On The Brink with Castle Island - Weekly Roundup 09/20/24 (Trump at Pubkey, Token 2049 review, RIP Airdrops) (EP.563)

Episode Date: September 20, 2024

Matt and Nic are back for another week of news and deals. In this episode: Nic's Singapore Zyn problem Nic's Token 2049 keynote The Iggy Azalea Eric Wall debate Trump make an appearance at Pubkey in NYC World Liberty Financial continues to be insane SEC versus Flyfish club Are airdrops done for? Is JPM really the "largest user of blockchain"? Bhutan has a ton of Bitcoin Listening to podcasts with AI Interest rates fell The exploding pagers and what it means for crypto Sponsor notes: Coin Metrics, The Crypto Universe Through the Lens of datonomy™ 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

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 to Britain's ailing economy with a new round of Conjecturee easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called 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 Witham. And if you listen to this show, you know that we take tax accounting and auditing very seriously. When it comes to digital assets, building trust in relationships with counterparties like custodians, brokerages, and even regulators is critically important.

And that's where Witham comes in. They're a top 25 accounting, tax, and advisory firm. And they have a team of professionals that is, 100% dedicated to the digital asset and blockchain ecosystem. They work with some of the highest profile companies in our space on things like tax advisory, accounting for token sales, stablecoin audits, financial statement audits, and much, much more. They're not just accountants. They are crypto enthusiasts and they're the first accounting firm to build out a full-scale digital asset practice. Witham is passionate about this space. They're passionate about

helping your company. So head over to witham.com slash crypto to learn more. So we are doing this one on Wednesday, late night, my time, early morning, your time. You're in Singapore. How are the vibes? Fives are pretty good. Yeah, it's always a good conference here. Singapore is a very nice place. I've had a hiccup here with Singapore.

I don't even know if I'm allowed to say this or not. But it turns out Zinn is not allowed in Singapore. They don't allow that. Wow. I had a can of Zinn confiscated. Wow, so they just took it away from you. I didn't get thrown in Singapore in jail. I don't think you want to go to Singapore prison.

No. Is it the death penalty for Zinn? I'm surprised you got away with that. I don't think it's the death penalty, but yeah, it's weird. You're allowed to smoke cigarettes, but not nicotine pouches, which I don't know about that rule. I think they might have that one backwards. Yeah, so you can.

smoke can you smoke indoors now right i don't know i don't know i don't know any of the rules here um be careful over there i know i'm gonna try and make it back if possible things are going good i would say energy levels are high there's not that much chatter about the u.s election here which is refreshing wow that's good because you can't you know walk by a crypto person in the u.s without them asking you about the election i'm right after this i'm going to deliver a little keynote it's going to be a sequel to my keynote last year. So it's on crypto dollarization, specifically in emerging markets.

So if you're here, well, that doesn't make sense because we are not going to publish this episode right away. But anyway, by the time this episode is out, my keynote will have been delivered. And I'll publish the slides like I do. And yeah, I'm pretty excited about it. It seems like everyone in the industry is there. Is it as big as it was last year?

Yeah, I would say. so I would say so every you can't go 10 feet without finding a happy hour it's actually kind of hard to find a bar or restaurant here because they're all closed or private events like yesterday I was trying to get a coffee and I walked into a coffee shop and Dovey was there and she was like oh I'm so happy you made it and she was throwing an event that I had been invited to that I I didn't know that I was meant to be there. That was nice of you to attend. So I was like, oh, yeah, I'm definitely not here by coincidence.

Like, I really intended to be here right now. So, yeah, but the city is absolutely crawling with crypto people. The aesthetics are, you know, of the crypto people are still very bad. I'll say that. In terms of the dress code? Yeah, we're just not looking good as an industry. We're not looking good. Yeah.

Yeah, it kind of, it's like the Zuckerberg thing. Remember when he wore a suit and tie for an entire year just to like get serious? I think we should have probably done something similar after FTX. Yeah, I mean, like the hoodies and like the wearing backpacks around like to the bar, to the club, it's just not giving, you know. Leave the backpack at home, guys, leave it at home. You look like you're in middle school. It's weird. We like the backpack.

So, so. So yesterday I did actually a stable coin panel, which was very good. And Brian Johnson went on after me. Oh, is he the I'm going to live forever, guy? Yeah. I don't understand what his angle is with crypto at all. But he, yeah, he had everyone like standing up and doing exercises and things like that. How do you look?

He looked vigorous, very pale. Yeah. very pale. I don't agree with his avoiding the sun element of his routine. And then Eric Wall went on and he just talked about how there's an AI apocalypse coming. That was his talk. So he was meant to have a debate with Igiazalia regarding meme coins. But there's been great controversy over that debate. I don't know if you saw this. I didn't see that. Did she not show up or something? I think it was meant to be today or something. And, uh, And she pulled out because she wanted to do a flash mob style dance event during the debate. Like, have a bunch of dances come up on stage. And apparently Breakpoint didn't want that. Interesting. And they were kind of humorless about the whole thing.

So she actually pulled out. And now my understanding is Ansem is going to take the pro-meam coin side of the debate. It's the hard-hitting panels. Although it does seem like there have been some decent announcements, like product announcements and stuff like that over there. Like which ones? Like Google just announced that Ethereum RPC service. I totally miss that.

Oh, you know, that's the meme coins. And then it must have been the other panel. Well, I would say, you know, you're not missing out on that much. I mean, this feels like, it feels like east coasters going to Singapore. It's just weird and just aging like a shared suffering ritual, you know, getting here and immediately hopping into meetings being horrendously jet lagged

and not actually recovering from jet lag for the, for the whole week. Yeah, you're just recovering on like your last day there and then you just have to recover when you come back. Yeah, it's like when you do like, I don't know,

the turkey chase on Thanksgiving, you know, it just sucks so much that the rest of your day is better. I think that's kind of the point of this conference is to suffer together. Yeah, well, it's good. Good to have some camaraderie.

Well, maybe I'll come next year again. All right, well, let's hop into some deals of the week. It was a very busy week this week. First one up is permissionless labs. This is a developer of a permissionless CDN called Pipe Network. They raised $10 million from multi-coin robot ventures and Solana Ventures. Then we have Ferma, a ZK proof generation layer.

There is 5 million from Lemniscop, A16C, crypto, and bankless ventures. Then it's Vana. This is a network for user-owned data. They raise $5 million from Coinbase paradigm and polychain. Then you have Kudas,

a Web3 AI Wellness company. They raised $5 million from Draper Associates, Skybridge, and Penrose. I didn't really click into this one, AI Wellness. I never heard about that before. Web 3 AI Wellness. Just a

the intersection of Web 3 AI and wellness. Nice. All right. Next one up is Limitless Labs. This is a developer of a prediction market. There raised $3 million from one confirmation paper ventures, collider, and others. Prediction markets are just having a year this year, huh? They really are.

Next up we have Hemie, a Bitcoin Layer 2 network built on, or it's a layer 2 network built on Bitcoin and Ethereum. Sorry, I can't speak to that. There is $15 million from Binance Labs, Brayer Capital, big brain holdings. Then here's an announcement. Bigget and Foresight ventures announced that they had jointly acquired $30 million worth of the

Ton token, which is the telegram-based blockchain. So it looks like an OTC deal to invest $30 million in that project. Then we have Regolith Labs. They're developers of a proof of work currency on Solana. Interesting. There is $3 million from Foundation

Capital Coliseum and Salonaventures. Then it's yellow network. This is a decentralized clearing network that raised $10 million from Chris Larson, Consensus, GSM, and others. And then we have borderless capital. They are a crypto investment firm. There is $100 million for the latest deep in focus fund backed by Peaksalana Foundation, Jump Crypto and others. Big congrats to the borderless team. Here's another fund that raised HackVC, a crypto investment firm, raised $77 million for their latest fund.

Congratulations to Alex, Roe, and the whole team over at Heck. And before we hop in the news, let's look at the metrics minute. Today we're looking at Coin Metrics's Deutonomy product, a digital asset classification framework. The crypto universe is expanded from a single asset in 2009 to an ecosystem of four asset classes, 14 sectors and 41 subsectors, as defined by Daytonomy. Aggrate market cap stands at $2 trillion, doubling from last year. Digital currencies make up 57% of the total market cap, while blockchain infrastructure like smart contract platforms make up 31%.

On chain derivatives and digital asset applications represent 8 and 4% of market cap respectively. The specialized coin sector leads in year-to-day performance followed by application, utilities, and information technology sectors. For more on that, check out Coin Metrics's state of the network. That's your Metrics Minute. All right, and that was the Metrics Minute.

So just breaking news, minutes. ago Trump showed up to Pubkey, is that right? He showed up to Pubkey and he bought a burger with Bitcoin. Is that what happened? Yeah, so it's 9 o'clock Eastern time as we're recording this. And it looks like a couple of hours ago, Donald Trump went to Pubkey, which is, of course, the Bitcoin bar started by Thomas Pachia, our former colleague, which is definitely my favorite bar in New York City. It's the coolest bar. We did a podcast episode there with the Galaxy. That we did. So, I mean, so what? He just happened to be in the neighborhood and popped into a random dive bar and it just so happened to be the Bitcoin bar in New York. Is that what happened? And then he bought a cheeseburger with Bitcoin, it appears. I think he's got to be the first president in the history of presidents to buy a cheeseburger with Bitcoin, don't you think? Well, I mean, there have only been like two presidents and Bitcoin came out. Yeah, he's first. He's first. Yeah, I don't think Biden did it at any point.

What a cool thing, though. Pubkey is really firing on all cylinders right now. I wonder how that all came to pass. There's other Trump stuff that we're less happy about also. Well, so he announced the World Liberty Financial thing. I guess he did a big X spaces on it. I didn't listen to it. Did you?

I suffered through that thing. I listened to two hours of that. I mean, the interviewer, it's this guy from Rugger radio. Rug radio. I'm not as familiar with. That's short for Rugpole, I think, unless there's some other term that starts with rug. I mean, it was terrible.

I don't know if that's Trump's fault or what, but they were just bantering and didn't really disclose any details of the project at all. So we just had to listen to this insufferable banter for two hours, didn't learn anything about it. I don't know why they're so reticent. to share any substantive details of the project. I'm just trying to bury this story under a rug because I don't see a lot of upside on this.

I mean, pretty cool that they're all into crypto, but there's an election here. No, it's not cool. It's like focus on the election. Don't focus on this weird crypto side quest. You already convinced us to you like crypto. You don't need to do anything else. There's only downside.

the whole thing is totally baffling and I don't understand what's going on and Trump is putting meaningful effort into promoting this he is well he's going to pubkey and buying cheeseburgers with bitcoin so guy clearly likes his crypto all right let's hop in there's a bunch of SEC stuff I feel like we've been talking about the SEC just every podcast episode for the past two months here but end of the fiscal year coming up they had another enforcement action And this one, I had not heard of this. This was, it's called Flyfish Club. I guess it was kind of like one of these membership only clubs in New York City that issued NFTs to represent the membership interest.

So I guess they, the SEC said that these NFTs that represented the membership interest were unregistered securities. They fined these guys, $750,000. So they settled. And then there was a dissent. So commissioners Hester Perce and Mark Uwaita had a pretty great dissent. I mean, these dissents are just really impressive lately. They said the SEC should change its menu to include a healthy serving of guidance to give non-security NFT creators the freedom to experiment.

Kind of hard to argue with that logic. I mean, this is just put this one in the category of like, what does the U.S. populace get from the SEC spending time and resources going after a members-only club in New York City that is not hurting anyone and just happen to use blockchain technology to do a membership club. Yeah, that one's this is a little baffling actually. So this was, does this have anything to do with fishing or it's just a restaurant? It's an NFT themed restaurant. I think it's just like a private club called the Fly Fish Club. Maybe there's a fly fishing theme. I don't know. So they sold memberships and they just so happened to be an NFT format. And so that was

sufficient cause, apparently, for the SEC to come in and sue them. Yeah, the SEC said that they were stipulating or they were suggesting that if you bought a membership, it could go up in value and they're rare. But I don't know, man. This just seems like a waste of resources. This is the case with all memberships. Yeah, I mean, if there's resale for, I mean, I don't know. This one's a little beyond the pale, in my opinion.

Apparently, it's Gary V's project. Oh, yeah? So I kind of feel less bad about it now. I don't know much about Garvey. In other SEC news, House Financial Services Committee Chair Patrick McKenry and House Majority Whip Tom Emmer sent a letter to SEC Chair Gensler, accusing the SEC of, quote, creating a hostile regulatory environment with regards to token airdrops. And they asked for general clarity on air drops, including, you know, why these things should be treated

differently from airline miles or credit card points. Yeah, good luck getting a response on that one, but we appreciate the effort. I think the airdrobs meta is totally done and over. And not even strictly because of the SEC, just because it ended up being a covert form of proof of work, which is something people don't understand. But there became this emerged this industrial air drop farming sector out there,

which completely eliminated the democratizing nature of air drops. Yeah, civil farmers. Yeah, it was a cat and mouse game between increasingly aggressive civil resistance mechanisms and increasingly sophisticated air drop farmers and regular users to whom the airdrops were presumably intended, just ended up caught in the middle here. So air drops are done, not because the SEC, but just because of the SEC, but just because the mechanism doesn't work, as it turns out. Well, the only reason that the mechanism really existed at scale was because people felt

like they could not sell the tokens. And that's actually probably the best way to get tokens into the hands of people is just sell them at a fair market price. Yeah, I guess you could say that's why air drops existed initially was because they were concerned about securities laws. Yeah, I mean, I think certain airdrops in the early days, like Stellar did one, I think, with Facebook, where you could like sign into their, you could like the page or sign on to a group or something like that.

And it was kind of like a marketing expense, but it wasn't a huge percentage of the overall float. And then once the ICO thing happened and the SEC started going after the ICOs for being unregistered securities offerings, people started putting these air drop mechanisms in place in order to just get wider distribution of the token. But what you really just need is a way to safely and compliantly sell the token. So you basically need something like what's in this market. structure bill. Pretty interesting. I mean, there's not really an analogy for air drops with

equity to like traditional equity. Like think about if at an IPO, at every IPO, it was expected that the company would not only list, you know, 20% of the shares, but they would also just give away an additional 20% of the shares to like users of the product or the general public. If that happened in the equity world, people would think that, company was completely out of their minds. But it's completely normal in crypto. It is. Yeah, it is.

I think Uber actually tried to do this, right? Didn't they try to give their drivers equity or try to have them buy it at a lower price? But the SEC put the kibosh on that. I think air drops, I think we've talked about it on the podcast before, but they're kind of, the analog would be the Russian privatization, right? Post-Soviet Union collapse. Yeah, and that didn't work, to be clear. That didn't work.

No, neither did airdrops. It's a good lesson in markets, actually, because most people didn't know how to value the vouchers they were getting. And so they sold them for sort of pennies on the dollar. And then a few sort of hedge funds and industrialists kind of bought them up. And it didn't end up decentralizing ownership. And I think there is a fallacy there, which is that you can achieve a market-driven,

outcome, which is more fair. And I'm doing air quotes right now with my fingers. And it's just kind of like a socialist theory. It's like, yeah, let's collect, you know, the means of production and then distribute them out to the general public, to the laborers, to the working class. And we'll have a more equitable situation that's just not, you can't predetermine a market outcome is what I'm saying. And so I think it's the same fallacy that underscored the Russian privatization. And, air drops. So I'm happy to consign them to the dustbin of history, to be honest. All right.

RIP air drops. And then the last SEC story so far this week, maybe there'll be more in enforcement action and settlement against a D5 protocol called Rari Capital, which is being charged with running an unregistered brokerage, basically. So seeing a few of those already and just add this one to the list. Okay. here is something that cracked me up. Did you see this? Jamie Diamond has said something again. Something about like JP Morgan's the biggest user of blockchain in the world or something.

Yeah, this is something you definitely say if you are one of the biggest uses of blockchain, which is, quote, we're probably one of the bigger users of blockchain, just blockchain, an actual user, like a real user. He said about the blockchain technology, quote, it's just a database. I don't know if I believe him. Is J.P. Morgan one of the biggest users of blockchain? Well, J.P. Morgan has a private blockchain that moves dollars, right? They have some sort of like an internal ledger system that is not decentralized.

So you might as well just be like, hey, we're the biggest user of Oracle database infrastructure in the financial services world. It would be the same statement. So I was actually asked this. I did a Q&A about our paper. and I was asked, why didn't I publish analytics on private blockchain movement of dollars? And A, I don't even know if there are any of those. Is JPM coin real?

Does it exist? Are there JPM coins floating around somewhere? I don't think so. And B, I don't have the data because it's a private blockchain. Let me come on. How am I meant to get the data? I mean, it's not even a private blockchain. in the context of these private blockchains

that were raising capital in 2015 that were like, hey, we're going to have a network of users and they're all going to be running validations and they're going to be able to audit the infrastructure. This is just JP Morgan running a centralized database and sticking the word blockchain on it. So yeah,

you know, apparently, according to him, they are the biggest blockchain user. I'd love to see some data on that. I don't know. Here's an interesting story that happened this week. So Arkham came out with a report that says that the kingdom of Bhutan now holds over 13,000 Bitcoin, which would be at today's price is a little bit over $760 million, thanks to their Bitcoin mining operations.

It's a pretty big haul for a country like Bhutan. Yeah, this is consistent with my understanding of Bhutan, actually. So I believe it. They have been mining. they do it with Bitmain, Bit Deer, I think. They have abundant hydro resources. And it always was interesting to me that people were sleeping on Bhutan because it's been reported in the press that they were mining Bitcoin. But no one ever talks about them as a kind of Bitcoin focused nation.

Yeah, this has been out there. And it's also been out there because I think they do some work with Bit Deer. And I think Bit Deer might have to file some public statements. And so this has been in like SEC reports that the kingdom of Bhutan has a pretty scaled up mining operation. Pretty awesome. How do you get to Bhutan? So you can't just visit Bhutan. Well, you can if you know the leadership of the country.

But you can't just show up there. It's a closed country like Turkmenistan or North Korea. They're very, they're guarded. They don't want globalization. And you know what? I don't blame them. Globalization is bad. It seems like a pretty beautiful place, though.

Yeah, that's the amazing thing. Unless you live next to the Bitcoin mining rig, which probably is loud. That's the amazing thing about it is it's the last destination that hasn't been polluted by, you know, Instagram travelers. They just can't get there. So let's keep it that way. Let's keep baton closed. Let's put out a little challenge to the, uh, on the brinket on the brink. rank warpcast community. If anyone has ever been to Bhutan, put some pictures up there. We'd love to

see some pictures of Bhutan. Yeah, our warpcast has been very quiet of late, so please. There is a guy in the warpcast, though. Did you notice this? He runs a 5K every Friday morning listening to our on the rank podcast. And he puts his stats up there. I see that. I can't run and listen to a podcast at the same time. Oh, really? That's all I do. I can't focus. My brain is too scrambled when I'm running. I just throw on at like 1.5X crypto podcast. That's the only thing I listen to. Do you internalize it?

Yeah, I listen to it. I just listened to the 1000X podcast. I just went for a run like a half an hour ago. So I tweeted about this, but I don't listen to a podcast anymore. I have figured out how to digest the information with AI. I saw this. It seems really complicated, though. Yeah, as it turns out,

turns out there's like way easier ways to do it. I've made it difficult for myself. But there was a podcast I wanted to listen to but it was two hours long and I didn't have the time. And so I spent way more than two hours actually figuring this whole thing out. But you know, you download the MP3, you use a transcription service, you segregate the speakers and the different speakers. And then you summarize the conversation with AI. So you don't have to listen to podcasts anymore. podcasts are obsolete. We're just going to use AI tools to summarize them and extract the nuggets. That's great.

I'll take the podcast. I'll take the podcast. I think you just keep one AirPod in at all times and just listen to podcasts all the time. That's what I do. Next up we have River. That's a portfolio company of ours. They're a Bitcoin brokerage, Bitcoin Financial Institution of the U.S. They launched a proof reserve system.

We're actually publishing an episode on this. imminently. Trustlessly verifying that the exchange holds the Bitcoin. It's based on the Bitmex proof of reserve implementation, which is the Merkel approach, not the ZK approach. As a River user, I can attest that I verified that my coins are there. I did the proof of reserve. So yeah, listen to the episode.

Congrats to Alex. Actually, when we made the investment in the river, which I think was 2018. I think it was 2018. Out of our first fund, I told him that was contingent on him doing a proof reserve. I remember that. Six years later, they came through. So very happy. It's really well done.

As soon as I got the email, I did it immediately. It's pretty awesome. It works. It works. And what I like about it is they're doing an off cycle. Like proof of reserve is a thing that some exchanges phomo into when there's an exchange hack like an FTX or Kodriga. But not a lot of exchanges are just methodically plotting away and making themselves more credible and secure all the time. River is one of those exchanges.

Obviously we're biased because we're investors. But Alex has a knack of doing the right thing, not when it's buzzy and exciting, but just when it's necessary. So this is an example of that. Spot on. All right. Other product announcement So Bitco, which is, of course, the digital asset custodian, they announced plans to launch their own stable coin, as did Revolut. So this is a, Revolut is the European Neobank. They are apparently in later stage developments for their own stable coin. We're about to see just a bonanza of stable coin issuers come into this market, especially if we get a stable coin bill in the U.S. I have to say, I mean, I don't think, I don't know if there's going to be a long-tailed stable coins.

Be honest with you. I think liquidity and network effects really matter. Well, I think there's going to be a lot of people trying to win it. I mean, it could be that Circle and Tether already have the insurmountable lead. That's possible, but that is not going to stop people from coming after this market. People are going to try it. Circle and Tether have beautiful business models. The prize is very big.

So people will try. But if you think about it, I think stable coins are like mutual, like money market funds. And there's not that many of those. There's like five big ones. No, there's, I mean, there's like 20 that are great businesses, though, still. I mean, even the 20th largest mutual fund complex still prints money. But think about banks. So it's like the question is, what's a stable coin analogous to it?

Is it a mutual fund or is it a bank? Or is it something else? There's lots of banks. I think there's 5,000 banks and credit unions in the U.S. Yeah. That's the case because they have G. graphic focuses. They will, and they have, they, you know, lend to different types of borrowers and they're based in a certain place. And they have some niche, you know, maybe it's like the,

whatever, they lend to veterans only. Stablecoins endeavor to be these global settlement networks. That's kind of the point of them. So, and they want to be listed in every exchange against every FX beer. So I just don't see why there would be like a lot of, segmentation there. I think they endeavor to be innately global, and I think that's why Tether has dominated this entire time. They have 70% market share. It just makes sense to use one common, you know, liquidity venue as opposed to being super

fragmented. That could very well be the case. But I do think you'll see a lot of these fintech firms try to compete in that space. I mean, there's just so much profit to be had there. but we'll see, hey, interest rates went down today. It didn't even, it took us half an hour to get to that, but 50 basis point rate cut. They did. I think the Fed's panicking.

I think if you look at history, when the rate cuts happen, it's actually not a good sign for equity markets because it implies that something terrible has happened. That makes sense. Well, it's Elizabeth Warren sent a letter earlier this week asking for 75 and all she got was 50. So still on the fintech side, actually, Venmo owned by PayPal. They announced an integration with the ENS, enabling crypto transactions via usernames as opposed to wallet addresses. Congrats to them.

That's pretty cool. Yeah. And then I mentioned this one earlier, but Google Cloud, they launched an Ethereum compatible remote procedure call, RPC, is the shorthand for that. It's a service that allows decentralized applications to, easily interact with blockchain data. So pretty exciting stuff. Google has a great crypto team.

They're not very public, but this is definitely a service that will be used. That's true. They are under the radar, but very active in building crypto products. And lastly, on news, Janus Henderson, asset manager with $360 billion of AUM, they are partnering with Centrofuge to manage a tokenized treasury fund. More and more tradfai coming in here. So what do you make it the exploding pager story? Oh my God.

I cannot believe the level of sophistication that that must have taken to pull that off. I mean, I feel like we're going to see a movie about this. I've never heard anything like it in my entire life. I mean, it's got to be the highest profile, other than maybe Stuxnet when the CIA and Israel got into the nuclear facility in Iran. stages, yeah. Yeah, but I mean, this is probably higher profile, right? I mean, the second order effects here are going to be crazy because you presumably they would know everywhere that these beepers went.

So you've got beepers in different countries attached to different people that maybe you didn't even know were bad guys. I mean, my understanding is that they did a supply chain attack and just put small amounts of explosives in the Pagers. So you don't think they had like a, GPS device in there as well to say, okay, someone is in Turkey and this just blew up or something. No, I think they just had a sense that they were being used exclusively by the Hespa kind of higher ups or the at least mid-rank.

There's reports coming out about people getting blown up that, you know, we're surprising, I would say. The whole thing is completely insane. Stuxnet was a little different because it was the computer virus that was actually a discriminate, but it had a specific target. So it was kind of benign. And it infected like half of all Windows operating systems, I think. Yeah.

But it still found the target in the end and exploded the centrifuges. Yeah, that was what, like XP or something? It was like an older version of Microsoft. But yeah, I feel like we're just scratching the surface on the story. It scares me in the crypto context because not that that's like should be the main tigua or whatever, but I mean it shows the sophistication of state level agents and what if you know rogue state like say North Korea infiltrated the ledger manufacturing facility and was able to just put a poison pill or whatever in every single new ledger device sat on it for a year and then collected all the coins

I mean that's not outside the realm of a possibility. I remember talking to the cost of the cost. I remember talking to the guys about this when I was first setting up my CASA like five years ago whenever that was and they at the time were advising to not use all ledgers or all treasers to like mix it up that's right that's right hardware what do they call it like hardware decentralization or something yeah and it was kind of a pain because I had a preference at the time but it really does make you think that yeah any device could get compromised. Yeah, multi-device hardware multi-sig is the only way to do it. You can never be too careful. I mean, yeah, just a wild, wild story. The level of paranoia you need to operate in the crypto industry is just off the charts.

It is. Especially, I was talking to one of our investees recently in exchange and, you know, they knew this, but I was explaining this. them that the one left tail, there's a fat left tail running a crypto business that's custodial, which is the business can cease to exist overnight if there's a hack. And I was just running through dozens and dozens and dozens of snars of how you can be hacked and explaining they were the best most sophisticated hackers in the world and they're up against you. You know? Right. And it doesn't matter if you only ready to seize a seed round or whatever, like you're still up against these guys and they're actually going to come for you when you're most vulnerable.

So it's very asymmetric. It's very dangerous out there. I mean, that reminds me of, speaking of, like, attacking when you're the most vulnerable, like the FTX hack. I don't think we ever got to the bottom of who actually hacked FTX right as they were declaring bankruptcy. Yeah, do we know?

Was it an inside job yet? It never came out. I mean, it was never in any of the charging documents that it was an inside job or anything like that. So maybe it's in Salami's book. He wrote a book, right? Oh, did you write a book? Yeah, I think he had a tell-all book that he wrote.

I don't think so. I mean, isn't he just about to go away? No, he wrote a book. He just hasn't published it yet. Oh, really? I would read that. Yeah. I've been curious for his side of the story.

I feel like he probably has a lot of things to get off of his chest. I mean, there's, I don't know. I kind of think he might have got the raw end that deal. I agree. Justice Rissalami. All right. Well, I think that's it for the week. I'll let you get off to your keynote here. Good luck. Yep, crypto dollarization. Here I come. You know, I left, I had a bit of a dilemma yesterday. I left my suit jacket on all my Blazers in Miami. I just forgot. I just forgot. I just thought. I knew there was something I forgot. That was it. I was thinking myself, can I just do a keynote in a button down? And most crypto bros would say,

yeah, like, you know, they do with their keynotes and flip-flops and t-shirts. But I just think that we have to have a little bit of a higher standard as an industry, you know. I like that. And I've never not delivered a talk wearing a blazer or a suit. So anyway, I went and procured one. I went to the Chinese flea market here in Singapore in my neighborhood. And I was able to do it. Oh, that's great.

High quality? I might have to send you my measurements. Honestly, I don't know. I don't know if it's high quality or not. I don't know what I paid for it. It was some number. I don't know what the exchange rate is. But I'm going the extra mile is what I'm saying.

I mean, you're the guy that used to wear a suit and a tie to work on just a regular day at fidelity. Well, you know, back in the day, people, everyone would do that. So I'm just, you know, I belong to a lost era. I don't know what to say. It's true. All right. Well, good luck with the keynote. We will get this one out.

And we'll see everybody back on Monday for another episode. It's a safe and healthy weekend.