On The Brink with Castle Island - Weekly Roundup 03/21/25 (Trump addresses DAS, Kraken buys NinjaTrader, FIRM act advances) (EP.604)

Episode Date: March 21, 2025

Nic and Matt are back for another week of news and deals. In this episode:  Trump speaks at DAS Is anyone in Washington talking about abolishing capital gains tax for crypto? Trump denounces OCP2.0 TON raises a huge round Remember IOTA? We reminisce about Slock it and the DAO What happened to Ethereum Classic? Can you redeem PAXG for physical gold? Kraken acquires NinjaTrader for $1.5b The SEC says PoW mining is not a security Tim Scott's debanking FIRM act advances from the Senate Banking Committee We review Bessent's appearance on All In  What was the deal with the 'vibecession'

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

The federal government loans American International Group, AI, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called the Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. Recording this one in person with some new microphones here. Yeah, we got the Shore SM7B. you know the classic podcast microphone i think you can you hear the quality i think so i think you should be able to hear this quality we have gotten some good feedback to put this um just the audio on youtube so we heard you it's a good suggestion if we have time we'll figure that out yeah unfortunately the

responsibility for that if i had to guess is going to fall on my head i think i tried to figure it out at one point but it's actually not hard maybe just upload a audio file you'd think that would be easy We will try to figure it out. Turns out we're pretty busy. Yeah, this is not at the very top of our priority list, but... Maybe it should be. I don't know. Just be glad that we record every week.

It's a busy market. There are a lot of companies out there and a lot of fundings. I mean, this deal week was crazy. Do you think that was because of Das? Das was getting bigger by the year. My gosh. Did you watch Trump speech at Das? I watched the tail end of it.

What do you think? Perfunctory, I would say. Well, the fact that a sitting president is speaking at a crypto conference, I think is a good achievement, certainly for the blockworks, guys. That's a good haul. He's been to more crypto conferences than I have in the last six months. Yeah, he's on the scene. So I think people were expecting there to be a major announcement, but we were saying this to each other last night. What more is there to announce?

He's kind of already done everything. He's done. He already made the campaign promises. He executed on the promises. He went over and above in some respects. So what's left? What could be bullish that Trump? A lot of people think that this is whole abolishing capital gains tax or crypto. I don't know where you guys got this idea from, but it's a complete fiction.

Yeah, that's not going to happen. No one in Washington is talking about it. There were no credible rumors about this. This is something that someone on crypto Twitter made up and you all just decided to go with. Yes. Just stop. Stop. Okay.

Please. stop you're getting all excited of her made-up fantasies and then you're getting all upset when they don't happen you don't have to do this to yourselves guys it's i think it's promises made promises kept and we're pretty happy and uh he i don't know he basically just took the victory lap talked about operation choke point what did he what did he say it was disgraceful it was disgraceful that's nice it was what i'd like to hear it's not over by the way by the way it is not over It's not over. It's getting better, though. We still need something to change out of the Fed.

I'm not going to declare victory until the Fed sort of officially changes course. Right. And that hasn't happened yet. All right. Let's get into some deals of the week. Very, very busy week. So first one up is Ton. This is the layer one blockchain that was originally designed by Telegram. It's integrated with Telegram.

Remember they did a massive ICO back in the day and then had to give the money back. Maybe they did the pre-sale to. the SEI, I forget exactly what it was, but the SEC had an issue with it. But this project has raised $400 million in a token sale to Sequoia, Ribbitt, Benchmark, Kingsway, number of others. That's a monster raise. Huge raise from some of the obviously best known investors on the planet. And actually, as of yesterday, I think Telegram itself has a billion monthly actives, some unit of time actives, billion. You know, it would be nice if they could spend a little bit of that money taking down the

impersonators on Telegram. That is a huge problem. It's a plague. It's a plague of that network is that you go on there and there's 27 Nick Carter's, you know? Every single day someone sends me a screenshot of a meme or a Wyatt has a lot of impersonators. Wyatt does. Poor Wyatt. Yeah.

I don't know what it is about Wyatt that they are just on him. All these impersonators are, you know, pretending to be investors. sending random DMs to founders trying to get them to click on calendar links that malware attack their devices. It's kind of hard to fix it though because sometimes I'll DM someone. I don't have a policy on not DMing people.

I will occasionally DM people. But you won't DM them and ask for $1,000. No, I will ask to give them money. Right. They don't have to give me any money. It's a one-way money flow. Yeah. So if you get something from Nick and it's asking you for money, that's not actually Nick. No. And you know, if if the message from me says anything about exploring synergies

that's not. You don't talk like that. Especially if it's in broken English. Okay, here's how you know it's from me. I'm don't punctuate. I barely capitalize. Not full sentences. If it if it's formal, if it looks like Chad GPT wrote it, probably not me. Now you're just giving your playbook to the North Koreans. That's true. Now I just told them that they're adapting. Right. So be careful with that. Yeah. Anyways, Telegram spent some of that $400 million on protecting the users. Next up, a monster deal, Walrus, a decentralized storage protocol. There is $140 million from standard crypto, A16 Z crypto, electric capital, and Franklin Templeton. So this is interesting from a couple of different respects. Number one, it's just a great name for

a company. Number two, we haven't seen a ton of innovation in the decentralized storage. space. I think part of the reason is because it's just been regulatory murky around some of these tokens being securities or commodities. But I think we live in a new world where you'll see new companies forming in this category and a bunch of other categories too. So good to see this. Next up we've read is it red dot pay or re dot pay or red ought pay I would go red dot pay but there should be an extra D in there, don't you think? Yeah, there's there's a D missing.

Also, red dot pay, they are a crypto payments platform. There is 40 million from Lightspeed, Excel, Hongshan, and Galaxy Ventures. Then we have CrossMint. This is an enterprise-grade blockchain infrastructure company. They raised $23.6 million from Ribbitt, Franklin Templeton, Nike, first round, and others. We might actually be setting a record here for capital raised in a given week. For sure. Huge.

Plus M&A coming up. Utila, an institutional crypto wallet provider. there is 18 million from Nica partners, Wing, BC, and ARCA. Then it's StableC. This is a stable coin orchestration platform that raised $3.5 million from Kindred, Ludlow, and others. Then we have Halliday, a crypto application development platform. There is 20 million from A6C and Z crypto, Blizzard Fund, and SVangel. Privy is a crypto-walled infrastructure company that raised 15 from Ribbitt, Sequoia, Paradigm, Coinbase, and Blue Yard.

Ribbitt's getting on the board this week. Have you noticed that? They're active. Yeah, they're back. Yeat is a crypto casino and sports book. They raised 7.75 million from Dragonfly, primitive, and Marana. That's one of those words that has a meaning, right? It is a word with a meaning, yes. Yeah, Yeet. Like many other words.

Then you have Pluralis Research, a decentralized AI protocol that raised $7 million from Coin Fund, USB Invariant. This is an interesting one. Via is a decentralized identity protection platform. There is $28 million from Bosch Ventures and Mass Mutual ventures. Bosch as in Bosch. Bosch, they make like fridges and stuff. Yeah,

Bosch. So they're also active in the DID space. They like DIDs. Were they in Iota back in the day? Am I misremembered that? They might have been in Iota. What was that? The tangle. The tangle. The tangle. So they were

once involved in Iota. Yes, they were. I knew it. And then who else was it? Was it VW? was involved and not yes they were in iota too w was uh they had a spurious fake partnership and i just remember arguing with the iota people in like 2018 and they're like yeah well we have bosh and vw

so uh we're we're all set uh did iota just not work was that the thing with iota i think it literally did not work yeah so it wasn't a blockchain it was a decentralized it was a dag right yeah but the problem was that they had this coordinator So it was basically centrally controlled. And they were trying to do cordicide to, you know, suicide, the coordinator or whatever. This whole catchphrase around it. But I don't think they ever committed cordicide in like eight years.

I think at one point Iota was a top 10 coin on coin market cap. I used to love hating on Iota. It was that and then Veritasium was the other one used to love. That was easier to hate. Man, let's take me back. I mean, I guess it still exists. Simpler times. We were talking about automated locks.

So our office has a very cool automated lock. And the best automated lock company ever was Sloket. Yeah. So Sloket started as a lock company and then somehow wrote the Dow. They became the team behind the Dow. For Ethereum, in case you're not. You haven't been in this industry for of all 10 years. The Dow was not just any Dow.

that was sort of like the first Dow. The Dow. That was the whole reason for the Ethereum fork between, you know, original Ethereum classic and Ethereum as we know it today. I mean, many people listening would not have been around for this, actually. This was a big, yeah, this was a real turning point for Ethereum, but that team, they built a smart contract powered lock, which probably was a good idea.

They probably should just stuck with that. Did they build a lock in the end? I don't know if they ended up shipping it, but they had a prototype for an Ethereum smart contract lock. I don't know why you need a blockchain for that, but it's a good idea. The Dow really affected me because I was a Codeslaw guy, and I was really upset by the Ethereum rollback, or what did they say, a regular state transition?

Yes. And I thought that Ethereum Classic was the true Ethereum. People don't talk about that enough. And Larishin's book identified who she thought the person was, and I'm blanking on the name of the person. But didn't people think it was Hodgkinson? No, it wasn't him, though. Well, at least according to her, she identified the person who was behind an ICAO. Yeah, the Dow hacker.

Yeah, the Dow hacker. Someone who lived in Europe. But then kind of nothing happened. He didn't go to jail. There's no repercussions for hacking the Dow. So me and Barry Silbert really hated the fact that Ethereum did the rollback. Right. Yeah.

Barry got behind Ethereum Classic. For years, I was like, yeah, theorem classic's a true Ethereum. Like, it's going to win. And I was wrong about that. Did not win. It's quite wrong. Did not win.

All right. Next one up is Daisy. This is a stable coin powered influencer marketing app that raised $4 million from CMT Digital Volt and EV3. Then we have level stable coin yield protocol. There raised 2.6 million from Dragonfly, Polychin, and Wagmi Ventures. Oro is a tokenized.

gold protocol that raised 1.5 million from 468 capital and facet. tokenized gold remains a very interesting use case to me. Yeah, I was actually looking today into Paxos gold, Pax G, and you know you can redeem it for a physical bar of gold. Yeah, it's a cool use case. I think Tether has a very similar functionality on theirs. So when you own a gold ETF, you cannot redeem it, right? unless I guess you're an authorized participant.

Right. I do like the fact that in theory, you can get the gold. But I want to know, has anyone done it? Well, even an ETF, aren't they cash create? I don't even know if you could, I don't think you could get the gold. Well, shouldn't there be some, there has to be a connection. Yeah, I guess maybe it would be the APs. We'll have to look into that.

I'm sure people know the answer to that. But I do, I agree. I think if you hold gold that's represented on a blockchain that is convertible for the physical, and there's a clear process, that's a pretty cool financial product. I looked on the Paxos website. They specifically say you can do it. But I want to know, has anyone ever done it? Any listeners out there, hold as Pax G, have you redeemed for physical?

Let me know. Hit my DMs. This has been an idea that's been around for a long time, and I guess it hasn't gotten to sufficient scale. But the other good thing about this is that if North Korea steals your gold token, they can't actually show up in New York City and redeem it for physical. gold. So it's pretty cool. Well, I mean, does the terms of service say North Koreans can't redeem? Well, can North Koreans come to the United States? I met a North Korean once. Really? Yeah. And actually in Oslo, though.

Okay. But yeah, and that's a good question. She was more of a refugee from North Korea, though. Is it the one that wrote that book? Yeah. Yonmi. Yeah, I read that book. Yonme Park. You read it? Yeah, I read that book. She went on Joe Rogan. Quite good. All right. So that's Rho. Next one up is Habashi. This is a decentralized trading platform. They raised 5 million from Dragonfly and electric capital. Then we have uranium digital, a tokenized uranium exchange. There is 6.1 million from Framework, Moranaventures, and others. Talk about taking physical delivery. I'm guessing you can't. I don't think I'd want to take

physical delivery of this, but my understanding of the uranium market is that it's quite inefficient. I was obsessed with uranium in 2018. I thought it was the best. trade ever and then I got out of the trade and then four years later uranium went absolutely bonkers yeah why is uranium performing so well because I think we're just re-nuclearizing yeah that makes sense yeah you think these mini reactors uranium plays would be interesting um all right then we have manifest this is a company that is focused on tokenizing private equity real estate they raised 2.5 million from vannick ventures and lattice fund that might have been the longest deal section we've ever done. And we're not done.

We have an acquisition. So Cracken, of course, everyone who is Cracken, they acquired Ninja Trader, their CFTC registered futures trading platform for $1.5 billion. This comes right after Coinbase's announcement to launch futures trading in the U.S. And it's also in the midst of Cracken's reported preparations for an IPO next year. Wow. I think this is one of the most interesting deals that's ever happened in the crypto industry. So Ninja Trader, so they're a U.S. retail futures trading platform.

So they have an FCM over there. So it's not a crypto company. It will be here pretty soon. But Cracken is going down the path of looking at equity trading and payments. And now you buy this platform, which is in the future space. So then you kind of have a 24-7 always-on technology platform that you can just drive liquidity to different categories here. So kind of combines traditional financial services with crypto. You would think that Cracken would take some of this infrastructure on the future space

and the derivative space and just put crypto products on top of it. I would think that this would also geographically expand the company. So Crackens in Europe and UK and Australia, I would think you'd be able to take Ninja Trader into those jurisdictions. So $1.5 billion, just definitely the biggest deal that has combined Tridefying crypto infrastructure. It looks like these guys have, the ninja trader has 1.8 million professional traders on the platform. So big deal.

Congrats to Cracken. That's the record for the largest crypto acquisition ever, right? I think so. Well, I guess it's not a crypto company being acquired, but biggest crypto-Omaneva to date. Definitely. And I think you'll see more consolidation here. So in the U.S. market, you're going to have the likes of Cracken and Coinbase going into traditional securities, I would imagine.

A lot of them will be blockchain powered securities at some point. I guess we'll talk more on Coinbase and what they propose this week. But huge deal. It's a huge deal. And if you're getting ready to go public, this is a type of transformational deal you would be doing. So on the Coinbase front, they announced verified pools, which is a trusted way to seamlessly trade and swap on chain. So it looks like the objective here is to make institutional access to D5. a little safer and more seamless.

Seems like a really good type of a thing to have if you eventually have securities on a blockchain, don't you think? So is the idea here that if you use a verified pool, you know who your counterparties are in the defy pool? Yeah, and maybe you don't know who they are, but you know that everyone in the pool has been KYC'd and is not on a sanctions list, perhaps.

Very interesting. I don't think it would be strictly necessary to know who's in the pool as long as it might be necessary to know that whoever's in the pool is legally in the pool. Well, speaking of pools, a different type of pools. The SEC releases a statement on mining and mining pools today. So I put this in the category of things you probably knew, but were still useful to write down. So they are basically saying that mining proof of work specifically is not a security.

Kind of makes sense, you know, like especially if you're solo mining, clearly not a security. I don't even know how that could be conceived of as a security, but even pooled mining is not really considered, you know, a securities offering or anything like that. So a very useful statement from the SEC. Well, it's the type of thing that seems obvious, but, you know, it is helpful to write it down because if you ever end up with someone like Gary Gensler in charge at the SEC again, this just seems like something he could make a pain point out of. On the futures front, Bitnomial announced launch of the first ever CFTC regulated XRP futures contract.

They've also dismissed their lawsuit against the SEC. Yeah, so Bitnomial dismissed their lawsuit against the SEC. That's right. And more ripple news. So Brad Garlinghouse put out a video this week and said that the company's legal battle with the SEC is over. I guess the commission has verbally agreed to drop the case. It still needs to be put to a vote to become official. would end a five-year saga over whether XRP, which is an unregistered security.

I'm not sure how this case ends up, though, right? Because Ripple is still contesting a piece of the Torres decision, I believe. So there was some legal wrangling there. And kind of unclear to me if those institutional sales of XRP are still going to have been unlawful, but who knows? Yeah, there's a ton of FCC news this week. Mark Uyeda instructed his staff. reconsider Gensler's crypto custody rule, which asked RAs to hold their crypto assets only

qualified custodians, which basically meant that RAs couldn't hold the long tail of assets. That was quite problematic. So that's now under review. So if that crypto custody rule goes away, I think you'll see more registered investment advisors getting active, probably opens up the door for some of these infrastructure providers on the MPC front to be more active in that market as well. That's great. I think the crypto custody rule was a bad one. So we also have a response here. So in response to SEC Commissioner Purse's call for input on the crypto task force priorities, Coinbase put out a list of recommendations. There's 36 big ones to outline a path forward for digital asset regulation. The four biggest ones that were emphasized here, number one is a clear taxonomy to define digital commodities versus securities. Number two is a secondary, market sales for digital commodities are not securities transactions. So getting clarity on that issue, I think, would be huge.

Number three is they would want the SEC to defer to Congress to establish a market structure framework to address ambiguities. That seems like a no-brainer. And the number four, focus on enabling markets to unlock the potential of tokenized securities, which is a part of the market that doesn't really exist yet at scale. So all these made a lot of sense. And like I said at the time when this call to input was put out, you know, if you have a business in the space, you should be responding to this stuff. And CoinBiss had a really detailed response.

So piece of news we forgot to share with you last week. Tim Scott, chairman of the Senate Banking Committee, his debanking bill advanced committee, actually the same day that the Genius Act passed committee. So this bill, it's called the Firm Act. it basically considers reputational risk as part of the bank regulatory evaluation framework. So I like to joke that when regulators look at banks, they use the Camels framework. I say it should be called cramels because they did shoehorn reputational risk in there. But obviously, it doesn't really make sense for regulators to look at banks and say, well, we think it's reputational

risky for you to deal with this industry. So we're going to give you a negative camel score. I mean, that's just very arbitrary. So anyway, this bill says not to look at that and it passed committee. So potentially actually a viable bill.

Why would you be against this bill? I don't know, but all of the Democrats on the Senate banking were 11 of them. I mean, this is the type of thing that protects both sides. It protects politically disfavored. institutions from losing their bank account. So it could be weaponized on each side. Yeah. And also with obviously with Republicans in charge, you'd think Democrats would be strongly in favor of this because Trump could do, he could turn around and do Trump, Trump choke point

3.0 and be like, okay, well, I keep saying this. I just know one listening. He could just be like, well, you know, abortion clinics and universities and NGOs, those are reputational risky so banks can't serve them. Yeah. Yeah. I mean, you don't want this to just ebb and flow from party to party. Yeah. So like let's end the pendulum swing back and forth. Why wouldn't Democrats want to ensure themselves against that kind of backlash? I don't know. Understanding Washington is just you can see why people have full-time jobs just on the policy and advising and which ways the wind blowing because some of this stuff just seems so obvious. Yeah, I sure don't get it. But anyway. I'm very excited about that bill.

Also on the politics front, Robin Hood is launching a partnership with Kalshi. They're providing prediction markets for sports politics and economics through the Robin Hood app. Have I told you my theory here? I think retail brokers

are going to be pushed into sports betting and prediction markets. I think you're going to live in a world where on like Schwab.com, you're eventually going to be able to bet on New England Patriots games. Do we need more sports? spending? I don't know if we need it, but it seems like it's a profit pool. And with trading fees compressing and 24-7, I just think if you're one of these retail brochures, you're going to be

pushed into that. So did you fill out a bracket for March Madness? I did not. Did you? No, because I don't know anything about basketball. I'm rooting for Duke. I think Duke looks like a wagon this year. See, this is, I just, I don't have a stake in collegiate athletics. I didn't even go to school in this country. Well, so Duke has this guy, Cooper Flag, who's from Maine. And this was supposed to be his senior year of high school, but he skipped a grade or advanced through high school fast. And his, I think his twin brother is still in high school. But he's a freshman at Duke. And he's one of the top prospects I've seen in a long time. I think he's guaranteed number one pick in my book. So this kid is like 17 or 18. He's playing against like 21, 22 year olds. Yeah, he's like a year

younger than everyone else in the league. That's insane. He's crushing it. But I, I didn't watch enough college basketball to fill out a bracket this year. I can't say I've ever voluntarily watched a college basketball game. I used to fill out brackets when I was in elementary school. We used to take the newspaper and then someone in the class would be running the pool. You'd be writing it down with a pencil while you're at school. You didn't do that? No.

No, we didn't have that. You didn't have that. Executives from the Trump Media Technology Group would launch a SPAC. Remember those? There was $179 million with the goal of acquiring company in the crypto and blockchain data security or dual-use technology sectors. I don't know what dual-use technology is. You could use them in blockchain or somewhere else, maybe. I don't know.

But you kind of scoff at specs, but spacks are not inherently bad. Some spacks worked out. Yeah. And this is a good instrument for taking companies public. First of all, if you just step back, it should be a lot easier to take companies' public. public in the United States. Sarbanes-Oxley really did a number on capital formation for IPOs. And so as a result, you know, you have private investors through venture funds capitalizing a lot on just, you know, these companies where, you know, if you look at the early internet, businesses

just went public a lot sooner. And yeah, maybe that's risky, but it also gives retail the ability to participate in a lot of the upside here. So I'm all about specs if they're responsible. But like, yeah, why wouldn't you take some of these crypto infrastructure companies public after their Series B even? There's some great companies out there. Draft Kings was a SPAC. Draft Kings was a SPAC. They were successful.

Lucid Motors was a SPAC. They did well. There's some others that I've never heard of, but not all SPACs were failures. Only most of them were failures. Yeah. Maybe there were some issues with the last crop, but that was a frothy time.

Speaking of, did you see the all-in podcast with Scott Bessent this week? Yes, I did. I thought that was quite good. He was excellent. He's impressive. Yeah, I think Chimath and the other guy. Friedberg. Bredberg did a great job interviewing him. They did. They were like kids in a candy store at the White House. They were so thrilled to be there. They were. And I just thought Besson was so articulate and measured. It was really, really encouraging. I didn't realize that Bessent was the analyst on the Soros and Drucken Miller breaking the pound trade. Yeah, he was in the London office.

That was an incredible story. And so I think he sort of, it sounds like he gets a lot of credit for it. He sort of sought the opportunity, rented up the flag pulled to Drucken Miller. Drunken Miller wanted to put it on. And then Sora said put it on and double the size. Double size. Yeah, I feel very comfy with him actually in charge because he's been on the other side. Right.

He's a markets guy. And so he's used his lens to attack government. So it makes you feel better. Like you kind of want a savage like that in charge of divining the city. Yeah. Yeah. And I think he has a very clear explanation of what he's trying to do and how fast you can go in certain categories here. I get it.

Kind of de-financialize the economy, de-globalize, focus on domestic manufacturing. The tariff stuff, honestly think he's just kind of following Trump's lead on that. It doesn't seem like his hearts in it, truly. He wants to de-lever, reduce the size of government, increase productivity by taking people out of government, getting them jobs in private sector, should in theory, increased productivity, unleash corporates by reducing regulation and cheapening energy, which is the core input to everything.

I get it. And so he wants to bring the deficit to GDP ratio down to 3%, if I'm not mistaken. But my question is, like when do you start actually paying off this debt? Yeah, that's kind of, nobody wants to answer the question. It probably involves inflation and growth. It would have to, right?

I mean, you have $35, $36 trillion worth of debt. When are you going to get to the point where you can actually start to make payments on that? You need to inflate it away because we're never going to run a persistent surplus for like 20 years. Right. I do worry. I worry that like Western liberal democracy within. aging population where the political incentive is to have these massive entitlements that go to the growing and growing share of the aging population is incompatible with long-term solvency.

Right. I think there might, like the equation just may not balance fundamentally. So, you know, how do you play that, right? If you think that you either have to inflate your way out of this or, you know, you're not going to have a hard default, but people talk about being in having equity exposure to offset some of that inflation. I guess that's obviously you want that in public market equity investments, but you're really just making up for it in dollar terms, right? So you would think that this would shine a light on things like Bitcoin, things like gold. Yeah. The one reason I feel okay

about all this is AI. That's the only thing. Don't you think AI is just going to eliminate a lot of jobs, though, won't you have the... Maybe? Yes, growth, but at the expense of a lot of jobs. Well, there's nothing we can do about that. I think it can tack on one to three points of growth, and that would be enough. Yeah. That's the only way out of this quag wire.

Well, you deregulate, which, you know, that sounds good. It's funny because in crypto land, we're actually asking for regulation. We're not asking for deregulation, but broader financial services. I mean, the shackles are coming off. Yeah, you want the agencies themselves to ease up, but then we're asking for a stable coin bill and a market structure bill. But yeah, you want ease up from CFTC and SECC. So part of it is probably just deregulation of the financial markets to promote more growth. You just hope that you don't run into a buzzsaw and create the next financial crisis in doing so.

He did talk about bank regulation too and freeing up credit and lending from banks. Banks don't lend anymore. It's all private lenders. Yeah. What is the issue in the treasury markets right now? The SLR or something? It's basically there's some plumbing issue, it sounds like, where if they were able to get some accounting exemption, the banks would be able to lend more to some of these offshore hedge funds that are levering up and buying treasuries and doing carry trades and things like that.

That's a level of wonkishness I'm not on. Yeah, I went deep on this a few weeks ago. but I'm blanking on the exact mechanics. But I wouldn't be surprised if you see some bank accounting changes here in the next six months. What he did say was he does not intend to revaly the gold to current levels. So all the bitcoinsers that think that's going to happen, he's not doing it. Okay? So we can just toss that one in the garbage.

Yeah, he didn't talk about that. He didn't talk about Bitcoin either. No, I don't think he cares. I mean, look, he's got bigger fish to fry. I'm sorry. You know, like the debt's $35 trillion. Okay, Bitcoin's not going to fix that. Sorry, Bitcoin does not fix this.

I don't think it does either. It couldn't. It couldn't. There's no way for it to fix that. The other thing I thought was funny was he made fun of the Biden admin cooking the books on the data front. And, you know how people were calling it a vibe session because they basically wanted to deny the lived experience

of American households who said they were hurting. Right. Whereas the Biden admin, was putting forth these phony job numbers, basically all the job creation was government. So it was fake. Right. And all these pundits,

and I hated this so much, all these pundits were calling a vibe session to make fun of ordinary people saying, hey, things are not good economically. That was such trash, and I'm glad he called it out. Thank you, Scott. He did call that out.

So I'm glad he's at the helm. I think he's doing a really good job so far. But he's got probably the hardest role in the administration, do you think? I think so. Have you seen his mansion in Charleston? No. It's a baby pink.

Oh, really? It's really, you got to look it up. It's like super cool, colonial-looking mansion. All right, we're going to take a brief detour so I can look it up. Architectural interlude. Wow. Yeah, you're not kidding. That's a very pink mansion.

It's quite pink. That's a big pink house. It's enormous and pink. Huh. All right. Well, I guess he was selling it for $22.25 million. I mean, they did make approximately $1 trillion on their pound short. I think you could have sold this thing for at least $24 million if it wasn't pink, but God bless him. Well, I like the color. All right, so that was Scott Besson. I guess this is not news, but just how much do you appreciate Zach XPT?

Yeah, I was going to say, so he found this hyperliquid whale. that was massively short Bitcoin was that it and everybody was panicking about this Is this the same guy? I think it was a different guy I think there was some guy who was doing the Do you remember the clams attack on Poloniacs back in the day?

Yes I do So this was something like that How could I forget Matt? I don't know we can get Dan Matashefsky back on the podcast to talk about this because I don't remember the exact details of how it all worked but in any event

someone was market manipulating on hyperliquid and Zach XPT hunted him down and revealed him. Yeah, I mean, and it turns out this guy had already been in jail for fraud in Finland or something. Yeah, he was, he's just a degenerate gambler who's been to jail for a bunch of stuff. So Zach XPT is just keeping the industry safe. So yeah, what was the, the TLDR was this guy exploited a casino game and he fished people. He had six figures and he gambled that into two.

$20 million on chain. I mean, no credit for stealing money from people, but it's getting impressive. Trading under a million and a 20 million. Yeah, that is impressive. But, you know, it's a little bit of shades of Avi Eisenberg

with some of the tactics here. I think this is... Got to hear both sides. A bunch of illegal stuff. Shoutout to Zach XPT. He's also been great on the Lazarus group. Zach is now, I guess, affiliated with Paradome. But I guess he just still does his own thing.

Yeah, I think they're just kind of sponsoring them, how you would sponsor like a Bitcoin Core dev. We need more Zach XPTs than this industry. Yeah, can we clone him? Seriously. There's way more fraudsters than there are Zach XPTs. I think he's the most valuable player. He's also talking to Chris Perkins about his idea around enabling people to go after North Korea from a like hackback perspective.

And so he has this concept of almost like privateers back in the revolution. Revolutionary War days. Letters of Mark. Letters of Mark, right. So you would have these deals with the U.S. government where you'd say, look, I'm going to go attack a bunch of pirates and then we'll split the profits or whatever. And they would set loose these just everyday people.

And he wants to do that in the crypto industry to go target North Korea. Wasn't Sir Francis Drake a privateer? Believe so. I believe that's right. I think the supply of vigilantism is far too low. State sponsored. Well, it's basically zero.

It should be higher than that. But if you wanted to cut down on this, I think you'd actually have to physically go over there because I think what's happening here is that North Korea is getting all of this from just boots on the ground people in China. So they're stealing the Bitcoin. They go across the border into China.

There's some person who's giving them hard currency or maybe oil or gold. There's an OTC market. So if you want to stop it, you lean on the China OTC market. Yeah, I mean, Well, I don't think even China wants that, right? Who knows what they want?

But the reality is that that's where it's happening, right? Yeah, because it goes, Eith, Bitcoin to Rmb, and then... Or whatever, Bitcoin to food or however they're getting it. And then they buy ballistic missile parts. Right. Not a good state of affairs, if we're honest. No, this is one of the... This might be the top issue, right?

now in the industry. It's probably the worst externality of crypto. Completely the worst externality of crypto. But I think North Korea just ended their tourism program too. So you can't even go over there. Well, why would you want to go over there? Well, you just told me you wanted boots

on the ground. Well, maybe in China. I don't know. I mean, I don't want to be the boots on the ground. I would say other people want to go over there. That's fine. I will not be trying to infiltrate North Korea. I mean, the only people that try to go over there historically in the U.S. or Ethereum developers trying to get people to learn Ethereum.

Yeah, normally it's a one-way flow of people trying to escape North Korea as supposed to try to enter. Who's that guy that went over, the Ethereum Virgil Griffith? Yeah, that was a bad idea. He's still in prison, I think. Yeah, you can't go over there. I don't think the pardon was on the table there. Nor should it be.

I mean, what do you think they're going to do with all that knowledge on how Ethereum works to go hack a bunch of smart contracts? Yeah, someone should have probably told him. Should have been a voice of reason there. Yeah. Yeah, well, I feel like they have very elite developers, unfortunately, and so they're probably using best practices. They're probably using ubiquies and 2FA.

I would think so. I don't think they're easily sim swapped. I think it would be hard to do anything just purely online. I think you'd be talking about sending people over there from Blackwater or something. Well, they have probably ballistic missiles, so we don't have a lot of leverage over these guys. All right, I didn't say it was like a super well-fought-out idea, but I thought the idea from Chris was pretty good. I'm going to need you to come back to me next week with some slides on this one.

I think it plays well at a high level. Once you ask two or three follow-up questions, I mean, I don't have all the answers, and I didn't really ask Chris if he did either. Details TBD on this one. Yeah, we'll see. All right, everyone. So I think that is it for the week. We'll be back next Monday with an episode.

Everybody have a safe movie.