On The Brink with Castle Island - Caitlin Long (Avanti Financial Group) on Bitcoin banks and the Wyoming SPDI (EP. 101)

Episode Date: July 13, 2020

Caitlin Long, founder and CEO of Avanti Financial Group, joins the show. Caitlin is a thinker and writer we admire a huge amount and she has done a monumental job with her advocacy for responsible custody practices among crypto depository institutions. She is one of the key architects of the Wyoming Special Purpose Depository Institution legislation which establishes a new form of crypto bank in Wyoming. In in no small part thanks to her efforts that Wyoming is the most progressive state in terms of defining and regulating digital assets and the institutions that custody them. We share Caitlin's enthusiasm for clarifying depositor exchange relationships and for public-facing proofs of reserve, so we were very excited have her on the show. Covered in this episode: Risks involved in complying with the FATF's travel rule How the FATF enforces its recommendations Why compliance burdens freeze out small and community banks How the $10k limit for disclosure for cash transactions increases the scope of transactions that should be disclosed in real terms How the Bank Secrecy Act and the third party doctrine means the government can procure warrantless financial data Caitlin's Bitcoin origin story The thawing of the gold community's sentiments towards bitcoin The tension inherent in the institutionalization of bitcoin Why Proofs of Reserves aren't more popular today The importance of distinguishing ownership of a key and a legal title Why users are poorly equipped to hold exchanges accountable Why the state by state regulation in the US doesn't suit the reality of crypto custodians How the Wyoming SPDI legislation got started What the Wyoming SPDI laws actually mean How Avanti got its name Caitlin's long term objectives with Avanti Why banking remains the achilles heel of the crypto industry Why existing banks might not be able to handle future growth of the crypto industry How the FDIC targeted the crypto industry Why custodians should have access to the Fed window Caitlin's pitch to entrepreneurs to move to Wyoming

Hello and welcome back to On the Brink with Castle Island. Hope you're having a good Monday so far. We have such a fun episode for you today with Caitlin Long, who is the CEO and founder of the Avanti Financial Group. She also is an appointee to the Wyoming Blockchain Task Force, among many other things. Most of you will be familiar with her work for good reason. She's one of the loudest voices in the crypto industry talking about counterparty risk at exchanges, talking about some of these important concepts, and then actually operate

rationalizing them. If you look at the Wyoming legislation as it relates to crypto assets, it's really by far the most progressive state legislation in the U.S. in terms of defining these things, giving them a consistent and fair legal treatment, and of course proposing this new special purpose depository institution framework to effectively create what could be understood as crypto banks. And Kately was intimately involved in the process of winning hearts and minds among those key stakeholders in Wyoming. And then, of course, she didn't just write about this. She went ahead and started a financial institution devoted to crypto assets and to bridging the traditional financial world and the crypto world. So as you can, I'm really excited to have her on the show.

It's always such an education listening to Caitlin. And I hope this episode is no different. Let's dive right into it. Not down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International. AIG $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis.

The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Caitlin Long, you are the founder and CEO of Avanti. financial group, and you've done many, many things in the crypto industry, which we'll get into today. I feel like it's way overdue for you coming on. I'm very glad that you did. Thanks so much,

and welcome to the show. Thank you, Nick. You know I admire your work, and we've been citing each other's work, but had never directly connected. So it truly is a pleasure to be on your show. Yeah, I'm very excited. Hopefully we're going to hit on some of my favorite topics. I think we've some very similar interests. Actually, I credit your work with helping me develop some of these interests. That's awesome. Especially around the topic of what rights depositors have at exchanges or custodians. Some of these, like, I think very consequential topics that really don't get a lot of airtime in the industry unless someone comes out and says, hey, this is important. There's risk factors here. This matters. Sure. Yep. And there are risk factors.

There's not a lot of counterparty risk analysis done in this industry right now. And then I've used your work so much on stable coins and crypto dollars and this report you just wrote is fantastic. So yeah, there's a little mutual admiration society going on here. Oh, man. Okay. Well, yeah, that was a fun one, actually. I think crypto dollars.

Actually, I just read the FATIF report on quote, so-called stable coins, they called them, which was the funniest thing to me. They kept on calling them so-called stable coins. And that one made me a little bit nervous about the stable coin industry, or at least as it's configured today, it seems like we're in kind of a Goldilocks or maybe a honeymoon period for some of these stable coin issuers. And I don't know exactly if it can last in its current kind of format.

Well, it's a good question. Obviously, the FATIF rules are in progress. the whole travel rule is a whole separate discussion and no one really knows yet exactly what it means vis-a-vis crypto. We've got pretty good guidance from FinCEN about VASPs that came out about a year ago. And in some ways the travel rule is already being complied with, but in others it's not. And as you know, the industry is kind of stuck right now, trying to figure out what is the right encryption method for sharing that data. The whole travel rule, just as a policy matter, makes me nervous because data in motion is

less secure than data at rest. And the travel rule is now requiring all financial institutions, not just crypto financial institutions, all financial institutions, to just send personally identifiable information all over the web all the time. It's just such a recipe for problems. And, of course, it has to be encrypted. There's no other better way to protect people's identity. But there will be a lot of problems with this.

And is each financial institution supposed to come up with their own encryption standard? It's an interesting question. And no one really knows yet. It's almost like we need another swift that works, that runs in parallel to public blockchains. which it seems like we're just re-architecting things that already exist. But this has been a regular problem in the banking industry. This is not a problem that's unique to the crypto industry at all. Every KYC process for each bank is different.

And it's a frustration even for the largest, you know, most well-known mutual funds. They have the same problem as an individual does. They have to prove who they are. They have to prove they have legal ownership. And the different banks have different standards. for onboarding customers, and there isn't a, people have been trying for decades, honestly, ever since the Bank Secrecy Act came out to try to create a common standard and it hasn't succeeded. Maybe the crypto industry will, because we have a, frankly, we have better technology

in general. We have more up-to-date technology. We're not stuck in sort of these, in these old traditional core programs that don't even have APIs in a lot of cases. So it's a lot easier for us to breakthrough on something like that than it is maybe for the traditional industry. But boy, it's not new. Our pain is not unique. So I know we didn't really set out to discuss the FATIF or anything, but I do have a question which I think would really be interesting. I think a lot of people have this question. And my guess is that you know the answer. So the FATF is kind of, as I understand, it's sort of a standard setting body. They sort of make suggestions as far as I can tell. But then they don't actually enforce those standards. So my question is, like, how do their, do their requirements

or their recommendations actually get enforced locally? Well, they get enforced. At the end of the day, the U.S. is the tent on guerrilla, even if it's not, you know, the one in charge of FATIF because the dollar is the world's reserve currency. It is used in something like 75% of transactions involving world trade. And so therefore, access to the U.S. banking system is king, even if the U.S. isn't in control of FATIF. And so if the U.S. is going to implement it, then effectively, the rest of the world in order to get access to the U.S. financial system has to implement it to. That's how it works. It's a de facto power rather than an actual power. And the U.S. I think, did have the rotating chair a year or two ago. And, you know, this travel rule thing has

been in the works since the Obama administration. I'm actually a little surprised that the Trump administration has followed through with it because if you, now that I'm working on starting up a bank, I really understand the magnitude of the compliance costs at banks. And I also am understanding also the challenge that that poses for small banks. We're seeing a lot of community banks disappear. And it comes down to really two reasons. One is the magnitude of the compliance burden, and the other is that they're stuck with having to choose from a small handful of core software providers. And those core software providers kind of have a regulatory monopoly. And that's one of the reasons there hasn't been a lot of innovation in the industry.

And it's very hard for a new player in the industry to break through and get approval. So those two things are causing the number of banks in the U.S. to shrink. and the community banks are the ones that are taking it hardest. So, again, these issues that we're experiencing in the crypto industry are not unique to us as financial institutions. And those compliance costs are huge. I wrote a piece on the Bank Secrecy Act. The last time the GAO, and I put it up on Forbes a couple years ago, the last time the GAO did an analysis of the suspicious activity reports,

I think it's something like, I'm going to misquote it, so please check the Forbes article, but it's something like 0.002% of suspicious activity reports actually result in a crime that has been prosecuted. It's a tiny, tiny, tiny magnitude of suspicious activity reports. And as you know, the banks have to, and every financial institution has to file a suspicious activity report for anything that triggers, the trips triggers, but especially everything that's over $10,000. And so there's just this, and by the way, they never inflation indexed that. I'm pretty sure the $10,000 limit was what was put in the original Bank Secrecy Act in the 70s. And so there's just been this proliferation of data that's related to compliance and all the people that are working in that field who have to interpret it.

And, you know, wow, it's a lot. But I also see from some of the other competitors there were a couple of situations where, for example, even this week, USDA, there was an address blocked on USC, and that came out and there was some carping in the industry. There was something with Paxos a few months ago where someone was complaining about their communication relating to coin joins and the like. And, you know, I look at all that stuff and think, gosh, you know, the consumers want to blame the companies, but it's not the company's fault. It's the regulations that the companies are required to comply with that are the problem. You know, it's like the airlines. Everybody loves to complain about the airlines. And

vast majority of what we complain about the airlines for has nothing to do with anything the airlines would be doing on their own were they not regulated. So it's really the regulation. That's the issue. Yeah. So on that $10,000 limit for reporting the threshold, so I just looked it up. And according to CPI, which I think, as we all know, is maybe not the most reliable measure of inflation, or maybe it undercounts it, $10,000 in 1971 is $64,000 today. Yep. So the real threshold of reporting has gone down massively, which it's just it's more pressure on financial and transactional privacy.

Yes. Because it means that just so many more transactions are captured in this sort of dragnet. That's absolutely right. And there's, it's, it's all related to something called the third. party doctrine, which came out of the Bank Secrecy Act, that was litigated all the way up to the Supreme Court to determine whether the banks could require you to disclose all this information. And the Supreme Court said yes. And this was in the, I believe it was the Miller case in 1977 that said the Bank Secrecy Act

was constitutional and that you do not have a privacy interest in any of the information that you voluntarily turn over to a third party. So what that meant was that the government could just circumvent the need to go get a warrant, which requires them to prove probable cause, by just going to the third party and getting the information. And this is what they've been doing with the banks. This is what they've been doing with the cell phone companies and the Googles and Facebooks of the world as well. As long as we provide the data to third parties, that doesn't require a warrant. So the Supreme Court two years ago was in the Carpenter case.

the same Forbes article I was talking about, the Supreme Court narrowed that slightly in the Verizon cell phone metadata case and said, all right, we're not going to overturn the whole Bank Secrecy Act, but we are going to say that in today's day and age, it's impossible for you not to willingly turn over data about yourself that's personally identifiable. And so they overturned that and said if the government wants to go get cell phone metadata to prove where someone was located, they actually have to get a warrant before they go to Verizon and get it.

So that opens the door to narrowing this third-party doctrine. Drew Hinkus has been doing a lot of work in this area, and I think he's right. I think we're going to see probably in the next decade that this whole compliance regime is actually going to be narrowed down because it is an unconstitutional, in my opinion, violation of the Fourth Amendment. And literally, just in the last two weeks, I read,

there was a case where the IRS was actually shot down by a court because they just went to a third party that was selling people's personal data to get the to get the cell phone location metadata to prove that somebody was in a state that they were claiming that they weren't living in. And so instead of getting it from Verizon, they paid a third party data provider to get the data, but the result was the same. And I think the IRS got slapped down for that. So you're starting to see the pendulum swing back. That the government really can't just go to private companies, including banks,

and get that information willy-nilly. They have to have a warrant. But that is not the law of the land right now. And I want to make clear as somebody who's starting a bank, we are going to comply with the law. We have to. There's no point. There's no rhyme or reason around it.

There's no gray area. We are complying with them. the law. And so if you're going to do business with my new company, it's going to be 100% compliant with the law. Don't expect anything otherwise. Yeah, it is interesting that since the BSA and then the subsequent interpretation, the privacy is considered to be entirely absent in there. I mean, you know, I'm not a constitutional scholar or anything, but it, as you say, it seems to be contrary to the Fourth Amendment. Yep. And it's strange that we have the existence of physical cash, which gives us genuine transactional privacy and autonomy.

And then there's no digital counterpart at all to that. And there's really no way to obtain privacy in online cash or just regular electronic money transactions, which is bizarre to me. Well, and Wyoming is grappling with this. The Wyoming Select Committee, which is broadened beyond blockchain to include now general technology topics. We are looking at the question. Now, I'm going to point you to that task force.

It's technically called a select committee. And one of the most powerful legislators in the Wyoming legislature is asking, should that data actually be property? Because, you know, if I pulled a book off a shelf in a library and started reading it, There isn't any record that I actually read it. But now if I go to Wikipedia, there's a record that I read something, that I was visiting that web page. And it is actually insight into our thoughts. Our thoughts are no longer private.

And so it was really interesting. It's towards the end of the last Select Committee meeting, which is available on YouTube. If anybody wants to listen to how a legislator is thinking about this, keep your eye on this space. because Wyoming, I think, is going to do something in this area. We've been grappling with this whole question of identity and self-sovereignty. We've done some very interesting things, for example, on First Amendment protections for software developers in Wyoming. But we haven't yet gotten to identity,

and I think we might get to identity this year, especially because some very thoughtful people are recognizing that personally identifiable data is actually property. And just because we disclosed it to somebody doesn't mean they can disclose it to somebody without our knowledge. We should maybe apply a license approach to it that we are granting a limited license when we grant that data. And most certainly in criminal investigations, you still have to go get a warrant if you're the government and you're proving a crime. You shouldn't be able to just go around the Fourth Amendment just because the data was commercially available. using taxpayer money to purchase the data.

Yeah, it's a difficult thing to reason about. Yeah. Because it's just so available and we cast off these breadcrumb trails of data wherever we go. So it's hard for people to wrap their heads around thinking about that as property. But I'm of the opinion that even something like social media handles should be understood as a form of property. Yeah, I agree. instead of just borrowing space from some internet oligopoly. So I think there's a case to be made for a much broader ontological conception of property than currently exists.

Yeah, well, and on social media handles, we are dealing with, you know, when we deal with the Twitters and Facebooks and LinkedIn's and Instagrams of the world, those are private companies. I love the idea of getting to a decentralized social media platform. where truly those would be, those handles would be considered property of the individual owner rather than something that's effectively leased from a private business. Because I do defend the right of private business to decide whether to do business with you or not. And, you know, all these, all these, all the brouhaha over censorship and the cancel culture hitting social media,

these are private companies. They are not actually the government. Now, some would argue, well, there are. using the FCC, right, they're using a public good in broadcasting their data and therefore they are getting effectively, they are government-enabled monopolies and that's a that's a whole other can of worms. But yeah, the power of decentralization and making it clear who really owns what is a lot more powerful than the kind of the idea of powerful central monopolies, absolutely. Yeah, my my response to that,

would be to say, you know, these, the, the lines between public and private are blurring a little bit. Yeah. You know, for instance, like TikTok is effectively an arm of the Communist Party in China. I don't think that's too controversial to say. Yeah. And so then the question is, well, is there policy of deplatforming certain voices on the platform? Is that a private or kind of a public action? And then, you know, to what extent can, Western countries exercise influence over the Facebooks and the Googles of the world. And can these become effective instruments of the state?

And that's when it gets much more complex. But we kind of know that states are trying to influence these social media platforms. I think there's a Saudi spy who worked at Twitter who was kind of unearthed. And so we see like both covert and exploits. attempts to sort of capture these platforms because they're very high leverage tools for these governments. So it gets really tricky. I don't know. I definitely, you know, as someone who's libertarian leaning, I very much align with, you know, these are private companies. But then, you know, I look at the state encroachment and it very much muddies the waters, I think. Right. Well, it also

gets you very quickly into the whole antitrust question. First of all, how did they get as big as are and again that's where somebody would push back and say it's because the government enabled them to because of the means by which they were they were using communications infrastructure but yeah should they have the ability to effectively become monopolies right i mean AT&T was broken up over arguably much less of a sort of predatory behavior so right yeah i mean you know it's it's not popular as as like someone in the crypto space to be in favor of antitrust. But, you know, Microsoft too. Like, if you look at the share control that Google exerts over internet ads and Google and Facebook jointly control or the control that Amazon exerts over their platform, selling their own

brands on there, yeah, there's a lot of what looks like monopolistic behavior to me. You're making a hell of an argument for decentralization, Nick. Yeah, I mean, that's my preferred mechanism of change, for sure, not the state intervening and, you know, getting really closely involved, but just building alternatives which aren't subject to these same issues. That are censorship resistant. And then, yeah, there will be a lot of people who say things you don't like. And there is no means by which to censor them. Yeah. And then we would just have to develop alternative UXs, you know, maybe just ways to comprehensively wall off those conversations you don't like from your own view.

instead of trying to silence them, you know, going to some authority and saying, you know, this person shouldn't be allowed to speak. Maybe just sophisticated tools to never come into contact with that, you know, objectionable speech. So zooming back out to the beginning. So, you know, I think most people in the crypto and Bitcoin space know you, but I don't know, well, I personally don't know the origins of your story. I know you've been active in the blockchain space for a really long time. But I'm curious what the first hook that got you interested in Bitcoin was. It dates back to the financial crisis when I got very curious about the mainstream explanation of what the financial crisis was caused by. And I heard then Treasury Secretary Tim Geithner

give contradictory statements. In one interview, he said interest rates were too low and that's what caused the financial crisis. And then two weeks later, later, he was on Charlie Rose saying interest rates were too high and they need to be lowered still. And that's what got me digging. And I did a ton of reading over those ensuing years and figured out that the Austrian school explanation was the one that made the most sense. There were light bulbs going off. And at the time, I didn't understand the Austrian scholarship was pretty outdated. I think if Murray Rothbard were still alive, he would have been all over the shadow banking system and the impact of derivatives. So I think the Austrians, many of them misdiagnosed 2008 in predicting a

dollar collapse. The dollar didn't collapse. It got stronger. And I think it's because they didn't understand some of the balance sheet dynamics and some of the mechanisms through which credit was created in the shadow banking system. But the basic underlying thesis is absolutely right. And I still believe that's right today. But I looked at everything all the way from that to modern. monetary theory back in 2008. Not a lot of people were talking about that, but I was reading it, reading about it. It's the old, it's the modern reincarnation of the old chartalism. So I went pretty deep. And then through that, through those communities, I started hearing about Bitcoin in, definitely in 2012. And then through Jeffrey Tucker in 2013, he had a sort of a how-to through

one of the book companies he was writing for. It wasn't even something he published. online. It was an email and he stopped working for that company and I sent it to him years later and he was so grateful that he, because it was the first time he started publishing about Bitcoin. I have it still in my email inbox because it was so, it was so incredible and it was a how to set up a wallet. And so I got started and definitely made my mistakes, but made my mistakes like all of us do. I made it when when it wasn't as big of a deal. So learn some important lessons. So you also were the chairman and president of Symbiont, which is more on the enterprise blockchain side. And then currently you're building Avanti, which has a big intersection with Bitcoin.

So I'm curious as to sort of your thoughts on the relative importance of private versus public blockchains. Well, I have definitely taken a detour. I like the way Jimmy Song puts it, you know, taking a detour through enterprise. kind of for the same reasons Jimmy did and others did as well, which is in the beginning we sort of figured that the so-called walled garden intranet was going to come first. And it was just too big of a leap to go from these centralized siloed, layered institutions within this layered market to let's decentralize everything.

And instead of having centralized databases protected by firewalls, everything's going to be encrypted and decentralized and we're going to share infrastructure. That whole paradigm shift was way too far for the traditional industry to go. And they still haven't gone there. And that's why ultimately I think most we're witnessing that there's a rise of a parallel financial system that's built on these decentralized architectures. The architecture is just too different from the traditional industry, which is designed for these, you know, for this, you know, layered net setting among these layers, net settling, rather,

among layers of counterparties. Every financial institution owns all their data. Cloud itself was a, huge leap for them to make and took them years to make it. But they control and own all their data. The concept of shared infrastructure is pretty foreign. And so I think the enterprise stuff, there are definitely things happening in enterprise. You're seeing a few companies that are succeeding, including my old company, has done a lot of very interesting things with Vanguard, but it hasn't actually restructured the entire financial industry like I think some of the folks thought it might. And so I kind of concluded this, not that different at a time than Jimmy did, that it's really going to be hard to do all those things. Let's just go back to Bitcoin

and work on building a parallel new financial system. And so in a way, that's what we've been doing. We've been building these building blocks in Wyoming for where we are today. It's been a two, coming up on, yeah, two and a half year process. And in terms of, you know, where you perceive Bitcoin today, you've been watching the market for a really long time now. Is it ahead of where you thought it would be kind of eight years on from when you first started paying attention? Or is it still, is it disappointingly immature still? Yeah, it's still disappointingly immature.

Maybe I was just too optimistic about it. And maybe we haven't seen enough of a break in the traditional financial system yet to cause folks to really dig in. Every time we see breaks in the traditional financial system, we get more people over here. And we've definitely seen a thawing of the gold community who initially, and again, it's ironic as I came from that Austrian world, a lot of Austrians are the most vociferous Bitcoin critics, right? a lot of Austrian school folks and, you know, Peter Schiff and they just are, you know, given Bitcoin the Heisman. But we've definitely seen a thawing of the critics there too. But I think a lot of it is just we're still really immature as an industry.

And I hate to say it, but bringing folks that have more experience in the traditional financial industry over to the crypto side is really important in order to figure out how to have crypto become mature. Now, there will be some who say, we don't need institutional money. This is all a grassroots effort. It's all about individual consumers. And let's not worry about whether our pension fund or mutual fund or sovereign wealth fund money is going to end up in Bitcoin. But I look at it and think, why don't, let's make, let's, why can't it all come over here? I think it is, it's a compelling asset class. It's, it is an asset class that I do believe institutional investors should be looking into most of them already are many of them haven't taken

the plunge yet because of the very practical issues of custody of valuation of accounting of tax those are the very real-world things that that cause folks not to not to do it but every time there's a new one that comes in like paul tudor jones most recently there's a co-tail effect there are a lot more people involved in it today than are publicly talking about it. And I can even say, having worked with corporate treasurers back in, I first started talking to corporate treasurers about Bitcoin in May 2014. And I've been aware since before then that multiple corporate treasurers have actually been using Bitcoin, but they would never say it publicly. And it's not in very large amounts. But this is not new. Wow. Yeah. Yeah. I think the, maybe the, maybe the mistake.

take people sometimes make is trying to class Bitcoin as either a solely retail or solely institutional phenomenon, whereas I think, you know, in practice, it's just going to be a mix of the two. You know, historically, it has been mostly retail driven. But there has also like, even going back a long way, there have been, quote unquote, there's been institutional interest in the asset. You know, folks like Chamath of social capital, I think he took a position in 2013. or something like that. Oh, yeah. Well, Fortress, obviously. And yeah. Yeah. I mean, there are some asset managers and funds that have had positions in this asset for, you know, five, six, seven years. It's just that the distribution is, the composition is changing a little now as certain more sophisticated

custodians come along. But yeah, I mean, like, just like gold. Gold is, you know, there's probably $2 trillion worth of gold, which exists in jewelry form, which is mostly owned by individuals and households. And then, you know, there's a, I don't know what the exact number is, but there's a lot of gold sitting in in vaults, in bar form, bullion. Yeah. Yeah, for, for central banks. So that's obviously institutional gold. But there's a huge amount of retail gold owned by, you know, households and places like India, you know, so it's always going to be a blend. And it's still, I think, important to just work on that plumbing so that, you know, institutions can get access to it if they want to. because the retail side has sort of, it's, you know, pretty advanced.

Like, as a retail user in the U.S., you can get access pretty easily. Yeah, absolutely. And some of the things that I think the industry needs to up its game on, on the institutional side, one is the very basic legal building blocks. Retail investors don't ask the question, is my transaction legally enforceable? institutional investors, especially anyone who's in a fiduciary role, like a pension fund manager, they have to ask those questions. And if the answer is not a very clear, yes, they can't invest.

So there's some very basic building blocks like that that have to get put into place. But they're coming. They're being put into place. And there's just a lot that Wyoming did in our rules. And I salute you for having actually read the digital asset custody rules in Wyoming. remember you tweeting about, hey, Merkel tree appears in a regulatory, in a set of rules. How great is that? I know. I know. I know. Because we actually, you know, we're a bunch of industry people who got together and said, let's solve some problems here, but let's, you know, we were also solving for some of the bad behaviors of the retail side, right?

I mean, look at what Quadriga did. They knew for 18 months that they were insolvent. And yet they just tried to trade their way out of it. And a true financial institution that deserves to be a counterparty for institutional money would never do anything like that. They can't. They wouldn't be able to. Right. Yeah. They wouldn't get into that position. And you and I were just going back and forth about proof of reserves as well.

You know, why are the companies in this industry not doing proofs of reserves? I mean, there's a lot of complaining that the auditors won't audit crypto companies. And that, too, is changing. That's coming soon. but if we can't use traditional audits, then why won't we do something even better and just voluntarily disclose proof of reserves? A couple of companies have, but nobody's made it a big issue. And I think it's because retail isn't demanding it.

And so why would the companies spend the time and money? I hope it's not the alternate answer, which is that they're not solvent and they don't want the world to figure it out. But as more institutions come in, those kinds of things are going to get fixed. they absolutely are going to get fixed, and I'm optimistic about institutions coming here once there are counterparties that they can trust. And I know the word counterparty is verboten in this industry, but when we're dealing with institutions, they are both by law and custom required to segregate the custody of the assets they manage from their own control. And there's some very good history,

very good reasons why, especially with bearer instruments, you don't want your asset manager to be the custodian of them. You want a third party just for small C control reasons. And I think that that's not likely to change. And so if you're talking about third party money, there's going to be a third party custodian. And so how do we figure out, given that there is a requirement for a third party custodian for most of that Wall Street money, I would say 80% of Wall Street money is subject to some third party custodian requirement. Then if we don't have third party custodians and we're truly not your coins, not your keys under all circumstances, then you're carving out 80% of financial assets in this country.

So if that's not where we're going, how do we create the least evil, if you will, which is how do we create custodians that don't violate the not your keys, not your coins, ethos. And what we did in Wyoming is to say, all right, why don't we segregate the legal title of the asset from the control of the private key? That's something that nobody in the tech world had been thinking about. But to have somebody who could come in with a legal approach and say, just because you have the key doesn't mean you actually have legal title to the asset. So why don't we actually segregate the two? and say, all right, if an institution is going to custody an asset at a Wyoming bank, then that doesn't mean that they're giving title of the asset to the Wyoming bank.

They're giving control of the private keys with very specific instructions about the very limited things that they bank can do with the private key. But if they retain legal title to the asset, all along, what happens if that bank goes down? Those assets aren't caught up in that bank's bankruptcy. So unlike Lehman or MF Global or Refco or any of the other broker dealers that have gone down or any of the banks for that matter, the customers of those institutions had to wait in line to get their money back. But the structure of the Wyoming special purpose depository institutions is that the customers will not have to wait in line because they still have legal title to the assets. Those assets do not belong to the bank.

They're not really a counterparty for digital asset custody. They're just a service provider. It's kind of back to the old money warehouse model of the free banking era. Yeah, yeah. I'm reflecting on the, obviously, the Gox insolvency was a big one that people are familiar with. And I don't know what the exact number is. I think people are getting back something like 10 cents on the dollar maybe. Well, it's not clear.

Well, it's not clear because it's not done yet. And that's the other thing is it takes years for these things to go through the courts. But one of the early mistakes I made, I started buying my Bitcoin through Gox. And so I'm going through that process. And I have no idea how much, if any, I'm ever going to get any money back for that. But yeah, that was cheap tuition that I paid. Yeah, right. Yeah, that's a great way to put it.

I mean, but it's not just Gox where the depositors are now waiting in line to see what kind of haircut they're going to take. It's Quadriga. Obviously, Quadriga and Cryptopia, I think is another one. There are seven or eight of them. Yeah. Actually, I think they're even more than that. There was the Bifenex one, but of course they kept on trucking and somehow managed to claw their way back to profitability in theory at least. Well, and OKEX did the same thing.

They had a big loss on a futures contract and bailed it in and essentially just said, you know, hey, we were going to go bust. They didn't say it in such stark terms, but that, you know, we obviously have a big loss. And so, you know, to keep the, to keep the services going, here's what we're going to do. And I think in the OKEx situation, I don't think anybody sued. Certainly they did in the Bifenex situation, but I don't think anybody sued in the OKEX situation, which is interesting too, because there hasn't been a lot of litigation in this industry. People generally look at it as caveat emptor. It's risky stuff.

So if something goes wrong, it was my loss. you know, my cheap tuition, so to speak. And that's one of the, that's an issue, though, is this, we, we have this fatalism among users of crypto exchanges and custodians. And if they lose money, they just throw up their hands. They're like, well, I guess I deserved it for trusting, you know, a central third party. And it's like, no, you didn't deserve it. And you shouldn't accept that. And we should demand that these, these custodians and intermediaries are actually held a little bit more accountable. Absolutely.

Absolutely. And it's like we have these, it's almost like the global nature of the industry kind of dooms the plaintiffs a little bit because they can barely even organize. Right. Because they'll be from 200 countries. And getting a class action together is borderline impossible. So they can't even really rally themselves together even when there's wrongdoing by one of these exchanges. It's very frustrating to watch kind of time and time again.

Oh, absolutely. And that is why the exchanges and other intermediaries in this industry have such power. And it's not just in the insolvency situations. It's also in the terms and conditions of the contracts. So, for example, one of the big players in this industry defines Bitcoin as, quote, unquote, a digital asset. Well, if one day they decide that Bitcoin is Bitcoin cash, well, good luck getting good luck suing them because a judge is going to say you should never have agreed to a contract that was so vague. Because a digital asset could just as easily be Bitcoin cash as it as it is Bitcoin.

So there's another one that is very prominent that actually has a warning in the terms and conditions that we do not know if transactions involving this asset are legally enforceable. There's a very big, very clear, scary sounding disclaimer. And again, you know, when an institution looks at stuff like that, they say, whoa, this is not ready for prime time. So I think one of the evolutions of the industry is going to be that you see a big step up in the quality of the terms and conditions for the industry and that retail will benefit from that because institutions are going to be the ones demanding it. And so eventually the markets will work and people will figure out how to price the counterparty risk. And it's not just the counterparty

credit risk, i.e. the default risk of the of the exchanges that is, I think, right now being underpriced and certainly mispriced. It's also the, it's also the legal terms and conditions. It seems like there's a complacency, at least in the U.S. when it comes to exchanges, and people just assume that they are secure, that they are going to treat the depositor as fairly if something adverse happens. No. But there's not a lot of scrutiny of the terms of and conditions, as you say, they're very muddy, in my opinion, from when I've looked at them. And it's also really not clear where they stand from kind of a regulatory perspective because it's still just this patchwork of state-by-state regulation with certain exchanges opt out

of New York and some of them have the trust license. But it seems like there's not a lot in most of those state regulations about being a responsible custodian of digital. assets. There's nothing except in the state of Wyoming. I don't think there are any states other than Wyoming that actually have any requirements of digital asset custodians. It seems like it's because it's MTL, they regulate them as money transmitters. They don't even take notice of the fact that their primary business is actually more, you know, like kind of a principal agent situation where they're holding funds on behalf of someone. But that's, it's like there's a huge mismatch between the reality on the ground and the way that these things are generally regulated.

Right. Well, and also, I mean, you can get a money transmitter license. I think it's for $5,000 in one state. So it doesn't, you don't have to put up much capital. If you're going to get a bank license, you're going to be putting up at least $25 plus million a capital. So you're just in an entirely different zip code. I think a trust company in one state, I know the trust company minimum requirement is $100,000. Right. So you're talking about $5,000 for a money transmitter. $100,000 for a trust company and $25 million for a bank. You tell me who you'd rather be dealing with. But beyond that, it's not just about the capital. It's also about the magnitude of the regulatory requirements, many of which are very bureaucratic and don't get at the real point, which is, is the company solvent or not? Yeah.

And where did the depositors stand relative to the company? Where are they? How senior are they? are those balance sheet assets or not balance sheet assets? Yep. Are those assets being commingled? What happens if the company goes down? One of the reasons the SEC historically has not liked trust companies is that there is not a trust company bankruptcy regime that's clear. And so in part because there haven't been a lot of bankruptcies of trust companies, it's not clear how it would work. If it's an FDIC insured bank, it's really clear

how the receivership works. If it's a state chartered bank, it's really clear how receivership works. Same thing for broker dealers. It's really clear how receivership works. It may take some time, but it's really clear what the rules are. There isn't something like that with trust companies, and that's one of the reasons why the SEC excludes them from being a qualified custodian under the customer protection rule if they are not acting as fiduciaries. So it's an interesting area of the law, but up until the Wyoming Speedy Banks came onto the scene, there wasn't a possibility for crypto companies to get a bank license. So, you know, it's almost like the industry, that the banking industry kind of forced the crypto industry into the money transmitter and

trust company regulatory regime, and neither one of them fits well at all with what's going on in crypto. So let's talk about Wyoming. I called it as a lot. I guess speedy is the nickname. Yeah. It's not speedy by the way, so it's an ironic name, but yeah. So this is something that you're known for. You're known to be sort of intimately involved. But what I don't know is how this actually came about in the first place because it seems like you know, Wyoming wasn't really on my radar at all. And then out of the blue, Wyoming has passed this super progressive legislation about crypto bank. or custodianship, and I, for one, was totally taken aback by this. So I'm really curious as to how

that whole legislation and that movement got started. Well, the movement started very innocently. I tried to donate Bitcoin to the University of Wyoming, my alma mater. I grew up in Wyoming and had always stayed close to the state and to the university. And they couldn't take my appreciated Bitcoin in 2017. And it was because they had a bad money transmitter law. And I'd been on the board of the foundation before. And I said, I won't be the only one who is going to try to donate Bitcoin. So we got to get this fixed. Wyoming had one of the three worst money transmitter laws in the country vis-a-crypto. So Coinbase and Circle had pulled out of Wyoming. And some people actually got their assets stuck. And so I volunteered to help get that fixed. And then the whole thing

just snowballed. A legislator named Tyler Lindholm, you've probably seen pictures of him with a giant cowboy hat with me. And he's the one. who understood the power of this. And he and I locked arms, and there was a very talented legislative research person who just dug deep. And we got five bills passed, and I have to say, I have to,

it was, of course, a confluence of a lot of people, but the people who did the heaviest lifting were the three of us. And a lot of people made it possible because they understood the power of what we were doing. And they also understood we were trying to create what effectively South Dakota had created for the credit card companies. We were early to a niche in the financial services industry, and we had a competitive advantage,

which is that we were really willing to give the legal clarity to this industry that it's so craved. And so we decided as an economic development matter for Wyoming to just run with this. And it started with five bills the first legislative session, and then eight more, the second one. and then we did another seven this last one, and we have more coming. So there's a whole legal regime here that is designed to attract decentralized technologies to the state of Wyoming and the developers who build them. In terms of the share of attention that the Wyoming State Legislature gave, what kind of fraction of their effort and attention has this crypto initiative been

over the last couple of years? Oh, it's still pretty small. I mean, legislators are dealing with hundreds of bills in each legislative session. So for us to have gotten five, you know, that was, they were definitely the most high profile because they were the most interesting from an economic development standpoint. And you had the governors getting behind it and a lot of international press. And as one of the legislators said, you know, people are coming up from Denver. Usually it's the other way around. Wyoming loses a lot of its, you know, talented young folks to the big cities. And, and there's usually an exodus after college. And now they're actually coming up from Denver. People were noticing that. And it was exciting. It was that Wyoming had actually hit on something where it was a true competitive advantage. And we set it up responsibly.

So there were anti-fraud provisions in the legislation. And we have had a couple of fraud situations, literally two that I know of, one of which we reported to the Secretary of State and the SEC. So we've done the right thing to do. to protect investors. Nobody, to my knowledge, has lost money in Wyoming. So the upside downside from the whole initiative has been really squarely on the upside of the equation in terms of the companies coming in. And now the tax revenues that are coming into the state as a result of Wyoming doesn't have a corporate or individual income tax, but you do pay a two basis point

annual report license fee. That's the only tax. It's a tiny tax, but it's not nothing. in a low-tax state. And so they're starting to see the revenues come in. And it's exciting. And we're modeling ourselves on South Dakota. Sioux Falls, South Dakota, in 1981, when they decided to change the usury law to attract the credit card industry away from New York, they, they too were a rural agricultural town. And now there are 16,000 jobs there in the credit card industry alone.

And so I think in, you know, 30 years, I'm hoping we see the same thing in Wyoming. That's what we're playing for. So I'm going to post the text of the law in the show notes, because I actually find it to be quite readable. Yep. Or the various laws. And also you have a great blog post laying out what it actually means. But sort of in short, what are the most important things that these packages of laws lay out and kind of proposed to do. Yeah, the biggest one is we defined the legal treatment of digital assets under the law.

They really fall between the cracks. Are they commodities? Are they securities? Are they money? Are they just property? And we defined all that. Categorized three different categories, virtual currencies, digital securities, and then digital consumer tokens. And we mapped them to existing categories under Wyoming law. That's the most important one. I'd say the second most important one is that we've actually clarified that they cannot be taxed in the state of Wyoming for state tax purposes. And then we set up a fintech sandbox. So essentially, all the existing regulation, as long as you're not hurting consumers and you tell the regulators what you're doing, you can get an exemption from existing financial regulations in Wyoming. That's been an important

one as well. And then a fair amount around the, of course, around the bank. I mean, anytime you're setting up a regulated financial institution, if you look at the numbers of pages of legislative language, by far the biggest one is related to the special purpose depository institutions. Most of the other bills are actually pretty short and sweet. So how do you expect other states to react once we have a few of these, these SPDIs that get regulated in Wyoming or, you know, get registered and start to do business in other states, what do you expect the reaction to be there? Well, we've seen a couple of other states already proposed to copy the Wyoming SPDI legislation. It's funny, nobody proposed to copy

the bit license, but we are seeing states proposing to copy the Wyoming license. And ironically, actually, I think that Brian Brooks, who's the acting commissioner of the office of the controller of the currency, I think he's also probably been watching what's going on. He was Chief Legal Officer of Coinbase, so I'm sure he took a look at it as well while he was there. And really what he's proposing at the national level is what Wyoming already has at the state level. And at the end of the day, there are two ways you can get a bank license. You either go through the national charter, which is the OCC, or you go through one of the 50 states. but at the end of the day, you get the same master account at the Fed.

So there isn't a particular benefit per se to getting a national charter versus a state charter because you get the same master account at the Fed once you get to the end of the process. But anyway, I think there will be a lot that copy in. And to be clear, it's a long process. It's like watching paint dry to get a bank chartered. And I know that a number of the big law firms have said, you know, let's just watch and see and see what happens in Wyoming. There are officially three applicants, and there are others that are waiting in the wings,

and will be fast followers. But, you know, candidly, you asked about other states. We've been at this for two years now, right? We got the legislative stuff done, which is, again, like 100 pages alone just in statutory language for the bank. And then the rules, which you were tweeting about, where we, mention Merkel trees. That was a whole long process, right? You've got to put the rules out for public comment and then, first of all, you've got to draft them and then put them out for public

comment and then publish them finally. That's about a nine-month process. So in the best case, another state who wants to copy us is two years behind. And I think that's probably true also for the National Bank Charter too. When I've been listening to Brian Brooks's podcasts, it's probably at least three years before, even in the best case scenario, if they do get through before they would be able to offer the first national special purpose deposit bank that could open its doors. It's pretty interesting to me that the three kind of most important regulatory agencies as they relate to crypto, assuming Jay Clayton actually joins the SDN line and Hester is at least

the interim replacement, we would have three representatives at the OCC, at the CFTC, and at the SEC that are all sort of eminently favorable towards the crypto industry. That's something I did not expect five years ago. Yeah. Things seem to be happening faster than we thought almost. That is awesome. Right. And even also at the Federal Reserve, there are, you know, the Fed is not a, is not a single organization. In other words, there are a lot of people with a lot of different opinions inside of it. And so it's a collaborative body that makes decisions literally as a group. And so this, it's, it's not even true that the Fed is anti-crypto. It's, it's, it's just been the folks at the top of these regulatory agencies historically that haven't been favorable to it.

But yeah. Yeah. Yeah. I mean, I know quite a few people at regional feds that actually, you know, are either favorable to crypto or used to work in the crypto industry. Right. Yeah. You know, Bob Bench at the Boston Fed, X Circle. Yep. I know they've actually been hiring from the crypto industry as the Fed starts a thing more carefully about CBDCs and, you know, borrowing concepts from crypto.

There's actually kind of an interesting cross-pollination going on right now. Right. And there's an also, sorry to interrupt, there's an amazing law review that I want, article that I want to highlight by Jess Chang in the Berkeley Law Review. She's at, I think, the Board of Governors in D.C. And she talks about how to make, how to create a stable coin that is legally enforceable under existing U.S. commercial law. Hint, hint, I'm not sure that the existing ones are, but she lays out a pathway.

So anyway, yeah, it's a big, like this is a Federal Reserve attorney. Right. So your point is well taken. I'll dig it up. I'm going to post that one in the show notes as well. So we haven't talked about Avanti yet. Yeah. So I want to definitely. So is it Avanti or Avanti? Avanti. It actually is Latin for forward. Oh, I guess I should have probably figured that out. It's like Avant in French. Exactly. The Latin root. Yeah. Yeah. We are moving forward. I speak Italian. And it's funny, when I first looked into

picking that name, it was the name of a socialist newspaper during the World War II era. And I thought, you know, if someone stole the word liberal, you know, the other side stole the word liberal, we can steal it back because this truly is progress. So was that in an American socialist newspaper? No, no, it was Italian. Italian. Yeah. Oh, really? It's also, there was an automobile called an Avanti. It was a really high-end automobile. So, you know. The Italian socialist didn't do too well in the end. They sort of lost that battle.

Yeah, but they did hijack the word of Vanti and we're going to take it back. That's my thought. They probably don't believe in intellectual property. There you go. There you go. So you've amassed a considerable amount of excitement for sure. I count myself among the people that are pretty excited to see what happens with Avanti, you've made some really high profile hires. What is the objective with Avanti? What are you

trying to achieve? Well, we are building critical infrastructure that doesn't exist in the industry to professionalize the industry. And it is literally getting at using the Wyoming laws. It's funny, I sat back hoping that many would come and use them. It was not my intention to start a business. I was pretty much done. But it turned out that as Wyoming, regulators said there were more than 150 inquiries and they were all they were noticing the vast majority of them fell away and it turns out there were really only three that made it just to the starting gate much less to the finish line none of the applicants are through the finish line yet that shows you just how hard it is to get a bank and I sat back hoping that others would do it

and I watched a number of industry groups put together you know five or ten million dollars of capital, but it takes, you know, 25-ish to get started, right? And so they weren't willing to put that much capital at risk. And so essentially, this is a consortium type of approach. We are officially agnostic because we're serving by side customers, but the vast majority of the business we expect to do, the vast vast majority of the business we expect to do is going to be Bitcoin and Bitcoin related. And we serve, we will serve as a compliant bridge between the U.S. dollar payment system and the digital asset industry. And that effectively, in your estimate, doesn't really exist today.

It definitely doesn't exist today. And the reason is that there are, of course, banks that service the industry, but they are prohibited by the FDIC from providing custody services around digital assets because the FDIC doesn't want the FDIC insurance fund to be exposed to digital assets. So the existing banks have, they provide cash management service. in dollars to the crypto industry, and they are awesome and they are critical infrastructure. But to quote Ryan Zellkis at Masari in his year-end report, that is one of the Achilles' heels of the industry is that there really are only three small banks, they're community banks.

These are not large banks that service the entire crypto industry for our dollar needs. And that's a bit of a challenge. And what if the FDIC really did decide that they don't want these banks, He raised that question. I posed a little bit different challenge, which is I'm such an optimist. I actually think the bigger issue is the capital constraint that's going to come, that the relatively small balance sheets of three community banks aren't necessarily going to be able to handle the magnitude of growth that is going to come in crypto's next growth wave. So that's a part of it, too. It's just providing more, more deposit capacity to the crypto industry, which is deposit

capacity constrained right now in U.S. dollars. I would argue. Yeah. Yeah. We see it every single day. We see not just capacity constraints, but obviously crypto startups have a hard time getting banking, whether that's a structural factor or just the risk assessment that banks happen to be making. We know the FDIC has a bit of a checkered track record when it comes to sort of encouraging banks not to do business with entire industries. Oh, yeah. They were outright encouraging banks not to do business with crypto. You and I talked about Operation Choke Point as part of our prep for the interview. And that actually had a huge impact on the Wyoming legislators because the firearms industry is one of the industries that was targeted by Operation Choke Point.

And one of the critical committee members had a firearms business and lost his bank account and almost lost his company as a result. And this is a legal business, right? It's not like the marijuana business that was illegal federally. He had a lawful business and the banks wouldn't bank him. So, yeah. So this is a problem. Believe it or not, Avanti had trouble in the beginning.

We even had trouble getting a bank account. You think about what banks actually are? They're sort of, it's so highly regulated. It's almost like a public-private partnership. You serve at the pleasure and discretion of the state. And they exercise control through many levers, but one of the main ones is FDIC. And the state can effectively determine which industries can live or die based on this really specific means of control. And the fact that the government wholesale kind of de-platformed multiple industries,

through choke point is absolutely scandalous, in my opinion. I completely agree. And the courts have struck it down. And when the Trump administration came in, they did tell the FDIC to cease and desist. But there was just a letter by 13 senators about, it's over a year ago now, that said, hey, despite the cease and desist, we know it's still happening. And, you know, we see it. It's definitely still happening.

The banks, because their compliance costs are so high, they look at something like that and say, if I'm going to attract extra regulatory scrutiny, why would I touch an industry like that? So they're not being irrational. Well, it's both. They were definitely told my regulators don't bank this industry, but it's also a risk discussion, right? Obviously, there are banks that are baking the industry, so it's not a blanket prohibition. And if you look at the Silver Gates and signatures and metropolitons of the world, they figured out how to make money doing it. But we as an industry pay a lot of extra fees to them in order to help them cover their costs to justify banking this industry. Whereas, you know, other industries that are not deemed high risk don't

have the fees, the compliance costs, therefore the banks don't have to charge them as much. So you're absolutely right. I actually didn't finish the other thought earlier as to why this doesn't exist right now. So we talked about one leg of it, which is that the existing banks can't custody crypto, but on the flip side, the existing crypto custodians, don't have direct access to the Fed. You actually have to be a bank in order to get direct access to the Fed. There are a small number of exceptions. Like State Street, for example, is a state charter trust company.

The DTC itself is a New York trust company. So there are a couple of trust companies, huge trust companies that actually are banks or have access to the Fed, even though they're not legally banks. But none of the trust companies in the crypto industry are legally banks. Therefore, they do not have direct access to the Fed. And if you think about back to the institutional custody discussion, if you look at who all the big custodians for securities are, State Street, Bank of New York, Northern Trust, Wilmington Trust, they're all banks. There's a reason for that. Or if they're a trust company, they actually have direct access to the Fed. The big institutions want their custodians to have emergency liquidity access. And so it does matter that they are a bank. It's not just for. form over substance. It's literally they have access to the discount window. If you're not a bank, you don't. So then looking forward with Avanti, with all this in mind, what does it look like

in five years if successful? Well, it's critical infrastructure for the industry that is helping a lot of institutions that have not heretofore felt comfortable with the infrastructure, come into the infrastructure. We're going to solve the operational problems. accounting problems, tax reporting problems, and the qualified custodian, institutional quality with institutional terms and conditions, ERISA level quality around our product offering. And we're going to be doing a lot in the payments area as well. When I say a bridge between digital assets and the U.S. dollar payment system, there are a lot of details in the payment system that are problematic for the crypto industry.

So, for example, an ACH payment technically can be reversed by a consumer for 60 days after the statement cycle, which means it can be reversed for 90 days. Well, that means you don't have settlement finality for 90 days. And in crypto, you have settlement finality in Bitcoin in 10 minutes. So how do you solve that? How do you resolve that, right? And so in the real world, you know, people want settlement finality in some cases they don't care, but in some cases they care a lot. So if you're willing to pay for Fedwire, you can get faster settlement. But even Fed wires can be reversed.

So they're not legally final for, I think, up to 48 hours. So there's a lot that can be done with digital assets to help the real world users of payments with settlement finality. And we're going to be doing a lot in that area as well. On maybe a lighter note. So aside from the SPDI, what is your best pitch to get crypto founders to move to Wyoming? Oh, well, it's the tax and privacy approach of the culture here. It was not an accident that the Wyoming legislature understood the ethos of crypto because it's very consistent with the ethos of the state of Wyoming.

We are a rugged individualism place. People are very self-sufficient and that the culture very much fits with the culture. of decentralization and individual liberty. Our privacy laws were attacked when the Panama papers came out, and there were a lot of Wyoming LLCs that were being used. And some legislators were horrified and said, my gosh, we should start collecting beneficial owner information about all the Wyoming LLCs and reporting that to the IRS.

And the legislature looked at it and by an overwhelming veto-proof margin said, nope, we like our privacy. So there's a history of that here in Wyoming and we've bucked the system. The motto of the University of Wyoming is bucking the system since 1886. There's very much a culture here that I think folks will quickly realize that they fit in with. And as more and more companies and individuals move here, they are experiencing that. I don't know anybody who's moved here who's left. So it's a trickle, but, but, you know, it's a trickle. But, but, but, it's going to turn into a river at some point, I think. I think Kanye West has done a lot to popularize the idea of living in Wyoming.

Yep. You know, he seems to really enjoy it there. It's a cool place. I know. I'm overdue for a visit. I went during the eclipse in 2017. I happened to be in Denver, so I drove to Casper, Wyoming to see the full eclipse. I don't know if you were there at the time.

You got common traffic. No, I wasn't. Yes, I did. I did. It was horrible. So, I mean, it was a great eclipse and it was, you know, it was a nice drive. But then trying to get out of the state, it was a 12-hour traffic jam. I heard that. And I heard you say that that is the great irony because there is almost no traffic in the entire state of Wyoming. And then you had the one traffic jam that it's been experienced. And it's in the last, you know, 50 years probably. Well, you know, it's the adage, you know, you're not just stuck in traffic. You are the traffic.

Right. Indeed. No, it is a neat place. And we are coming up with more excuses to get folks from the crypto industry to come here. Wyo Hackathon is going on again this year. It'll be the third annual. And Tim Draper has already committed to provide a keynote. And a number of others are, we haven't announced yet. But it's the last weekend of September in Laramie. And we will be doing joint Zoom and in person. Wyoming doesn't, it never had a lockdown. Again, think about the ethos of the place. It never had a lockdown requirement. So maybe you could argue it's because we didn't need one, but needless to say, we didn't have one. So almost certainly it's going to be open. And if you want to travel here, come on in.

I was just in Jackson Hole last week. And given that folks aren't flying, I swear they're all taking road trips with their family to Yellowstone. There was so much traffic up there in that part of the state. Yeah, that's where the traffic actually can have. happen is in the summertime, especially if there's, you know, a buffalo or a moose or a bear on the road. Well, I look forward to seeing what develops there with the crypto cottage industry. I'm definitely going to try and make it out there to visit. That'd be awesome.

And I can't wait to see what you do with Avanti. So thanks so much for coming on, Caitlin. Really appreciate it. Thank you, Nick. This was really fun.