On The Brink with Castle Island - Weekly Roundup 09/29/23 (Gensler HFSC hearing, Vespa problems, SBF trial starts) (EP.455)

Episode Date: September 29, 2023

Matt and Nic return for deals and news. In this episode:  Is AI going to cause unemployment for IB associates? Blockchain based sneakers Tungsten business cards What's happening with OTB merch? Nic's Vespa catastrophe Gensler's HSFC hearing How Gensler is the Tonya Harding of crypto Made up airlines What's going on with Huobi? FTX trial starts next week Content mentioned in this episode: Merch: onthebrink.shop Eric Hess, Bridging Policy and Practice: A Pragmatic Approach to Decentralized Finance, Risk, and Regulation Nic's Token 2049 talk

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 Concentive 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. Welcome to On the Brink. I'm Matt Walsh.

And I'm Nick Carter. And this episode is brought to you by Coin Metrics. And here is the Metrics Minute. All right, today's Metrics Minute. We're talking about Bitcoin mining. The hash rate surged to a new high of 400 X haashes in Q3, up for 250 XA hashes at the beginning of the year. U.S. miners are benefiting from falling energy prices. Apparently, Texas industrial prices are the rates are dropping from 6 cents a kilowatt hour to, well, from 7 cents per kilowatt hour to 6 cents per kilowatt hour. Bitmain has announced their amp miner S-21, which has pretty great performance so you'll see a rotation of A6 as the S1 comes into the market. In terms of mining pools, Founder and Antpool together control over 50% of Bitcoin's hash rate.

Pretty remarkable. F2 pool has been at the center of controversy. They refunded a erroneously high transaction fee of $500,000 made by Paxos by mistake. F2 pool also earned an extra 400k by mining stacks with zero fee transactions. So I guess prioritizing their own transactions, I guess you can call that MEV. So there's MEV on Bitcoin. That's your Metrics Minute. Pretty good Metrics Minute.

Lucas Nuzzi was on Galaxy Brands. They released it early. I don't know why, but usually that comes out after we record, but Lucas Nuzzi was on Galaxy Brands. Lucas is the head of R&D at Coin Metrics, and he hinted at some big analysis that's going at Coin Metrics around like related party transactions at FTX around the FTT token. I am very curious.

Can't wait to see that. You know, the thing the Galaxy Brains has over us is Alex Thornt does the intro raps. It's very good. They're a unique rap for each episode. I don't know how he does that. And he produces the beats, I think, apparently. Alex produces the beats. He's a generational talent on the beat.

And the rams, actually. I think we need to respond in kind with our own musical endeavors. I don't think we have any shot of competing there. I think you just got to play games that you're good at, and that doesn't seem like a game we're going to be good at. Although you are a noted generative art, what do you call that? Generative musician?

I mean, I like to consider myself a musician just in plain terms. In a classic sense. yeah but I couldn't I don't know how to make a beat and I don't know how to rap so you do play the piano you could play like Mozart yeah I mean I could make an intro for us I hate our intro if you ever let me change it no I'll make I will write a original song for the intro if you let me change it once the fed wakes up you can change it but the fed is still asleep but it's that is all about the 2008 crisis that when we took all the headlines from.

That was some years ago. We've had new crises since then. We might have another one. I mean, if we keep on hiking these rates up to 7%, you don't think there's going to be another SVB out there. They're lurking. This BTFB program, as turns out, they said it was going to be a temporary program. This thing is full-blown, institutionalized forever.

There's nothing more permanent than a temporary government program. So maybe we'll have some more soundbites. Kramer, maybe? Yeah, I mean, the 30 years at a five-handled now, which is, judging by the telegram chats that I'm in, I don't know what that actually means, but everybody else seems horrified by it. So I assume it's bad. Well, it means you're not going to see a lot of people buying houses, I suppose, but it's also crazy that Bitcoin is hanging in right now.

Bitcoin is up on the day. That's true. It's impressive. I think that's an important thing, especially as other risk assets sell off. So speaking of interest rates, I looked at my credit union's rates that they pay me yesterday. You aren't believe this. They pay me five basis points on my checking account, 20 basis points on my quote-of-quote

savings account. Oh, time to switch. Time to switch. Yeah, you're getting screwed there. How do you justify that? Because they're collecting 535 basis points on the cash. Yeah, that's not good. If they're in short-term judges.

That's insane. That is an interesting. Do they also, do they do your dry cleaning? Are there other services that they provide? They're the worst credit union in the world. They don't even have branches. So I can't like go get cash or anything. It's terrible.

Oh, you got to switch. I mean, why don't you just use Fidelity? I can actually show up to a Fidelity branch with a physical check and just hand it to someone. It's really good. You know, I've never used a check in my entire life. People ask me for checks sometimes. I don't know what to tell them. Like a check seems like a completely old-fashioned technology.

Yeah, you're a digital guy. You're a Web3 guy. Yeah. So I drained my entire account yesterday. And they called me and they're like, hey, what are you doing? Like, how dare you? You're like, I'm out of here. I'm like, it's been real.

Let me introduce you to the concept known as opportunity costs. Like you guys are 530,000. tips short here. I have to get that from somewhere else. What did they say to that? They didn't really have an answer. So I'm like, please approve the ryer. The funds are going, okay? Yeah. And you don't actually have the cash, you know? They don't actually have the cash. That's a dirty secret. Well, it's kind of crazy that there's a phone call to prevent you from moving your own money. It doesn't really feel like that. That feels quite unfair. Like, if you'd be sure, show up with a bank branch and ask for the cash, you're just not getting it. No. Like you asked for

like, I don't know, $500,000 of cash. You drain the account. I don't think they'll give it to you. People, it's, how many of these type of anecdotes do people need to hear in order to think that a blockchain-based bearer asset is a good idea? So anyway, the future banking is on chain T-bills, as we know. Yes. Very bullish on that. Speaking of which, my talk at, Token 2049 videos out. It's live. We put it in our newsletter. By the way, go to castle island.vc if you want to subscribe to the newsletter.

There's a button people have been asking. It's right on the website, castle island.vc. And then we put out a newsletter every Friday. It's basically a text version of this podcast without the humor. Yeah. So people don't know this, but we're not just coming up with all this stuff originally on the spot. We're actually just basically regurgitating the text. is in the newsletter that you write.

It's a great tool to stay up on the market developments. You just write a little bit every time you see a deal. So this is one of the longest running newsletters in all of crypto. Is that fair to say? It is. It's pretty niche. So it started off as a newsletter that we just sent to our higher-ups, our bosses at Fidelity, in order to gin up excitement about the crypto space in terms of just saying,

hey, stuff happened this week. there was one venture capital transaction and there was a press release from overstock that they like Bitcoin. That was basically the first newsletter, I think. Those were the days. That was almost like, that was almost 10 years ago. Yeah, I mean, you've been doing this thing for a decade. How does it feel? Feels good. I don't know what else I'd be doing. So, um, feels really good. Yeah, I was thinking about that. Hopefully I don't have to find a real job. I don't have any skills. Any discernible skills. at all. So we're pretty much all in on this thing. Well, you're a good public speaker. This

token 2049 thing was good. I guess you could give public speeches on like, you know, vitamins or supplements or something. There's other ways to make a living. Thanks. That's great. What's the name of that guy, Tony Robbins? Maybe I can be like Tony Robbins. I think you're going to need to bring up the energy and the voice a little bit if you want to compete with Tony Robbins. That guy's pretty electric. I actually, many have said this. Yeah. I was looking for a quote. the other day for our LP letter and Tony Robbins his name kept on popping up on chat GBT so he's somehow manipulated the algorithm over there when you ask for like quotes Tony Robbins pops up all the time so I do have to give a shout out to AI this week because

AI is just so great code interpreter the advanced data analysis plugin on chat GBT is mind blowingly good. It is. Have you tried it? No, but I watched that LinkedIn video, which is crazy. The bicycle, the guy just put a picture of a bike and said how to fix it. Is that what you're talking about? No, that's the multimodal that Open AI also just dropped, where you can do voice communication

with the AI. You can send images, you know, multimodal. But for me, the number one most important thing that AI has ever produced is the advanced, I think it's called advanced data analysis or code interpreter plug-in. So you have to be signed up to the top level of chat, GPT. Then you go to the settings page. You enable this thing. And then you can upload any dataset.

You can have it figure out what the data is. You can have it clean the data. You can manipulate it. You can combine variables to any kind of transformation you want. And then visually represent it. And you can just ask it, what's the best way to visually represent this data? And they'll, based on the data, they come up with, you know, chart options. And then the actual charts they produce.

are higher quality than anything I would come up with in Stata, believe it or not. That's crazy. I used to have it, when I was a management consultant, I used to have this book. There's a physical book called Say It With Charts. And it was the entire point of the book was, here it's a bunch of chart options for this type of data set. Use this type of chart. Don't use this type of chart for this thing. That's crazy that.

ChatGPT does that now. So it has eliminated like the associate investment banking role, I feel like. I mean, it's really dangerous, I think, for a lot of white-collar professions where you're doing this grunt work. I mean, when I do a data-related project, like, 90% of my time is finding the data and cleaning the data. And then, so, like, that 90% is, like, has gone away. Wow. So, I mean, we're talking mass and unemployment for first year of investment banking grads. Oh, there'll be a new.

There'll be something new. I don't know. What would people have said about, you know, the internet? This is going to eliminate so many jobs. But it created new industries, created new segments. I think there'll be new stuff. I don't know. I think this vastly enhances productivity, but I don't see.

I don't know. Like, there's so many sectors of the economy this affects. I'm kind of a dumer from that respect. Like, we might have to go for UBI here. I don't know. I think you're, you're sounding very malfusion. So that's AI. That's AI.

All right, let's hop into some deals. A couple big ones this week. So IYK, this is a startup that's focused on connecting physical objects to blockchains. They raised $16.8 million from A16Z, 1KX, collab currency, lattice, and others. This is a category that I love. So we've made a few investments in this space, tying physical goods to digital records. And I think it's going to be a huge category. So congrats to the IYK team.

Yeah, we like the fidgetals. The figital segment continues to grow, despite the broader sell-off in the NFT space. My only qualm with this segment is the word figital, which I don't like. Oh, let's drop it, then. I don't hear anyone saying it anymore. Well, what would you call this?

What would you call it? I would say connecting physical objects to digital records. It just rolls right off the tongue. Yeah, that. Maybe we can condense it to one word. You could call it digy-fidgy, potentially. Did you like that? Nope, I don't.

The N-State guys call them entangled objects, like a photon. I'd workshop that. I like the N-State guys, but I'd workshop that a little bit. All right, we've got to A-B-Test some of these. So, anyway, we like the Figitials. Congrats. I'm okay. Speaking of N-State, can we just say that I'm an investor in N-State?

had the NFT and I have the NFT. I still haven't gotten my shoes and everyone on our team has gotten the shoes except for me. So I have the shoes. I played golf with the founder like two months ago. He said he was going to send them to me. He didn't send them. I hope he listens to the podcast.

So for context and say it is a startup that creates NFT associated shoes, starting with shoes, all kinds of stuff. I think the shoes are really great. I have a couple of pairs. You miss the window to redeem your NFT for the shoe. that's the problem. I missed it, but then there was some other mechanism and I did that. So I wear the shoes.

I think they're really handsome sneakers. I'm not a sneaker head. In fact, I don't own any sneakers, really. Sometimes I wear them and people comment. It's like just the other day, I was in the elevator this lady gets in.

I'm wearing these great teal and reddish end-state sneakers. She's like, wow, those are really cool sneakers. Like, no one ever comments on sneakers, right? And I'm like, yeah, you know, these sneakers are actually on the block. blockchain too. Like there's an, I know.

You said that. Yes. And so I scan the NFC that's in the tongue of the sneaker. And I show her like, hey, this is, there's a chip in here, which has a, you know, a key on it. And it's an NFT. And like, this sneaker is also in the metaverse. Wow. And she was like, well, I really liked it before you said that part.

Oh, she doesn't like it anymore. No, she liked the sneaker and then she didn't like the blockchain. So clearly we've got work to do in terms of public sense. Yeah, she probably just associated the blockchain with like Sam Bankman-Fried. She doesn't want any part of that thing. Yeah, that was pretty much it. So anyway, we got some work to do here. That reminds me, you know what I have in my possession?

A tungsten business card from one Dan at CMS. I've heard of these. it's the best business card I've ever felt it's like a pound it's the shape of a business card it's very thin does it's very heavy is information on it it is so I'm not going to put that on the podcast but it is a it's a great business card it's definitely the best business card I've ever seen in my life this is the most expensive business card of all time it is yeah but it's um it would survive like the rapture so I mean he must really value you custodying his information if he's going to the effort to give me a $20 business card.

I did feel pretty good. I mean, it might be like $100 business card, if we're being honest. I think he just wants to make sure I know how to get in touch with him, which is great. I do. I mean, you could walk 20 yards and go see him. I could or I could just look up his information on my tungsten business card that I now have. It's on my shelf now. That's a huge vote of confidence.

Yeah, and I felt pretty good about that. Yeah. All right. Well, next up, we have Anchor Watch and ensure that covers commercial entities holding Bitcoin. They raise $3 million from 1031, AxiMBDC, Bitcoin Opportunity Fund, Time Chain, and others. Big congrats to Rob and the team over there at Anchor Watch. Rob Hamilton, listener of the podcast, who's actually been on the podcast. So he's a listener of the pod, fan of the pod. He was actually on the pod. So he's a star of the pod. And now he's being mentioned on the pod, having a deal on the pod. There's a lot of coverage there, but really like what they're doing over at Anchor Watch.

Not to mention last time I saw Rob, he was wearing OTB merch. He's like a great, yeah, he will go around wearing the OTB merch. That's how you guarantee a mention on this show as you buy our merch, which, by the way, is our merch store still operational? Honestly, I don't even know if he's still alive, the guy. I don't know. I don't even, is the domain name still up? What to do with the merch?

What is it? On the brink. Dot shop? On the brink. Dot shop. Are there things on there? All right. Well, let's go investigate. It works. It still works.

There's actually new stuff on there. Wait, there's new stuff on there. Wow. We got new mugs. We have camo hats. Look at these camo hats. They look great. Have we been making money on this or no?

Just the merch guy. Oh, there's a best for mug. There's a turkey mug, and there's a best of mud. This is great. I'm just doing stuff in the background. There's an actual turkey mug on this. This is classic. We didn't approve this. All right. So I

do have a huge Vespa-related problem, which is very embarrassing. So I was reticent to even share it on this podcast. Okay. All right. Hit me. It's pretty bad. So I forgot to transfer the title

of VESPA to me. Again? Because I have never done it in the first place. I bought the Vespa. I sent the nice lady who sold me the Vespa. I sent her some money on Venmo. And she just gave me the Vespa. I'm like, okay, well, I've purchased the Vespa.

Now it's mine. And that's the last thing anyone needs to hear about it. Boy, was I wrong in that. Yeah. Maybe you should have asked me about that because I could have told me that that was a thing. when you buy a motorized vehicle, you were meant to tell the government about that. Yeah.

And if you don't, you end up in a huge world of pain. So I was pulled over. Did I tell this story on the pot? I don't think I've told the story. That you were sitting on the side of the road? I was pulled over driving the VESPA. And I made an illegal right-hand turn. Okay?

I'll admit it. I did that. That should be like a $150 parking ticket. It ballooned in. to an entire scandal in catastrophe because I didn't have registration. Also, I didn't have my license on me. I didn't know that. I didn't know you have to have your license on you whenever you go anywhere.

What do you think the license is for? It's a driver's license. I thought having it was good enough. Also, I don't consider a vest way to be a car. I don't either. I don't either. So I didn't have the license. I was driving a license, kind of.

I didn't have the registration and the tag was expired. And I made an illegal right-hand turn. That's four tickets. And some of them were like really big tickets. So it was over $1,000 in tickets. I mean, I don't know. Should we edit this out if our D&O insurance provider is listening to this? This is a shocking lack of knowledge on how the motor vehicle system works in the United States.

I know. I know. My brain is much is very focused on ingesting relevant information and disres. guarding irrelevant information. So I, the cop didn't like any of this. He didn't like my story. He thought that I'd stalled. He accused me of stealing the Vespa because I wasn't,

dude, who would steal this thing? Because I didn't have my license and I couldn't really prove that I owned it. And I'm like, do I look like I stole the VESPA? I mean, come on, sir. I am not a thief. And I showed him the Venmo. transaction, which kind of placated him a little bit. But he made me sit on the side of Alton Road for like half an hour while he ran everything. So for future knowledge, if you have to

buy a house or a car, there's a process. You don't just give the cash. Here's the problem. I have to, I went to the DMV with the bill of sale later to prove to them that I had bought this. And they're like, oh yeah, you filled in this form wrong. So we can't. Yeah, don't get started. But like, going to the DMB is this huge thing. And so I still haven't done it. So I put the Vespa in storage and now I don't ride it anymore.

Because writing it is like the most dangerous thing ever because when I do, I get pulled over. I got $1,000 in tickets. And I have to send the government a money order. I even know what a money order was. Yeah. Do you know what a money order is? I haven't done a money order in a long time. I had never done that before.

You can't pay the tickets online. You have to potentially, you know, talk to a judge about this whole thing. And so the Vespa is officially toxic and I can't write it. So we're going to retire the VESPA. All right. The Vespa is done. So buy some merch of the VESPA and it's a commemorative merch. All right.

Moving on. We've got another deal here, Pimlica, which is an Ethereum infrastructure company. They raised $1.6 million from one confirmation, safe consensus, and others. And then lastly, we have RAPLOR. They're building staking infrastructure. There is 12.8 million from archetype policeholder one confirmation, robot ventures and maelstrom.

All right. So what to talk about this week? So there's a bunch of regulatory stuff. So the House Financial Services Committee held an SEC oversight hearing, not overhite. That was not a short joke. The SEC oversight hearing this week,

among the notable developments, basically it was just a bipartisan T-off session on Gary Gensler. It was kind of interesting. So I'll give you some of the highlights that I saw. So first of all, a bipartisan group of representatives sent Gensler a letter the night before urging him to approve a spot Bitcoin ETF. That was Republicans and Democrats signing that. Chairman Patrick McKenry began the hearing by pretty much blasting Gensler. He said, your efforts to choke out the digital asset ecosystem, which has created a real harm for consumers and our markets is clear to all. Chair Gensler, you have also said your goal is consumer protection. Your actions have pushed legitimate digital asset firms outside

of the regulated financial institutions where consumers are best protected. Representative Andy Barr followed up by calling Gensler the Tanya Harding of securities regulation because you are kneecapping U.S. capital markets. Wow. That's actually a great line. That is a great one. That's a good one. I'd say whoever came up with that one that was really good. I don't know if anyone listening gets up. Everyone listening gets the reference. This is kind of a boomer reference. Okay.

So 1994, winter Olympics, forget where they were. But I guess we can Google that. In 1994, Nancy Kerrigan was the favorite to win the figure skating. And Tanya Harding was another American who was competing against her. Tanya Harding's boyfriend. and some hired thug actually kneecapped Nancy Kerrigan. They attacked her physically in a warm-up, and they hit her in the knee, tried to break her knee.

She still competed, Nancy Kerrigan competed and won the silver. It was Lillahammer Olympics, I believe. So kind of a 1994 reference by Representative Barr there, but I thought it worked. Kind of kind of a good reference. I mean, this is like one of the most incredible sensationalist, sports stories of all time, right? It's a huge story.

I mean, and this was before the internet, so it was even, it's hard to say how big this would have been in the days of having the internet, but it was huge. Tanya Harding. So Tanya Harding won the gold medal in this? No, no, no, no.

Tanya Harding ended up falling. Nancy Kerrigan, despite being attacked, won the silver medal. I believe it was, she was still able to compete. won the gold, I believe. I'm going off top of my head. I don't know this on the top of your head.

That's insane. Yeah, I don't know. Well, Tanya Harding performed, according to Wikipedia. She was a second female to ever perform a triple axle at that Olympics. What that is, I don't know, but it sounds impressive. I think that's like you spin around three times. So, anyway, Gary Gensler is the Tanya Harding of Secure. these markets. So that was one of the highlights. Then you had whip Emmer. He said, I am convinced

you're not an impartial regulator. Instead, it's clear you're working to consolidate your own power, even though it means crushing opportunities for everyday Americans. Got to love, Emmer. Then you had Democratic Representative Richie Torres, basically had this, we'll put the link to this one. It's a little bit too long to go verbatim on it. But he hit Gensler very hard on the fact that there's no case law to support the stance that they're taking on. cryptocurrency regulation. And then lastly, in terms of my highlights, Representative Mike Flood, who's really emerging as a great advocate for the digital asset space. He's a Republican out of Nebraska. He took Gensler to task on Staff Accounting Bulletin 121, which is the one that we've

been talking about for a long time that is preventing regulated U.S. banks from being in the custody business. It's making them keep customer assets on their own balance sheet and take a capital charge against it. So it's preventing companies like Bank of New York Mellon from launching Bitcoin and Ethereum custody. So he took him to task on that. And then later in the day, flood as well as Richie Torres. So it's a bipartisan group. Also Congressman Wiley Nickel, a Democrat out of North Carolina and Congressman French Hill, a Republican from Arkansas, they introduced the uniform treatment of custodial assets act right after this hearing. And that would just roll back Sab 121. complete common sense. It's a total no-brainer. Sab 121 is probably illegal. So it was great to see

flood hammering Gensler on that. So I don't know. That was kind of my highlights. What did you make of the hearing? I wasn't able to tune in, but I'm glad that we had a kind of public venting session at Gensler. I don't know if that's going to change his mind. In fact, I'm sure it won't. He probably thinks of himself as unfairly maligned for carrying out his divine duty. to crush the crypto industry. One thing that does occur to me is that it's very cool that three of the four sponsors of this uniform treatment of custodiacs,

their names are also just nouns, like flood, nickel, and hill. Wow. That's great. That is pretty good. Huh. Yeah. That's the commentary you come to this show.

That's why you come back every week. week. Yeah, that's why people listen every Friday. So yeah, I don't know what happens as a result of this, but there are, I think the most likely thing to happen here could actually be that the House Financial Services Committee sends a subpoena to Gensler. So apparently they have not been forthcoming with the records around FTX and the meetings that he's had with SBF. And so that was a source of controversy at this meeting. Who knows what happened? We know that there was a lot. of meetings with iEX and ftx so gensler was involved here in some capacity it sounds like he has not produced answers to that committee that are sufficient so maybe that's a logical follow-up here

outside of that i think we're just going to see more of the same from the SEC it feels like everyone in washington met with ftx at one point yeah like leil braynard met with ftx oh really like it is not to make a torture analogy it's like how many buildings are you millionaires are there that didn't meet with Epstein, like not that money? How many people on the hill didn't meet with FTA, with Sam? Like, apparently they all met him. Well, the guy, I mean, the guy basically lived in Washington for that year that he was just spraying money around. He's just walking around Washington, D.C. with customer money, just giving it to anyone he could see. In hindsight, that was the worst investment of time and money ever. I mean, if he had just been

hauled up at the Bahamas, just checking the books, you know, like maybe we wouldn't be in the situation if he'd been running the business and making sure the money was there. So am I right in saying that this trial starts on Monday? That's, yeah. I mean, it's next week, right? Yeah. So the book will come out.

I think the Michael Lewis book comes out on Tuesday. We'll have to read that between Tuesday and Friday. Is this an opportunity for me to be a hater of Michael Lewis? I think you've already been on record quite a few times with hating Michael Lewis. I'm his number one hater. Normally I'm the one with haters, but in this case, I'm becoming the hater. Yeah, you just don't like Michael Lewis. I think he was at the center of this thing.

It's like if you're shadowing Sam for like a year, how do you not figure out something is up? So did he just bite his tongue because he's like, oh, this is going to be a great drama for my book later on? What did he know? That might be the hottest take that you've ever had on this podcast is that Michael Lewis was knowledgeable about the FTX fraud. That is... I'm not saying he was in on it. I'm not saying he was in on it.

I'm saying, how could you not figure out that something is a myth? Maybe not everything. Maybe you don't uncover the whole fraud. But if you're like there with SBF, the whole thing. time. You're in the Super Bowl. You're watching the Super Bowl with him. I mean, come on. He was brought in to write a, he was brought in for a job, which is to write a hagiography of Sam. He stumbled into something much bigger. How could he not know? He's a journalist. All right. Hot takes. Hot takes. All right. What else happened this week? So, Coinbase continues

to make strides outside of the United States. So they have obtained a license from the central bank of Spain to operate their exchange in custodial products in that country. And they've also, this just happened today, they received regulatory approval in Bermuda to list perpetual futures on their offshore exchange as well. So Coinbase full steam ahead. They also had a huge contingent down there, including Brian Armstrong down in Washington for the hearing. A lot of positive momentum there.

Yeah, shout out to Bermuda. We're trying to land in an interview with the Premier. We'll see what happens. I'll be in Bermuda in two weeks or less than a week, less than two weeks. I don't know, in a week. Interesting Bermuda situation. I was looking for flights there. I was going to have to go through Philadelphia or something.

Turns out there is a brand new airline that just dropped, which will fly from Miami to Bermuda direct, called Bermude Air. Huh. It's daring you to get on that. Yeah, I know. And I found it through chatGBT. AI is just working wonders. I asked chat DBD, how do I get to Bermuda? Because I didn't believe that I would have to go through Philadelphia.

And they're like, yeah, there's this new airline called Bermude Air. That sounds right. I don't get on that. It turns out you can just start an airline. Did you know this? You can just start. Two guys came together and they started the airline like any old kind of startup. And you're actually thinking about getting on it?

I booked the tickets. So I went and I selected the seats Nobody else had booked any of the seats on these flights That's because it's a make-believe airline This is like the guy from Babson like 20 years ago Who just made up an airline And this was like right before I got to Babson This guy literally started an airline out of his dorm room

He made like $80,000 because he had these like flights that were rare There was no planes He didn't have the planes No he just sold he just pre-sold a bunch of airline tickets Yeah, that's what you just did. Are you allowed to do that? Well, that's what the guy just did to you, I think. So, yeah.

The FBI was on Babson's campus. It was a total scam. But see, this is the fine dividing line between scam and visionary, which you kind of never know where, which side of the line someone's on. If he had sold a lot of tickets and then he used the money to get the airlines, he would have been a visionary, right? Yeah, he would have been like Steve Jobs. So maybe that's valid. Is that valid? You pre-sell tickets and then you get the plane with the proceeds.

It's like Theranos. I'm going to raise a lot of money to build something eventually. Yeah, but so if Theranos had worked, Elizabeth Holmes would have been considered visionary. This is why I'm saying the fraudster visionary line is only knowable in hindsight. You can only know it in hindsight. So these guys, hopefully they turn out to be on the visionary side. but so I booked the tickets and I'm the only one on both of these flights I think you're going to want a backup option there do they still send the plane if it's literally just me

that's what I want to know no no that may no I think you just get in touch with the Premier he probably has his own transportation he's trying to be big in the cryptosca I agree to send you like a jet I don't know if they care about me enough to send me on the diplomatic plane

we're helping the GDP of the country tremendously. Yeah, I agree. I agree. So if they're listening, like, I'll consider any transportation options here. We'll see if the, I mean, I'll let you guys know. We'll see if the planes are real. I mean, I'm going to show up to the airport with the boarding pass for maybe a plane that doesn't exist. All right.

More odds and ends here. There's a new paper out by Eric Hess, which is really interesting in the context of the law and decentralized finance. So it's called bridging policy and practice, a pragmatic approach to decentralized finance, risk, and regulation. Definitely worth a read, a long read over the weekend. What else? The Wall Street Journal has an article entitled The World's Biggest Crypto firm is melting down. They had a, it's about Binance in case you can figure that out. They have this cool image of the Binance logo melting. Certainly, Binance is up again. it.

I'm so sick of talking about Binance. There's some exchanges that are really filling the gap. Like I would say, OK, X is one of the big winners of the Binance withdrawal. Sounds like it. Yeah. Binance also sold their Russian operation to an exchange called ComX, which I'd never heard of. And looks like it was just created.

So finance is not in Russia anymore, apparently. The WSJ also said Huobi, which is now known as H-T-X. Hwobitron Exchange is what that stands for. Apparently Huobi is a big winner of the loss of finance, but I wouldn't recommend that anybody trade there. No disrespect to Justin Sun to his excellency. His excellency of Justin Sun. The on-chain data around Huobi leaves a lot to be desired, to be clear,

as in the presence of the reserves is very questionable. Yeah, so if they can't point to where the money is, then maybe they don't have the money. Yeah, don't recommend that one. So I think that's it for the week. We'll have a busy week next week with this FTX trial started. Maybe we'll have some insights on the witness list. I don't know.

Maybe we'll have read Michael Lewis's book by then. We'll see. You're going to have to read it. I can't, in all conscience. send money to this guy. Well, I've already prepaid. I will read it. And we will see you on Monday.

Have a safe and healthy weekend.