On The Brink with Castle Island - Weekly Roundup 08/23/24 (SALT Wyoming, Bozo of the Week, Fairshake drama) (EP.554)

Episode Date: August 23, 2024

Matt and Nic are back for another week of news and deals. In this episode: SALT Wyoming review Nic's next fight  How Bitcoin miners have a procyclical effect on the Bitcoin price Hunting Hill is launching a credit fund seeded by Kraken Wyoming is launching a stable token in Q1 of 2025 The SEC rejects CBOE's filings for SOL ETFs Is Gensler actually being slated to run Treasury under Harris? Tether is launching a UAE Dirham stablecoin Our upcoming Emerging Markets Stablecoin Report Our Bozo of the Week Babylon is launching Ron Conway defects from Fairshake PAC Chuck Schumer is evolving on crypto Would a CBDC actually be private for users? Sponsor notes:  Unwrapping Wrapped Assets & wBTC: In Coin Metrics State of the Network Issue 273, we understand wrapped bitcoin's (wBTC) custody transition, BitGo's business model and usage of WBTC in DeFi Withum's Digital Currency and Blockchain Technology Team specializes in crypto-assets, offering accounting, tax and advisory solutions to fortify trust in a dynamic industry. Contact them today to get started. - withum.com/crypto

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. Guest 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.

What down by bad mortgage investments, Lehman, which has 25,000 employees will be liquidated. The federal government loans American International Group, AIG, $85 billion. dollars. This is a different kind of market and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. 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. Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by

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And the answer is, this podcast is not free to run. It's not free to run. We have costs. There are some costs, and we've been running at a loss for a long time. Yeah. So please, it's one minute. Okay, you can skip the ad if you want.

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So go to, yeah, Witham.com slash crypto. So we are recording live. In person, we are in Jackson Hall, Wyoming. We're in 48 hours, the future of the world's financial markets will be. be decided. This place will be crawling with central bankers. We're not here for that, though. No, we're leaving for that part. I can't imagine anything worse than being trapped in a small town with hundreds of central bankers. We are here for the Salt Conference, which is being hosted by Cracken, and it's an awesome conference so far. Yeah, honestly it gets top marks for me so far.

Excellent group. And just what a place. Jackson Hall is. Unbelievable. We need to talk about our fun runs. Yeah. So they've been. been they've innovated there's been innovations in conference technology every morning there are guided runs and yesterday's run almost killed us i mean i thought that was going to so it's a 7 a m run i thought it was going to be a casual like three miles we ended up going at a altitude of what it was it 6700 feet 5 miles into the mountain and the run started we just ran directly up the mountain the ski slope just straight up straight up and there's some fast runners. I mean, I'm sitting there next to Mike Alfred. I know I'm in trouble. This guy runs

like 100 mile races. Yeah, I didn't think it was very fair because a lot of the runners were actual ultramarathoners. Yes. And Andrew Casey over Cracken is a very good runner. He's an excellent runner. And we live at sea level. Right. Huge disadvantage. I was sucking air. I mean, we finished. We finished in the lead pack, I would say. Mike Alfred definitely out in front. Gladstein's a good runner. I fell, skinned my knee, but kept going. Yeah, you're actually a little beat up, but honestly it was amazing. I think all conferences should have it. We did it again this morning, decidedly smaller group.

There was some attrition from last night. A lot of fall off, a lot of fall off. Some of the top runners, I'd say we didn't see it on the second day. But I think all conferences should start the day with a run. You just feel so much better after starting your day with a run. And this is like altitude training for me. It's great. It is.

Yeah, so you're getting ready for another fight. Yes, we have another fight. September 19 in Singapore, I'm fighting hedged hog. The infamous hedgehog. Boxing match. It's boxing. I don't know what his actual name is. So we're going to close the year out at 2 and O, hopefully.

The other piece of news, of course, in the fight game is David Hoffman is back. He is going to be fighting in permissionless. He's fighting Kane. How do you pronounce this name? Kane Warwick from Synthetics? From Synthetics. They're fighting. I thought he was David Hoffman was supposed to fight you.

That didn't happen. and he's found another opponent. And he's told me he doesn't want to fight again after this. I would encourage David if he wins. I think he'll be addicted. He'll be hooked. And then maybe we can arrange a match for next year. All right.

Well, good for David. I'm looking forward to seeing that. Shall we start off with some deals of the week? Yes. So there's not a lot of news, but there's plenty of deals. So first one in our portfolio, Bitwise, asset management. They've acquired ETC Group, a London-based asset management firm. That's a huge.

acquisition for Bitwise expands the presence of the company into Europe. You can do a lot more in Europe in terms of these exchange traded products. Single asset ETPs are big over there. So huge congrats to Bitwise, really rolling. An ATC group, no relation to Ethereum Classic, I presume. Not Ethereum Classic. No. Next up we have Fabric Cryptography. They are a cryptographic hardware company. There is 33 million from blockchain capital, 1KX, Polygon, off-chain labs and Matter labs. That's a big raise, but not as big as this one. Story Protocol, which is an intellectual property focused blockchain. They have raised $80 million from A16 crypto, polychain, and the number of others. Just a massive, massive raise. That's a big time raise. Lots of interesting participants in that

raise as well. I think Paris Hilton is also involved. Paris Hilton's still around. Remember her? Yeah. Next up we have corn, a Bitcoin focused yield protocol. There is 6.7 million from Polychain, and Binance Labs. That's a good name, actually. Corn. Yeah, I like that. Yeah, I like that. Next one is ZKMe.

This is a decentralized identity protocol. They raised $4 million for multi-coin, OKX, and robot ventures. Then you have Sorrella Labs. They're a crypto trading infrastructure company. There is $7.5 million from Paradigm, Uniswap Ventures, Bankless Ventures, Robot Ventures, and Nason. Then it's Yeager AI. These are developers of a decentralized AI network. There is $7.5 million from North Island ventures, node capital, and

Arrington capital. Jaeger, is that like Chuck Yeager? That's what I was thinking. Chuck Yeager, the right stuff? Yeah. Did you read that book? I did. Yeah, that was a great book. That's an excellent book. So Chuck Yeager, is he the, so he had a huge jump from like a balloon or something too, right? Did he jump from like orbit down to the? No, that was the Austrian guy. Was it? Okay. He jumped from, he skydive from orbit. So did Chuck Yeager break the sound barrier for the first time? Was he the first guy to break the sound barrier in a, in a jet or something. Just looking it up, he was a test pilot, and he was the first pilot in history to exceed the speed of sound and level flight. That's what I, yeah, that's what I thought. And he wrote

a great book. I really recommend it, the right stuff. It's my second favorite book about aeroplanes. The right stuff is just an incredible book. I mean, these are like, these were cowboys back then. Yeah, the thing that really struck me was they used to just get horrendously drunk the night before, and then they would just go fly the next day. Yeah, it was just a different culture in the Air Force back then. Back when men were men, you know. So he's regarded as one of the greatest pilots of all time. He flew the experimental Bell X-1 at Mach 1 in 1948.

So he broke the speed of sound in 48. Now he's got a decentralized AI network named after him. So congrats to Chuck Yeager. Next up, we have WSPN. I don't know what that stands for. They're a stablecoin payments infrastructure company. They raise 30 million from Foreside Ventures and Folius Ventures. WSPN.

That's a play on ESPN, I think. Do you think so? Probably not. Next one up is Nexus Interactive. This is a Web3 gaming studio that raised $2 million from Anamoka, Jump Crypto, Maven Capital and others. Then we have BitFarms, the well-known publicly traded Bitcoin miner. They have acquired Stronghold Digital, which is also a Bitcoin miner, for $175 million.

Both of these firms have had executives appear on our show in the past. Stronghold Digital is a very interesting model. They use coal waste to mine with. So the EPA has a program. focus on the remediation of these big piles of ancient coal waste from mining that occurred over the last hundred years that are just sitting there in Pennsylvania and other places. And Stronghold figured out how to, you know, convert them into energy and then mine Bitcoin with them. So they're a very interesting company in that they got a ton of flack for doing that from environmentalists.

But the interesting thing is they were actually remediating this. environmental catastrophe and yes there's emissions from this but the alternative is also that the waste piles just emit CO2 and they leach into the soil and it's an ecological disaster so this is a classic example of a Bitcoin miner that's actually doing something good for the environment's an official EPA program they get a ton of flack from environmentalists really interesting and so BitFarms has bought them there's a lot going on in the Bitcoin mining space right now there's

There's a good panel with a bunch of the publicly traded miners yesterday that Mike Alfred moderated. And it seems like the business models are all quite different in terms of, you know, how they source, how they source energy, what their strategy is on holding Bitcoin or acquiring additional Bitcoin. Very interesting category. Well, and the miners have actually just begun to start holding and buying Bitcoin again. So Marathon bought Bitcoin recently. And this kind of is why I always think of the. miners is this pro cyclical agent in Bitcoin. So everyone thinks, oh, the miners just automatically sell off the Bitcoin. That's actually not the case. They add cyclicality to the Bitcoin price.

When times are good, they hold the Bitcoin or even buy more Bitcoin. Then not all of them are like this, to be clear, but many of them will hold and buy Bitcoin and, you know, they're publicly traded, so the market likes that, the stock price rallies, they have an incentive to do this. When times are bad, there's consolidation, there's bankruptcies, they have to pay off their creditors, and they have to puke up and sell all the Bitcoin all at once. Reflexive down. So when times are good, they scoop the Bitcoin, take it off the market. When times are bad, they pique the Bitcoin back onto the market.

So it's very important not to model them just like these structural sellers, but to understand their behavior, which is still, you know, meaningful driver of the Bitcoin price. Next one up is Skyfire. This is a payment network for AI platforms. There raised $8.5 million from Newberger-Berman, Brevin-Hauer Digital, intersection growth partners, and quite a few others. And lastly, we have Soulbound, a Web3 gaming platform that raised $4 million from Anamoka and Big Brain Holdings. And here's your Metrics Minute. For today's Metrics Minute, we're looking at data around wrapped Bitcoin amid its custodial transition.

WBDC has a market cap of $9 billion, making it one of the largest. wrapped assets along with and wrapped staked eth WBTC's supply of 154,000 Bitcoin represents 0.8% of Bitcoin's total supply with 67% of that locked in Ethereum smart contracts. The number of Ethereum addresses holding WBTC has doubled to 98,000 since January 2023. Approximately 3 billion in WBTC's locked in Ethereum lending protocols, prompting MakerD out to prevent new WBDC collateralized loans as risks from custodial changes emerge. That is your Metrics Minute. All right. So that was the Metrics Minute. So we're recording this on a Wednesday, which always means that something big is going to happen on Thursday. A little bit light on the news

so far this week, but we do have some interesting announcements. So this one actually just happened at the panel that we just came from, actually. So there has been an announcement that Hunting Hill Digital, which is a crypto asset manager, they have announced the launch of a new credit fund, which has been seeded by Cracken. Very cool announcement here. Obviously, credit has really not been a feature of this ecosystem since the collapse of three hours capital, I would say. So it looks like a really interesting product focused on cash lending into the crypto markets.

You could say that this is the next credit bubble happening, but I would just say the market is healing. And the market has been very scarce of credit for a long time since 22, and it's just returning to its natural state. You know, credit should be a part of these markets. So there's a pretty exciting announcement to see. Yeah, really exciting announcement. So congrats to the Cracken team and the Hunting Hill Digital team, Adam Gurren over there.

Cracken has a great presence out here at this conference, huh? Yeah, they've put on an excellent conference so far. I would say one of the best ones I've been to, actually. Maybe it's because it's such a nice part of the world as well. And great, great crew. So we're, we just came from also a, a panel with Mark Gordon, the governor of Wyoming, as well as Joel Revel from Two Ocean Trust, which has a great presence out here as well. That was awesome. To hear a governor of a U.S.

state talking about being pro-cropto, pro-innovation, they're launching a stablecoin, a Wyoming stable coin out here, which they said it's going to launch in Q1 of 2025. The proceeds of that, the net profits from their stablecoin, which is backed by U.S. treasuries and repos, will go to the school system. So as Joel Reveller, said it's for the children. Yeah, I mean, stable token technically, I guess they're not calling a stable coin. Yeah, it's a stable token. But basically the same thing. And this is something we've talked about, I think, on the show. We have. But people haven't really picked up on the fact that Wyoming passed the law and is actively pursuing the launch of a Wyoming branded and issued

stable token. They're hiring, by the way, if you want to work on the Wyoming Stable Token team. And I think that's a pretty landmark development. I mean, in parallel, we have Congress mulling over stable coin legislation, which is really focused on the federal path. We don't know what the fate of the state path will be yet. I think that's a big part of the negotiations. But, you know, meanwhile, Wyoming is just plowing ahead with their own stable token initiative and making the case that the states should be a part of this.

And you might ask yourself, does the state actually have the ability to, to administer a stable coin. And bear in mind that Wyoming actually has a $29 billion sovereign fund out here. So they have this tax basically on minerals as they come out of the ground. And it goes into this permanent fund. And that permanent fund buys treasuries and does repo agreement. So they really have the scaffolding of how you'd want to run a stable coin already. No state income tax out here either.

So it's really a very interesting state. Yeah, I mean, a lot of open questions as to what it'll look like, what blockchain is it going to be on? What's going to be the privacy model? You know, I'm personally hopeful that it will be as meaningfully private as possible. Will it, you know, you be able to transact the token on a public blockchain without KICing every wallet or address? We don't know.

Still an open question. But I'm very excited to see this project come to fruition. All right. So what else happened this week? The SEC has rejected CBO's 19B4 filings for two prospective. of Solana ETFs over concerns. It seems like the SEC has indicated that they think Solana is a security. So we're not getting a Salana ETF, but that's not really surprising.

Yeah. Elsewhere in SEC News mango markets, the Dow that was infamously hacked in October 22, the Dow appears to be voting to agree to a settlement with the SEC to avoid further litigation. But the SEC, has the SEC even sued the Dow? yet? I don't understand this. So did they proactively come out and vote as a DAO that they would settle with the SEC, but the SEC hasn't actually sued them yet? So this is interesting. So the proposal on the, I guess it's called realms, which is maybe where they coordinate Dow votes, says that they actually can't say whether or not there is an active investigation or not,

but nonetheless, they are voting to cede a fund in order to proactively settle with the SEC. So it looks like there probably is some kind of investigation. Fascinating. I mean, so it seems like they'll just stop doing token sales and deprecate the token. Yeah, decentralization, huh? Elsewhere, Coin Center, are friends over Coin Center. They have won the right to sue the Treasury and the IRS over the 22 amendment to the tax code that would have required individuals to disclose personal details related to

crypto transactions to the IRS. That's a good development. So Coin Center continuing to really fight for the personal freedoms over there, big fan of what they're doing. Of course, the other story that was going around this week, which I don't actually believe, but there was a story that suggested that Harris, if elected, would nominate Gary Gensler, the current chair of the SEC to be the Treasury Secretary, I give this a very, very slim chance.

I actually don't believe this report. Yeah, so this is an outlet called The Washington Reporter. Dot News, which I've never heard of before. And the author is Matthew Foldy. I'm actually familiar with this guy. He was like in the orbit of this Twitter personality called Comfortably Smug.

Do you know who that is? Comfortably Smug? Like a conservative Twitter provocator. and he had a failed run for Congress, I think, last cycle, and is now, I guess, a reporter. This reporting traces to a tweet by WIP Emmer, who kind of warned about, I would say, generally warned that Harris might pick Gensler

for certain cabinet roles, and then Foldie just, I think, way overinterpreted that, and then it kicked off an entire news cycle. To be clear, I don't think we have any evidence at all right now that Gensler is being considered for Treasury. Representative Wiley Nicol, who's a Democrat out of North Carolina, came out yesterday and said that there's a 0% chance that Gary Gensler would get into that seat, which I believe it coming from him. Well, and also he would have to be approved through the Senate, and we don't know what's going to happen in the Senate, but the Senate electoral math seems to favor the Republicans, as far as I can tell. Also, if it's a Republican Senate, certainly he'll not be approved, even if nominated. In stablecoin news, Tether has announced plans to launch a UAE-based stablecoin.

So it's the UAE Durham, apparently. Is this the first UAE Durham stablecoin? That's a good question. It looks like the OE recently passed a payment token services regulation. And so, yeah, this looks like the first or one of the first thing is, about non-dollar stable coins is they just no one uses them so i ran the numbers recently it's really 99% dollars and then 34 basis point euros and then there's 50 basis points of gold if you consider that a currency and then there's a long tail of just minuscule saw other stable coins against other

sovereign currencies so for whatever reason people just want dollar stable coins I've never seen any other FX gain any traction whatsoever as the quote currency for a stable coin. Interesting nonetheless that Tether is doing it. I mean, Tether is issuing these stable coins on all different types of blockchains. It begs the question, would Tether ever just launch their own chain and just aggregate liquidity on their own chain? Wouldn't that make sense? I mean, they seem to be doing well enough right now using other blockchains, right? I guess.

But I mean, you're paying transaction fees, really what people are. after is the stable coin. It's demonstrated by the success of Tron network in terms of stable coin usage in places like Africa. People don't really care what chain it's on. So why wouldn't the Tether L2 be an interesting chain? Well, on the stable coin front, we have been rumoring this for a while and two weeks time will be publishing a report approximately two weeks regarding emerging market usage of stable coins. You put a lot of work into it. I think it's going to be the flagship stable coin report of the year tons of new data that no one's ever seen before and new insights as to how people use stable coins globally so very very excited to be publishing that one so stay tuned for that

all right so it's time for the reintroduction of the bozo of the week let's cue the music introducing bozo the world's most famous all right so matt who is the bozo of the week the bozo of the week is an entity that we've talked about in the past on this show, it is our friends over at Prometheum. So Prometheum, they're up to some antics here. What have they done this time? All right. So Prometheum came out this morning,

which is Wednesday morning, and they said, you know, we are ready to launch some securities, some securities on the chain. Okay, exciting. Those securities are Arbitrum, the token, ARB, and Uniswap, which are, you know, I would say not securities,

either of them, really. Right. So Prometheum has a special purpose broker-dealer. They are, as far as I know, the only entity that has a special-purpose dealer, broker-dealer, rather. They have a very interesting cap table, some ties to some folks in China. Kind of a strange one. We've covered this at length in terms of how this company was actually approved for the speedy, while a number of other companies have been trying and trying to get such a designation.

they, of course, had the view that they were going to list Ethereum as the first security. So a lot of people in the industry thought that they had this deal with Gensler, where Gensler was going to declare Ethereum a security, and it could only be traded on a special purpose broker dealer, such as Prometheum. Obviously, that did not come to pass. And so the Ethereum ETF was approved. The SEC now effectively is saying that Ethereum is a commodity, and Prometheum is standing up and saying, well, we're on to the next thing.

and uniswap and arbitram are going to be their securities. So I think that's going to get a lot of uptake? Probably not, based on the traction they have so far. I mean, is your theory here that they're sort of in cahoots with the SEC and proactively labeling these asset securities, not for the sake of commercial desires, but in order to just put a black mark on the name of the various tokens that they choose to list? Yeah, I think they would like the SEC to come out and drop the hammer on a number of these projects and have them be deemed to be securities, which is just not going to happen on a timeline that Prometheum needs it to happen.

So even if the SEC came out and sued Uniswap, which they probably will, just based on the fact that Uniswap has gotten a Wells notice and they assert that the UNI token is a security. Uniswap's going to fight that in court and that's going to take multiple years. You're probably going to end up with a Judge Torres-style decision like Ripple where they say, say that the token itself is not a security. So I don't think that this is going to happen. The other interesting thing here is that Prometheum, I don't think they're going to be around. And so, you know, there's a SEC filing, a Form D that happened about a month ago for Prometheum saying that they were in market raising $20 million. You know, typically I'd say a lot of these companies, if you're doing well, wouldn't be in market with a placement agent. So Prometheum,

obviously is not doing well. They don't have any customers, any revenue yet. They're in market to raise $20 million. They filed with the SEC that they're in market with Aegeus Capital Corp out of New York to raise this $20 million. As part of this $20 million, $2 million of it would go to Aegeus as a sales commission. And then there would be an additional 3% expense allocation on top of that. So going out with this Aegeas capital, have you ever heard of these guys? No, but I like the word Aegis. Agis. Yeah, it's a good name.

I'd never heard of them either. Now, keep in mind that Prometheum had previously gone to market with, I think it was, Network 1 financial services, a company that had something like 20 public disclosure issues and fines with the SEC. So they probably,

Promethean probably went with a more buttoned up shop, right? Yeah, I mean, the rule of thumb from the venture perspective is if a startup is using a placement agent to raise a series A, things are not well. Yeah. And, you know, if you have a black eye of going out with a placement agent that has a number of other issues, you probably would get a really buttoned up one. Not the case here. So AJA Capital Corp has 38 disclosures and fines over its lifetime with the SEC. A number of them around misrepresenting basically commercial offerings, like going out and misrepresenting the risk of some of these like penny stocks.

So it's a looking at the broker check report right now. very, very long one. So it's 117 pages of disclosures on their previous issues. So I would say bozo of the week to Prometheum here. A couple other pieces of news. So very light news week, actually, really in the summer doldrums here. BlackRock's ETHA is the first Ethereum ETF to cross a billion dollars in net inflows. Congrats to BlackRock. And on the Bitcoin front, Actually, that was what my panel was on today at the Salt Conference was about the future Bitcoin. And pertinent to that, Babylon is launching on Mainnet in two days. So launching on Friday.

I think this is really a project to watch, probably one of the most touted L2s. I don't even know if you could call an L2, but restaking protocol allowing other L1s to borrow from Bitcoin security. So that's an idea we've been mulling over for a really long time. It's exciting to see them launch. Yeah, we're excited to beat backers of Babylon. And everyone's talking about Babylon out here. Yeah. To really capture the zeitgeist.

I mean, it just makes sense, you know, like proof of stake blockchains have an issue with security. And for the most part, they are kind of permissioned, you know. They are exposed to cartilization and capture. I stand by that. I've always felt that Bitcoin's proof of work. It's really the only major proof of work. work blockchain and I think it does have something special in terms of the settlement assurances you get and the decentralization and the validator set. So it's just Babylon is taking something that

these other L-1s need and also something the Bitcoin needs, which is fees and usage of the block space. So I think it's a match made and haven't. So there was a little bit of interesting news on Fairshake, the largest blockchain pack and the largest single issue super PAC that I'm aware of. So there was a high profile defection from Fairshake. What happened? Yeah. So this is a little bit of inside baseball on what folks in the crypto industry have been talking about out here and around the policy discussion. So Fairshake has raised over $100 million into this super PAC. You know, we've supported Fairshake in Dries and Horowitz, Ripple, a number of others in the industry. And they're not focused on the presidential election. They're focused on

Congress and promoting pro-crypto candidates. And going after non-pro crypto candidates, too, I should say. So there's a big spat this week. So Ron Conway, who's a very prominent, you know, legendary, I would say, angel investor, venture capitalist out of Silicon Valley, big Democrat, big booster. It's been very helpful to a number of crypto companies over the years. He is not happy with fair for putting $12 million into the Ohio race in supporting Bernie Moreno against Sherrod Brown. Sherry Brown is the head of Senate banking. I'd say he's probably the second most antagonistic to the crypto cause behind Elizabeth Warren in the Senate.

So it's not surprising at all that, you know, he would be a focus for Fairshake, in my opinion. Conway did not like that. Conway says that, hey, we're trying to build rapport on the Democrat side and this is not going to help. So that's one thing. The other side is that some of the more Republican-leaning donors to Fairshake are very unhappy with Fairshake as well for putting $3 million into two Democrat races. So Fairshake announced that they're putting 12 into Ohio, but they're also going to put three into Michigan. I forget where the other three was going, Arizona maybe.

So, you know, Fairshake getting it from both sides. But I would say, look, you got to play to win here. So I would say there's kind of two schools of thought on this. But this is kind of what Fershick said they were going to do. Yeah, I'm baffled by Conway being vexed by this because what did he think he was signing up for? I mean, Sherrod Brown is the number two crypto antagonists in the Senate behind Warren. And just generally, as we often say, flipping the Senate is very important for the future of crypto. So how on earth could he be surprised that Fairshake would go after him in a tight race with Bernie Marino being his opponent who is a big booster of crypto?

That's like the most obvious place to put those superback dollars to work ever. Yeah. And I'd say folks that are operating in the industry running big companies, big custodians, exchanges, I would say generally have the view that crypto needs to be bipartisan. and that's absolutely true. We should be building bridges on both sides. But you also need to exert your will in some of these critical races. So I was a little bit surprised that Conway didn't know what he was signing up for when he donated to Fairshake, frankly. Yeah, that one is shocking.

But yeah, Fairshake is crushing it. And I think they're doing an excellent job. And I think the donating to both sides, it makes sense, you know? Like you can make an impact on crypto policy in this country by primaring certain Democrats. So I think they are the most effective organization we have at the moment. Yeah. And we should be supporting the pro-crypto Democrats as well. So Wiley Nichols has been excellent on these issues.

Jake Gotchenclas has been pretty good. Richie Torres has been unbelievable. Rocana has been, you know, trying to do things as well. So, you know, there is a faction there, I'd say, on the Democrats. side that should be supported. Chuck Schumer even. I mean, I think he's come out very publicly over the past few weeks and gotten behind this, probably because a number of the banks that are supporters of him want to launch crypto custody businesses. So he's doing what's in the best interest of his constituents. And, you know, folks like that should be supported. Yeah, the Chuck Schumer

evolution hasn't been talked about very much, but it's a very significant change for the future of crypto legislation in this country. I was at a cookout this past weekend, and I tried to cook some burgers, Chuck Schumer's sale. Oh, what is that? Because he, like, took a picture of burgers on the grill that were raw and he'd put cheese on them or something. Yeah, you just put cheese on raw burgers. That doesn't sound like it works. No, it doesn't work.

Because you have to flip it. Yeah, I try it. You have to flip the burger. Yeah, no, it just makes a mess. So the cheese is in the way. I would not recommend it at all. No. But they have great burgers out here.

Speaking about burgers, bison burgers. Yes. We had an elk stew or an elk chili last night, which... Unbelievable. I'm just going to be dreaming about that elk chili. Oh, my gosh. What a great food out here is amazing. Pretty much everything about Wyoming is great.

The people are awesome out here. And there's only 500,000 people that live in Wyoming. Wyoming has one congressperson and two senators. That's baffling to me. Well, I mean, it's based on population, right? Yeah, it's a math. I guess you can't have zero, right? Yeah.

So it's, you know, you might just run into the governor at the grocery store or something. Governor's up there wearing cowboy boots and talking about crypto. It's like, what could be better? Yeah, I think I don't have enough Western gear and I need to change that. Well, you had, you were kind of dressed in the, you had a cowboy. I have some cowboy year. Yeah, and I'm sitting around here with like a Brooks brother shirt. I don't really fit in.

A lot of people are unironically wearing. cowboy outfits. Yeah. And it's great. Can you do that in Boston, though? That's the quote, or Miami for that matter. Probably not. No.

Probably not. But there's some hitters out here. Jake Clayton and Chris Giancarlo were on a panel together yesterday. I thought that was quite good. That's right. Yeah. That was actually a heated panel about stable coins mainly. Yeah.

Keith Tarbert as well was on it. Keith Tarbert was on it. The GC from Anchorage was on it. Yeah, there was an interesting point that Jen Carler made, which was that because of the Fourth Amendment, a CBDC would actually ensure privacy for the users of the system? Yeah, I had not heard him say that before, which is an interesting point. But, you know, he's not necessarily advocating for a CBDC. He's more just advocating that we need to study ways to ensure that the dollar remains dominant.

And to him, stable coins are a big part of that. I believe John Carlos is on the board of Paxos. The thing is, though, I just don't buy that once government gets that power, they'll willingly surrender it. I don't either. You know, like, I don't know what the analogy is here, but it would be too tantalizing for the government to try and impose kind of mandatory KYC on a system like that. Yeah, to have that full visibility. I tend to agree with that. There was another interesting point on this panel around do we even need a market structure bill.

So there is this argument that the SEC has the power. to grant exemptions and that they should grant exemptions to the exchanges and the custodians that are offering a number of these tokens and kind of grandfather and a number of protocols that way and you don't actually need the kind of the two-pronged approach that the fit 21 bill proposed which like that that's kind of interesting but you would need a ahead of the SEC to actually get on board with that in order for that to actually happen right you need much more proactive and cooperative SEC but there is some you know some reticence I would say in the industry, and maybe even just broader than the industry, to give the CFTC the power

to regulate spot commodity markets. Because spot commodity markets are generally not regulated at the federal level. Like you don't have gold being regulated at the federal level. You don't have wheat. Well, yeah, I mean, should they? You know, these are things that farmers pull out of the ground. ought that be regulated. Yeah. I mean, it would be really hard to regulate physical commodities. I guess it would be a lot easier to regulate a digital commodity, obviously. But you're never going to be able to stop like a local Bitcoin's transaction from happening abroad. So you're never going to have the full ability to regulate it. It's interesting thought experiment.

Well, I think it's all about the election here. I don't think we're getting any legislation until then. But it could be in the lame deck session after the election before the end of the year. Schumer said that he wants to pass a market structure bill. So we'll see what that ends up looking. like we'll be hearing from a number of politicians this afternoon. We're taking just a quick lunch break here to record this podcast. Yeah, Tim Scott and Cynthia Lemis will be talking later on.

We will relay to you what they have to say next week. All right, everybody. Have a safe and healthy weekend and we will see you on Monday.