoin or Ether,

you can contribute it directly to an ETF and retain your tax status, like the tax level. I don't know if you can explain this better than I can, but this is something that people are saying. We're very bullish on. Yeah, I don't know that this is that big. a good deal. It's kind of an easy win. It's very obvious that this should have been possible from the beginning. But previously when the ETFs were initially approved, they did not allow in-kind

creation and redemption. You had to create in cash and redeem in cash. So the authorized participants, which is like, you know, Jane Street and these hedge funds that are allowed to be participants in these markets, if you created or redeemed out of the ETF, you had to do it in cash and pay the slip it on Coinbase or whatever you're buying or selling your Bitcoin. So basically what this means is that simply there's going to be tighter spreads and less just like kind of slippage that people are paying when they're buying or selling these ETFs. That's kind of it. It's it was, it was, the reason why this was such a big fight is that it was so obvious that this should have been how it was structured from the beginning. And it just wasn't. The SEC was just like, no, no, no, no,

who knows what would happen if you were allowed to contribute in kind to a crypto ETF, like maybe that pandemonium would set loose. And so this is just one of the obvious things the industry was like, why the fuck did you set it up this way? Clearly, every other ETF, like a bond ETF, you're not to subscribe to a bond ETF in dollars. You can subscribe to it in bonds. You just put the bonds in a basket. That's the ETF, right? So if you have a Bitcoin ETF, it's just Bitcoin in a basket. Why can't I put another Bitcoin in the basket and say, great, now I've created a new instance of the ETF. SEC said no. Now they're saying yes. So there's no like large unlock of access to additional capital that no is, okay, it's a procedural

thing? It's a procedural thing and a market efficiency thing. It's good. Thank you for doing this SEC. The previous SEC was crazy. That's what this is. All right. Let's get into some Zora Pump conversations. Are you paying attention to the token launch pad wars? Not as much. I mean, I see

the, you know, barbs going back and forth, but I'm more of an ETP guy than I am a ZOR. More of an ETB guy. All right, so let me fill you in because this is I've been kind of playing around in the Nank of the Wood. This is from Dan Smith. Blockworks Research.

some pretty good stats on Zora specifically. So just tweet out this happened earlier this last week. New Zora all-time highs for new posts, coin trading volume, active accounts, trading fees, aggregate coin, FDV, and the number of coins above $10,000 market cap,

$100,000 market cap and a million dollar market cap. Overall, there's been just like a focus on the launch pad wars, generally speaking, I would say, especially since the launch of the pump token. And people are kind of, you know,

positioning Zora as the pump equivalent on the base chain. And you take Coinbase's, like culture and consumer crypto brand, and then you take Pump Fund, then you get Zora. It's kind of like what you get. Zora issues out a bunch of tokens. You can't speculate on them. And then, of course, on the Solon side of things, you have actual Pump Fund along with Bonk. Now, Bonk has actually surpassed Pump Fund in terms of on-chain revenues, token deployments as well. So Bonk has meaningfully entered the fray. And then also, like we were talking about last week, with me and Ryan, the pump token has dropped down to almost 50% below its ICO price.

So it's coming in just a little bit above $2 billion. So meanwhile, while pump is going down, its local competitor on Solana is doing bank, is doing great. And also Zora is doing great. Zora itself has actually passed pump fund in revenue, which is, it would be unheard of if you told anyone that. Not realize that. I'm, I think I'm not bullshitting.

Let me, let me go open to the blockworks that have research and actually see. maybe I'll have to check myself after that. But that was, at least a tweet that I saw this week. Okay. Oh, here we go. Zora 356,000 flipped pump in daily revenue yesterday, over a one-day period at the very least.

Still trailing the category leader by $1 million, which is bong. I want to go over to a take from Kyle Simani. He put out what I thought was a pretty good take. He's basically saying Web2 apps like Instagram, Snapchat, Twitter, are these kind of like carefree dopamine brain rot apps that don't really require you having a lot of attention. And then Web 3 apps like Pump Fund Zora Blanc are these adversarial dark forests of thin liquidity speculation. And mixing these things don't work. Like when I open up Instagram, I don't want to be thinking about like an adversarial environment where if I buy

this token, am I going to get dumped on? And so mixing entertainment and tokens in this fashion is just not where product market fit is. And he says both Zora nor Pump Fund nor I'm assuming Bunk as well have really fixed this problem. Zooming out, I just get through a bunch of stats at you, some of the drama, and then Samani's take. What's your reaction? I don't know that I have much of a reaction. I remember seeing the thread between,

I think it was Jesse and Anatoly, where they were arguing about... The one that caused Solana have a bunch of drama. Yes, yes. Are content coins fundamentally different from meme coins? Yeah. And I think in a way, like the, the hermeneutics of meme coins are very interesting to me. Hermannut.

I'm going to need you to define that word. Basically, like, the philosophy, let's just say, the philosophy of meme coins. Like the way in which when it's the other guys, like when it's the other chain stuff, they're shitty meme coins and they're valueless and they're extracting from retail. And when they're yours, they're in innovation and value. creation, it's a new form of financial entertainment, it's, you know, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, I, I, I just find it, look, um, I think Kyle is being a little bit too, um, self-confident in his claim that, uh, that these things are not fundamentally going to, like, these things are broken in some deep way. It's very clear, both of these are operating as casinos. They're this kind of fun speculative game. Everybody at this point understands that.

It was once upon a time, I remember, what was it, 2023 when we were like peak financial nihilism. Maybe 24 was more when the financial nihilism meme was getting really strong. And people were talking about, like, why are people trading these meme coins? It's just like the same thing as meme stocks. And it's like, it's all connected to this financial malaise and like the reality that nobody can get ahead in life and millennials are making less money. There was all this, there's all this like narrative, you know, window dressing we were putting on that. Like, why are people trading meme coins? Okay.

Today, nobody talks about that anymore. Right. We don't talk about like, oh, you know, millennials aren't making enough money and people get married, where are their homes, they're not getting married. That's not why people are trading meme coins. They're trading meme coins because they're just DGens. They're just gambling. It's fine that you're gambling that you're gambling that you're gambling there. You're gambling on Zora. And I think that's kind of the right answer. And I think you sort of, if you over intellectualize it, you're just going to continually get the wrong answer, which is that either one, this connected to some secular trend, which means that, okay, well, the secular trend's not gone. People are still, you know, if there was, wealth inequality or people can't afford houses, that's still true. And, you know, Pump. Dot Fund volumes have materially declined from where they were at the top. I think a much better answer is that there are different speculative vehicles now that you can just go buy, you know, you can go get levered on Robin Hood and go buy some, you know, strategy or some, you know, S-Bet. And you don't need to go buy a Pump.com fund token if you want volatility. And volatility is returned to

crypto again. So once crypto itself is volatile, I think these assets just become less attractive on a relative basis. I think that's a big part of the answer. But I don't know, you tell me. The conversation that you were talking about between Jesse and Anatoly got spawned from this one individual who tweeted out something to the effect of

both Pump Fun and Bonk and Zora, they are all tokens being issued on a bonding curve with a picture attached. And mechanistically, behind, once you pull back the curtain, you see the same thing. You see a token on an illiquid bonding curve that the price goes up when more people buy.

because that's how bonding curves work. And so it doesn't matter if your front end is Zora or it's bonk or it's pump. So long as it's an illiquid token on a bonding curve at, you know, behind the scenes, we're ultimately doing the same thing and we're just trying to like, you know, brand this is a creator coin. And I accept that point. I think that's a valid point. If it's all the same token logic and then swar contract at the end of the day,

then like really that's what we are just kind of like reproducing in the front end. However, the front end really matters. If you go to Pump Fun, you see a 4chani website that looks like a slot machine. It like vibrates like a slot machine. It's got different colors like a slot machine. It looks and feels like a slot machine. If you go to Zora, you get something like Instagram. And I do think the front end also matters because you are attracting a specific person.

You're encouraging a specific behavior. And so, yes, even though it's an illiquid AMM in the back, the actual app that you use does dictate who is going to use it and the nature of their behavior of how they use it as well. And so I'm kind of of two minds. I remember we did a podcast together on stage where I think, I think it was Tom who said that Zora is basically pumped out fun for millennials where it's like, okay, if you're Gen Z and you're like on 4 channel day. Yeah, exactly. It's like if you're Gen Z, you're on 4 channel day, you're just kind of messed up in the head, then yeah, okay, you're going to be on pumped

off fun. But if you're like, oh, I kind of like Instagram and I like my, you know, Latte's or whatever, and I like nice, clean design, and this sort of Silicon Valley approach. But fundamentally, to your point, it's pictures on a bonding curve. And pictures on a bonding curve, it's like, okay, that was the same thing for Intech was, was instead of pictures on a bonding curve,

it was pictures of a PFP on a bonding curve. And at the end of the day, it's the same game with a different skin. And that's what, you know, when you go into a casino and you look at the menagerie of different casino games, what you will see is that they're all basically the same game with a different skin.

Every slot machine, like there's an Indiana Jones one, there's a Terminator one and there's a Ninja Turtles one. And it doesn't really matter which one you play. They're all the same damn thing. I think the big question, though, is Pump raised like $800 million to go make a Twitch competitor. And Zora and Jesse from Bass are really trying to take Zora mainstream and have the

base app, which hooked into Zora, to be an Instagram competitor. And so, well, yes, we can be kind of like, I don't know if Nihilus is the right word. We can be reductionist and say, oh, it's just. a picture on a bonding curve, so therefore it's the same thing. We don't really need too large, too well. Well, both people are trying to make these things mainstream and make them and break out of crypto Dgen trenchers and make them be a part of like regular mainstream culture. And so I think it, it does kind of matter how the path dependency does matter. Like, is this a pump fun live stream platform that is taking like, you know, streamers trying to

pump their coin mainstream? Or is it a, you know, more of an Instagram look-alike for creators who just want to get paid for creating and they aren't paid on Instagram to create. I think whether or not mainstream society is interested in adopting this behavior at all is the ultimate question that we do not know is answered. I'm open to that possibility. It remains to be proven that the form factor is the dominant thing that's going to create a totally different unlock or behavior pattern. So far, as far as I can see, and I'm not a user of Zora or Pump.com. As far as I can see, the games look pretty similar to me.

The way in which people are playing them, the way in which people are talking about them, like not the way in which the creators are talking about them. But if you listen to Alon versus listening to Jesse or listen to Jacob, the way they talk about their products is very different, right? But what's the way their users talk about their products? They seem pretty similar to me, but you tell me.

No, no, I think that's right. As I was going to close out the section, I would say, Haseeb, if you were to ever get onto Zora, I would probably buy your coin under a particular price. That's a good reason for me not to, yeah, it's a good reason for not to get on Zora. All right, let's, we'll wrap things up with a more serious subject, as we kind of alluded to in the beginning,

turning back to Roman Storm. This got, was breaking right as Haseeb and I started recording. No verdict today in the United States versus Storm case. The jury is being sent home, and deliberations will continue, not Friday, but Monday. I mean, we are not going to hear the outcome of the Roman Storm case until perhaps not even Monday. Deliberations will continue on Monday. And then if they conclude deliberating on Monday, then we can hear a verdict on Monday.

But in theory, it could go into the next day as well. From Jake Chervinsky, he said, you know, optimistically, trying to be optimistic about the situation is that long deliberations are believed to benefit the defense because there needs to be a unanimous agreement with, the prosecution in order for the prosecution's charges to actually be successful. In order for prosecution to win, they need all 12 members of the jury to unanimously agree with the prosecution. So if there's any, if anyone doubts, we can get ourselves into a hung jury, which would result in the whole story, the whole case starting over again if the United States attorney wanted to even do that in the first place. So I think there's like reasons to be optimistic about the outcome here, although we just don't know. and it's going to take us until Monday at the earliest to actually find out. Haseeb, what's your reaction?

Yeah, so people may know that I'm very close to this case for a few reasons. So we were actually the seed investors into tornado cash. And Dragonfly ended up ourselves getting pulled into the whole situation because, you know, we were subpoenaed in the process of the DOJ investigating this case. And then on Friday, last Friday, the DOJ in open court, claimed that they were planning to charge Dragonfly for being investors into tornado cash. Now, this ended up kicking off a whole firestorm,

and by Monday, they backtracked. In open court stated that, oh, no, hold on, that's not what we meant. We're not planning to charge anybody at Dragonfly. They're not targets in our investigation. In open court, you mean in Roman's case, they said. So in open court means that basically, it was open to the public at the time that they made the statement, meaning that the media was in the room.

There's a high profile case. So there were media coverage. Most cases, nobody cares. No one's watching. You are never, ever allowed under DOJ rules, to mention any investigations into a third party in open court. It is absolutely not allowed.

You are supposed to clear the court and have a private colloquy with the judge if you want to talk about anything that is relevant to anybody besides the parties in the case. So the DOJ knew they messed up. You could see it because they sealed the transcript. And they basically mean that the public normally is around to read transcripts from what happened that day in court. They sealed the transcripts for that day, meaning that nobody

from the public is allowed to read it because of the fact that they read this into open court, which they weren't supposed to. So anyway, this was kind of a crazy week for me personally. Of course, you know, I know Roman very well, known for years. And like last, yesterday were the closing arguments in the case. And I read the entire transcript. It's like 230 pages. I read all the closing arguments. Unfortunately, I couldn't be there because I'm not in New York. I'm on the West Coast right now. But it was really difficult to read. I think right now, the jury today, they asked a few questions. So the jury goes away and deliberates, and they can deliberate for as long as they want. And they're allowed to ask the judge questions, which they write into note and then they hand the note to the judge

and the judge can answer a question to clarify something that the jury wants to understand about the law. The jury today asked the judge a question about whether or not Roman Storm had arguments presented before the indictment for the prosecution to bring charges based on venue. So venue means when you bring charges against a defendant, you have to bring it in the right venue. You have to bring it in the right place. You can't charge them anywhere you want. So if somebody did some activity in state X, but you charge them in state Y, your case is going to get thrown out for venue. It's going to say, you're the wrong venue. Go try it over there if you want to try it.

So one of the weakest parts of this case has been venue. So if you remember, actually, the Mango Market's case, the Mango Market's case got thrown out post the verdict because of venue problems. Because basically they tried in Southern District of New York, but the Mango Markets guy, Avi, he was in Puerto Rico. and there was no activity in New York. Their claim of like, why is this case being tried in New York? The answer was like, well, there are some users who use mango markets were in New York. It's like, no, no, that's not enough to establish venue. That's not where the crime took place.

Crime took place in Puerto Rico. No, screw off. Get out of here. So Roman Storm, he was in Seattle for the entire period of him working on tornado cash. And the arguments that they brought of why this case was being tried in New York was we found some victims who used tornado cash, who were in New York. Those are the venue arguments, is that there are some people

who used Turner Cash who were in New York. North Korea was obviously not New York. Any sanctions violations obviously did not had nothing to do in New York. And the other claim they had

was that Tom, who was at Dragonfly, he was one of the people who was part of the investment in Traneer Cash. He was in New York for a couple weeks while Roman talked to him about some random messages.

Nothing to do with tornado cash, nothing to do with sanctions, nothing to do with money laundering, nothing to do with any of the actual substance of the charges. So these were their arguments for venue. The fact

the jury is asking the court, did they prove something else about venue that we don't know about? And the judge replied, you're not allowed to consider that. Go back and keep deliberating. To me, and I think Jake also pointed this out, that may be a very good sign that the jury is seriously considering whether or not to throw out these charges just on the basis of venue. I mean, so we're all trying to read the minds of 12 people in a deliberation room. So we don't really know. I think there are, what I'm reading is there's reasons to be optimistic, but we are making assumptions as we do become optimistic based on of those things. To be honest, I think Roman's best chance. So one thing we know from the trial is that the jury is very non-technical. Before the jury was seated, you do jury selection. So the prosecution and the defense can both

cross out jurors. Everybody who knew stuff about crypto was eliminated jury selection by the prosecution. So nobody who's on this jury knows anything about crypto. So they're all learning all these concepts at the first time. The closing arguments from the prosecution were very strong. If you don't know anything about crypto and you don't understand what a Tao is, you don't understand what decentralization is, you don't know any of these concepts, right? The argument from the prosecutors was, look, don't, you use your common sense. These guys made money. Money was laundered. It's a money laundering business. The end. You know, look. look at these guys, look at, just look at them.

You know, you know in your heart of hearts that these guys are money launderers. That argument, I think it's very likely that a jury is going to be swayed by that. Now, when this case goes on appeal, everybody I know who's a lawyer has said that Roman's odds to win this case on appeal are very high. There are a lot of decisions that the judge made that are very likely to be over, very likely to be looked at with suspicion by an appellate court. But the district court ultimately comes down to these 12. of jurors. And if they don't get a finding on venue, my fear is that they're very likely to convict

on at least one of these charges. The reason why we're throwing out all of the technical jurors is because if you have any sort of context about crypto, it's easier for the defense to explain some of these concepts. But if you don't, imagine teaching 12 people about the nuances of crypto and how this all works, that's just like not favorable to the defense whatsoever. I mean, to be clear, the defense also struck jurors and probably the jurors they struck were anybody who says, you know, I don't trust Russians or I don't like crypto. I think crypto is used for crime. Like, they struck all those people, right? So everybody had their chance to strike a jurors, but what you're left with is ultimately a non-technical jury pool. And that's how our jury system

works, unfortunately. I don't know how much you can actually speak about this to see, but the idea that the Department of Justice might have a lawsuit, lawsuit against Dragonfly, because you guys are Criminal charges. Criminal charges against members of Dragonfly for being an investor in Tornado Cash, in the company behind Tornado Cash. Talk about the implications of that about why is that significant, obviously, beyond just face value and what the long-term impacts of that are. So first thing to be clear, they did not file any charges and they made very clear that they're not intending to file any charges against us or any investors into Tornado Cash. There's also no precedent. for it in American history. Never happened. So whether it's Enron or Theranos or any of these cases where the underlying company has been indicted for some criminal activity, the investors, unless the investors are actually co-conspirators in some way, unless it's like a mob front or something, that just never happens. Absolutely never happens. So there's no case law. There's no precedent for

doing this ever. Now, that being said, even the threat of saying that you might get prosecuted, if you invest into something that we later decide is engaged in criminal activity would have such a massive chilling effect on the willingness of investors to invest into anything that is not clearly within the boundary of a regulated business, right? I mean, we just heard from this Paul Atkins case, is that the goal of the Trump administration is to open up the avenues for innovation, to allow builders to continue to build and to innovate, unperturbed by regulators or by law enforcement, Just make the rules clear of what you can and cannot do. 2019, FinCEN gave this guidance that said very clearly,

if you are not custody assets, that you are not a money transmitting, a transmission business, and therefore you do not have BSA obligations. You don't have to AML, you don't have to KYC, you don't have to do any of these things, right? Self-custody was the boundary that they defined. That was the rule that everybody in this industry followed, whether it's Monaro or Z-Cash or Aztec or Tornado Cash.

Everybody followed those same rules. for them to then go back on that and to say, no, no, no, guess what? If North Korea used your business, all that's rough. If your protocol was used by the wrong dude, doesn't matter what you, doesn't matter what rules you follow,

doesn't matter what you thought at the time, doesn't matter if you thought what you were doing was legal. That precedent is a horrible, outrageous, and chilling precedent. And that's why I think the DOJ backed off of it so quickly, is they realize that, like, hey, there are bigger consequences

than just what happens in this case if we allowed this to potentially stand. My read on this case as a whole is the DOJ is just trying to use tornado cash specifically, Roman Storm specifically as like a, in order to do make a chilling effect upon anyone who wants to build a privacy app. They're really just using him as an example and going after him hard because of how tornado cash really just goes against their goals of the DOJ. And I think I mean, I think anyone in crypto kind of understands that, or at least,

thinks that that to be the case. But I'm guessing the jury doesn't understand that or see that angle whatsoever. There's no assumption that we should make that the jury sees the DOJ really in what would a crypto person's perspective be reaching in order to make this case against Roman storm. I'm guessing the jury doesn't really see that angle. Of course not. I mean, one of the most notable parts of this case was the, you know, Roman was indicted in 2022. At the same time, soon before that, tornado cash itself was sanctioned by OFAC. Last year, 2004,

after Roman Storm was already indicted, 2004, those sanctions against tornado cash got overturned in the Second Circuit. Those got canceled. It is now legal for Americans to use tornado cash as much as you want. Despite that, the prosecution went through. All they did was drop one of the charges,

which was unlicensed money transmitter. Now, so the reason why they dropped that was actually not because of the Oafax sanctions. The reason why they dropped that was this Blanche memo, which I don't know if you covered this at all a bankless, but Todd Blanche wrote a memo. He was, I think, Deputy Attorney General. He wrote this memo basically saying that

there's new rule in town for the DOJ. The new rule is that we are no longer pursuing prosecutions for registration offenses. So if you did not register, or you have, you know, you fail to get a license, we're no longer prosecuting that. It's not a good use of our time. We are going to prosecute criminal actors, hackers, or people who are either attacking others or attacking crypto people. If you are actually going out or, you know, cartels or, you know, drug offenses or things like this, right? Like these kinds of people using crypto, we will absolutely

continue going after. But registration offenses were done going after that criminally, right? This was the Blanche memo. Everybody thought after the Blanche memo, well, they're probably going to drop these cases because this is, you know, what is the case here other than to say that, well, they should have registered, they should have done AML, they should have done KIC, that's effectively a registration offense. But what they did instead is they simply dropped one of the three charges, which was the unlicensed money transmitter charge. But the conspiracy to, I believe there's conspiracy to launder money, conspiracy to evade sanctions, and then there's the last charge is like conspiracy to transmit money illegally or something like this. Those charges are still there. So I

this is one of the last cases that is, again, like a holdover of the Biden administration era, attack against crypto. And it's really painful to see this kind of playing out in front of us at the same time that the rest of the industry is moving on. Yeah. Yeah. Yeah. It's going to, it's a long weekend ahead of us that, like I said, the jury doesn't come back on Friday, so they go all the way until Monday. I just can't imagine the just excruciating amount of pressure that Roman Storm just feels doing, I don't know what, sitting in his hotel, waiting for Monday to roll around so you can hear the verdict. And that's kind of how I feel as well.

Likewise. Well, Haseeb, to end on that note, I guess, thanks for joining me on the weekly roll-up. And I think I'm keeping Roman in my thoughts over the weekend. And I know you are as well. And we ask the listener and do that and do that too. Yep. Absolutely. Thanks again for coming on Haseeb.

Whenever Ryan needs to take a break, I really appreciate it. You're a gig of brain that I appreciate you bringing on the show and talking about the week in the script. for me. My pleasure, man. Thanks for having me. I'm sure you're going to go talk about some of these subjects on your own podcast as well. Where can people go to go find those takes? People can find me. Just Google my name. I'm Haseeb, H-A-S-E-B, and you can find my Twitter. We post a podcast roughly once a week on the Unchained Feed, so come find us on the chopping block. Chopin block's pretty good. It's one of my favorites. Sisi, thank you so much. Bankless Nation.

You guys know the deal. Crypto is risky. You can lose what you put in, but unless we are headed west, this is frontier. It's not for everyone. But we are Glad you are with us on the bankless journey. Thanks a lot.