On The Brink with Castle Island - Weekly Roundup 02/18/22 (Canadian Truckers, BlockFi settles with SEC, CIV III) (EP.287)

Episode Date: February 18, 2022

Matt and Nic return for a huge week of news and a big CIV announcement. In this episode:  Matt scans the Coinbase QR code ad The post-Superbowl backlash against crypto ads Is there any hope for music NFTs Castle Island announces a third fund Binance buys a stake in Forbes Is Circle a bet on interest rates? Our thoughts on BlockFi's settlement with the SEC Does the SEC's BlockFi settlement create a regulatory moat for larger lenders? What happens to DeFi in the wake of the BlockFi settlement? Canada weaponizes all financial services against truckers and donors Miners are once again active in Inner Mongolia – with a catch The etymology of tantalizing Content mentioned in this episode:  Bloomberg, Castle Island announces Third Fund CIV on Medium, Announcing Castle Island Ventures III  Hester Peirce, Statement on Settlement with BlockFi Lending LLC Sponsor notes:  Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Learn more at fireblocks.com Intro and outro track credit: OmgKirby Genesis #326

Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Fireblocks. More on that company later in the episode. I almost dropped my son during the Super Bowl. It was almost a devastating Super Bowl. I was holding him and I saw a barcode pop up. And I just grabbed my phone as fast as I could.

Almost dropped him. Raced to scan it. Scanned it. Didn't really work. But that's neither here nor there. But it was for Coinbase. A lot of Super Bowl ads. So without knowing that it was Coinbase related, you went to scan the QR code.

I mean, I just see a QR code and I'm like, is there an NFT here? What am I getting in my wallet when I scan this QR code? It could have drained all my funds. Right. I think we need to reevaluate our security practices here. I mean, what are the chances, though, that a hacker is going to get into a Super Bowl ad? Super Bowl ad, maybe not. You'd hope that those would be vetted.

That was a good idea, though. That was a very clever ad, I thought. I don't encourage people to go around clicking mystery links. Even if they're on Super Bowl ads? Yeah, even. I mean, can you imagine how incredible a heist that would have been if someone had gotten a fishing link into a QR code on a Super Bowl ad? I mean, that would be the all-time heist of all.

Can you imagine? It's just someone just drains billions of dollars worth of Bitcoin. Well, the Bitfinex hackers, they're already in jail. So the masterminds were behind bars. That's true. We were safe at that point. Yeah. I mean, I think the standout ad was the FTX ad.

That was hilarious. Incredible. Yeah. And apparently Larry David had never done a commercial before. The extended cut is so funny. I think I've watched that 10 times. Yeah, it's genuinely very good. So big congrats of the team that put that together.

The interesting thing has now been the backlash. against, well, against all of the ads for crypto platforms. And the funny thing is people, you know, there was a tweet that went megaviral the week after the Super Bowl, something like you never see advertisements for money, right? And so like that's why crypto is illegitimate or whatever. And it's like, well, these aren't ads for money. these are ads for investment platforms. And it's like, have you never seen an ad for a stock brokerage before?

Yeah, e-trade, scot trade. I mean, come on. How many of those? Like, those are incredibly popular advertise, like, you know, any of these advertised. So just, and then, you know, people are like, well, you know, you never see people advertising for currencies. But it's like, like, these are for the platforms. They're not advertising Bitcoin.

You know, that'd be cool, but they're not. And then all the comparisons to the dot-com ads back in the day, it's like, well, the internet turned out pretty great. Right. You know, what are you complaining about? Let me check what the largest sort of five stocks in the S&P 500 are. These are all internet companies. Yeah. It's like, calm down, people.

They're good ads. They were good ads, and that's why they hate them because the ads were good. and they know that they took an L, the crypto haters did. The other ads were just all for electric vehicles. Yeah, there was a lot of EV, yeah. It was a good game. It was a disappointing, disappointing and tough ending. Oh, man, I thought he was going to pull.

I thought Joe was going to pull that out. Yeah. I don't think really anyone was rooting for the Rams. No, no. I hate to see it. I think Barrow will be better. I think Brady's coming back, by the way. Oh, yeah?

Yeah, I'm just, it doesn't seem like he's done. We're not going to be able to talk about football for another six months now. I know, it's terrible. Well, actually, we can talk about fan-controlled football. I recorded a podcast with those guys. That combines two of my favorite things, cryptocurrency and football. So that's right. So that was because we recovered it in the show.

Yeah, and one of their investors, reached out and said, hey, you know, you got to talk to this guy. And I'm glad I did because it sounds pretty awesome. And we uncovered all the secrets behind fan control football? Yeah, you, I mean, you actually call the game. You can, as a fan, you can call the place. It's starting, it's starting in April. I think we got to go. It's down in Atlanta. It's filmed in like a studio. It's a 50-yard field. I think it would be great. A studio field. Indoor's 50-yard. doors it's like a rena league style 50 yards johnny mansell was in the league last year maybe britt maybe brady will make an appearance i don't know i don't know that doesn't know

like you got to be a little bit washed to play in the league but brady's i mean height of his game still that's yeah okay so there will be some more football chatter we do definitely be talking football We have a backlog on this show. We have like 10 episodes in our backlog. I don't know how, because we're always scrambling for episodes. And then all of a sudden we're insanely backlogged. We're very backlogged. We did two this week.

So Jared Nussinoff was on the show, founder of MASH, which is one of our portfolio companies, building a lightning-enabled content monetization engine, I would describe it as. So that was a good episode. You threw them under the boss talking about torrenting back in the day. Yeah, that was pretty funny. So Jared used to sell bootleg CDs of unreleased tracks from musicians, I guess, in the early 2000s, late 90s. And this is actually in the pre-Torrent era. I didn't even know that file sharing was a thing before Torrents, but this was in the FTP server era.

Oh, yeah. I remember when I had a friend that got a CD-Bern. at Circuit City back in the day doing the same thing. That was a good business to be in. Yeah, so apparently Jared would sell these for like $10, $20 a pop, which is like, I guess if there's scarcity, and you can't get it anywhere else. It's not like in today's age of Spotify and YouTube.

So it was a good business back then. Yeah, that is a good business. And then Ria set down with Matthew Chaim. This is the founder of Songkamp, part of our music NFT series. That series is going very well. Yeah, we even rolled out a custom theme, and there's an Easter egg in this episode. I don't know if you noticed it.

Well, don't spoil the surprise. Go listen to it. All right. Well, I have to tell you because it won't make sense if I don't tell you. So the Easter egg is that the intro music in that episode is a generative audio NFT. Pretty great. from I think OMG Kirby

but it works great as podcast intro music and don't worry if you own the NFT you have the IP rights to the music

100% full rights so that's why we're able to to use it I think music NFTs are going to be huge yeah I'm a fan I like the generative ones

I mean the idea of having music expresses code which exists on the blockchain and is then rendered in your browser. I mean, same with generative art NFTs, like the art blocks idea. I think it's a really cool notion, you know, like an NFT that's fully on chain. It's not like

referring to some external file held somewhere else on the internet. And the, you know, the challenge being create, you know, sufficient diversity in a number of NFTs while also having them be musically compelling. It's an incredible challenge. I mean, you know, because that's what people like is creating distinct members of the vintage with in a programmatic way. But if you can do it and have them still sound musically good, that's kind of incredible. Mostly the generative music, NFTs I've heard just sound like random assortments of sound. It's more like noise than music. But, you know, I feel like we're progressing towards actually good, genuinely, generally.

Generative music NFTs. Someone's going to come out with podcast NFTs pretty soon. We're going to get the show on an NFT. Well, you could train a, what's it called? Like a deep fake generator of our voices and then scramble words and then create an audio output based on that. So you probably could, you could have us saying anything really. I mean, think about how much audio content we've created now.

Just out there, yeah. Just someone splice up the, we need to get one of those guys like Calcanus and the all-in guys have. It just splices the episodes. We need an intern, actually. Yeah. We need like a CMS intern style content person who's just a mastermind. But there's only one, I mean, CMS intern can't be replaced. No, I mean, that guy's a Mount Rushmore of Twitter people.

Yeah. Some superlative memes over the years. Well, should we get into some news? First deal of the week is us. So we raised a new fund. Yay. We got a new fund. More capital to be investing into early stage startups.

And we also promoted RIA to general partners. So congratulations to Ria. Ria's a rock star. Yeah, that was a little bit overlooked in the announcement. Ria as the fourth GP. We're very excited, very proud of her. Fully deserves it. And so she joins, obviously,

the two of us and Sean Judge, four GPs, and 250 million of dry pow. And we're going to be putting it to work. We're going to be hiring some people over the next year. So stay tuned. We'll have a bunch of stuff going on this year. So nice to have a Castle Island deal to start. Yeah, love to announce their own deals. And there's coverage on Bloomberg. And also we wrote a blog post in case you curious, where we're going to put it all. We have a medium post. Where we're going to put all the money? Yeah.

Yeah. Have you decided that yet? Well, I don't exactly know yet. It's just one of those things where you don't know until you do it. Some good memes out there in the Twitterverse. I had fun yesterday with all the reactions. Yeah, some disconcerting memes, but also, you know, a lot of kind people. And so, you know, thank you for supporting us.

Thank you for supporting us. Podcast will stick around. So nothing will change here. So, yeah, I saw a funny comment saying our fundraise isn't real until it's announced on the Deals of the Week section of On the Brink. Oh, really? All right. Well, we're on the books. It's real now.

It's real now. It's real. We said it. All right. Well, let's move on to some other deals of the week. Here's a big one. Forbes has received a $200 million strategic investment from Binance. What a headline that is?

Yeah, the interesting one. I think Forbes and Bin Laden. finance had kind of a feud or maybe CZ did. And I guess CZ's preferred way to resolve that is to take a significant stake in the company and presumably influence its editorial decisions. I mean, that's just the alpha dog of alpha dog moves right there. Yeah. You don't like the coverage. I will buy the building. Yeah, exactly. I kind of love that. Good, good for him. Next up we have three Vox Labs, their data composability network. They raised 30 million from multi-coin, USV, Metacartel, reciprocal DCG and others.

Next one up is Ref Finance. This is an automated market maker on the NIR protocol. They raised 4.8 million from Jump Capital. Then we have Axler, a blockchain interoperability network. There is 35 million in a series B from Dragonfly, polychain, North Island Ventures, and others. North Island. That's a good island. A sister fund, yeah. Good island. Next one up is Circle. So Circle in the Concord Acquisition Corp, they've revised the term of their SPAC merger, basically doubled the price of the business, it looks like. So the company is now valued at $9 billion.

Interest rates are going up, you know? The stable coins, it's great for business. Circle is a rates bet, right? Because they don't pay interest on, you know, obviously, U.S.D.C. outstanding and yet they're deploying the reserves into treasuries and things like that. So rates are up. SPAC prices up. I will say I got a look, a sneak peek at the new Circle platform.

And it's pretty awesome. They're coming out with a big revamp on the product side. And it's a really great product. So shout out to the Circle team. Got a little peek under the hood this week. To what extent would you decompose the prospects for Circle into their circle for businesses platform and then just their current business model, which is more rates related. Well, I think there's going to be a huge market for just software around stablecoins.

So just the API business and like the paid API business around getting things on and off stablecoin rails seems to me like sort of a stripe for crypto type of a play more than an interest rate, but obviously they make money on the float, too. So it's kind of both. Yeah, so they'll be cheering the resurgence in rates. So lastly, fireblocks, everyone knows them. They have acquired first DAG, which is a crypto payments processor. More and more M&A. Yeah, more and more M&A on the run. When your business is scaling up and your portfolio is growing, you don't want to waste precious time on manual crypto treasury management or settlement. Fireblocks can handle that for you with smart custody solutions for your crypto business,

along with industry leading security technology. Whether you're starting a new fund or expanding operations, Fireblocks offers scalable solutions for companies of any size. From day-to-day crypto transactions to the most advanced defy strategies, Fireblocks is here to give you a competitive edge. They'll take care of the back end so you can focus on the big picture. Visit on the brink.com slash fireblocks to learn more. So let's hop into some news of the week. So the first one up, let's talk about BlockFi. And I guess we'll just disclose, disclose, disclose that this is a big position for our fund. And we're huge fans of the company.

So conflicted here. They have settled charges with the SEC around their interest account. And it is a $100 million settlement, $50 to the SEC, 50 to a number of states. It is a pretty big deal, I'd say, for the crypto industry. certainly, I think, is a big positive for BlockFi in a lot of respects. Obviously, $100 million is a lot of money. And there's a lot to talk about here. I guess the first is, you know, we can debate all day whether or not this product actually should have been a security or not. And I think there are some good arguments on both sides, but it frankly doesn't matter. You know, the SEC has come out and said that that account, as it was constituted, is a security. So others that look like that in the industry, you could only, you know, leads you to believe that those are securities too.

And I guess there's a few things to jump into here. The first is I think it's a net positive for the industry to have clarity on this issue. And so now you have the ability to actually bring a product to market in a compliant way. And so this clearly lays out a path for BlockFi to revamp the product, keep it in market, first of all. And so there is not like a wholesale shutdown of either the business or the product. It's a revamp of the product. So I think you have to look at it as a big net positive that the SEC was constructive on just the general concept of interest bearing accounts. And you need to have some tweaks to them.

So I think that's a positive. I think the other positive was that the agency worked with the company. And so this wasn't one of these, you know, obviously like $100 million, a tremendous amount of money. It looks like that's deferred over a number of years. But they didn't come in over the top and just shut them down. So there is some precedent here that, look, if they come after you and you're constructive and your open kimono, then there's a way to work with the agency. So I think that's good as well. I think if you're blockified, then, you know, again, disclosure were conflicted.

But this just puts them on a different playing field, sort of a reset event that their regulatory issues are kind of cleaned up and should be a, should be a. net positive for that business. There's a few other things to say, but I'm curious what your take was on this. Well, I think it's a very expensive way to learn what the SEC thinks about this, and

you know, it'd be obviously less arbitrary if the SEC were to have simply volunteered their thoughts on the interest accounts instead of regulating by enforcement. The regulation,

regulating by enforcement also means I share a view that this is has the potential to create a regulatory moat for the firms that are large enough to absorb these hits which block five certainly is and it will most likely be very tough for smaller firms that are trying to do the same thing but don't really have this the stomach or ability to to countenance these adverse outcomes. I want to point listeners towards Hester Purse's dissent here, as always, very astute and fair. And, you know, she helpfully points out that Blackfine wasn't sanctioned for defrauding its customers, for failing to return the crypto lent to it, for, you know, they weren't sanctioned for anything like that. It was just more about

running an operation that the SEC felt was an unregistered security and misrepresenting over collateralization. So basically a failure of disclosure. And so, you know, it's not that there was money lost. It was that they, you know, made their clients money, but they, you know, misrepresented the risk in some cases. I think that that's an important clarification. Yeah, and I think the Hester Purst, look, her dissent is spot on.

And we're really lucky, I think, to have Hester Purst at the SEC. She points out some of the inconsistencies in the SEC's approach here. Going through the Investment Company Act, going through this S1 process to revamp parts of this product, it's not clear that the SEC is addressing a lot of these applications in a time-sensitive way. And so, you know, there's some problems here with the process, for sure. It's great to have this on record from Hester. I have no idea if this is going to have an impact on how fast the SEC prosecutes some of these applications. But I think she raises some great points.

They're sort of like, hey, come to us and talk to us invitation from the SEC. But in order for that to actually be something that entrepreneurs want to do, you need to actually commit to working with the companies. and you need to kind of craft sensible and timely regulatory paths for companies. And so I did really appreciate the fact that there's a dissent here on this ruling. Yeah, I think there's a possibility for this to be kind of a rug pull in terms of the SEC saying, all right, the way you offered your product is not permissible. Here's the alternative route, but then putting a roadblock around the alternative route. it remains to be seen

how that will exactly shake out and under which manner they could register the BIA with the SEC Yeah and to that point I mean there's a path here where this becomes a really viable product for people with large balances because you can offer these kind of bespoke arrangements but there's a you know there's a simultaneous path there

where it just becomes really difficult for small balance accounts to get access to these types of products and services. And I'm not talking about Block 5 specifically. I'm talking about writ large. You know, you risk sort of entering this regulatory regime where credit investors can get access to a lot better products in the crypto space than, you know, just everyday users that want to have an interest account. I do worry about that.

I also worry that, you know, a lot of other companies here are just going to take the path of going outside the United States and offering these products and, you know, gating U.S. customers. And there's the risk here that the U.S. becomes a lot less competitive around some of these account types. Yeah, the other thing I always think about is if it becomes regulatory challenging to offer interest accounts to retail, then you'd imagine that crypto yields would actually creep up because the supply

would, the supply of credit to these systems would be really choked off. So I think it would be a positive effect on yields. But that would kind of engender an increase cost of capital in the industry. I think that's right. I think that's right. There's a couple other things that I think keep on the radar. One is that there are other companies with this product and market right now that offer it to U.S. customers.

And so we'll see what happens there, other centralized companies. The other thing that's going to be interesting to watch here is, I don't know how they're going to treat the defy platforms. And so, you know, the protocols that are basically doing the exact same thing, these protocols are kind of known entities in terms of who the founders are, who the teams are, who the backers are. And so you would think that there might be, you know, some sort of an action against some protocols at some point in the future.

So we'll see. I don't know. You know, what does it look like to go after a defy protocol that offers essentially the same product? Yeah, and, you know, I haven't really seen any evidence that many of these protocols that were doing exactly the same thing effectively have really steeled themselves against regulatory pressure in a meaningful way. You know, oftentimes as a U.S. based entities, U.S. based individuals backed by U.S. based firms. So I'm dubious that they can resist the SEC should the SEC turn a similar scrutiny. them. Moreover, the SEC was scathing in their treatment of blockfai's disclosures around risk.

DFI is not exactly famous for making transparent disclosures around the risk of using these platforms. Quite the contrary. Risks, I'd say, are frequently misrepresented or just non-existent. You know, I mean, think about disclosing multi-sig arrangements. These teams are averse to doing that in many cases. So I think if the SEC applied the same scrutiny to BlockFi, then they did to a lot of DFI protocols, they'd find a much worse situation with regards to disclosure. Well, and I think almost by design, right, these things are intending whether they are there or not to be community on software. And so what does it even look like to go after a D5 protocol in terms of subpoenaing information? I mean, you go after them, you ask for all sorts of disclosures.

At BlockFi, they have a general counsel and a bunch of lawyers that are going to go get you all the disclosures. They're going to serve it up to you in a timely fashion. But, you know, with a defy protocol, who do you ask that information from? And do you look on chain and, you know, play that out a little bit. Let's say you want to find a defy protocol. What if the funds are held in a multi-sig and the majority of people are sort of unknown or, you know, you don't know who they are at least and they don't want to sign on that transaction? I just, it's going to get really hairy, I would think. That strikes me as a very optimistic view.

I mean, like, there's salient information about DFI protocols, which is not visible on-chain. I mean, multi-sake arrangements are a great case study. Like, obviously, DFI protocols should disclose how they are safeguarding user funds if there is a custodial element to them. And generally speaking, sometimes they do, sometimes they don't, right? But that's, you know, clearly if you were to design a disclosure regime, that was intended to enhance, you know, customer protection, a lot of them make, you know, educated decisions, you know, you would ask for that information.

That's probably the most basic thing. But like Polygon, for instance, they were sent a letter from Chris Black quite famously asking for details on their multi-sig arrangement and they just refused to answer. They wouldn't have that option with the SEC, right? So if you apply like any meaningful standard, of transparency, it's going to be tough, or at least the current models can be found lacking.

So I don't know. I don't know what it's going to look like in the context of DFI, but, you know, this is a big landmark settlement here, I think, for the industry. And I think we'll probably see some firms get in line, try to figure their own individual products out with the SEC on the back of this. So I think a net positive, I mean, could have been a lot worse, both for Block V for the industry. I'm glad we have rational people at the SEC that are putting out dissents and pointing out some of the roadblocks here. And I think net net this will be looked at favorably in the arc of history. So elsewhere in SEC News, the agency is probing trading affiliates of finance U.S. Yeah, it looks like so that it looks like what they're probing is some affiliation.

So some market making firms that have some of the same owners as the Topco. And so obviously in a securities world, you wouldn't have an exchange that owns the market makers that are trading on the venue. This kind of like a market structure issue where there's a lot of things that crypto industry is going to have to learn in terms of what roles should be segregated in financial services. Where in crypto you have sort of retail brokerages that are also. exchanges that may or may not have affiliates with market-making firms. So there's a lot of conflicts there. You also have sort of like data issues where people are not relying on third-party reference rates. There's a lot of stuff there that eventually I think will need to get cleaned up. You have firms that are acting kind of like clearing houses as well. So who knows where this one goes and I

don't know anything about the market-making firms, but market structure, I think, is going to be a thing that eventually the SEC gets around to in the crypto space. So stay tuned on that. I guess the really big story this week has been the intersection of crypto and the trucker protest in Canada, which has really struck to the heart of crypto Twitter in many ways. Yeah, some of these crypto Twitter people are like in the mix, it looks like. Yeah, it's kind of wild. So for context, truckers are, I guess, occupying or at least parking their trucks in, various Canadian cities, Ottawa mostly, to protest, I guess COVID-related, vaccine-related mandates on trucking as an industry, as far as I can tell.

and they were crowdfunding on GoFundMe and then GoFundMe basically shut off access. And then there are a number of other platforms that sort of cropped up, including what seemed to be a kind of informal Bitcoin-based crowdfunding effort, which actually gathered some material amounts of funds. And then Trudeau passed an emerging. resolution, an order, for the first time, I think, since the law was written, asking for new stepped up powers in order to, you know, end the blockades. And part of that was a financial element to basically make it illegal to donate to the truckers. And this actually carries. And this actually

carried direct sanctions against literal Bitcoin addresses that were involved in the crowdfunding effort. So it's a very, very strong test of sort of decentralized payments systems. One that I would say the Bitcoin community is sort of not passing with flying colors right now. This is kind of a wild situation. So they've sanctioned 34 wallets across a range of protocols here. I mean, they're talking about going after people's brokerage accounts. This is like a very political issue here, kind of calls to light the need for non-sovereign value stores. Yeah, it's not something I would have expected from Canada. So there's a Bloomberg article saying, quote, the new rules make demands of a broad list of entities, including banks, investment

firms, credit unions, loan companies, securities dealers, fundraising platforms, insurance companies, fraternal benefit societies. They must determine whether they're in possession or control of property of a person who's attending a legal protest or providing supplies at demonstrators. If they find such a person in their customer list, they must freeze their accounts or report it to the Canadian police or Canada's intelligence service. Any suspicious transactions must be reported to FinTrack, which is their version of FinCEN. So these are important. broad-based financial, not just surveillance, but really like seizure-related rules here that cover not just banks or payment processing, but also, you know, securities companies, investment platforms,

just an enormously broad, you know, broad financial crackdown on not just protesters, but people affiliated with them or supporting them. It's kind of, you know, deeply, deeply perturbing. And it kind of makes me think, wow, you know, we spent 13 years sort of doing crypto stuff as an industry, but very little of it was actually spent building, you know, censorship-resistant crowdfunding platforms, you know, because that clearly hasn't really worked in this instance. So it made me sort of reflect on our priorities as an industry a little bit here.

Yeah, I mean, there's a lot of stuff that still needs to get built. This is just a wild situation. It's really, it's easy to ignore being in the United States, But Canada is just, this is the biggest story in Canada by a long start. Yeah, I mean, I don't even think it is that easy to ignore. I mean, this is just a much more aggressive version of something like a choke point, which we did have in this country on, you know, smaller scale. It's a bit more quiet.

But, you know, politicizing banking activity, we did a little mini-series on that. And I don't know if it would happen in this country. I'm not even sure it's possible. constitutionally speaking with maybe, you know, the Fourth Amendment, things like that. But imagine if Canada had a CBDC, they wouldn't need to, you know, use all these elaborate tactics to sort of financially disempower protesters. They could just with a click of a button suspend their accounts. Yeah.

So we might be in the final days of being able to actually have financial sovereignty. before we get CBDCs and then it's over. Yeah, I think that's probably right. Well, let's move on. BlackRock, they're reportedly evaluating adding crypto trading to their Aladdin platform. And I'm just going to do the BlackRock senior leadership team of favor here with this evaluation. This is a good idea. You should do this.

That's a good idea. You're going to make a lot of money if you do that. I don't think there's a lot of asset managers at this point left that, that haven't at least announced their intention to do something with crypto. So welcome to the party, BlackRock. A lot of them just announced that they're going to do something. It seems to be that mostly is just fidelity, like doing real stuff. But BlackRock, if you're evaluating that, ease of implementation,

it's going to be pretty easy for you. There's a lot of stuff out there you can use. And then market opportunities really big. And so you should do it. Yeah, that classical consulting takes. right there. Top, top right quadrant.

It's very easy to do this right now. And it's a big opportunity. And every compliance person at your firm doesn't want to do it because they're going to have to work a little bit harder. But you should do it. So I just found out what Aladdin stands for. It's actually a pretty clever. It's asset liability, debt, and derivative investment network.

Kind of a pretty clever acronym. Yeah. well it's a huge platform it's a i yeah i didn't know what that stood for so yeah obviously black rock should do that here's an interesting story that went overlooked a little bit relevant to our mining miniseries apparently the government in china's intermongolia province which is not mongolia the country it's a province of china uh it's where a lot of mining used to occur um has announced a electricity surcharge for cryptocurrency miners, which is only a thing you do if there's actually the presence of mining or an intention to reopen mining there. So that kind of implies that

miners are either already back online in Inner Mongolia or will be at some point quite soon. So it's a bit of a reversal from this story that all of the hash rate deserted China. I can't do this every week. Just China's in, China's out. This is like a terrible ping ponging. Yeah, well, so, I mean, we did say on this show while back that they're actually probably back in in a meaningful way. And so, yeah, it looks like they're back in bearish for U.S. base miners.

I guess. I guess. I don't know. They'll probably ban it again next week. So the New York Stock Exchange filed a trademark around an NFPA. marketplace. You know, there's a lot of trademark filings. Who knows if this is real. Bank of America is up there with just the biggest trademark filers and patenters of blockchain stuff in the space. Hopefully New York Stock Exchange is not out there doing just innovation theater trademarks,

but it looks like they're trying to put their name on some NFT marketplace concept. So there's a good piece in the Wall Street Journal on how the regulators found the Bitfinex hackers. What a good piece that is. What a crazy story. And the critical piece of evidence that they used to crack the code was a $500 Walmart gift card. Well, yeah, crazy. So I'll probably get this a little bit wrong. So a small piece of that heist was siphoned off onto an offshore exchange. That offshore exchange was linked to an email address. That email address was tied back to a service to buy Walmart gift cards.

The IP address was tracked to an IP address in New York that was tied to the hacker. And this was a couple years ago, it looks like. So they were kind of just slowly trying to get money out of this thing. And Walmart gift cards was one of the laundering ways. $500 Walmart gift card. I mean, just talk about a drip of the funds. They had $3 billion. and they just could only get like 500 bucks out at a pop.

It's crazy. That's like a, it's like almost biblical in terms of how frustrating that must be. It's like, you know, it's like tantalus, you know, the story of tantalus and the,

I don't. I don't know. In the Greek mythology. It's where tantalizing comes from. Well, etymology lesson there. So I think tantalus was cursed. He was in the underworld,

I believe, and he was cursed to sort of, he's like standing waist deep in a pool of water with, you know, fruit tree above him. And every time, he was dying of hunger and thirst. I mean, I guess he was in the underworld, so he couldn't die exactly. But he would reach up for the fruit and the fruit would sort of just go out of his reach. And then he would go to take a sip of water and the water would drain. And so, yeah, Tantalus, it's like a, you know, he's like a cursed for all eternity to suffer that fate. Kind of like the, like, like, the, like,

like the alleged BitFanex hackers, they've got a huge fortune, but they just literally can't do anything with it. Oh, man. Yeah, that's kind of like having a Bitcoin ETF filing with the SEC. It's just to get a little bit closer. They ask you for more info and just you can never have this.

Yeah, you can't get it. Yeah, tantalizing. Did you read Alex Thorne in the Galaxy Digital's piece on Avalanche? Really well done. It's in my bookmarks. But, yeah, Galaxy research is one of my favorite. kind of researched us in the industry right now. Maybe my number one favorite.

Yeah, I mean, I think he's going to be a little bit upset if he's not the number one draft pick. Yeah, Fidelity Mafia. So I did a cool event, the Canicord Digital Assets conference this week. We actually taped a live version of the podcast. It was Dan from CMS, Matt Beck from DCG and Pat McAvoy from Canacord, had a good little chat, talked about Tether, which every time we talk about Tether with Dan, podcast downloads Spike.

So I think this is going to be an all-time episode. But interesting development at that conference. So Ben Reynolds, who's the chief strategy officer of Silvergate, talked a little bit about their roadmap. They're going to launch a stable coin in 2022. So I'm interested to see Silvergate push deeper and deeper. Obviously, they have all that DM infrastructure now that they bought from Facebook. Yeah, we're going to see a collision of stable coins in the banking sector, whether it comes from banks issuing stable coins or stable coins acquiring bank charters. looks like Avanti's on the brink of getting one, actually, or other stable coins, like maybe

USDC, I think they would be well served to get access to a Fedmaster account. And so I think that could be the story here the next year with stable coins. So Twitter has added support for Ethereum wallets for its tipping feature. So I think that was the case of just, you know, Jack left and there was a lot of people that just wanted to do Ethereum stuff. And so now they're doing some Ethereum stuff. Yeah, well, they have the support for hexagonal NFT profile pictures. I see that you haven't changed yours.

You still have a legacy profile picture on Twitter. I do have a legacy one. I probably do need to change this to an NFT, right? Well, you just have to signal to people that you're crypto-native. You can't have them thinking that you're a crypto-boomer. I have, I got an NFT from CoinDesk back in the day. I think I bought a bunch of NFTs tied to conference panelists. I like gave them to the people that spoke on the panel.

So like I think I bought a Tom Jessup one. I just gave it to them. You know, those things, who knows? Those could be very valuable NFTs. Yeah. It's like finding gold de blooms from a Spanish galleon that sink. Yeah. You know, you find some of these 2017 vintage NFTs.

Those are, those are going to be collectors items. So we, yeah, we have very backlogged. We don't actually know which shows they're coming out next week, but I assure you they'll be good. They'll be really good. I think we'll have at least one with another fund manager. So teaser there. It's about defy and regulatory.

So that'll be a lot of fun. All right. Have a good weekend. We'll see you on Monday.