On The Brink with Castle Island - Weekly Roundup 05/05/23 (Bank apocalypse, Biden's miner tax, Bhutan's crypto ambitions) (EP.422)

Episode Date: May 5, 2023

Matt and Nic are back with another week of news and deals. In this episode:  Updates on South Shore Bar Pie The CIV boys consider new sponsors Regional banks keep failing Is the turmoil in the bank sector deflationary or inflationary? How does the Fed end the banking crisis? McHenry's stablecoin bill Biden proposes a 30% tax on Bitcoin miners Why Biden's DAME tax is counterproductive RFK Jr's pro-crypto takes Nic throws his hat in the ring for RFK Jr Gensler running for Senate in Maryland/ Where in the world are the FTX executives FTX attempts to claw back funds from Genesis FTX debtors stumble on Mysten Labs Is summary judgment in the Ripple SEC case almost due? Nate Chastain is found guilty of insider trading Poloniex settles with OFAC OpenX is reprimanded by Dubai for not registering Coinbase launches in Bermuda Bhutan has been mining Bitcoin since 2020 NYMAG spills the beans about Protego CIV is throwing a pickleball event at BTC Miami Content mentioned in this episode:  Jen Wieczner in NYMAG, Is the Federal Government Trying to Kill Off Crypto? Sponsor notes:  Coin Metrics State of the Network - MakerDAO's Dai Dilemma: As one of the longest-standing DeFi protocols, Maker has held strong as the maintainer of the decentralized stablecoin Dai. Still, the protocol faces headwinds, and MakerDAO stakeholders must make major decisions about governance and risk management.  

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of Concentuteease. You've printed a couple trillion dollars, and all of a sudden, people start to worry. So out of this worry, we have something called the Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter.

And this episode is brought to you by Coin Metrics. And here is the Metrics Minute. For the Metrics Minute, we're looking at Maker. The Maker protocol was launched in 2017. It's one of the most popular defy applications on Ethereum. The current supply of Dye is 4.7 billion down from a peak of $9.9 billion in 2022. 1.6 billion is held in smart contracts. The rest is in user-controlled, externally owned accounts. During the recent USDC DPEG in March, Maker actually allowed for one-to-one swaps between Dye and USDC, which actually caused Dye itself to trade as low as 88 cents on the dollar alongside USDC. This is renewed concerns around Makers' accepted forms of collateral, as a lot of it is exposed

to centralize assets like USDC, WBT, and U.S. Treasuries. more about Maker in their latest state of the network. That is your Metrics Minute. Coin Metrics also announcing that Kathy Clay from Sebo is joining the board of CoinMetrics. So big announcement there. Congrats to Kathy Clay and to the Coin Metrics team. So we had a bunch of people asking about the sponsorships again this week. So we did Linwood last week, which went over well.

They didn't have their payments up and running. But a lot of people coming in and saying the big. bean pizza at Linwood is their favorite thing of all time, which I agree. That's a phenomenal pizza. Did you get some feedback? Yeah, I got a lot of DMs of people that went and sent me pictures of the pizza that they ate. It's a phenomenal pizza. I'm no clearer on what a South Shore bar pie is, but some of our listeners are now. You know, I was thinking that maybe we would do a couple regional banks for sponsorships because they really need it, but that's just like sending people to FTX right before it collapses. We don't want to do that.

There's no safe regional bank right now. It's no good out there. It's really not good in regional bank land. I have this FinViz screener just looking at the 24-hour change in this sector specifically. Right now, Pac-West is down 42% recording this on Thursday at 3 p.m. Western lines, down 34% First Horizon down 33% Huntington down 20%. These are actually pretty sizable banks too. They're not small. Those names I just mentioned, that's another 100, 150 billion in deposit base.

I mean, pretty serious stuff here. I mean, this rate hike this week just makes it all that much worse for these banks. I mean, what would you do here? If you were Biden, if you were Powell, what would you do? what they're going to have to ultimately do is some kind of universal deposit guarantee. I don't see an alternative way. Right now they're just kind of playing whack-a-mole and hoping that the outflows stop. But why would the outflow stop if you're a depositor in one of these banks paying 0%?

First of all, you have to deal with the solvency risk. Second of all, you can just hold treasuries that are paying 5%. so there's no reason why the outflow would stop and the equity buffers for these banks is eroded by the by the week i mean bill acman has been saying this on twitter since silicon valley bank weekend i think he's right it's and i think you're right i don't think there's any way that this stops unless there's a blanket deposit guarantee which on paper is going to be tremendously costly to the taxpayers and definitely introduces moral hazard but i just don't see any other way and i think that's the other way and i think that's

think if you were to do it, then it's just the fact that you would put that deposit guarantee in place probably means you won't have to use it. Yeah. Some measure has to be taken to restore confidence here because it's completely shaken and it has to be drastic. Otherwise, it'll just continue to happen. It's not going to stop on its own. I don't see a mechanism that, you know, causes this to stop unless rates are cut in very short order. But clearly Powell's not going to do that. I mean, can you imagine, remember back in 2018, Trump was out there just haranguing Powell and actually caused him to reverse course to some degree. You're not going to see that out of the Biden administration. We're going to see how long the government can tolerate this. There's an interesting discussion

as well about whether it's inflationary or deflationary. I think bank lending ceasing as the banks become more distressed is deflationary, for sure. There's just less credit introduced in the economy, businesses of less capital available to build with. But at the same time, what we're talking about, a deposit guarantee would massively expand the monetary base. I mean, you're talking trillions and trillions of dollars, which the only way that's financed is through the Fed basically ready in their liquidity bazooka. And so that's very inflationary. So I can't really decide which direction it goes there between the two. And my understanding is on this, deposit guarantee, this would require an act of Congress unless there's some emergency procedure

that I'm not aware of. And I don't really like our chances of getting something passed through Congress on anything right now. The debt ceiling here is looming a month away and it's not much going on there. Talk about a poly crisis. I mean, the debt ceiling negotiations are more intractable than ever. You know, here's what I think. This idea just came to me. We're going to, we got to raise the debt ceiling, right? Why don't we just put McHenry's crypto market structure bill, attach it to the debt ceiling, sell that thing straight on through, and let's just get some regulatory clarity while we're at it. Well, they're trying to put some very nasty stuff in the budget. Let me tell you. There's just the tax on the Bitcoin miners. They're trying to sneak that through.

Yeah, well, to be clear, that's not in this McKinery bill as far as I know. No. So a 30% tax. I guess let's get into that first. But maybe before we do, just a quick this week on the brink. Check out the podcast that I did with TPI Cap, Simon Forster and Duncan Trenholm over there. They're building some really interesting stuff in the trading space. So we talked about the institutional market structure for those market structure nerds in the audience. I know there are a lot of you. That was a fun episode this week.

That was a well-reviewed episode. It was. All right. So let's hop back into it. Biden administration wants to tax Bitcoin miners 30% in the United States. Sounds great to someone who is maybe not paying any attention to second order effects, but this would actually have an unintended consequence. Yeah, I mean, it's not hard to figure out what the consequence of this would be.

It's certainly not hard. So this is called the Dame tax, digital asset mining energy excise tax. 30% tax on miners in the U.S., which first of all is crazy because normally we don't single out specific industries for a special treatment like that. You would just, if you felt that there was an externality with the generation, you would try and tackle the emissions at the source, right? You don't penalize industries that are duly purchasing electricity. We'll leave that aside.

Leave that aside. Who are the biggest miners? outside of the US. What countries? Ones that we're not friends with. I'll tell you. I'll tell you. China, actually, about 17 to 20% based on my latest estimate, believe it or not. Still mining in China. Russia. Kazakhstan.

Iran. Venezuela. Also Canada. Forget about Canada for now. Those are the biggest miners outside the US. The China mining might actually be even more than we know because it's a little but disguised in the data. So by doing this tax, you're basically killing mining in the U.S. So you would lose tax revenue because these miners would not operate. They would be unprofitable. You are not reducing the emissions of the Bitcoin network. You're actually increasing them because mining that's done in these other places, Kazakhstan, for instance, almost entirely fossil-fueled

grid is far, has a far higher carbon intensity than mining in the U.S., which is relatively clean. You are funneling revenue in some cases directly to the governments of these countries. Russia, apparently a state-sponsored mining. We know that Venezuela and Iran, the state is involved in these activities. Should we know the Bhutan has some mining, which is being done by the government, which is that's another weird thing you talk about that. We'll hit on that in a second. Bhutan. And in China, it's probably not the government that's doing it.

Could be local governments within China. Either way, you're funneling money to our adversaries, basically directly funneling money to Russia that we have sanctions on right now. You're raising the carbon intensity of the network and you're crushing domestic industry, which, as we've discussed on our mining miniseries, helps. It's benign on the grid. basically helps increasingly renewable grids with these miners participating in demand response, it buys new renewable energy. So it's sort of the trifect of badness if this builder were to go in. And it doesn't achieve the stated goals that the Biden admin lays out. It's not good for aggregate emissions. So it's just one of the more counterproductive policies I've ever seen them propose.

You know who's against it? Is RFK Jr., who's polling at 20%? in the Democratic primary poll. He's one of the most confusing candidates I ever come across. I'm not sure how he's an actual Democrat, but everything that he has put out on financial services policy has been spot on, including his crypto takes.

I mean, I like that he echoed some of my takes on choke point 2.0. That was the first for me. Yeah, yeah, no, well, I saw that tweet. That was kind of my introduction to him. I didn't even know he existed that. I didn't either. His Wikipedia was another one. His Wikipedia is not spotless. Let's just say that. I mean, the guy doesn't seem like a Democrat at all. No. Like even a little bit.

It's, I think if you're Kennedy, though, you have to be a Democrat. I mean, you probably also have to have some things in your past on Wikipedia, too, for that matter. The Kennedys, yeah. So I support this guy officially. Yeah. All right. So David Sacks came out and supported him last week. Really? Yeah. Really? Supporting? Yeah. Yeah. I mean, the guy has, he's got good crypto takes. I don't actually know about the rest of them. I don't even know if I want to dig into the rest of the platform. I might dig in. The crypto stuff is great. I support the crypto stuff. I'm going to have to dig into the rest of the platform a little bit. I mean, are the Democrats even having a primary or are they just sort of coronating Biden again? I don't know.

if you get a guy that's polling at 20% don't you have to have a primary i think i think there are primaries i think this guy is going to get some meaningful votes the dnc is historically not the most free market in their approach though i mean didn't they kind of like stifle bernie back in the day too they did they did yeah i um i voted in my local town election last weekend and really yeah they don't even require an id like anyone could just walk in there and said that there were, you know, a resident and vote. Shocking. It's very interesting.

Shocking. So I might vote a couple times when it comes to this RFK January. Careful what you say there, Matt. Yeah, this election is a key one for crypto. Register to vote. Register to vote. Vote harder this time. Everybody vote harder.

Yeah. And get in touch with your local elected officials. And there's going to be some legislation coming. So maybe we'll, Maybe we'll jump into that before we get into the kind of the salacious news of the week. But McHenry, Patrick McKenry, who's the House Financial Services Chair, he came out this week and said that within two months there's going to be a market structure bill with language. So he said he's working with Senate Ag Committee Chair.

Senate Ag oversees the CFTC. McHenry's group oversees the SEC, the House Financial Service Committee oversees the SEC. So they're working together, which is great, to come up with a market structure bill. I am very optimistic about this, actually. I think McKenry knows an awful lot about this. I think if you were to get a bill that had some sort of a path to take a token from a fundraise under the SEC's oversight to a decentralized commodity under the CFTC's oversight

and to compel those agencies to work together and to just give that regulatory clarity and you were to just have that spot market regulatory clarity, then you'd just see all sorts of broker dealers and banks get involved, you'd see more capital formation, you'd definitely see more venture activity. And I think it has the potential, you know, I haven't seen the words, who knows,

but it has the potential if it's done right to be the Telecommunications Act of 1996 for crypto. You know, that Telecommunications Act of 96 really just set off the next 20 years of the Internet and just exploded. There's kind of a parallel universe where the telcos would have just owned the Internet and you would have these like walled gardens.

And I think this could be could be that. So when that comes out, I think we're going to have to really band together as an industry here and get vocal and make our representatives vote for it. Well, we've never had McHenry on this show. We have had Emma twice. We have an open invitation to members of Congress and want to come on the show and make the case.

All right. Well, if anyone's listening that knows McHenry, come on the show. we'd love to have you. People ought to really know McKenry because he's the one that asked the question to Gensler on if Heath is a security. And Gensler just, just dottered around like a someone that didn't have a voice. He just kind of talked in circles for five minutes. Gensler rumors that he would run for Senate in my native Maryland. I would encourage that. I think he, I think, you know, if anyone in that camp is listening, I think it's a great idea. I think you should

probably get out in front of it and, you know, probably quit your job and go move back, establish residency, start to campaign. I think that's probably the best thing to do. Yeah. It's the best use of his time right now. I initially thought that I would move back to Maryland so I could vote against them. But actually now reflecting on it, I now currently support his Senate bid. Oh, I'm supportive. Yeah, I think that it's a great idea. I think it's a legacy defining thing. It doesn't seem like this treasury thing's going to happen because you kind of have to like run the SEC well to get treasury i think but um i definitely would like to see a krenshaw led cc here i think uh gensler has relatively few friends in washington aside from his his patrons

i mean his even his cc nomination was fraught i think it was something like 55 45 it's pretty close yeah it's not like he's made any more friends since then no but i think the people of maryland love him. We support. I didn't even know he's from there. Yeah, we support him. I didn't know. I didn't either. Come, come home, Gary. All right. So should we get into some, some deals? Yeah, light deal week. So we have, first up, we have the Fair Protocol, they're a decentralized finance project. There is $6.2 million from goat capital and C-square adventures. Next one up is Tristero. It's a company building a trustless dark pool. They raised $4.8 million. from General Catalyst and Steel Perlowe.

Then we have ZKLink, a zero knowledge trading platform. There is 10 million from Coinbase. Next is Vibe, an NFT platform. They raised 4 million from Alchemy and Aglai Ventures. Aglea Ventures is the VC arm of LVMH, if I'm not mistaken. LVMH, what a run those guys have had, huh? Juggernaut. I saw a tweet the other day

saying something like all of Europe's richest people work in the fashion industry. I don't know if that I don't know what that says about Europe that they're not tech entrepreneurs. They're just fashion. Isn't he one of the top three richest people in the world? Bernard.

Bernard. Bernard is number one currently, actually. It has a Elon. That's incredible. Next up, we have open trade. a supply chain company, there is 1.5 million from Sino Global and Circle Ventures. All right. So let's get into some FTX news. And, you know, I was thinking maybe a good theme for this show would be like, where in the world are certain fraudsters? We know where Sam is.

Where like where's Sam Trubucco? Where in the world is Carmen San Diego? Yeah. Yeah. So was that a TV show or like a board game or? It was on Channel 2, wasn't it? Wasn't it? TV show on WGBH? Did they have theme music that we can not license and use for the show? Yeah, yeah, I think so. I think so. No one has ever actually questioned us about our unlicensed use of other TV show theme music. Have we, have we done that, I guess.

Yeah, we certainly, we have. We've never paid any royalties for that. It's fair use. Uh-huh, yeah, parody. Okay, so why don't we do that? We'll do the theme. All right. next week we'll do a wear in the world and then we'll just go through the various people

that are kind of on the run or or just the law has not caught up to just all these FTX employees that like we're frotting people that have not been brought to justice but their boss has they're still unaccounted for yeah shocking actually where in the world is the head of corp dev product you know investor relations i've heard those were all the same guy it's same guy actually Where is he? Where is he? All right, but there is some FTCS news. This FTX debtor estate led by John Ray. It's clawback season. So this one is kind of crazy. So they're trying to clawback $3.9 billion of crypto from Genesis Global Capital. And it relates to $1.8 billion of loans, $273 million of collateral. It's another $1.6 billion in change of assets that apparently Genesis Global Capital withdrew from the trading platform. right before the bankruptcy. I don't know, man. Good luck here. It's Genesis is the one that got screwed by FTCS. I don't really see this happening. Yeah, I'm sympathetic to Mr. John Ray here, but I am on the side of Genesis on this one. And I wish them luck trying to recover these assets that

don't exist. Everyone's trying to clawback from everyone. This is just going to be like a daisy chain of clawbacks here. There was a credit explosion, but the actual assets underlying all the credit is much less. Yeah. So it's just illusory, the funds that are being clawed back here. Yeah, I don't think this is likely to happen. But who knows? I guess they're, they got to try.

Did you see that? So FtX, this Mistin Labs deal, they allowed the Mistin Foundation, the company behind Sui, to purchase back at a discount, a slight discount, their tokens, and now they're trading way up. So bad trade by John Ray on that one. I mean, it's actually shockingly bad. I think they sold them back for like $100 million. And now, what is it, Sween?

Is that the token? Yeah. Is trading far, far, far above that? multiples. Yeah, it's like a $500 million error on John Rayshardt. So do your job, dude. What are you doing? Stop being an idiot.

I mean, that's kind of like maybe why you want like sort of like, maybe you want a Dan Matashevsky in charge. that part in charge of like that here's what we sell here's look if they're trying to suppose thing of the crypto assets just Porella is supposed to actually know what they're doing and apparently they don't what they need is I just don't know if John Ray's in the trader chats you know on telegram in the chats I haven't seen that they need someone lurking in the various trader chats otherwise you can make these kinds of mistakes I mean how hard is it to go hire some advisors that actually know what they're talking about in the crypto world.

That's insane. I can't believe that's if you're a serious error. An FTX creditor, you should be really pissed. I've seen a lot of, yeah, a lot of creditors that are super peaved by that one. All right. So there's been some additional movement here with this SEC Coinbase lawsuit. So Coinbase has sued the SEC as they're probably going to get sued by the SEC. but they preemptively sued to try to get some clarity on this rulemaking proposal that the SEC has just

dragged its feet on. And they, the court has ordered, so the U.S. court has ordered the SEC to come out in 10 days with a response. And then Coinbase can then file a subsequent response seven days after that. So the clock is ticking here on the SEC to come back on this rule. I'm sure it's going to be pretty disappointing. I'm sure they're just going to not take a posture. It'll be the written equivalent of Gary Gensler describing what ETH is, which is just a meandering diatribe of nothing. Yeah, at the minimum, at a minimum, though, I'm kind of glad to see the court enforcing a timeline here to get them to say something about their stance. Definitely positive development. I mean, the courts here are going to be the champions of the crypto industry. If the SEC can't even win this

ripple case, then good luck, man. I saw some commentary that we're almost due for judgment on the ripple case. I know we can't triangulate it to the day, but I believe it was John Deaton maybe that tweeted that this judge historically rules on these things in around 60 days, and that's basically where we are. So who knows? Maybe we're in for some kind of outcome on that case. That's been years. That's been so long. That was under Clayton. That was under Jay Clayton. Advisor to numerous crypto companies now, Jay Clayton.

Yeah, it always kind of ticks me off a little bit that people leave government where they're hostile to crypto and then they turn pro. Where was that when you were in government? Where was that? It's not. What's up with the sequencing there? I don't like it. I do not like it. How about being consistent?

Thought of that? too much to ask apparently. So speaking of the courts, Nate Chastain, former PM at OpenC, has been convicted of insider trading NFTs. That case went to trial. He did not take a plea deal. I don't think we know what the actual sentencing is, but he has lost the case. And over a relatively small amount of money, too.

Yeah, I think it's like $50,000. It's crazy. So he, yeah, he could go to jail over that, huh? Yeah. I think the plea deal had jail time in it, and he didn't take it. Oh, it would be interesting to see what happens there. That's tough. Not great.

Poloniacs, cryptocurrency exchange, they've agreed to pay a $7.6 million fine to settle just a ton of sanctions violations. Surprising that Justin's son wouldn't be running that on the up and up. It actually seems low, frankly. given OFAC violations how serious those are. I was asked by someone if I thought Tron was a security, and I said, yeah, slam dunk. But nevertheless, Tether on Tron is one of the most popular ways to transact stablecoins globally. It's true.

I guess Tether on Tron is not a security, but Tron is a security. Yeah, I mean, I guess you need Tron for transaction fees. I don't know how Tron works. Does Tron, yeah, does anyone, know how Tron works. Isn't it just like Ethereum with a little file coin sprinkled on it? Yeah, I think they just change some of the parameters in in Geff maybe. I believe that's what Tron is.

His excellency, Justin's son, is just still operating just with no regard for the law. But didn't he have his title stripped from him? Yeah, they didn't he no longer a diplomat? I think he was renting that. his excellency is a great thing to be known as it is yeah he he would sign emails if he can get his excellency yeah yeah someday it's not enough titles titles in the united states there's no like nights you know um open x remember them they uh so it wasn't enough that the uh you know some of the founders are being held in contempt in the bvii for not

cooperating with liquidation. It's not enough that the supposed investors in the round all came out and said that they're not investing actually. Now, on top of that, the Dubai authorities has reprimanded them for operating without a license. These guys, man, these are some of the craziest criminals I've ever come across in my life. They just keep on doing things that are illegal. So they just launched this exchange with all this fanfare in Dubai where they were trying to make out to be this great crypto hub and they just did not register it with Dubai. Are you kidding me? Kyle Davies had this whole threat about eating oysters. Did he see this? Well, he is from Duxbury, Massachusetts. That's a home of a great oyster. Yeah.

They do have some great oysters. You know, he'll never have a Duxbury oyster again. I think that's a fact. I mean, the oysters didn't look good. They look like warm water oysters. You want cold water oysters. guys. He's probably yearning for a nice Duxbury Oyster, but the only way he'll probably get one is if he's in, you know, can you fly a Duxbury Oyster to like a federal prison? It depends on where the federal prison is, I suppose. I actually heard that there are some federal prisons where you can actually pay to go to a nicer facility. Oh, really? That's pretty expensive, like $100,000 a year. But so you can, like everything in life, you know, you can you can pay to upgrade. And so I think there's some where you can actually, get specifically sent to the nicer ones where they have like tennis courts maybe squash you know things like that wow that's i did not know and maybe they have oysters maybe they might have oysters oysters are great it's hard i mean it's hard to hate on kyle for the for the tweet storm it's very no i support oysters as a food oysters are really good yeah i used to go to this place in south boston they

had the best of the oysters well so we didn't settle our debate from the other day about whether lobsters are bugs or not? No, they're seafood. That doesn't mean that they're not bugs. Yeah, they're crustaceans. It's very bug-like. Lobsters are great, too. All right.

Well, Coinbase launched a derivatives exchange out of Bermuda. We should go. We should go down there. So I heard that on Bermuda, there are no cars. That's fine. I think you have to ride a golf cart around

to get around. I don't think it's very big. Bermuda? No, I bet this guy, this must be taxis in Bermuda. So Bermuda is getting a lot of clout as a destination for crypto firms

are leaving the U.S. I read Joel Tillengass book, famous Fidelity PM. He runs the low-cost fund at Fidelity. And he had some comment in there that really resonated. I wish I read this book a lot earlier, but he said that a lot of frauds

come out of these like Bahamas, Bermuda's Caribbean type of places. And if people had just read that book pre-FTX, that would have been a lot better for everyone. Well, let's not lump in Bermuda with Bahamas and the Cayman. Okay, there's a bit of a difference there. Yeah, they're close, though. They're close.

Bermuda is not on the FATIF gray list. They're A-plus in terms of FATIF. They do. They do have a thriving insurance industry in Bermuda. I do think that they're elite for a bunch of things. That's true. They are the third largest insurance hub. I've been doing my homework home home in Bermuda lately, as you can tell. They're the third largest reinsurance hub in the world behind London and New York, I think. All right. Well, I think if Bermuda wants to get very pro-crypto, then I'm all about it. So, look, we're also accepting sponsorships for this show.

You think we can get the country of Bermuda? I think we have a 3% chance of getting a nation state to sponsor the podcast. So it's either Bermuda or Bhutan at this point. I mean, I was just about to give a free ad to loco oysters in South Boston. You think we can get Bhutan to actually sponsor? I think there's a chance. All right. Well, shoot a shot.

I think you. I love the enthusiasm. So, all right, let's talk about the kingdom of Bhutan. So these guys, these maniacs in Bhutan, which, you know, I have the map open right now. I just don't know how we'd get here. if we take these guys as a sponsor. No, I don't know. They're good.

Did you know that they have a cabinet position, which is the minister for national happiness? That's a great role. That's a great role. I mean, these guys are not, it's not the best neighborhood that they live in over there. I think Bhutan is a good place,

from what I've heard. And they like Bitcoin, like a whole lot, apparently. Okay, so there's a Forbes article that says that, one of the number one imports into Bhutan is ASIC chips and they're mining Bitcoin with them. And they have been for quite some time. They've been mining Bitcoin since 2020.

Apparently they're also creditors and blockfine Celsius, but we can just kind of forget about that for now. Yeah, I mean, can you pay some of that back, please? So, but so it doesn't surprise me that they, you know, we know nations. state's mine. We know that it happens. There's definitely nationalized mining operations in places like Iran, Venezuela, Russia. That's fact. El Salvador. So I'm just glad that the roster of Bitcoin nations has grown to a third nation, which is less questionable than the other two. I just want to know who the person in Bhutan that came up with this idea, a very smart idea. I mean, they're probably doing great if they are procuring this much in terms of ASIC capacity and they're

probably not paying for any electricity. It sounds like they have plenty of access to energy over there. So they have a lot of hydro, apparently. And so Bitcoin is just another way to export energy, which other commodities that people use to export energy are aluminum because it has a very high embodied energy cost. And Bitcoin, is just another way to do it. Bhutan doesn't do the whole democracy thing, do they? That's a kingdom? Well, the kingdom, yeah, would be the clue.

Kingdom of Bhutan. They're the king. So the king must be on board. He might listen to the podcast. You never know. If you are the Bitcoin advocate in Bhutan that made this happen, please come on the show. Explain your reasoning.

Can you imagine if we got the king of Bhutan as an interview for On the Brink? I mean, we've interviewed, you know, Bitcoin policymakers in the past. Why not? Hey, why not? We can actually, let's look at our metrics and we can see if we have listeners in Bhutan. I'm sure we have some. Oh, yeah. I forget we have that map view.

Yeah. All right. I'll investigate. All right. So things to read over the weekend, Jen V. Etchner from New York Mag, I wrote another great piece. Did I tell you that I actually subscribe to the print edition of the New York magazine just because of Jen Vietchner's writing? Really?

She's a great financial journalist. I'm back to the print edition of... You're single-handedly keeping the print magazine industry alive. Yeah. So she wrote about these extrajudicial moves that the Biden administration is taking as it relates to crypto companies. Basically a deep dive into Operation Chokepoint 2.0. I thought it was very well done.

Yeah, Jen is my number one journal. journalist right now in terms of credible truth-seeking people that cover crypto. So good job, as always, Jen. Her analysis or coverage of the Partigo story specifically was pretty eye-opening. I think that was the first time we'd seen it mentioned. There's a lot more stories like that than need to be told. Those guys got done dirty. All of these, I think these OCC things, there needs to be some more investigative journalism because everyone who went that OCC path just got done dirty. Yep, in a big, big way. So if you're a journalist looking for your next scoop,

look at the denials of the OCC charters or the provisional conditional approvals that turn into denials. There's a lot of dirt there. A lot of FOIA requests to be made around interagency machinations for some of these FOIA or some of these OCC pathway companies.

I mean, the more I learn about choke point 2.0, the more totally lawless and brazen it appears to me. By the week, I learned something just shocking about how these regulators behaving when we eventually get discovery in a court case, God willing. We're going to read some of these text messages

and emails and it's going to be the worst of you could possibly imagine. It really is. All right, well, I think that's all the news for the week. I'm off a busy conference circuit. I was at the Medici conference out in L.A., Adam Winnex conference. A-plus, as usual.

By far my favorite conference of the year. For some reason, I have your backpack from that conference that they gave you a swag. Oh, you do? I have it. What color is that one? It's black. I've been looking for that. Yeah.

I'm sorry. It's mine. And I use it for my pickleball gear. So it's indispensable now. I was wondering where that went. All right. Well, you can have it. Did they not give you another one?

No, I don't get, I don't think I got any swag this year. I might have, I might have missed out. They might have been given it away. but I had like a meeting at the end of the conference before I went to the after party. Light on the swag budget this year, huh? Times are tough. No, there was swag. I don't think times were tough at Medici.

I came away from that very encouraged. There's a lot of builders there. There's a lot of allocators there. There's a ton of funds. I met a bunch of people for the first time that I've only talked to on Twitter. Well, speaking of conferences, we are throwing a pickleball open invitational. It's actually just pick up play. tournament or anything to coincide with the Miami Bitcoin Conference if you'd like to attend

it's the 17th DM me on Twitter excellent special special invitation for Brinknation listeners we don't do me in pickleball it's not just about drinking alcohol at happy hours it's about pickleball you got to stay fit during these bare markets we throw healthy events that's right how are we doing on the Castle Island rackets for the pickleball rackets we're supposed to do those right oh I don't know whose responsibility was that I don't know. I think it's neither you nor me, but hopefully we hopefully next time. Next time. All right, everyone, I think that's it. Have a safe and healthy weekend. We will see you for an episode on Monday on Cybersecurity. See you on Monday.