On The Brink with Castle Island - Weekly Roundup 03/11/22 (Biden's executive order, Korea's pro-crypto President, Is Bretton Woods over?) (EP.296)

Episode Date: March 11, 2022

Nic and Matt return for more deals and news of the week. In this episode:  The fallout from the seizure of the Russian fx reserves Did America default on its obligations? How are Chinese interests served by the US weaponizing the dollar? Can Bitcoin become an inter-state settlement asset and sovereign-scale SoV? Zoltan Pozsar declares an end to Bretton Woods We digest Biden's executive order The White House calls for 14 studies on crypto and CBDCs A pro-crypto candidate wins the Korean presidential election BNY Mellon gets into MPC crypto custody Stripe now supports crypto payments The Verge profiles Justin Sun Does insider trading apply to commodities? Coinbase blocks 25k Russian users from the platform Content mentioned:  Nic in Coindesk, America's Quiet Default The Verge, The Many Escapes of Justin Sun Sponsor notes:  Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Learn more at fireblocks.com

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 concentrated 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 Breconcern. Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. In this episode is brought to you by Fireblocks. More on that company later in the episode.

Well, it's snowing again in Boston. Is that right? Yeah, it snowed again. Boston does that. I mean, sometimes it snows all the way through April. Oh, yeah. We had a blizzard in April when I was growing up. It was like three days off of school.

It's about 80 degrees here. Can't complain. Busy week, huh? Yeah, so there's still a war going on. No update there. They're going to be a war. Well, a lot of financial updates there, for sure. It was definitely a busy podcast week.

So Ria sat down with Verite and Vanessa Magos. That was for the music NFT series. She's knocking it out of the park on Web 3 music miniseries. We did a custom, like, visual for that one. Did you notice? I did, yeah. That looks good on the website. And people might not know that we have a website, but it's, what is it again?

On the brink dash podcast.com. So yeah, I mean, we do actually post. We have a whole website dedicated to our podcast. On the brink dash podcast.com. Yeah, that's our website. And there is no place to go and just talk about the content of this podcast, but there will be soon. Uh-huh.

So that's a little tease. We're going to do a little community action. We're going to have a place that Brinkers can go and chat about the episodes. Yeah, so this was a problem, I guess, because, you know, Brink Nation would kind of reach out to us on Twitter and stuff, but we do need a central discussion repository. So that will be coming soon. Coming soon, we were very deliberate about who we chose for that. We're very happy with the platform that we're going with. It's below the radar platform.

I'm sure a lot of people haven't heard of it, but we're going to drive a lot of traffic there. It's unknown to many of you, but yeah, there might be, dare I say, some Web 3 elements even. Yep, it's going to be good. Wow. It's going to be really good. So prepare yourself, Selprink Nation. You sat down with So Rob for Rudy of fan-controlled football, and I think that was because we'd mention it on the show, right? Yeah, we mentioned it on the show.

It's two of my favorite things, cryptocurrency and football. They're doing so many cool things in that league. and I am really I'm thinking about going down I think it starts in at the end of April but I want to get down there and see a game or two so it's it's not a full court though right it's it's a 50 yard field is that the idea yeah it's I think it's 50 or 55 yard field it's kind of like an arena league field and you get to vote on the plays and so as a viewer it'll pop up you know a number of plays. One of the things I asked him was like, well, you're just going to run like Hail Mary from the 10 yard line in or something. How do you control it being a good play? And I guess there's a not every play in the playbook is available per play. So it'll pop up and it's almost like Madden

where it's like here are the three or four logical plays to run in this situation. You kind of like run those. So the recommended plays. And you can vote on the players too. So the other question I asked was, well, what if the quarterback is just constantly doing audibles? And the kind of control against that is that you can vote out the quarterback. With on an in-game basis, you can kick the quarterback out. Yeah, you can kind of like vote on who should be on the field even. So it's almost like professional wrestling in the sense that you have these athletes that are building up reputation and getting people to like them.

But can you imagine how cool that would be to just vote someone off the field? like Carson Wentz, you probably would have already voted him out of the league, right? Can you believe that that's your quarterback? No, I can't. As a Skins fan, I probably should have a vote here. I'm not favorable on that. No, that's just, it's going to be a tough year for you. Wouldn't it be funny if there was a hostile takeover of a team in game

where the opposing fans acquired the tokens and then just caused chaos? Well, so that's what we talked about at the end of the episode. I was saying what I would do if this was the NFL is I would just vote to just control the Jets plays. And I would just run that butt fumble play nonstop. It could happen. They can't get any worse, even with hostile control. It's hard to see how the Jets would do worse. Yeah, no, they just, you let the Jets be the Jets.

That usually takes care of itself. The joke of a franchise. So you wrote an article for CoinDusk. America's quiet default. Yeah, I came out of retirement and I'm back. They let me write, I think this thing is 1600 words,

which is double the recommended length for a column. But it's an important topic. You know, it's good when it starts with a mention of bank or. The bank or the Kane's idea. Maybe that's coming back, huh? So it may be, yeah. So the whole point of this article is that,

you know, we had Bretton Woods one, which lasted from 1944 to 1971. That was the gold. It was a, you know, hybrid gold standard where if you had dollars, you, you as a government could redeem the dollars for gold that the U.S. was holding. And then eventually we defaulted on that. We produced a lot more dollars than we had gold. And then certain countries were calling our bluff and sending warships to collect the gold. And then we severed the peg. said, okay, no more gold. Then we had the petrodollar system where we gave military support to various oil-producing nations so that they would back the dollar with oil effectively. They would only sell oil for dollars, and then they would take those dollars they earned and buy treasuries. So that was the whole system that Kissinger really architected that with the Saudis. And then that system kind of lasted for a while. And then it also... started to decay. And after 2009, you know, foreign central banks basically started to get really suspicious of the Federal Reserve and they stopped buying as many treasuries. And they really stopped in

2014. They basically started divesting treasuries. At the same time, the U.S. started getting much more aggressive with their sanctions. So they sanctioned Russia and Crimea. We had aggressive sanctions on Iran, in other countries. And then, of course, And this is what precipitated the article. Last month, we had the most, probably the most aggressive, you know, sanction ever, which was freezing the $630 billion worth of reserves that the Russian Central Bank owned. And they weren't just in dollars, but it was effectively orchestrated by the U.S. And what I'm arguing is that that actually constitutes a soft or an implicit default,

where the U.S. treasuries were as good as gold, they were the savings device for sovereigns throughout the international system, including by our enemies or adversaries. And by showing a willingness to freeze them, even if it's warranted, we are undermining the role of U.S. debt as that collateral in the international system. undermining it as a store of value because you're introducing the risk of confiscation. And so it's no longer risk-free. It was really believed to be risk-free. And that's basically the argument I'm making is that U.S. Treasuries are no longer risk-free and something new will have to take that role, whether it's gold or something else.

So, you know, what's the second-order effect here? So sovereign debt gets discredited as an FX reserve, basically. Do you imagine that this would have a ramification where India and China would start to lower their dollar exposure in the years to come? Yeah, they already have been. And like, it's not a secret that China wants to displace the dollar system because the dollar system gives the U.S. so much strategic advantage. And so having Russia orchestrate this war and then having the U.S. respond the way that it did, it actually serves Chinese interests extremely well. I don't know if that's what they planned, but this does materially move the needle in terms of ending the dollar's dominance.

The dollar had had unquestioned dominance for a long time now. China has been not only, you know, slowing their treasury purposes, but divesting from treasuries. They only have a trillion or so. I don't think they're the largest foreign creditor now. And so they have been de-dollarizing. Russia, after 2014, also aggressively tried to de-dollarize, and they bought a lot of gold. But I don't think they anticipated the broad-based G7 sanctions that the Europeans collaborated with, too.

But so this does serve the interest of a country that's interested in a multipolar, multi-currency world, I think Chinese interests effectively. And it does put the U.S. in a tough spot because we do kind of need foreigners to buy our debt. That's why we've been able to issue so much debt at such cheap rates for so long. If they stop buying it, the Fed just has to buy it all

and it's kind of sterilize that issuance. But, of course, that's inflationary. And inflation, what is it today? 7.9%. Yeah. Inflation is prohibitive in terms of the Fed injecting that amount of liquidity into markets. So we are in a bit of a tough spot here. There's no question about that. And, you know, some people might see this as me cheering for America's demise or something. I mean, to be clear, I'm an American. I benefit when the U.S. is the global hegemon. I'm just pointing out what I see is a pretty unfortunate reality. So, you know, as Groman kind of pointed out this week in his write up, we're heading towards a multi-com. multi-polar world here and it was probably officially born this week with some of these actions.

Now, the question is, what is the other currency that will become the store of value here? And is this China emerges, which I think everyone would sort of guess is that the Chinese currency starts to emerge. But you also have to look at things like gold. And I think, you know, obviously you have to look at public blockchain assets, you know, Bitcoin, as potentially, you know, filling some of the. that some of that void. Now, the price hasn't really reflected that, although Bitcoin did hang in this week. Yeah, the problem with Bitcoin is that it's too small to be sovereign scale.

Like, gold is worth around $11 trillion, and maybe half of that is sort of investment gold. And so that is a lot that governments can use. It's pretty liquid. Bitcoin is worth less than a trillion dollars. So it doesn't have the liquidity profile to be relevant at the sovereign level, just yet, my opinion. Whose job is the chief investment officer of the United States? Because if you're sitting there and you're seeing that we're going to have this multipolar world here, there's going to be the emergence of dollar alternatives as a store of value on global scale, you'd want to have exposure to that. You'd want to have a long position on the yuan, and you'd probably want to have some Bitcoin. You'd probably want to have some other commodities on the balance sheet. And you'd want to have

a percentage of whatever network ended up being the multipolar alternative. Yeah, I think Jerome Powell is our CIO for better for worse. So like, you know, this is when you want to dust off the Satoshi coins here and actually move them into the treasury. Go over to the NSA and say, hey, we actually need those now. Bring those back over. We know you guys created this and have 12% of the supply. Why don't we bring those into the coffers? Yeah, just wander over to your colleagues at the NSA, yeah. But yeah, that was what I suggested, I think, on what Bitcoin did a few weeks back. I said, just buy or acquire the equivalent amount of Bitcoin that equates to the amount of gold you have, to the fraction of gold that you have. And the U.S. actually has the most gold of any nation.

so it's since there isn't that we should have the most Bitcoin of any nation. We're kind of behind in the Bitcoin race. We're behind El Salvador. I mean, this is a free podcast. This is not investment advice, but it's kind of investment advice to Jerome Powell. Anyway, obviously the U.S. should prepare itself for Bretton Woods 3 or the post-Bretton Woods era by shoring up its currency with various hard assets like golden Bitcoin. and I think that's the conclusion.

The thing that took me back was Zoltan. I mean, Zoltan is like the most famous and well-respected interest rate strategist, just macro strategist. Yeah, so Zoltan's over at Credit Suisse, for those of you who are not familiar, and wrote a widely red piece around Bretton Woods three this week.

Yeah, so he also says that we're moving to a commodity era that, you know, obviously you see what's happening to every single commodity. They're getting repriced. much much higher. We're moving to a commodity-based system where commodities are actually more of the collateral as opposed to treasuries.

And he thinks that the consequence of this is going to be highly inflationary for the U.S. and probably netgoat for China as well. So when someone like Zoltan says these things, you know, I'm inclined to really pay attention. His last line was Bitcoin, if it's still around, will probably benefit. Yeah, he's not been a Bitcoin bull, Zoltan.

He's still part of this camp that thinks that the government is going to crush it at some point, that it's going to be like a little gnat that's swatted by the state, which actually probably brings us to our later topic of conversation, which is the executive order. 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.

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Next one up is upstream. This is a Dow creation platform. They raised 12.5 million from Bold Start, Tiger, Alpaca, Human Ventures, and others. Then we have a fund announcement. Bain Capital announced the formation of Bain Capital, crypto, which is a $560 million crypto-native fund. Congrats to Bain. Congrats to Stefan and the team over there at Bain,

Stefan and Alex. Next one up is Cake Defi. They launched a $100 million fund focused on defy. I mean, just the amount of capital flowing in here. You know, I don't see a bare market in private valuations anytime soon. Speaking of which Spartan group, they raised a $200 million metaverse fund.

Next one is Lunar. This is a Nordic. FinTech platform, they raise 77 million, and with it they are going to be introducing a crypto trading platform. Then we've got Wallet Connect, well-known crypto wallet infrastructure company. They raised 11 million from USV-1KX, Coinbase, and others. Next one is Karate Dow. This is a blockchain gaming project that raised 6.85 million from Polychain.

Then we've got UNXD, a Metaverse fashion company. They raised 4 million from Anamoka, Polychain. gone and others. Two Metaverse fashion companies. You have to look good in Metaverse. If you're looking good, you're feeling good in the virtual world. And the last one is Espresso. This is a Web 3 privacy platform. They raised $32 million from Greylock, Electric, and Sequoia. Busy deal week. Probably the news of the week has got to be Biden's executive order. A lot to cover here. It's a lot to cover. So this was the long, awaited executive order. And, you know, People thought this was going to be pretty tough, I think.

And there was all sorts of rumors flying around various bad things that would be in this executive order. And there wasn't, there weren't bad things. There was basically a call for a bunch of studies. But I sort of thought that this executive order was hanging out there over the Bitcoin ETF for a while, that the SEC was unwilling to do anything on the Bitcoin ETF until there was an executive order. And that executive order, I was thinking that the executive order would just assert that the SEC, had full control over the crypto commodity spot markets and that that would solve that potentially,

that part of the SEC's ETF view. But I don't think that was, you know, it's clearly that was not true. Yeah, the SEC wasn't mentioned much, actually, in the order. What I found, it was much more focus on CBDCs, which was maybe, slightly perturbing. Certainly, Biden seems very keen on CBDCs. But aside from that, you know, it just called for a bunch of studies, basically. I did like that in the first paragraph,

they said that 40 million Americans have invested in traded or used cryptocurrencies. So right off the bat, they just had to make that clear, you know, that a material amount of people use this stuff. 16% of adult Americans. Yeah. So I think you pointed out, it's nice to be able to just point to a White House executive order to show how big this industry is. Why don't I just hit on a few of the bullet points and then we can go deeper on some of this stuff? So the executive order calls for some measures

to number one, protect US consumers, investors and businesses by directing the Treasury Department and a number of other agencies to assess and develop policy recommendations around a number of things. And so oversight over systemic risk, safeguarding of assets, the same. second thing is protect U.S. and global financial stability and mitigate systemic risk. So they're going to ask the Financial Stability Oversight Council to do a study, basically.

Third thing is mitigation of illicit finance and national security risks involving digital assets. So there's going to be some study into policy frameworks to cut down on illicit activity. The next one is promote U.S. leadership and technology and economic competitiveness. So the Department of Commerce is going to work on that one. And coming up with a framework for how the U.S. can be competitive by leveraging digital assets. Next one up is about equitable access to safe and affordable financial services. It seems like the Treasury is going to have a role in that, working with some relevant agencies, produce a report on the future of money and payment systems,

and we'll see what comes out of that one. Two more. The second to last one is support technology advances and ensure responsible development. using digital assets. So this one is a little less clear to me. There's going to be a study. There's going to be a deep dive on technology advances, design, implementation of digital asset systems, looking at privacy, security, reducing negative climate impacts. We'll see what happens there. And then the last one, and I think this is going to be the big one, is explicitly explore a U.S. Central Bank digital currency and to do a study on whether or not the U.S. should release a C.B.

DC. And the administration is going to work across a bunch of agencies and with Congress, and they're going to put these reports out. So that's, that's it. I mean, there's no kind of direct intervention in the markets. There's no reorganization of who the regulators are for certain types of businesses. There might be, at some point, there might be some recommendations coming out of these reports. But that is setting the table for you. Yeah, probably one of the best outcomes we could hope for. By my count, that's 14 studies that they are commissioning, all do within, for the most part, around six months. So what do you do? Do you just go hire like McKinsey to do this study for you if you're one of these agencies? Who actually does

this work? I have no idea. But I'm hoping that they get someone better than Alex DeVries to the climate part. Well, this is going to be like the stable coin, the stable act study, you get some joker to go do an analysis or something. Hopefully they find good people to actually do the on the ground work here. Yeah, with regards to Bitcoin mining, that's obviously going to be a focus. It's interesting because the House Energy Committee and their memo on Bitcoin mining, it was pretty misinformed a lot of it.

So assuming that they actually put real resources into the study on that aspect, I think they'll actually come out much. more optimistic about it because they'll learn the reality on the ground, like what sources of energy these things are actually using, aside from what's reported in the press, they'll learn about the flexible load, how that they're potentially accretive to grid stability. So if they do do an honest accounting of what miners are up to in this country, then I think they'll come out pretty favorable on it. But it does depend who they get to do the study. So what's the actual impact here for startups and ecosystem participants here coming out of this EO?

Anything change? I don't think anything much has changed. You could say some of the quote-unquote regulatory uncertainty has been diffused. To me, it seems like the main thrust of this is just acknowledging the crypto industry as an important part of American competitiveness, which is really cool to see. but then also more worryingly, appearing to go full steam ahead on a CBDC, although the passage where they talked about CBDCs, they did mention privacy a lot. So there's some sort of cautious optimism there,

but I think it's going to be tough for any government to create a truly private CBDC. I mean, I don't think there's political appetite to do a CBDC. if you just look at the commercial banking lobby and look how powerful they are, do you really think that the banks are going to get behind something where an individual would have direct access to Fedwire and effectively eliminate retail commercial banking? It just seems super far-fetched to me.

Yeah, I'm going to go on record and say, I think the way this is going to end up is that USDA gets access to the Fed directly so that they have unlimited support. and they can back their reserves with the highest quality assets. And then USDA handles the actual administration of, you know, the quote-unquote digital currency. And so I think we're going to get a hybrid model where a stable coin issuers effectively do a public-private partnership. And they get made some, you know, kind of different bank charter from the ones we've had before.

And we call that a CBDC and we call it a day. I mean, I'm sure Circle would love that. Can you imagine? That would be just a groundbreaking development. Jeremy Aller had a good thread just on the potential impact of this EO. There was a bunch of good takes, but Jeremy's take was that it's a watershed moment for crypto, Web3, and it's akin to 1996, 1997 when you ended up having the Telecommunications Act and the whole of government kind of woke up to the commercial internet. So he was pretty optimistic about it, which I thought, you know, that's a guy who's been in the trenches on a number of regulatory fronts for the industry over the years.

So to see his take being very positive made me feel a lot better. So that is the executive order, I guess more to come. But the markets rallied when it was leaked the night before. So it seems like Mr. Market liked it. Yeah, the markets were up about 10%. the cryptocurrency markets were about 10% on that news. So, you know, positive development. So elsewhere in state level crypto policy, this wasn't on my radar at all,

but a pro-crypto candidate will be South Korea's next president, Yun Sukhil, the conservative candidate won a close election. he is a very pro-crypto candidate's part of his platform. The interesting thing is that his opponent was also pro-crypto. So they're trying to out pro-crypto each other. So presumably very good news for Korean crypto entrepreneurs. Yeah, so he advocates a 120-hour workweek. I think we should go with that at Castle Island, too.

New hires, it's a 120-hour work week. You just work all day. That might be a reduction of our effort. Yeah, you get to work less. He looks like he's got some interesting takes, though. There was another take that he has around you should be allowed to have substandard food policy. So basically, like, deregulate food safety. Not sure.

That kind of goes part and parcel with the long work week. Yeah, it's just work a ton and eat dangerously. Well, none of that matters. the purpose of this show. He wants to develop crypto unicorns in Korea. He wants to make it easier to get coins that have been stolen from you back.

He did, interestingly, pledge to raise the threshold for capital gains on crypto profits. Will Korea be the first metabrous nation remains to be seen? Oh, that could be interesting.

Good to see these pro-crypto candidates. And my skeptical view here on this executive order is that it was probably going to be a lot worse. My guess is that the Warren wing of the Democratic Party was pushing for this to be a hell of a lot worse. And I suspect that there is a lot of Democrats who want to run next time around on pro-crypto platforms because they see how powerful this lobby is. They saw the infrastructure bill and how people came out of the woodworks, how all these

political action committees are popping up. And we'll talk more about those in the months to come, just some of the stuff that's going on behind the scenes there. But I'm sure a bunch of Democrats are saying, hey, look, we're going to run on pro crypto here. We can't be openly hostile to this emerging asset class. And so let's do a bunch of studies. Yeah, I mean, the political calculus is pretty obvious.

It's not just about the lobby. It's just also about the facts on the ground. There's a lot more people that are pro crypto and for whom it really moves the needle than there are anti-gripto, right? Like, as loud as they are on Twitter and in the news. Yorker and the Washington Post in New York Times, stalwart opponents of crypto are like relatively few and far between. Ultimately, it is a tool for economic opportunity and wealth generation and to allow you to do transactions you might not otherwise be able to do. And so the default thing,

the default attitude someone has on crypto is to be in favor of it. So politically, it just doesn't make sense to be against it. Yeah. All right. Well, why don't we hop into some news that was a little bit overlooked this week, but I think it's a huge deal. So State Street has entered into a licensing agreement with copper, which is a crypto-MPC software provider, and they are going to build institutional-grade custody services in partnership with each other. This is a huge deal. So State Street is one of the largest custodians in the world. They recently acquired the BBAH, a Brown Brothers Haremont, custody business as well. And now they're on the board here building out custody infrastructure. You combine that with Bank of New York Mellon, who I believe

is probably the largest custodian in the world. Now you have two of the largest custody banks in the entire world doing MPC custody infrastructure. Boni is doing it in partnership with fire blocks. If this actually gets to production, which seems like it's a pretty serious effort, you're going to be in a world where the customers of some of the largest banks in the world for the first time have the ability to own spot Bitcoin and spot Ethereum and probably a number of other assets. If you just think about the unlock there, obviously these are qualified custodians. This is going to satisfy a lot of regulatory needs for their customers in a way that some of the custodians in market today just don't.

And these guys have the balance sheet to be able to run a business like this. So huge development. It's great to see State Street actually doing things for the longest time. it was, hey, let's do private blockchain innovation theater things, but this is a push towards public blockchains in a super meaningful way, it looks like. Yeah, in a very, very crypto-native way. Another interesting development in the financial infrastructure space, late breaking, just as we were starting to record the podcast came out,

Stripe is now fully supporting crypto businesses with their own payment rails. exchanges, on ramps, wallets, NFT marketplaces supporting pay-ins and payouts, KYC, identity verification, fraud prevention. So a huge turnaround from their prior, pretty hostile views on crypto for honest, and a full 1-80 towards embracing the space. Wow, that's great news. You had to think that when they added Matt Wang to the board there, that they were getting serious about crypto stuff. So really positive development. Well, that'll change the game for a lot of a lot of payments use cases. And a totally alternative note here.

Did you read the Verge profile of Justin Sun? This was this is, I would recommend everyone to just pause this podcast right now and to go read this Justin Sun profile piece. It is going to be the best movie ever. I audibly laughed when I read the part about how he compared his C-Soo to Chairman Mao's generals. Yeah, they all died. They all died.

Yeah. And so he was comparing his staff to Chairman's Mous Generals, and one of them raised their hand and said, didn't, weren't they all killed? And he's like, yes, yes, they were all killed. Yes. The part about the KYC,

so he bought Poloniacs, and apparently just completely vaporized the KYC process that you could upload any picture in past KYC. So you could upload a picture of like Don. and you could pass KYC onboarding. That's probably not the way it's supposed to work. So there is one thing in there that I thought the verge got wrong, which was the insider trading part.

So, you know, clearly there was trading on non-public information that occurred based on their reporting at Tron. They seemed to imply that you had to be a security for the insider standard to apply. and that, you know, it was kind of a loophole that, you know, most of these cryptocurrencies are not securities. As far as I know, the CFTC does have a group that actually covers insider trading in commodities. So the SEC is not the sole regulator that covers insider trading and securities

are not the only assets covered. Believe it or not, there's insider trading. prohibitions and commodities, just as an FYI. Yeah, it doesn't seem like firm footing to just say this is not a security so I can just trade on material non-public information as much as I want. That just doesn't seem like a smart idea. Right. And Matt Levine wrote an interesting blog post on insider trading in oil in 2018, and the CFDC had an enforcement over this. But oil, there's a lot of There's not, arguably there's no insiders in oil, right?

Because it's a global commodity. Like, is there really secret knowledge you can have about oil? You know, like there's just, it's everywhere. There's a ton of production. It's not like you could have a ton of like sort of non-public information. So that one is maybe a little bit more challenging in terms of an insider standard. In cryptocurrencies, however, there's obviously information asymmetries. with the possible exception of maybe Bitcoin.

I mean, can you think of an example of an insider piece of information pertaining to Bitcoin? Can I think of an insider? I mean, you could imagine a world where like you found out that Satoshi was going to activate his coins and you traded on that. Yeah, that's pretty much the only thing I can think of. Because like even a bug in theory is sort of publicly discoverable. So that is, you know, if there's a.

bug in the source code or something that is technically in the public domain it's open source but yeah so basically don't listen to the verge okay there is such thing as an insider standard when it comes to commodities which the CFTC treats most cryptic currencies as commodities so just a wild wild article a couple other things this week so FTX has launched a new business unit called FTX Access. This will be an institutional focused business unit. It will do advisory, trade execution, and index products. So those guys just continue to ship product over there. And then kind of disappointingly, Coinbase blocked 25,000 while it's linked to Russian users pointing out, claiming that they're engaging in sanctions evasion. But I find that a little far-fetched that there were 25,000 Russians all

ordinary Russians olivating sanctions. I think Cracken is not taking this action, right? But there's got to be a ton of pressure on Coinbase right now from the regulators. So they're sort of in a tough spot. Yeah. But keep in mind, like it's kind of the same situation as Venezuela. Ordinary Venezuelans, they're not sanctioned in the U.S. But they can't really get access to any Western financial infrastructure because all

of the banks are kind of afraid of dealing with them and having, you know, toxicity emerge from taking Venezuelan clients. I think that would be a pretty bad outcome for ordinary Russians who may have done nothing wrong and now are seeing their access to exchanges dry up completely. Yeah. That seems to be what's happening. Yeah, that's tough. That's tough. All right. So I think that's it for the week. Busy week, executive order week. I think we'll look back

on this one as a big watershed moment for the industry. And we have another busy week of podcast next week. We'll have three more podcasts next week. We have a former skeptic, a noted former cryptoskeptic coming on who has now done a full 180.

Oh, can't wait to hear about that one. And then we have big crypto exchange CEO coming on the podcast next week as well. So it'll be a busy week. Have a safe and healthy weekend. And we will see you on Monday.