On The Brink with Castle Island - Weekly Roundup 01/16/26 (CLARITY problems, InfoFi Dead, CA Wealth Tax, Kontigo) (EP.696)

Episode Date: January 16, 2026

Matt and Nic are back after a week off. In this episode: The Clarity market structure bill markup is delayed for now Coinbase backs out of supporting Clarity The bank lobby is trying to torpedo Clarity Kontigo is accused of ignoring sanctions X changes its API to block InfoFi California's wealth tax has backfired already BitMine invests $200m into Mr Beast's company Why tokenized deposits aren't as interesting as stablecoins Content mentioned in this episode: Jason Mikula, Kontigo: Y Combinator's Venezuelan Sanctions Evasion Startup

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only is an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated.

The federal government loans American International Group, A.I. $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. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And sorry for missing last week, first of all. I was down with just a hellacious case of flu A. Yeah, this is our worst run of absentees ever in the history of this podcast, right? Two out of three weeks we missed. I just texted you.

I was like, I am in bed. I cannot move my body whatsoever. I was down. I had a 104 fever at the time of recording last week. 104 is really bad. Really bad. Yeah, we were worried about that. but I don't this flu.

Don't get flu A this year. Maybe you already had it because you were doing. I think I had it. I think I had it, but I did record while I was six, so for the record. I couldn't do anything. But yeah, sorry. I wanted to record last week, but we couldn't. We are going to make up for it.

We're going to do last week's deals and this week. We're going to do two weeks of deals. It'll be exciting. We got a good episode. We got a market structure bill that is falling apart right now. but maybe for good reason. So we'll have a lot to talk about this week. Do you want to talk about some of the Castle Island content?

I guess we were unable to plug your Delphi Digital podcast this week. I thought that was a good one. Yeah, so for anyone who asks, I am retired from doing podcasts. So just to be extremely clear about that, please don't invite me on your podcast. I made one exception for Tommy's good friend of mine. And it's actually the only time I've sat down given my quantum thoughts in a full podcast interview. You explaining quantum mechanics was the highlight for me. I can't claim to know very much about it, but I think I know enough to make a risk-based assessment.

Also, the loafers, that was a highlight. So that's why you got to do video podcasts because you get nicely prepared. Otherwise, there were, yeah, like, what's even the point of owning shoes if you don't? I actually made Tommy adjust the camera angle, so they were in the shot. So you can put them in there? Yeah, that was a good touch. In other Castle Island content, Wyatt this week sat down with Jake Lynn. to talk about the future of on-chain markets.

And we'll get into that this week as well, because I think this market structure bill will factor heavily into that. Yeah, markets are the future of on-chain markets in question right now. It is in question. Should we start with the deals from last week? Okay. First up, this is from last week. This is from the SIV portfolio, Babylon, the Bitcoin staking protocol.

There is $15 million from A16Z crypto. Then it's habit trade, a multi-asset trading platform that raised 10 million from newborn town, stable stock, and bright venture capital. Then you have, is this Trace finance or Tray, Trace. Trace. Like, very, word very in French. Very finance. Very finance is a crypto accounting and taxation reporting platform. They are acquired for $130 million by Fireblocks.

It's a good acquisition, I think, for Firefox. Tress is already integrated into fireblocks from my understanding. So congrats to both teams there. Then we have a staking, which is an institutional staking infrastructure provider. They were acquired by the tie. Then you've UBICS, that's a stable coin settlement and clearinghouse company. They received an investment from Barclays. Then Coin Check acquired a 97% stake in 3 IQ, which is a Canadian digital asset management company

for $112 million of consideration in CoinChic. stock, it looks like. And enhanced digital group is an OTC provider for structured crypto products. They led a series A, they raise a series A run led by StoneX. Congrats to Chris and the team over at EDJ there. Transitioning to some of the deals that happened this week, why don't you lead this one off? All right. First up, we have Project 11.

This is a company you've probably heard out about a little bit, and you'll hear more. They're an applied quantum computing lab focused on digital asset security. They raised 20 million in a series A round led by us, Castle Island, with participation from Coinbase, Quantination, Ladis Fund, and others. I will be joining the board of this company. So very excited to join Alex and Connor and the rest of the team and double down on our investment and lead the Series A. And I guess what we're saying here is we're taking.

a stance, we're putting up risk capital saying that Q-Day is going to come at some point during the life of our venture capital fund. Yeah, that's exactly right. Within, so that's 10 years, by the way, venture funds, laughter is around 10 years. And within the life cycle of this company, specifically is what we're betting on. And, you know, some people might think it's weird to look forward to a destructive event like Q-Day, but while we're doing really is anticipating it, And it's something that we think has to be tackled and dealt with. And you will see this year many blockchains and applications, stable coins, L1s, L2s will start to harden themselves quantumly.

And left behind will be those that do nothing and deny there's a problem. Yeah, doing nothing is definitely not an option. And we're excited about Project 11, Alex and the team, he's building over there and think that they have a lot of different ways to capture the opportunity. So congrats to the project 11 team. Next one up is Rain, which is a crypto card payments company. They raised $250 million from iconic Dragonfly in Bessemer. Rain really one of the breakout successes in the stable coin space.

Next up we have Alpaca, a brokerage infrastructure company focused on tokenization. There is 150 million from Drive Capital Citadel and Cracken. Then it's noise, which is a prediction market for cultural events. They raise $7 million from Paradigmund, Figment, and GSR. Meld is a stable coin payments platform. There is $7 million from Lightspeed faction, F Prime, and Yolo investments. Then it's Nora Mint, an AI agent and tokenization platform. They raise $5 million from Maelstrom, Borderless, and Salini Capital.

Bact, which is the publicly traded crypto infrastructure company, they agreed to acquire distributed technologies research, a stable coin payment provider, and an all-equity deal. And then lastly, Polygon Labs made some interesting moves this week. So they have acquired CoinMe, which is a U.S. license payments company, as well as Sequence, which is a wallet infrastructure company. Sounds like it's for a combined $250 million, part of their ambition to build a, quote, open money stack and transition to being a payments-focused blockchain.

interesting moves there from Polygon. So on the news front, I think we have to talk about this clarity markup. It has reportedly just minutes as we're about to record here, the markup has been canceled for now. Is that right? Yeah, so we're recording this on a Thursday, and on Wednesday afternoon is really when this happened. So the plan was for Senate banking to have a markup here, and then Senate ag later this month. Brian Armstrong, the founder and CEO of Coinbase, came out at, it looks like, 405 Eastern on Wednesday, and he said, after reviewing the Senate banking draft over the last 48 hours, Coinbase, unfortunately, cannot support the bill as written.

There are too many issues, including, number one, de facto ban on tokenized equities. Number two is D5 prohibitions, giving the government unlimited access to your financial records in removing your right to privacy. The third thing he cited was the erosion of the CFTC's authority. And the fourth was draft amendments that would kill stable coin rewards, allowing the banks to basically ban their competition. So as it stands today, the markup in Senate banking has been postponed. It was interesting. A number of other crypto companies came out and said, hey, we're still on board with this. So it was kind of just Coinbase that took the public stance.

But there's a lot to dive into here. What was your take in seeing Brian Armstrong kind of blow this up here, so to speak, before the markup? Yeah, I mean, he wants to be able to run a platform that offers as many products as possible, including tokenized securities and with as few limitations as possible. And he wants to offer the best consumer product possible, which means yield bearing stable coins, which is how it currently works. So I get that he doesn't like the bill as written. It makes sense to me. I do wonder whether stable coins issuers, whether they might be ambivalent about this ban on interest,

because they might actually prefer to be able to retain all 350 basis points of yield as opposed to being forced into this race to the bottom by the market. So they might actually, am I crazy to say? They say they might be okay with this ban. Yeah, I don't think that's necessarily crazy to say. And maybe taking a step back, there's kind of two camps here. One camp is saying, look, a bad bill would be worse than nothing at all. Because if we get a bad bill, then we're codifying the structure that the banks have really

lobbied aggressively for here. And we're kind of painting ourselves in a corner. And we'd rather just be in a position where there's no bill. and you get CFTC making rules, the SEC making rules, and we actually get a lot of the things that the industry would like to see via rulemaking. Now, the other side would say, look, but if it's just rulemaking, it's going to be easier to roll back those rules during the AOC or Elizabeth Warren administration, if that were to come to pass.

So those are kind of the two sides of the argument. I am incredibly sympathetic to Armstrong's view that the bank lobby here has just come in and tried to undo a lot of what was already agreed upon in the Stablecoin bill, the Genius Act. And so the banning of rewards on stable coins, I think the bank lobby way overstepped. There's language in this markup that came out of, or this proposed markup that came out of Senate banking that would allow the banks to actually pay stable coin rewards, but not anyone else. And so I think they just totally overplayed their hand.

And even if this is just for a negotiating posture, I think it's, understandable on Armstrong side to kind of blow this up here before we move forward on a bill that is very hostile and honestly just has the bank fingerprints all over it. Yeah, I'm with him on this. I think no bill is better than a bad bill. And I am very annoyed at how the banks are behaving. I mean, genius is the letter of the law and it says what it says. And now they're asking for a do-over. And I just don't think they deserve that. And I don't believe, If you listen to Bank of America CEO, Brian Moynihan was talking about this recently. I don't really believe their claim justification.

They're basically saying it's going to cause deposit flight. Banks are going to be forced to cut lending and it's going to hurt small and medium-sized businesses. A lot of lending is occurring outside of the banking sector in the first place. And the huge amounts of net interest margin banks are able to make is mostly just going into pure profitability as far as I can. until. And it's a third of a trillion dollars a year in the U.S. They pay out piteously low rates. And in the other business, you would call this a cartel, frankly, engaging in anti-consumer

behavior. But for some reason, the banks get away with it. And I think it's tremendously unfair to consumers that this is the status quo that they're trying to enshrine in law. I think that's spot on. I am a little bit less in the weeds on Armstrong's complaints about tokenized securities in this bill. It seems to me like there's a workable path there, but clearly he knows it better than I do on the product side. So it seems like there's probably products that contemplate tokenized securities that he wants to release, that he feels like this bill would paint into a corner. his complaint around the SEC having, you know, basically too big of a role here versus the CFTC,

I get it. I mean, look, we just had the SEC run by the worst regulator in the history of the United States and Gary Gensler for the past four years. He did terrible things to innovation in the United States. I totally understand Armstrong's point on having the CFTC oversee a big part of this market. So it would be interesting to see what the path forward here is. the folks that I'm hearing from in Washington seem relatively pessimistic on the odds of this going through. Would have been interesting to see if the whole industry just got behind the house version, if that would have been workable?

I wonder why that wasn't possible. It's been interesting seeing a array of different opinions on this, actually. The crypto industry is not spoken with one voice. Some of the advocacy organizations actually seem totally fine with the draft. I think you also honestly have to look at this through the perspective of incentives. And so Coinbase has an established business and they want to continue to grow across certain vectors. The market structure bill would open up a lot of market opportunities, but also rulemaking could do the same thing. So they want to grow through tokenized securities.

They want to be able to continue to pay stable coin yield. You have other companies that are pre-IPO in the industry that are very vocally supportive of this bill because just getting the bill would, add value to their company. It would be regulatory clarity such that when they went public, they would be worth more. And so I get why companies like that just say, look, just let's get a bill. Like it is going to make my roadshow so much easier if we have a bill. Frankly, and I guess we would fall into this bucket, getting a bill would be great for anyone trying to raise money, right?

And so a lot of these bigger venture capital firms are saying, look, like, we got to get back to it. We've got to get a bill because it will make it easier for. LPs to commit capital into some of these funds if there are clear rules of the road. Now, I guess we're trying to be a little bit more intellectually honest here. Like we want a good bill, not just any bill. But you can see why certain pockets of the industry really just want a bill, even if it's kind of ugly. Yeah.

I mean, it's a bill literally called clarity in all caps. Yeah. So that can't be bad. It's, you know, it's bad if it has these defy prohibitions too, which, um, I feel like Defi has fewer people that will fight for it. But if you're in a situation where you're putting, you know, onerous rules on like the metamaskes and the phantoms of the world, that just seems a little, that seems heavy-handed to me.

I mean, those are software products that are non-custodial. And so to start treating some of those enterprises as if they were broker dealers, it seems like an overreach to me. It is, it does seem to be the trend, though. that the obligations, because DFI is this decentralized stack of some centralized institutions and then some protocols, the obligations of reporting and compliance, it looks like they keep being pushed out to the edge. So I think now the regulators have kind of realized you can't regulate uniswap and it's very hard to regulate the validators. They're going to the last place, which is

the wallets, the interfaces, that seems to be where the hammer is coming down. I think you run into some major league First Amendment issues if you were able to get something. Like that, Elizabeth Warren would love to live in that world. We're just making open source software developers liable for the actions of people that use their products. But I think constitutionally, that seems problematic to me.

But that's where we are, right? it's, you might see MetaMask and Phantom being asked to put filters in for OFAC or to save some user information. I don't know. That seems to be the direction of travel. Well, if that's what you want, then have the bill say you have to put an OFAC filter in. Just don't leave it so open-ended that you have to record keep on every transaction that's ever happened and be liable in certain situations.

I think an OFAC filter makes a lot of sense. sense, actually. You know, maybe the last thing I'll say on market structure for now, I guess to summarize my view is that good rulemaking here will actually last, because if you're able to put out very good rules from the SEC and the CFTC, and then you have large asset managers that line up and launch products behind those rules, I think even if you were to get a Gary Gensler type again, it would be very difficult to go and roll back all of those rules. rules if you have a lot of economic activity happening on these blockchains as a result of it.

So I'm fine with no bill. I'd prefer a good bill. Maybe the last thing I'll say on this is on the stable coin yield issue, and this will maybe just highlight the disdain I have for the banks on this issue, Bank of America's CEO Brian Moynihan was vocal this week. He was talking about on an earnings call that he believes up to $6 trillion in bank deposits could be at risk if Congress allows issuers and exchanges to, um, to do this yield thing.

But he said, hey, Treasury put this study out. But it's not. It's some, it's the treasury, it's some like bank policy group. Treasury Boring Advisory Committee. Yeah. It's a industry group with banks on it. It's not the actual treasury. Yeah, it's a group that advises treasury.

Crazy. I shouldn't be allowed to get something that I egregiously wrong on an earnings call. I mean, he's lying on an earnings call. And then people are just reporting this as if it's gospel. It's crazy to me. But I don't know what we can do in this country, how we let the bank lobby get so powerful. But it's clear they're just a total force. Yeah, Elizabeth Warren working hand in glove with the banks, an interesting sight to see.

Unbelievable. There was one good thing that happened this week, not related to Congress at all, which was infofi has been nuked from orbit by X, formerly known as Twitter. Did you see this? Yeah, I didn't see this until just before we turned on the recorder. and I think maybe you should explain this for people that are not living on Twitter all day. This is something that I had, I'm not going to take sole credit for this. Crypto Twitter is in a period of decline, is fair to say. Even though crypto, I think, is fine.

Crypto Twitter is not doing well. And the biggest problem is this InfoFi phenomenon, which is incentivized posting. So, Kaito is the main one of these, but there's others. And the idea is that you rack up points for posting about specific coins, and then you go on a leaderboard for that coin. And then the developers of the coin can give an air drop to the 6,000 people to tweet the most about the coin. So that's the premise. And this whole thing relies obviously on being able to pull data from the Twitter API. And the very predictable outcome of all this is that you end up with enormous,

quantities of low quality discussion that are solely intended to gather points. And so a lot of this is AI. So all those AI bots you see in your replies, a lot of these are like points farmers, basically. And all they're trying to do is meet the minimum threshold to receive points and hopefully receive an air drop. It's like airdrop farming on Twitter. And Nikita Beer, the head of product, finally got fed up with us.

and turned off API access for all these InfoFi companies, which I think immediately cleans up a huge amount of spam because you're removing a direct financial incentive to create spam. So this is a good thing. So removing the API access, will that actually solve the problem, or are there other ways to have these leaderboards? It'll be illegal, basically.

It would be against the terms of service for these firms to, offer this, you know, because they need to find a way to read the Twitter database, right? Interesting. And Quito, hours after this announcement happened, said they're deprecating that product. Really interesting. I mean, I think just the bots on Twitter these days is just awful. So if it makes it more usable as a product, I'm not fully supportive of it. Yeah, I mean, it's like that story with, you know, the British Raj in India and the, the Python, the bounties for the pythons. Yes. And how people started breeding the pythons and then bring them the snakes.

It's like that. Actually, you know, in Florida we have bounties for pythons. Do you really? But I'm not aware of any, yeah, you get paid for, for killing, because in the Everglades, the pythons go around ruining the local fauna. So you get paid for killing a python. That is, you're right. That's an incentive to bring pythons in. Yeah, it's an incentive to, breed them. Yeah. Just realizing Florida has this exact situation. Wow.

Yeah, that can't be good. I'll clean that up. I mean, luckily you'll have more tax dollars coming into Florida from California to be able to figure out some of this stuff. Yeah, should we touch on this briefly? Because it's such an incredible thing that's happening.

Yeah, I mean, I've been following this for a while, but it's unbelievable to see California shoot itself in the foot like it has. Yeah, so it's very interesting what happens. So just for those of you that haven't followed it, California is a weird state in that they have, what do they call it? Where you've direct democracy, ballot initiatives?

They have ballot initiatives. Yeah. So most states don't have this, right? Well, I don't know. We have it in Massachusetts, but it's a little bit harder to get something on the ballot. Yeah. So for some reason, California has a weirdly permissive initiative system. Is that fair to say?

And so this allows people to vote on things, which always goes badly. So it's a real indictment of democracy, if we're honest. Because I feel like California's had a number of initiatives that have wildly backfired in the past. And this is the worst of the lot. So this isn't on the books yet. And it doesn't even have enough signatures to be on the ballot yet.

But there is a proposal to do a 5% wealth tax, 5% on billionaires. And one of the problems with it is that it treats economic control as ownership. So, of course, you have dual classes of stock, especially with Google, and you might have 3% of supply, but 30% of voting rights. And it treats that 30% as your whole economic stake. And this is actually pretty common, obviously,

because Zuckerberg popularized this concept. And so now you have a tax bill, which is calculated based on your, control, not your actual sellable equity. And so you end up with a situation where I think Sergey Bren and Larry Page both left California over this, the situation where they would owe more in taxes on its 5% wealth tax than they actually own in stock. Yeah, it would be the same issue for anyone who's the CEO of a private unicorn. Yeah.

So, you know, the lack of attention to detail on the ownership, and control thing is crazy. But in general, the idea is nuts. A quote-unquote one-time wealth tax to fund Medicare because, of course, California is poorly run and is upside down on their budget. And yeah, so this doesn't make any carve ads for private equity either.

So it would force you to be selling huge chunks of your company on the secondary market as you got marked up with each round of financing, which most of the time, there was just no market for that stock. It's not like there's like a difficult market. There's just no buyers outside of those rounds of financing. So the whole thing would just immunize the state against early like capital formation.

The crazy thing is even if this doesn't go anywhere, the damage is already done. If you just look at the people that have left the state, it's crazy to me. And, you know, I think Gavin Newsom's probably the angriest because this is something that is going to torpedo his chances of getting elected. So yeah, the big irony of this. So yeah, there was, I think Chamoth did account and there's over a trillion dollars of wealth have left the state. So the big irony is, in three weeks. In three weeks, right, because, oh, I forgot to mention. This is so interesting. It was a retroactive tax. So even if it passed, it would pass in November of this year, 2026, but it would be backdated to January 1st to being resident for the whole

year in 26, which that accounting starts on Jan 1, right? And so very unclear as to whether a backdated tax is constitutional. Yeah, I think they would fight that, but that's the way it was written. And it was, by the way, it was written by the SEIU. This is a ballot initiative by like a labor union. So a lot of billionaires left the state ahead of the end of the year. Not that maybe if you were there for, you know, on January 2nd, January 1st, you might be okay, but still, you probably don't want to take any risks. And so because it was backdated, that just changed the analysis that, you know, it was a tip for attack game and people just left early. And a trillion dollars of wealth, probably more left. And that's just going to reduce ordinary taxes collected

by California. So fiscally, this whole thing is almost certainly going to be negative. So it's a backfiring in a huge way. And also, it's kind of like a sovereign default. Like, who's going to lend money to Argentina now that they've defaults at eight times, right? Who is going to, which billionaire or even mere hundred millionaires is going to trust that California is not going to do another one-time confiscation? Of course, now the social contract is broken and you're not going to trust the state anymore. I mean, Austin, Texas is going to be booming here as a result of this. Florida is going to be booming.

Yeah, I mean, some of these people moved here already. There was a, was one of the Google co-founders bought a $200 million estate in the Coconut Grove here. Is that right? I mean, it's sad. You know, it is really sad. You know, people are saying, oh, well, other cities are just going to build a tech industry. I don't know if you'll get, I think the conditions to create something like Silicon Valley are very specific. And I don't know if you can just rebuild that somewhere else.

I mean, even think about Solana. I'm pretty sure Solana founders have some sort of nexus in California or they did at some point. But think about a private token that is being launched and the impact that it had there. You have locked tokens and this thing goes off and it starts trading at some very high number. And you owe taxes on that, but you actually don't have the wealth. So it's actually a very interesting angle there for blockchain startups that have a token that would be. be deeply problematic. But really bad bill.

People are saying, oh, well, this only applies to billionaires. It's like, well, who's to say the next one? They're not just going to be blowing the threshold, you know, down, down to mere 10 millionaires, which is just ordinary entrepreneurs. Who's to say that won't happen? So I think it actually permanently changes your analysis if you're an entrepreneur in California. Well, why don't we talk about New York next? So I don't know what this guy's doing, but the former mayor of New York City, Eric Adams,

launched a meme coin this week called NYC token. It went to, he was like walking around New York, like hawking this thing. It went to $600 million in value before basically crashing to zero. And it looked like a rugpole, like a Javier Malay Libra-style rugpole, if you remember that coin from early 2025. Eric Adams has denied all knowledge of this. He said he didn't sell any. But this just looks like he got taken by whoever did the Bruce Jenner coin.

Why is this guy doing a meme coin? Yeah, I mean, look, it's Eric Adams. He's not a very serious person. I think it's really on you if you're buying the Eric Adams meme coin. Like, that's kind of on you. What did you expect? What do you think was going to happen? Yeah.

Don't buy NYC token. I mean, it's 2026. It's 2026 and you're still buying a political meme coin? Why? Tough luck. Tough look. So the dot world is puzzling at the best of times, but this one really threw me for a loop today, actually. So Bitmine, which is the ETHDOT that Tom Lee runs, they are investing 200 million into Beast Industries,

which is, of course, Mr. Beast, that's not his Christian name, I believe. it's his holding company. I think his real name is Jimmy. So what this has to do with Heath, I don't know. But yeah, this is a thing that's happening. I guess the great thing about this podcast has been great for so many reasons, but one of the really positive externalities of this podcast is that a lot of entrepreneurs that have companies,

they kind of know where we stand on certain issues. And so they know kind of how to think about approaching us or not approaching us. Like if you're a, you know, blockchain-based video game company, you're probably listen to a couple of these episodes over the years and say, look, Matt and Nick are probably not going to invest in my company. They don't really do that category.

I'd just like to reiterate that we have no interest in digital asset treasury companies. There are so many hairbrained ideas coming out of these things, even as they're trading at like 50 cents to nav. And so many permutations of financial engineering they're coming off these things. So my first comment is more of a category. comment is these remain very disinteresting to me. And I think that they are ripe with shareholder lawsuits and I can't wait to read the 10Ks that come out once they actually have to disclose some of the insider dealings on these things and the put rights that some of these investors

have. It's just, it's a complete dumpster fire as a category. Maybe the second thing I'll say about this one. I just don't get this Mr. Beast thing. And I guess I'm just showing my age here, but like I've watch two of this guy's video like why is this guy the most popular person on the internet yeah mr beast i really dislike this man the videos don't make sense he has 490 million subscribers which is insane the videos are kind of weird it's like the one that i did watch was like he he locked a person in a grocery store for like a month and like who's watching this yeah i mean i they're all along the same lines, which is paying people to achieve weird feats of endurance. I get it. I think you're

going to run out of that. You're going to run out of ideas eventually. It's like I paid a guy to live inside a private jet for a month. It's like I paid a guy to, you know, it's like you're getting more into like, who is that magician guy that would like freeze himself in a block of ice? Oh, David Blaine. David Blaine. Yeah, you're getting into David Blaine. territory. It's like I paid a guy to drown himself and then be revived. So I don't, I think you're going to run out of content. Also, I did look into it. The value of beast industries is mostly, do you know this? It's in feastables. What is that? Feastables is a snack line. And I think lunchables adjacent. I remember those. Yeah. I think it's meant to be seed oil, I believe it's

seed oil free lunchables alternatives. Oh, you should get, get, get, get behind that then. Which I actually do support that sort of, but it makes maybe a hundred million dollars a year. The YouTube channel makes a few dozens of millions of dollars a year. I'm really wondering about the economics of this deal. Why does it make sense for an Ethereum digital asset treasury company to own $200 million worth of it? What's the eth angle there? I mean, and it's not disclosed how much the company they bought, but are they really valuing Beast Industries at $400 or $600 million? I mean, this is, the whole thing is based on one guy. There's no, it's like Colbert without Colbert, right?

Like, there's no there there if Jimmy stops making Mr. Beast videos, right? Yeah, I don't get it. I don't get it. All right. Well, that's Dats for this week, but yeah, we don't like Dats. All right, according to a new SEC filing, BitGo, which I guess this has been out there for a while, but it seems like this might actually go public next week. They're looking to raise $200 million.

They've come out and given the range of what they expect this to price at. So we'll keep an eye on that for next week. And then it looks like BitPanda, the European crypto exchange, is looking to go public in the first half of 2026. I think you're going to see a bunch more IPO activity type of things here in the next couple of weeks. Not a lot of homegrown European crypto public companies are there? Yeah, Bitpanda, I guess has always been top of that list. Blockchain.com, they're technically...

I guess they were British. They're British, right? So I wonder if they're going to be on the queue. I'd expect maybe they would be trying to go public at some point soon. London Slack Exchange is launching a 24-7 blockchain-based platform for tokenized bank deposits. Yeah, I was talking about tokenized bank deposits today in a meeting we had. And I think where I net down on tokenized deposits, we've probably talked about this as sure, it's interesting, I guess, to some people. But I think this is just a much smaller market than stable coins.

If you're, you know, bank deposit, it's a liability to the bank. They're going to take that money and do other stuff with it, lending activity. And I just don't see how a, if you're trying to peg this to $1, why would a J.P. Morgan bank deposit trade at the same parity as a, like a Deutsche bank deposit? Yeah. I don't get it. They're not super fungible to me if they're over the FDIC insurance threshold. You know how central bankers talk about the free banking era all the time when they attack

stable coins? That actually is much more analogous to a tokenized deposit. Yeah. you do run into this function you run into the fungibility problem unless you force customers to hold this on your online banking platform i don't see how this if you actually had a choice between a bank deposit and a stable coin and you actually were educated on it you would never hold a tokenized bank deposit so there is one thing we have to talk about which was in the news actually this week which is contigo contigo contigo which means with you

in Spanish. Do you know that? This is a Latam-focused stablecoin company, and that is a category we're very active in, but funny, we're not investors in Contigo. All right. Well, yeah, you kind of spoiled it. So Contigo is a Venezuelan crypto exchange, wallet, et cetera, backed by some pretty serious investors, including Y Combinator. And as it turns out, they were being used by basically, sanctioned individuals.

I think we have to go with the allegedly here because it seems like Contigo is litigious, at least on. Oh, yeah, that's right. I'm going to direct your attention to Jason McCullough's article on that, which I thought was good. But yeah, the allegation is certainly that I think not only was it being used to skirt the sanctions, but also making money by arbitraising the official rate of the Belvoir, the Bolivar. and the market rate, which, of course, very few entities have access to the official rate. And so it seems like that was part of their rapid ARA growth.

I mean, we've obviously invested a lot in Latam stablecoin stuff, but certain countries are too hot. You just have to stay away from them. I mean, anything that is touching sanctions is very, very dangerous to be anywhere close to. So keep an eye on that story. It's going to be some more black eyes and things like that. But there was an allegation that was it there was some affiliation with a son of someone in the government, right? Was it Majora's son? Yeah.

Yeah, yeah. I mean, the tricky thing is when you're investing in frontier markets, you, I mean, Venezuela is like the ultimate frontier, right? Yeah. You either are doing something the government doesn't like, in which. case you get harassed, which we've had startups have dealt with this in the past, or you somehow ingratiate yourself into the government, at which point now you're responsible for their sins as well. And it seems like this is the latter case. There's a couple things from last week that I wanted to touch on. We didn't get a chance to

talk about. Ledger, they suffered another data breach last week. This time it was customer names and email addresses via a third-party e-commerce integration. How many times are we going to do this on this podcast? Talk about Ledger suffering a data breach and people's PII being at risk. It's just crazy. Yeah, how many more people need to be, I mean, Ledger themselves should really appreciate this

at a very deep and visceral level. How many more people need to get kidnapped before they get serious about the data security? It's just unbelievable. So bad job, again, Ledger on that. Yeah. And then Morgan Stanley. So this was an interesting story last week.

Morgan Stanley filed for spot ETFs for Bitcoin and Solana, as well as an Ethereum ETF that would include staking. So this is not Morgan Stanley putting third party ETFs on their platform. This is Morgan Stanley asset management actually doing these products, which kind of caught me off guard in a positive way. They've had some leadership changes over there. Yeah. It seems to be going really well.

And then the other one that I want to hear. hit on was Wyoming's Frontier Stable token. It's out. It's on Solana as of last week. They made their first transaction happen. It's a state issued effectively a stable coin. They don't call it a stable coin. But congratulations to the whole team there. That was a couple of years in the making. Yeah, it has been big congrats to that team. Well done. So I'm looking at the prediction markets here. Honestly, prediction markets are way easy to read the odds than Vegas odds. I think about that all the time when I'm listening to like a Bill Simmons podcast and he's talking about the conventional odds.

I'm like, I don't get this. What is money line? And what is minus a thought? What does that mean? The money line I get, which is just like win or lose. But the...

Wait, so money line is what? Explain money line. So if you took the Patriots and the money line, it just means picking the Patriots to win the game is what I gather. Oh, is that? Oh, it says I thought there was like a point. spread. Well, no, or you could pick them against a spread, in which case you could still lose. Then they have to. Then that's like beating earnings. You're like outperformer expectations.

Yeah, but I agree with you. The prediction markets for people that are not like gambling all the time just seems a lot easier. All right. So anyway, the Pats thought the commanders didn't make the playoffs. The Pats look pretty good. They're trading at 63 cents against the Texans. Can't get, can't get the hubris up. But Yeah, my question to you is, are they adequately priced? Are you longing or shorting the Pats at 63? So, the star wide receiver for the Texans is out, I think, or at least that's the rumor. So I love the Pats. I mean, this Patriots team has just been a delight.

Value at 63 is what I'm hearing. It's just a phenomenal organization. I'm picking, of the four games this weekend, I'm going Broncos at 53 Sons over a bill. That's the one I'm wrestling with is do you want to go through the Broncos at mile high? So assuming the Patriots can win, but I don't want to assume that. But I feel pretty good about it. Or do you want Buffalo to come into Foxborough? Ooh.

I'd like to see Buffalo come into Foxborough and let's take care of them. Yeah. Maybe get some cold weather, maybe some snow. Well, they're used to it, right? Yeah, yeah, that's fair. And Buffalo, you know, that's like Snow Central. That's true. That's true, I guess.

Like an AFC South team. I guess maybe we wouldn't have a huge advantage there. Yeah, it's snow. You know, business as usual for both teams. Yeah, but it's our snow. It's Massachusetts snow. It's not upstate New York snow. It's Massachusetts snow.

All right, I think that's it for the week. Sorry again about missing last week, but we'll do these when we're healthy, I guess, is the punchline. We didn't miss an episode for a very long time, but then, you know, some things are outside of control. Think of us like elite athletes, you know. We have our off days, too. Speaking of that, I got an IV and I got a Toridol shot as part of it. Toridol is good, right? Oh, my gosh.

They apparently give this to like NFL players before they play when they're hurt. And you can see why it makes, I mean, I felt like a million dollars after that. Really? Wow. So you actually had to go on. You're actually that sick. I was very, very, very sick. Wow.

But back now, minus the cough that you're going to have a hard time editing out of this podcast. All right, everyone. have a safe and healthy weekend and we will see you on Monday