Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Peter Van Valkenburgh: Towards Sound Bitcoin Policy

Episode Date: May 9, 2017

Coin Center is a non-profit in Washington DC that focuses on research and advocacy issues facing public blockchain networks like Bitcoin and Ethereum. Their aim is to protect users and foster innovation through achieving sound policies and regulations. Director of Research Peter Van Valkenburgh joined us to discuss the work of the center and the most pressing regulatory issues facing the industry today. Topics covered in this episode: The origins and objectives of Coin Center How to judge the success of Coin Center Why Peter is more bullish on permissionless than permissioned blockchains The three areas of blockchain regulation: Consumer protection, anti money laundering and securities His view about ICOs Why people should pay attention to money transmission regulations Episode links: Coin Center Website Open Matters: Why Permissionless Blockchains are Essential to the Future of the Internet Framework for Securities Regulation of Cryptocurrencies Twitter Peter Van Valkenburgh This episode is hosted by Brian Fabian Crain and Meher Roy. Show notes and listening options: epicenter.tv/182

This is Epicenter Episode 182 with guest Peter Van Valkenberg. Hello and welcome to Epicenter, the show which talks about the technologies, projects and startups driving decentralization and the global blockchain revolution. My name is Brian Fabian Crane. I'm Mayor Roy. Today our episode is focused on regulation, mostly focusing on the United States.

We shall talk to Peter Van Walkenberg, who is director of research at Coin Center, chat about what CoinCenter is and what are some of the regulatory developments happening in the space in the United States. So before we get into our show, let's have a brief intro from Peter. Peter, great to have you on the show. Thanks, guys. Thanks for inviting me. Tell us a bit about yourself and how you came to be interested in this space. Sure, sure.

So I was in law school in what, 2011, 2012. And I had always wanted to focus on Internet law. So these are areas of law that have already been disrupted in large part. You know, expectations about what can and cannot be enforced were challenged by the Internet, especially with regard to copyright, so because of BitTorrent and before that Napster. And also digital privacy law became a big topic. And the Snowden leaks came not too long after I graduated from law school. And I moved to D.C. under a Google Fellowship, actually, to work with a nonprofit here called Tech Freedom on telecommunications, copyright policy, digital privacy policy.

And not long after an old friend of mine from back when I was an undergrad at George Mason studying economics, we traveled in the same circles, Jerry Bredo, who was at George Mason's Mercatus Center, came to me and said, hey, Peter, I see, you know, he graduated. Congratulations on your JD. I'm glad to see you're in New York. I mean in D.C. How'd you like to come and be director of research at a Bitcoin think tank? And I think I laughed at him and I said, that's ridiculous. No such thing exists. And then immediately said, yeah, absolutely.

Where do I sign up? And the reason why I didn't hesitate at all really is because as crazy as that sounds, this is in many ways the new frontier of technology law policy. So we had disruption in the copyright space, in the privacy law space, and now we're going to have and are having massive disruption in the financial regulatory space. And I had to learn a lot more banking law than I ever thought I wanted to learn in law school because I took copyright classes primarily. But that's been a hell of a ride in itself and pretty enlightening as far as the way administrative law and the bureaucracy work. and we've been around now for two years since that conversation and just making a go of it. There's so much work to be done because it's really like open skies.

There's so many open questions that need to be resolved. And mostly we just want to find an equitable way forward so that people can as much as possible freely experiment with the technology without overly burdensome regulation. And regulators to the extent that they are already obligated under. existing law to regulate an activity are able to regulate in a way that doesn't crush the technology. You mentioned Coin Center. I think we all remember Coin Center got quite some attention when it started. But maybe you can give us a little bit more background. What was the thinking around when Coin Center was started? What kind of mission does it have? Who were the backers of it? And what was the early history?

Yeah, so like I said, two years ago we got our start. And around that time, for those of you remember, the Bitcoin Foundation was going through a lot of issues with their board and with other things and to some extent a loss of credibility. And there really wasn't a clear voice in Washington, D.C. that was able to represent the technology. So like one of my hero organizations is the Electronic Frontier Foundation. For those of you who are familiar with internet policy or, you know, internet defense, if you will, you'll know the EFF. They did amazing work back in the 90s and through the 2000s, defending your civil liberties online, essentially. Defending people who were arrested because they were running a server and relaying server traffic back in the early internet. Defending free speech, all sorts of things.

And the Internet needed a nonprofit like the EFF to exist. Because unlike a proprietary technology, there was no company behind the Internet that was looking out as a proxy for the interests of the user of the technology. The Internet was this public good. It was this open system that anyone could join and participate in. So you in many ways need a nonprofit to help educate policymakers as to how the technology works, defend the rights of users and developers in making the technology work better. Bitcoin's the same, and so is Ethereum and so is Zcash, so are all of the open, you know, decentralized computing systems, the open blockchain networks, as I sometimes call them.

They don't have single companies behind them. Even Zcash, which, you know, has a company that did the majority of the development, is an open network where they now just have people running it across the globe and using it. And who is out there speaking for those groups? To some extent, the developers, if they're working with a company like maybe Blockstream or something like that, but their expertise isn't in law or policy. And no individual private interest is actually capable to speak to the issues of the community at large. And really, so the goal of CoinCenter is to try and speak for the technology as an ecosystem,

as a group of users and a group of developers who have certain issues with existing regulation because it's unclear how existing regulations and laws apply to people using the technology or because they're potentially on the horizon is a desire to regulate these things in a different way or in a new way and you'd like a voice in the process of figuring out how to reach that future position from a regulatory standpoint because otherwise you worry that policymakers who are either against the technology, although that's actually pretty rare, but more likely poorly educated regarding the technology, we'll do something that will actually make it difficult to use the system to develop the tools to make the network work. And that's the outcome we're trying to

avoid. We believe these networks have a good chance of flourishing regardless of what governments do. They're disruptive and powerful and inspiring and their ability to decentralize power. but all the better if we can get to that future we want faster because there isn't undue government interference in these technologies so uh since since coin center is taking inspiration from the efff um does the efff also do both they worry about technology policy as well as um in defending people who might not have been treated very well by the definitely definitely and and i'll say the The EFF does some work here in D.C. The Center for Democracy and Technology is another great nonprofit organization that's not like a trade association.

It's just a think tank that's representing the rights of users on the Internet, the civil liberties issues when speaking to government. Then you might say, well, why not just leave it to CDT and EFF? I love those organizations. I think they still do great work and do good work on these topics when they have time. but they also have other big battles to fight, especially regarding, say, the USA Freedom Act, to take an example from last year, issues with, you know, repealing some of the onerous parts of the Patriot Act, issues with whistleblowing statutes like what Snowden ran into, issues with NSA snooping efforts, issues with copyright law. And they have a large, you know, institutional expertise in those topics. They have technologists on staff who know those things, and they have lawyers who know copyright law, who know digital privacy law. It's hard to get people on staff who know blockchain networks.

There's actually not many of them. There's certainly not all that many lawyers who know both financial regulation and how blockchain networks work and where the intersection gets muddy and dangerous. So I think coin center has a lot of value to add to the advocacy conversation by, being an organization that's focused specifically on open blockchain networks and not on the larger internet per se, because we can specialize. And we have three full-time attorneys on staff. We have two other full-time employees, a communications person

and an administration person. So we have a lot of resources that we can dedicate just to this one issue area rather than spreading them thin across a bunch of other issue areas. So have you guys done any work on behalf of Bitcoin users or users of other blockchain systems, you know, to defend them against, you know, prosecution that wasn't justified? So we're not like a public defense organization.

We don't do litigation primarily. What we're really trying to do is head that off before it even happens. So before the question of whether somebody is charged with something, there's the question of whether the law even applied to what they were doing. And that question is one of the most difficult questions in the space. you have this new technology that enables people to do something, say, send money to Mexico, for example, send Bitcoins to a software from a software wallet in the U.S. to a software wallet in Mexico.

Key question right there. To what extent is the developer of the software wallet, whether it's blockchain.com or any of the other software wallets out there, to what extent are they subject to regulations that generally regulate remittance providers. So people who like Western Union operate a business sending money, for example, to Mexico. To what extent are they subject to financial surveillance laws? So laws that say you need to know the name of all of your users, you need to record their transaction data, you need to submit suspicious activity reports and currency transaction reports to the Department of Treasury at the federal government so that we have, we, the Department of Treasury, have visibility

into the flow of funds to stop illicit financing, all that sort of thing. It's a big question. And in the old world, pre-Bitcoin, it was not a difficult question. It was you're running a remittance businesses. You look like PayPal. You look like Venmo. You look like Western Union or Moneygram. Of course, you're going to be regulated on these things. And in some sense, there's always companies like that in the Bitcoin space. So what's the difference really between a hosted wallet provider and exchange and PayPal. And if they're holding your bitcoins for you as a company, like Zappo, like Coinbase, whatever, they have these things. They hold stuff for people. Why not regulate them the same way? It makes, otherwise it's special pleading to say, well,

just because the valuables are denominated in this thing called a Bitcoin instead of a dollar, we're not going to regulate you for consumer protection purposes, for example. But there are also, say, the software wallet providers, the people who just write software, write an app, put it on the app store. Does it make sense to regulate them as a financial institution, as a money transmitter? I don't think so. And I also think if you tried to regulate people who are purely writing software as money transmitters, you'd really crush people's opportunity to use these technologies, at least in the US, legally. Because it just doesn't make sense that if somebody's going to write a GitHub repository, they need to first get a license. That's a disaster. It's also a disaster for U.S. constitutional law

where we treasure free speech and code is actually speech. There's actual Supreme Court holdings and federal court holdings that reaffirm that position. And so you can't put prior restraint on speech. But explaining that to a regulator who wants to maybe regulate a software wallet, both explaining the constitutional law argument and the regulatory law argument and also explaining the technology, why this is not the same as somebody running Western Union or MoneyGram. That's a really difficult thing to do. And so that's what we focus on. We focus on making sure that those understandings are established before it comes to a situation

where somebody's going to end up getting arrested and going to court. Wow. Amazing answer. And yeah, at least for me, I totally see the value proposition of an organization like Coin Center. So tell us, like, in the long run, let's say, you know, five or ten years from now, how do you judge the effectiveness or the success or failure of an organization like coincidental? Yeah, because education of regulators is a diffuse thing. And this is one of the things we actually struggle with, is we take a lot of meetings.

We take meetings with congressional staff. We take meetings with regulators at Treasury. And oftentimes we can't take credit for those meetings because, you know, a congressman doesn't want necessarily, it's a, you know, immediately hit the news that he's meeting with the Bitcoin people. And there's maybe a marketing branding problem there that eventually will be solved. So that would be part of it. You know, these networks become so legitimized that people are happy talking about them. But the big thing, honestly, is, so what do all of these networks do more than anything else? They decentralize power. They remove a centralized intermediary,

and they push the security on the network to the edge device, to the user device. They empower the edge. Now, that means you lose the choke point for regulation, because the choke point for regulation is the bank. The choke point for regulation is the centralized intermediary. And because of that, you also potentially enable illicit financing. I mean, just to be brass taxed. It is possible that people will use these networks to launder money.

It's possible that people already do that. It's possible that one day somebody will use these networks in a, meaningful way to finance terrorism just to get down to that right away. And the question then becomes, all right, this is a tool. This is a technology, just like cash is a technology, and cash is by far the best way to finance terrorism. What will be the government response the day when this tool is used in a way that a lot of people get very upset about? Our metric of success, I think truly, would be a reasonable response to clear evidence of illicit use. of the technology, like dangerous solicit uses of the technology.

A reasonable response being not an instant push to ban the thing, not an instant push to arrest anybody who's distributing software to the extent that that would even be constitutional, not an instant push to demonize the people who are using the technology, more of a reasonable conversation in Washington because there were people like Coin Center there, laying the groundwork, doing education, developing champions in Congress who know that the technology also can be a major force for good in the world, say for digital identity, for financial inclusion, for other purposes, who will raise their voices in the event of a catastrophe and say, look, this is a technology.

Just like all technologies, it can be used for good and for evil. And we are not as Americans in the business of banning technologies. We're not in the business of banning speech. And sometimes that has costs, but these are costs that it's important to bear. So that would be my metric for success. is something bad happens in the future. I don't want something bad to happen in the future, but if something bad happens in the future,

there are reasonable voices that we helped become more reasonable, ideally. That's a fantastic answer. Thanks so much. I think that's, yeah, it's very true that, you know, this is realistically, right? We know things like this are going to happen, and we know that there is this tendency for regulators to overreact in cases like that. I mean, I think we've seen that over and over again,

and you're certainly right, that if we can get in this area, reasonable responses, reasonable ways of finding solutions to that, that would be a fantastic achievement. I mean, what comes to my mind when you bring up this point is probably another absolutely crucial prerequisite to get a reasonable response. If, you know, let's say Bitcoin was used for to finance terrorism,

would be that we just need like real applications that have mainstream success, right? Because if you have stuff where there is, you know, 50 million users and they are like, this thing is great, it really makes something possible that I couldn't do before and it's a totally legitimate thing and, you know, this is amazing, it would be so much harder when it's still this kind of, you know, fringe thing. Yeah, and, you know, to some extent,

we hope to be clearing the way as best as possible in the more short and middle term for people to do that, to make sure that it is easy to develop on the technology because I think you're totally right. You need the legitimate use cases to emerge. You need to show that you're making a positive impact on the world, that it's not just a bunch of people getting rich off of token sales or people using underground drug markets. And the longer we go without more mainstream legitimate uses, the more danger we're in, I'd say. You know, and there are, there are legitimate uses. Unfortunately, one of our best stories when people ask,

oh, right, so like, so why should we defend this technology? You know, what is it good for? One of our best real stories is WikiLeaks. But now WikiLeaks is all politically charged because they may or may not be in league with the Russians. I have no idea and no opinion on that subject. But WikiLeaks was an amazing story of financial autonomy being important and cryptocurrency coming to the rescue. So WikiLeaks during the cable gate leaks where they were leaking information about,

you know, assets on the ground in, in, in, in, in, in, U.S. involvement in the Middle East, they lost all their payment processing through Visa, MasterCard, American Express. They suddenly weren't able to accept donations. And WikiLeaks is a legally incorporated nonprofit in the United Kingdom. And if I want to give money to WikiLeaks, that's that's, that's first amendment protected political speech, actually, supporting an advocacy group or a nonprofit like that that has a political purpose. But suddenly, because the credit card processors stopped.

servicing them, I can't give money anymore. And why did the credit card processor stop servicing them? Well, it's not because a law was passed that said you're no longer allowed to donate to WikiLeaks. In fact, that law would be unconstitutional if it was passed. It's that in a back room somewhere, someone powerful in the US government, talked to someone powerful at MasterCard, Visa, and American Express and said, hey, if you're a patriot, you're not going to process those credit card transactions. And they didn't. So it's amazing how fragile our, you know, electronic money is. if it's not cryptocurrency.

We really rely on a few centralized intermediaries again to make that system work. And that's an amazing amount of power to basically cut people off from financial autonomy and also to damage their financial privacy, which is a related subject to autonomy. And WikiLeaks ended up accepting donations in Bitcoin instead. And they've done so ever since.

Now, you've been at Coin Center for a bit over two years, I think. And I'm really curious, during that time and all your interactions with politicians, policymakers, how has, number one, their understanding of this technology evolved and how have their attitudes towards it evolved? Have you seen a more open approach or maybe have people become more skeptical as they maybe understand more the potentially disruptive nature of it? What was the kind of progression? I think people have become a lot more open to it, actually.

So it's pretty much a positive story. right now. So for example, some of your listeners may be familiar with the blockchain caucus, which is a group of representatives in the House and Congress who have come together to talk about and think about the potential need for legislation ultimately in the blockchain network space broadly. It's Congressman Polis and Congressman Schweikert, who were the co-chairs, the founders of that caucus. And we worked early on with them to impress upon them how important the technologies were. And they were totally open to having this official form within the House of Representatives to have discussions about it. And now I believe there are eight or nine members of that caucus and it's growing.

So hopefully it will become a bunch of people in the House, representatives in the House who are interested in the subject. The only thing I would say is to some extent the evolution of, you know, a politician or a regulator's thinking about the technology went from cryptocurrency to this thing called blockchain. And blockchain is a really vague word. I often say that like blockchain is a word that's a lot like the word vehicle, except unlike the word blockchain, rather, no one's going to come up to you and say like, hey, how do you feel about vehicle, man? oh, we can solve this problem if we have a vehicle. And vehicle technology to the extent, like, it's a thing is a really stupid broad topic. Like, we should probably talk about a specifically like a bus or Uber or something like that. But blockchain is like that right now.

It's like blockchain technology. It could be everything and it's this magic sauce that's going to fix things. And it's also, it's inspired by Bitcoin, but it's really unrelated to that Bitcoin thing because that's, you know, it's a little sketchy. So like if that's like a that's a sort of mean way to to express the evolution of thinking from like cryptocurrency. Like what is it? It's crypto anarchy and all these things to blockchain as this like totally unoffensive, completely perfect solution to all your problems. That's a problematic evolution in our opinion. I mean, don't get me wrong.

I love some blockchains. Like there's a blockchain behind Bitcoin. There's a blockchain of sorts in Ethereum and in C-Cash. But what matters to me is the consensus mechanism. So I always do a thing. There's peer-to-peer networking. There's consensus mechanisms and there's blockchains by which you mean hash-linked data structures.

And it's those three technologies that Satoshi Nakamoto kind of combined to create this amazing innovation that was Bitcoin, censorship-resistant electronic cash. And people have taken this one piece and made way too much of it. It's just a data structure. It's just a way of presenting it. so computers can verify it easily. What matters to me is the consensus mechanism. It's what are the rules that allow computers to join or maybe not join a group and come to a

reconciliation about the single source of truth, about what should go into the blockchain, whether this is valid, whether this is an attack on the network, or whether this is actually, you know, honest part of the consensus. It's that consensus mechanism that is amazing within Bitcoin. It's proof of work driven. And that was quite a revolution. I mean, proof of work was a thing before, but the idea of putting it into a Paxos-like decentralized consensus mechanism was something fairly new.

And that's also what makes Bitcoin this open permissionless network that allows anybody to, without paying anyone money, without licensing any software from a company, install a wallet on their device, and get a payment address, and be able to get paid. You don't need to do anything with a central bank. centralized intermediary to do that. You have to trust one person or another person's GitHub repository, but big deal. We do that for all of our digital stuff, and that's not going away anytime soon.

So that's radical and amazing. The blockchain itself, just a data structure that is one part of what powers that. Communicating that message that the open blockchain network is really a core innovation, and one that's fundamentally important not just for electronic cash, but also for machine-to-machine payments, for identity on the internet, so the stuff that like the block stack guys are doing or the people over a consensus working at, it's Uport, right? Is it Uport?

Yeah. Yeah. Like those are use cases that matter deeply, I think, because they'll both make the web work the way it should have without all of these centralized clutches in between, like the DNS system, for example. And because they enable individual freedom. They enable individual autonomy.

And that's very important in a world where with cash disappearing, and credit card companies and bank money replacing it, we're putting an awful lot of trust in those centralized authorities. And that trust is fragile. So if I understand you correctly, you're a little bit worried that this interest around blockchain, which I think you're completely right,

is this is a little bit nebulous, right? And it does take on many different forms in different contexts. So you're afraid that that kind of, you know, dilutes and distract the focus from from the core questions I need to be solved in order to have these public blockchain networks and things like digital cash and digital currency become really usable yeah so a few things on that um the first thing i'd say is i don't i don't mean to suggest that all of the non-open or closed blockchain products are our bunk

i think there's some low-hanging fruit in improving the technological back offices of, say, big financial institutions, and it's awesome that people were inspired by Bitcoin to do that. That said, I think there are some things that only open networks can do, and those are things like electronic cash, digital identity. I'd also add in Internet of Things type applications for these networks, because a closed network is going to be in many ways not all that different than some of the issues we have currently with IOT systems where there's one company that is the go-between between you and your light bulb and that's a weird world in a world we don't really want to live in, especially if it's not your light bulb, it's your

car, it's your ability to drive around, or it's your smart lock, your ability to get into your house or not. So I think the open networks are the only networks that can solve those important problems, which means they are valuable for more than just underground drug markets and communicating that message to policymakers, I think is very important, that these networks will do very good things. They will improve cybersecurity in certain areas, like, say, the IOT, ultimately. And then the other thing I'd say is that the closed networks are developed usually by a single technology provider. You know, there's a bunch of these. There's Axone, R3. They're great companies. But there is a voice for that technology. It's the company that developed it.

So it's not a public good like the internet or Ethereum or what have you where there's no single voice that can speak for the technology to regulators. So it's less the province of something you'd need a nonprofit advocacy organization to basically lobby the government on behalf of. And the policy questions that closed blockchain networks raise are pretty, there really aren't that many. If it's a closed network, it's identified parties like, say, six banks who decide to use this, and they decide to use it, they're already regulated institutions. And their choice of what technology service provider they hire to provide their back end is not really something that regulations have anything to say about. Now, compare that with an open blockchain network where you now have this permissionless system that allows people to get paid or pay other people, if you just take the naive case or the simple case. of, you know, Bitcoin, there are massive policy ramifications. The big one being like, what I was discussing earlier is like, who do you regulate in that space? Do you regulate the still centralized

intermediaries like the Coinbases and the Zappos of the world? Probably. They're not that different than PayPal. Do you regulate the software developers? Gosh, I hope not. Because A, I don't think they're creating the kind of risks to consumers or other persons that regulation is supposed to address And B, I also don't think it's constitutional necessarily to regulate them. And I also don't think it's very good for innovation. It basically would just push people to other parts of the world to build the technology, which I don't think anyone wants to see, especially if people get hurt in the process. So let's kind of switch gears into regulations and what is happening generally in the United States.

And so for people like me who basically consider, I assume regulatory news from sources like CoinDesk or Reddit, it seems like a big patchwork will like this and this, this, this, this, this, this, this, and this, and this. And like, we don't have a coherent way of connecting what all is happening. So could you give us like some coherent model of thinking about how, what all different kinds of regulations are there and how they matter? So you can break it down into issue areas. And for me, there are three big ones that are most worth discussing.

There are some other secondary issues, which, you know, you can go to coincenter.org if you want really minutia on them. But the three big ones for me are consumer protection regulation here in the U.S., which usually means business licensing. So this is like the bit license and stuff like that. That's the first one. Then there's financial surveillance law, which if you're a compliance professional, you don't call it financial surveillance. You call it AMLKYC.

You call it anti-money laundering compliance. And the third one is investor protection instead of consumer protection, our first one. And that's something that is primarily the province of the SEC, the Securities Exchange Commission here in the U.S. And primarily the province generally of securities regulation. So what do you have to do in order to sell equity, basically, in a thing? And these technologies touch all three of those areas. They touch consumer protection because, as we were saying, there are companies out there who will hold people's money.

The worst example of them, of course, was Mount Gox, because if you hold other people's money, you can lose it, and Mount Gox lost a bunch of people's bitcoins. And consumer protection regulation exists to try and prevent that, to try and keep consumers safe from bad companies out there. It touches anti-money laundering or financial surveillance regulation because there's value moving through these channels. And the federal laws are broadly drafted to say that certain people doing certain things

with money or monetary value, which certainly would include, I think, Bitcoin. It'd be hard to argue that Bitcoin doesn't have monetary value or ether monetary value. Certain people doing certain things with those valuable things need to surveil their users, record information about their users and send it to the government. Now, you know, there should be a larger debate in this country about the surveillance state, and it should actually start with financial surveillance, I think, because that conversation hasn't happened enough. We talk about, oh, they're reading my emails, but actually they see all your bank records all the time.

You have no choice in the matter. You don't even have a reasonable expectation of privacy under the current interpretation of the Constitution. So big debate over that, but I will say that the laws are broadly drafted right now, until someone's ready to challenge them, and, you know, I'm not seeing the legacy financial institutions challenging them. We got to play by the same rules. Otherwise, there's some dire consequences for people in the space. And I don't want to see that. And then that third area, how does cryptocurrency and decentralized tokens and such touch securities law? Well, now in the last two, three years with the rise of altcoins and bubbles around altcoins and then token sales now and ICOs now, which to me is like deja vu, but it's fun that we're having this again.

There's this question of whether somebody who develops tokens, like a decentralized protocol, like Ether or like Zcash or like Monaro or like any of the tokens that might be built on top of Ethereum long term with the token standard, whether when they build them and then sell them in a pre-sell, what they're really doing is engaging in an investment contract with investors. which is something that you can't do in the U.S. unless you first register with the SEC and do certain other things like make a prospectus for investor transparency. And if you don't register, there's some heavy penalties there, too. So it's not a foregone conclusion that all token sales and all tokens would fit into securities law,

but it is an open area. So those are the three big areas. And then we can speak a little bit more specifically about each if you guys are interested. Sure, let's do that. But let me just tie in one point here. You mentioned regarding the token sales. It feels like deja vu to you. Can you expand on that?

Deja vu in what way? I just feel like we've had a couple sequential. We used to call them alt coins. We don't really call them alt coins anymore. But like waves of enthusiasm about them and people making money off of them. I remember counterparties, proof of burn. I thought that was awesome. That was like a really cool way to do a distribution.

But that was now like, what, two years ago now? It's like dog years in this space, I guess. But now it seems like we're really in a new wave of enthusiasm over ICOs. And I hate the word ICOs or the abbreviation. Because it sounds just like initial public offering, which is like, it's like, I'm just going to paint a target on myself that says like, hey, SEC, come at me, bro. You know, and because the SEC regulates initial public offerings, that's what they regulate. And now you're going out saying, well, this is not a security, but we're having an ICO. I just kind of shake you.

It would be like, just be more cautious, man. You're building a cool thing, maybe, or maybe you're not. Maybe it's a scam. But why would you pick the word? So there's a lot of enthusiasm right now. And it reminds me of some of the enthusiasm over, like, past waves. Like, oh, counterparty is going to be awesome. Or, oh, light coin is the silver to Bitcoin's gold.

And it's great stuff. I don't mean to be derogatory. but exuberance can be dangerous too. Yeah, no, no, absolutely. Well, let's dive into some of these areas. So the first one was consumer protection. And in the U.S., that's, as I said, briefly, mostly a matter of business licensing law.

And that means the states do it instead of the federal government. And that means that in order to basically run an exchange or a hosted wallet provider where you hold other people's money, you're going to need to get registered in every state where you have customers. And if you're an internet business, you have customers probably in every state, unless you're not doing well as a company. So that's 53 states and territories where you're going to have to go to the regulator, have a conversation and be like, oh, hey, you already license people like PayPal

who do, you know, online money transmission. We're like that, except we use Bitcoin. And then you have to explain to them what Bitcoin is. And then you have to hope that they don't laugh you out of their office or basically just like clam up and be like, I don't know what that is. And you're frightening me. And to some extent, that was the conversation early on. You know, these are state regulators. They deal usually with like the local Western Union branch.

They're surprised by someone from Silicon Valley or wherever, maybe Switzerland, coming into their office and being like, hey, I do this with this. And then there's this open question like, all right, well, there's this statue on the books that says that money transmitting. mission is taking money or monetary value from one person and handing it to another. What if it's a Bitcoin instead of a dollar? Does that count? Probably. It's monetary value, right? But the regulators aren't always ready to get on board with this because this is all new technology and frightening. And the bigger problem is if you go to their office and they say, not going to give you a license, I don't know what you're talking about. Then you might ask, all right, well, does that mean I don't need a license to have customers in your in your state and then the regulator will

usually come back and say no no I didn't say that at all and that means you're in this really uncomfortable position you can't get a license and you haven't been told by the regulator that you don't need a license so maybe we'll just operate anyway might be the response it's like well we talked with them it'll be fine right they know we're cool problem is if you operate without a license you're in violation of federal law and also the state law potentially so if you If a federal prosecutor wants to come at you for doing money transmission in a state where a license was required and you were not licensed, they can, without proving very much other than the fact that you had customers in the state, they can lock you up for five years. And they're probably not going to do that. They're probably going to leverage that threat of jail time for a massive monetary penalty, like millions of dollars.

But it's very hard to defend yourself in that situation because the statute's written pretty clearly. It says you need a license and you didn't have one. And so that's strict liability. You violated the statute. That sounds like the kind of thing that a huge number of cryptocurrency businesses would be vulnerable to that kind of prosecution. Do you see that the same way? Is that a big threat for this industry? Oh, exactly.

And that's why you've seen the big hosted wallet and exchange companies pouring money. And rightly so, I would do the same if I was running those companies into figuring out a compliance strategy, into going state. by state and getting licensed. And of all the major exchanges, especially the U.S.-based ones, not just the ones with U.S. companies, they've gone to every state that'll give them a license and they've gotten a license. And in a few cases, they've blocked customers whose IP address seems to indicate they're coming from a state where they don't believe they can operate legally. Like Coinbase for a time blocked South Dakota, I believe. And Zappo for a time blocked North Carolina. I don't know if they're still blocking them, but it was one of those.

situations where they said, like, look, we don't want to poke that bear. We don't want to deal with the regulatory consequences there. And, you know, we need exchanges. We need hosted wallet providers, because not everyone's sophisticated enough to run a full node and people at the very least are going to need to be able to get onboarded until we get paid our wages in this stuff. So we need these companies. We need them to be able to operate without the threat of crushing liability. You might say, okay, well, then be an exchange based in a country that doesn't have these state-by-state licensing laws, but there's a thing called extradition, and unless you're in the horn of Africa, your government in your foreign country might be quite willing to cooperate with U.S.

authorities and have you extradited to be charged in the U.S. So, like, this is a big problem. And then it gets even bigger, actually. The bigger problem is a lot of these state money transmission statutes that say you need a license are drafted so vaguely that the definition of money transmission is something along the lines of the transmission of money. And the reason why they're drafted vaguely is because in the old days before Bitcoin, the only way to transmit money was to like take possession of it from one person and hand it to another person. That's a custodial act.

So what we should define it is having custody of other people's money is what needs a license. But it's not defined that way. It's just transmission. So then you have to ask yourself, somebody who's got a computer in their back room that's running a Bitcoin full node, they don't take custody. course not. That's not how these networks work. They relay sign transaction messages that can only then be spent by the recipient. But are they transmitting money if the definition of money transmission is the transmission of money? I don't know. You have potentially plenty of wiggle room in the way the statute's drafted to come at that person and say, you violated that statute.

And then it gets even more complicated with, say, someone who's not running a full node or a minor, but actually developing the core protocol software. Are they a money transmitter? They're facilitating these activities, but they're certainly not taking custody of anyone's money. And then really complicated with software wallets like blockchain.com, they don't take custody. It's client-side JavaScript that takes custody on the user's device, but they wrote the client-side JavaScript and they maintain the website. And then it gets even more complicated with multi-sig providers, like BitGo. BitGo does an amazing thing. They make somebody pretty sovereign over their money, but they keep a backup key so that if the person's phone

gets stolen. Hopefully they've got another flash drive and BitGo combined, they can move the money away. Multi-Sig is great consumer protection. But here's the question. Does BitGo or a multi-sig provider need to be licensed in all 53 states where there's money transmission regulation? Huge open question. They don't take custody, but they do have one key out of three. Explaining that to a state regulator is really hard. In fact, Mike Belchie of Bitco ripped up a $50 bill in front of a number of the assembly members of the California Assembly when we were doing like a lunch and learn. It was pretty awesome. And then he said, like, and I can't put it together.

But with Bitcoin, you can actually. So we need clarity. Otherwise, there's a lot of people doing some really cool things like developing multisig wallets, core protocol software, software wallets, running full nodes, doing the infrastructure, powering the technology, the really innovative stuff that's important to making the networks work, that are all in some ways in jeopardy because the legal gray area of what is money transmission could be stretched to apply to them. And if it was, they'd be on the hook for some serious penalties, basically.

Do you see any way around it? It's not easy. So there's a few. We've worked with the Uniform Law Commission. The Uniform Law Commission is a group of academics who gather together to create model laws that all the states should pass in order to have uniformity. So the Uniform Commercial Code governs commercial contracts between like big merchants and things. And every state adopted the Uniform Commercial Code so that they all had the same regulation of contract terms so that there isn't disagreement.

The ULC is now also working on a different Model Act, different than the UCCC, that would be a model regulation of virtual currency businesses Act. So it would be something that all of the states could pass into law that would clarify this specific gray area. Who needs to get licensed as a money transmitter, except they're not a money transmitter, they're a virtual currency transmitter, and who does not? And we worked carefully with them, and they were really open to working closely with us to create a definition of money transmission, and more specifically a definition of custody and control that excludes anybody who does not have the, unilateral ability to execute or indefinitely prevent a transaction. So that language was carefully conceived by us and the ULC to exclude a minority keyholder in a multi-sig arrangement, to exclude an enlocked transaction, so like what green address does, for example, with their

wallet product, to exclude people who actually don't have custody of funds. To exclude, by the way, an intermediary node on the Lightning Network, which is another huge open category of persons that would potentially be interpreted as money transmission if we don't get these laws right. So the ULC has this model act. They're going to finalize it this summer. That means that the states would then have to pass it into law. And getting 53 states and territories to all pass the same model act into law is going to be difficult. But the ULC at least has a good brand, so they might be convinced to do so.

But there are other ways around it that we're pursuing simultaneously from working with the ULC. Another one is federal preemption. And so for people who aren't students of federalism, we have a federal government and state governments. If the federal government says the states can't do something, then they can't do it. It's the preeminent authority. So normally preemption happens with like Congress comes in and passes the law and says, hey, states, you can't do this.

Congress is not going to pass that law. It's just too hard. It's politically unviable for them. They don't want to piss off basically the people who run the states that they get elected from the population of. And, you know, query whether they'd even, you know, agree with our perspective on this. But there's another route for some minor level of federal preemption. And that comes from the Office of the Comptroller of the Currency, which is this very old regulatory body that actually began in, I think, like, 1860. And basically, they were the regulator of national banks. And when the OCC decides to

charter a new national bank, so there are a bunch of national banks, like Wells Fargo is a national bank, for example, they become the only regulator of that national bank for consumer protection. That bank doesn't have to worry about money transmission licensing or state banking regulations in all the various states. So the solution that the OCC is presented with us, which is quite interesting that they're interested in this area because they're worried about innovation and American jobs and things like this is why don't we start chartering fintech companies as national banks and then they're not subject to state laws and that's pretty cool it's it's awesome that they're open to this and they you know comptroller curry who's the the head he's the comptroller of

the currency who's the head of the OCC unfortunately is on his way out because the Trump administration is going to replace him but they might replace him with someone good we're not we're not certain yet. But Comptroller Curry was actually pretty into Bitcoin. Like you read his old speeches. He's into digital currency. So to the extent they're willing to charter a fintech company, like what does fintech mean? I don't know. I think they might also be willing to charter a company that's like an exchange or a hosted wallet. And that would be great for that company because then they don't have to get licensed in 53 states where some of them don't even know what you're talking about. That would be really cool. But notice that this only solves the problem for a company that one,

wants to be regulated. Like, I was either going to have to do this 53 times or once. It doesn't solve the problem for the company that doesn't believe they're subject to any of this. The blockchain.coms or the BitGos of the world, the multi-sig providers or the software while providers. They don't want to become a national bank. And they know they're not a money transmitter, but it's hard to convince people of that. For this, we would need an actual safe harbor. That would be an act of Congress that would say, hey, states, you do a great job regulating custodial money transmitters, but anyone who is non-custodial in the digital currency space, for example, those are companies that you cannot regulate through licensing.

So it would be limited preemption. It'd be preemption just of that one area. It really would be a safe harbor. Kind of like there were some big laws back in the history of the internet that were safe harbors that made it possible for a company like YouTube to operate because we had copyright lawsuits that would have driven them into the ground without the digital millennium copyright. Act Safe Harbor or defamation safe harbors like the Communications Decency Act. So there's a good history of these safe harbors and I think we have a good chance of actually

convincing Congress that this sort of limited preemption through Safe Harbor is something that they could accomplish, maybe through the blockchain caucus, for example. Cool. Now that would be indeed fantastic. What kind of timeline and what probability would you assign to you guys being able to get something like this through? stuff's really slow right now, primarily because of the political situation with the Trump administration and the Freedom Caucus and the Democrats still, you know, hanging out there. And everything's in flux, I think, with the midterm elections coming up and, you know, any number of other political things that I'm not an expert in.

So moving legislation is pretty difficult right now. But again, I would say that this is nonpartisan. So maybe it's something that could actually get pushed through before. the midterms. That's probably our policy council, Robin Weissman, who's the real political expert, was probably looking at this right now and saying, Peter, don't make those promises, you're an idiot. But, but, you know, maybe we should be optimistic. I don't know. That was an amazing, amazing description, Peter. But so, so this is just one part of the regulatory areas, right? So that's consumer protection. Yeah. That's just consumer protection, right? Like businesses that

they want to serve customers and want to get licensed to serve them. And all of this is just that, right? And then there's consumer protection, but then there's also federal anti-money laundering regulation and then there's securities regulation. Right. Yeah, and I can go through those a little bit faster. I know this is probably, I'll probably get not in time. So federal anti-money regulation, which I prefer to call financial surveillance law, because that's what it is, says that if you're a money transfer.

transmitter, and they kind of mirror the definitions at the states. So we have some of the same definitional issues. If you're a money transmitter, you need to register with FinC, a different branch of Treasury from the OCC. There's a lot of branches. And after you register, you need to have an anti-money laundering compliance program, which means you're going to have some high-level people, and then you're going to have a big staff, and they're going to do risk-based anti-money laundering,

policies. So they're going to look for suspicious-looking transactions, make sure that every customer has been identified and truly identified, like no fake IDs, things like that. And then the big ones are you have to file suspicious activity reports to the Treasury, to the federal government. So if you have any reason to suspect that there's something fishy going on here and the transaction is $2,000 or more, soon to be $1,000 or more actually, to come in confirmation and conformity with the international standards, like the European standards, you need to send all the details about that transaction to the federal government. You also need to do currency transaction reporting, which is any transaction, suspicious or no, that's over $10,000 in value. That needs to be,

the details of that need to be shared with the government. And then FinCEN, the regulatory body that implements this whole scheme, shares that information with all of the major law enforcement agencies in the U.S., with some of their international partners, and also with some of the state law enforcement agencies. So it's a lot of private information floating around. And Bitcoin businesses, Ethereum businesses, if they qualify as a money services business or a money transmitter, which is a subset of money services business under the federal statutes, which, as I said, also mirror some of the issues at the state level, then they need

to register and do that compliance work and share that information about their users. big open question who exactly is a money services business and who isn't just the same as with the consumer protection space what if you're just a software provider again you don't actually like accept something from someone hold it and then give something to someone else do you fit the definitions at the federal level probably not now that's going to be interesting long term because I'm not sure that I'm not sure that all the financial surveillance regulators are going to be comfortable with not getting information from people who have a lot of information. So like a software wallet provider still might have information about their customers to some extent,

you know, if the transaction messages that the software wallet sends are relayed through a server of some sort or could be monitored by the software on the user's device. So the long-term equilibrium of that is open. There probably need to be a rulemaking at the federal level to actually change who is and is not covered. because pretty clearly in the way the regulations are drafted right now, that software developer is not covered. And there would also be a constitutional fight over that potentially because the software developer might be doing nothing more than writing code, which is free speech, a protected activity. And if you force them to write a back door to that code to identify users and do things like that, you're actually compelling speech, which is also unconstitutional. The government's in most cases not allowed to force people to say things that they wouldn't have said on their own.

This actually came up in the San Bernardino iPhone case with the terrorist attack where they wanted to get into the iPhone, and they tried to get Apple to write a back door into their OS. And Apple said, no, that's compelled speech. We have a good case here. We're going to fight you on the constitutional grounds. And then the government actually backed off and said, okay, never mind, we'll break the phone in another way. And they probably did because they've got a lot of resources. So that's a battle that's coming potentially.

Another gray area in financial surveillance law is token sales. So we'll get to more about token sales with the securities thing because most people think, oh, what are the regulatory implications of token sales? The big one is this investment contract for the SEC. But there's also this issue that most people aren't talking about of FinCN regulation, a financial surveillance regulation. So there's guidance from FinCEN interpreting the Bank Secrecy Act with respect to virtual currencies. The guidance is kind of unclear with respect to somebody who isn't taking Bitcoin from someone and giving it to someone else,

but is instead inventing something that's Bitcoin like, a decentralized cryptocurrency, a crypto token, an ICO, whatever, and then selling it to people. They don't seem like a money transmitter. They're inventing all, you know, out of whole cloth, a new digital asset and selling it. But, as I said, it's very unclear under the current statutes whether that activity specifically would be regulated as money services business. And if it was, then you need to register with FinCEN. And for everybody who buys a token from you in the sale, you need to collect their personal information. And for every sale over $10,000, you need to file a currency transaction report. And for any sale to someone suspicious, whatever that means, you have to file a suspicious

activity report. And if you neglect to do those things, you're in violation of the Bank Secrecy Act, which again carries some really hefty criminal penalties. And that's with every U.S. buyer potentially. So another big problem. And there really is almost no way currently to judge how the law applies to that activity. It's very vague. With something like this, with FinCEN and this money transmission issue, to what extent will they try to apply this to projects that are outside of the United States?

So especially with financial surveillance regulation, with stopping illicit financing, for example, if that's what you're worried about or stopping terrorist financing, the U.S. has a pretty strong track record of seeking to enforce its law abroad by asking for extradition of persons who are dealing with U.S. customers. So you get the jurisdictional catch by dealing with a U.S. citizen, even if you yourself are. are not a US citizen. The other thing to say here, though, is, you know, a lot of these things aren't currencies, not really. They're not fungible. In many cases, they're great innovations that are inextricably linked to a protocol. Protocol tokens is a good term for them, much better than ICO.

And if it's really just a protocol token for, say, a distributed file system, like what file coins building. It doesn't seem like you have a money laundering risk there. I hesitate to say that because what if you do and what if I just said you don't? It doesn't seem like you have a terrorist financing risk. Who's going to finance terrorism with file coins? Like, it doesn't make sense. It simply doesn't make sense. So I think there's good reason why the regulators in this case have not said anything yet, and it's because they're reasonable people, and they're not interested in crushing innovation, especially if all you get out of it is, you know, there's not actual bad behavior going on at any large scale. So I think there's a lot of caution here. I'm not concerned

about an enforcement action coming down the pipe anytime soon, but it is a gray area that's existed in many ways since 2013 when FinCEN first issued guidance. They, did have an enforcement action against Ripple for selling XRP. So that has happened already. But Ripple's a little different, and that enforcement action settled. So there was a settlement agreement between FinCEN and Ripple to not prosecute them for certain activities described in the settlement agreement. But that doesn't mean it's precedential. That just means it's an agreement between the regulator and that one company.

So it's still an open space. We'll see what happens. I don't think anything's going to happen soon. I don't mean to be alarmist, but it's an area that I think needs more legal certainty, mostly because if you're not a bad actor, you shouldn't have this sword hanging over your head. So it's a legal gray area,

but if FinCEN were to ever take the stance that doing an ICO or bootstrapping a token, whichever way would all, also necessitate the KYC and the filing of all of these reports. Then potentially all of the ICOs or protocol tokens that have been bootstrapped in the past two years, all of these projects would be affected.

Is that right? In a way, because that's actually how administrative law does work. So it's not as if they'd come out and say, this is how things are from now on. What they do is they issue guidance or an interoperative or an interpretation of existing law. And that means that that's what they're saying the law has always meant.

This is something that's hard to communicate to people who don't have a background administrative law because it sounds a little strange. But to the extent that your guidance interprets, say, an exchange dealing with Bitcoin and how they relate to the Bank Secrecy Act, your guidance says that an exchange, even in 2011, would have been regulated. even though we're maybe issuing this guidance in 2013, which is actually what did happen in the more limited case of exchanges. As I said, that guidance, that 2013 guidance is unclear with respect to token sales, and we'll see if they take the opportunity in the future to clarify it. But if they did, it would apply basically retroactively. That's true.

Now, it wouldn't necessarily apply to all token sales either. It might only apply to certain ones that look certain ways. So they might make a distinction in the way the sale is actually orchestrated or the way that or what the thing is that's being sold. Is it a protocol token or is it really just a currency? And is there some limitation on that? Or, you know, could it be that they go back in 10 years and say, okay, now we're going to like sort of do this archaeological forensics and how likely is that kind of thing? Well, actually, yes. So all laws, except murder. some places have statutes of limitations, so you can't go back and get somebody for something

that was too long ago. I actually don't know the statute of limitations for, say, the section of the Patriot Act that amended the Bank Secrecy Act that creates criminal liability for failing to register with Finsen, which is 18 U.S.C. 1960. You could probably Google statute of limitations 18 U.S.C. 1960 to find it. But it's probably not, it's probably shorter than 10 years, but But don't quote me on that. Well, we are almost the end, but let's just very quickly talk about securities law that last thing. And I think that the thing that has gotten the most attention of all of these regulatory aspects. What can you share about that?

So we were some of the first people to write about the subject back a year and a half ago. And the reason why we wrote our framework for securities regulation of cryptocurrencies, which we published back then, was because of pay coin, actually. So I said earlier that there's these sort of sequential waves of people doing these things. And that was the first ICO bubble, if you will. Paycoin, for those of you don't remember, was the brainchild of Josh Garza, who is a serial scammer before Paycoin, which was a fork of pure coin. that he sold in a pump and dump, basically. Before Paycoin, he had Geniuses at Work mining, which was a cloud mining scam.

He was selling hash power in a warehouse, but the warehouse was actually not full of any Bitcoin miners. Surprise, surprise. He was just paying old investors with new investor money, which is called a Ponzi scheme. And before GAW miners, geniuses at work is what GAW stands for too. Geniuses at work. Before that, he actually got a contract

to build high-speed internet access in upstate Massachusetts and Vermont from the government and then didn't build it, just ran away with the money. So like this guy's a bad actor. Like we felt pretty comfortable saying in this framework, like pay coin's a good example of where there really is investor fraud. Because what he did was he forked peer coin, said he was going to have Amazon integration and like a minimum $20 price floor for pay coins in the future.

So you should buy them now at the low, low price of like, like whatever point, whatever Bitcoin. And he collected a lot of money. And then he didn't develop Paycoin because he probably wasn't even qualified to develop Paycoin. And then Paycoin never went anywhere and people's money was gone. They paid in Bitcoin for these tokens that eventually went down to zero in value, basically. So that's a pretty classic pump and dump confidence scam.

And the sort of thing that the SEC has always regulated. What's different about it is that what he sold, was a token that was a decentralized cryptocurrency. Like, Paycoin was scammie, but it was open source software that if run by computers all over the world would create a decentralized cryptocurrency. It would work. It probably wasn't very good because it was a fork of purecoin, which had its own problems from the nothing at stake problem.

But it was the thing. And he was selling tokens. And so this was the first time that there's this clear indication that the SEC might be interested in going after a guy who was doing nothing more than selling decentralized tokens. And they had already gotten wind of him because of the cloud mining scam. They were already investigating for that. So we decided to write a big paper called Framework for Securities Regulation of Cryptocurrency that laid out various variables in the technology and matched them to the test for an

investment contract or a security in U.S. law, the Howie test, and said, look, some of these things, like Paycoin, fit that test perfectly. You should go after them if you're going to go after anyone in the space. But other things like Bitcoin, for example, even like Ethereum, even like some other more recent token sales, don't fit that definition of an investment contract under the Howie test. And these are also great innovations that help us finance public goods, that help us finance open networks and finance open source development. But do it in a way that doesn't involve basically putting investor money at risk of a common enterprise that doesn't make good on its profits, on its promises rather. So that framework carefully explains the different aspects of the

technology that make pay coins say different than Ethereum and then goes through some of the case law on the subject to explain why something like Ethereum, for example, doesn't fit. The cool thing, just to give one example, we probably can't go through the whole Howie test and framework as much as I'd love to. One of the cool things that we found in that framework was that the best way to make a legal distinction about Ethereum is to look at a line of cases that deal with condominiums. So in New York City, for example, many people, when they buy a home, they don't buy a home, they buy a share of a housing co-op. It's a co-op apartment. Now, if you sell that share, are you in violation of securities law if you didn't, like, register with

FinC, register with Fence and register with the SEC? if you sell a house as a co-op, are you an unregistered issuer and promoter of a security? The federal courts have actually said no. The SEC does not have jurisdiction over that. Because what you're selling may be something that people invest in in a speculative way. It's true. People buy apartments in New York because they think they're going to go up in value. But they also buy them to live in them.

And because it has that utility, that real use value, And because many people will actually buy a co-op to live in it, it's not the sort of selling activity that we want to regulate for investor protection the way we regulate the sale of equity. And ether is a similar story. If the network really is a global world computer, and if ether is a token necessary to run smart contracts on this world computer, then it has this useful value.

Yes, people will buy it because they think that it's going to go on the moon price-wise. But they'll also, many of them will also buy it for the same reason you buy a house to use it, to write smart contracts, to build the future of a decentralized web on top of this platform. And the same public policy concerns that say we don't want to regulate housing like we regulate stocks because we don't want to deprive people of housing. The same public policy concerns come in here. We don't regulate an open network like Ethereum like we regulate stocks because we don't want to deprive the world of the benefits of this technology that has a real use value beyond mere speculative investment. So I think that's a great story. And there are a lot of

these stories that come up in the securities law case. And I'm glad to see that it's become a bigger issue in the community. As I said, I'm now worried more about, in some ways about the issue of financial surveillance regulation in these tokens. But there are definitely two of the big areas that we have to think about hard and we have to make sure that there's good understanding on both sides so that good people don't end up on the wrong side of the law, especially if there's not even a public policy benefit to putting them on the wrong side of the law. Cool. Well, Peter, thanks so much for coming on.

And thank you for being so articulate in explaining all these important issues. And I think, you know, regulation has been such a recurring topic. We've talked about this so many times, you know, even back then early Bitcoin. I don't remember what we talked about then. a lot of BitLicense for a while we had so many episodes on Bitl License. We filed three comments in that proceeding. That was right when we got our start. It was like, welcome to your new job as Director of Research.

Write to these people in New York again and again about this really complicated law. Thank you for having me. Yeah, thanks so much. And hopefully we can have you on again at some point in the future to talk about new developments here. We'll of course be linking also to the Coin Center website. and they have a lot of really nice in-depth paper, many of them written by Peter, about different issues and different questions.

So I highly recommend those. So we'll have links to those. And yeah, thanks so much, everybody, for tuning in. Once again, we are going to be back next week. And if you want to support the show, then you can do so by leaving us an iTunes review or tipping the show by, I have Bitcoin, or, me too. So thanks much and we'll be back next week.