Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Peter Van Valkenburgh: Where US Cryptocurrency Regulation is Heading

Episode Date: March 21, 2018

Over the past year, as cryptocurrencies and ICOs started to go mainstream, we have seen a huge surge in regulatory activities. In the US, many different regulatory bodies including SEC, CFTC and FinCEN stepped forward to regulate crypto projects in different ways. Seemingly contradictory statements have added to confusion and fear of a broad crackdown looming. We were joined by CoinCenter Director of Research Peter Van Valkenburgh to shed clarity on recent developments and understand where things are heading. Topics covered in this episode: The recent congressional hearings about cryptocurrencies and ICOs How the US regulatory environment for cryptocurrencies evolved in the last year Whether overly broad and contradictory regulation is emerging in the US Understanding the difference between CFTC and SEC Why CFTC regulating existing cryptocurrencies and SEC ICOs would be a good outcome Why decentralized exchanges will be a likely target by SEC The recent letter by FinCEN about ICOs and money transmission Comparing US to European regulation and why the US could end up more friendly Episode links: Coin Center Website The Bank Secrecy Act, Cryptocurrencies, and New Tokens: What is Known and What Remains Ambiguous FinCEN raises major licensing problem for ICOs in new letter to Congress. Federal Court Adopts CFTC Position on Cryptocurrency Authority SEC.gov | Statement on Cryptocurrencies and Initial Coin Offerings Gibraltar Plans to Regulate ICO Tokens as Commercial Products E182: Peter Van Valkenburgh - Towards Sound Bitcoin Policy Donate to Coin Center This episode is hosted by Brian Fabian Crain. Show notes and listening options: epicenter.tv/227

This is Epicenter Episode 227 with guest Peter Van Walkenberg. This episode of Epicenter is brought you by Shapeshift.io, the easiest, fastest, and most secure way to swap your digital assets. Don't run the risk of leaving your funds on a centralized exchange. Visit Shapeshift.io to get started. Hello and welcome to Epicenter, the show which talks about the technologies, projects, and startups driving decentralization in the global blockchain revolution. My name is Brian I'm in Crain and we're here today with Peter and Valkenberg. Peter is the director of research at the Coin Center. We've had them on about 10 months ago to talk about cryptocurrency regulation,

Bitcoin regulation, blockchain, etc. And yeah, now it's time to come back because so much has happened in the last 10 months in terms of regulation. And yeah, it'll be interesting to catch up and see what's the current state and what's ahead. But thanks so much for joining us today, Pete. Thank you, Brian. So you just came back from congressional hearings, right? Can you tell us about that? Yeah, so I testified before Congress, gosh, it feels like a week ago, but it was only a day ago. And I testified before the House Financial Services Committee, subcommittee on capital markets.

And that subcommittee's jurisdiction really is looking after and looking over the SEC when they go and they do investor protection for people who are selling securities to the public. And that testimony I gave, you can check it out. It's short five-minute testimony. It focuses on the division between ICOs on the one hand, which, you know, we've had a whole year of explosive growth and enthusiasm and strange things and Lloyd Mayweather promoting. things and banana coin and all kinds. Like, it's a weird menagerie. So explaining that to Congress is hard and making them feel like everything's okay is difficult because maybe everything's not okay, actually.

I don't know. There's a lot of really bad tokens out there. I think even people who love the technology would agree about that. And then dividing the space, just so it's very clear to folks in Congress, between that kind of the new hotness, the new crazy, and, running, functioning, open source software, open blockchain networks that are achieving some sort of result in the world right now. Even if the result in the world right now is just digital scarcity, even if it's just the ability to have peer-to-peer transfer of these provably scarce assets like

Bitcoins or Ether or things like that. Because the dividing line's really important, because I think you're going to get, and maybe for the right reasons, much more heavy-handed regulation of the speculative ICO craze, then you would want to get, and then that we would need, I think, in the cryptocurrency space where the risks are different and I think less pronounced for investors. Now, just to give some context here, can you, so congressional hearings with this subcommittee, what is the purpose of these hearings? So, Congress needs more information to better oversee the work of the SEC.

they need to know whether they need to create new legislation that would augment the SEC's authority or any other agency's authority with respect to capital formation and capital markets. That's what these particular congressmen are most concerned about. And it's just an opportunity to get a lot of stuff on the congressional record, which will then be cited in court cases or then be cited by academics or other politicians as important information for people to know if they're thinking about. regulating the space, if they're thinking about legislating in this space, if they're in a court case where they have to ask, like, well, what's the sense of Congress and what's the sense of the

agencies? About two weeks before this hearing, Chairman Clayton, the chairman of the SEC, and Chairman Gene Carlo, the chairman of the CFTC, which is the Commodities Futures Investor Protection Regulator versus the SEC, which is the securities issuance investor protection regulator in the U.S., both chairman testified before the Senate Banking Committee on the subject of cryptocurrencies exclusively, which is quite radical, cryptocurrencies and tokens. But, I mean, it was really a watershed moment, I think, because we've had hearings that are about Bitcoin or that are about decentralization with respect to, you know, terrorist financing, money laundering with respect to innovation in America and small businesses and how can we,

you know, have more competition because of these things. So we've had positive hearings. We've had hearings that have focused on the risks. We've never had a hearing that focused wholesale on investor protection issues like commodities regulation and securities regulation, nor have we had a hearing, I think, where two chairman of two major agencies testified. So that was the Senate banking committee about two, maybe three weeks ago. And I think the House Financial Services Committee, so other side of the capital building, the House and the Senate, by camera legislation, they wanted to have a hearing on this and not necessarily solicit the same information from the same two agency heads, but instead solicit information from the industry and the ecosystem.

So I was testifying alongside of Mike Lempress, who's, I think, General Counsel and Chief Risk officer for Coinbase. Dr. Brummer from Georgetown, who's, he was a minority witness for the Democrats and has a lot of things to say about like adequate disclosures for ICOs, and he's an academic at Georgetown law. And an attorney in the space, Rob Rosenblum, who is, as many clients who are doing ICOs and things like that, and then myself as a member of, or a director of research at Coin Center, which is, you know, hopefully your listeners already know, but we're like a nonprofit that just wants to do good education and defend the technology as a technology. We're not defending the interests of Coinbase or any company.

We're trying to defend the interests of users, the rights of people who want to actually use this stuff. So is there any main big takeaway from you? I mean, it seems like one conclusion would be, you know, with these several hearings and these heads of these agencies coming that at least the interest is very high. Are there any other interesting takeaways? Yeah. So the big takeaway is, interest is spiking, which is something that everybody who cares about

the technology should at least pay attention to and maybe worry about a little because the state of the world today is not so bad. And when interest spikes in Congress, there's sometimes a tendency to change the state of the world from where it is today. And we would hope that that change would be only positive. but that's no by no means guaranteed. Another takeaway that was a common theme in the hearing that I was testifying at in the House

and also the Senate hearing where the two chairman were testifying is an idea that we can divide our ecosystem in half between what Chairman Clayton of the SEC called pure cryptocurrencies, which I like the terms, like totally pure, 100% pure cryptocurrency. On the one hand, and then on the other hand, token sales and ICOs, most of which, at least under U.S. law, and we'll see long term in European law and Asian law, but at least under U.S. law, usually will qualify as securities issuance, which means you'll have to do a lot more compliance with investor protection rules enforced by the SEC than you previously would have done. And with respect to pure cryptocurrencies, Chairman Clayton said, actually, we don't have jurisdiction over that. And he said this to Congress, and sometimes you say that to Congress as a regulator because you want them to write a new law that gives you jurisdiction. But he followed up and said, and don't mistake me for asking for more authority.

I'm not asking for more authority. So that's a positive signal, I think, because I don't think the SEC is the right regulator for those pure cryptocurrencies, which is basically what Clayton was saying. His counterpart, Chairman June Carlo of the CFTC, who on Twitter has now been labeled Cryptodad, because he, He told this really sweet and honest story about his daughter at the dinner table telling him about how she likes Bitcoin. And then he, in a really kind of like warm paternal way, testifying before Congress said, the new generation is interested in this technology. They're enthusiastic about this technology.

And as an older generation, we should not belittle that interest or enthusiasm. and we should honor it by making sure that it's not abused by fraudsters. And I thought that was like, that was great. That was perfect. But anyway, so Giancarlo testified, and Giancarlo is talking about CFTC authorities. So the CFTC, you know, crypto aside, SEC does public offerings and any Jobs Act safe harbors for people selling shares. And the CFTC regulates markets for commodities.

They especially regulate markets where people are trading derivatives. where the underlying is like wheat or salt or gold, and it's a leverage trade of some sort or a swap or a future. So like the Commodities Futures Trading Commission would regulate the Chicago Mercantile Exchange, CME, a big derivatives, commodities derivatives clearinghouse. And with respect to crypto, they're relevant because I think about two years ago now in 2015 or 2016, probably three years ago now,

2015, they came out and said, look, Bitcoin is a commodity for our purposes when it is the underlying asset in a financial derivative, like a Bitcoin future or swap. And they brought an action against Coinflip, I think, was the company for being an unregistered derivatives clearing organization. And since then, they've been looking at this space. They've got a great educational group called Lab CFTC, where they go and they direct people to learn more about the technology and some of the investor protection risks. And they ask people to come and teach them about the technology and they kind of experiment with it. It's a lab. And then they've got policing authority, and this is something a lot of people don't know, they've actually got

the authority to investigate and police evidence of market manipulation or fraud at the spot market level. And so the spot markets for cryptocurrencies are the exchanges. They're things like Coinbase or Zappo. And that means that the CFTC doesn't license or force them to register with them. They're not a supervisory authority. Instead, the CFTC can subpoena those exchanges for records if they think there's evidence of fraud or manipulation and then police them ex ante, or ex post rather, after the fact for evidence of fraud. So, so, so, so Chairman Jean-Carlo is talking about that jurisdiction and it's a perfect compliment, I think, to Chairman Clayton's SEC jurisdiction.

I think the SEC where we're headed is the SEC is going to handle the issuance side of this when new tokens come into the world and they are just promises of efforts, i.e. securities and the CFTC will handle the tokens once they're actually based on open source software, based on an open blockchain working in the world. That's a lot. Okay, that's super interesting. That is a very good update. I can tell you some more about the hearing.

So my hearing, I've focused on the other hearing. My hearing was interesting because we had a few congressmen who were really excited about the tech. So Representative Bud, Representative Emmer, Representative Bud thanked me personally for having Coin Center come brief him in the past about this stuff. and he recommended that all the other congressmen come contact coin center to get, you know, like a base of understanding and knowledge about the stuff. So that was a win for us. And he's really a good champion for new tech, new fintech that he thinks is going to change

the world for the better, which is what most of us in our community agree with. Representative Ammer came out really strongly and said, we should not be regulating any of this, which, you know, that's cool. He's more of a small government-type Republican, but he was totally, like dead set that we shouldn't be layering new stuff on top of these new technologies if we want to stay competitive in the world. And then on the Democrat side, we actually had a pretty cool champion. Representative Scott of, I think he's from Georgia, had a whole question and answer session with

me where he was trying to drill down to like, who are the regulators on point? And what we got to was exactly this distinction. So I was telling him about the Senate banking hearing and our work. with the SEC educating them about things and our work with the CFTC educating them about things. And I think he said you hit the nail on the head at one point. So that was a good win with respect to the division between CFTC authority and SEC authority. So that was great. Now, so that was all great. On the other side of the token, we had Representative Sherman who gave the opening remarks for the Democrats. But he didn't speak for all the Democrats. As I said, Representative Scott was a Democrat and was very positive.

Sherman's first words out of his mouth were cryptocurrencies are a crock. I think he means crock of poop. But he didn't specify what kind of crock it was. And then he went on to talk about all kinds of things. And later on, he went to a line of questioning with me about why anybody would want to use cryptocurrency. to buy groceries. And I, you know, I wanted to help him understand the real innovation here. And I, you know, I wanted to stay cool under some level of deep skepticism and kind of attack. So I walked him through the fact that in the U.S., you're not going to want to use cryptocurrency to buy groceries because that's just true.

If you're, you know, lucky enough to be in America, it shouldn't be too hard. It might still be a little hard, but it shouldn't be too hard to get a credit card and a bank account. And once you have those things, that's probably what you're going to want to use to buy groceries. But then I was walking them through how in the rest of the world, there are whole regions and populations where financial institutions don't feel like it's worth their time to make those people their customers. And if you don't have a bank in a part of the world where it's difficult to get banked, and if your local currency, like your cash is being debased by a kleptocratic ruler, like in Venezuela or in Zimbabwe, then you're, you're, you're,

shit out of luck. There, I finally said shit instead of crock of shit, shit out of luck. And Bitcoin, because it works with just a smartphone and an internet connection, might be your best chance for buying groceries, actually. Maybe this will happen in the next few years. And I'm hopeful about that. And the main thing I'm hopeful about is just that this is a new way of providing financial services that doesn't rely on trust institutions who may choose to just selectively say screw you to a whole population, we're not going to service you. All it relies on is the idea that more people will have smartphones in the world and more people have internet connections in the next 20 years. And that's actually kind of a given at this point. So he

kind of, I don't think he really listened. I think he was just dead set to portray this all as a ridiculous game. I wish I'd also been able to say, because he said some other things. He said things like he said, well, if you have a smartphone, you can use an app that uses dollars instead of Bitcoins. And I guess he was referring to Venmo or like PayPal or things like that. I didn't have time to respond because it was really fast and aggressive. But I wanted to say, look, Venmo and PayPal only work if you have a bank account to connect them to. That's just the way it work. Good luck using your PayPal dollars if you can't then cash out to your bank account. And PayPal won't even open accounts for people in most of the world.

They just won't. In fact, I believe they still don't serve as Puerto Rico because they felt that it was too much risk from an AML standpoint and not enough reward because those people weren't profitable to them. So, like, that's why the idea that, like, that we've got these centralized services that will solve the problem is problematic. Because that turns financial access into a privilege instead of a right. You have to go to a company and convince them you're working. It should be a right. And open source software should make it that right. You know, guaranteed that right.

Yeah, absolutely. I mean, I'm sure among our listeners, there's few who will disagree with that statement. There's a fun back and forth, though. Maybe I intercepted a little bit into Congressman Sherman's mind. I hope so. I kind of doubt it. He's from Beverly Hills. You know, that's his district.

Okay. They all have bank accounts. Yeah, they will have bank accounts, yeah. But that does actually sound kind of more positive than my memory. impression before because I want to I want to really read a tweet I really like that kind of summarizes a little bit of my impression kind of was so Charles Halskinson wrote this and I really like this so after reviewing recent US regulation it appears that cryptocurrencies are the first security commodity property currency token that requires a registration of the SEC and money service business

license and of course gets taxed like a baseball card so my my kind of impression was you know obviously not having the kind of insight you have, that there's all these different entities. They have different kind of scopes, like commodities or securities or, you know, money. And each of them was basically saying, oh, this is our thing, so we're going to, you know, apply our rules to that thing.

But it does sound like from where you're saying that, you know, there is some kind of process in play or going on where CFTC says, clear, you know, it's only when they're life and, you know, and they're trading, then it is something that concerns us. And the SEC says, no, that is not us, but only when it is a promise and kind of an investment contract. Yeah, we're starting to get there. So I am not at all saying Charles is wrong in that tweet. And Charles Hoskins is, I think, one of the smartest people I've ever had the pleasure of meeting, both about technology and surprisingly about law, which is not

necessarily his area of expertise. He's really sharp. So I think that that tweet was provocative in the right way because we do have a patchwork in the U.S. We have no fewer than nine federal regulators who all might have some jurisdiction over a financial product and 53 states and territories that might have jurisdiction over a financial product if it's money transmission. So we got a lot of regulators and they're each going to do their own thing and sometimes they're not going to coordinate well. So I think we're starting to start to see some emergent coordination, which is healthy, like a clear division of labor between the CFTC and the SEC. But that's by no means going to fix the problem on its own, because we've got

nine of these federal regulators in total that need to work together, not just these two, and we've got all the states. How can we fix this? I don't think there's any problems with the tax treatment. The fact that their tax like baseball cards is pretty much okay. Capital Gains treatment is actually quite friendly. You get a lower rate in the U.S. than you do for normal income tax and things like that. So I think there'd be a lot of people in our community would scream bloody murder if you tried to get Bitcoin taxed not as capital gains because their rates would go up. And they're right. I want a low rate too. The problem is then if you're transactional with your Bitcoin, like you used to buy groceries against the recommendation of

Congressman Sherman, then you'll have to calculate. the capital gain between the time you bought the Bitcoin a long time ago and the time that you're now buying the groceries because you were able to buy way more groceries with that Bitcoin today than you would have been able to buy back then. And so that's a taxable event. You had a gain. You had appreciation. So we've proposed a bill that's still pending in the House of Representatives in Congress that would create a carve-out, a de minimis exemption from capital gains treatment for small transactions with cryptocurrencies. And that's just common sense.

But it takes a long time to get something through Congress. I'm still optimistic. IRS can't really make that exemption on their own because they're bound by the statutory law and law takes a long time to change. So I think tax is actually fine. And it's okay that the IRS says that it's property while FinCent says it's cryptocurrency or virtual currency.

Those are reconcilable. potentially. Where there might be conflicts are who's the right investor protection regulator, SECC versus CFTC. And as I said, I think we're starting to see a sensible divide, which would be the right divide, between issuers of speculative future tokens and real cryptocurrencies on the other side. And then, you know, the states are playing this complicated role where they're sort of doing consumer protection because they're licensing money transmitters. And the old consumer protection rationale there was if you're Western Union and you sell someone a money order to pay their utility bill and then they take the money order and they go to the utility

company and they try to cash the or pay for their utility bill with the money order and then the utility company says this money order is garbage. It doesn't cash out to anything. Whoever sold you the money order screwed you. The consumer's out of luck. So that's why the state started licensing money order sellers or money transmitters back in the the 70s, but now sort of like the big question is, is Coinbase or a Bitcoin exchange, a money transmitter, or anyone else in the Bitcoin space for that matter? And if they are, do they need to get licensed in all 53 states where they have customers? It's a huge headache. And that's kind of a consumer protection, investor protection role, but very different than what the SEC and the CFC do.

And the SEC and the CFC have the benefit of being federal regulators. So you only have to work with one of them, not 53 of them if you're in the U.S. So what makes sense to me to further harmonize things, and we're going to be working on this proposal, basically, is we need a new federal law that will preempt state money transmission licensing with respect to cryptocurrency exchanges. So you'll no longer need to get a license from the states and put in place an alternative regime where one federal regulator gives you a license and supervises you and regulates you not just as a money transmitter, because that's not really what you're doing, regulates you as a highly liquid and speculative spot market for commodities, because that's really what these things are.

These are like giant order books where people are, you know, putting buy and sell orders in for wheat, only now it's Bitcoin. And the CFTC has expertise in looking at all that data that they could get from those companies if they were the licensing authority and looking for evidence of fraud or manipulation and stopping or busking trades before they go and things like that. That's the right authority. And then we'd get rid of the whole state thing, which would be great for the companies. We'd better protect investors because the CFTC knows how to actually protect people in this space better than the states do because the states don't have expertise with this sort of thing. And we'd firm up the division between the SEC and the CFTC, because the

CFTC would have a really proactive role protecting investors with cryptocurrencies by regulating the exchanges. And the SEC would then be able to feel comfortable sticking exclusively to its role protecting investors from issuers of new tokens by mandating that they do disclosures. It doesn't make sense to have the SEC own that whole space, because who's the issuer of Bitcoin? If you're regulating for securities, what you're doing is saying, hey, issuer, you've got to tell us about your financial history so we know and are reasonably sure that you're not defrauding the people who are handing you money to have these shares or these tokens. There's no issuer of Bitcoin. Then they're not going to go find Satoshi Nakamoto and say, hey, you've got to do your disclosure filings. It doesn't make sense.

And it wouldn't protect anybody. It would just be a wild goose chase with no benefits to investors. So the division makes sense here. Like, there are cryptocurrencies in the world that are like commodities. Let's regulate the spot markets for fraud and manipulation. There are brand new things that are being sold that are hugely speculative, like a coin that represents a banana plantation. That's mostly a security.

And I think it makes sense to have the SEC handle that. Just to clarify this here. So when you say CFTC would regulate basically commodities and exchanges, right? So in the future, you're talking about, okay, let's say this happens the way you describe it. Then coming at Coinbase in the future, they wouldn't have to get money transmitter licenses and get regulated in every single state,

but they would just have one license from the CFTC and they could basically do this thing. And then the CFTC would look for things like, I guess, insider trading or these pump and dump schemes or... Telegram groups. Yeah, yeah. Okay, okay. Yeah, I mean, and those things,

I think people are kind of supportive of, you know, it's like nobody complains when the SEC goes after a pay coin, because obvious thoughts. How do you think a CFTC in this scenario would deal with decentralized exchanges? So that's a complicated wrinkle. Decentralized exchanges kind of change everything. And, you know, to complicate things even further, there will be tokens that are out there that remains securities even once they're on a blockchain. And those would be where the token is actually meant to represent somebody's profits

from the efforts of somebody else, you know, like shared ownership in a thing. So if tokens, some of them which are securities and some of them which are commodities, and all of which we'd want to have some sort of oversight for fraud and manipulation with respect to the exchanges are trading on decentralized exchanges, it becomes a huge question. Who can you actually point to as the person running that exchange if it's properly decentralized? Especially in the securities context, so if your decentralized exchange is trading securities, so tokens that do represent fractional interests in revenue or something like that from a company,

you're going to be in trouble, I think, if you have anything to do with that decentralized exchange project. because assuming, yeah, assuming you haven't complied with the laws, but if you're associated with the project, you might be at risk because the SEC has really broad definitions of what qualifies as a broker-dealer or a national securities exchange. And they're going to expect people who are facilitating trades in securities to be registered just like the New York Stock Exchange is registered. So to be concrete, right?

Let's say something like zero-x protocol, they could go out. after relayers, they could go after, maybe the developers, they could go after people running nodes, potentially validating nodes if that kind of runs on their own blockchain or people writing front-end software tools, like you think they would go after all of those? I don't know. And it's going to be a while until I think we see that like unfold. But what I will say is if the decentralized exchange is trading things that really are securities, like transparently, then they're going to be a target. And people associated with it are going to be a target.

If they're trading things that are more just cryptocurrencies or tokens that have real functionality and no promise of profits attached to them, then maybe the SEC doesn't have jurisdiction over that. in which case the decentralized exchange has to worry more about things like anti-money laundering, state money transmission licensing, and if we created this federal framework for commodities exchanges, how do they fit into that? But that hasn't been built yet, so we don't know what the risks are to that yet. Is the SEC going to have appetite to go after people who are developing a suite of smart contracts that work on Ethereum like ZeroX?

Because some people are using those smart contracts in order to facilitate securities transactions. I don't know. I hope not because that activity, developing that sweet smart contracts, is really just publishing code. And I think personally that publishing code is a right that we have that's protected by virtue of it being speech and by virtue of us having a right to unrestricted speech. You have a right in this country to publish a book full of code. It could be smart contract code. and nobody in government can come and say, you're not allowed to publish that. They can arrest you after the fact for doing something with that code,

but merely saying you're simply not even allowed to disseminate that software, that's generally considered unconstitutional for the government to do here in the U.S. So it would set up a really interesting battle from a constitutional standpoint. I hope it doesn't happen, though, because I just would hate to see people

who are really just trying to build good tools on the wrong side of a fight with the SEC. So that's a big question. People running like relays, people running the front end of things might be more directly in the sites if the relay is trading securities. I think what you would see in that case would be like cease and desist letters.

You've got to stop trading these things because these are securities. And I think the best thing to do is if you're running a relay, make sure you're not trading securities. And that's hard to do because the definition of securities is flexible. But there are some things that I think that aren't securities. And maybe just stick to those. Questions for their lawyers, you know.

Cool. No, this is, Peter, this is so useful. I think this is really providing a lot of view about what some of the interesting directions are going to be in the next years. This episode is brought to you by ShapeShift, the world's leading trustless digital assets exchange, quickly swap between dozens of leading, cryptocurrencies including Bitcoin, Ether, Zcash, Gnosis, Monero, Golem, Auger, and so many more.

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on your slippers. Whenever you see that good looking fox, you know that's where Shapeshift is. So to get started, visit Shapeshift.io and start trading. And we'd like to thank Shapeshift for their supportive Epicenter. Now, I want to dive into some of these nuances here. In particular, So we may have something that was a security, right? And then at some point maybe it becomes a commodity. And like, do you have any kind of inkling about what standards will be used to determine that? So the test is the Howie test for an investment contract, which is investment of money with an expectation of profits and a common enterprise, reliant on the efforts of a third-party promoter.

And how that test gets operationalized with respect to cryptocurrencies or functional tokens is complicated. We've got a 60-page report that I think was, well, we wrote it back in 2015, and I think it's still spot on. I'm biased, but I would look at that because we break down a lot of technological factors that we think would go into the analysis. And these are things like how decentralized are the nodes of the network? Are there only, is there only one? Is there 50? How open and permissionless is the consensus mechanism?

Is it really true that anybody can help work on this blockchain and secure it by merely having commonly available hardware and open source software? If that's the case, then you really can't make as good a case that you're relying on a few people because you're really relying on whoever in the world chooses to buy the commonly available hardware and run the open source software. And then from a development standpoint, so you're developing that, open source software, how many developers are there? You know, is there just one guy in a room who forked Bitcoin, named it paycoin, and then made promises about how it was going to be great?

In other words, Josh Garza. Or is there a community of, say, 300 developers contributing to a GitHub repository that has multiple branches and multiple sub-repositories for a huge project? And that's something more like Ethereum. Like people point to Vitalik in Ethereum and say, look, look, look, you know, He's in charge. Just look at the GitHub repository. He didn't even write the majority of the code.

And there are a lot of contributors to that GitHub repository. And there's a whole ecosystem now built on top of Ethereum. So these are all factors. And they're squishy factors. They're going to be hard to judge. And we're going to have to, you know, make sure they get judged correctly. But ultimately, I think they are definitive. I think things like Bitcoin and Ethereum are not securities because they don't have

issuers. and things like pay coin are definitely securities because they had issuers. And then tokens that are nakedly securities because they actually represent fractional ownership in a common enterprise are, of course, securities. But figuring all that out is going to be hard. And I hope we don't get it wrong. Yeah, it is very interesting. I mean, so let's say we look at something like Ethereum.

And then, of course, there was the DAO too. Because in this DAO, SECDAO report, right, they did argue that the DAO was a common enterprise. even though it was kind of distributed and, you know, hard to argue on that point, I think hard to tell. And now if Ethereum, again, right, I have a bunch of ether, other people are developing stuff.

I mean, okay, maybe do some work related to Ethereum, but so again, or many people may just have ether and they basically benefit from depreciation of ether. So does that make it a common enterprise? Or then... Yeah, so merely, holding something that when people find better uses for it appreciates in value can't be a test for common enterprise. Can't satisfy the test. Because if that was true, then gold would be a

security. Like, people hold gold under the expectation that they'll get rich because they're holding gold. So they are doing it for investment purposes. And who are they relying on? Well, they're relying on this assumption that other people in the world are going to want this thing even more in the future. doesn't make it a security. They're relying on an assumption that, you know, we'll keep finding scientific or industrial uses for gold as an input in mechanical processes or in whatever. And that's what creates the value of the system. And that's similar to Ethereum. You're now relying on a huge number of people in the world, not a single person in the world, not even a small group of people in the world, to build applications that will consume ether as fuel

for valuable services. That could happen or that could happen. could not happen, but nobody promised you any specific return. Nobody promised you that they were going to buy this back from you in the future. No one promised you that it was going to be the next thing to power all things. And you don't rely on anyone specifically. So it's very much like a commodity ecosystem where you buy a bunch of uranium on spot markets because you think nuclear power is the future. You can't then sue nuclear power plant.

companies for failing to build more nuclear power plants, under security's law, at least. That's silly. Right, right. I mean, I think that the nuance there is if you have something like gold, well, I have a bar of gold. A year later is still a bar of gold. Nothing really changed about that. Whereas with Ether, well, it really only exists in the context of this technology,

which is evolving by other people, right? So it's... It does, but like the cumulative weight of a decentralized network, that's the size of Ethereum or the size of Bitcoin suggests that it's basically like you physically possess the thing at this point. Right. So in practice, though, often projects start out, you know, fairly centralized. So let's say in the case of Ethereum, you would probably have to say initially, I mean, the way you describe it here, right, the initial token sale that Ethereum did would have been

sort of fall under the SEC jurisdiction. and... Maybe. Yeah, and then at some point, that ceases to be the case. Yeah, so with Ethereum and the token sale that they had, you can also make, I think, a genuine legal argument that it didn't fit the test back then. And that's because the Howie case is a facts and circumstances dependent test,

and the facts and circumstances of our community, the cryptocurrency community, back in 2000 and... What are we talking about? 15, 2014. 14, yeah. Yeah, we're very different. You know, Ethereum only raised about $30 million from what I recall. It was 18.

Oh, 18. Wow. So really like peanuts compared to these ridiculous sales that are going on today. And I think they raised them from people who primarily purchased an interest in this future network because they wanted to use this future network. A lot of people might have thought like, oh, I'll get rich off of this. But these were sophisticated people. These were like people who'd been in the Bitcoin ecosystem for a long time. A lot of them were developers.

A lot of them were excited to develop on a decentralized virtual machine on the EBM. And they knew that they'd be able to use it as soon as it was ready if they pre-bought the token. And then a lot of people used it. There was an explosion of mostly not great, but early versions of things are never great, decentralized apps and smart contracts, including the Dow and including other things. So I think you can make a really good case that under the facts and circumstances of the ether sale, your average investor may have been motivated by a desire to get rich, but was definitely also motivated by a desire to use the tech

and to make this ecosystem function and work and become the future. contrast that with somebody buying, you know, some guy who's not even got a computer science background doesn't know what a blockchain is to save his life, which is most people, and that's fair because they're complicated, who like gets a hot tip from a friend who's in a telegram group to go buy some X token, I'm not going to name any, and then X token raises $2 billion from investors, none of whom know what the hell X token even does. Like X token might still be real, and it might be as real as Ethereum, but the motivations of everyone involved are radically different than they were in 2014. No, absolutely. Now, let's take this and think a little bit about

what kind of evolution we are going to see. I mean, I think one thing that is happening today, which is a huge trend, is that the number of token sales is, I think, decreasing or it's certainly not growing the way it used to. At the same time, we have a huge search in private sales, which often are just accredited investors or in some kind of, you know, done in different ways. So do you think what we're going to see is kind of exchanges that are, you know, for accredited investors where those tokens can be traded that are bought in these private sales, and then there will be other classes of exchanges that are more for the commodities no longer security type, where then anybody can trade, and at some point they sort of transition over.

Do you think that's a potential scenario? Yeah, I think that's pretty likely. And, you know, some people are unhappy about that. And there are legitimate reasons to be unhappy about that. Like, if any of these technologies become fundamental to the future, and if a big chunk of their original distribution was handed over to accredited investors, which by necessity means that they were at least over a million dollars net worth, in other words, they were wealthy, wealthy people,

then it does have, you know, inegalitarian effects. It does mean that, you know, where we have already something, divide between the masters of the universe in Silicon Valley and the rest of the world, that divide will continue to strengthen rather than weaken even in light of new decentralized technologies, at least as far as the distribution of wealth. But that is not a topic that we in the cryptocurrency space deal with alone. That's just the nature of how we do investor protection in the U.S. We do investor protection in the U.S. by saying, if you want to sell to the public, it's going to be really costly from a legal compliance standpoint.

You're going to have to do an IPO and do audited financials and do registration. And if you don't want to sell to the public because you don't want to suffer those costs, if you're comfortable just selling to rich people, then we give you a safe harbor. It's called Reg D Rule 506. You file with the SEC. It's a very easy filing to do. They can't deny you. And then you only sell to your accredited investors and you make sure that they're all credited.

And that's how we protect mom and pop from, you know, things that might be dangerous. We say, if you're going to sell to mom and pop, do a whole bunch of disclosures that are hard to do. And if you're not going to do those disclosures, you can still sell your thing, but only to rich people. And that might not be a good policy compromise, but it's one that we've been doing for a long time, irrespective of cryptocurrencies and trying to knit the future of cryptocurrencies and ICOs to, of fighting that longstanding policy compromise is dangerous. We should just argue separately about that policy compromise, whether it has to do with paper shares of stock or whether it has to do with a token.

We shouldn't turn our industry into like, we're all about leveling capital formation. Personally, I think. I think we have other things to focus on like just decentralizing the internet, like what the Blockstack guys are doing, decentralizing file storage, like what file coin storage and are doing or decentralizing money, like what Bitcoin does, we shouldn't take on the SEC and say, hey, the way you currently do investor protection is wrong and we don't care that you think what we're doing is wrong. Yeah.

No, I think that's a valid point. Of course, I personally, I do think it would be sad for that to happen. I think that kind of openness, anybody being able to participate is a good thing. But at the same time, what you said before, certainly also true that there is an insane. amount of dubious projects and scams and all kinds of stuff. Now, I don't know if there's going to be less of those when you just have accredited investors. I mean, if you have stuff like Telegram raising $2 billion, which seems insane to me. The assumption is not that you'll have less of them. The assumption baked into the securities laws is they'll be just as insane,

if not more insane, but the only people who will get hurt are people who have enough cushion to suffer or who we just don't care about as much because they're rich. right. Now, one other effect of this trend that I have, you know, heard from projects that I think is starting to happen, is that they say, okay, let's say we do a token sale to accredited investors, but then we do some kind of airdrop or giveaway or incentivization, basically distributing the tokens for free to people.

do you think that's possible? Is that an approach that we may see alone? So, you know, caveat what I'm about to say with the fact that an airdrop doesn't necessarily mean you haven't done a securities issuance. People gave away stock to their dot-com companies to anybody who visited their website back in the 90s, and the SEC actually came after those people. That said, the real projects in this. this space recognize a few things. And this is not just them marketing themselves or trying to position themselves in a way that's defensible from the law or from ethical standpoints. Real projects in

this space understand that you need maybe to raise some money by selling tokens. But the main thing that the tokens need to do is create an open market for participation in whatever the service is going to accomplish. What that means is they're going to be a reward for doing things on the blockchain. They're going to be a reward for securing the blockchain if it's proof of work. They're going to be a reward for people who provide goods or services through the blockchain or decentralized computing system. So if you provide cloud storage to the cloud storage network that's described by a blockchain and can be purchasable with the token, then you should be rewarded with the token as a provider. And then when consensus mechanisms are proof of stake-based,

instead of proof of work-based, in that case, you need people to have the tokens in order to play that valuable role as economic weight in the consensus. In Bitcoin, your economic weight in the consensus, the reason why we can trust it is the fact that you invested all of your money into these useless computers, and you're feeding them electricity from a dam in Western China, well, at least until recently. In proof of stake, we believe in the system because the people who are actually powering, it had to sink all this capital. into these tokens, whether they're ether, if ether moves to proof of stake finally, or anything else. And that won't necessarily be a reliable and decentralized system if the only people

staking are the people who are the original investors. So finding a way to get tokens more widely distributed is important for the technology. Now, what should you do? I think if you're a developer and you want to show good faith and maybe take less risks from a regulatory standpoint, you should give them away or you should make them reward for honest participation in the system, whether that's something like mining or anirdrop, you know, and that makes sense. So that's all my feelings about that. Yeah, yeah. No, I mean, I certainly think from a project perspective that can make a lot of sense.

I think it's also probably often a good idea in terms of creating demand for the token, you know, like liquid trading volume and all those kind of things to have like a fairly broad user base. Yeah, that starts to sound more like securities. Yeah, exactly, right? Because I think that that is also where it's going to get interesting, right? Is this seen as, or is this just a way to kind of work around? some of these restrictions that are coming.

Yeah. Okay, well, let's speak about FinCEN. So actually, last time we did a podcast with you, you brought up this topic. So you guys wrote a blog post back then saying, oh, this is a big danger. FinCEN could basically be a big problem by saying that, let's say,

people doing token sales or money transmitters or otherwise just applying these money transmitted rules very broadly, and then that seems to basically have happened, right? And there was a letter by FinCEN recently, and you guys wrote another blog post about that. Of course, we'll have links to both posts in the show notes. So what's going on with Vincent and all this money transmitters? Yeah, so almost a year ago, like you said, we wrote a blog post and a whole report, like with full legal reasoning and citations and things like this,

outlining, rather, what FinCEN's authority in the space has looked like to date and outlining how there's an ambiguity with respect to FinCEN's authority over token sales. FinCEN's authority to date has been in the 2013 guidance of the implementing regulations of the Bank Secrecy Act. They say, look, we have this broad category of things called money transmitters. What they do is they accept and transmit money or monetary value. look at an exchange for cryptocurrency, they accept from one person and sometimes transmit to another person monetary value, they're a money transmitter. They need to then register with FinCEN.

They need to know your customer so that the only people who should have accounts on their platform are people who've been previously identified. And they need to file suspicious activity reports if somebody's like somebody's never bought a lot of Bitcoin in their life and then they suddenly buy a couple, you know, a million dollars worth. Maybe something's happened. And I think that's fine. You know, I'm generally against warrantless surveillance, which is what this is, by the way. This is the government saying to certain companies in the world, whether they be banks or money transmitters or exchanges, you need to collect information on your customers and feed it to us, even though we're not getting a warrant to get that information. But this is something that's just there.

of win a battle to fight that today. And so if that's the state of the world, and maybe it's a good state of the world, too. Maybe there'd be just too much crime if we didn't have this war on and less surveillance. So that's another question. But if that's the state of the world, what does that rely on? That relies on the idea that intermediaries between two people, money transmitters, who accepts from one and transmit to the other, I need more fingers, are, you know, the kinds of people that we can require all this information from without warrants. Very different to then take the same underlying law and say that it allows us to require that a person, singular, on one side of a transaction, creating a brand new thing, creating X-coin, selling it to another person on the other

side of the transaction, that that somehow is money transmission. There's nobody in between. You are just regulating and demanding information collection without a warrant from one private person engaging in a transaction with another private person. That is a fundamentally different bargain from a warrantless surveillance standpoint, and I think it might even be unconstitutional, let alone an impermissible extension of the current regulatory framework, which FinCEN really shouldn't be doing merely by issuing a new letter to a congressman. they should at least do by having a public and transparent process of notice and comment, which we would then commenting. Yeah, just one point here, though. I mean, you talk between person and person, but generally, right, the token issuance, I mean, the purchaser will probably be a person or maybe some kind of entity to,

maybe like a crypto fund or something. But the entity creating a token, right? I mean, it could be a person. It could be an individual, but very often those are. be, I don't know, let's say a foundation or company or some kind of entity. Even if it's a company, that's fine. That's still a company acting on its own behalf with another person. I just mean there's no intermediary, corporate person.

And we already accept that this is the way things should be with respect to money transmission regulation, anti-money laundering, when we talk about miners. Miners create new units of Bitcoin and they sell them to people in order to then buy more mining hardware. They sell them because, or they hold them. They sell them or they hold them based on their own personal decisions because they own them. They created them. How is that distinguishable, really, from someone who invented through coding instead of proof of work a new batch of tokens and wants to sell them to people? It's still one person or group of people or foundation acting on its own behalf with another person in the world. I don't think they're different. And what FinCEN said with

respect to miners back in 2014 is you guys aren't money transmitters. because you're selling on your own account. So how do they reconcile that former administrative ruling with this new letter? I don't think it's been reconciled, and I think it needs to be reconciled in a more public proceeding, in an open proceeding with, as I said, notice and comment rulemaking,

or maybe even new legislation. If they really want this authority, maybe they have to go ask for it from Congress, not just pretend that they have it. Okay, so I mean, I agree, it seems like a very strange thing to claim from FinCEN, but let's just, just, you know, they did that for the time being, right?

I just said, this is the way they see it. It sounds to me that if you take that, right, you say, okay, so you have some entity that has created tokens, they have sold it to U.S. residents. They didn't register with Finsen as a money transmitter. Didn't apply K-YC and AML. And so the consequences are, you know, federal felony and up to five years in jail.

Pretty grave. Now, that sounds like that would apply for basically every single token sale. Yeah, if you want to be provocative, you can say that like a whole bunch of people, respected people in our community are under this, I think, impermissibly broad interpretation of the Bank Secrecy Act, potentially liable for a federal felony. That is basically a strict liability crime, which means you could get the best lawyers in the world, but all the other side needs to prove is that you did the activity, which has been classified as money transmission, and you didn't have a license at the time, or you didn't

register with Vincent at the time. So both those things are easy to prove, and you will try to argue facts to say you're not a money transmitter, and you'll try to argue the legal definition of money transmitter, but that's hard to do because agencies get a lot of deference from courts as to how they interpret their own rules. So this is a very big. dangerous criminal statute. It's 18 USC, 1960 for anybody who wants to look it up. And yeah, it's a problem. So practically speaking, let's say this happened and they go out. I mean, first of all, I agree, and it seems crazy because also they then have complete latitude, right, to go after whoever they don't like, because obviously they're not going to go after

everyone, but they could go after anyone. So does that mean practically, let's say they did apply this ruling and then you went before court and the courts as well, Vincent said this money transmission and you know, you did this thing that Vincent said you did so we're going to convict you. Then would you hope be that this goes to a Supreme Court and they would say FinCent overstepped their bounds and this is unconstitutional? Yeah, I mean the appellate courts and then ultimately the Supreme Court would be more open to both arguments that it would

be an overreach of their interpretive authority with respect to regulations and an overreach with respect to the Constitution. So, hey, if you're really into Fourth Amendment jurisprudence or administrative procedure law and you want an interesting battle, this might be a space to watch. It might not come to that, too. Maybe this letter was kind of a glitch. maybe, you know, it's not a comprehensive letter. It just says that and then cites to the guidance and the mining ruling without really

explaining how the guidance and the mining ruling justify that statement. And I don't think the guidance and the mining ruling do actually adequately justify that statement. So maybe it was just a letter that people thought wouldn't be widely read. And, you know, I don't know. Maybe it doesn't represent the opinion of the entire agent. just the author, I don't know. Okay, cool.

But yeah, that's, we'll certainly be interesting to see what comes out of that. But it doesn't sound like you expect that Vincent will actually start enforcing this on significant scale. I think if they did anything. So, no, I don't think there's any urgency to do it. And I don't think they're looking at projects from 2014 and 2015 and saying, like, we can go get those guys now. I think maybe if we have clear evidence that someone is using an ICO as a vehicle to launder money, which there probably are some examples of, that's how they'd use this authority. Maybe that would be okay.

But as somebody who cares about the law and being clear about what the law means, even that worries me. Because I'm fine if they go after somebody who is really just laundering money through an ICO. But I want them to do it because they were laundering money, not because they were operating an unregistered money transmission business because that's strange and too dangerous. If that's that broad, then that can cover a lot of things that aren't money laundering.

And I don't want them to have that authority to cover those things that aren't money laundering. Right, because that starts also setting precedent. Yeah. The problem is it's a lot easier to prove that someone was an unlicensed money transmitter, even if you kind of abuse the term money transmitter to force a bunch of things into it,

then it is to prove that someone actually knew that they were laundering money. Like, you need evidence that like, like, hey, man, I'll buy some tokens from you. I just, you know, sold this cash for drugs. You sell me the tokens with, and then if you're dumb enough to like answer that email, and you're like, sure, give me your drug money. And then you find out that the guy on the other end of the email was actually DOJ and you've just, you know, you know, given them all the evidence they need to convict you. So, like, that's, yeah, anyway.

Okay, cool. Now, let's briefly speak or contextualize all of these things about the US in an international context. Now, again, please correct me if this is wrong, but to me it looks like, well, there's a lot of, a lot of regulation coming in the US. It's going to be expensive to comply with all this stuff, very complex. You know, you probably have to spend a lot on. legal and compliance to figure out what to do and where to regulate what or to avoid it, etc. So it seems like a kind of shift out of the US may be quite natural. Do you expect that

to happen? So I think we've seen some of that already. We've seen a lot of people not selling to American investors. We've seen some people move their projects to Switzerland or things like that. I just want to reiterate things I've said before in other forum. If you have a American investors, that's what matter. Doesn't matter where you are based. It matters where your investors are based. If they're Americans and you're based in, say, Geneva and the SEC wants to come after you for abusing American investors in some way, they will probably be able to get extradition.

They will probably be able to exert their laws extraterritorially over you. Now, maybe you can hide in the jungles of Indonesia or in Venezuela, but good luck with that. Now, is this going to continue as a trend? Are we going to see innovation moving over to Europe? I think there's a possibility of that. I think if we get it right here in the U.S. with respect to dividing commodities authority and SEC authority sensibly and having light-touch CFTC regulation of the commodity-like tokens and cryptocurrencies,

then maybe actually the U.S. will be a more friendly home, a more certain home, because it will also get rid of that state money transmission issue. which is also costly if you're in the U.S. If we fail to get that right, then maybe we see more people continue to move to Europe. But I'd also add that I don't think Europe is a friendly or home for this stuff purely because they like it more. If anything, sometimes you find people who are much more skeptical in government in Europe. I think the reason why it's a more friendly home right now, in many cases,

is because there's a tradition of civil law there instead of common law, which means law is code-based. You know, there's like black-letter law, and like a security is these things, which we've enumerated in black-letter law, it's never something broader than that, unless we add new things to that law. Whereas in the U.S., it's common law,

which means, this is an abuse of the term, but common understanding of a flexible test is what actually makes you issuing a security or not. So that how he test is a broad standard. And that means that regulators in the U.S. can act faster. They can say, well, our foundational laws and principles give us the ability to stretch the interpretation such that we can go after this bad actor when we see them doing something wrong. Whereas in Europe, they're going to have to wait for the member nation of the EU to pass new law and probably even wait for the EU Parliament to issue a directive saying all the member nations need to pass this new law to cover this bad actor. and then all the member nations need to pass these laws,

and then eventually the thing gets either criminalized or regulated in a certain way, that might be coming in Europe. So with anti-money laundering, it is coming in Europe. The fourth anti-money laundering directive has an amendment to it, which is still pending, that would basically make running custodial wallets and exchanges subject to anti-money laundering authority. It might not be as bad as in the U.S. where we have this broad definition and maybe even token sellers are subject to it, but we'll see.

So, and I think the securities and investor protection issues could turn out to be similar. So, you know, you can even kind of broadly read existing securities laws in, say, Germany. And if you really wanted to be careful doing your token sale, you should be submitting a prospectus to Bofen, the German securities regulator. Baffin has gotten some of these prospecti, which I think is the plural for prospectus and said, nope, sorry, this is not the kind of, you know, security's great instrument we normally put our stamp approval on. So there's already impediments to doing these things in a compliant way in Europe. And it's not necessarily a fate accompli that it will get better there before it gets better here or that it might even get worse there or it might get worse here.

Or just don't do a token sale. Just be Satoshi. Just write software and share it with the world and build cool things. Stop taking people's money on promise of like riches. I know that's that's it. Well, that's an impassioned please for all of all lots of Satoshi's to arise and change the world. So thanks so much for that. Cool. Yeah, I mean I agree right in Europe. It's it certainly seems much better and then at least it seems like the risk of you know stuff like 50s spin to anything right like okay. okay, now we're going to go back and maybe all of the token sales, like in the past, violated this thing. It seems like with the civil law approach that is less likely, right?

And maybe in the future there's going to be new rules and they're going to make it much harder and more honors. But it sounds unlikely that they're going to go back and, you know, let's say in Switzerland, I don't think it may well be that these foundation token sales in Switzerland won't be feasible anymore in the future. but it seems unlikely to me that they'll go back and do enforcement against people, you know, unless there's outright fraud. And again, if there's outright fraud, then that's cool. They should do that. And I think in America, it's not as dire as I might have made it sound.

I think we just rely instead on the discretion of the regulators to not be too backward looking. And so far, the SEC has been pretty true to that. they came out, they came out not with an enforcement action because that would have been kind of backward looking, right? They haven't said anything about token sales and now they are enforcing. They came out with an investigative report on the Dow last September or August. And then going forward, they brought actions against people who after that investigative report sold tokens to people in various ways. And they started with really just naked fraud, like a gold-backed token that didn't have any gold backing it. And then they went on to the Munchy case, which was about

kind of a utility token, but you're relying on the company to build this ecosystem of restaurants that will take the token, and it's going to take like two years for them to figure that out, and you're really relying on their efforts to build those business partnerships between restaurants. And then they've sort of broadened, but we're still talking about, you know, things that either look like the Dow or even more speculative than the Dow, actually. The Dow was at least a smart contract that was sort of working until it didn't work in a big way. Cool. Well, Peter, thanks so much for joining us today.

Maybe a last thing. What are the most important topic that you see in the next year coming up on the regulatory front? Yeah. So the most important thing to Coin Center is getting this distinction between cryptocurrencies that aren't a good fit for securities regulation. clearly separated out. No one's saying they're in right now, but it's important that they not be in because it doesn't make sense.

And having them regulated in a sensible way that doesn't involve state-by-state money transmission licensing and instead involves a light-touch prudential regulator who also monitors for fraud and market manipulation, like the CFTC. I think that's the top priority. That would be great. That would make the U.S. actually

a really pioneer in good policy in this space. Cool, fantastic. Well, thanks so much, Peter, for joining me. of course, we'll have links for a lot of the stuff we talked about in the show notes so people can dive deeper. You guys have really produced a lot of great content on CoinCenter and I was looking at the website. There's been a ballooning of content in the last year. Oh, thanks. There's still only five of us here. We're trying to hire another person to work on Capitol Hill. So if you have a friend who works on Capitol Hill and would like to learn

about Bitcoin in his job or her job, like find us. And also, we're totally donation-based. So if your listeners like all the content we produce with our small staff, you know, we're clearly not just like sleeping back here. Please make a donation. We rely on donations. Okay, cool. Yeah, so I will link to the donations and that page as well. So if people want to support that, and yeah, of course, it sounds like a great place to work.

You guys are certainly doing important work. It's pretty good. Okay, well, thanks so much for a listener again, for once again tuning in. so we put out new episodes of Episode 10a world every week. And you can subscribe to the show on iTunes, SoundCloud, or your favorite podcast app. You can also watch the video version of the show on YouTube at YouTube.com slash episode on Bitcoin.

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