On The Brink with Castle Island - Weekly Roundup 11/17/23 (FDIC scandal breaks, Vivek's crypto policy, SBF parents in focus) (EP.475)

Episode Date: November 17, 2023

Matt and Nic are back with another week of news and deals. In this episode:  Tail risks with the Bitcoin ETF Are SBF's parents off the hook? The FDIC is embroiled in scandal Should Marty Gruenberg step down? Tokenized bank deposits versus stablecoins What's wrong with the third party doctrine SAB121 under pressure Content mentioned in this episode: Fidelity Digital Assets, Understanding Proof of Work The WSJ, Strip Clubs, Lewd Photos and a Boozy Hotel: The Toxic Atmosphere at Bank Regulator FDIC Whip Emmer Letter to Treasury regarding Hamas crypto financing Sponsor notes: Coin Metrics STATE OF THE NETWORK—November Rally Reaches New Corners of the Digital Asset Market In Coin Metrics State of the Network Issue 233, we delve into the primary beneficiaries of the recent market rally and explore diverse avenues channelling this momentum

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 you by Coin Metrics. And here is the Metrics Minute. For today's Metrics Minute, we're looking at the November crypto rally. The digital asset market cap surged past $1.4 trillion, with Bitcoin and Ethereum reaching over $37,000 and $2,000, respectively. but the rally was broad-based to cover a wider way of sectors. Solana reached $62, five-fold increase since January, and spot trading volumes in Solana, reached a high of $2 billion on November 11th,

the highest since FDX's collapse last year. With a near-term focus on Bitcoin derivatives markets experience heightened activity, as BTC open interest on CME reached over $4 billion, overtook OI, on Binance. The Grayskill Trust products saw significant surges. The GPDC discount to NAV narrowed to 10%. ETH is trading at a discount of only 14%. Closing the gap from a 59% discount earlier this year. Grayscale Soul and Link Trusts are trading up premiums of 870%, 250% respectively.

That's remarkable. Wow. And transaction fees surged on Bitcoin and Ethereum. reaching a daily max of 9.1 million and 12.8 million, respectively. That is your metrics minute. Pretty good metrics minute. Man, these markets are volatile this week, huh? Yeah, I do worry if there's no ETF approved by January, I worry that we will have the mother of all sell-offs. I think there's, let's say, 20% chance of that happening. It's because everybody's experience. expecting an ETF approval. Everyone's expecting it within the next. Yeah, I'm expecting. I'm expecting. I'm expecting one. You are certainly expecting one. I, I am expecting. I'm on the record as being expectant of a Bitcoin

ATF. On what time frame I at this point, I think I'm saying early January. I think there's a 20% chance it doesn't happen and then there's just a massive crushing sell-off across all asset classes in crypto. So I was on the road. this week and, you know, I was with some folks that know an awful lot about ETFs. And they had the view that a lot of people that are talking about ETFs don't know what they're talking about. I sort of took it as an insult. But it's true. I mean, there's really no way to know what's, yeah, it's a known, unknown. It's a known unknown that I don't know that I don't know that I don't know what is happening with these 12 sponsors. I feel pretty comfortable saying that.

We just outsource started thinking to James Safer and Eric Balcunas. Okay. Yeah, I think they, you know, also don't know, though, but they're probably in the top echelon of people that don't know, if that makes sense. So James just showed up on the live podcast appearance we did last week. That was awesome. How good was that? So it was, I actually didn't tell you.

So Thorne and I were thinking about asking him to come. come up and then we came to the conclusion that that would be unfair to him to put him on the spot and maybe he wouldn't want to do it and you just sort of ran with it we didn't talk to you about it but you just say hey he's here come on up and he did he was great on the podcast yeah sometimes you just got to go for it you know very insightful I mean I guess so 19 B4s let's say they get approved there's still the S1 process right and so is there a world where the 19B4s get approved and then the S1 process is itself drags on. I guess that's the next question. I don't know. I have no answer to that.

It's a known unknown for sure. So yeah, as I said, as I said, the price reflects that expectation. So if nothing happens, I think it'll be catastrophic. Well, there's, you know, there's just more people buying than more than selling is sort of the math behind the price. See, I never liked that because that's not necessarily true. There could be one person buying with a lot of capital and a lot of people selling. So that always. There's more buying than selling. It's probably a clear way to say that.

So you did a good podcast episode with Anthony DiMartino of Trident this week. Yeah, I got a lot of feedback on that. People like that. He had a lot of interesting takes on the commercial real estate market. and how that will impact the banking sector. That's probably what the FDIC should be really focused on. And it seems like what they're focused on under this Martin Grewdenberg character is boozy parties

and being really mean to people that work there. It's sort of the sense that I get from the Wall Street Journal Expoise, which was a all-time bad look for our boy, Martin Grewenberg. Yeah, and to be clear, I've been a big-time hater of Marty, even before we knew that he was presiding over this rampant culture of harassment. But, yeah, I mean, credit to the, you know, Wall Street Journal. I've always liked those guys at the Wall Street Journal. I've always liked them.

We've never criticized them. This scoop was great. I do. So, you know, for those that aren't familiar, Marty Greenberg has been part of the FDIC since 2005 and he's been chair twice now and also under Obama. So he's been in senior positions at the FDIC for basically two decades. And starting in 2010, according to the Wall Street Journal, there is just all these allegations of harassment that sort of come out. Well, they came out this week, but they began back then. And apparently the culture over there is just terrible. And I mean,

these are meant to be sober, serious bank examiners that are meant to keep the banks in check. As we know, they do a lot more than that. They sort of extrajudicially persuade the banks to exclude entire legal industries, starting with payday lending, firearms, adult, back under Obama and continuing with crypto under Biden. So they're meant to be kind of like the adults in the room. but according to the journal, it's just chaos over there. Yeah, I mean, this has it all. I mean, you have sexual harassment, misogyny, you have a culture where it appears that a lot of females have felt like

bad behavior goes unpunished. You have a lot of examples of Martin Grudenberg's very bad temper. Yeah. I don't know why he's so angry. I mean, according to the second journal article, he romp, he chronically bruntically, broke his phones in frustration, like physically destroyed them? What's over that?

This guy seems like he has a little bit of a problem with anger. Yeah, I don't think he's. And so here's something interesting. In a hearing yesterday, he was asked by Chair McHenry, Representative McKenry in the house, whether he had been investigated for any professional misconduct. He said no. And then they went for their lunch break.

and someone must have told him, wasn't reminded him that he had been investigated for workplace misconduct. Apparently, he had browbeaten a female subordinate of his, and there was an investigation about that. And so after the break, he came back and he had to correct the record. So actually, you know, I lied earlier and I have been investigated. Wow. I didn't see that.

So he actually just came in and said, hey, I'm just kidding. I was investigated. Yeah. So I don't think you'd forget something like that. You know, you probably don't forget that. I would remember that for sure. Yeah. So either his memory is really faulty in a pretty critical way or he lied under oath.

Yikes. Not good. Not good. But I guess if you correct it then. So I guess that undoes the perjury. If you say, I guess. I don't know what the rules are. I accidentally just perjured myself.

Sorry, I did perjury, but I, do I get a give back? Yeah. Can I unperjure? It kind of just seems like it's not a very well-run government establishment at this point. So it is kind of in crisis right now. They've canceled some routine meetings that there is. Frankly, I think Gruenberg should be forced to resign over his unconstitutional weaponization of what should be a sober bank regulatory firm

and using it to wrongly kind of harassed and intimidate banks into cutting off the crypto space. But if he resigns over this, that's also good with me. Whatever the cause is, I support his resignation. You know, he resigns and then Elizabeth Warren just picks the next one. Is that how this is going to work? Yeah, pretty much. So there's nothing new under the sun.

So we can't ever really win. but I do look forward to tweeting Rip Bozo in all caps when he does resign. I already have that tweet drafted. You got to draft it? Yeah. So hopefully I get to tweet that in the coming days. So when I do, please, RT. I'll engage with that one.

All right. Well, it was a busy deal week. You want to hop into those? Yeah, these deals powered by Masari Enterprise. Thank you. First, great product. The block. The block has announced a transaction in which Foresight Ventures has acquired a majority stake in the firm.

Congrats to all parties there. Yeah, so this looks like an 80% transaction here. So the block, of course, got entangled in the FtX debacle. Their former executive, I guess he wasn't the founder because like Judas was the founder, but CEO took a bunch of money from FDX and seems to be the cleanup job here. So good job on getting that transaction done. It looks like Larry Sermak will continue to run the block. So it seems like their leadership structure will be largely unchanged.

Next one up is finality. This is finality without the eye. See what they did there? It's F-N-A-L-I-T-Y. This is a company that is building tokenized versions of major currencies, collateralized by cash at central banks. They raised $95 million. It was led by Goldman and BNP.

Pahribas had participation from DTCC, Euroclear, Nomura, Wisdomtree, and others. Does this count as a crypto deal in your view? I guess it's like a private tokenization play. It's like a, it's blockchain, not crypto. So I've been trying to determine the difference between a stable coin and a tokenized bank deposit. And I think the difference is just the kind of perceived. credit worthiness of the issuer. So a stable coin you have to evaluate the issuer itself and do your own credit analysis of them. I guess the tokenized bank deposit is you already understand the

creditworthiness of the bank. So that seems to me to be the salient difference there. Yeah, I've always thought that if you had banks issuing these tokenized deposits that they should actually trade at different parity levels. So, you know, the Goldman thing might be more credit worthy than the, you know, SVB backed stablecoin. So they ought not trade at parity. But that's not really good outcome for the fungibility of those instruments then. I'm sure they're thinking about it. I mean, it seems like you could solve a lot of this with a consortium or having the DTCC

involved somehow. I'm sure there's an answer to how you get around that. Or maybe you just have a huge trading opportunity, like a big FX market emerges around these things. That is very reminiscent of how free banking worked. Maybe I should do another free banking episode. I was exactly like that. I mean, it was basically banks issuing stable coins and having them mutually accept them. That was how free banking worked just with notes. So physical notes instead of digital notes. That was how it worked. And it was stable without a need of a central bank. So we have done episodes on that.

It's a big round though. I mean, that's one of the bigger deals. Yeah. Next one up's a big one too. So we have blockchain.com, of course, they do a lot. They're London-based crypto financial services company. I don't exactly know how to describe them. There is 110 million from Kingsway Capital, Lightspe and others. Then we have Superstate. This is a tokenized investment fund, started by Robert Leshner of Compound. They raised $14 million from Coin Fund, Distributed Global, Briar Capital, Galaxy, Arrington, Road Capital, and others. Then we Adversify a digital asset trading lending firm.

They raised $10 million round led by Hunting Hill. Inversify is Martin Garcia, formerly of Genesis. A great team over there and exciting to see them back in the mix here. Next one up is Baton. This is a Web 3 music collaboration platform. They raise 4.2 million from Bitcraft, Techstars, Dormroom Fund, and others. Then we've got Beobel, a Web3 Beobel. I don't know how to pronounce it.

It's Web3 messaging. Impossible. Impossible to say that. It's B-E-O-B-L-E-B-E-Bel. Anyway, it's a Web3 messaging platform. There is 2 million from DCG, Samsung Next, and Hashkey. Then we have Kinto. this is a KYC Layer 2 protocol that raised 3.5 million from Kiber Capital, Spartan Group, Parify, and others.

These are getting more abstract by the second. We have Mod House, a Web3 K-pop, a Web3 K-pop company. No idea what that means. They raised 8 million from Sofermian and others. I was talking to the Suframian guys about K-pop. I don't know anything about K-pop, but K-pop is huge. um bt s is k pop yes i don't know what that means i think bt s is probably the largest music act in the world wow really maybe just behind taylor swift but uh you should you should know them

they have some bang i know a lot about taylor swift taylor swift is on in my house all the time it's i get vetoed you know i try to put on the pearl jam and i it ends up being taylor That's tough. Are there any of her songs that you like? I like a good bit. I don't know any of the names of them, but I like most of her songs. So here's what I object to regarding Taylor. People say that she put Travis Kelsey on the map, and that's just not true.

I mean, Travis Kelsey was a great tight end. He is a great tight end. He is a great tight end. He won the Super Bowl. He's the second best tight end, second best tight end that I've ever seen. seen behind gronk behind gronk yeah of course i knew you're going to say that i mean he's extremely talented and he's at the top of his profession so come on she didn't put him on the map also good opportunity for me to say all these people that are in my dms asking me to talk about the patriots on

the podcast patriots we have them we have the whole league right where we want them right now come out with a great draft pick win the super bowl next year so don't think i've lost the faith here I mean, you did lose to the commanders, which is pretty tough. As a commanders fan, that's a horrible thing to happen. I'm not saying that that was a great performance. I'm just saying you can't win every single year. We did for 20 years, but eventually you have to let the rest of the league catch up. And that's what we're doing here.

Just setting the foundation. The defense is great. this is you sound like a Liverpool fan you know I don't know you don't know soccer but I I like no I like I like I do like Liverpool they rest it on their laurels I know yeah that's a lot in common of them they rested on their laurels for it appeared a success and then a period of failure and there's a lot of delusion in the fan base for a long time I don't know if you know this but I I um I know someone at Liverpool and they sent me a bunch of of kids Liverpool outfits.

Really? And my daughter wears the Liverpool get up to soccer. And the soccer coaches watch soccer. I don't watch soccer. But they're always saying, oh, did you see that Liverpool game? I'm like, no, man. No. I don't watch soccer.

I mean, I think you have to watch them now. You're affiliated. I'm rooting for them, but there's only so many hours in the day. And soccer, man, that is just like, I'd rather watch paint dry. I've watched a number of MLS games this year on account of Inter-Miamy. Thank you to XBTO. And it's tough, man, I got to say. The MLS is a tough league.

I think they should just let people tackle each other or something. They've got to pick up the ball with your hand. Yeah. America's got work to do, frankly, on the soccer front. Oh, that's another thing that people, listeners of the pod. We love all the listeners of the pod, but I got a lot of heat. for saying that the U.S. could win the World Cup within 10 years if we actually wanted to. I stand by that.

No, as a soccer fan myself, I actually do agree with that. But we don't have the political will to win. We are hosting it, though. You don't, it's like you don't think if Rajan Rondo and some of these great, you know, former basketball players just decided to play soccer, we couldn't win this? Come on. Travis Kelsey. He'd make a good senator.

Just go to the high school, just pick the best players in various sports. you just say, look, we're on a national mission. This is like landing someone on the moon. This is a 10-year plan, and we're going to put someone on the moon. We're going to win the World Cup. And then you guys can go back to playing real sports after that. Yeah, I mean, soccer is, what, the sixth choice for a talented athlete in the U.S.? I mean, baseball, NFL, certainly well ahead of basketball.

Pickleball? Probably even hockey. Yeah, I do have to address something, actually. A lot of people come up to me say, how's the picture? pickle ball game going, Nick, how's your pickle ball? I quit pickleball. Okay, I'm on record there. So you can stop asking me, I quit. I was in New York, uh, and I heard that you were there. I knew you were there last week. And I heard that maybe you got, you got dusted in paddle. In paddle, yeah. So I play paddle now. It's a more bourgeois sport, let's say. And I did lose, but I was hung over. So it wasn't my fault.

Oh, yeah, you can't be, you got to play to win, but yeah, there was someone who was very happy to be telling people that they beat you. Yeah, well, come to Miami, come to my home, my home turf. We'll do a little rematch. Paddle is a great game. Sam Bankman's Free's favorite game. Do you think they're a favorite sport, actually? Do you think that they have paddle it in minimum security prison? Probably not.

They might. I don't know. They might. Is he going to minimum security prison? I actually, I think he's medium. I don't think he's minimum. Medium doesn't sound as fun as low. Not, yeah, not at all.

So that's, yeah, I just had to address that. All right, we got two more deals. Next one up is Taproot Wizards. This is a Bitcoin NFT company. They raise $7.5 million from standard crypto, geometry, and a number of others. shout out Eric and Udi exciting to see that good luck

I think that'll be an interesting one to track and lastly we have Uniblock Web3 API company there is 2.3 million from Kedenza blockchain founders fund and hustle fund so a lot of policy stuff this week so we already talked about the FDIC what did you make of this letter so there was a letter sent by Representative Emmer and a number of other

lawmakers I would describe them as crypto-friendly lawmakers, lawmakers that understand the industry. I'd say at a pretty granular level. And the letter is to President Biden and Secretary Yellen asking them to actually quantify this Hamas digital asset fundraising scheme. And the way it's worded is very common-sensical, I think. So they want to know, look, what do you know? And how does that actually compare to non-crypto sources. So let's quantify what we know about how Iran has funded Hamas through cash as well as through traditional banking rails. And let's just have a side-by-side comparison. And then kind of some interesting ideas around taking some of the proceeds that were captured

and giving them to Israel, which that's a good idea. So just take Hamas's tetherers and just hand them over to Israel. Yeah, I thought the letter was great. We'll put it in the show notes. I mean, the ostensive purpose of the letter was to ask for more information from Treasury, if they have it, regarding the actual magnitude of the flows here, and put a firm number on what can be ascribed to Hamas in terms of crypto usage. But also just to contextualize the debate here in a very helpful way, which is the obvious fact that Hamas funds itself through state sponsors and through bank accounts and cash, you know. So very sensible letter, and I think I'd be shocked if we actually got decent answers to it.

But I think it deserves a follow-up because the WSJ, you know, they didn't really quantify how much was seized by the Israelis. they weren't really able to put a precise number on the actual funds raised by Hamas via crypto. I mean, that was where I always took issue was we didn't really have clear evidence of these fund flows indicating funds being raised. All we're seeing is funds transiting on the blockchain. That doesn't necessarily mean raised. And so I'm hopeful we get some answers here. I think the debate is still very much open.

and we're still very much in the dark about the numbers. So that wasn't the only letter of the week. If you had Sab 121 on the bingo card, you're about to hit it. So some interesting stuff happened in the bank custody arena this week. So Commerce Bank, which is one of Germany's larger banks, they announced that they now have a license to custody crypto. So another international bank stepping into the crypto custody game, while these U.S. banks structurally cannot enter because of staff accounting bulletin 121,

which the GAO has said is not enforceable and was illegally designed. So a bipartisan group of senators and representatives have written a letter, and the letter really calls out to the OCC and to the Fed and says, we want guarantees that since this rule is not constitutional, that it will not be enforced. And so they're calling for a clear sign there, which that's an interesting concept. I don't know that they would get an affirmative answer to that. But I guess the idea would be let's just have the bank regulators say, yes, we will not enforce this.

And at which point you would have to think that Bank of New York Mellon and some of these other U.S. banks that are really on the cutting edge of building out their own crypto custody stacks, they would perhaps be able to launch. And we're aware of large banks and custodians in the U.S. that have entirely furloughed their crypto custody plans because of this specifically. So the damage it's doing to America as a financial hub is very material. It's very quantifiable and real. And it's interesting because you can see that the bank lobby is starting to get the picture here

where they're just leaving a lot of money on the table and they want to be able to compete for this business. And so you can go through the custody rule comments on the SEC's website and see the meetings that have been taking place. And senior senior representatives that a lot of the U.S. banks are involved in this as well as now the bank lobby. So bank lobby is one of the most powerful lobbies on planet Earth. And so once they start to get behind something,

you generally start to see movement. So hopefully we do here. Yeah, I always thought it was odd that the mouthpiece organizations for the banks have been so anti-crypto because crypto custody or stable coins, like other possible revenue sources represent potentially very meaningful revenues for the banks. So it's very curious.

Hundreds of millions of dollars. Yeah. It's odd that they've been so hostile to it. I think that'll change. It's not necessarily bad for the banks. I don't see it as strictly being bad for the banks. I mean, obviously it's not a uniform category, but there are many banks that want to do this. So I think they should change their tune, frankly.

So a lot of letters, I don't know if we're going to get a ton of action on it, but that's what I like to see. So the other thing, so you're down in Texas at the Texas Blockchain Summit right now, and I guess something big just happened with Vivek a couple hours ago. Yeah, Vivek has rolled out his crypto platform. And I must say, I was sorry, we're actually saying his name wrong. I think it's the vague, as it turns out. Yeah, so he, I was very impressed by his keynote. and I believe that will be published next week or, you know, in a couple weeks. Not just by the content, but also the delivery.

I mean, I obviously he's a professional politician now, so you would expect him to have a good stump speech, but he's delivering novel content. In 20 minutes of extemporaneous speaking with no notes, by the way, he didn't use a single filler word, and he didn't stumble over his words once. No. That's pretty impressive. We do this podcast every week and we speak, but we constantly use filler words all the time.

We do. It's painful. I wish we had an editor that knew how to cut those. We do, but the editor is busy, so he doesn't have the time to do that. See, there I just use the filler word. So I was so impressed by that. I think he's by far the most eloquent of the repulsions. candidates and also the substance of what he said was very good. This Republican field is not the most impressive field I've ever seen. Nikki Haley came out this week and proposed some pretty radical changes to the way social media platforms work where the government would KYC everyone. That didn't seem to go over very well.

Yeah, it doesn't seem like that. That doesn't trend in kind of the direction we want for crypto either, for that matter. But Vivek is clearly getting advice from, some crypto native folks. He's been engaged with the crypto space, actually, since even before his candidacy, believe it or not. And so here's some of the things he called out in his speech. I feel like it was written just for me. It's like all the things that I care about. So he called out Operation Chokepoint 2.0 multiple times. He called the Bank Secrecy Act unconstitutional, which will get to that. Clearly is, my opinion. He criticized the third party

doctrine. I mean, how many people will even know what that is? Like, yeah, why don't, why don't you, I, you just told me what that was before we started recording. So why don't we define that? So the third party doctrine is a very perverse thing. So as basically financial markets have been electronified over the last 40, 50 years, we've lost the right to financial privacy. And third party doctrine, which came about from a Supreme court case, I think, in 1976. is a big part of that. So basically it stipulates that banks as intermediaries for your financial transactions can actually share that information, your financial information with the government, without a subpoena. So that would be the equivalent of, you know, your phone company wiretapping you

and sharing it with the government without a subpoena because they happen to be that intermediary. I mean, it's perverse. But that's the status quo in banking in the U.S. today. I think that is unconstitutional. I would say it violates the Fourth Amendment, my opinion. So he specifically called that out. I was, I think I was the only guy in the audience that was excited by that point in particular. He also said that the Constitution explicitly protects the usage of self-hosted custody, self-hosted wallets, so just ordinary wallets, as we know them. He said that he would rescind, quote, most, if not all, crypto-focused SEC regulations on day one, which that part didn't actually make them much sense to me because the SEC doesn't really

have a lot of crypto-focused regulations. They just apply old regulations to crypto. Yeah, I think they would, you'd just repeal Sab 121. Yeah, that's a big one there. That's kind of the, that's the main one. So we'll see if we can, we can get them to talk about sub one-to-one. We're trying to get him on the podcast. Actually, we'll see what happens there. That'd be a big get. Yeah.

I mean, look, this is the policy podcast. We've had members of Congress on, so had candidates. And he said he would reduce the number of federal bureaucrats by 75% in his first year. What are they all going to go do? He said something about they can just go to the private sector where they have to do real work. And he got a laugh in the crowd. So I thought it was a great speech. And in terms of hitting on the matters that we as an industry care about, he did exceptionally well.

So I thought the reception was also very good. It's kind of interesting to have these pro-crypto candidates with Vivek and RFK Jr. Yeah, and RFK is due to speak today. Actually, I think speaking right now at the conference, and he's also explicitly called out chokepoint. I think it's harder from the left as well to stake out those kinds of claims and to make pro-cropo points. So credit to RFK Jr. for doing that as well. All right, so let's highlight another WSJ article, which was a good one. They do great work over there sometimes. They had an article. I loved the WSJ. I'm glad I didn't cancel myself. subscription when you told me to. They had a interesting article about SBF's parents and spotlighted

that they're being sued by FDX. There's all sorts of legal questions around whether or not charges could potentially be brought against them. There is a section in there that said that it is expected that Joe Bankman will go back to Stanford, which I just found puzzling. And generally, just an expose of some of the trials and tribulations, I would say. Yeah. I don't like the sympathetic tone. I don't know how sympathetic this was. Actually, the WSJ now is a hard paywall, which I can't beat even with my best paywall busting abilities.

It wasn't that simple. I thought it was a pretty neutral. It was just here's all of the things that they're being accused of. They have customer money that they're financing these lawsuits with. But the puzzling part was that it was just matter of fact that he could go back to Stanford. No, they shouldn't be good. going back to their jobs at all. They should be joining Sam in prison, in my opinion. And the campaign finance charges, those hadn't been brought against Sam yet. Is that right? Well, he's going on,

that's part of the second trial. That's the second trial. So I think they're going to become relevant in that. I mean, Barbara freed, her entire job, well, one of her hobbies, aside from being this kind of wacky philosopher with really anti-human views, in my opinion. Her entire hobby is raising tons of money for these dark money super PACs. So I don't think you have to go that far to find out where Sam got this idea about massive amounts of donations and violating campaign finance laws. You don't have to go that far to find out where he got the idea. So I hope there's surface is in the trial, the next trial. I mean, Joe Bankman was explicitly very involved in FTX, so the fact that he has largely escaped any kind of, and they both profited heavily from it, the fact that he's escaped scrutiny,

for the most part, is puzzling to me. And I do wonder if their political affiliations, and in particular, Barbara Freed's reputation as a huge bundler for the Democrat Party, is that protecting them? I mean, I want to see some more answers, Sarah. This is not over. A lot of questions, not a lot of answers so far, but the heat is on, I would say. So we'll see. I don't know if I have enough time and attention to spend on the second trial. Yeah.

Well, credit to the WSJ for their reporting, they've had two dubs recently. So, you know, they're not off the hook for the Hamas thing, but credit where credits do. Yeah, always like those guys. All right, what else? So interesting Fidelity Digital Assets report this week on just understanding proof of work. We'll put the link in the show notes in our newsletter. But Wertha Reid, they continue to put out some great research over there at Fidelity. Yeah, you know, at these conferences I go to, I run into so many people that work for Fidelity now in all of the branches that cover crypto, which is quite a few.

And there's like hundreds of people at Fidelity. now that work on crypto stuff. It's very impressive, especially compared to when we were there when it was single digits of crypto people. All right. So I think that's it for the week. Everyone have a safe and healthy weekend and we'll see you on Monday.