On The Brink with Castle Island - Weekly Roundup 05/16/25 (GENIUS is back, Coinbase data breach, Big Tech stables) (EP.625)

Episode Date: May 16, 2025

Matt and Nic are back with another week of news and deals. In this episode: Why is Boston such a good sports city? Price inflation in dinosaur skeletons Cryptopunks IP is sold Machinsky is sentenced Nakamoto Holdings launches Meta wants to add stablecoins to its platforms Exchanges are honeypots for KYC data Coinbase suffers a data breach The GENIUS act is going to a vote next week GENIUS act new provisions More Movement shenanigans Thailand is launching a $150m crypto token Content mentioned in this episode: Tuongvy Le and Austin Campbell published a paper, "Crypto and The Evolution of Capital Markets", which dissects the current market structure for securities trading and settlement and discusses how blockchain networks can improve this architecture.

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 is 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, IG $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 to Britain's ailing economy with a new round of quantitative easing. And print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called a Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. Celtics are in a tough spot. What's the latest there? Is it the Knicks they're playing? Yeah, we're down three games to two,

but Jason Tatum ruptured as Achilles. Not good. But then they won game five. Is this the final? It's the Eastern Conference semifinals. So you win this and then you win four more games and you win everything. No, then you go to the championship.

So you win this and then you'll play the Pacers and then you go to the championship. Oh, so you guys aren't even close. to winning. What is it, what's the Lombardi trophy for the NBA called? Oh, that's a good question. It's the, the Larry O'Brien trophy, I believe. So the Celtics in like, was it the 80s? They won like six in a row or something ridiculous. Well, in the 50s, in the 60s, they won, I think it was like 12 total. It was eight in a row, but 12 total during that stretch with Bill Russell or something crazy. It's insane. There's a great HBO documentary that just came out around the Celtics dynasty.

It's really good. Boston is, without a doubt, the most spoiled sports city in America. Without a doubt. Like, it's not even close. The city of champions. I mean, we've earned it. So why is Boston so good at sports? Is it an Irish Catholic thing?

I think, no, I don't think it has to do with that. I think it's just more of a, it's a blue-collar town that really supports its teams. And historically, we've had really good ownership groups. Why does that make the teams good? Isn't it something to do with, like, the ethnic composition of the city? No, I don't think it's not like it's all Boston people playing on the teams People are coming from all over to play for the Celtics It's the warm weather climate people really like living in Boston

It's a mecca I mean I because like I spent four long years in Boston right And I'm just I don't understand what's in the water Like and I I need Jared Diamond or the free economics guys to do some analysis And tell me why it's by far the best sports city in America Well the way to think about it is people came over from Europe and they went to either Virginia or Boston area and some of them left but a lot of good talent stayed some of that talent went ended up you know starting businesses starting sports teams

and that's kind of how it went because I mean you know okay the fans are engaged that's fine but then why don't Philly sports went all the time because they have like the most engaged fan I mean I guess Philly is also a good sports city I don't know Philly that what are they they're throwing batteries at Santa Claus in Philly. Yeah, but they're engaged. They're engaged. They're engaged in a physically violent manner,

is what I would say about Philly. Well, if you know why Boston wins, send us a DM. It's still a mystery to me. All right. So busy podcast week, why it's been on a tear with these podcasts? So why did Alex Cutler from Aerodrome,

talking about the defy markets. He also sat down with TN from Pendle, talking about Pendle, one of more interesting projects, and also in the DFI space. So those were the two podcasts. week this is the third yeah i'm i'm petitioning to have why actually replace me as the host of the of the weekly roundup and i don't know he doesn't seem to want to do it he's just getting he's getting

a lot of buckets yeah his numbers are going up for his podcast downloads yeah i mean he's got the reps in like why couldn't he do this part too and free me from the shackles he could i mean if you or i ever took vacation it hasn't really happened in the six years that we've been doing this podcast, but eventually maybe we'll take a vacation. Yeah, I think we've missed two now, right? We missed two? I thought it was one. Did we miss two? There was one we recorded and we forgot to publish. And then there was one where I think I was in Costa Rican and I'd COVID and I just couldn't do it. Oh, is that right? Yeah, that sounds that sounds right actually. So we got some good feedback this week. I want to give some shoutouts to our listeners. This is a new segment that we're

starting thanking the listeners like we're mpr or something mike zeniman said that we were his favorite oh okay thank you mike yeah and uh i think dan metashevsky did too i don't want to misquote these guys they might have just said something sort of like very moderately favorable and i'm totally spinning it but yeah i think they both said that it's their favorite well that's high praise that's high praise yeah the feedback i get about this podcast is that they like that we just do the news and absolutely nothing else. And we don't have too much sort of side talk and chit chat. Are you joking?

No. People also say that like your critter encounters. But I think compared to a lot of other Croathechow podcasts, we have much less chit chat. Yeah. I guess I'm guilty of a little bit of that chit chat. I was actually, I was in New York yesterday and spending time with someone who listens to the podcast

and they were asking me a lot about the turkey situation. And people can't really grasp the concept of wild turkeys that are closer to squirrels than they are to a traditional farm turkey. And I always have to explain that it's sort of this phenomenon that happened in Massachusetts, where in the 1970s they were not a part of the ecosystem and someone just reintroduce them. And they just spawned from there. So I find myself talking about the turkeys quite a bit when this podcast comes up. But are they uniquely aggressive and fearless as turkeys in Boston?

specifically? I don't think I've encountered them anywhere else. I'm sure they're in New York and places like that, but I think Boston has just taken the stance that you can't kill these things. And so they just continue to proliferate. So our version of that is we have green parrots in Miami. And they're very loud and aggressive. And they're not actually from here.

They were just introduced, but they're actually my favorite birds here. But they're totally, people think they're tropical birds. here they're not the other birds that we have in Miami are chickens all over the place like when you go to Key West you see them on around everywhere yeah and peacocks I've never seen a peacock in yeah so there's look if we want to get more into the foul discussion I've got birds for days all right well that'll be a podcast for a separate week because we actually have a lot of news this week this genius act by the way it was last week was kind of crazy where all that news was unfolding that the deal fell apart and we're in the middle of reacting to it while we were recording.

Similar dynamic this week actually where it looks like the deal has come back together. So we'll talk about that. Yeah, the same thing happened again. In real time, it's changing, but now in the good way. Yeah. So politics is weird. I don't know. There's just, I feel like we've spent a lot of mental horsepower understanding politics over the last five years.

But we're no closer to understanding how it works, I would say. I have no idea. It's completely inscrutable. All right, let's do some deals of the week. A couple in the Castle Island portfolio, Mountain Protocol, which is a yield-bearing stablecoin issuer, they have been acquired by Anchorage Digital. So congratulations to the Mountain team

and just a really smart move by Anchorage, I think. Yeah, yeah, for sure. Congrats to Martin and Matthias. The rest of the team, I'm on the board of Mountain. Great acquisition for Anchorage, exceptional team. Anchorage starting to flex their muscles in the stable coin space. Really excited to see what they come up with there. Next one up is Nirvana. This is a blockchain cloud infrastructure company. They have raised $6 million from Crucible Capital, Jump Crypto, Us at Castle Island, RW3, and Hash 3.

Shout out Meltem and Crucible. Yes. Yeah, VC on the block. Next up, we have Wonderfi their Canadian crypto exchange. They were acquired by Robin Hood for $179 million. This is a really good acquisition by Robin Hood. I think Robin Hood has been very thoughtful with the way they build up their crypto. strategy investing in some of these exchanges. Big things coming from Robin Hood is the sense I get. Yeah. It's just the golden age of MNA in crypto right now. It's just deals right and left.

Next up we have TREX. They're a purpose-built blockchain for consumer apps. They're a 17 million from Portal, North Island framework, and others. On the topic of dinosaurs, do you remember when CMS sent the intern to Paris to buy Yeah, to buy a dinosaur. But they didn't get it. They were outbid. They were outbid by

Who was it? Totally blanking on who got it. Did Ken Griffin buy it? No. It was someone else that will come to me during this podcast, but they got outbid by someone really famous. And they, instead the intern came back

with a fish, right? Yeah. Yeah, like a prehistoric fish or something. Yeah, like an old fish, but it was not a dinosaur at all. I don't know where the T-Rex actually would have gone. I mean, it was enormous. I want to say it was like a professional basketball player bought it. But it was like a dinosaur that you would see in the museum of natural history or something.

It was a huge dinosaur. Yeah, like people aren't tracking. Actually, there's been serious growth in the prices for complete dinosaur skeletons. Like no one is even looking at that sector. How wild is it that dinosaur fossils weren't discovered, I think, until like the mid-1800s? Yeah. That just seems insane to me. I mean, what did you think people thought they were before, like the bones of giants or something? I mean, I guess people just were not digging for these things before that. Is that the way to chalk that up? That people were too busy doing persistence farming to figure out that they wanted to have free time to go dig for dinosaur bones.

And can you imagine finding one of these things and trying to figure out, okay, what is this? It's like we didn't have a reverence for our ancient history before we'd achieved some kind of comfort as a civilization. So we didn't care to look into the past because we were just struggling. Yes. And then you had, you know, like, I guess British explorers, was it? Others. I mean, it's even the same with, like, the Egyptian pyramids and the wonders. Like, no one even thought about excavating that until the 1800s.

Right. Well, makes you wonder what else we're going to discover. Yeah, like, is there something else hang under the earth? like the pyramids we suspect are now there's like something under the pyramids that's what they say i think what is if i had the assets i would do a big excavation of the yucatan peninsula in mexico and because there's all these ancient mine pyramids and ruins the mexico is never even looked at but if you scan it with light lightar and such you can find all these mounds in the rainforest,

this evidence that this old vestigial civilization that's no one's ever contemplated digging up. That stuff fascinates me. I will watch endless documentaries on stuff like that. Yeah, I think there was a lot more civilization in the past than we give it credit for. We talked about this in the context of a nuclear war a month or so ago.

Yeah. These theories that human beings have evolved to a certain level of sophistication and then got back to the stone ages. I don't know if I fully subscribe to that, but I do believe there's many old ancient civilizations that we haven't even uncovered yet. We'll probably dig up some crypto steals at some point. It's just the version of Bitcoin that was invented 5,000 years ago and we rediscover. Next up we have purple.

There are perpetual futures exchange on Monad. That's a $9 million raise from Dragonfly Ergonia, Brevin Howard. and L1D. Then it's GoQuant, a digital asset trading infrastructure company that raised $4 million from GSR, copper, and others. We have double up, decentralized casino on the suey blockchain. There is 4 million from Caritage, Mistin Labs, and Salini Capital. Decentralized casino.

You big casino guy, I can't stand casinos. I am so against them. I used to play a huge amount of poker in my youth, actually, believe it or not. And I'd spent a lot of time in casinos, and now I just cannot abide them. I just, I don't like going to them whatsoever. No, the, one of the biggest tourist attractions in all of the Miami area is the hard rock casino. In Hollywood, it's a guitar shaped one. Oh, yeah.

And if you go, it's like, everyone's all dressed up for their big night out at the casino. Yeah. A whole destination. And it makes, it really makes my soul sad because it's like, you're just playing slots for hours and hours. Yeah, and you see people walking by, carry. their respirators and things like that. It's just kind of depressing. That's bleak.

Yeah. Next one up is KYD Labs. This is a blockchain-based ticketing platform. They raise $7 million from Andresan Crypto, finality, and tech stars. Then we have Turtle Club. That's my name of the week. A defy liquidity provisioning protocol,

there is 6.2 million from Thea, Susquehanna, and Laser Digital. And then the last deal of the week is the Infinite Node Foundation, which is a nonprofit dedicated to conserving digital art. acquired the full IP rights of Cryptopunks, which is one of the, I guess this is one of the biggest NFT collections ever, originally designed by Yuga Labs. But this infinite Node Foundation, I believe Mickey Malka from Ribbitt is behind this. Kind of a cool concept, I think. Wow. So this, I had never heard of this before, the Node Foundation. They focus on preserving

digital art. Yeah. Wow. I think it's a non-profit, yeah. Mickey Malka and Becky Kleiner. Very, very cool idea. Cryptopunks, I don't know. I haven't. stayed up on what's going on with the crypto punk market. But this is the second time it's been sold, right? Yeah, I tried to sell some NFTs recently and on both OpenC and Magic Eden. And I couldn't get MetaMast to work on either one. And I think it's a conspiracy between both sites to ensure that no one can sell an NFT. So they're trying to keep the prices up.

Yeah, you sign you should just huddle. I mean, NFT is a total disappointment in terms of what that. market turned into, but you see some of these use cases around ticketing and, you know, intellectual property rights. It's all going to be built on NFT infrastructure. I guess just the timing wasn't right for that category. And then FTX really was a buzzsaw that a lot of these bigger brands pulled back from their crypto projects in that space right after that exchange collapsed. My biggest probably contrary an opinion right now is that fidgetals are actually going to be thing. I'm still a believer in the fidgetals.

Yeah, physical objects tied to digital records, for sure. Yeah. Well, actually, the EU has this whole rule around that. I mean, it doesn't specify enough T's, but they want you to put chips and everything. I totally buy that that's a big thing. Chain of custody in the EU is a huge thing. And I do think that blockchain infrastructure is going to play a big role there. EU just can't get out of its own way, though, with all sorts of technology issues. It's just, I cannot believe that the EU is getting things so broken with Mika.

Yeah, I mean, and so I guess speaking of, we were worried we might go the way of Mika, but apparently the Genius Act is going to be voted on next Monday or next Tuesday. So I guess there's a vote scheduled for Monday evening. Yes. So last week, as we were recording this, we kind of thought that they had the votes. and then some of the Democrats had pulled back and cloture failed. And cloture is really, apparently, this is just a measure to make sure this doesn't have a big floor debate because they want to get this passed by Memorial Day.

So there's been a couple of, I wouldn't say they're curveballs necessarily, but some things added. So interest bearing stable coins are just very clearly out. It looks like there's more clear rules for foreign stable coin issuers. Another thing is that public companies that are not engaged in financial services are going to be, I don't know if precluded is too strong of a word, but they're almost going to be written out of this bill as covered. So it reads to me like they don't want Facebook to do a stable coin.

Why is it that I guess it's mainly the Democrats pushing for this? Why do they hate big tech so much but think big finance is A. okay? I don't understand that. I don't know. I think the bank lobby is very active behind the scenes on this bill, definitely on the interest bearing element where they see the deposit risk. I don't really see that, though. I mean, I was talking to someone earlier today and saying money market mutual funds were the big risk, right? People pulling their money out of regional banks and putting them into government money market funds, that already happened. So I don't see this insatiable demand for stable coins by retail people in the U.S. as a form of payment.

I think people use Venmo and Zell and PayPal in the U.S. And that works fine. So we're really talking about a phenomenon that is dollar access outside the U.S. and then the payment rail into those countries, which is where it's really taken off. I think there's this weird view that civils are consumer technology, which is like imbued into the regulation here, which I don't think they are, actually. I mean, there's so much better than bankwires for consumers that ordinary folks are using them. but to me, the space is getting much more intermediated,

and most activity will be through these PSPs. And I think people think the whole thing is going to be verticalized under big tech. I don't see it going that way at all. And I mean, this doesn't preclude big tech from incorporating stables into their products that they haven't issued, right? Yeah, it doesn't. So they just can't issue, it looks like. So if you're Amazon, if you're Facebook, if you're Google,

you won't be able to do your own stable coin per this bill. I wouldn't be happy about that if I were them. I think that's actually a big opportunity for some of these players. But I guess they'll have the, you know, whoever is the dominant stable coin. I guess they would use that. Yeah. But like that isn't stopping big tech from issuing stables doesn't mean they can't mess with their users through the fintech channel or the payments channel.

They still have discretion. They can still write their terms of service however they want. Big tech already has kind of like full. discretion over any user funds. And big tech is already active in payments. Apple pay, Samsung pay, Google pay. I mean, I don't get it at all. So this genius act, if what we're if what we just said, what we've been told is true, then I think you'd have a vote on either Monday evening or Tuesday for cloture. And then that would be followed by hopefully a full Senate vote before Memorial Day. Then what would happen is you'd have to go to the house.

and the house is making progress on their Stable Act. And then you go through the process of tying them together. The goal from the administration still seems to be August for Stablecoin. So not everyone's thrilled about this. Actually, the Cato, Jennifer Shalpa Cato had a threat on it. She's unhappy with the big tech prohibition. Also giving the Fed a bigger role, which is honestly valid. I would be skeptical of the Fed too.

And it also calls for tightening up defiant illicit finance risks a little bit. So the latest round has, I wouldn't say alienated some folks on the pro-crypto side, but it's certainly tightened it up a lot. So we'll keep an eye on that one. Let's move on to another big story of the week here. So Coinbase announced this morning, so we're recording this on a Thursday.

They announced that they've suffered a data breach in which customer data such as names, addresses, emails, and masked account numbers have been stolen. The data bridge did not affect deposits, passwords, private keys, anything like that. It looks like customer service agents went rogue here. So customer service agents not living in the United States were compromised, bribed maybe by hackers. And these hackers have used this information to reach out to people. It's all the text messages. Everyone who listens to this is probably getting. It's like, hey, I'm Coinbase customer support, you know, hop on this Zoom call and I'll steal all your money, basically, but manipulate you into sending your money

and say that your account was compromised. So it's a, I don't know, I guess it's a sophisticated attack. It seems to be working. You know, Coinbase has said that they're going to set aside. I think it was up to $200 million to compensate people that have been scammed by this. It's a bad look. Yeah, look, I think we're Coinbase fans on this pod generally, but this is really deeply unfortunate. It's not just the immediate fallout, which is for sure a lot of less tax savvy people have been scammed in this manner. Without a doubt. Without a doubt. You're getting a phone call.

They know all your account information. They're telling you, you know, you need to wire some funds over, you know, process withdrawal from Coinbase. Like, definitely people have been scorned. that way. We all know better, but still, even really smart and savvy people get dinged in this manner. Not only that, I mean, it's the leak of your address data. Your name, you know, you're known to be a crypto holder and your address is leaked. That's terrible. I mean, this comes to the same week there is masked bandits tried to kidnap someone in France, the daughter of an exchange CEO, the ledger co-founder was kidnapped, they chopped up his finger,

else's finger got chopped off. I mean, it's getting scary out there. It really is. So I don't know what the, I've seen some reactions to this that says, okay, you should be hiring customer service people in the United States. Maybe that's a learning here. It sounds like Brian Armstrong indicated that maybe that's one of the things that will happen.

Hackers demanded 20 million in ransom. Armstrong did a public post and said no to the ransom and put the $20 million up as a bounty to count. catch the hackers. It's not good. I mean, this is the problem with exchanges. They're gigantic honeypots. And it's an incredibly valuable source of information, just the KYC data.

I don't know how there's no way around it. They have to collect KYC. But they just should be so careful with who can access that. And I mean, just hiring U.S. customer service agents, that's not going to solve the problem. Like, think about the sim swapping that happens. You have someone at AT&T. they're compromised. They saw the data, some scammer, like happens here too. There's nothing, Americans are not a uniquely moral people. No. I mean, it really, I think you hit on the core of it,

which is the KYC data is a honeypot, although it's not the assets. It just puts people on physical risk. And so why do you have to collect the KYC data? It's largely because of the bank's secrecy act. And obviously, they catch a lot of bad guys because they have this control in place. but it makes you wonder if there's maybe more of a zero knowledge way to do this at some point in the future. You're not going to roll back this KYC requirement unless you change the Bank Secrecy Act. Yeah, and I mean, I don't think we should do away with it fully, but exchanges could be much more cautious with this data. All right. Well, in other Coinbase news, they were added to the S&P 500, effective May 19th. So that'll be next week. That's a big development.

And the third Coinbase story of the week is the New York Times reported that despite dropping its lawsuit against Coinbase earlier in the year, the SEC is continuing to investigate the company for misrepresenting user metrics. I don't know. I don't know if I believe that or not. But we'll see what happens. Mixed week for Coinbase. Their stock ripped when they were added to the S&P 500. That's the power of passive investing right there. Those passive flows, man.

Yeah, they go right into those S&P 500 names. On the meta front, there is a report from Fortune that says they're in discussions with crypto companies to introduce stablecoin payments to their platforms. Of course, years ago, they shut down Libra slash DM their own stablecoin effort. But look, I think it makes total sense. Let's say you're selling something on Facebook marketplace or Instagram. Why not have stable coins there for an easy payout option? The timing on this announcement, or I guess it wasn't an announcement. It was more of a report.

but I bet meta wishes they held off for a couple of weeks as this genius bill was getting negotiated. No one in politics wants to hear if Facebook is launching their own stable coin. And that's not exactly what this said, but it said they're leaning into it. You know, it was a smart thing to lean into. I get it. But also, are we still mad about Cambridge Analytica? Like, still mad? Is that why politicians are comfortable?

People are mad at Facebook about everything. I mean, I think that's- They just want to be mad at Facebook. Yeah, Facebook is just, I don't know. It's a hateable company that almost everyone in the United States uses their product. I have no issue with them whatsoever. I don't even care. You know what?

I'll say it. I don't care about Cambridge Analytica, even the tiniest amount. I think we should forgive them and move on. Oh, it's very charitable of you. Yep. I don't know. I mean, we might look back on Zuckerberg as being like the equivalent of selling cigarettes to children once we've actually realized. is what social media does your brain.

Honestly, I don't mind him these days. I mean, he's doing open source AI. Like, that's, I think he's had a pivot. I think it's genuine. You know, other AI companies are not open sourcing their products. Oh, he's only doing it because it got leaked. I mean, he's not doing it out of the kindness of his heart. His Lambda thing got leaked initially.

And so he kind of had to lean into the open source. It was already out there. No, I think he really cares about open source. I think he cares about it because it's a good business model for him now. But I don't think he's You think he's just out there Thinking that open source AI is the way to go I think if you wasn't seeing it as a way to make money

He wouldn't be he would be doing it proprietary If he thought it was a higher upside for him You can do good and do well At the same time You're a very cynical view on this Who knew you were such a Zuckerberg fan Well look he's an MMA fan And he likes one of my favorite fighters

Alex Volcanowski He was actually in his corner I think in the Miami fight and then Volcanovsky lost probably because he had Zuckerberg in his corner which definitely didn't help but yeah there's good things to say about the guy

all right all right you're having a week where you're just in a charitable mood there all right let's hop to the next story Nakamoto Holdings which is founded by Bitcoin Magazine CEO and CrumpTripto advisor David Bailey is merging with a company called Kindly MD which is a publicly traded

healthcare company. They're going to launch a Bitcoin Treasury strategy, a micro strategy type of strategy, the deal involves a $510 million pipe and $200 million in convertible notes. That's a very big platform. Yeah, you remember how on this podcast we used to talk about GBDC to an absolutely autistic level. Yes. I've decided that this is going to be the new thing. It's just all of these Bitcoin access vehicles are the new GBDC in both the good and the bad way. Yes. Both the good. I agree. and the bad way. And we're in the good part now

and the bad part will come later. I'm already at the point where I'm reading an unbelievable amount of 8K filings on these things. You have to get smart on them. That's the problem. DBDC was just one thing and now there's like 50 of these things.

They're going to be one for every coin and every stock market. That's so many permutations. It's going to be more than one. That's for sure. There's a clear trade here. So the trade is, I think this is what the trade is.

you read all the filings and you determine the amount of debt and the thresholds of which we enter a liquidation cascade. And you just look at the price of Bitcoin relative to all that. For now, clearly these things are scooping up tons of Bitcoin taking it off the market. So we were a rally. At some point in the future, it's going to turn sour. I'm not saying this one. I actually really like David Bailey.

I'm sure he's going to do good. But in general, in the aggregate, these things are going to puke out all the Bitcoin. all at once and it's going to be absolutely terrible. I don't think they're all going to puke it out. I don't think they're going to puke it out unless they have liquidation thresholds that get triggered and they start doing some debt structure that is kind of off market. But if you're just doing convertible notes, really just have to have enough cash flow to make the payments every year, right?

So I think it's fine as long as you don't lever it up in a stupid way, but I just don't trust human beings to not lever things up in stupid ways. Yeah, I mean, it's like we don't trust bankers really, and so we have to bail them out periodically. And it's the same thing. Like some of these issuers will tack on too much leverage and they'll be punished and they'll sell Bitcoin. Right. That day will come.

We're telling you right now. Maybe it's in two years though or five years. Yeah. It doesn't. It certainly won't happen in the next few months here. These things are trading at ridiculous premiums right now. Yeah. But the thing about premiums is one day they turn into discounts.

That's true. That is very true. All right, let's move on to, you know, one of the historic bad boys of the industry, just a real bad actor in the industry. Alex Machinsky, former Celsius CEO. He was sentenced to 12 years in prison for his fraud in the 2022 collapse of the Celsius crypto lending platform. Prosecutors asked for 20 years. His side was asking for, I don't know, a couple years. They settled on 12. Yeah, I think we can close that chapter from now. Yep, I think that's over. Next up, MasterCard is a partnership with MoonPay to allow users to spend stable coins anywhere. MasterCard is accepted, which by the way is 200 countries. So basically anywhere on the planet. Huge deal. Big kudos to MoonPay.

Yeah. For locking that one in. That's a big, big deal. I actually hadn't seen this next item before is in our newsletter. apparently the finance minister of Thailand has announced that the country will be issuing a digital investment token called G token

in order to raise $150 million. Do we know what this is for? I have no idea what that's for. It's meant to provide investors with a higher return than they would on bank deposits. It used to raise funds from the public under the current budget

borrowing plan. And this is a crypto token. Wow. I was not aware of that at all. I mean, I'm not monitoring the daily papers in Thailand, but that's an interesting development, for sure. Speaking of interesting developments, SEC Chairman Paul Atkins gave an address this week at one of these Crypto Task Force roundtables. Some good developments here. So I'm just going to read one of the quotes.

A key priority in my chairmanship will be to develop a rational regulatory framework for crypto asset market. that establishes clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law. He also indicated that they would consider replacing the special purpose broker-dealer framework, which honestly just hasn't worked at all, said that they were going to look at modernizing the ATS regulatory regime, which is alternative trading systems. He also made reference to registered investment advisors being able to self-custody. And then just today, as we're recording this, actually, the SEC has withdrawn their previous joint statement on broker-dealers custody digital asset securities.

So it looks like they're going to be making it easier for broker-dealers to get involved in crypto assets and digital asset securities. Really, really good stuff, honestly. Yeah, and you know what I keep thinking of when I read these is I read them juxtapose against news items about movement. Labs. Yes. And they just go together like Peeby and Jolly. Because just today came out that Movement Labs quietly sold

or promised to early insiders 10% of the token supply without disclosing it to investors or anyone for that matter. That was reported in CoinDisc today. These documents were leaked. So it's like, this is why we need rules. Because

there's absolute chaos going on. And something has to change. Yeah, completely agree. I mean, we have to, we really have to

get this disclosure thing right. I think, and I don't know if we can get there without a market structure bill is the thing. I think the SEC can put out guidance,

but some of this will end up falling on the CFTC under the proposed market structure bill. And I don't know, the industry has just shown no ability to self-polize. No.

And, you know, there's a reason, we say this a lot. There's a reason why we have disclosure laws. is why you had to file an S1. You have to be honest in your S1 when you go public. You have to be honest in your quarterly filings,

your discussion, like there's a reason for all that. And the point is to give ordinary investors to put them on an even informational ground with the insiders and to prohibit bad behavior from the insiders. We need something like that for tokens because this regime has to change. I really like the idea of pushing more

into the broker-dealer framework for what it's worth. I think you can actually expand the market pretty significantly if you just come up with a structure where existing broker dealers can touch Bitcoin, Ethereum, other commodity-based assets, but also eventually interact with security tokens. I think that's a really good outcome to get to. I do think there's some questions there, particularly around, we haven't talked about this on the podcast in a while, but 15C3-3, like the good control location aspect. Oh, yeah. That's bingo item on the bingo card. Yeah, I think there's some questions there. Like if you're a broker dealer and you want to hold your crypto assets at like a Wyoming trust company, that should be okay, I would think.

I don't know. I think we might need some explicit clarity on that or can you hold it in a New York trust company? Is there any difference between Wyoming and New York? How does that work? Like we really do need to get into the nitty-gritty detail on how broker-de-de-eat. dealers can hold crypto. So on the topic of the merger of securities and crypto markets, there is a paper we want to call your attention to. It's by Austin Campbell, a podcast favorite, and Tuong V. Lee. It's called Crypto and the Evolution of Capital Markets. Definitely worth paying

attention to. We're going to put the link in the show notes. It's about the current market structure for securities trading and how blockchins could improve it. Yeah, this was really, really well done actually. A fascinating historical read too. NASDAQ, I had forgotten about this. So the concept of NASDAQ was originally a white paper or a consulting report, I guess,

by Arthur D. Little, which is where I used to work. Really? Yeah, this consulting firm just kind of came up with the concept apparently. So I'm deep in the bowels of the securities clearing system right now because a company I was in went public

and I had private stock and I have to get it onto a brokerage. Let me tell you, it's not a trivial thing at all. No, no, not easy. You have to go down the layers of the infrastructure. You have to penetrate ever deeper in the layers of infrastructure. You have to go to this company computer share that apparently has the shares and extract them and deliver them to a brokerage. It's not seamless at all.

Yeah. Still a lot of things that are broken. And I actually think, you know, I don't think this is all going to happen on a public chain necessarily. but public chain with some privacy very likely. I think a lot of this stuff will just be blockchain based at some point. So Eric Adams, New York City mayor has announced, I think he was under investigation now he's not anymore. He announced that the city would hold its first official crypto summit on May 20th

and wants to make New York the crypto capital of the globe. It already is, by the way. It is. He doesn't actually have to do anything. I don't know if I can do another conference. These conferences, how do people go to all these conferences? I'm doing one, which is the name of StableCon. So find me there.

It is also in New York. I just generally think we have produced too many conferences. Way too many. Total overabundance. And I'm sensing conference fatigue. A lot of people are going to Bitcoin, Vegas, to, I guess, consensus in Toronto. Is that happening right now? As we speak.

And everyone I talk about. talk to you about it seems upset that they're going. Yeah, I don't know. I like the smaller conferences. Medici was a really good conference. So the SEC has delayed its deadline for decision allowing in-kind redemptions for BlackRock's Bitcoin ETF, Ibit. They are asking for public comments. Yeah, I mean, I think this will happen. It's just operationally complicated. I think a lot of these authorized participants don't touch Bitcoin spot right now. And so trying to figure that out is going to be a challenge. And then, you know, say you have a family office that sits on a lot of Bitcoin and they need

to, or they want to get that into the ETF. They want to do kind of an in-kind create there. Just who do they on board with? How does that work operationally? I think there's some stuff to figure out there. People know how it ought to work, but getting there, you just have to build it. There was a profile in Bloomberg of Richard Heathcote, who is the CEO of Tether's $150 billion portfolio, probably one of the most interesting jobs in the world, got to say.

That was a fascinating one. We'll put that in our newsletter. That's probably the job I'd most like on the planet. Just managing $150 billion. You have so much cash to make discretionary investments. Sounds pretty fun. Yeah. I mean, think about, I mean, they're making some pretty off-the-run tip of investments there.

Yeah, like they bought a huge stake in this Italian soccer team, UVA. Did they? All kinds of stuff. Yeah. I don't know. Yeah. It sounds soccer teams sound like a bad use of capital, but I don't know, football teams, basketball teams, baseball teams, baseball teams. Chris Kuyper, Vice President of Research at Fidelity Digital Assets, give a great speech at Strategy World 2025 titled The Investment Case for Bitcoin. So good speech. We'll put that in our newsletter as well. So strategy world is like the new version of going to the Berkshire Hathaway annual meeting, I guess, for Bitcoiners.

Just another conference to go to. but this one is all about corporates buying Bitcoin. All right. With that, I think we are at our limit. We've got to go to meetings. Good luck to the Celtics, I guess. Good luck to the seas.

Everybody have a safe and healthy weekend, and we will see you on Monday.