On with Kara Swisher - The Crypto Founder Who Won a “Landmark Victory” Against the SEC

Episode Date: July 17, 2023

Hollywood may be shut down, but one industry seems to be enjoying a surprising upswing: crypto. Kara interviewed Ripple co-founder and Executive Chairman Chris Larsen hours before what is being called a “landmark victory” – but, as Nayeema and Kara note, it’s not a clean victory. We discuss the Ripple case, whether the crypto winter is over, and why Larsen is investing heavily in everything from campaign donations to public interventions on crime in SF – but would rather “vomit blood from his eyeballs” than actually run for office. Need advice?! Call 1-888-KARA-PLZ and leave us a voice note with a question for Kara and Nayeema to answer in an upcoming advice episode. Other questions or comments? Email us at [e-mail] or find us on social media. We’re @karaswisher and @nayeemaraza on Instagram/Threads. Chris Larsen is @chrislarsensf on Twitter. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just kidding. This is On with Kara Sw from Disney World's bunkers. Just kidding. This is On with Kara Swisher and I'm Kara Swisher. And I'm Naeem Araza. And Bob Iger might be in a bunker right now. Yeah. In case you've been just watching the reruns, Hollywood has officially shut down. SAG-AFTRA has officially joined the WGA in strike.

And this is the first dual strike since 1960. Yeah, it's a big deal. And we'll see what happens. Even as big movies are opening this week, Yeah, it's a big deal. And we'll see what happens even as big movies are opening this week. Barbie, obviously Mission Impossible already opened and Oppenheimer. Yeah. As you joked about, Bob Iger is facing some serious flack for comments he made saying that unions weren't being realistic. This was before the strike even went through, saying they've been able to negotiate a quote, very good deal with the directors and saying that the model is broken.

Well, those are two separate things. He was talking about the networks are broken, the broadcast model is broken. And he's right. He's 100 percent right. Everyone knows that broadcast has been declining really precipitously over the past couple of years. And streaming is here. Streaming is expensive. People are trying to figure out the economics which caused the strike. And he's just saying he's selling ABC. That's really pretty much what he said. You didn't think we'd get to a SAG strike. Are you surprised? Oh, no. I just, Fran Drescher was very positive about it. They thought they were going to have

a deal. And then she realized very quickly they didn't want to deal with the core issues, just the outside issues. Yeah. Well, we foreshadowed this Hollywood meltdown in our episode with Sarah Jessica Parker a couple of weeks back, and we'll be discussing it further on an upcoming big episode next week. You can also tune in to Pivot if you want to hear Karen Scott Galloway chatting about it there. But today we're going to be discussing an industry on on that is surprisingly having an upswing. Absolutely. Just cryptocurrency. Yes, indeed. You know, like everyone in cryptocurrency now says blockchain, so they don't have to say cryptocurrency because of FTX. But,

you know, AI has supplanted crypto as the hot, hot young thing in tech right now. And of course, AI is substantive and a lot of people feel crypto is full of scammers and maybe a little more underwhelming than people thought. Well, the industry is like, it seems to be picking itself off the floor after it suffered a beating with that crypto winter last year. And then Sam Bankman freed, you know, scammery or whatever we want to call it. Legal proceedings ongoing there. But everybody in the industry seemed to be thinking there was a comeback. I talked to a VC weeks ago who said they hadn't done a deal in about a year.

And all of a sudden they were doing five in a month. Coinbase was up 24% on Thursday. And the reason for all of this is actually related to our guest today, Chris Larson, the co-founder and executive chairman of Ripple. Yeah. Chris is, I've known Chris for a very long time. He and I ran each other in the late 1990s when he was at Elone. He was very pioneering around loans, online loans.

And then he did another one that was sort of similar, very pioneering around loans, online loans. And then he did another one that was sort of similar, which is small business loans called Prosper. And then he started Ripple. And for a New York minute was one of the richest people in the world because of Ripple. He's very wealthy. That's longer than I've been one of the richest people in the world. He was sort of in the froth around cryptocurrency. It was really early at the time and there were a couple like it, but he was certainly early and has now gotten this victory out of the courts, which we talk about extensively in this interview, which I did last week in San Francisco. Well, we do and we don't because we taped this interview live at Manny's San Francisco

on Tuesday, at which time Ripple was embroiled in the lawsuit with the SEC, which alleged that Ripple's cryptocurrency XRP, its token, was illegally sold securities, basically. But the U.S. District Court's ruling came in less than 48 hours later. So just after the interview came out. But Kara, explain what the ruling said. It's a huge victory for Ripple and a big victory for crypto because there's been a real push-pull between the Securities Exchange Commission and the industry, as well as the commodities regulators in Washington, over what cryptocurrency is and what these coins are. And they are claiming they're commodities and are not under purview of the SEC. It's not a security like a stock. A stock is a security.

And so this judge is saying it's not a security. The SEC didn't lose completely. It didn't lose completely. It's not over. It's not over yet. We should clarify what the ruling said, because obviously Chris was unable to comment on it during the interview, which was taped before the ruling came in. But the judge did not rule that this isn't a security. The judge actually ruled that, look, Ripple had done a ton of sales, over a billion dollars worth of sales of XRP. It said that those sales that were made to individual traders were not illegally sold securities, but it said the other half, so about $728 million, which it made directly to hedge funds, sophisticated, accredited institutional investors do constitute an illegal sale of securities. So that's actually totally bonkers because if you think about it, securities law, it was all set up to protect retail investors, individuals.

And what the judge is saying is kind of, you know, if you read the ruling and the analysis around it, it's, hey, you know, individual investors, you're kind of on your own here, but sophisticated, accredited investors require more disclosures than they were provided. And this could be a sign of things to come. And that part of the ruling will probably be appealed. I'm sorry, I overspoke, but it's going to be, it's not going to be a security. I think this is what Ripple and many others have been trying to resist SEC oversight. And so this is what they're trying to avoid. And they are alleging, as you will hear in this interview, that Gary Gensler, who runs the SEC,

is trying to kill them. It's like using a hammer rather than a much more sophisticated tool. They basically don't want to be, they want the commodities regulators to regulate them and not the SEC. They do not want to be dragged into an SEC environment, a regulatory environment. Yeah, 100%. We can imagine that Ripple might appeal the part of the ruling that applied to hedge funds and other investors. And it will be a sign of things to come. SEC, Gary Gensler is pursuing lawsuits with others. So a lot is happening here. It's about power in Washington. It's about power regulation.

It's also about a lot of tech companies. And these are tech companies wanting to do whatever the hell they want. And that's where we are. I bet crypto wasn't the only thing you discussed. It's also not the only government intersecting aspect you discussed. Actually, your primary motivation when you pitched Chris Larson for a conversation on the show, it was about San Francisco and your mutual love of the city and the investments that Chris has been making in San Francisco. Yeah, I've lived there for 30 years.

I mean, I live in Washington now, but I consider myself a San Franciscan. Still have a house there. And he is born there. He went to school there. He lives there, continues. He started his companies there. And he's been sort of an anti-tech bro. You know, he loves San Francisco and he wants to do things to fix it and actually is pushing

up against a lot of people there that he doesn't agree with. And he's not dumping on it the way a lot of tech bros came in, made a lot of money, left and then, you know, to go to better tax havens and then dump on the city constantly and usually inaccurately. Well, cryptocurrency and the future of San Francisco. Those are the things we're going to talk about with Chris Larson right when we're back from this break. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see?

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You need Indeed. Chris, it's good to see you here. There's a lot going on. The crypto industry is mired in uncertainty. A judge just allowed a class action lawsuit against your company, and you're being sued by the SEC. So plenty of tough questions for you there. Later. Good start.

Good start. But I'm just preparing you to get ready. But let's start with the better news, the city of San Francisco, which we both love and have defended for years. You're very different from a lot of other very wealthy people in San Francisco have decided to make the city a punching bag. And we'll talk about that in a minute. But San Francisco is facing some serious issues. None of us are naive about it, including homelessness, petty crime like car break-ins and robberies, drug dealing. The San Francisco Chronicle had a really great piece about the drug markets. It was really important to read.

Overdose deaths, more drug problems coming in in a lot of different ways. And a lot of the problems are connected, although some of them aren't necessarily. They're part of a modern city post-pandemic. Talk to me about what you think the single most pressing problem the city is facing, or it is a sort of a potpourri of all these things? Yeah, so I think the most serious problem right now that I'm most concerned about is actually what's going on with the police department. We overcorrected, and all justifiable. Lots of really troubling things happened that the whole country witnessed.

But it sort of happened at kind of the worst time, because you have something else happening with police throughout the country, not just here. But remember when President Clinton, you know, he did 100,000 cops on the street, right? But that's about 30 years ago, those cops are retiring. So you already had this huge problem with a huge wave of retirements. And then you had the kind of overreaction defund the police. You also had in the cities where it's just, you know, it was 20% of our police officers live in the city. That's very different than the way it used to be, right? It used to be the children of cops became cops. You don't have that anymore. You don't have military wanting to become cops anymore. It's really concerning. And when you look at the numbers in San Francisco, you're probably already 500 short of where you have to be with a city like this.

But the trend is going in the wrong way. You start to get to a point where the public safety is kind of red alert. And you see criminal gangs that are sort of taking advantage of that. So a lot of the crime now isn't, you're not so worried about homeless crime or petty crime. It's these organized crews, very sophisticated, and they're getting more and more brazen all the time. And this is not a San Francisco problem. This is everywhere. So we've really got to figure out how to rethink the way society engages, treats, and trains, and recruits, and inspires police. And it just doesn't have to be police, but there's modified versions of that. But we've got to figure this out or things start slipping away. And so when you think about that, what are some of the solutions you would come across? We'll get to some of the things you have funded,

but if you're in a crisis position, and again, it's not just here, it's across the country, cities are desperately looking for cops and competing. So the prices will go up, there's nowhere to live. As you talked about creating real communities of civic workers. How do you solve a problem like that, if you thought that's the most pressing problem? So you got to do more recruiting. And you're right, you're competing with everybody. So every city is picking off cops from everywhere else. So that's partly pay. But it's also partly, you know, what's the life of that cop like? Are they being asked to do all the things that were sort of dumping on them?

Mental health, drug abuse. That becomes a pretty terrible job. And then on top of everything else, you know, we got some special problems in the city where we do have some opportunistic political leaders that don't really want to know what happened. They're going to be out there taking advantage of the press to, you know, say this, that, or the other thing. And that hurts. If you're a cop, that hurts. Particularly if you're not living in the city because it's too expensive. It's like, why bother?

So it's a morale problem. It's a recruiting problem. It's a pay problem. And then taking the load off the cops. So more things like ambassador. I love the ambassador program. I think that's working. I know some people think it's controversial.

There's a new program I think you'll start seeing that hopefully we'll get through the police commission called patrol specials. Used to have it. You got to design it in the right way. But that might plug 200 positions. And that would be privately paid by maybe the community benefit districts. So it's not actually on the city. And maybe they can handle those lower level calls that are kind of going unanswered right now.

And then that contributes to people being really frustrated. You know, why even bother reporting a car break-in anymore? Nothing's going to happen. Right. So you feel like you're moving into Gotham City territory, presumably. And then the other critical thing we need, we need more tools. And I know this is controversial, but we've got to engage with AI tools, with camera. I'm going to ask you about that.

All that kind of stuff. I'll ask that in a second. But you wrote that safety, justice, and privacy are the three basic principles focused on to solve the city's problem. Why those and why in that order? Yeah, no particular order, but I do see those are all trade-offs. So every society, every city, you need privacy. And, you know, San Francisco, we do really well there, right?

I mean, we all value it. We don't tolerate anything that violates it. So that's super important. Public safety, though, obviously super important. Otherwise, you don't have a livable city. And then justice or criminal justice. And I think in this case, it's still criminal justice reform. We got to do better.

There's too many people in jail that shouldn't be in jail. But let's face it, there are too many people on the streets that shouldn't be on the streets. All right. So at one point, you said you've used a lot of your money to give grants, right, in a number of things. And in 2021, you gave almost $4 million for the installation of private network video cameras around the city. Obviously, it was controversial. You worked with former DA Jason Boone on on this and talk about the camera's impact. And does it contradict your emphasis on privacy? Yeah, well, it's the way you do it, right? So it's just like anything,

it can be done really terribly, like in China, you know, many states, many cities, I think do it pretty terribly. London, that's terrible. That's CCTV. Yeah, but it can be done in the right way. No facial recognition. That's a law in the city. That's a good law because facial recognition is not reliable. I don't think store it with the big tech companies. So when you think about Nest cameras, Ring, I think those are terrible because all that data is stored in the big tech.

Who knows what's going on with it? And by the way, they also pick up audio. You want to violate somebody's privacy? You know, anytime you walk on the streets of San Francisco, someone's got a Nest camera, you should figure your conversation's being picked up, recorded. That's terrible. So design a system that doesn't capture audio.

By the way, Ring's owned by Amazon and Nest is owned by Google. So how can we have any faith in any of that, right? Right. So this system that we financed, very importantly, is managed by these local CBDs, Community Benefit Districts. So there's 18 of them in San Francisco. They're great organizations. Think of them as hyper-local governance structures, nonprofits.

governance structures, nonprofits. So think about Japantown, Fisherman's Wharf, Mid-Market, Tenderloin, Union Square, Castro. They're wonderful organizations. Let them run the system. Just give them the money. They're tax deductible. They run the systems.

They only keep the data for 30 days, then it disappears. So if there's a crime, they can see what happened or something else. Most of it's been after the fact. Although I think, and again, controversial. Another tool I think the police need at this point to be able to monitor in certain circumstances, and we have sort of a law like that in San Francisco. I frankly don't know why that's so controversial. You can have a cop up on a building with telephoto lens anyway, but it's an important tool. But I think having it in the hands of these hyperlocal folks, like for example, Tenderloin does not allow the video to be shared with ICE. That's just a rule that they came up with. And there's a bunch of best practices,

again, 30 days, anybody can get access. But it exists and ICE could come for it, correct? That's the worry, presumably. Yeah, I mean, nothing is perfect. But what's interesting in the Tenderloin, 25% of the polls for cameras. This is the video polls over 30 days. Yeah, you just go to the Tenderloin CBD, say there's an incident, I want to pull the record. But 25% of them are from public defenders. So it's also helping people get off who are not guilty. So what's the impact from your perspective?

This is a lot of money you've spent doing this. It's a private citizen doing it. What is the impact? Well, it's just giving the money, right? So it's not controlling or seeing. That's super important, right? But the impact is very clear. If you talk to Chief Scott or David Lazar, who kind of runs 80% of the department, it's crystal clear this is an essential tool in making cases. If you talk to the DA, whether it was Chessa or Brooke or George Gaston before, it's super important. It does work. And you're not particularly worried about the privacy implications?

Well, you always have to be concerned about privacy. And, you know, when we actually took EFF, and I'm going to rail on EFF a little bit. Okay. It's Electronic Frontier Foundation. Thank you. Now, I was on the board of EPIC, so I've been in privacy a long time. The EFF people are super unhelpful. And when I talk about that sort of kind of organizing between these three things, public safety, criminal justice, privacy, those are all trade-offs. And EFF just, it's like they got blinders

and they're just going at, you know, anything that would be in the privacy domain, they're just going 100%. Almost as if there is no public safety issue whatsoever or no criminal justice issue whatsoever, just don't care. And it's infuriating. We took them on a tour of these camp because we wanted to embrace them, what do you think?

They were super arrogant, and then kind of shortly after, they filed a suit against the police, which they lost. And by the way, the plaintiffs on that were, they were employees of EFF. EFF, get it together, come on. If you donate to EFF, please tell them, work with us. You're part of the city. We all have a stake in this.

You can have privacy, public safety, and criminal justice. So you're not a fan? I was a fan. And they do important work. But it's so frustrating, the stand that they take. And by the way, one last thing. Okay. I think they do it to raise money.

It's very effective. I mean, just make a big stink. You raise a ton of money. You never see that. And the city is the worst. Anyway. You just hope that that wasn't what nonprofits do. They're there for the public good.

It's super frustrating. Well, one of the things you have, at one point you were the fifth richest person in the world. I don't know if you know that, but you were. Whatever. Now you're just extra rich compared to everybody else. Anyway, but you announced you're doting $2 million in grants to retail districts. Top of that, 1.7 to Avenue Greenlight, which is adding things like the new rainbow flag to the Castro. Thank you.

It's very delightful. And that's more about making the city a pleasant place and things like that. You did that in 2021. These grants range from 5,000 to 50,000. Why focus there and not say homelessness? And I'm going to ask you about the report that the Benioff Foundation just completed about homelessness. But tell me what the idea of that is, is to spur small businesses and to make it more pleasant to be here for tourists, et cetera. Yeah.

Unlike cameras, we love that one because it's completely nonpolitical. Everybody's happy about it. So that one's really fun. But, you know, there's 30, which I didn't know, there's 34 merchant districts in San Francisco. It's not just Union Square. It's all our little neighborhoods that we all cherish, right? But they're struggling after COVID and everything that's happened.

These small businesses hanging on for dear life, super committed to the city. And it just doesn't take much to really change what those merchant districts look like. So we love that channel because they make money go so far. Just simple things like putting lights up on streets. And you've got a bunch of them here, right? I mean, that just totally adds to the way the city feels, right? Signage, right? So kind of where do you find this, that, and the other thing.

Art walks, especially with all the empty storefronts now. Let's fill them with art. San Francisco is awesome with art, right? California is awesome with art. We can do so much more there. But it doesn't get to the really significant problems of these empty storefronts. And this, again, it's not just a San Francisco problem. Every single downtown is struggling with what to do. The work from home rate is still very, right now it's dipped again,

even though businesses are trying to get people to come back to work. It's now at 50% in San Francisco, even like it's 30. These are problems that aren't, it's a secular change that has happened here. Well, it's interesting. Actually, some of the neighborhoods in the city, these 34 neighborhoods. Are doing better, yes. Doing better because people are just sort of staying in their neighborhood. They just don't want to walk too far from their home office. You're right, though.

Union Square is a whole different animal. Yeah, in downtown. And oh my God, do we need to fix that. And by the way, we really got to push back when you have a supervisor saying, oh, it's a handbag theft problem. Don't worry about it. Give me a break. That's the engine of your city. It's like huge taxes are coming there and it's in rough shape. That's a problem because that's where your tourists, not just your tourists, tourists actually are back in a big way. It's actually local Bay Area people. They don't want to go to Union Square anymore. So how does that change? It can't change by

$5,000, $50,000 grants. Well, I think Union Square is a special case. I don't know. That's hard to change. And downtown. Downtown's probably less. Union Square is going to need some really tender, loving care. Downtown's going to get fixed. But are the grants enough to stabilize them, the big ones? And the second part of that is, should we have to depend on the kindness or sometimes unkindness of the wealthy? You happen to be someone who's generous and is not constantly dumping on it. But still, that's where we are. We're rich people. And that's happened before. Look, there used to be a whole other class of financial people at Wells Fargo who gave to the opera, this and that. This is not a new thing in cities for wealthy people to benefit a city, but it creates a real problem

for the government. Well, it's interesting. And you're raising a good point. I mean, look at Chicago, New York, they have a kind of a very old established business presence. We're giving, it kind of happens a lot. Problem San Francisco has, it's a very new, industry is very new and very transitory. So you don't have a lot of stickiness there. We do have to fix that. We got to get the tech industry supporting the arts more. Kind of like what they do in Burning Man. Burning Man is a successful model invented in San Francisco where people with money support

artists and build great installations and radical self-expression. And there's probably more rules there than there are in San Francisco. I don't know. We kind of make some sense of all that. Right. I think it works because they like psychedelics, but that's just me. It's also hard to get there. Yeah.

Oh, I'm sorry, but I think you had another question there. We are depending on the kindness of wealthy, essentially. Here's how I look at it, though. The city is all tied up in this bureaucratic knot. So even if it's got a $14 billion budget, but it is so hard to do anything, right? I mean, how hard is it the mayor to do anything in the city? So sometimes private money, especially going into these hyper-local nonprofits, a little bit of money goes a long way quickly. Whereas if it was to the city, just unfortunately, we just can't get stuff done here.

What was it? They just did a count of the number of agencies, boards, and advisory commissions. It's like 180 in a small city like this. We got to untie that knot. like 180 in a small city like this. We got to untie that knot. So one of the things you said, you just mentioned the transience of tech wealth, essentially, that come in and out. And one of the things you said, which I thought was a really interesting quote, you said, if you're going to bring the poop, which I thought was an unfortunate word, but if you're going to bring the poop, bring the scoop. I want you to explain that. Well, you know, that's a Brad Garlinghouse quote, so I was repeating him. All right. Okay. Well, you can explain it on Brad's behalf. But do you think the techies left

poop and then left? Well, I think yes and no. For sure. You're here. You're responsible for your community. Don't just be a carpetbagger and make your money and leave. So for sure. But then the flip side, they get a lot of criticism. I mean, give me a break. Having protests about the Google bus was the stupidest thing I've ever seen, right? So it's just on both sides, we're not talking to each other. That was one thing I found out kind of as you started getting into City Hall. It's like tech in the city that they don't interact at all, probably more with Sacramento and Washington. It's weird.

So we got to break that. Both sides are at fault. Both sides can make peace, and the city will be better for it. But they just left. A lot of them did just leave. They just made money and then moved along. I mean, you do have people that are attracted here because of all the freedom, the innovation, just the way it feels, the Mediterranean climate with our extra air conditioning. I mean, you know, it's the greatest place in the world, right?

So you get a lot of people attracted here, make their money, and then, you know, like a Marc Andreessen. I don't know. Is he here anymore? Where did he go? I think he's in Vegas, right? I don't know. I think that's not a loss necessarily. I don't know. I don't know what happened that's not a loss necessarily but that's just I don't know I don't know what happened

to Mark none of us do you see his AI thing by the way recently what did he say now the AI save the world yes I know it's perfect

anybody who's concerned about safety is a colt and a bootlegger yeah what the heck I don't get my life advice from Mark Andreessen

smart something happened to him I'm not really? I don't get my life advice from Marc Andreessen. Smart. Something happened to him. I'm not really clear and don't care to find out. In any case, what a lot of these tech people did was attack, was attack, attack, attack, and say, this is wrong, this is wrong. And making a lot of hay on it, a lot of it on Twitter, a lot of it by Elon Musk, including that terrible murder, immediately coming to the conclusion that it was a homeless person. I, in fact, that day said, I don't think it is. It sounds like someone he knew. I'm not like—

I used to live over there. I'm not Colombo. Same place. Yeah, I know. I'm like, I'm not Colombo, but that's not a high crime area. Yeah, totally. And I got totally attacked by them. It was crazy.

But at one point, you contributed $300,000 to efforts to recall Chesa, and then you ended up opposing the recall. Talk a little about how your thinking changed, because you're obviously frustrated with government sometimes and bureaucracy, and at the same time, have an inclination to help. Yeah, so it's correct. I didn't contribute to the recall. I think maybe it was the 300 who came through some other political group that tried to go after Dean, I think, which actually I regret because they were a very aggressive ad thing, negative. You live and learn. But not Chessa. Actually, I really like Chessa. He's a good friend. I didn't support the recall. In fact, I contributed to fighting the recall. Along with Reed Hastings and some others.

Yeah, because I think it just wasn't fair. He was elected to do a certain thing. I didn't agree with everything he was doing, but he never had a chance. The pandemic hit. Talk about that particular effort. You said unfair. Why do you think it happened the way it did? And what is the result? Because then it sort of emboldens very wealthy people to try to smear people. Yeah, you're right. I know I think recalls are bad. People elected make their choice and let it run its course. And there's another election if you didn't agree. So I think some of that recall thing gets really ugly.

And you're right. I mean, San Francisco, it's a punching bag because of what we represent. And that just kind of comes with the territory. It's always been that way, I think. And it just, as our media has gotten uglier, we get more of that. But these are specific people, very powerful people. Maybe trying to boost Miami.

I think a lot of that doom loop crap is coming from Miami because they're over there sweating and see how nice it is here. And wondering when the wave is coming, right? And that too. Yeah. Yeah. I don't want that to happen there, but nonetheless it will. But you know, it's interesting because a lot of them, they are in Miami, but some of them are here. When they did it at some point was so obsessively talking about it. I finally called one of them. I said, your girlfriend broke up with

you. You need to stop talking about her. Right. You know what I mean? And it was really weird. But I want you to, you know these people. I do too. I have some ideas of why they're doing this besides being desperately unhappy and insecure people.

What is your take on why that is the case? Are you talking about sort of the tech people? Yes, yeah. You know, there's a gang of them. There's a lot of people in tech.

David Sachs, Elon Musk, Jason Calacanis are very vocal about San Francisco. You know, I have really mixed feelings on some of those people you mentioned. So I mean, Elon, I mean, I can't figure that guy out. But at the same time, he's done probably more for climate than anybody on the planet, right? Not just with his own company, but getting the entire world's auto anyway. So mixed, mixed feelings there. But I think a lot of tech, it's almost like they think they're a different species of human. Like a superior species, we know

better. And they try to hide it but it just sort of drips out and it's pretty ugly. Is it dangerous? Oh yeah. Totally dangerous. In what way? Well, I mean, just take AI which thankfully is being led here but it's a pretty small group of people

that, I mean, who knows what the implications are of that. So, and we're entrusting, I mean, I don't know. It's something's not really right there. Yeah. Wait till you see the latest Mission Impossible. You're not going to like what happens. Can't wait.

Yeah. We're in trouble. But don't worry. Ethan is on the case. Okay. We'll be back in a minute. Support for this show comes from Grammarly. 88% of the work week is spent communicating, typing, talking,

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It's implemented in just days, and it's IT-approved. Join the 70,000 teams and 30 million people who trust Grammarly to elevate their communication. Visit grammarly.com slash enterprise to learn more. Grammarly. Enterprise-ready AI. Thumbtack presents the ins and outs of caring for your home. Enterprise Ready AI done. Out. Beige on beige on beige. In. Knowing what to do, when to do it, and who to hire. Start caring for your home with confidence. Download Thumbtack today. I want to get your take on some politicians here and across the state, starting with a very quick District Attorney Brooke Jenkins,

who I've interviewed. She has Chase's job. How's she doing? She's doing a great job. Why is that? Why? A couple of things. One, she's getting, you know,

she's somebody who understands the importance of criminal justice reform, but also holding people accountable. And that's what we need. And unlike Chessa, like I love Chessa, but one thing he wasn't doing, he was not working with the mayor and the chief of police. And right now, Brooke, the mayor, and the chief of police, they're working as a team. And that's good, right?

The DA is not supposed to be a public defender. Public defender, you have one job, do it all the way to the max. But DA, you're balancing a lot of different things. Okay. You mentioned Mayor Breed. I've interviewed her also. Where is she? I love the mayor, yeah.

Why is that? I think she's tough. She knows what needs to be done. And I've talked to her about this. She knows what it's like to be afraid of the police, and she knows what it's like to need the police to protect you in a dangerous neighborhood. That is something you don't see a lot from someone running a city. And the problem that she has, of course, is, again, the city is so bureaucratic and tied

up, she can't make decisions. So she doesn't have power to do so. You know, she doesn't really control the police department. It's the commission. We have some great commissioners here. But that's kind of weird. Why don't, what are we doing we're we're trying to protect ourselves from this wonderful black mayor to make decisions that we all we've supported her

let her make the decisions and fix the city uh governor gavin newsom also repeat offender on my podcast no i love gavin as well i wish he would run for president. He may be. Secretly, right? Like now. I believe that's what he's doing right now. That's my take. I hope so. But how does he contribute to helping San Francisco? Well, he's actually stepped up in a big way. We have that APEC summit coming here in November. That's a big deal. It's a big deal to show off the city, but we could also stumble and all the enemies are going to be yelling at us, right? We've got a lot of people in the race to replace Senator Dianne Feinstein.

Should she step down before her term is over? No. No. She shouldn't. She's a wonderful person. Terrific history here in the city. Let her be. So let her stand.

She got soul. She got soul. Yeah. Many people don't agree with that. Just, you know, that in the party. I say we, she leaves of Grassley leaves. That's my feeling. Like we won for one, right?

Read his tweets. They're fascinating. Anyway, there are a number of Democrats in the running so far, including Katie Porter, Adam Schiff, Barbara Lee. Who are you supporting? Adam Schiff. Why is that? I've met with him a couple of times. I think he's very thoughtful.

He listens. You can tell he's listening. Yeah, and I think he did a great job when standing up to Trump. So yeah, I like him. Okay. Last one. You maxed out on your donation to North Carolina Republican Patrick McHenry, chair of the House Financial Services Committee.

It's a good way to get into crypto. Notable for two reasons. He's not in California. You usually back Democrats, and he's a conservative. Can you talk about your support for him? Obviously, financial services is your industry. Yeah, no, he's a super thoughtful guy. By the way, I think he's a bridge builder. If you look what he did in the House vote, he was a bridge builder there. So I have confidence he's one of, look, we've got to solve, and we can talk about climate on this too, this left-right climate divide, the left-right divide period, we got to solve this. And he's one of those guys that will solve it. And he's also very thoughtful. He has

been out here many, many times going deep on crypto in a very thoughtful way. And he's trying to lead now, I think, very reasonable regulation, which we need. So I put Patrick McHenry in the same category as Ro Khanna, who I think is amazing. I wish he would run for president. You know, there's a bridge, but they don't stick to the usual. All right. That said, Republicans have made San Francisco and California, along with Fox News, a punching bag. They've been able to use crime as a wedge around the country in the last few years. How do you change that?

Besides the fact that Florida is more dangerous than San Francisco. Well, you're right. Well, it's a narrative thing. And by the way, we are working on a new narrative campaign. It's going to be called It All Starts Here. So think about New York when it was suffering in the 70s. I love New York.

It's kind of stuck. So this campaign will be It All Starts Here, whether it's innovation or whether it's social innovation. And I think it's going or whether it's social innovation. And I think it's going to be very powerful and emotional. Bob Fisher is working on that, a bunch of other really great folks. And that should launch in September in kind of prep for APEC because we do need to change the narrative. Did you enjoy the stylings of Ron DeSantis who came here and found bad things?

I mean, it's just nonsense, right? I have some relatives who are Trumpers, and they're like, I'm not coming to San Francisco. I said, well, you're not invited, so it works out just fine for all of us. It's like, we don't want you here. We'll enjoy our tremendous produce by ourselves. You didn't mention the last thing, and I want to get to crypto then, is homelessness.

There's this new report. How dire is that situation? It's the one that gets a lot of the attention besides petty crime. Yeah, it's super hard to fix. So, I mean, you've got three things obviously going on. You've got the lack of affordability. That's an economic thing. You've got to build more affordable housing, clearly. You've got a mental health thing. We need more facilities. And we got to be a little tougher

about making people go in and getting help. And then you got the drug thing. And with the fentanyl deaths, we got to be tougher. And I think that's starting to happen. But those are three very different things. And by the way, back to some nonprofits that are not very helpful, the Coalition for Homelessness, not very helpful here. Why is that? Why aren't they very helpful? They're trying to defend people who have no defenses. They're tying up the city in these lawsuits rather than working together. They should be working with the mayor, working with social services, figuring this out.

But it takes enormous resources, slows everything. How can you be an effective leader? Some people might call that a democracy where people have a point of view, right? You know, America is a messy place. So yeah, it's a fine line, right? It's a fine souffle, but we're out of balance right now. And we've got to get those groups to be part of the solution and stop optimizing selfishly on their one thing, right? As part of a group thing. Although, I mean, we're all reasonable people if we all get together, you know, but there's a lot of stuff going on there, right? Some of it's fundraising, some of it's attention, some of

it's true compassion, but it's not working, right? So what is your solution if that's not the case? Because some people say the how to fix homelessness is housing. Well, yeah, you do have to build more housing. I'd be honest with you, I've stayed out of that issue. It just seems impossible. I mean, private money and donations don't solve that. There's no, there's no group to really, you know, that's going to need major, major work. And by the way, it's going to need state work. And federal work, probably. Yeah. You're going to, it's a broader issue.

That's really hard. So let's get into crypto. It's been a tough couple of years in the industry. For people who don't know, Chris started eLoan in 1997. It was an early pioneer in online loans. He sold it. Then he had Prosper, which was a loan company, essentially, too, to help businesses similar to the loans you're making in a lot of ways. Also a pioneer.

Had some defaults, was very early. But then you founded Ripple. You also have a crypto token, XRP. It's six in the market for cryptocurrencies under BNB Coin and USD Coin. Talk about what you do for people who may not understand. They're fundamentally different than most blockchain companies and crypto tokens. Yeah. So Ripple, the company, is using blockchain technology, using cryptocurrency specifically. XRP is the one that we think is the most efficient, most climate efficient. But we're using that to make cross-border payments more efficient. So remittances, you were in the remittance business. Remittance is part of that, but it's anything that's crossing borders. So that could be

treasuries and companies. This is a huge problem in the world where moving money, which is mostly digital, cross borders can take 10 days. It can cost huge amounts of money, huge failure rates. It's cutting out billions of people, the global economy. So this, we think, is the best use case for blockchain tech, is fixing cross-border payments and making sort of what you'd call an internet of value that would be overlaid with the internet of information. So you have this company that facilitates, not necessarily was in crypto, but you have this coin that you're using to do so. When it seemed to stabilize, crypto had a fallout after the collapse of FTX last fall, of course. But right now, Binance, the biggest exchange for crypto, is in real trouble, losing staff. It has an SEC

investigation, whether customers' funds were mingled and mishandled, not unsimilar to FTX. Then again, shares in Bitcoin and Coinbase, also a facilitator, also under investigation by the SEC, have made significant gains in recent weeks. Talk about the state of crypto right now. And it's being supplanted by generative AI. Everyone's on to that. They've moved from crypto. But is it in spring, winter, fall, what? Spring, yeah. I think the winter is over. But here's the thing, it's the tale of two cities. In the US, we have really screwed up blockchain tech and crypto policy. Everywhere else, it's booming. And so we've actually lost our leadership role. It has now moved to Singapore,

London, Dubai. They're kind of the three majors that are fighting out. Japan also is a player. Brazil, everywhere basically is kind of welcoming this. And most of our people that we're hiring now are overseas. So we're still booming. We're hiring like crazy. We're just not doing anything in the U.S., even though we're headquartered in San Francisco. And we're committed to San Francisco. And that's a shame.

Let's talk about that. The industry has the perception it's full of scammers, especially around the news around FTX. Sam Bankman-Fried was everywhere talking about crypto, encouraging Washington to regulate crypto, credibly visible, money everywhere. How has his fall affected the industry's profile? Because you're wound up with the SEC and others. I'll get to that in a second, but talk about him as a moment. Oh, it was just catastrophic. Mostly because he was incredibly political. He saw everybody. So what happened was the supporters, particularly in the Dems, because he seemed to really be going after the Dems. Anybody who saw him- His other founder did the Republicans, but go ahead.

Right. Yeah. And the word was there was a bunch of Dem staff members that were kind of really looking forward to joining the company. So when it blew up, all of the supporters were like, OK, you know, I can't. Chuck Schumer even said, like, we can't talk about crypto for six months until it cools down. But that did not stop the enemies, the Elizabeth Warrens of the world and the Brad Shermans, California representative. Senator Warren, literally her campaign slogan is, I'm building an anti-crypto army. Okay, why? I mean, it's not like I'm protecting consumers, and she's done great on that. I mean, I used to love what she was doing. It just doesn't make any sense, right?

You know, the progressives in Washington, there's like two flavors. There's the Elizabeth Warren, Senator Warren, who's super anti-tech, she always has been. And then there's like two flavors. There's the Elizabeth Warren, Senator Warren, who's super anti-tech. She always has been. And then there's the Ron Wydens out of Oregon, who, if it wasn't for him, probably the Clinton framework on the Internet would never have happened, right? He was instrumental. And the Ro Khanna. So it's really weird. But somehow the sort of anti-innovation progressives grabbed the wheel after Sam and it just undermined everything.

Isn't it right to be nervous about such a scam to happen so quickly? Absolutely. But like in anything, it's like fix the bad stuff, get the bad players, and encourage innovation that's going to be good for our country. Wouldn't that be blamed on Sam Bankman Freried and not the politicians who are reacting to it? Well, I think there's a lot of players in the game and there's blame to go around. But Sam definitely was a complete catastrophe. So it's created a real problem for you. And the SEC lawsuit was filed against Ripple in a press release,

said that Bitcoin and Ethereum are Chinese controlled. In December, the Ethereum creator said a bunch of things, including that XRP is still centralized. He also said he hasn't got an apology. Is he going to get one? So, you know, we used to hang out with Vitalik. He was like covering the space before he started Ethereum. I think Vitalik's been on Twitter too much.

He's got that Twitter disease. But look, it's a very tribal industry. And so every protocol has its sort of army, so to speak. And they all hate each other. Not entirely. It's starting to wane a little bit. But that's what that is. I mean, what Vitalik said there is just BS.

And was he offended that we said that proof of work was controlled by China? Well, it was until they kicked everybody out. Now it's all here. Now hats off to Vitalik for leading Ethereum to switch from proof of work, burning insane amounts of energy to cutting that by 99.9% by moving to a different system.

Hats off to them. But that's another reason why it's such a head scratch that US policy now, and Gary Gensler in particular, he's a big Bitcoin fan. He sort of put everything in this big question mark, except the thing that is literally, it's using about 100 trillion watt hours in energy. More energy sucking. Let's get to Gensler.

So we've mentioned other SEC lawsuits. I want to talk about Ripple's. The SEC is saying that Ripple Labs, your CEO, Brad Garlinghouse, who I've known for a long time, and you sold $1.3 billion of unregistered securities without getting too technical into this. Give me a good faith explanation of their allegations and why you disagree. Basically, for people who don't know, it's either a security or a commodity, correct? So talk about that difference. And this is the big thing that the U.S. has to get straight. Talk about that difference.

And this is the big thing that the U.S. has to get straight. And XRP, for example, in London, in Singapore, in Japan, in Brazil, you name it, they're commodities. They're commodity-like things. They call them different things. They're not securities. That's already been established. Commodities would be corn or gold. Yeah, and I think the way to think about it is, look, a commodity stands on its own. It's an asset that stands on its own.

If it's pork bellies, you can look at the pork belly. That's it, right? A security is a asset that's backed by something else. And the SEC is exactly right. You have to make sure you're disclosing properly that something else. Otherwise, how does anybody know the thing that it's built on is going to perform?

But that's not what cryptos are. Now, you can create a security out of anything, absolutely. But the main cryptos, they're standalone assets. Look at the code. That's what they are. You don't get any privileges or rights in any entity. And there's no entity that has obligations. That's the fundamental of security.

So the real crime here by Gensler and the SEC is a power play. They're using their enforcement action to shake down people into submitting to settlements so they gain power so he can regulate a huge industry. Versus the Commodities Trade Commission. It should be in the CFTC. Versus the Commodities Trade Commission. It should be in the CFTC. Oddly enough, I was at a party where someone from the commodities regulators and the SEC were arguing with each other, and I was standing in the middle of them. We should have it.

No, we should have it. But they're essentially alleging that selling and distributing XRP, you are all raising capital from investors in order to finance the business where you argue it's a commodity. Yeah, and that's completely incorrect. The protocol was absolutely functional before anything was ever sold. It's just an asset that existed. So this is the essential, essential problem that you face. So you're not alone. The SEC has said almost 70 crypto tokens are securities. Why do you think he's been so aggressive in going after it? It's just a part, like he wants to control it and she feels like it's close enough to currency. It's sort of, well, it's sort of the Gary Gensler MO.

It's sort of what he did when he was the CFTC. And it's sort of what he did when he brought down Libor. By the way, did a bunch of lawsuits, lost all of them. But he doesn't care. Yeah, he's trying to destroy the industry. That's what he's trying to do. Except apparently, except Bitcoin. He's a Bitcoin fan.

He's always talking about Satoshi, this, that, the other thing. He did a bunch of tours with Joe Ito back in the day, with MIT, all over the world, kind of bashing everything except Bitcoin. I just don't get that. That makes no sense to me. And it's totally inappropriate for a US regulator to take that position, an unelected person.

I mean, talk about agency power, everything the Supreme Court hates these days. This should go to Congress. Congress should pass regulation. This is the weird point where people say, oh, it's, you know, the industry doesn't want regulation. No, they want regulation to make it clear. And until then they will fight it out. Just, you are correct. In 2018, before he was chairman of the SEC, Gensler said that Bitcoin, Ethereum, Litecoin, Bitcoin Cash were not securities. They made up roughly three quarters of the market at the time. So he's changed his tune because you can change your mind. You do know that, that you can decide that maybe they are, in fact, securities.

And some people do make very good arguments about it. And now with the switch to proof of stake, sorry to get too much in the weed here, with Ethereum, he's now questioning whether it's a security again. And that makes no sense. Of course it's not. And one more thing about Gensler and specifically the suit against us. We're going on for two years. It's in summary judgment. And you have said, Brad said on CNBC, you'll spend $200 million defending yourself. We are going to defend this to the end. This is unjust. These things go through Congress, not these unelected agency, power-hungry people that, by the way, look down on San Franciscans.

They always have. There's people in Washington. Sorry, I know you live in Washington. But it's true. They look down on us, right? No. I don't agree with you. I don't.

I don't know. I've met with so many of them. Really? I'll tell you what. If San Francisco was the blockchain capital of the world like it was, I think your vacancy rate would be half what it is today. Well, it's going to be the AI center of the universe. I guess we made room for AI.

But one really important thing. So the suit the SEC has, there's no, they're not saying it's misrepresentation or fraud or anything like that. This is a policy issue. And now think about it. And they went after me personally and Brad. Now that's really what, that was completely unjust. So you were hoping that Congress will do something, but you don't think they will. And so this will be a tussle between the Commodity Futures Trading Commission and the SEC. Now, if XRP is ruled a

commodity, it will be under the purview of the Commodity Futures Trading Commission. Their budget is about a quarter of the SEC's. People are worried about there's not enough regulatory scrutiny. They're very pro-cryptocurrency over there at that particular agency. Well, they're also tough, right? And there's a lot, you know, in the US where you have eight different regulators, and then you have 50 state regulators, we have a lot of regulation here. So I'm confident that we can we can make sense of this. And it's really important to know the FTX was not a US company. It was based in the Bahamas offshore. The other company, by the way, in the crosshairs of the SEC, Coinbase.

Now, how outrageous is it? Coinbase, the SEC let them go public. They're probably one of the straightest shooters you're ever going to find. Brian Armstrong, the CEO, he's been at this for 10 years. These guys are straight shooters. And they have bent over backwards to work with the regulators, to make suggestions on how the industry can improve. To go after them is the most cynical thing I think I've ever seen. But it would be good for you and your company if you're a commodity.

So that has to be your stance. Not only that, but in the current way the law is structured, if something's under the SEC, it cannot be a currency because securities can only be exchanged by broker-dealers. You actually destroy it in the current regulatory regime. Every other country has either said, nope, they're commodities, they're a commodities group, or they create a new agency and new rules that really capture the essence of the industry. Would you like that? Well, you have to have something that works and not destroys the industry. The way Gary Gensler is going, I mean, you have to conclude he's trying to destroy the industry, except for Bitcoin.

So that doesn't make any sense. And by the way, in the securities laws, it's a specific exemption. Currencies are not securities for that very reason, because everybody has to be able to exchange them. And again, as- And if you lose? Well, appeal and our appellate strategy, I think is ironclad. And if we lose? Well, appeal and our appellate strategy, I think, is ironclad.

And if we lose the appeal, Supreme Court, and I think this case would be taken by the Supreme Court. When you look about the agency overreach here, I think it would be taken. Taken by it. And it has to be decided on, presumably. You are dealing with another lawsuit. A California judge recently certified a class of ex-RP coin owners to give them class action status. You're essentially making a similar argument. There's as the SEC, the crypto coins that were bought as unregistered securities. Were you surprised by the ruling? No, not at all. It's actually a really low bar to get class. And they only got class on

the US, by the way, because internationally that's different rules. But you're intent on continuing to fight this right to the Supreme Court? Absolutely, yeah. But I don't think it goes that far. So we feel good about where we are. Okay. I'm going to switch to climate. You have a climate change foundation with your wife. You've put money into conversion plants, which convert trash into energy.

That's called, I think it's Omni, but you put about $35 million into that. You have one called Blue Planet, which makes trash into building materials, I believe. Green concrete. Green concrete, right. There was a story about Sam Altman, who's behind OpenA, also doing small nuclear devices for the home. Oh, is that Fusion? This is a fascinating area, Fusion. Yeah, he's gone big on that. He's gone big on little fusion, yeah. There's a lot going on about, I just did a really interesting interview with Oliver Stone of all people about nuclear energy.

There's all kinds, Bill Gates is making investments all over the place, Elon is too. I can see why it's existential. None of this we've talked about matters whatsoever. Exactly, yeah. And you can see what's happening existential. None of this we've talked about matters whatsoever. Exactly. And you can see what's happening across the country right now. We've got to leave our kids a planet that's livable. And it's a race right now, right?

You see some really great stuff going on, you know, more investment in renewables than in oil and gas last year. By the way, you know, Texas installed three times more solar than California last year. I mean, there is fascinating stuff going on. So that's a race. And then meanwhile, you know, plants getting hotter and storms are getting bigger. Hottest days in history last week.

And oceans are going to get maxed out on how much carbon they can hold. And we got to get our CDR industry going. So if you're into climate and you've been opposing CDR, we got to get CDR working. Carbon dioxide removal. I know some people think, it gives the oil companies an excuse to keep burning. We just got to suck carbon out of the air

any way we can, through oceans, through direct air capture, make that a huge industry. Otherwise, you're not going to get there. Are you making any nuclear energy investments? Because many people think that's the only way to go. We've backed some policy work on nuclear. By the way, we spent a lot of time on the left-right climate divide. And I think Republicans are getting, they all know it. They just are kind of stuck. And they need a path. And nuclear is one of them. So if that's a successful path, great. Let's do it. So there's a bunch of good groups working on getting Republicans. Most people think renewables are not going to make it, but not enough. I know Bill Gates does. I've interviewed him many times about it. I think you can get renewable fuels though. That's an area we like. So think about pulling out carbon dioxide out of the air, splitting water with solar. You basically have like solar fuel. You're not drilling from the ground, you're drilling from the air. And you'll probably need that for planes and ships and all the other things you can't electrify. So I think that's a big area.

So it kills two birds with one stone, taking the carbon out and you're making fuels. So how much money needs to be put to use here? And one of the things I did a couple of years ago was say, I just made this up. I said, the world's first trillionaire is going to be a climate change person. I just completely made it up. I just wanted inspirational. Is that really where the money's going? Because it looks like it's rushing into AI right now. And you've said some very upsetting things about it that you're worried. Yeah, we got to work on AI safety. We're not cult people who work on that, according to Marc Andreessen. But anyway, we won't go there. But climate, I think, is the biggest challenge we've ever faced. and I think it's going to be the greatest wealth generator of all time.

And when we think about cost, it's not really cost, it's investment. It would be trillions invested, but great, the world's got trillions to move around. We've just got to get a little bit more motivated. I mean, a little bit of the weird good news, bad news, as things get worse, that tends to motivate people. Interesting. I think we're like a frog in water myself.

We're on it, though. I think everybody agrees. Again, even the Republicans agree. They just are stuck. We need to unstick them, which means working with them and not bashing them and not doom and gloom in them. We got to put away, we got to get the humility going and start talking. Be nice to them.

Tough love. They're not very nice. But you know, they could really accelerate on the climate if you, if you do the angles right. Money maker, beating China, you know,

it's just protecting hunting grounds, whatever it takes, like get them in the race. Protecting hunting grass. That's hunting grounds is really a big thing great yeah i'm on it that's a big thing you can shoot your fucking guns anywhere you want um anyway my last question one of the things you sound like a lot to me is like you might run for office never in a minute i'd rather vomit blood from my eyeballs than do

that so so have you ever thought about it? Never, ever, ever. Why? Because it sucks. Those jobs are awful. But you're asking them to do better, and you're calling them power mongers like Gary Gensler. Don't you think you should be in the game?

He's a special case. He's a special case. Yeah. Don't you think you should be in the game? No. No, you can do better work on your own quietly. So never? Ever, ever, never.

Would you serve in the Newsom administration? Never, ever, ever. So, no. That's a hard no. All right. Anyway, Chris, thank you. I really appreciate it. I do like having thoughtful discussions with, you know, the idea that you have to hate tech or you don't. I love tech, which is why sometimes I get mad because I hate what they've done to the place, essentially. But I really appreciate thoughtful leaders like you and others. There's a lot of them. And so I'm glad we're here in dialogue. Thank you, Karen. I really appreciate it.

I'd rather vomit blood from my eyeballs, he said, than run for office. He's a colorful guy. He was very, what I like about Chris is he really does say what he thinks, right? You can hear it from him, whether it's the SEC or the Coalition on the Homeless. Oh, he did not like that Coalition on the Homeless. He did not. He doesn't like a lot of things. You did some good pushback there where you're like, well, you could call it democracy. You know, they're advocating. Yes. It seemed like he didn't like single issue based agendas. He wants for kind of a composite view of the city. But the history of progress is often like interest groups, you know, but it's also the history of not progress. I would say they're obstructive. I would agree. They don't want to ever cooperate. Every rich

person is an asshole. Every person who wants to help has an agenda. Everybody's a developer with his hand out. Like it's at some point you have to cooperate. There's a city is full of the rich and the poor. It's full of different races and especially San Francisco. It's a very tolerant city. And so at some point lawsuits like the mayor is hamstrung. And we should be careful here, just like developers and government, et cetera, are not a monolith, nor are these activists. So these issues can be obstructive. They can also be helpful. It is a mess over there in San Francisco right now. And something we have talked about with Mayor Breed, something that we have talked about with DA Brooke Jenkins in previous interviews, if you want to go back and hear those, but it seemed like they all kind

of agree. Yeah. I don't think any of them are acting like everything's all sunshine and roses there. I think, look, every city is undergoing, including the red states, this issue of what happened post-pandemic. And San Francisco is just as usual on the cutting edge of this. of what happened post-pandemic. And San Francisco is just as usual on the cutting edge of this. You've got to figure out smart ways to do this because with the fentanyl, which is not necessarily linked to homelessness,

there's the crime issues around the fentanyl and the drug gangs that are there. He's trying to come up with solutions. And a lot of people either just decry it or block it. And I think I prefer a Chris Larson to a lot of people because he wants cooperation, I think, but it can get exasperating to try to cooperate. Do you think his views on privacy or surveillance

are at all problematic? No, I think they're doing it the right way. I think they're doing, I think it's, you can't pretend you don't need cameras. It's how you use them. I think to not have them is a problem because you need to be able to see what happened. And, you know, I think they

use those cameras in that recent, a terrible murder of actually a tech guy where you could see what happened. And they only keep them 30 days. I think one of the things that's interesting is anyone can use it. We're talking about public defenders using it. Everyone gets access and it's not hidden away by the police and they don't use it, you know, for spying on people. I don't know why that makes... You have to be really far out on the privacy limb to think it's a problem. I was one of the New Yorkers who I think cameras and subways is probably a good idea. And I've always found it kind of remarkable that someone who didn't grow up primarily in the States, that Americans are often up in arms around surveillance cameras from the government. In London, you're used to seeing CCTV on every corner, but they're so happy to put Amazon Echo

in their home. That's right. That's correct. So I'm like, wait, what? Or Nest or Ring. Yeah. And a lot of these technologies, I think it is about what you hit the hammer on the head talking about transparency. It's about transparency and how they're used, but they can also get to more accuracy. And I believe the tech, I know there's a lot of Joy Balmwini, other people have kind of critiqued the racism of certain technologies, but I do think that accuracy beats that. And we know that, you know, the system puts a lot of people away without accurate information. Yeah. I think the most, the strongest argument is, okay, they'll get rid of it after 30 days. What if they don't get rid of it? It's there, right? That's the, you know, but I, you know, in a city you have to balance safety

and as he says, safety, justice, and privacy, right? You have to balance them. And if you want a safe city, there's only so many ways to do it. And more cops, that's what he told, we need more cops in San Francisco. You don't have to demonize every single cop. And so- And we should just take a Burning Man approach to the city. That was funny. I love that reference. Everyone on drugs and nobody cares about anything. Yes, sure.

Bring your own, contribute something, radical inclusion. I think that's what he's advertising. I've never been to Burning Man. Have you? Neither have I. No, I refuse to go. We should take you there, Kara. No. Next birthday. No more Palm Springs. Never happening. We're take you there, Kara. No. Next birthday. No more Pomsperls. Never happening. Never happening.

We're going to Reno, Kara. Never, ever happening. Unless they build a Four Seasons there, then I'll go. That's fine. There are some very nice camps. I've seen photos of some. They don't look like camps. I don't care.

Anyways, quickly moving on to his comments on crypto. Lots of choice words for Gary Gensler. Lots of choice words. He did. He was very clear. He's pissed off. I think he's got some reason to be. I think Gary Gensler is a little performative on this stuff, very late to the party. I think they're drilling down on the problems with the SEC on this, riding in as if they're heroes when in fact,

they didn't do anything for a lot of fraud. And that's very typical of some people, regulators, some regulators. He said the US had really screwed up blockchain tech and crypto, that's lost its leadership role globally. Do you see it the same way? I do. I think what happens is you tend to paint everyone with the same brush as FTX, for example, and Sam Bankman-Fried. I do. I think this is an industry we were far ahead in and China and others are moving in. Lots of countries, not just China, but lots of countries. Well, China can make just decisions to outlaw entire corporations. Yeah, yes, I get it. I get it. But I think government should have moved in a lot quicker in terms of both support and regulation. And that's both. Who should regulate it if not

the SEC? What do you think? I think it's a commodity. Really? It's like gold. Yeah, it's like gold. Or the treasury department. It's a currency. I don't know. I don't know. It feels like a speculative asset. It's certainly not a stock. No, it's not a stock. I don't know. I don't know. We'll see. We'll see where this goes, where Ripple case goes. Smarter people than I go. We'll see. We'll see. We'll see. But it was a great episode. Blake Nischik did a fabulous job prepping it. The team did a fabulous job producing it. And do you want to read us their names, Kara? Yes. Today's show was produced by Naima Raza, Blake Nishik, Christian Castro-Rossell, Megan Cunane, and Megan Burney. Special thanks to

Kate Gallagher and Eric Johnson. Aaliyah Jackson engineered this episode and our theme music is by Trackademics. If you're already following this show, you get a trip to Burning Man or fresh produce from the city of San Francisco. And it is delicious. I can attest. I just had some. If not, you're moving to Miami and good luck with that tsunami. Anyway, go wherever you listen to podcasts, search for On with Kara Swisher and hit follow. Thanks for listening to On with Kara Swisher from New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with more. vital. In comes Huntress. Huntress is where fully managed cybersecurity meets human expertise. They offer a revolutionary approach to managed security that isn't all about tech. It's about real people providing real defense. When threats arise or issues occur, their team of seasoned

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