On The Brink with Castle Island - Weekly Roundup 01/27/23 (Modulo Capital, PoR legislation, Tungsten mounts a comeback ) (EP.392)

Episode Date: January 27, 2023

Matt and Nic return for another week of news and deals. In this episode:  Is there a socially optimal level of vigilantism  What's the deal with Modulo Capital?  SBF's mother and brothers are now in the crosshairs Matt and Nic hash our VR vs AR Ted Cruz asks cafeterias in the Capitol to accept bitcoin  Texas introduces Proof of Reserve legislation  What's North Korea's endgame with all their hacked crypto? Tucker Carlson's theory that the airline outage was due to Bitcoin randomware  Matt's Bell's Palsy story Roger Ver owes Genesis $20m  Tungsten cubes are making a comeback Our Super Bowl picks Content mentioned in this episode:  Fidelity Digital Assets, "2023 Look Ahead: Refocusing and Building on Digital Assets' Core Principles." Galaxy Digital mining, "Surviving the Perfect Storm – 2022 End of Year Mining Report" Former Senator Phil Gramm and current SEC Commissioner Hester Peirce in the WSJ, "The SEC Seeks to Supplant the Market. Its mandate doesn't include telling CEOs how to run their companies and investors how to invest" Texas Bill HB-1666 NYDFS new virtual currency guidance for custodial institutions

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, 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 Concentuteease. You print a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called a Bitcoin. Welcome to On the Brink. I'm Matt Walsh.

And I'm Nick Carter. Busy week, busy podcast week this week. Yeah, you guys have been active. So you did a podcast with Mniewsh Gandhi and Michael Liddy at Evanston. That was a fun one. Yep. Talked about the Evanston Capital crypto efforts. They've been allocating to the space for a while.

So it was good to get their view on how this FTX collapse will impact institutional attitudes. That was a fun one. You also did Web3 breakdowns with Eric Golden. Big fan of that podcast. So Eric Golden is a former fidelity colleague of ours that now runs a very successful podcast on the Petrick O'Shaughnessy Network. And that was a fun one. So I could talk to Eric for ages. Is it more successful than on the rank?

Probably. He's got the same editor that we use for some of our episodes too. they edit it very well over there so I will say that they take out all of the ums and the aze and they make you sound very much more intelligent than you actually are I don't do that anymore I used to but it's way too time consuming to take out filler words but it's the ROI on that is is extreme

it does make you sound much smarter what about we just don't use any filler words for the next hour it's impossible to do that People just have these weird tics. People say like and um and just all sorts of stuff. There's nothing that makes you more bearish on yourself than listening to a recorded audio of yourself talking. I know. It's tough.

Sean also did a podcast, so a new one called Web 3 With Me. So I did Web 3 breakdowns. He did Web 3 with me. And he had his block clock in the background. I think it was taped a few weeks ago. It was $17,000 Bitcoin. It's how you know it's aged because I'm looking at my money. It's we're above 23 right now.

So my block clock, I forgot how to set it up. So it's inert right now. It just doesn't work anymore? I think it would work if I could remember how to set it up, but I don't remember how. So I know I've not taken advantage of it at all. Well, you know, it's kind of depressing to look at it when it's constantly streaming down. But it's been, I mean, price of Bitcoin's up like 25. percent year over year or year to date right now we're so back in business up only all right

i like the attitude the implied market cap of all cryptocurrencies now sits at over a trillion dollars that's up 7.8 percent on the week do you remember when vitalic had that thread when was it all of crypto hit a trillion in 2017 was that it and he said something like have we earned it or something like that did we earn it i don't think we did back then We had not earned it. We had not earned it. I don't know if we've earned it now. There's still a lot of clowns in this industry.

I feel that we have paid for it this time in blood. I would say we have suffered for it. I think we need some resolution, though, don't you think? I think we need to have some people in jail cells. And we need to have some, you know, the last stage is people in jail and movies coming out about the time. Some of our beloved Brinknation listeners sometimes ask us, well, where do you do? doing to ensure that the industry gets cleaned up aside from just the bad boys segment and uh i would say that's the extent of it to be honest there's not that much we can do well i think it's not like we can

go out and make a you know an arrest here there's plenty of people that deserve to be behind bars i don't think it's appropriate that we start going to ftx leadership and just arresting people i mean what do you want us to do we're calling out all the fraudsters i think First of all, I'd like us to have more downloads on these shows. So I think we need to start getting more controversial. I think we know. Yeah, the hack I think is leave a review, right? That adds to the downloads.

Leaving a review helps. So here's my new strategy to get more listens on our show. We just say more outrageous stuff. You know, people think of us as sensible people, I believe. so I'm leaving that behind. That's in the past. So we're adopting more of, let's say, Tucker Carlson type attitude.

Just more cavalier with the truth. I had a tweet this week about this medulla capital thing in the end of the tweet, I just said, lock them all up. So that's a pretty Tucker Carlson type of take. Lock them up. 2018, Matt, would have never done that. So I'd like it. That's a good start.

I think it's an outrage that some of these frauds are still walking around free right now. It's not good. I don't think you can heal as an industry when you have people that have just outright stolen funds and defrauded people that are still on the lamb. So here's my contention. I think there's a socially optimal level of vigilantism that is above zero. So there's some level of vigilante activity in society that would encourage better behavior, which is non-zero, a non-zero amount. I don't know. I'm not saying go full Duterte,

but I think citizens' arrest should be contemplated from time to time. Well, I think there's been some people that have shown up at Sam's house and tried to arrest him. I think he was public about that. That's wild. I would love to have seen that. That's insane. Yeah, so what three men in a van showed up to his family home and told the security guys that they'd be back? Is that what it was?

Is that seriously what happened? that's what happens i mean i'm not advocating that that's a little crazy i don't support that i don't support that that's shocking that's pretty bad i mean yeah we're that we're by no means saying that we are saying let's take a hard look at some of these lieutenants it's a capo they're the capos in the crime family i'm sure people are taking a hard look at them so i'm sure it just takes a little while the the wheels of justice turn slow sometimes but they grind extremely fine so the Medillo Capital Revelation in the Times, credit to the Times, this is actually a good article. Rare to say about David Yaff Bellany's work. But yeah, I thought this was an excellent article.

And just baffling, baffling, $400 million to Maduro Capital in the waning days of FTX. I guess a former paramour of Sam's, kind of a trend there. This is a total clown. So FTX spent $400 million investing into this crypto trading firm that no one's ever heard of. It was domiciled in the Bahamas in the same complex that Sam lived. And it was started by two people, one of which was this guy, Duncan Yu, who was two years out of college. His business partner is Lily Zhang, who was formerly romantically involved with Mr. Bankman-Fried, according to the times. So it looks like what happened here is Sam's former girlfriend got 400.

hundred million dollars on top of what his other former girlfriend caroline ellison got which was just billions of dollars of customer funds who knows what he was doing here but it looks like he was going to shut down alameda and have this medulla capital thing be the principal proprietary trading firm on his venue he certainly knows how to keep it in house i mean the only trading firms that he likes are the ones that he's romantically involved with the founder on it's just crazy and so these guys are obviously in on it uh so they need to be brought to justice that that $400 million should go right back to the bankruptcy estate. We'll see how long it takes to figure that out.

Medulo Capital is also the name of this Brazilian asset manager. So I think they called it this to make it look like it was a legitimate operation. Clearly not. I mean, this thing is just a total scam. So also Jane Street Alums. I don't know what's going on over there. They're Jane Street alums, but they did like two years. It's like Sam.

He wasn't a real Jane Street person. I mean, he was there for a couple years. Jane Street's full of smart people. And the FTX fraudsters are the ones that couldn't cut it at Jane Street. So they left and they started defrauding people. Just like Romnik. I mean, Romnik Aurora came from Facebook. But he's not like he was like a Zuckerberg lieutenant here.

He's a Sam Bankman-Fried Capo. He's out there defrauding people with these deals. So also disclosed last week. The federal prosecutors had seized $600 million in assets belonging to CM. Cash and stocks kept in bank and brokerage accounts. This is the same man that said he was down to his last 100K. Including $50 million in this Moonstone bank deal,

which is the deal that Romnik Aurora led into Farmington Bank, which had $11 million in deposits when they did the deal. So they're just, you know, this is a crazy situation here. Sam's out there saying it's 100K. Meanwhile, he has $50 million of stolen funds. in this Farmington bank. And then he has the Robin Hood shares. He's got money everywhere.

I mean, just lying through his teeth. Like, what did you think that it wouldn't come out, that he had this cash hanging around? I just don't understand it. Well, the other thing is, so his mother and his brother are now in the crosshairs. So the bankruptcy process is churning here. And so there's been a motion by FTCS and John Ray

saying that the mother and the brother are not cooperating with the bankruptcy process. and they would like the ability to send them subpoenas to get them to comply. Obviously, entities that the mother and the brother were involved in got a bunch of money as well. And so that will need to come back. Yeah. So, I mean, so his father was formally involved in FTX Alameda, was present in meetings in D.C. with regulators and things like that.

Mother and brother were advisors. So, yeah, I mean, they should be considered part. of the same entity. And given his affinity for conveying assets to people in his inner circles, certainly something to look into there. Yeah, I think we're going to get to the bottom of a bunch of that. I mean, his brother, his brother, Gabriel ran an organization called guarding against pandemics, purchase a multi-million dollar property in D.C. Presumably not money he had licitly earned. That will be going back to the creditors, I would imagine.

All right. Well, their deals did occur this week. A bunch of deals this week. So first one up is QuickNode. This is a blockchain node infrastructure business. They raised $60 million in a series B. It was led by 10T, had participation from Tiger Gload, Global 776 and QED.

Another Miami crypto business right there. Next up we have HatchFi, a blockchain API company. There is $1.2 million from the Delta blockchain fund and Orange Dow. Next one is asset reality. So this company helps clients track down and recover their stolen assets. And this company raised $4.9 million from Framework, TechStars, and SGH Capital. Then we have Ply Labs. That's PLAI. They raised 32 million in a seed from A16Z. Spatial Labs, a company focused on Web3 brands, raised 10 million from blockchain capital and Marcy Venture Partners, which is Jay-Z's venture fund.

Then you have Architect. This is a trading technology company started by Brett Harrison, formerly CEO of FTXUS. They raised $5 million from Anthony Scaramucci, Coinbase ventures and Circle Ventures. Then we have Ethos. This is a wallet that is building on the SWE blockchain. They raised $4.2 million from Bold Start and Gumi Cryptos. And lastly, StoryCo, a Web3 storytelling platform, raised $6 million from collab currency, blockchain, and Flamingo Dow.

So the Brett Harrison one was interesting, huh? So he's had some long tweet threads about his. interactions with SBF and with the leadership at FTX. He's getting pretty, you know, combative as I guess I would if I was innocent and accused. So that'll be interesting. The one thing that I haven't seen anyone point out is that, you know, the SEC is going after folks here for securities fraud against the investors. So misrepresenting. Brett has a tweet from when FTCS raised that big round of capital at, I think, an $8 billion valuation. where he said thank you to Romnik Aurora and I think Sam for like running the process.

So it's possible here that like FtX, the parent org was running that fundraise process and some of the things that would typically raise securities law of concerns. It doesn't seem like he was really like running it. So I'm going to be interested to see how that aspect of it plays out. Yeah, so here's the exact tweet. FTXUS is happy to announce we've completed our series A raise. This is on January 26 of 2022. Thank you to our partners, many of whom invested in FTX from the start, to Romnik Aurora for managing the round and to Sam Bank and Fried for being the reason we're all still here.

So that kind of reads like someone who's not driving the fundraising process and maybe, you know, will not be in the crosshairs potentially. We'll see. I think the truth of the matter will come out in discovery at some point. That's kind of why I'm interested in seeing Sam's case go to trial. trial, but not optimistic at well. Well, what's that? Middle of October is kind of what we're looking at there. That's right.

All right. So we already talked about major news in the FTCS crime family with Medulla Capital, the mother or the brother. I think that was pretty much it for FTCS this week. There was a list of creditors that came out today. They owe money to a lot of people, including Netflix. It's a bunch of Netflix subscriptions that are unpaid down there. It's a travesty.

Yeah, sometimes service providers and vendors get included in these as creditors. That doesn't mean necessarily that they had funds on the platform per se. So just be judicious when reading through the list of the creditors. People get scooped into that wide net that we're not necessarily, you know, actually holding funds on the platform. Meta was on there. I don't think Meta had any crypto on there. Although maybe Facebook should just pivot back to crypto. this VR thing. I don't know, man. I don't think this is working.

I'm not a VR bull for the very simple reason that it makes me seasick. Yeah, you can't do that. That's the case for a lot of people. I just don't think it's a repeatable. I don't want to have something on my head and go hang out in the Metaverse. I would put it on and I would do one of those like workout classes, but I'd probably do it like once. I don't think I'm going to have a dedicated part of my house for like boxing in the Metaverse. No. I'm an AR bowl unequivocally. Whoever makes this app, I think, will make a killing. It's very simple. Let's just say the hardware exists, AR goggles, Google Glass 2.0, whatever. Whenever someone walks up to you to conference, it does some facial recognition scanning, cross references against their LinkedIn, and tells you who they are. 100%. You don't remember anyone's name ever again. That has to be invented.

My number one fear in social settings is saying the wrong name. It's just walking up to you and being like, hey, Nick, I mean, Sean, I'm just getting it wrong. Yeah. I mean, you remember in The Devil Wars Prada? Do you remember that film? I never, I never saw that. Oh, it's really excellent. I recommend it.

All right. So Emily Blunt, I believe, is the assistant of the, I don't know, she runs. a fashion magazine, Vogue maybe. I don't know. I saw the film a long time ago. What I do remember is the assistant to this chief editor lady has a book and she's to memorize everyone in her network. So then when they walk up to her at a gala, she whispers in her ear what their name and title is. And so she's just ready to blast, you know, greet people by their first names. So an AR automated version of that, basically. That should be software.

I'm really surprised that it's not already. I would 100% use that. I think the way that that would actually be really beneficial is if there was a way to actually have that into your glasses. So I don't think people are going to be walking around with Google Glass. I don't see that happening. Everyone wearing the same glasses. But if there's a way to get it into your actual glasses that you picked out, I think

that would be great. Maybe into the lens or something. Yeah, I think that's all doable. The technology already exists. I think law enforcement uses it. I mean, it's a little invasive because then basically just by walking around on the street, people know who you are. Yeah, that's that privacy consideration.

Well, what if you get facial reconstructive surgery, like some of these crypto fugitives are getting? Will it still pick up on you? But all you would need would then just be one update. But yeah, maybe that could fool the algorithm for a little while. It's going to be harder and harder to be a fugitive. Can you believe that Joe Lowe is still a fugitive? Yeah, I just don't understand how that's possible in the days of ubiquitous, you know, facial recognition software, gate analysis.

That's another thing. You walk in a specific way and that can be fingerprinted. It's, I mean, yeah, it's going to be hard to be permanently anonymous in society going forward. I just don't think there are many places in the world that you can run to. So let's say Sam wanted to make a run for it. I'm kind of surprised you didn't. Where would he go? I think he believes that he can beat the charges.

Yeah, that's... I think he really believes that. So, interesting legislative developments this week. Got a bunch of stuff going. So let's start in Congress. A certain Mr. Ted Cruz has introduced a bill asking for food service contractors and vending machines in the capital complex to accept cryptocurrency. Is that what he did?

I didn't even see that. Yeah. Did I ever tell you about the time I met Ted Cruz? No. Very brief interaction. I just walked up to him and I said, hey, thank you for being a supporter of this industry. And he said, yeah, the Democrats are trying to kill it. And that's what he said.

And I said, all right, nice to meet you. That's my story. I saw him both years when he participated in the Texas blockchain summit, which is actually a really good one. And I thought he demonstrated a command of the Bitcoin mining energy market dynamics very well. I was very impressed by that. Yeah, he definitely gets it. you can tell he likes this stuff.

So I don't know where that's going to go. That seems kind of like a 2016 era sort of school of thought of what crypto is good for. Fidelity infamously tried that in the cafeteria. It was that in 2016, 2017? Yeah, World Trade Center cafeteria in Boston had it. I think the one in Raleigh might have had it too. But I definitely paid for a couple lunches with Bitcoin. And the price of Bitcoin back then was like $200.

So that was a tough. That's a tough loss. Yeah. Next piece of legislative news. Here's an interesting one. Texas, again, Texas. This is in the Texas state legislature. A bill has been introduced by Representative Capri-Glone.

We'll paste this in the show notes, basically asking a crypto platform. exchanges that are active in Texas to segregate operating and client capital. And then also asking them to on a quarterly basis perform a proof of reserve at a station. That sounds pretty good. That sounds good in theory. Report it reported to the state. And you know, the interesting thing about this is this is obviously state legislation. But if you are a crypto exchange, you probably want to be active in Texas. So that is a bit of a forcing function nationwide, in my opinion. I hope they do this right. The devil's in the details. You don't want to have something

onerous and cumbersome and something like the New York Bit license. That would be a disaster. So I hope they implement this correctly. Yeah, I agree. The thing I am nervous about is audit firms. as we know, most of the crypto audit firms that, really all of them that oversaw proofs of reserve are kind of out of the market. The interesting thing is that the top six or so audit firms, I know for a fact, have the technical ability to oversee proof reserve. There's no technical barrier to that. They all have these digital asset teams. They don't have the political will to do it as far as I've seen because their regulators haven't said anything about what a proof reserve, you know, undertaking involves. And they're very risk averse. As a group, I found auditors to be rather

risk averse. It's so weird how that works. These auditors are more than willing to do a proof reserve when the price of Bitcoin is 50,000. But when the price of Bitcoin is 20,000, they're not that excited about it anymore. Well, anything can be overcome just by paying them a lot. Obviously, the exchanges have a lower willingness to pay these days. But yeah, I think it's just reputational. They, first of all, find crypto to be a difficult industry. And then they are also wary of, you know, the Mazars and Arminino PR was pretty

rough in the last few months. So hoping that changes. because there is now an urgent need for audit firms to start to supervise these out of stations. And some of this will come on the back of greater regulatory clarity. New York put something out to that extent this week. So they put out guidance for crypto companies to essentially segregate customer funds from operating capital. And that makes sense. So I think maybe stuff like this will continue to be pervasive and put out at the state level, potentially the federal level eventually.

And not only to segregate, but to privilege depositors in the case of a liquidation. Am I reading that correctly? Yeah, that's right, which theoretically is what something like a New York trust would do. So Gemini, which obviously has the earned product that has the $900 million plus hole to Genesis, theoretically and by their terms of service, their custody business is totally separate from that

and would be bankruptcy remote and you'd be able to get your capital out of there. Now, we haven't seen a lot of those bankruptcies is the problem. And so that's all good in theory, but seeing that work out in a court is going to be what it takes. And so these cases that are going on right now with Celsius and Voyager and BlockFi will be instructive to how that actually works. You know, Gemini has that trust license for a reason.

and this is one of them. So DFS asks for either separate on-chain wallets for each customer under that customer's name, which frankly doesn't seem efficient at all, especially if you think about smaller clients, or, you know, omnibus wallets, which is how it works, but that contain only virtual currency of customers held under the custodian's name as an agent or trustee for the benefit of those customers. So I believe that that would accomplish the customer protection in the case of a dissolution or liquidation.

Yeah, but how is that actionable? So say that you have an omnibus wallet and there's a billion dollars in there and it's all customer money. How do you pay the transaction fees on the outbound transactions? Do you just say, hey, the way this works is that the customer pays outbound transaction fees and it all gets boiled in? then you do like a rebate back. I would think that some of these exchanges would want to actually pick up the transaction fee,

the on-chain fee, not like the on-chain payment to the miner is what I'm talking about. Those details are not included as far as I can tell. But this seems like a very positive step forward. I mean, look, we've been critical of DFS in the past bit license, certainly not beloved. But this all seems relatively sensible. It does seem. Yeah, it does seem sensible to me. Did you see this FBI story this week?

So they have confirmed that the hacker behind the Harmony blockchain bridge hack last June was North Korea. So that was a 100 million plus hack. North Korea is just busy with these hacks. We got to stop these guys. So they're raking it in. My question is, and they've been connected to many other hacks. The question is, what are they going to do with all of these? coins that they've accumulated over the years. Do they have a plan?

It's pretty sloppy on chain, right? They're trying to get it out through all these exchanges in Asia. I'm sure they're trying to launder it through individuals. I don't know how they're going to do this. As far as I can tell exchanges are getting better at coordinating and responding to these alerts. So it is getting harder to extract funds through you know, centralized exchanges after hacks. Yeah, I mean, ultimately if you're North Korea, you're going to, be sitting on a bunch of these tokens and you're going to need someone to accept them as a form of payment. So, you know, is there going to be some like mafia Don and China that accepts harmony

tokens in exchange for coal? Like, that's what we're talking about, right? Yeah. Well, maybe they, I believe they always typically try and convert into Bitcoin or Eath, but it is a good question. Like, does North Korea expect, are they planning for a future world where they're not a prior estate anymore and they can pay for imports with cryptocurrency that they have stolen from Western depositors? Is that the plan? I'd love to know what the plan is. Yeah, I don't know that there's a plan other than, hey, this is a bunch of money we can try to try to grab some, but they were attacking the Swift network for years and it seems like they've slowed down on that and now they're focusing on cryptocurrency exchanges. Yeah, was it the Bangladesh, um,

Central Bank was hacked for $500 million through SWIFT, something like that. Correct. Yeah, they got route access, I think, to the Bangladesh Central Bank, and they were able to process outbound SWIFT transactions. So I guess they just decided that crypto tends to, settlement tends to be more final. It is, right? They're bare assets. So they're objectively, it's probably a better type of thing to steal. It's kind of an interesting development. So there's a lot of sophistication in terms of the theft, but then the second step is still very opaque to me.

I read this book called The Lazarus Heist by this guy, Jeff White, and he goes into detail about the North Korean cyber war. And I remember they took down Sony Studios, too. So they've been attacking all sorts of stuff over the years. Actually, speaking of Tucker Carl's, Did you hear his theory that the outage, the flight FAA outage, which affected me, by the way, that grounded all flights in the U.S. for four hours or something, was the work of a state-level hacking agency or just a sophisticated set of hackers, possibly North Korea, that were asking for a ransom in Bitcoin, which explained why the price of Bitcoin was pumping during the outage at the FAA? I saw that, but there's, I mean, there's no way that that's true, in my opinion. I think it could have very well been a hack from a state-sponsored actor.

That much I would totally believe, but I don't believe that the U.S. government's going to make a ransomware payment in Bitcoin. I think they'd be much more likely to take aggressive action, maybe even bordering on military action before they were to do something like that. Yeah, that last part I found to be tenuous. But it is interesting that there were, there have been attacks on. air travel infrastructure in multiple countries. I think Canada had one. Canada had one too. Yeah, there's some bad boys out there for sure.

Someone's, someone's weekend having. It's remarkable that taking down one server can ground all flights in the U.S. for half a day. Yeah, it's not good. The state of air travel right now is terrible. I went to Texas this week and just delays. It's crazy. It's poor.

Also, my ears. My ears are still, I have some sort of a respiratory thing going that seems to be moving into my head. And my ears have not popped. It's been like two days. It's a disaster. That's a terrible feeling. It's a terrible feeling. I've historically had some problems with air travel when I have cold.

So you were telling me a story before the pot. Is this a story for Brink Nation? I guess we could share it with Brink Nation. So I was telling you that I had, I'm always fearful of, traveling because my ears. Because when I was 22 years old, I went to California and had a friend that was living out there at the time, had a big weekend, get on a 5 a.m. flight back from California to New York and get, you know, over the middle of the country and all of a sudden I go to drink water and it just comes right onto my chest. So it just wouldn't go into my mouth. I couldn't get the water in

my mouth. And I was like, what is going on here? So I went to the bathroom, looked at myself in the and I had a stroke face. One side of my face was completely stroked out and I couldn't close my eye and I couldn't close my mouth. And so I walked out and I tapped the flight attendant and she just like gasped. She was like, like what?

And hopped. Just like she was looking at a monster, like a hunchback of Notre Dame type of monster. And she immediately tells me sit down in the jump seat, at the back of the plane. So I sit down and she hops right. So she had to segregate you from the other customers.

Put this mutant in the back seat with all the food. And so sit down. She hops on the loudspeaker and she's like, is there a doctor on board? Please come back with a sense of urgency. So I was at that point officially freaking out like what is going on. I thought I was like dying. Do you think you're having a stroke?

Yeah, I had no idea what to think. I definitely thought I was having some sort of a stroke. And so two people come back. One's a nurse. And she said, this looks like Bell's palsy. And I said, what is Bell's palsy? She said, it's some sort of a, you know, reaction, it's similar to a stroke. And I said, when does that go away?

She's like, this could be yours. So just the diagnosis was just get ready to live. I was like, that's not going to work for me. I need to go. I need to work. This is your new life. I'm going to work tomorrow. I'm just, this is going to be a problem.

when I've talked to a client. Second guy comes back. It's probably like three years older than I am, and he's in medical school. And his diagnosis was, he said, have you been partying this weekend? To which I said,

yes, for sure I have been. 22 years old. Okay. Going to visit my high school friends. And his diagnosis was, we probably just all messed up from the partying.

And I said, I'm going with this guy's diagnosis. I don't forget those bells, palsy thing. I'm just going to go with the, this is a side effect of partying in California. Very, you just parted too hard and half your face melted. Yeah. So they both walk away. I had one Bells palsy diagnosis, one partying diagnosis. And I went back to my seat with my face, the way it was. People are just horrified. And they were, they were like, so they became aware the other person that was sitting next to me was like, why am I? You could tell that they did not want to be

sitting next to me. So I sat down and I just started saying the rosary. I just started praying. Oh, really? That probably unnerved them even more. Yeah. So I'm just, you know, sitting there and I'm trying to, trying to really make some bargains in my life. And we go below 10,000 feet on the way down and it's like a gunshot goes off in my head. Like the loudest pop of ears you would ever feel so painful. And it was gone. it immediately opened up my ear was killing me so i landed i went to the urgent care and they're like you have blood in here that's like the eardrums all jacked up it wasn't fully rupture but they're like this is a really bad situation so i don't know ever since then i've been terrified of flying so that's

my story and for someone that the flies 50 to 100 times a year that's yeah now i fly i still fly all the time but i just tried not to um you know i took the party and comment to heart i don't party is hard anymore. Now you don't party. Can you scuba dive or like any, you know, since you ruptured your aerodrome? So I have been scuba diving. It was around that same time the last time I went though. I don't know that I would go back again.

Yeah. I'm medically prohibited from scuba diving. It's one of my great regrets. Scoob diving is really dangerous though. It's like the flying after scuba diving is what you also need to be really careful of. Really? Yeah. Yeah.

So you don't do the scuba either. I can't. I have holes in my eardrums dating back from when I was a kid. Man, who knew? A lot of info for Brink Nation. We got two bad ears in this, I guess four bad ears on this podcast. Yeah, a whole host of bad ears. Yeah.

I'm very upset about it. I'd love to scuba dive. Scoobo diving is so fun. It's so fun. I learned how to scuba dive in Honduras. It wasn't really like the most safe place to scuba dive. They just kind of throw you in there and say have at it. But it's a great, great time nonetheless.

So, okay, what else do we have in terms of news? There's a few bits and pieces. They're all. Well, so we got some, yeah, we get on to lesser fun topics, I guess. Well, the Genesis Gemini thing is playing out. So we've got the SEC going after both of them, which I guess we didn't talk about last week, but the SEC has come in and it's going to try to lay the hammer on both of them. Turns out Gemini was talking to the SEC for 17 months. So in discussions about this Gemini

earned product and I guess the fact that this all blew up is caused for the SEC to go in there and say this is an unregistered security. So Gemini did a 10% workforce reduction this week. Genesis, of course, had filed bankruptcy last week and that's kind of playing out. We'll see if a deal can be had there. And then Roger Verre made an appearance. Yeah, so Roger Vair is like a rucking ball going around this industry, not just with the, you know, Bitcoin cash stuff, but he took down CoinFlex, apparently, defaulted on, on some debt there. And apparently now he owes Genesis $21 million for an unsettled trade and they're seeking repayment. It's, you got to pay your debts here. I don't know what we're arguing about.

The fact that they're in bankruptcy doesn't really change anything. This guy also decayed on a margin position at Coinflex. I don't know. Yeah. So he's just been going around running up huge positions with these counterparties and defaulting. Yeah. If I was running an exchange, I think I'd probably think twice about maybe onboarding this individual. Yeah.

I don't know that it's like Suzu level, but it's, you know, or Kyle Davies level. Does it be on the list? Does that go on your credit score if you default at a crypto exchange? Is that included in FICO? Should be. I mean, it should be. It's like, yeah. Hey, we got a $21 million option position.

I'm just going to choose not to pay that. A couple good weekend reads that I would highlight for for people. So Fidelity Digital Assets put out a really good one. We'll link it in our newsletter. 2023 look ahead, refocusing on building digital asset core principles. So they always do a good job over there. And then the mining team and the research team over at Galaxy Digital put out a report called Surviving the Perfect Storm, 22 end of year mining report.

I enjoyed that one too. So speaking of Weekend reads, there's an article in the WSJ from Greg Opelka about the Three Arrow's new business that they're pitching GTX, I guess. And the guy who wrote this article totally plagiarized me. What did he say? Jacqueses. So he said, quote, the whole situation is like an arsonist torching your house, then offering to take the incinerated remains off your hands for pennies on the dollar in the hope of brokering a profitable sale later. That's basically my quote about that. That's shameless. Yeah, that's shameless. Yeah. It's shameless.

in a bunch of publications, basically to the exact same effect, I thought I phrased it a little more elegantly. And he just went ahead and printed it in the WSJ as his own. That's tough. But I'm glad that he has that take. It's better than having the take of, hey, everyone deserves a redemption story, even though they're on the run from creditors, not cooperating with the liquidation and just outright lying. I like his take. Yeah, I mean, it's plagiarism in service of a good cause.

so I suppose I will forgive it. But get a little attribution next time, perhaps. Yeah, like, come on, I came up with that. Speaking of which, this tungsten cube thing is getting another life in a non-crypto Twitter context. All the barstool people are really into tungsten now? Did you see that? Yeah.

So I guess I wasn't the first person to be into tungsten cubes. I believe that I helped popularize it. Is that fair to say? Yeah, I think that you added a lot of enterprise values. to Midwest tungsten. Midwest tungsten had them on the show as well. I was really fascinated by that episode. I just,

it feels like a very 20-21 thing to be excited by. I mean, tungsten is a timeless metal. I agree. And the heaviness of the tungsten is, it feels otherworldly. You know, the density is really quite something.

I have a tungsten cube, but we don't do, we don't do video, but you can see, we are going to do video, by the way, but the tungsten cube is right behind me with my CASA node. Speaking of which,

I had a great CASA customer service experience this week. Shout out to those guys. Really? Zach at CASA. So disclosure, we're investors, but I also use the product. And they do this annual safety check, like health check on your setup. And I had put it off a couple times because it's sort of like going to the dentist. You're like, oh, do I really, you know, but you go through this and you feel so much better

about what you have going on. It's just, all right, I feel safe. Do you feel safe? Have this thing fully updated. I'm, you know, things are good. People, the $5 wrench attack is not in play. And my assets are not on FDX. So highly recommend.

I'm a biased bystander, but they're doing a great job over there. And shout out Zach for walking me through the process. Last piece of last week on read for you here. Former Senator Phil Graham and current. and current SEC Commissioner Hester Purs wrote a WSJ op-ed entitled The SEC Seeps to Seeks to supplant the Market. Another critical piece on the SEC from inside the SEC.

We don't really deserve Hester Purse, but she's there still. So I'm very happy that she's still there. All right, so I think that's it for the week. You know, we got some football games this weekend. Patriots just hired. a new offensive coordinator. It's our old one, Bill O'Brien,

getting really excited about next year already. So speaking of current year, actually, who do you have? Who's your pick for a Super Bowl champion? Bengals, I think Joe Burrow. He's that guy. He has the best completion percentage in the history of the league right now. So I can't stand to see the Chiefs win again

as a commander's fan. It would be horrifying if the Eagles won again. So I'm with you. Let's go Bengals. Yeah, we're rooting for the Bengals. This is a Bengals podcast for the next couple weeks. So let's see if we can get it done. All right, everyone.

I think that's it for the week. We will see you on Monday. Have a safe and healthy weekend.