On The Brink with Castle Island - Weekly Roundup 09/26/24 (Chokepoint 2.0 updates, Gensler's House hearing, Ellison sentenced) (EP.564)

Episode Date: September 27, 2024

Matt and Nic are back with another week of news and deals. In this episode: Gensler denies knowledge of Operation Choke Point 2.0 We recap the Silvergate collapse Why did the MSM ignore the new Silvergate revelations? Trump's fair banking access rule Looking back at the Signature closure Gensler appears in front of the House Caroline Ellison sentenced to 2 years in prison Options approved for Bitcoin ETFs SEC versus TUSD What's going on with the port strike? Nic's panda moon moon situation Sponsor notes: Coin Metrics, Real World Assets (RWAs) & Tokenization Report. Exploring the RWA landscape, sectors and networks gaining adoption, regulatory implications and market opportunities. 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 Content mentioned: Ross Stevens, Bitcoin's Protection under the First Amendment

Matt Walsh and Nick Carter are partners at Castle Island Ventures. All of these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle Island Ventures. Guests and host may maintain positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only is an expression of their personal opinion. This podcast is for informational purposes only. Brought down by Bad Mortgage Investments, Lehman, which has 25,000 employees, will be liquidated.

The Federal Government Loans American International Group, A.I. $85 billion. This is a different kind of market, and the Fed is asleep. The federal government is stepping it to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The Bank of England has pumped 75 billion pounds more to Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars, and all of a sudden, people start to worry.

So out of this worry, we have something called the Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Matt Carter. And this episode is brought to you by Witham. So if you listen to this show, you know that we take tax accounting and auditing very seriously. And when it comes to digital assets, building trust in relationships with your 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 with a team of professionals that is dedicated to the digital asset and blockchain industry.

They assist some of the highest profile companies in our industry with things like tax advisory services for token sales, stable coin audits, financial statement audits and much, much more. They're not just accountants. They are crypto enthusiasts, and they will help you and your company achieve your goals. Just head over to witham.com slash crypto to learn more. Busy, busy week, man. So you dropped a banger of an article here on pirate wires. I don't even know where to start with this.

Yeah, I don't know either. It's 8,000 words. Please read it. It's very important. So I would characterize this as a deep dive into Operation Chokepoint 2.0 with a bunch of new information about Silvergate. And it seems like what we were saying at the time, all turned out to be true. Yeah, that's it. Sorry, my apologies, I'm sick.

Pick something up in Singapore. Like happens every single year. Happen again. Everyone from that conference is sick, huh? Yeah, my aura ring stats this morning were catastrophic. I looked at it and I I just wasn't sure if I could you know face the day

my resting heart rate was 80 80 oh wow yeah you must be really fighting something it's normally in the 40s believe it or not I don't I can't wear one of those things because with the three small children you know your aura ring would just be depressing every time you look at it I know and the problem is

is it will just it like tries to cheer you up a little it's like your stats are a little off but you can face the day like take some deep breath today or something but you look at the numbers and it's basically it's like yeah it's you're screwed and that's what it told me today so as many of you know we did a lot of reporting on

the banking crisis in 23 I wrote two pieces for pirate wires I coined the term Operation choke point 2.0 which actually Gensler had to answer a question on that in the hearing this week. He denied he to

ever heard of it. I found that that's kind of hard to believe. Yeah, we some people think that he has heard of it and he's lying about that. So we're going to get to the bottom of that. So, uh, since then, a lot of things happened. The bank crackdown continued across other banks that served crypto. Anyone that has followed this knows that. There is an additional crackdown on bank serving fintechs. The FDIC has been disproportionately going off to them with the same tactics. And most recently, Silvergate filed for bankruptcy because they're in the process of liquidating, but you can't, a bank can't file for bankruptcy.

Do you know that? I did know that. That's a post-Dodd-Frank thing, right? I don't know. But I found that out recently. So they converted the bank into something else and are now filing from bankruptcy out at that. and in their first day filing, which is kind of where you tell the story

to the bankruptcy judge to give them all the information. Their chief accounting officer, Elaine Hedrick, wrote up what I thought was basically an Easter egg. Like, I think they left that in there for me or the press, you know. She wrote up a version of their events, which told the Silvergate story from their perspective really for the first time. No one had ever shared this. The Silvergate leadership had been extremely quiet.

They hadn't said anything, basically, about, you know, the regulatory harassment that they'd faced at the time they chose to liquidate. They hadn't said much about their choice to voluntarily liquidate. They laid out the story. It was right there in the bankruptcy docs. I found it. I did a big thread on it. Over a million impressions on that thread.

I thought a journalist would pick it up for sure. I know they'll follow me. They didn't think it was newsworthy. They didn't. And I sent it to a bunch of journalists. They're like, what's the story here? what's the angle? I'm like, do I have to do your job for you?

Do I have to literally do your job for you? I was pitching the editors for these major publications for them, trying to explain to them how it's a story. I mean, it's just crazy. It's like, okay, well, if I'm going to do your job for you, I'm just going to actually do your job, and I'm going to write it up. And that's what I did. And a few days later, pirate wise, to their credit, published me.

And that's, the piece. I got my hands on a lot of new information. I got a copy of the Mark Cahode's pitch deck that he sent to various members of Congress, by the way. Yeah, that was floating out there, huh? So you got your hands on that. Yeah, I was doing real journalism. I'm very proud of myself. And I got a copy of an email he'd sent to a Warren staffer. And I talked to a bunch of new sources and confirmed the things that I suspected. And I was basically able to confirm and extend my reporting from last year, specifically on Silvergate, which I didn't spend a lot of time on at the time.

It was more focused on signature. I confirmed that the FHLB had cut them off for political reasons. I confirmed that it was actually SF Fed that message to them that they had to reduce their crypto depository exposure to 15% or thereabouts. That was the, I initially thought that was the FDIC. Turns out it was the SF Fed. So I was really able to build on a lot of my prior reporting and I thought that it demanded a retrospective because a lot of time has passed since the crisis and I really wanted

to clear Silvergate's name. I mean, they were not perfect. They were dinged by the SEC and the CA, DFPI and the CAA DFP and the, the, Fed for basically compliance failures. Actually, the main thing that they settled with those agencies for was insufficient monitoring of the SELVIGEGET Exchange Network. I found out what happened there. As it turns out, they had a monitoring system in place.

They didn't upgrade. The monitoring system went down unbeknownst to them. So there were transfers that happened on the Senn that weren't monitored. although keep in mind all the transfers were between clients of Silvergate so they knew who was transacting it's just that they i guess weren't monitoring those specific transactions so it's not like it was unknown enemies using the son or anything so that was the specific issue and then the SEC sued them for saying that they had a you know sound compliance policy and so they actually sued them for what they said as opposed to the policy, the failures specifically.

So anyway, I felt like it was worthy of an update, and that's what I published yesterday. What do you think happens next here? I mean, if I was a Silvergate shareholder here, I'd be looking at a lawsuit of some sort, I would imagine. I mean, this was just a complete kneecapping of their business. I think there were so many injured parties. There's the shareholders in Silvergate. There's creditors.

And by the way, the shareholders being. wiped, especially these fines that are being paid to the regulators. I don't know why the regulators would sue a defunct bank and just take effectively expropriate common shareholder money and send it to the government. That's what the fines are doing. I don't know why you would sue a bank that voluntarily liquidated and made everyone whole. And there were obviously the depositors to Silvergate. They were injured parties because they had to go find other banking.

and in some cases maybe they couldn't. We don't know those stories. Nobody's put up their hand and said that. So there's a lot of people that were affected by this. I don't know what the remediation looks like. I'd like to see a class action maybe. I think you could bring a suit against the government for a Fifth Amendment violation,

for a violation of due process. That's what Cooper and Kirk, they wrote a memo about this a while back. They said, choke point at its core is unconstitutional because it's violation. of the Fifth Amendment because it's unequal treatment under the law. You're specifically targeting one industry, which is the crypto industry, via the banks.

It's not allowed. So what I did end the article with a specific call to action, which is I would like to see, obviously I can't, you know, mandate that this happens, but I would like to see a congressional review, a hearing. And what's interesting about that is the leadership that are in. invited to testify, they can waive their liability. Congress can waive their liability for sharing confidential supervisory information. Yeah, and that was a huge part of the report here. That was the problem. That's why the details haven't come out is because much of the issue, specifically

the verbally messaged covert mandates to the bank to curtail the crypto business, that would be considered CSI. And so that's why it hasn't been shared. And so if they are invited to testify, I don't know that would happen, maybe no one cares about the banking crisis anymore, then that could be waived. And we could hear the truth. I'd love to understand the constitutionality of imposing these 15% limitations on specific industries. I thought we had already adjudicated this with choke point 1.0. I'm shocked that that's still happening. Chokepoint 1.0 never went to the Supreme Court or anything like that. Cooper and Kirk filed suit and representative Luke Kamire looked into it.

What actually happened was Trump was elected. And then the fair banking access. Yeah. Fair access to banking bill or whatever that was. It just immediately ended when Trump was elected. And it's like kind of funny, people like, oh, crypto is not partisan or like Trump could just as bad, you know. But we actually have, he has a track record of ending the.

unequal treatment of bank access. And Chuck 1.1.0 concerned firearms manufacturers, the adult industry, a bunch of industries. It ended, as far as I know, when Trump came in office. And then, yeah, Brooks, his comptroller, controller, passed the fair access rule. And guess what happened on day one of the Biden administration to the fair access rule? They stopped doing it. It was rolled back by acting controller. sue.

And so, like, it shouldn't be partisan. Like, you shouldn't, it doesn't matter if you're Democrat or Republican. Like, banking should not be something that's politicized. That's obviously bad. Because, like, what if Trump gets elected? And he's like, all right, well, there's all this infrastructure in place to eliminate entire industries by covertly going to the banks and saying, don't serve the industry. And you don't have to pass a law.

you don't have to do it out in the open you don't have to have a notice and comment period you just tell the FDIC to tell the banks don't touch this industry he could do that that's precedent that's been set so you should be concerned about this regardless like it shouldn't be a political thing

so yeah I don't know I don't know what's going to happen but I felt really compelled by this and I want to shed light on it because I think the common narrative around Silvergate is wrong and I wanted to set it straight. Well, well done.

That was a lot of work, but I guess the jet lag really helped you there. Yeah, I wrote most of this thing on the trip back from Dubai on Emirates. I did not have Wi-Fi. Can you believe that? No, that's terrible. 15 hours from Dubai. And so I wrote it from memory on my laptop with no Wi-Fi. And then what a hero.

Filling in the gaps. But, yeah, you can thank Emirates for having a Wi-Fi outage forced me to lock in. Well, I'm sure we'll be talking about that in the coming weeks, as I think there will be some fallout here. So there's just too much intrigue around this one. And Elizabeth Warren's role in this, I hope we start to hear about that in the debates.

There'll be two debates with John Deaton in October. So I don't know if people in Massachusetts really care about crypto is their primary issue. It seems like there's a long list of things to argue about other than this. And maybe that doesn't help Deaton, but I'd love to see her really help to account for her actions. Yeah, this is crazy. if there's any law against this, but it's just wrong for a sitting senator, especially on the

Senate banking committee, to publicly harass a bank and exploit a relatively fragile time in that bank's history. And it implied that they have criminal liability for FTX, which, by the way, that didn't happen, right? So that was another reason. Oh, there's allegations of like ISIS and all sorts of stuff that was just never, it didn't come to pass. Well, that's why I wrote the article, because at the time in 2023, like a lot of people that I talked to in the banking sector were like, like, oh, yeah, Silvergate, like, actually, they might be in deep, deep trouble. And there were, the narrative around them was they may face criminal penalties for their actions around FTX or other things.

The reason, one of the reasons I wrote it was because that didn't happen. And so with the benefit of hindsight, we know that they most likely will not face those penalties. So that was a big part of the kind of short-selling thesis. So anyway, I think it's so irresponsible what she did. I don't think sitting senators should be allowed to encourage bank runs. And that was the first bank run. And then you'd a huge regional banking crisis with banks responsible for over 500 billion in deposits went bust. This was the first one.

This was the tender that lit the flame. I feel like there's probably more to the story with signature too. No one really talks about signature. and there haven't been any investigative pieces on signature, but that one was another drive-by shooting. Yeah, and that one is maybe worse, because signature was a bigger bank. And in that case,

we did have the benefit of Barney Frank coming out and saying that they were taken out unjustly whilst being solvent because DFS, Adrian Harris, had a political animus against them, whether for crypto or because I think signature might have banked Trump or some of his friends, something like that. Yeah, they had banked Trump.

one point. I don't know if they still were, but definitely people in his orbit. So yeah, there's always been a lot of behind the scenes chatter that that was politically motivated. Yeah. So actually a lot of people told me their animus against signature was more to do with that than it was with the crypto. But I would like, there's such a gap of journalists. Like, where are they? Why aren't they looking into these stories? Why do I have to do it? I'm busy. I have a job. Okay. Don't make me do it. Yeah. Hopefully you get paid back in early stage. deal flow. Or retweets or something. I don't know. Do they give Pulitzer's to non-journalists asking for a friend? I don't know. It's worth looking into. I feel like the whole journalism industry has just been

turned on its head as a result of X. I'd be embarrassed to be a journalist, honestly. They're not doing their job. This is a huge scandal. Why do they not care? Why does no one care? All right. So more to come on that story. Shall we hop into some deals of the week? Yeah. So first up, Celestia, the modular blockchain for data availability. They raise 100 million from Bain Capital Crypto, synchrecy Capital, 1KX, placeholder, and others. Then it's Dark Bright. This is a Web3 gaming studio that raised $6 million from Bitcraft, RockawayX, and OffChane Labs. Then you've Helix Labs, a multi-chain liquid staking protocol. There is 2 million from Tribe Capital,

LD Capital, and E Mergo Ventures. Initia, which is a roll-up aggregation network, raised $14 million from theory, Delphi and HackVC. Then you have Daylight, a transaction recommendation engine. I've never heard that before. There is 6 million from USV-1KX framework in Chapter 1. Then it's Amino chain, a decentralized network for medical data. They raised 5 million from A16's crypto and Sercano.

Then you have Maridiana DFI protocol for the Move ecosystem. There is 4 million from Parify, Borderless Capital, and the Amber Group. Next one up is Mawari Network, a D-Sty-Wi network. pin project for spatial computing. They raised 10.8 million from borderless, 1KX, and Anfield. Anfeld, not Anfield, that's the Liverpool Stadium.

Anfield. Not that. You're not a soccer fan, so you don't know that. I do like, Liverpool is my team, though. Is that right? How did you pick that? How did you pick Liverpool about it? I've got some friends in the Liverpool kind of kingdom.

I don't know. I figured that I would just support them. I don't know anything about soccer. I was at lunch the other day. We were picking up lunch with the team and we were in this, it was actually a pizza shop and they had this indoor soccer thing on TV.

It was like Paraguay against Afghanistan and it was like on a blue field. Have you ever seen this? Indoor on like a blue sport court or something. Indoor soccer? Yeah. I didn't know that was an international sport. Is it really?

Yeah. Like futsal? Was it futsal? Yeah, I guess it was footsall. I'm guessing it's footsall. Yeah. It's soccer. right? Well, it's a slightly different game.

No, they're kicking ball into a net. It looks like soccer change. Lastly, we have Infinex cross-chain wallet protocol. There is 65 million from Wintermute Framework and Moonrock Capital via a public NFT sale. And before we hop into the news, we have the coin metrics metrics minute. Today we're talking about tokenization. So the RWA tokenization space is led by public securities valued at 2 billion followed by private credit and commodities blackrock's biddle tokenized is a money market fund backed by us tibills with the current supply of 522 million there's 80 million USDC in biddle's redeem fund allowing holders to instantly off-ramp into usdc highlighting the role of stable coins in tokenized rwa tether gold is a digital token backed by

7,600 kilograms of physical gold. You know about that? It sounds like a lot of kilograms. They have a market cap of 645 million. Ethereum secures the most RWA value with an average transaction size of 4,700. That is your metrics minute. All right, good metrics minute.

A lot of deals this week and a lot of news. So I guess first one up, let's talk about this really interesting hearing. So the House Financial Services Committee had a hearing on Tuesday. and it was with SEC Chair Gensler testifying as well as his entire commission. So all the commissioners of the SEC were there. And pretty groundbreaking.

Before we hop into that, the other interesting thing was that Gensler himself was supposed to appear in front of Senate banking the next day and Sherrod Brown canceled the appearance. And I don't know why. I wonder if it has something to do with the fact that Bernie Moreno seems to be really running very close and in a lot of polls ahead of Sherrod Brown. in Ohio. So maybe Brown just thought, hey, I can't be seeing love and softballs here to Gary Gensler. I'm going to cancel this. That would totally make sense, honestly. Yeah. So pay attention to Bernie Moreno in Ohio. He's very, very pro-crypto. And Sherrod Brown, I'd say, is the number two antagonist

in the Senate behind Elizabeth Warren on crypto, and he's the head of Senate banking. So that's, if you were a single-issue voter, that is that in Montana, I'd say, are the two most important races in the Senate right now. Yeah, and you know what's funny, though, if Brown loses his race, then a certain Elizabeth Warren becomes the chair of Senate banking. No, no, if Brown loses, then the Republicans would probably have the majority. And my guess is that Tim Scott would actually be the chair of Senate banking. Well, yeah, but I'm saying if the Democrats retain the majority. Yeah.

But you're right. It's an important race for the Republicans. I think if the Republicans win Ohio, they're going to have the majority. majority. Yeah, the electoral math here does favor the Republicans, and people forget that. We could end up with, you know, Republican Senate, at least, and, you know, Democrat in the presidency. That wouldn't actually be the worst thing for crypto. The Republican Senate would be a big one. The House looks like it might flip blue, though, if you look at the prediction markets, and then you'd get Stephen Lynch as the head of the digital asset subcommittee on House financial services. And I don't think

think anyone wants to see that again. Yeah, I mean, if that happens, we're never getting any pro-crypto legislation ever again. But the Republicans could stop the worst nominees for the various appointments. That's true. All right. So let's hop back into what happened here on Tuesday. I don't know how else to describe this other than this was a complete shalacking of cancer. I mean, can you imagine having five people that, I guess, work with you, work for you to some degree, just in front of everybody, in front of anyone in the country that wanted to watch it, anyone in the world that wanted to watch it. And they're all, well, not all of them,

but I guess two of them specifically are just saying, in as many words, everything we're doing here is wrong, and I would be doing it in a completely different way. And meanwhile, he's getting roasted by both sides of the aisle. You have Wiley Nickel talking about the SEC's hostility, saying that he has put the U.S. behind the rest of the world by years. You have Richie Torres, who's another Democrat,

saying that there's no legal, distinction between the sale of a Yankee ticket and the sale of an NFT. I thought he was incredibly eloquent with that one. He was, of course, referencing the Stoner Cat NFT lawsuit. You had Emmer just coming out really, really strong with just an overall rebuke on Gensler's leadership. The fact that he's been tied up in this debt box case, the fact that you've had issues with just overall staffing at the SEC. And then you had Congressman Mike Flood questioning Sab 121, in great detail and how the SEC allowed Bank of New York Mellon to circumvent the rule, but they should just repeal the rule in general.

So very satisfying to watch this hearing, I would say. Yeah, Whipmmer delivered, as usual, always so good in those hearings, and a number of his colleagues did as well. Shalaking is right. I will say, though, on the stoner cap front, I might actually side with the SEC. I mean, Ashen Kutzer is just so annoying, and it really was a great. garbage project. Yeah, I guess there's been other

NFT things to reference, but I don't know anything about the Stoner Cat. What was that? They were going to build a TV show behind these NFTs or something. Horrible, yeah, they sold NFTs and they were going to do the TV show and of course they just deserted the project entirely. Yeah, that's...

Milikunis was involved too. Yeah, really? Yeah, I don't know. Yeah, no opinion on Stoner Cats, but this was a great hearing. All right. Other news here, Caroline Ellison, who was the former CEO of Alameda Research, was sentenced this week to two years in prison, a minimum security prison, and an $11 billion restitution, I don't understand that whatsoever. There's no way she has $11 billion. So is that just like you can never make money ever again until you give us $11 billion of your future earnings? I don't get that. Yeah, that was quite strange, tricky accounting right there. So she cooperated, I'd say she was the star witness in the SBF trial.

Gary Wang and Nasad Singh have not been sentenced yet. I think that's coming up next week or in a couple weeks. Were you surprised at this two-year number? I'm glad that she got something. I do think she was involved. Obviously she was and liable. Even if she cooperated, it is a little perverse, actually, that in the American judicial process, you were rewarded for being as close.

close to the crime as possible because then you have the most valuable information if you end up cooperating. So, you know, you could compare her sentence as some of the others that will be handed down for people that presumably had less knowledge of what was going on. Yeah, specifically

Ryan Salem, I'd say. He gets seven and a half years and she was like very, very central to this fraud. I don't think it was clear whatsoever that Salem was. I totally agree. I think his issue is that he was actually further from the inner circle and didn't strictly have valuable

information to share so i think i think two years is light i'm glad it's not zero yeah i don't know i assume that this means gary wang and the shot get probably a little bit more um her they would not have been able to convict him i don't think without her i mean that was that made it really easy I shouldn't say that I mean he was dead to rights I guess in a lot of ways but this just made it very simple yeah so two years and she'll be out and about out and about it back to crypto

well how else are you going to make $11 billion yeah that's true she needs to she's 11 in the hole now she's start another trading firm I mean you gotta hit a home run in other news the SEC has approved the listing and trading of options in black Rock's Bitcoin ETF I bit. So I don't know how the SEC would have denied this. I'm sure they wanted to,

but if you just look at the law, which I guess has never stopped the SEC from denying things in the past. But you were going to get options on Bitcoin ETFs. I think you'll end up getting options on probably all these things that have sufficient liquidity. So BlackRock looks like they get the first nod here. Were you surprised? No, I'm glad this finally came through. I don't, I've seen seen some takes about how options trading on Bitcoin are going to, you know, cause it to go parabolic. I don't know if I believe that. But it's always using this fancy language of options, but they don't understand at all. I swear they speak a completely different language. The gamma squeeze? You're talking about Jeff Park from Bitwise's tweet storm about there being a gamma squeeze? Yeah, the thing is with

options traders, I just have to take their word for it because I don't understand the first thing that they're saying. But there kind of have been options on Bitcoin via Deribit for long. time. Yeah, it's a big market. I don't think the market structure is actually changing that much, to be honest with you. Well, I think there are, I mean, I don't think there's a lot of U.S. institutions that trade on Derbid outside of the market makers and OTC desks, but could be wrong about that. Yeah, either way, I'm glad we got there. Another rare dub for the SEC, actually, is that they settled charges with the backers of the T-U-S-D, true-U-S-D. stable coin for 700K after they found and alleged that the token was actually more of an unregistered

investment contract with the vast majority of its collateral held in kind of shady offshore accounts and not necessarily liquid dollar assets. So I actually give the SEC credit for this one. I wasn't tracking this one at the time it was popular in the market. Were you surprised at this one? Yeah, I mean, it was always alleged that Justin, or not always, but it had been alleged that Justin's son had become involved in true USD. There was a change of ownership. That's never good. Yeah. And as it turns out, they were engaging in shady accounting and didn't necessarily have the assets held in reserve in the same way that other stable coins do.

So, yeah, if you read the complaint, this is, yeah, as I said, a rare win for the SEC. Because, you know, they basically got in and stopped this before anything blew up, which is rare for them. SEC has an important role to play. Next up, also kind of in the stable coin space, PayPal announced that U.S. merchants are able to buy, hold, and sell crypto directly within their PayPal business accounts. They just keep embedding crypto more deeply into the platform. That's a pretty big announcement, I think. It's really interesting. Now businesses have the ability to transact stablecoins, I guess, on the PayPal platform,

which that's going to, PayPal is really, I don't follow that stock, but how many public market investors do you think really understand PayPal's stablecoin strategy? It just seems like a great strategy. Like you have this cost center with the interchange and you just build a network. Yeah, I don't fully understand it either, but apparently if you had, P-Y-U-S-D, you can now link Venmo and PayPal, which had been segregated before. I believe there were ways to move funds between them in the past, but this is kind of the most seamless one.

So, you know, kind of real demonstration of the power of stable coins. Another newsworthy item here from a trad-fi firm, Guggenheim has partnered with his economy to tokenize $20 million of commercial paper on the Ethereum blockchain. I think we're seeing a lot of these couple years ago, and they're starting to come back. So RWA is, I guess. There was an interesting article this week, more of a paper, actually, courtesy of Ross Stevens, the chairman of Stone Ridge called Bitcoin's Protection Under the First Amendment, makes the case that Bitcoin is actually a form of speech and protected by the First Amendment.

So I thought this is a very thought-provoking article. we're going to include that in the show notes. Yeah, I really like that article. I wonder what prompted him to do that, but that was a really, it's like, hey, the gold confiscation thing would be really hard to do for Bitcoin. Yeah, it's an argument that I haven't seen before. Actually, with Bitcoin is speech.

It's really well-reasoned. Another shout-out, cool piece of code that was launched this week is commit boost. So this was the team that involves Drew. formerly of Brevin Howard. So put the link to that in the show notes, but kind of a common good for the Ethereum ecosystem. It's great to see some of these common goods being built across all different types of blockchains.

So there's a Wall Street Journal article called Bitcoin Burgers and Big Money Donors. So actually they're referring to his pub key visit, talking about his alliance with the crypto industry. Then there was a New York Times article saying, we think he's be clowning himself by doing the defy thing, which is valid. I think we agree with that. I haven't heard much on that defy thing lately.

No, they keep announcing advisors that I've never heard of. Like, I don't think any of the folks listed as advisors or people that I was previously aware of. There's a couple people. Like, one of the security researchers is a very legitimate guy. I really hope they just see the error of their ways

and sit on that thing until after the election. There's a lot of stuff to talk about. Are we pressing the panic button? on this port strike, by the way? I haven't been tracking it at all. There's a hurricane here, so that's sort of the immediate concern for me. Are you worried about the ports? Ever since COVID, my philosophy has just been,

if you're going to panic, panic early, and there's a potential port strike on the East Coast as well as the Gulf Coast. And the union workers are demanding like a 70% pay increase. I guess the West Coast port workers, Longshoremen, got like a 35% plus pay bump last year. So Biden came out this week and said that he's not going to intervene. But if you get a port shutdown even for one day, it can impact global supply chains. I mean, that could be a

real big issue. So it might be time to stock up on the canned goods. This is like the definition of fear mongering right now. You're mongering fear. That's what you're doing. I guess I am to some degree, but what's the downside of just buying a couple extra stakes and putting them in the free? I mean, if you're getting a port shut down in October, talk about October surprises. It's like, here's a surprise. Gas is $10. Well, yeah, I mean, I'm very exposed to that. Obviously, I live in a city, so I'd be kind of screwed if the supply chain was disrupted.

But I don't know. I've heard nothing about it. This is really the first I'm hearing about it. Yeah, I don't know. Hopefully I'm wrong, but Ryan Peterson from Flexport put out a tweet storm a couple of nights ago and I read it and I immediately sent it to you and the rest of the team and I said the time to panic is early. Have you been prepping? A little bit. Are you prep right now? A little bit. I mean, yeah. Good for you. Got to have a little bit of food, you know. So I tweeted out a story from Singapore,

but then a lot of people said that I was meant to tell the story on the podcast first. And anyway, this is the story. It's stupid. So I was at this bar in Singapore. and I saw someone just his other guy at the bar drinking like a, I don't know, a whiskey sour. And it looked good. And I was like, what's that drink called? And he said, Panda Moon Moon. That's what he said. Panda Moon Moon, never heard of that.

He was a Singaporean guy, kind of singlish accent. The Singaporean accent is hard to parse, in my opinion. I had a huge amount of trouble with it when I was there. But he's very clearly said panda moon moon. I'm like, okay, well, those are like Asian things. Like we're in Singapore. Like, I guess that could be the name of a drink, right? Like, that's plausibly the name of a drink, right?

Yeah, of course. Yeah, so I go to the bartender. I'm like, I would like a panda moon moon. And she looks like, she looks at me like I'm completely insane. And she's like, what are you talking about? I said panda moon moon, like, look, he's drinking it. She stares me for like at least 15 full seconds. And then, you know, she then she says, do you mean pandemonium?

Oh, embarrassing. I'm like, I guess that is what I mean. Yeah, I do mean pandemonium. I had bad information. What was it? A whiskey sour? It was actually great. It was delicious.

I've never heard of that of a pandemonium. I felt very hard done by because, you know, pandemonment could easily be some kind of weird Singaporean cocktail. Like, that makes sense. Yeah, that's not on you. That's tough. That's a tough issue. Yeah. Did you have the spicy crabs this year?

I didn't. Last year, were you there? You were there, right? Yeah, that was a great meal. I mean, the great thing about Singapore, the bad thing about Singapore is that the bars all closed at like 10 p.m. That's weird. And they confiscated my zen, which was so not cool with them. The good thing about Singapore is that there's all these food stalls that are very trustworthy because it's Singapore. Everything's clean. And this food stalls were open like until five.

like all hours of the night. Oh, wow. And it's amazing like Michelin Star stuff, just like street vendors. So you can go and get an amazing, you know, Peking Duck or whatever pork belly at any hour of the night. You just can't get a drink. Yeah. Well, that's great. So it's a trade-off.

Very unlike Boston. Boston has hot dog stands and sausage stands outside the bars. And, you know, you go out and you get one of those and you get in a fight. That's kind of what it's like to be 22 in Boston. There's no fighting in Singapore. No, you don't do that in Singapore. You get caned probably if you fought. Yeah, that's about right.

All right. So I think that's it. Busy week. Maybe we'll have some more reporting next week. Everybody have a safe and healthy weekend. And we will see you on Monday.