On The Brink with Castle Island - Weekly Roundup 08/18/23 (Stablecoins offshoring, Better Markets oddity, more Prometheum) (EP.444)

Episode Date: August 18, 2023

Matt and Nic return for another week of news and deals. In this episode:  Geographic distribution for USDC v USDT Blockchains have become dollarized What's the deal with Helium's phone plan? SBF heads to jail We inaugurate a new member of the bad boys Dubai regulators fines OPNX What's up with Argentina's Libertarian presidential candidate? We need a new theme song for the SEC The Prometheum saga rumbles on What's going on with Better Markets? Coinbase can now offer Bitcoin and ETH futures FTX and Genesis reach a settlement Content mentioned in this episode:  Brooke Masters in the FT, When Tackling Crypto, the SEC Should Be Wary of Overreach Kristin Smith in Coindesk, The FIT Act Is the Most Comprehensive Crypto Regulation Ever Voted on by Congress Sponsor notes:  Coin Metrics STATE OF THE NETWORK — From East to West: the Global Pulse of Stablecoin Transactions In Coin Metrics State of the Network Issue 220, we leverage seasonality analysis to reveal geographical trends in Stablecoin usage and volumes

Brought down by bad mortgage investments, Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International Group, AIG, $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of concentrated easing. You'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... of Bitcoin. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to by Coin Metrics. And here is the Metrics Minute. Today's Metrics Minute, we are looking at geographic variations in stablecoin usage. So Coin Metrics was able to triangulate different regions propensity to use USDC and USDT based on a time zone analysis, which is very clever. I encourage you to read their state of the network about it. So as everyone kind of knows already, North America has a geographical preference for USDC,

so their volumes are consistently much higher. You can see a huge spike in volumes after the FTX collapse. In February 2023, the introduction of pro-cryptor regulations Hong Kong resulted in uptick in USDC volumes in Asia. As everyone knows, USDT is dominated, by volumes in the Europe, Africa region, as well as Asia. But interestingly, after the banking crisis in the U.S., you can see huge spike in tether volumes in North America. And this, of course,

USDC depegged during this crisis. This reflects some American crypto firms switching over their usage from USDC to USDT. This is clearly visible in the data. So you're basically seeing an offshoring of stable coins from the US to basically Euro dollars. So crypto Euro dollars offshore. So anyway, I encourage you to read this report. It was really fascinating. It's so interesting to see just how different the user bases are for Tether and USDC. That's your metrics minute.

That was good metrics minute. Coin metrics put out a great stable coin report a couple weeks ago too. Highly recommend reading it. Yeah, we've been diving deep on the stable coin market. know, I was revisiting that paper we wrote in 2020 about, we tried to call them crypto dollars. And so I re-ran a lot of the data. I know, you know, I still think it might catch on. So I re-ran a lot of the data from that report.

And I found the most interesting thing. So stable coins today are about 10% of crypto market cap. This is a little preview. If you come to some of my talks this fall, you'll hear this in fuller format. Stablecoins are 10% of crypto market cap today, right? What portion of transaction volume would you estimate stable coins account for across the whole crypto market? Transaction volume in dollar terms.

I would say north of more than that, north of 40%, north of 50%. About 75%. Wow. Blockchains are tools for moving dollars, huh? Yeah. So this is going to. need to sink it. Blockchains are all about dollars. All right, forget everything else. They're removing dollars around. All that other stuff, that was just, that was sort of a phase.

Okay, and now we're that digital gold thing, that internet computer, it's all about moving dollars. Forget it. Forget about Bitcoin, ether. We are moving dollars around. That's what we're doing. So anyway, that's a little stable coin tidbit for you. Pretty good. You've, you have, you have, got some talks coming up on stable coins. I sign up to do nine talks here in the next two months, and I think I might perish. I might just die. That's a lot of talks. It's insane. So odds are you'll be seeing me at one of these conferences coming up. All right. So should we hop into some of the deals of the week? It was actually a busy week. Yeah, great to see. Super active on the deal front. Let's start with a really chunky one, Bickgo. Everybody knows.

most BitGo Crypto Custodian, they raised $100 million at a $1.75 billion valuation. Undisclosed investors? Is it known who? Yeah, it's not clear. It's not clear who led the round or who invested in the round, but what a chunky fundraise in this environment. And I guess BitGo is doing great since Prime Trust blew up, right? It's all of those Prime Trust customers probably moved over to Bitco.

They were supposed to be acquired by Galaxy for $1 billion. So to raise it at 1.75, what, about a year later? a really good accomplishment. Yeah, I mean, they had the acquisition fell through and then they were trying to acquire Prime Trust and that fell through. So it's good to see them land on their feet here with the big fundraise. Prime Trust is one of the biggest dumpster fire stories in crypto. Luckily, it wasn't bigger, but what a terrible, terrible situation that is, huh? So they went into bankruptcy this week. I would feel really bad if I were a Bitcoin company that, that my whole strategy was to troll other crypto companies

and claim that they were scams and frauds. And then as it turns out, I was just an interface, a thin interface on top of what actually itself was a gigantic fraud. I'd feel bad if that was me. If you're a Bitcoin company and you were that thin interface and you didn't actually have any control and you built it on a complete fraudulent company, you're not a very serious company.

I don't see how you could show your face in public ever again or on Twitter for that matter. I think you should move to Mars or something. Agreed. All right. So the next one up is called Zeta Chain. This is a blockchain layer one protocol. They raised $27 million. And it was from blockchain.com, human capital, and a number of others, including Jane Street, CMT, and Foundation.

Because we need more all ones. We need more all once. Blockspace. I don't know. Isn't the block space is going to the L2s? Just an explosion of block space these days. Here's a little factoid that might blow your mind. Tron, Justin Sun's Tron, is on track to do more fees than Bitcoin this year. More fee revenue for Tron than Bitcoin itself. Well, Justin Sun is also a total leech on this industry.

I mean, that guy, Hwobie looks like it's insolvent. Everything that guy touches is murky and shady. Be that as it may. Tron has product market fit. I hate to say it, you know, it does. So, someone's paid to use it. USDT on Tron, yeah, I can understand. It's, I mean, it's cheaper to move money around.

So there's a use case there. But I wouldn't want to be invested in anything that that guy touches. Wow, you woke up mad today. chose violence this morning. We're recording this on a Thursday. This is probably going to be Thursday morning. I was hoping that this gray scale announcement would come out, this SEC gray scale announcement.

People think that there's a really good chance that comes out tomorrow morning, as in Friday morning, aka around the time you're listening to this podcast. So we'll get to talk about it next week, I guess. Yeah. That always happens. All right. Next up we have ZTX, a Web3 virtual world and creator platform. They raise 13 million from Jump, Cloud Currency, and others.

Then we have something called Helio Protocol, which is a decentralized lending protocol that raised 10 million from Binance. Then you've got Denari, a decentralized stock trading platform. They raise 7.5 million from Susquehanna, 500 Global, and Baloggi, Srinavasan. then it's Lenera. This is a layer one blockchain platform. It's one of those Facebook offshoots, I think. They raised $6 million from borderless capital.

Then you've got JK Labs, a Web3 governance platform. They raised $2 million from 1KX and I think something like 60 angels. That's a lot of angels. Like a huge number of angels. That Carta instance, whoever is doing that Carta administration. is like, why'd we do this? Yeah. I mean, there's actually a lot of new platforms for...

I think Carta is a pretty good product in and of itself. I like Carta. You know what? I really like Angelist. I think... Angelus has come a long way. ...UI is clunky. The UI is troubled.

The product itself is incredible. If you ever spin up an SBV on Angelist, it is amazing. Shout out Angel's... That's quite good. Yeah, you can fund an investment with stable coins. There's fees, I think. But yeah, I actually love it. I don't have enough good things to say about Angel's.

All right. So the last deal of the week here is an M&A event here. Securitize has acquired the digital asset wealth management startup on ramp for an undisclosed sum. So busy deal week. So I have to bring something up first. I keep seeing ads for, have you I need an explanation here maybe you know because you interviewed this man on the podcast helium now has a mobile data plan yeah five dollars a month did you know about this because I did

know about that and Miami is the first city that they launched in so I keep getting ads for this I'm like well how is it even and this isn't an ad this is me reacting to an out I've seen and I'm baffled buy it. I mean, I think it's just, it's another crypto product. You just got to try it, right? Just buy it and then worry about it later. Fred Wilson was blogging about it. Yeah, I guess it's a thing. So how can you afford not to try it? So I pay like $130 a month for my mobile plan. So how does it work to sell mobile data for $5 a month unlimited? I don't understand that. I don't know. It sounds like it's an ad, but it's not. I don't know. I think you just, why don't, You get the thing, and then two weeks from now, we'll do a little report on if it works.

Do I need the saga Solana phone to use this? I don't think so, but you probably should have the saga phone. I mean, you should, the number one rule of crypto is buy every trinket. Dan Matashefsky taught me that. That's true. I mean, we have every hardware wallet, I think, ever between the two of us. I've got a salana node, a physical salina node here on the floor. It's not plugged in.

Salana? If it ever worked. Yeah, it's like a salana little brick thing. Really? Yeah, I don't know if it works. What else do I have? Your block clock's not working either. My block clock hasn't been working for like two weeks and I've just been too lazy to figure out how to do it.

I plugged it in and out and didn't work. It's only for the best that it's not working because you'd hate the price if you saw it right now. Yeah, because the price is going down here. Yeah, all that happens. Yeah, it's been going down. So there's some crime family new. Should we cue the crime family? Let's roll it.

All right, so Sam's in jail. That had not happened when we were recorded last week. He is in Brooklyn, MDC. Thoughts. So I guess what he did was he had a New York Times reporter in his house, and he showed them Caroline's Diaries, what purportedly was Caroline's Diaries? That was a big no-no.

He attempted to contact some other witness in the case. Is that right? There was a second thing that he did wrong. Yeah, he reached out to FTX, U.S. General Counsel, Ryan Miller, who's going to be a witness. He reached out to him to try to talk to him over Signal. So that's crossing a line. he's uh he was on a vp he's on a vpn i mean remember he was on the vpn and he said it was to watch football

it's like dude your parents have cable what are you doing a vpn to watch the super bowl it's on tv so yeah that's a good point so he wanted to watch the like japanese broadcast of the super bowl or something like that he couldn't watch fox i mean he was clearly just using a vpn't get on defy protocols to rustle up some money to pay for his defense which we'll get to that story We got more on that. Yeah, so he just basically kept being incredibly sketchy. I mean, we had our other theory about him using storybook brawl. Yes.

That didn't even come up, but I think that was, that happened, probably. Voice chat, Storybook brawl. Yeah, I think he was probably chatting on video games to people. There's no explanation of being so bad at video games and just always on video games. He had to have been using the video games to do communication. Very curious. We agree. So the judge didn't like any of that and put him in physical prison, which this one doesn't sound good. I looked into it. And this was the one. First of all, they have a lot of celebrity inmates. That's kind of interesting. R. Kelly, Martin Schrelli, Galane Maxwell. They were all there. So this prison infamously lost power in the winner, I think, of 2022. And, and all the inmates just, like, froze.

Not to death, but close. And this is also where Epstein was killed, right? Well, where he died by a suicide, Matt. He died by suicide. Martin Shkreli said that it wasn't that bad, actually, the prison. He said it wasn't that violent. I mean, it's just, you have to be one of the biggest dopes in the world to pull this stunt with the Caroline Ellison diary,

where you can be in your parents' house that has a pool and is in Palo Alto until your trial in October, and you just decided to pull this stunt, and now you have to go to jail, probably for the rest of your life. Yeah, I mean, it really shows, like he just couldn't quit his little machinations,

even with the threat of the worst possible threat, I can imagine, and he still had to play his little games. the man is incorrigible. I think you have to go with the insanity defense. There's no other defense here that's going to work. And it actually might work. He actually might be insane.

He definitely has some, you know, some type of mental syndrome. I can't speculate. But, I mean, let's say you even do have an insanity defense. Do they just put you at an asylum at that point? It's not like you don't know. Yeah, where do you go? I think, I don't know. You, yeah, you probably go to somewhere.

up in the mountains, right? I thought that we kind of did away with asylums. I thought that that was actually one of the reason the prison population swelled so much as we kind of got rid of asylums as a country. Yeah, someone showed me this chart. Have you seen that chart where it's a mental asylum population is just trended very far down and then prison population is just up. So it just seems like one has replaced the other.

He's not the only bad boy in his family. Yeah, we're inaugurating a new bad boy officially. As of today, we're inaugurating a new one. All right, cue the music. What you're going to do? What you're going to do when they come for you? Bad boys, bad boys. What you're going to do?

What you're going to do when they come for you? Who is it? Joseph Bankman. Joseph Bankman is officially bad boy. He's not just a neutral onlooker. He's a bad boy. He's a bad man. He's a bad bank.

man. Joseph Bankman, refresh the listeners. So he was, he's the Stanford professor who has a very close tie to Elizabeth Warren and they work closely together on tax policy. Say more. He helped FTCS with their tax structuring, so creating endless shell corpse. Tax structuring is a euphemism for doing crimes, my opinion. He was very involved in FTCS. He helped them with fundraising. he raised Sam, so clearly screwed up, you know, somewhere along the way. Something went wrong there. And he still has a role with Stanford, by the way. He still has a role with, an active role with Stanford.

And there's an interesting article in the Stanford Daily that says that he received a $10 million donation from FTCS in his FTCS account, transferred it. into his personal bank account, and that's how he's paying for Sam's defense. I mean, this is stolen money. This is stolen money. It's crazy. I don't know, but yeah, you mentioned the $10 million. You also kind of hinted at, there's a lot of stories in the venture community right now. I haven't seen as many of these being publicly reported on that Joseph Bankman actually introduced Sam

to quite a few of these later stage generalist funds, that he actually made those introductions, that he knew a bunch of the people that were running some of these firms that historically don't do a lot of crypto deals. So I'm not sure if any of that will ever get confirmed on the record, but he played a super active role in making sure that Sam was able to raise later stage capital. Yeah, I mean, he obviously had enormous social cachet. And as a prestigious professor at Stanford, the mecca of startups and academia, he was able to definitely assist in terms of FTX's rise. I mean, otherwise, I don't think it would have been possible because they wouldn't have had the social proof necessary to raise this money so quickly. I think he's an instrumental character in the story, and the fact that

he's being treated as incidental is surprising. He's the one that's architecting Sam's whole defense with stolen money. Ten million dollars of stolen money. And nothing's happened to this guy. It's just to at least give it back. It's baffling. Yeah. It's bizarre. It's really crazy.

So, yeah, he's officially a bad boy. He's a bad boy. Well, there's some other bad boy news. What happened with the 3AC and OpenX clowns this week? All right. So they are on a mission to commit crimes in every jurisdiction in the world as fast as possible. I think they're trying to break the record for offending regulators and courts in as many countries as possible and as short amount of time as possible.

The Dubai regulators, the Virtual Assets Regulatory Authority, they find OpenX, aka Kyle Davies, Suzu and Mark Lamb, for not registering their exchange. and they didn't pay the fine. And now that has enraged the Dubai V-A-R-A. And now the fine is bigger. So there was some other nonsense. They paid the individual fine, but the entity hasn't paid the fine. I can't keep up with this.

But it was Mark Lamb, and who's that other sketchy guy who started the thing with them. So it's four rogue miscreants. Well, Mark Lamb's wife, a purported wife, Leslie Lamb, I'm not sure if she exists, actually. It's kind of a strange thing to say. I think she might be an AI deep fake, actually, as far as I can tell. Anyway, they've offended their local regulators, and we'll see what happens next. Well, I follow that 3AC liquidation group that's Taneo, that's, liquidating this thing and they just sent another subpoena to both of them via Twitter. So I don't know what's going on with this case.

I don't understand. This is again, isn't this why we have the Navy? Just send a ship in. Let's get the four of these guys. Let's just put it on a pay-per-view trial and we'll pay for the expense of the Navy that way. This is why we have the Navy. We have 12 aircraft carriers. 12.

Are they all being used? Surely there is a spare one. It's a training. You think it's going to be hard to get Suzu and Kyle? Just you send in like a first day Navy guy. Boom. You know, you remember that scene Batman where he abducts the, I don't remember, somewhere or other by basically tying a harness to him and throwing a balloon up and then

the plane scoops it up in a sky hook type maneuver. Oh, so you want to do that? So that's what I'm kind of envisioning here is more of a balloon. skyhook maneuver. Okay. I think we might just need to get champagne bottles with their names on them, and then we'll have the champagne once they're arrested. Yeah, I mean, but this is something that the United States does do.

Extraordinary rendition. See, we even have a word for it. Yeah, I mean, we have, Guantanamo is still open. Is it? We're pushing, yeah, it's still open. It's Trump refused to close it, I think. and there's slowly people are trickling out or you know obviously some have died over the years but there's so there's beds down there's we have the capacity we've got room i mean or brooklyn mdc that's

just put them in there together they'd probably build a new layer one blockchain but so apparently kyle davies is immune from uh prosecution in the u.s because he forsook his U.S. passport is the legal argument he appears to be making these days? So he, yeah, they said that he could not be served via Twitter for this 3 AC thing.

So this is Judge Martin Glenn of New York who ruled this, I think, two weeks ago that Kyle Davies could not be served because he wasn't a U.S. citizen. But he was not ruling on whether or not as a person who used to be a U.S. citizen, you can actively defraud U.S. investors and companies.

That was not part of the U. the synopsis. Yeah. So the fact that Kyle Davies was behind. Warbler Capital, do you remember Warbler Capital? We heard the pitch. They were soliciting U.S. investors. Yeah, that was more of a minor procedural point.

Yeah. Anyway, look, the process will play out. Okay, it just takes forever. I mean, look how long Doquan was able to run around in Montenegro after Luna. I mean, when did Luna go down? It was ages ago. is March of 2022, right? Yeah, that's, yeah.

So, that sounds right. These things just take absolutely forever. Trust the process. All right. So what else in news this week? So I don't know if we touched on this last week. So Ryan Salem, who's the former COSIO of FTX digital markets, he has apparently said he's going to take the Fifth Amendment

and not incriminate himself if he's asked to testify. What I sort of read into this is that they're trying to cut a, deal here and he's not going to say anything until he has a deal. Was he married to Michelle Bond? Am I misremembering that? Boyfriend, girlfriend. Okay. Involved with, she ran for office.

Do you remember this? I do remember this. On a crypto platform with FTX money. Can you imagine if she'd actually been elected? I mean, George Santos was elected and there was a lot of donations from the FtX. So Romick Aurora was a big donor to George Santos. Yeah, I guess that you can't imagine because people get elected to things that, like, have very questionable pasts. I mean, there's FTCS money into, what, 200 plus politicians.

SBF was the number two donor to Biden. That's true. Okay, we have to have a little interlude to talk about this Argentine presidential candidate. Have you heard of this man? Yeah, he's got great, great hair. So we're not sure if the hair is real. So basically he's a libertarian ANCAP economics professor. And people described him as Trumpian, from what I can tell, he's pretty incendiary.

And he won the primary, shockingly. That doesn't mean that he's going to be the president, but he appears to be the frontrunner in the presidential race in Argentina right now. And his whole plan is to create a dollarize Argentina. And he also loves Bitcoin. So his clips have been getting a ton of traction on Bitcoin Twitter. But what I find interesting is that the peso has been selling off like crazy ever since he won the election, which I don't understand that because here's a man saying,

hey, I want to fix chronic levels of inflation in Argentina, which are just inordinate. It's a nation that's defaulted nine times. And his idea is to basically do away with the discretionary monetary policy and dollarize it, maybe do some weird Bitcoin thing too. Why would the peso sell off in anticipation of that? That's what I don't get. Shouldn't you be encouraged by that as a peso holder?

that it'll eventually be pegged to the dollar. Well, maybe people just want to try to get dollars before they're used widely down there. I guess you would just declare convertibility. I mean, dollarization actually takes a while. Typically, it's a process because you need to get sufficient dollars in. It's interesting that that's been, some Argentines have been saying,

well, there's a shortage of dollars. So we won't be able to dollarize. It's like, how can there be a shortage of dollars? Just get them. I mean, what? Like, stable coins. Hello. Great some tothers.

All right. I want to transition into, I guess we're going to have to have a new segment here. We experimented with the Benny Hill theme song to talk about what a clown show some of the SEC's policies are. But I don't think that's serious enough. I think we need to have a song that really gets to the, institutional decay that is going on here with the SEC. And there's a couple stories that I want to talk about this week. But should we solicit user input?

Yeah. So what is this song? How can you capture institutional decay in a song? That's a very complex feeling. Yeah, I don't want it to be something that connotes force. Like, I don't, this is not like, we're not rooting for what's going on here. The kind of song that maybe you'd listen to during the collapse of the Soviet Union, some song that connotes like a shambolic failure.

So what is happening here is not great. And so there's a few stories this week. So several members of Congress this week sent a letter to SEC Chairman Gary Gensler demanding answers and records that he has yet to produce on Prometheum. Prometheum is of course the very shady CCP-affiliated broker-dealer that does not have any customers or business model that was approved by the SEC a couple of weeks before that hearing a few months ago. They're approved as the first special purpose broker-dealer. They have investment from the CCP. It's complete sham.

No other established companies who have tried to go to this path were approved. very clearly the SEC just approved these guys so that they could say, look, there is a path here even though they literally cannot operate. There's no business there. So that's one. And the records have not been produced on this, which I find deeply unsettling.

I think your Twitter thread, when you went mega viral, I think that contributed to this. I think you got to pie yourself on the back a little bit. I mean, there's no, all I was doing was finding things that were in the public and surfacing them, but I'm glad that members of Congress are now actively engaged on this. And there's got to be some answers here. This is not the way, this is a merit regulator.

This is an SEC chair that has a negative view on blockchain technology and is doing everything in his power to prevent the real businesses from flourishing in this country. And case in point, there's a second kind of troubling thing that happened this week. So the SEC comment letters on the Fidelity ETF were due on the 9th of August. And so there are usually a few days delayed in getting them posted. But there was a really weird one that got posted a couple of days ago. And I'm going to pull up the exact letter here.

But it's from Better Markets. It's from a group called Better Markets that I have never heard of. And so it was a comment letter that. that makes some really just questionable, if not completely incorrect claims on how the spot market and the futures market work for Bitcoin today, taking pot shots at the CME Bitcoin futures market saying that it's not a regulated market of sufficient size, and encouraging the SEC to not approve this Fidelity Bitcoin ETF. And so I just found that super strange that they were so forcefully saying something that in a lot of ways any practitioner in this market would be able to

dissect this letter and tell you how incorrect it is on any number of levels. And it almost sounds like it was written by Elizabeth Warren or Gary Gensler or Shrod Brown, one of these anti-crypto people. By the way, Shrod Brown's in a super competitive race in Ohio. And he's the head of the Senate Banking Committee. He's in a, I don't know who the opponent is. I guess we should probably find out and do what we can to promote the opponent. But he's in a very close race if you look at the polls.

and he's the reason why a lot of these bills in the Senate are not being introduced because he's just standing in the way in any event. So I read this comment letter. I said this sounds like it could be from Elizabeth Warren. So I go into some of the websites and the annual reports of this group called Better Markets, which is run by this guy, Dennis Kelleher. And you've got quotes in here from Elizabeth Warren. So she says, Dennis Kelleher and his team at Better Markets have consistently pushed for financial reform

that will help protect the U.S. economy from another financial crash. There are strong partners in the fight to level the playing field for middle-class families and have been persistent fighters for American people, their jobs, savings, and retirement. Senator Elizabeth Warren. Next, I come up with Sherrod Brown. So Senator Sherrod Brown has this to say about better markets. It's more important than ever that consumers and taxpayers have strong advocates like Dennis and better markets to stand up for ordinary Americans.

So we got two of the people that I thought it was. And then, of course, you've got Gary Gensler. So Gary Gensler says, it's good to get some balance in the mix. My mom and your mom don't usually have someone like better markets who's going to spend the time reading the detailed rules and do not necessarily have the same resources or desire to be in the minute details and the large financial interests on the other side of this debate do.

That's Gary Gensler. I mean, in what world does misrepresenting the facts of a Bitcoin ETF that would make it easier for retail, get access to this stuff and not have to go to offshore bucket shops to get exposure to Bitcoin. In what world does this protect them? In any event, the three kind of hench people of the anti-crypto army are behind this thing. And if you look at, if you look at Gary Gensler, if you look at his public calendar, he has met with better markets nine times since he became the SEC chairman in 2021. This is a level of access that basically no one has.

certainly no one, maybe with the exception of SBF, has been able to get that level of access. And it's so much so to the fact that Doug Sifu, who's the head of Virtue, just jumped into the fray and said, hey, imagine we had to beg to get two audiences in three years, talking about two audiences with Gensler. He said, I got in to see the Pope with less effort. Meanwhile, better markets is just walking in here. It's obviously a mouthpiece for Gary Gensler and Elizabeth Warren, and they're putting up these crazy statements that are provably false in a Fidelity Bitcoin comment letter. What the F is going on here? Yeah, this is some kind of front for the anti-crypto wing of the Democratic Party.

It's remarkable. It really is remarkable. And yeah, I mean, it's furthermore, it's remarkable. that this guy Dennis Kelleher from Better Markets was nominated by Gary Gensler to serve on the transition committee for financial services for the Biden administration. So there's a deep relationship here. This is obviously just a front for Gary Gensler and Elizabeth Warren. And they're going on a rampage.

And this will be, you know, if this gets denied, it'll all come down to whether or not Crenshaw is on board with this. Because I'm reasonably certain that PERS and UADA see the light here on this and at least two commissioners should be on board with the the ETF proposal. But if this gets denied, then it'll be probably just a copy and paste from the better markets right up. There's an interesting threat on Twitter this week, and I forgot who came up with it, but the gist of it was Gary Gensler wants technological and financial market development to just stop. And he's refusing to admit that there's a world in which crypto remains relevant, and then we need new rules. So he's just standing,

you know, that expression is standing a thwart history yelling stop. That's what he's doing. He wants all development in these markets to cease, and he wants this frozen in some kind of like pre-2008 era stasis, whereby the old rules apply suitably indefinitely. And there's just not how it works. Things change and new rules are developed that are, they comport with the new financial market realities. And he's taken the position that no technological process is admissible. Progress is admissible. It really just gets to the heart of do you want to have a disclosure-based regulator or do you want to have a merit regulator that decides which technologies ought to thrive in the United States? So I had a brain blast while you were speaking, and I realized what our song for the SEC should be.

Okay. Well, I humbly submit this proposal. Chikovsky's Swan Lake. All right. Should we just play it? Yeah, sure. Let's play a little bit of Swan Lake. All right.

So in 1991, when the Soviet Union was collapsing, the state news broadcast didn't know what to put on TV. because there is so much chaos in the government. So while all the chaos was going on and their failed coups and succession was unclear, the state TV just broadcast Swan Lake on loop. Oh, yeah, I remember that. And this came to be, well, I don't know if you actually remember that. That sounds very far-fetched, but...

I remember hearing the story. I wasn't there for it. I didn't actually remember hearing it. yeah you would have been about you know eight at the time um so anyway so swan lake came to signify in the eyes of russians the collapse you know the institutional the final leg down the final collapse and so maybe that can be our i'll submit that we'll get we'll also get some submissions from the audience too but that's my so get in our get in our twitter mentions and us if you like that song.

Yeah, I mean, look, public blockchains are a really good way to keep people honest and put records on chain and things like that. So this is kind of a unique situation here that a lot of what we're complaining about is just the lack of being forthcoming on public disclosures and records and freedom of information and stuff. So, you know, it's kind of puzzling that this technology that is so reviled by the SEC could actually be holding them more accountable in a lot of ways. In somewhat more positive regulatory news, the National Futures Association, which is the CFTC's self-regulatory organization, they approved Coinbase as a registered futures commission merchant FCM.

This means they can offer futures in Bitcoin and Eath to eligible customers in the U.S. Yeah, this is huge. Really big congrats to the Coinbase team. This is a long time in the making. I think they bought a company called Fair Markets in order to add this capability. This is a positive development. It's kind of funny. The CFTC approves Coinbase for this.

And meanwhile, the SEC is, you know, suing them. So that was a good development. Looks like there's another development with FTX and Genesis. So they've reached a settlement, which allows FTCs to make a claim of $175 million against the Genesis estate. Previously, this was rumored that FTX wanted to make like a $4 billion claim. So I'm not sure what to read into what will actually.

happened there, but it seems like they have decided not to go to court. I'm going to direct your attention to Brookmasters' piece in the Financial Times. When tackling crypto, the SEC should be wary of overreach. I thought she put it very well. Yeah, that was a good one. And Kristen Smith wrote a nice op-ed for Coin Desk. It was called The Fit Act is the most comprehensive crypto regulation ever voted on by Congress. That was a good synopsis of what's going on. So I think that's it for the week. Let us know what you think about the songs, have a safe and healthy weekend, and we will see you for an episode on Monday.