On The Brink with Castle Island - Weekly Roundup feat. Gus Coldebella 05/15/26 (Clarity advances, Circle's Arc token) (EP.720)

Episode Date: May 15, 2026

Matt and Nic are aback with another week of news and deals, today joined by Gus Coldebella to cover the CLARITY Act. In this episode:  The Clarity Act advances resoundingly from committee Sen. Warren doesn't like the Clarity Act Will there be an ethics provision inserted into Clarity? The next fight in DC What's up with Nantucket real estate? Nantucket's ponzinomics Nantucket is the birthplace of venture capital Circle is issuing a token Cprkrn recovers 5 BTC with the help of Claude  

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 as 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 and print a couple trillion dollars and all of a sudden people start to worry.

So out of this worry, we have something called a Bitcoin. Welcome to On the Brink. I'm Matt Walsh. And I'm Nick Carter. according this one in a hotel room in nantucket we're at a conference there are worse places to record so i want to talk about nantucket real estate oh it's the only thing better than bitcoin as an asset class i think it's better also i think nantucket is the highest per capita real estate value in a single county in america it's they're not making any more of it you know about the land bank yeah that's why

this is what i want to discuss there's a crypto economic primitive at play here there is I mean, these people in Nantucket are geniuses. So the way it works is that every time you sell a house on Nantucket, there's a tax. I don't know what the percentage is. Three. Three percent. Three percent of the transaction goes into a pot. And with that pot, they are a reservation bid on land, which is just turned into like greenery.

It's basically like turned back into nature. This is buy and burn. Buy and burn. And, you know, occasionally they'll build like housing, stock for the workers on the island or something like that. But it's kind of rare. So you end up in the spot where there are fewer housing units as the years go by. And so the prices go up. I mean, it's just an incredible Ponzi.

It's not even a Ponzi. It's just the greatest financial scheme I've ever come across in my life. You're right, though. It is like a crypto primitive in a lot of ways. The supply is dwindling. So hang on. Play this out. So the more volatility there is in transactional activity, the less land.

I think it's like a good portion of the land already on the. this island. Oh yeah. There's a lot of nature preserves already on the land. It's not like, I mean, it's picked dress, but it's basically just barren scrubland. Yeah, it's pretty nice. So if there's enough trading activity in Antigate real estate, just mathematically, they'll eventually just be one house worth infinity dollars. It's just going to be deer out here, you know? Yeah. And one family left out of that. Just one very expensive house. So there's probably a logical limit to how far you can push this because you just end up in a spot where, you know, bartenders can't afford to live here and things like that.

So, well, I think we've well surpassed that limit. I was walking through the town and I stumbled on on a property for Gay Street was the address. And it was a three bed, pretty unremarkable looking house. Let me tell you. List it at $9 million. Wow. Well, sorry to whoever owns that house. You just got publicly called out on our podcast.

I mean, it's just outrageous. It's completely outrageous. The market is the market. But the interesting thing about Nantucket is that it is the birthplace of venture capital. So the LPGP structure was started in the whaling industry in the middle to late 1700s. And so you'd have this pooling of risk. And they'd just send send these boats out. They'd be gone for three, four years. Sometimes, you know, people would come back and would be presumed dead. You know, your wife would be married to some other guy. It's, you know, these people had it rough. Yeah. But I mean, If your wife left you during that time and everybody thought you were sunk, it must feel pretty good still to come back in a harbor with a, you know, cargo full of whale oil. As long as you came back with whale oil. Some of these people are coming back in to end it probably. That did happen.

I mean, the thing that gets me, just like entrepreneurship, really, the thing that gets me is that for a good amount of time, our industrial economy ran on sperm whale oil. Yes. Like that is, first of all, it's barbaric. Yeah. These are sentient creatures. I think they're pretty smart, actually.

Yeah. Second all, how's that, it's just beggar's belief that that happened. Yeah, and I guess was this before we realized that oil from the ground was the way to go? I guess it was, right? Because why else would you be hunting whales? I mean, the whale hunting continued well into the 20th century. You know, the Soviets mechanized whale hunting, and they actually virtually exterminated whale. Not to, I mean, yes, to throw shade at the Soviets.

Absolutely. I'm currently throwing shade at them. They almost exterminated sperm whales from the Atlantic because they just kept doing it long after there was any industrial need for it. Yeah, not great. Not great. It's kind of a blight on humanity, the fact that we were so barbaric with the whales. You know, I think it's a blight on humanity or treatment of animals.

And I say that as someone who I'm a carnivore. I love. Matt, your favorite hobby is to talk about how much you hate turkeys. I don't like turkeys. I think we should probably exterminate all turkeys that live in Massachusetts. That's for sure. but you do wonder if 100, 200 years from now, we look back and we realize that animals were a lot smarter. I think about that.

Well, yeah, I mean, I think AI is going to make us realize that as well, because we already wonder if we have moral obligations towards AI. Some animals are borderline conscious. Dolphins. Yeah. I mean, they can certainly feel pain of virtually anything higher on the consciousness ladder than a salmon can feel pain. A few years ago, we didn't even realize babies could feel pain. Really? Yeah.

So we had all these completely wrong assumptions about consciousness. We would do surgery on babies without anesthetic. Oh, my God. That's awful. I can't imagine that. Yeah, terrible. So, yeah, I totally agree. I think we are going to realize that we have so many more obligations towards all of these critters and maybe even AI, too.

All right. So this will be a quick episode because you and I have to run out to dinner. But we have a special guest coming on the show. Gus Calde Bella, our chief legal officer at Castle Island. we roped him in to do a podcast. We gave him, I don't know, 20 seconds notice. So I just wanted to talk to him about the Clarity Act and kind of where that stands. And that was the big news story of the week.

We did have a couple of deals. First one up is Circle. Circles, of course, a publicly traded staple coin company. They have raised $222 million from Andresen, BlackRock, Apollo, intercontinental exchange. It is not an equity transaction. It's a financing event tied to a token presale for Circles, ARC blockchain. Really, really, really interesting. Publicly trade company doing a token sale.

I mean, my refrain loat these last many years has been you don't want two cap tables. It's too much trouble and then you get up getting torn asunder between two different stakeholder groups, the token holders and the equity shareholders. So you really don't want the trouble. But they are apparently inviting the trouble. You know, it's interesting. It does it does make me kind of think about that overstock deal from a few years ago. Do you remember that? Yeah. So overstock issued some sort of a token.

It was a security token. And the thought process, I think, at the time, was that Patrick Byrne was doing this to actually get at the short sellers. Yeah. I know there are a lot of short sellers in circle. I think this one's different, but in that... He infamously hated the short sellers. He hated the shorts.

I mean, he was calling them, yeah, all sorts of names. It was a huge thing for Patrick Byrne. But the reason that was interesting was because the existence of this this token, which was another security, it was hard to actually to get it. Right. So it was hard to like, it was hard to be short that name when you didn't have exposure to that asset going up. So in terms of getting a locate, you couldn't borrow it. And so I don't think that this maps to that necessarily because it's not on the capital stack and we don't know the relationship between the equity and this token. But that was the first thing

I thought. Yeah. Which other publicly traded companies have done something like this. This is different, but Byrne doesn't get enough credit for what he did with that move. Yeah, I had the same reaction. When you see a publicly listed company issuing a token, you do wonder, is this an effort to screw the shorts? Yeah.

Through an extremely esoteric procedural mechanic. And I have no knowledge of the exact plan here, but I would think that this probably looks a lot like trying to build a decentralized payments infrastructure where you need buy-in from other parties. And so it kind of reminds me of what the banks did with the creation of the Visa Network, as maybe an analogy. Next up, another chunky deal digital asset holdings, the company behind the Canton blockchain, is reportedly raising $300 million at a $2 billion valuation from A16Z. Yeah, I guess that's a reported deal. Maybe we'll do it again once it's,

public, or once it's closed. Next one up is an acquisition. Moon pay has acquired Don Labs, which is a trading infrastructure company. Moonpay continues to be just super acquisitive here, along with Cracken. And lastly, on the deal front, Elliptic, a digital asset compliance company has raised $120 million from NASDAQ, Deutsche Bank, and one peak. All right, so we're going to pass it off to Gus to talk about clarity here, but maybe before we do, just quick takes on Senate banking.

So it got out of Senate banking. How are you feeling about the progress here? I feel pretty good. We will pass it to Gus to hear the residual issues. Polymarket has it at 70%. I mean, I just think the amount of time and effort that's been put into this compared to how important it is when you consider all of the priorities of Congress, it seems very disproportionate.

Yeah. And obviously we in the crypto industry, We want to have the bill pass. We want to get special treatment. We want the crypto bills. But my goodness, it seems like they're wasting so much time and energy on this thing. Well, I'm glad that they're, look, everyone is sort of portraying this who's against crypto saying, look, these crypto people just want deregulation. It's like the exact opposite.

You know, this is a push for regulation. So it's what we're looking for. Ultimately, I think it has a potential to drive a lot of GDP growth in the United States if we can get our financial system wired. to this new technology. So, hopeful it happens. All right. So let's bring in our in-house expert on these matters, Gus Caldebella. Some breaking news today, which is the Clarity Act, has, well, something has happened in D.C. I don't know what, but luckily we have lawyer extraordinaire.

Our D.C. attache and correspondent Gus Coldebella, who also happens to be the chief legal officer here at Castle Island. Gus, welcome to the podcast. This is your first podcast. My first podcast ever. Thanks very much for having me. Gus, what happened in D.C. today was the Senate Bank and Committee markup of the Clarity Act. And a markup essentially is when the entire committee gets together and decides whether or not they want to vote in favor of a bill going to the floor of the Senate. So the big risk here was, is this just going to go to the floor of the Senate on partisan lines? That is, are only the Republicans on the committee going to vote in favor? And I think a big step forward for this bill and for crypto clarity in general, two of the Democrats on the committee voted in favor.

Which two? Senator also Brooks and Senator Gallego. Now, they were careful to note that their vote out of committee does not ensure that they're going to vote in favor of the bill on the floor. But that would be a tough reversal for them to make. What does this mean for the prospects of the bill? The bill's prospects are even better, given the bipartisan nature of what happened in the committee. So, you know, kind of where do we go from here? I guess there's ethics language seems to be what's holding this up. The count is also kind of interesting. So, you know, I've heard some people say, look, you're going to need 10 Democrats to vote for this because there's a world where three Republicans could fall off and you still need to get to 60.

what do you think about these ethics provisions? Does this bill get through without some ethics language? And I guess, how would the president react to that? Great question. I think on ethics in particular, a lot of folks who are watching this process say that there will be a compromise between now and the Senate floor vote. And to answer your question, I think one is necessary. I don't think that the seven bare minimum seven Democrats that are necessary to get to a cloture vote at 60 will come on board without ethics language in this bill. But the larger question is, what's next? All right? So this bill is favorably reported out of committee. As you know, because the jurisdiction sharing part of this bill is between the SEC,

which is overseen by the banking committee, this committee, and the CFTC is overseen by the Agriculture Committee in the Senate. Their companion bill was voted out of committee on a party line vote a while back. So next step is conforming those bills to each other. The step after that is getting it to the floor. And I think the point that you raise is very important, which is between now and then we also have to have ethics language that's agreeable to the Senators and to the White House so the president signs the bill. leads to what might be the biggest hurdle, which is the clock. Right?

So all of this stuff has to happen before the end of this Congress. And time is winding down. So there has to be some leadership and some urgency among the Senate's other priorities to get this thing done. Gus, the polymarket is trading the Clarity Act's prospects at a 70% chance by the end of this year. Are you taking the over, the under, or hitting the bid? I'm a natural optimist, Nick, but I'm taking the under. I think the ethics part of this bill, which is unaddressed today, is highly complicated. And it's going to be tough to come up with a solution that pleases everyone that needs to be pleased, but we will see.

Our dear beloved local Massachusetts senator, a certain Elizabeth Warren, has just stated the CryptoClarity Act will, quote, blow up the economy. if that does come to pass, how did the Clarity Act blow up the economy? What's your guess? In a world without the Clarity Act, there's a lot more opportunity for the type of mischief that Elizabeth Warren has complained about over time. This is actually going to help law enforcement. It's going to help issuers. It's going to help developers to operate in an above boardway in the United States. So just going back to the kind of the ethics here and just the process, you know, I think everyone would agree we need ethical standards in capital markets. I think insider trading is actually kind of what I think of what I think of initially when I think about the congressmen that are trading on inside information. So, you know, I think everyone can get behind some general ethics guidelines. But maybe just kind of building off of that, money and politics is also a big factor here. And so Fairshake has a bazook that they're ready to spend at the midter. I would think that that would have to be going through the mind of some of these politicians as they enter a vote. 100%. I think one thing that we've learned from the last year of, well, the midterm election in the Biden administration and the last presidential election is that it doesn't make any electoral sense to be against crypto. not just because Fairshake has its money bazooka that is willing to aim at people like Sherrod Brown,

who was defeated, I think, very soundly for the reason that he was a crypto opponent, but because it just doesn't resonate with the voters. Elizabeth Warren, what was it, three years ago, produced an ad that she was raising a crypto army. And I think that was- She was raising an anti-crypto army. And that was met with crickets. So I don't know who they're appealing to, but when you see, Folks like Gallego and also Brooks cross over to make this a bipartisan vote.

I think that's a sign that senators and members of Congress in general don't think that it's a winning issue. I think they might, the anti-Crypto Army might now be the anti-Data Center Army. Seems to be a lot of the same people. The same team. Though I don't know if Bernie Sanders was in the anti-Crypto Army, but he's certainly in the anti-Data Center army at this point. The one other point that I'll make regarding your question, Matt, is that ethics in crypto makes a lot of sense, as you said.

But the ethics bills that we've seen have been directed at one actor in the crypto space. And that's the president and his family. So my fear and the reason that I was taking the under when Nick asked the polymarket question is to come up with something that will garner the Democrat votes and still be acceptable to the president. president is a tough needle to thread. Yeah, leaving aside the partisan aspect to it, it is funny that a bill could target the one person who is most able to defeat a bill legally, constitutionally, the president. It is funny, and it's also perhaps a poison pill. Gus, last question for me, and I don't want to jinx this, but let's say clarity gets through.

We figure out the ethics, we get enough people on. board, you know, let's say the Democrats just don't want to make this a huge midterm issue and it actually does pass. What are we going to fight about next? Well, I don't know if it's going to be a fight, but I think there are a lot of downstream issues after clarity passes, which I hope it does. The first one is there's a lot of SEC rulemaking about, you know, not to get into too deep into the details of the bill, but But when something is an ancillary asset that is a token that's issued as part of an investment contract, the issuer of that token has to engage in quarterly and annually disclosure and have

other requirements to the SEC. And at some point, that issuer is going to want to get out from under that obligation. The standards for doing so are almost completely up to SEC rulemaking. So I think there's going to be a really interesting discussion, you know, an NPRM or a notice of proposed rulemaking out of the SEC that the industry will be able to comment on. I think we're also going to be thinking about issues that are facilitated but not completely addressed by this bill. Securities on chain are still securities. But how is the SEC going to deal with the disintermediation of each of the components of securities transaction? actions that currently exist. That's going to be the subject of rulemaking. And it's not all new.

I mean, the crypto task force and project crypto and the joint efforts between the SEC and the CFTC that have happened all year are moving in this direction. But I think after clarity passes, if it does or even if it doesn't, that those efforts are going to accelerate and we're going to have a chance as an industry to comment on them. Well, I'm not as erudite as Gus, but my guess is prediction markets. I think there's a lot of fighting to be done about prediction markets. It hasn't even been gone yet. And, you know, one of the other issues that's related to securities on chain is regulation of vaults. VALs have become a big deal. I think they make online activity more legible to people. And, you know, Chair Atkins has been talking about a

sandbox for a year now. And I think this is something that's probably ripe for sandboxing. That is, hey, I'm a vault creator. I'm a vault infrastructure provider. I'm a vault curator. I'm a vault curator. I actually don't know whether I have to register with the SEC and if so, as what. So a sandbox would allow these entities to go into the SEC and say, this is how I want to run my business. will you oversee me for some period? And then at the end, we can discuss, A, if this works, and B, if it does, what my registration status be? I think that makes a ton of sense, actually. Put the vaults in a sandbox. People already don't know what we're talking about outside the industry. But I think you're

right. I mean, I think there's a question, do these vaults players need to be broker dealers? Do they need to be registered investment advisors? There's just a lot to figure out there. it's probably the perfect type of category to put into an SEC sandbox. I think we're horribly mixing metaphors when we talk about vaults and sandboxes. All right, Gus, well, thank you for joining us on the podcast. Hopefully the first appearance of many. And we will give you more than like 30 seconds to notice next time. Thanks, fellas.

This was a lot of fun. All right, so it was good to hear from Gus there. Odds and ends, what else happened this week? So do you remember Roaring Kitty? I do. Yeah. I used to run a track against that guy. Ron Coy.

He went to Brockton High School. So Keith Gale. He's an unbelievable, Miler. We've talked about this on podcast before. He ran like just over a four-minute mile when he was like a junior in high school. He's unbelievable. Now, this is more evidence for my theory that when people are really exceptional in one domain, there's often two or three things that they're really good at.

Yeah. I mean, he's clearly very good at trading. He was good at trading one coin, one asset. So his ex account, he's not good at Opsack, apparently. His ex account was hacked and used to launch a meme coin, which was rugged for a million dollars. Believe it or not, the hacker was his brother, Kevin. Oh, no. So not a lot of brothers.

And he admitted on stream to making $500,000. That is not great. So you can tell not a lot happened this week, given that that's our second news item. Here is a heartwarming story. I feel like we're doing like a morning show or something. We're doing human interest stories now. Yeah, human interest. Human interest story, Twitter account Capricorn, had five Bitcoin loss somewhere on his hard drive

for 11 years. He fed the hard drive into Claude, and Claude recovered the coins. That is wild. How do you feed your hard drive into Claude? That's actually what I want to know. How does that even work? I think this guy is an advanced Claude user, but he was highly motivated to do so. That's incredible.

I mean, what a story that is. Yeah, so he had changed his wallet password 11 years ago while drunk and forgot it and spent years failing and he tried to brute force it with 7 trillion attempts. And then finally Claude figured out. His advice is just mega dump all of your computers and notebooks into Claude. The coins were originally purchased for $1,200 and they're now worth $500,000. Wow, good for this guy. Yeah, forced hottle by this capricord. So he reset his seed phrase when he was drunk. That's not a best practice.

It seems like his key management skills were highly deficient. Yeah, you probably don't want to do that. Maybe like hypnosis would have been another attempt. All right. I think that is it for the week. We will be back with a longer episode next week. Everybody have a safe and healthy weekend and we will see on one.