The Pomp Podcast - #1079 Aaron Daniel On How Free Speech Is Under Attack

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Aaron Daniel is a partner and board-certified appellate attorney at Kula & Associates. In this conversation, we discuss free speech in the First Amendment, including an overview of the landmark Bernstein v. Department of Justice case, the recent issues with Tornado cash and the OFAC list. We talk about Alex Jones, the mainstream media and what it means to actually go after someone for defamation. And then we talk about Bitcoin, how Bitcoin can eliminate negative externalities, how Bitcoin could change many parts of the legal system, and why Bitcoin

Starting point is 00:00:44 as a piece of technology is neutral, but what it could mean for things like the First Amendment. I really enjoyed this conversation with Aaron, and I hope that you guys enjoy it as well. once we get to the end make sure that you let me know in the comments or tweet at me on twitter and i hope that you guys find this just as fascinating as i did anthony pompliano runs pomp investments all views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of pomp investments you should not treat any opinion expressed by pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational

Starting point is 00:01:23 purposes only. All right, guys, bang, bang. I've got Aaron here with me. I'm very excited about this because it seems like a huge debate in society that has happened in the past, but is resurfacing. It's this idea of software being free speech and being protected by the First Amendment. You have a specialty in understanding a lot of this, but I thought a great place to start would be the uh kind of quintessential um legal case of bernstein versus the department of justice which really set the precedent for code being uh free speech help us understand like what should people know about that specific case that really laid the precedent for you know some of the things are happening yeah so it's so it's it's really interesting and i i didn't know as much about it

Starting point is 00:02:06 until recently and i started going back and researching you know the crypto wars of the 90s and the you know formation of the cypherpunk movement and all of this you know that's that's all this started and it's interesting to know that the the bernstein case bernstein was a professor um and had basically created an algorithm right uh encryption and decryption algorithms and and also had an academic paper on it and wanted to publish the paper and you know publish the the algorithm you know this was his you know he worked on it as a graduate student and wanted to put the information out there and teach on it and so at the time you had these really strict um export regulations you know cryptography was classified as like a munition so you had to get

Starting point is 00:02:50 permission pre-permission from the government at the time it was state department and then it shifted during the litigation it was moved to different departments and things like that but you had to get pre-permission to essentially export these munitions you know encryption algorithms right and so he sued the department of state um to get permission to do well he sought permission they denied it within their boundless discretion which then became really important to the decision because um the trial judge judge patel in northern district california said first there were actually a series of orders that she issued the first was code is speech and that's what everybody thinks of when they think of bernstein is you know the source code

Starting point is 00:03:38 is speech um then the next order was summary judgment in favor of bernstein because this scheme of boundless discretion within you know an agency determining whether or not to license the speech it just violates the first amendment there's got to be you know you can have time place manner restrictions on speech right um noise ordinance stuff right yep but it's got There's also got to be really strict judicial review and a method and a process for reviewing the discretion of the agency that's licensing speech, basically. So that was the first part of it. Now, what happened was, and this is what I didn't realize either until I started looking into it more deeply, those are trial court orders. okay in terms of like order of precedential value um those are pretty low compared to something like

Starting point is 00:04:42 the supreme court case which would be the highest precedent in the land every single court has to follow it even the state courts and you've got the intermediate appellate courts um and in this case it was out in california so it was the ninth circuit court of appeal the ninth circuit did issue an opinion affirming um but what happened was the government asked for rehearing which means rehearing en banc which means you get most of the judges together instead of a three-judge panel really big decision um and you know get all of the the judges to weigh in on on on the court so they rescinded the ninth circuit rescinded the affirmance of the code of speech you know orders and then never got around to issuing an en banc opinion because in the interim um basically the

Starting point is 00:05:30 government back down on so bernstein basically said hey i'm gonna release this uh uh code the source code uh along with a white paper essentially uh and it was related to uh encryption yes at the time encryption was literally deemed a weapon ammunition yeah uh and therefore they said you are exporting weaponry right uh even though it was words in a database um and he said no i'm not i am speaking exactly i'm using words uh and so they went to court as these things tend to do yeah uh one just like how about the balls on bernstein to go against the united states government around weaponry or words it's it is yeah it talk bernstein all of these you know the cypherpunks and folks who are cypherpunk adjacent like zimmerman who created pgp like zimmerman

Starting point is 00:06:22 you know went not only against like the government and nsa and stuff like he went against like the patent holders of these encryption encryption algorithms public key private key encryption algorithms rsa was the company that had a lot of the patents and we could get into you know how a lot of people think that you know also delayed the public's use of encryption because you not only had nsa trying to you know in the state department preventing you know private use of encryption but then you also had patent holders who had the most powerful you know encryption products you know as as it was the thought process that encryption essentially allowed for uh their use cases but they didn't see the use case for like the individual to have privacy oh no they

Starting point is 00:07:08 saw the use case they just didn't want to have it exactly it was it was that the trade-off you know privacy to the NSA and the government was a you know a sacrifice they were willing to make you know on behalf of the american people to keep people safe got right that was the idea is that we can't let terrorists and arms dealers and you know foreign adversaries have this you know important shielding technology to shield communications because then it's going to make america less less safe got it and so as bernstein went to court wins kind of the court case there's these two distinct and different kind of judgments, if you will,

Starting point is 00:07:50 or outcomes. One, code of speech, and two, you as the U.S. government can't just say, like, hey, we make up the rules as we go. Why did the government back down in some of the appeals process or eventually not take it to the Supreme Court or whatever? Yeah, I mean, what happened was

Starting point is 00:08:06 Bernstein essentially lost his standing, and the issue became not right, was one of the final rulings uh in that in that saga because the government essentially just let him just said hey we're not going to win into some degree and so rather than it was catch the l yeah it was probably a strategic decision yeah and so then what you had you had two other decisions that were subsequent to bernstein

Starting point is 00:08:32 um one from the sixth circuit court of appeals called junger and junger was also almost same fact pattern as as bernstein he was a case western professor who had you know algorithms and papers he wanted to publish and ran the same playbook um and that actually did get an opinion code is speech now the problem was it was much more limited and kind of problematic and i think this is a nuance that a lot of people are missing today in the discussion about code being speech and you know first amendment rights protecting code the junger court said code is not just speech it has conduct elements to it okay right explain that you run you you you've got source code which is speech but then you also run the source code through a compiler and click a button and now

Starting point is 00:09:26 your program you know just decrypted dvds or whatever it is so there's a conduct element to it that you know the person who's receiving and running the software isn't reading the source code it's not communicative it's it's conduct and so the government junger said should be able to look should be able to regulate the functions of code if they're doing it in a way that is content neutral as to the speech so is this like when you get into like the ghost gun stuff where it's like the the code for or like the plans of the ghost gun itself are protected by the first amendment right but then if i download it and i go and i create a 3d printed gun that would be more of this idea of like there's a functional component yeah this conduct and function and then so then

Starting point is 00:10:20 yeah so we'll put a pin in that we'll come back to that um the other case was um in the second circuit which is overseas new york and so they get a lot of you know the financial type litigation but this was um universal studios brought an action not under the export laws but under um dmca which we're all familiar with you know the strikes and takedowns and stuff but there's actually a provision in dmca that says circumvention technology technology that's designed to circumvent um digital rights management encryption that you know prevents you from playing a japanese dvd on an american dvd player um that technology was you could the government could get injunctions to enjoin publishing that circumvention technology that's circumventing you know rights

Starting point is 00:11:12 copyrights and things like that um and so i don't know if you ever read the 2600 magazine it was like a hacker hacker quarterly 2600 magazine it was a little like 10 inch you know pamphlet magazine in high school i got it you know i'd go find it and felt like i was you know like on the edge like you know living the cypherpunk dream because i was reading about i you know i i barely knew how to code i was just you know messing around with computers and stuff in high school but um the publisher the editor of of 2600 was publishing um dvd decryption algorithms got it he didn't write them but he was publishing the code and publishing links to the code um on 2600's website and universal studios came in and sued him to get an injunction to stop that decryption software

Starting point is 00:12:01 from getting out and the second circuit said the same thing as junger is that there's this functional component to code and so if the government is going to regulate the functional components um without you know obviously regulating the speech elements and saying what you can and can't necessarily what is the difference right yeah it's it's a difficult distinction to to bring up there the function was you know essentially circumventing copyright regimes so you can have the code you can right you can look at it you can look the code yeah you can look at the code there i think that the actual um ruling was you know they couldn't 2600 couldn't link out to it um and disseminate it that way um but it gets there's not much of a distinction let's put it

Starting point is 00:12:52 that way yeah the bernstein decision judge patel's decision was the more um principled i think um Because what the Younger Court and the Corley Court were saying was that the functional aspects, we're going to use these tests to analyze whether or not the functional aspects can be regulated. We're going to use these tests that came out of like the flag burning and the draft card burning cases, which is which Judge Patel also looked at and analyzed that argument and rejected it and said, you know, regulating flag burning and nude dancing is so totally different from regulating source code. it it the analogy just doesn't just doesn't fit because you know and this is something that um peter van valkenburg at coin center has written on too um and he also agrees you know with with judge patel's reasoning um which is which is that code code is pure speech yeah and they're sure there's some conduct elements to it but it is a medium of speech and the part that i describe to people it's like yeah you write words right in a database right

Starting point is 00:14:10 and so if they are going to say you can uh tweet or you can write on paper or you can write into a database it seems in today's day and age that that is all speech and is protected where we get into this weird world is and really kind of the conduct component i think a modern day example is this idea of tornado cash yeah where uh my you know elementary view or the way that i would describe it to somebody is uh an engineer went wrote code that code allows for people to use it and do things with it uh and there's a lot of people who say hey that's protected by the first amendment of the united states right uh because code is speech maybe it's not as black and white it's not as black and white unfortunately you know if if uh right so that so we're stuck with

Starting point is 00:15:01 the corley and the younger you know functional distinction with code um and so that's where tornado cash now there's a lot of different issues with tornado cap okay so we can peel it apart but that is that is where that is where there's wiggle room for the government to regulate code in certain ways so tornado cash for those that don't know is a mixer which uh at the most basic sense uh allows you to uh take the information on the blockchain uh the sender is very clearly able to track uh funds from sender to receiver right is the whole idea of a blockchain everything's transparent yeah everything's written there it's immutable it can't be changed right a mixer uh in the most basic form says uh the information or the value of the transaction from the sender to

Starting point is 00:15:56 the receiver is now not as easily trackable and the way that that's done is uh you can send economic value into the mixer yeah mixes your funds with somebody else's or many other people's and then the output is uh appears to be random to somebody looking at this but you're able to direct it as the sender right and the recipient still receives the value that you want them to receive uh walk us through like the analysis of uh software is speech yeah but it sounds like the government uh drastically disagrees we've now seen them uh invoke ofac uh there's been a developer who was arrested how do you look at a situation like this yeah so the so i guess let's just reset where what happened with tornado cash and and ofac is the office of uh foreign asset

Starting point is 00:16:48 control there that's the department of treasury that you know hunts terrorist funds basically and money launderer funds and tries to you know stamp stamp that you know tamp that back down um and so they have a list of you know specially designated nationals has to be foreigners can't be americans okay and um if if someone's put on that list or someone's bank accounts are on that list americans are on notice they cannot transact so americans can't be put on the list but if you're an american and you transact with or then you can be liable yes under the regime um there's like civil penalties there's also some criminal penalties i'm not this is not an area of law compliance is not my area of law but i'm you know i've been following along um slept at a holiday

Starting point is 00:17:40 exactly i slept at a holiday inn last night down the street and uh you know it's all good So OFAC, though, as far as I understand it, is authorized by its authorizing statute to add entities and individuals to that list, that SDN list of sanctioned, the sanctions list, and then the essentially, you know, account aliases of those individuals and those entities. Okay. So let's talk about what happened with Tornado Cash. tornado cash tornado cash you know scare quotes is what was the first entry on the list and then the website okay let's let's for purposes of the discussion just assume there is an entity a group of people called tornado cash sure okay call it you know people like to get into like well it's a dow and it's not a real entity because it doesn't have legal rights it's like well

Starting point is 00:18:37 dows are all kind of general partnerships under most state laws like if people get together or joint ventures if people you know you and i get together and you know it's kind of like a contract is if you and i can have a verbal contract even if we didn't paper it if we you and i start working together unincorporated entities yes yeah yeah we can have you know full liability okay for for our enterprise that we start working on so but but so let's just say tornado cash is an entity sure um you know the website being added to the list you know i guess that's the front end so you know you can't go in and transact through that front end if you're an american and then there's this list of ethereum addresses on the blockchain i didn't understand this at first because i'm i'm

Starting point is 00:19:21 not really steeped in you know how ethereum works i mean i know it's smart contracts and turing complete and all that stuff and um but some of those addresses were like donation addresses for the project and so presumably there's like an admin key that someone holds and there's some control or the dow holds or something there's control over those others though we're just the address where those where the smart contract of the mixer exists right where you where you call on the contract at that address that's where that's where you send your funds that's how the mixer works it it would be like listing you know the cal berkeley server where bernstein's algorithm was got it got it right it's that's that's essentially what happened now where where we

Starting point is 00:20:13 get into whether or not that was authorized is well is that property of tornado cash like they don't have the they can't change that code now it's like you said it's immutable and it's on the blockchain right this is very similar to like uniswap has the front end which is controlled by the uniswap entity and they have made changes they have responded to regulation but uh theoretically the uniswap smart contract cannot be changed shut down etc and there's you know i don't know 50 to 100 other interfaces exactly leverage that you know almost back end right you can yeah the front And then you can point to whichever smart contracts, you know, you want. But, you know, if someone knows the address of the previous smart contracts,

Starting point is 00:20:57 they can just go access those smart contracts. Just like, you know, you change the links on your websites, but, you know, if you don't take down the original, you know, page, and you remember the link, you can go access it. So let's go through this part by part. So Tornado Cash, there's a group of individuals, right, that the organization, whether incorporated or not, that gets put on the list. that seems to be based on your analysis and maybe others that i've seen uh well within what normally

Starting point is 00:21:25 would have been expected by ofac yeah okay exactly then there are what i'll call those individuals accounts which is equivalent although different but but equivalent to their bank accounts in the legacy financial system and so if the people or the group is going to be put on the list then you would expect the their accounts to be put right and and the analogy this happened recently with blender.io which was another mixer that was custodial meaning you know you said they had a lot more you know yeah contact with the actual users who were using it um and were just taking it in and then remitting out you know they had a lot more discretion over what was going on it was the same these announcements and the listings mirrored each other um and in the

Starting point is 00:22:07 blender.io there were bitcoin addresses that were listed and the entity that ran blender.io presumably had you know the the private keys so let's stop right here for one second there's a couple of questions just at like the highest level around uh the u.s government stepping in and saying you know no mas right this is not good um their argument uh from what i read is that there's north korean hackers right who were able to uh launder funds using these products or this technology uh and that was really the impetus for why the government was stepping in and saying hey this isn't allowed if that was not the case let's say that uh there was no trace of north korean hackers using the technology uh it is unclear whether they would step in and say you

Starting point is 00:23:00 cannot use this you cannot do this um there's a lot of people who would argue no they were just looking for a reason to step in and shut this stuff down uh there's other people who argue no it's good faith they are only trying to stop it because north korean hackers you and i aren't going to get to the bottom of that but but it does bring the question of uh it appears that the north korean hacker argument uh is true and rather than debate the accuracy of it let's just hold that as true now the counter argument is well wells fargo and jp morgan and ubs they seem to be doing a lot of you know uh uh complicit activities that help people launder money whether they know it or not it over and over and over again we see from mexican cartels to terrorists to you know whoever

Starting point is 00:23:49 there's money going through those organizations but we don't see the same heavy-handed approach there's fines sometimes there's whatever there are a lot of fines uh i mean like hsbc i think got hit with they're probably the big one yeah they're the big one um and that was and that was it was pretty pretty impactful i think for that bank um and you know i think the the distinction that some would make is that well yes but all of these banks have very robust compliance regimes departments anti-money laundering protocols um and they're so long as they're making you know the good faith effort, and they're checking all the boxes on the compliance checklist, then that's different

Starting point is 00:24:37 than what we have here because, one, we have a group that's not doing that. Now, I think they did start to make some efforts at one point, the Tornado Cash entities, to screen OFAC-sanctioned addresses. um which feels like at the most elementary level like that's like a pretty simple uh okay fine we'll prevent the ofax sanction right addresses from interacting with it we can yeah we can have a debate about whether or not you know your privacy tools should be should be uh accessing

Starting point is 00:25:14 blacklists uh and but but yes so so they were attempting to do this but at the same time you You know, the other distinction is, well, banks, you know, have a social economic purpose, you know, extend credit and, you know, just allow the economy to grow at a much faster rate than, you know, barter, et cetera, et cetera. Basically, that argument is like, yes, they're being treated differently, but there's a reason why. There's a reason why, right. And because this, because Tornado Cash, the purpose for Tornado Cash, it's a privacy enhancing tool, right? Some would say it's a money laundering tool. No, no, no. It's a privacy enhancing tool and money launderers have used privacy enhancing aspects of it to their benefit and to the detriment of national security. interface and store your assets in a ledger enabled wallet. Plus you can put real dollars

Starting point is 00:26:25 in your core wallet in just a few clicks. Go to core.app to access the full power of web three today. This episode is brought to you by bullish. They've reinvented the digital asset exchange. They give you access to defy features like automated market making and liquidity pools in a regulated environment. It's a whole new way to generate alpha. Bullish's total trading volumes have exceeded $25 billion just in the seven months since it launched. And the industry-leading order depth means you can trade confidently when you want

Starting point is 00:26:54 at scale with better pricing and lower risk, all within a regulated market environment. Good reason to be bullish. Learn more at bullish.com slash pomp and follow at bullish on Twitter today. And this goes back to the whole encryption debate of you and I can message on, I'll use WhatsApp as the example

Starting point is 00:27:13 of how many people will pay the encryption there. uh but if we are communicating it's not because we necessarily are hiding anything it's actually we just want the privacy to be able to communicate without you know worrying about people hacking or communications or whatever uh but the argument previously had been no this is only going or bad people will use it right and so just because bad people will use it doesn't mean that good people shouldn't have the ability to do it uh same thing with the bank right is bad people will use it doesn't mean good people shouldn't use it right which then brings us to tornado cash which is like If bad people use it, does that mean good people shouldn't use it?

Starting point is 00:27:46 Yeah, and this is what a lot of people are struggling with, and I'm struggling with it too, is to figure out where the line is, right? Because if we start from first principles and say code is speech, you have a First Amendment right to code and to publish that code, then there should be very few prior restraints on your ability to publish that code. um again you can make these edge case hypotheticals where you know you've got you know dirty bomb plans and stuff like that right that are clear clear national security importance that um you

Starting point is 00:28:25 know there might be some but again even in that case you know if you're arguing from just first principles you know this is where we're we're still there's there's some social value to even you know discussion publishing dirty bomb plans right i mean this is basically figure out how to diffuse the dirty bomb plans yes but this is like the whole like ghost gun argument right which is like there's a lot of people who are like hey we don't want unregistered guns on the streets we don't want all this stuff and then there's a whole nother group of people who say the plans are not the gun and even if the plans increase the likelihood that somebody will create a quote unquote gun uh but actually it's the receiver it's not the full gun like there's all this nuance to

Starting point is 00:29:08 that debate that we don't need to get into uh the plans for a bomb and the plans for the lower receiver of a weapon um still are protected right to some degree right and again some degree but you know if you're publishing it with an explicit call everyone go make bombs and you know go blow up buildings then you're inciting violence and then that's not protected by the first amendment correct so there's context that goes into uh if you just publish something versus if you alongside I'd say right go incite violence okay that's a little bit different but with the tornado cash specific example from again I've read enough about it to understand it was always just you can use this to enhance your privacy it was not a call to hey every terrorist criminal money launderer in

Starting point is 00:29:54 the world come use our tool because like it's a free-for-all yeah as far as we know it publicly that was what was going on you know who knows who literally who knows what's going on behind the scenes the details would change if all of a sudden you know developers of tornado cash were emailing based on all the assumptions we have now yeah and and the publicly available information we have now yeah that's true and so yeah you get into this because of where we are in our first amendment precedent with functional aspects of code allowing incidental regulation of the speech elements it it is now the government gets to draw lines on how much usage is illicit before they're going to regulate the speech um so like literally a percentage amount like if

Starting point is 00:30:48 one percent or less then they're obviously this is obviously not the like the the law right and this is not like the doctrine but this is functionally i think a way to this is a heuristic to look at it right it's a mental model to look at it you know there was about 10 i mean it was 12 that was flagged uh of funds that went through tornado cash that was ransomware derived half of the funds were defy where flag is just defy funds right so you know when you look at the percentages of licit versus illicit use and then i i forget what the other categories were you know the the overwhelming amount was just general trade and commerce right some would say speculation but but that's also trade and commerce okay um so in that case the

Starting point is 00:31:40 government stepped in um which is almost like you're you're uh uh hinting at because we don't know the answer but like let's say the government had an unofficial rule that once it crosses over 10 once we hit double digits of illicit you know use for flags yeah now we will step in right but if it had stayed at 9.5 maybe they wouldn't have and it's and it's also it's like well is it percentage of you know they were going by percentage of funds that were flowing through but percentage of users you know the north korean hackers was much smaller percentage of users and And so that's where neutral tools, so you can say Tornado Cache is a neutral tool. It just allows privacy.

Starting point is 00:32:20 Neutral tools can be used for good or for bad. The internet is used for good and bad. So where you draw that line is the question. And right now, the government has the pen, and they get to draw the line. Is that a good thing? That the government has the pen? Yes. The government's got to have the pen to some degree.

Starting point is 00:32:42 um we do you know if we want to live in a society that's you know has a government that has a government and and is safe and then protecting you from you know foreign aggression what have you um then you need to have a government that is drawing lines somewhere um but the way how they use the pen it with respect to tornado cash i i think was outside their their statutory OFAC statutory mandate because again they used they drew the line by adding just pure unowned code those addresses that are on the ethereum blockchain forever were sanctioned but the statute the authorizing statute doesn't give OFAC the ability to sanction unowned code so is this right this is not intellectual property of tornado cash this is

Starting point is 00:33:40 unowned code is it the equivalent of we said okay the you know unincorporated organization right or whatever the group of people okay again we can debate whether they should or should not an entity they're at least what they're allowed it fits what they're statutorily allowed to do those people have accounts yeah and so similar to the bank account right those get put on again whether or not they should have been put on is different than they are allowed to be put on or there's precedent for being put on uh this list but then you're saying it's almost like uh oh these individuals read a book one time right and now they don't own the book uh so we're going to put the book on the list and it's like wait a second like the book is a neutral thing you go to the

Starting point is 00:34:20 library and you pull the book then you're going to be in violation yes and that is uh where i think this first amendment question comes in which is um just because these people who you deem to be in violation of something and again we'll debate you know whether that that's true or not uh they read this book now no one else can read the book and that seems to be where a lot of lawyers are saying wait a second uh we may need to have a deeper conversation exactly yeah how do you think that plays out yeah it's difficult to game out because again because it's code that's not owned by anyone you know going back to that question of like standing who has the who's been harmed and has the ability to bring a suit to challenge these this ofac action it's it's difficult to

Starting point is 00:35:07 to identify anybody right um so so teeing up a court case which i know coin center is trying to do is really difficult um there there's some argument to be had that americans who use tornado cash and deposited into tornado cash and had not withdrawn funds from tornado cash and still have their funds locked in the protocol and are now presuming look i'm not giving anybody legal advice but are wary about withdrawing that yes um those folks might have a claim because their funds have essentially been frozen without prior like due process process yeah without prior notice so that that's an avenue that if somebody wanted to challenge these broader these this broader action that would be you know i i think that's a strong that would be a strong case so from a

Starting point is 00:36:11 non-lawyer um a lot of times there's cases uh bernstein um seems a little bit different but maybe in the crypto world there's an individual i believe he was in kentucky uh he was taxed on i think staking yeah uh rewards and it was a pretty nominal amount i mean i think it was like two or three thousand dollars frankly um but it was more of a principled fight that was the economically driven hey this is a lot of money uh and he's continued to pursue that uh there's a lot of folks who are watching because they're saying hey that's pretty interesting that is an interesting case yeah um it feels like here jared jared versus the u.s or irs yeah it feels like here with the tornado cash like there are probably people who have material amounts of money locked

Starting point is 00:36:56 up whatever that is to them uh but it does feel like there's almost this like legal apparatus that is somebody is going to pick up the flag and take on this fight uh and it's more the principled fight than it is hey i've sent ten thousand dollars and like you know that's my life savings yeah no and but but you need but you do need some some harm yes to be able to bring a case uh the first amendment is a little bit first amendment challenges it's a little bit easier that like harm requirement is a little softer okay because um the idea is you don't have to have suffered a direct harm if there's an argument that it's like overbroad and there's a chilling effect and it's preventing the public from engaging in that type of speech then um

Starting point is 00:37:44 then your direct harm requirement is a little there's a little more wiggle room there okay so then let's go to uh maybe the second step which was uh there's this ofac uh list a bunch of stuff gets put on it i think there was kind of a shot across the bow a little bit and the crypto community is like oh shit things just got ratcheted up you know a couple of notches and of course uh there are people on the internet who uh will take things into their own hands and there's an individual um who went and collected a bunch of publicly known or kind of doxed addresses right it was like puma and companies shacks celebrities well-known people in the crypto world i mean i mean this was very much like let me go to you know a whole list get a

Starting point is 00:38:31 much of these addresses and then they began to withdraw very small amounts it was 0.01 eth into these publicly known addresses right so at the most kind of barbaric analysis uh puma which is a yeah legal you know a corporation that would like to be in good legal standing in the united states of america and uh for everything that we understand does not want to participate in any sort of money laundering or violation of the ofac list they potentially violated the ofac list because they uh received funds right that came from a entity slash software and account whatever piece of software yeah that was sanctioned yeah now i would imagine again you you will correct me if i'm wrong here if they went to court and said we didn't do this right we didn't know it's the

Starting point is 00:39:21 equivalent of somebody sending me a wire right and uh i didn't ask them to do that i just woke up one morning and it was sitting there um they probably won't get in trouble right but i don't know like well that's where that's where ofac is like serious business because it's a strict liability regime where like you don't the government doesn't have to prove intent okay so explain this a little bit more like and maybe let's use puma uh only because they are an entity i don't want to pull individuals in puma i apologize uh somebody else sponsored by them somebody else did this to you uh but like as a corporation i think it's it's different than an individual as well where it's like they have legal teams they have compliance like they have

Starting point is 00:40:06 shareholders like like there's a lot of complexity how would you begin to analyze like is puma potentially liable for something here or do they just go to court and say like hey guys come on Right. Well, it would take, right. I mean, like, practically speaking, OFAC is not, you know, Department of Justice is not going to bring an action against Puma for, you know, unknowingly accepting funds that came from Tornado Cash. But, you know, again, so going back to the strict liability, right, they could. It doesn't matter. It happened. You received the funds. um so so a um legal legal scholar he's practicing attorney but i'll call him a legal scholar because he predicted this a few years ago really yeah andrew hinkes he's a uh attorney at knl gates um he he had he had predicted that like someone could he called it like a spray attack right could just spray this essentially tainted you know be it ether you know bitcoins out and because

Starting point is 00:41:12 right in ethereum and bitcoin and you know most cryptocurrency you know that you don't have to accept it just you know it just shows up on the ledger as as being uh in your address um so he he had uh predicted this um and it's a big problem it's a big problem because under the letter of the law yeah there's there's violations there um and so it's just it goes back to kind of that boundless discretion of ofac right it's just up to them now like how they're gonna treat all this and let's say that they were like no yeah you know fuck you guys you did this uh and they wanted to enforce the letter of the law what is the penalty or like how bad could it yeah i mean the penalty can be jail time um for for folks yeah it's real serious uh probably it would be like fines um but

Starting point is 00:42:03 it can yeah it can be it can be jail time there's criminal penalties um but i think you know there's a process and a procedure for like sequestering funds that you suspect are you know tainted and and you know flagging it with ofac and things like that so i think i'm sure puma's compliance folks have you know checked all the boxes and you know made sure to to quarantine off any uh any tornado cash eve well so the reason i want to start with puma is because they have all that infrastructure shack i do not think has a full-fledged uh you know compliance team and it's like you might be surprised he's he's he's pretty uh he's a pretty big business so i'm gonna move from puma to shack to then to whoever the average citizen yeah right and i think that it's it's at least expected that

Starting point is 00:42:52 puma has some sort of legal right you know team and compliance team etc shacks maybe in the middle maybe maybe not uh the individual doesn't right and so it almost goes back to this idea of like the banks right i remember reading this article at one point uh one of the things that the banks do in order to kind of shield liability or at least, again, you could argue whether it's good faith or it's kind of cover your ass, if there are transactions that they think could potentially be troublesome,

Starting point is 00:43:23 they basically just flag them. But the problem is that they're incentivized. Suspicious reports, yeah. Suspicious activity reports, yeah. They are incentivized to use these SARs or suspicious activity reports. Just do them all, right? Like at some degree,

Starting point is 00:43:37 like just keep processing all the transactions and then you just say they're all suspicious. Now, again, they don't do that, but they do a lot of them. They err on the side of caution. Let's put it that way. It's a very politically correct way to say it. They err on the side of caution. And again, there's an argument as to maybe that's a good thing.

Starting point is 00:43:55 But then if somebody shows up later, like OFAC or whoever, and says, hey, that one was problematic, they say, well, we flagged it like we thought it was suspicious and we sent it to you guys and whatever happened from there happened. The average individual doesn't have that infrastructure, doesn't even know some of this stuff exists and you get into these problems so i guess it becomes this weird thing where like now it's almost up to whether it's the department of justice or somebody do they want to enforce the law or not and that feel like that kind of gray area feels like again

Starting point is 00:44:25 where some legal folks are standing up and saying like let's have a deeper conversation about absolutely yeah that's that's where it goes back to you know there's got to be especially when you're talking about speech there's got to be some kind of guidance on agency discretion when they're licensing or you know preventing speech of some type there's got to be just you know just protocols that they follow and then there's got to be a clear method for reviewing that now on that point about a clear method to review it someone whose funds are in tornado cash there is a process whereby you can apply for a license from ofac to remove funds or to to transact with a sanctioned entity so there is a process but again that's a post-facto process um and when

Starting point is 00:45:16 we're talking about due process we're talking about you know pre-notice you know that's that's the that's the gold standard of due process so forget crypto for a second if i don't know you were on no fact list right and i had previously had a business relationship with you you had some money uh i wanted to withdraw or or get that money back i could go and say hey here's all the details will you pre-approve me to do this transaction i'm not trying to do anything nefarious they approve yeah there's a process for that okay um i can't imagine they're handing out a lot of those licenses at the moment no i don't know i i can't imagine anybody would want to dox themselves to apply for one of those licenses so this brings up another fascinating point which is we have a

Starting point is 00:45:58 piece of software which we will hold the assumption that it is decentralized no one has control i do think that that will come into question and and it will be fascinating to see how decentralized is it actually um but many of the addresses who have been engaging with it or interfacing and transacting are not like you know anthony pompliano's wallet address right it is a random string of letters and numbers they're still anonymous yeah and so i do wonder how far will legal organizations uh or government organizations go to figure out who are all those addresses now they've obviously done it for uh the ones that they claim to be money laundering or whatever um but you know joe blow off the street who put ten dollars in because he wanted

Starting point is 00:46:45 to test out the tool right is just a random address today because it now is on the ofac list do we expect every single one of those accounts they'll do the work to like doc i don't think so i i don't think the incentive is there for ofac or department of justice to do that because you know again they they traced the you know the lazarus group i think that was the north korean groups they trace the money into tornado cash right because that's you got you got to start somewhere you can't you can't really it would be difficult to i mean i guess you could i guess there are ways you could trace it if you you know you could map uh personal identifiable information onto um coins essentially or you know eth that comes out of tornado cash after the fact

Starting point is 00:47:37 um but yeah i mean they they were they were chasing you know the money laundering funds and the ransomware funds into the funds led them to the tool not let's start with the tool and then work back exactly um and so again because you know i forget who was chain analysis or one of those you know analytics firms has has done the you know done some heuristics and breakdowns and said you know half of it is defy you know presumably they know that there's not really they know generally what type of activity was going on in Tornado Cache. Again, they don't know who was doing what necessarily all the time. But yeah, I don't think the incentive is there for DOJ

Starting point is 00:48:17 to go after every single user who's ever used Tornado Cache. But again, now we're having these conversations and we're having conversations again about privacy enhancing tools and it really all comes back to do we have a right to anonymity? and how would you analyze that right so when you're talking about speech the supreme court has said you have a a right to anonymous speech in certain circumstances like when you are engaging in uh political assembly um so actually and this is this is kind of what what gives me a little bit of hope about where we're going with with uh you know the first amendment and code and anonymity

Starting point is 00:49:01 and privacy um i think it was last year a case uh called like bonta americans for prosperity versus bonta came out and the supreme court invalidated cal california law or regulation um that required disclosure of political donors identity over like a certain amount threshold oh interesting Yeah. And it was like $5,000 or something like that. So like major donors, they, yeah, all these PACs had to like create a list and like turn this list over to like the California regulator who is, you know, regulating, you know, in election spending. And the Supreme Court struck that down and, you know, based in part on this line of cases that you do have a right to anonymous speech and anonymous assembly, which stems from, you know, our rights to assemble anonymously when we were creating this nation, you know, for fear of, you know, being hung by the British, right? um so it's it's it's a the right to anonymity is like a deeply ingrained i think american value um and it's only really in you know recent times modern times where that uh the practical ability to maintain anonymity has been rolled back right so um so the supreme court is is is putting out

Starting point is 00:50:33 opinions that respect and acknowledge that right of speech and even so this was in the context of spending too right this was in the context of um you know keeping um keeping political donations anonymous or electronic dollars like if i go to the bank and i send you a wire is that considered speech because it's software is it considered speech because it's software um like i'm not sending you physical dollars right that that is a metaphysical question that has not been resolved in the courts so this gets into yeah this gets into um if if i was going to give you a physical dollar that's kind of like conduct yes but it's also speech you know if i'm giving you that money um to to support your you know campaign for mayor of miami or whatever um

Starting point is 00:51:26 never how much swore i keep doing this thing yeah um but you know i look i'm of the opinion and not a lot of legal scholars agree with this um but i think a lot of people in the cryptocurrency and bitcoin uh industry would agree with this is that um money and transacting uh is a form of speech It might be more conduct than speech, but it transmits information because what's that phrase? Like, you know, don't tell me what you think. Show me your investment portfolio. Right. Like, what do you value in life? You know, where and what is more expressive than me showing you where I prefer to spend my hard earned, you know, time and effort, right? Money is just like the store of all of your prior work and effort and blood and sweat and tears, right? So when I show

Starting point is 00:52:27 you what I'm going to spend that on, that tells you a lot about me, right? I think there are a lot of communicative elements to transactions. Well, I'll take it even a step further of just if money is not in the analog form, right? It's not physical money. And I send you a wire. It's all software yeah yeah i'm sending you words in a database right and now sure they have a purpose they have a value assigned to them they have all these different things but i communicated with the bank literally i told the computer do this the computer then sent you words yeah your your bank accepted those words and put them in a database for you to look at later right and in some way uh it's words yeah it is and and it always goes you know it money money also is like this this

Starting point is 00:53:20 this giant accounting system right it's how society directs where to place uh you know its efforts and its capital so that we can progress um and so that it's a giant information system all forms of money you know even before even before you had um i heard this this uh explanation of what credit was the other day um from from a podcaster and he was you know he describes it as you know just at its base level two cavemen in the cave and you know you make fire today i make fire tomorrow yep that's a credit transaction right speech right that's speech that's not you know there was some work that occurred you know at different times um and there was value that was exchanged with you know the work that was done to make the fire but it was all

Starting point is 00:54:14 just speech yeah you know that credit formation was just speech i'm not going to take credit no pun intended for that analogy because it was really good it was uh um the guy from the the crypto voices podcast yeah he's very good yeah this episode is brought to you by lmax digital the number one institutional crypto exchange they offer clients the deepest pool of liquidity and they have 100% uptime track record through all the volatility spikes. LMAX Group's liquidity relationships and ultra-low latency technology

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Starting point is 00:55:03 and hardware crypto wallet. They offer beautiful, user-friendly blockchain products that sync across all your devices, making it easy to send, receive, and exchange over 150 crypto assets in one place. And with world-class customer service available to you 24-7, Exodus always has your back. Run, don't walk, over to Exodus.com slash Pomp for your free download today. Again, that's Exodus.com slash Pomp. Go check them out for your free download today. if we go back to tornado cash uh the next step in this kind of analysis is you know so we have

Starting point is 00:55:36 the ofac stuff then we've got the like spray attack yeah um the one of the developers gets arrested yeah in the not in the united states how do you analyze um the arrest itself the fact that it didn't happen in the u.s i don't know if he was an american citizen or not i do not i do not know yeah I don't know if he was a citizen but just the arrest in general how do we understand the legalities of it or the precedent it sets yeah I mean it's a big chilling effect

Starting point is 00:56:13 it sets a huge precedent that if you're coding and launching and publishing privacy enhancing tools that then money launderers go and use that you could be liable i guess now again we don't know all the facts behind that who knows maybe maybe you know i don't want to i don't want to hope for criminality but i hope there's more of a tie uh than just the fact that this guy in this group wrote this code and and published this code i hope there's more details there are details that could come out which we

Starting point is 00:56:50 are not privy to today i don't think anyone in the public is uh that would drastically change analysis but given the information we have right now it appears that there's not yeah nefarious malicious conduct or anything and that's why there's so many questions yeah and it and it really has created a chilling effect i mean anyone who is an engineer and a software developer um is scared i mean they're scared and understandably so i mean it's it is you know it's like it's like we're thrust back into the 90s and you know you've got big you know you've got goliath you've got you know the government's coming down on on developers um and that's a that's a scary thing and um we as a society shouldn't tolerate it we should we should

Starting point is 00:57:39 you know raise our voices and say this is not this is not uh consistent with our values as a country and a nation and you know not consistent with our constitution um we don't want to live in a society where anonymity is criminalized we want to live in a society where you know privacy and anonymity are seen for what they are which is um protection right protection from uh you know those who might want to you know steal our identities you know steal our funds um those who might want to harm us if we have the wrong political opinion um which thankfully in the u.s is not you know always the case uh certainly the government not is not always trying to harm us uh because of our political opinion but uh in most of the world uh that's not the case and so we should be promoting these tools

Starting point is 00:58:32 and as a society and trying to reclaim our our rights to to anonymous speech and anonymous assembly and and the ability to go throughout our lives with the um authority and the autonomy and the power to choose what information we disclose to others because that's what privacy is you know there's been tons of definitions of privacy over the years and everyone struggles to understand what it is just as brandeis wrote um a law review article back in like the 20s that It was like the foundation for our understanding of privacy where he said it's the right to be left alone. It is, but I think the cypherpunks helped us realize

Starting point is 00:59:17 that privacy is really the right to let other people know what you want them to know and that you maintain control over your information. And it's that control over your information that is the key to privacy. um it feels like um the ofac list stuff a lot of people uh wow like that surprised and shocked people the rest of the developer i think ratcheted it up even more yeah um and again we don't have all the details uh but how do they draw the line in terms of the privacy technology and i'll give

Starting point is 00:59:58 you may be kind of different as the spectrum. So if I was a software developer who worked at, I don't know, Coinbase, a publicly traded business that, for all intents and purposes, follows the rules, has a compliance team, legal team, regulators have signed off, it's in the public markets, all that stuff. And I am creating technology that enhances the privacy of our users to be able to transact. And then you've got maybe Tornado Cash on the other end of the spectrum.

Starting point is 01:00:26 not saying that either one is right or wrong or whatever but just like how do they think about like is it all privacy technology is it just ones where somebody does something bad uh unfortunately i am sure uh that somebody has used coinbase to do something nefarious or wrong um and so how do they think through that or is it literally just a uh kind of a group of people that get together and they decide the severity and then later on the courts figure out whether it was the right decision or not yeah i mean again i think it comes back to you know the government does have you know it doesn't have boundless uh resources we think we think it does it has a lot but they still do have to you know department of justice and and ofac and

Starting point is 01:01:15 and these these departments have to pick and choose what they're gonna you know who they're going to go after um and so again i think it just comes down to the the most nefarious characters are going to you know go down first um it's the easiest regulation right right the low-hanging fruit um and in the process right there they're taking a swing at at privacy tools um if we had a third person here on the podcast and they were from the department of justice or from the treasury or whatever, what are some of the questions that you would have to better understand the situation? Like, are there things that you're

Starting point is 01:01:55 like, man, these are like the two or three open questions right now that maybe it'll be decided in court, maybe we'll get more information, but these are the things that you're most interested in learning more about around this specific case? Yeah, I mean, it would, you know, first and foremost, it would be, and this is the question we

Starting point is 01:02:11 should all be asking whenever there's any government action anywhere, state or local or federal, what's your authority for this? Where do you derive the power for this action, like we were talking about before? So I would like to get some understanding of their thought process for putting these smart contracts that no one owns on the list. Whose property is that? Are these aliases for someone?

Starting point is 01:02:43 What's the rationale behind that? Because I think, you know, perhaps there's not an understanding from OFAC of the engineering behind this system. And maybe there is. I mean, it's a lot of smart people. Well, and I think it brings up the question of, like, again, decentralization. Like, how decentralized is it? And we've heard from the securities regulators and others, you know, what's it, Dyno, the terminology, decentralized to name only. I think most people who have looked at the tornado cash situation, people way smarter than me who are much more technical and read the code and stuff, they do believe that it has legitimate claims to decentralization.

Starting point is 01:03:30 Now, decentralization has a spectrum, this whole thing of like, is it, you know, you need 10 nodes, you need 50 nodes, you need, you know, a certain amount of people holding the keys. Like, there's so many different ways you could cut it. But it does feel like a lot of people think it checks those boxes. And those are some questions that we could ask, right? Like, what is the rubric internally that you're using to determine, you know, control over this tool? Yeah, right. Admin keys or, you know, however many developers are working on it and, you know, who's directing, you know, directing flow of funds, you know, the developers weren't directing the flow of funds through this protocol. Yeah. It's fascinating to think about also because it begs the question that, one, regulators, governments, organizations that have oversight in various parts of economies, I think most of them, and I've talked to some of these individuals, everything from, you know, SEC commissioners to the head of CFTC, they're like, look, we got a pretty good grasp of like some basic stuff. but we're figuring it out along with everybody else because guess what a piece of technology

Starting point is 01:04:37 that exists today didn't exist two years ago yeah right and like as this thing's getting built the builders and investors are figuring it out but also the regulators are kind of running side by side trying to figure it out and just naturally the innovators will always be out in front and then the regulators kind of catch up as they go so i think anyone who analyzes stuff you have to like one put in uh one part of the conversation of like if you were the regulator yeah would you have all the information necessarily to make an analysis some situations yes other situations no and i think that's an important distinction but the second piece of it is uh there's a lot of information that we don't have in tornado cash situation but many others where what's being

Starting point is 01:05:20 publicly presented if you hold it at face value you come to one analysis right and then we've later found out all sorts of different you know pieces of data uh that you're just like if i had known that other data point like my mind would have completely you know changed and so i think that there's a little bit of like the fact-finding mission that some of these uh bodies are going through of just like how do we understand the full playing field before we start making decisions or frameworks or rubrics or whatever and i don't know if there's right answers right like sometimes is definitely a right answer right and from from the regular's perspective and you know ofac and doj's perspective like the fbi's perspective if they wait you know this would be the argument

Starting point is 01:06:02 to let it all play out and to have it figured out then these tools are going to be in the hands of every bad guy and every bad guy is going to be using it and it's going to be too you know it's too late uh to do anything about it um and some of that is just you know the answer to that is we have to tolerate some criminality in our society um you you can't uh you know look we've been having we've been having these debates you know since the 90s but you know definitely since 9-11 and the patriot act you know americans have been struggling with um the the trade-offs between safety and civil liberties and privacy um and this is just another front in that continuing discussion or battle if you want anything we're doing in that balance now like would you give us

Starting point is 01:06:56 a a plus f minus like like like it obviously each situation is a little bit different right like tsa and yeah and all that people get all worked up about but like do we do a pretty good job do we do compared to like other countries are we actually like really shitty like how do you think it um well if it's a comparison game i think uh we're doing okay i would give us a c okay just because i feel like um our our you know ability to challenge actions in the courts um is still pretty strong um you know our as much you know we're talking about free speech in the first amendment it we still have a first amendment you know it's still there and it exists and we point to it and we can argue over it and you know it is enforced um that's not the case in a lot of the

Starting point is 01:07:52 world so i i i feel good about that you know now yeah i think i think you know and this is just since the Patriot Act and 9-11, yeah, we've gone backwards in our, in our, you know, rights and civil liberties and our, and our freedoms. Um, and, you know, again, it was understandable at the time, the fear that the country felt and, you know, but, you know, then we, we, you know, had too much of a, a, a counter response, uh, domestically, um, internationally as well. I mean, it's just, it's kind of wild because, you know, we're about the same age. And so like, you know, yeah, exactly. You know, our adult lives, we've been living in the guat in the global war on terror, right?

Starting point is 01:08:44 I mean, it's something that, but we're old enough to have remembered like the before times, you know, in the 90s and, you know, how it felt different. um even as kids i you know i just felt uh a little bit like freer um in terms of uh i don't know walk to the gate there was yeah airport exactly exactly exactly you pick up somebody pick up your family at the yeah you go back you watch seinfeld or friends on netflix and you're you just like it's a time capsule yeah and you know it's it sometimes it it hurts because you're like wow that was like it it wasn't all it wasn't all bad like we didn't have you know planes falling out of the sky every every other day like and this is you know this debate about like safety and the trade-offs between safety and civil liberties you know i had a a german

Starting point is 01:09:40 professor in in college and uh and this was you know early-ish in the war on terror and and and everything was still fresh. And she was saying, look, you know, Germany went through this. Germany had a, you know, I guess in the seventies series of, you know, terrorist organizations and, and attacks. And she said, look, we had to, we had to decide, like, do we want to lock ourselves down and live in fear and give up all of our liberties for safety or perceived safety, I guess? Or are we going to you know hold our heads high and live our lives without fear and and and treating everybody with you know dignity and respect and and keeping our rights and you know she was of the opinion that germany at the time had you know made the right choice and and chose not to um you

Starting point is 01:10:31 know aggressively uh shut society down um to combat terrorism and uh america went a different direction we did um and it's a shame but again it gives me hope because we have tools uh like bitcoin that that do provide financial freedom um then we have tools like cryptography and you know those tools are enhancing our safety and our you know through anonymity um while at the same time they can be used uh for ill but i think those tools are in everyone's hands and and and so we've we've we've got the ability to keep moving forward uh and reclaiming freedom so uh i met you because you were on peter mccormick's podcast that's right yeah shitty podcast but i love peter uh and you were talking about bitcoin and what bitcoin the first question that came to mind

Starting point is 01:11:30 when i saw the tornado cash stuff was if i was a government official and i was hell-bent on just completely stomping out bitcoin and i was based in america could they do what they did to tornado cash and just say the entire bitcoin blockchain is now on the ofac list and anyone who touches it i mean theoretically they could right theoretically they could like i've never heard anyone talk about No, no. But yeah, you and every other lawyer would be lined up outside the court ready to have a field day, but it does open up. No, it opens up this, this is an attack vector for any protocol. And so every protocol and all developers

Starting point is 01:12:14 working on these systems, communication systems for transferring value or just communication systems in general, should be rigorously testing and having really serious conversations about whether or not their technologies are sufficiently decentralized to survive something like that. Bitcoin will survive something like that. It'd make it difficult for us in the States to transact,

Starting point is 01:12:42 but it would survive. The technology and infrastructure would survive. The US user could be, quote unquote, frozen out from this. What it then brings into is this whole thing, like decentralization is really freaking important. It's really important, right? but just because you have the decentralization that protects the protocol

Starting point is 01:13:07 that protects the tech itself it doesn't necessarily have the same impact on the individuals because they are still subject to being the standing citizens and this is where you need base layer privacy and base layer anonymity and Bitcoin doesn't score great on that there are tools you can use

Starting point is 01:13:27 that are similar to mixers but are different coin join tools and things like that where you can obscure and regain forward anonymity in your transactions. And those types of tools are desperately needed because that's the piece, like you said, that's going to allow individuals to continue to use a decentralized network.

Starting point is 01:13:51 There are privacy coins and privacy protocols that have that built at the base layer and they make different trade-offs that Bitcoin's made. um but that's the that's the key that's that's what's needed is is privacy and anonymity and and the problem is is we live in this you know bank secrecy act regime where there's no your customer regulations and it's really hard to participate in these protocols um these cryptocurrency digital asset protocols without going through these kyc processes and these kyc gates now like it's it's really difficult you can do it um but it's not user-friendly

Starting point is 01:14:33 and that's where you know and i'm not an engineer if i were that's what i'd be working on i'd be working on you know those privacy tools anonymity tools that um you know help us and help individuals participate in these in these protocols anonymously um you know when you think of bitcoin it has the ability right if people continue to build technologies to do a whole bunch of things that i think the bitcoin community is very excited about one of the things you've looked at which i find fascinating is bitcoin today in its current form without having to be built uh kind of further continued innovation uh can really i don't know mitigate some negative externalities um and one of the things that i i saw that you wrote that fascinated me is in many legal cases

Starting point is 01:15:25 there is a judgment and if there are financial penalties or fines uh through a whole host of different actions the court essentially can take the money they can freeze assets they can confiscate it right out of somebody's bank account uh the irs does this time to time somebody owes back taxes or whatever the idea of self-custody changes the playing field there it does yeah how did that like how does that now enter into the fray of just like if they can't freeze your assets or they can't confiscate your assets does that level the playing field does that ratchet up their scrutiny exactly hey we don't like this yeah so that's the bitcoin is a you know seizure resistant it's not seizure proof uh and censorship resistant money uh you know and uh if you self

Starting point is 01:16:17 custody it uh it's not like having a bank account that can get frozen right if um so what happens in the how how it affects the legal system this is something i've been thinking about because this is what i probably what i do is you know i i uh work on litigation but i'm an appellate attorney so i see the cases after there's an order that needs to be appealed and you know overturned or upheld and then sometimes we get into these like post-judgment collection issues and sometimes they're pre-judgment where somebody is being forced to turn over money before there's even a determination of liability why would they do that so yeah exactly so this is this is very important because in the united states pre-judgment attachments are um really hard to get they're

Starting point is 01:17:06 frowned upon by the court system, because if you have your property and you haven't been determined liable, it's still your property. If ownership hasn't been determined by the court, we're not going to take property that's probably yours, maybe yours, maybe not, but it's in your possession. Possession is nine-tenths of the law. I'm going to let you keep that property until there's determination. That's not the case in a lot of countries. So we saw this in Canada with the trucker rally and you know there's a big movement a lot of donations through bitcoin to fund that political protest and then there was actually a civil class action lawsuit by like the ottawa businesses who were who were you know saying that they lost revenue from this and they sued

Starting point is 01:17:56 the organizers of the trucker rally and one of the you know bitcoin for for uh for the truckers organizers um was a defendant and had to turn over all the bitcoin that they flagged as his so that you know it wouldn't be dissipated and you know disappear before there could be a collection so that's that's the theory like a flight risk it is tight it's like it's like that now in that case i mean this is something called a mariva injunction like the common law jurisdictions have this it came from england canada has it um i'm sure like australia and it's it's spread out okay um and it's used right to prevent uh dissipating and shielding capital that can eventually be used to satisfy a money judgment which then you know meets out justice

Starting point is 01:18:52 between the parties i don't know how important the distinction is i feel like i'm gonna get a a law degree here but um is it different than freezing assets like i think of freezing assets it's like it's in your bank account and they say hey you're not allowed to move it and maybe the bank helps them or whatever this sounds more like you were scared you're gonna move it or or we think there's a threat that you're gonna move it give it to us yeah i think in that case um i think in that case perhaps it would have had to been transferred because the nature of bitcoin is like if you remember your seed phrase like yeah you could give you could give them you know your wallets or whatever but then you know you just go right spin up another wallet with

Starting point is 01:19:33 your seed phrase and move it so they probably yeah the authorities probably somebody had to take custody of it but usually when you're talking about bank accounts right it's just a freeze and and this is this is where you know this is the difference between bitcoin and the traditional financial system when it comes to money judgments you know all of our financial system is built on intermediaries banks custodians um and bitcoin allows for self-custody and disintermediates and the way that money judgments are executed and collected is writs of garnishment on those third-party custodians you have a bank account you know i tag you with a judgment because whatever you hit me with your car you know simple tort claim or whatever and you owe me money and you

Starting point is 01:20:22 know you don't pay it so then i get a writ of garnishment from the court and it's served on your bank and your bank says that's a valid writ and here's the money i'm going to remit it to you mr plaintiff um with a bitcoin system where everyone's holding their own keys and has their own, you know, their own wallets. There's no one to serve that root of garnish from and on to collect from. So now, right. The question is what do courts do about that? Um, you know, let's obviously right now it's not a huge issue. Um, but if we're like in a talk in like a hyper Bitcoinized world, you know, and, and intermediaries are gone, you know, what, what are the courts do? And I think the tools they have available are these prejudgment type attacks where maybe if they know that an individual has funds because they have KYC funds and all of their information is on the blockchain and they can follow the funds around, they can then get orders to freeze that money.

Starting point is 01:21:33 now again i have the keys so who's going to freeze it that's where the second piece comes in where the courts have contempt powers where they can hold individuals in contempt and put them in jail for not complying with court orders so then if i get an order to turn over my private keys and i refuse and the only place they are in my head and the only recourse left for the courts is to start imprisoning people and now i literally have the key to the jail cell in my head so this brings an even kind of more complex piece of uh everyone that i know who has done any self-custody right uh when they first start like i've forgotten things right or i lost something or i sent whatever right um and you know thankfully for me uh up until this point

Starting point is 01:22:21 let me knock on wood uh it's always been you know non-material amounts i was screwing around whatever and learning uh but there are definitely people who uh on one extreme you know the guy who's digging through the landfill trying to find it on the drive, but supposedly he's got hundreds of millions of dollars, but he literally can't find it, to maybe the people who joke on Twitter and say, oh, I got in a boating accident, right?

Starting point is 01:22:43 How do they determine whether you actually forgot it versus you won't hand it over? Yeah, that's just going to come down to putting the contemnor, possible contemnor on the stand, asking them questions, and then making that credibility determination there in court. I mean, this is crazy.

Starting point is 01:23:05 It is crazy. And it's something that sounds far-fetched, but it's happening. I'm tracking cases where this is happening. There was a case, I can't remember what it was in the States, but the plaintiff accused somebody of defrauding them them out of you know bitcoin and some other cryptocurrencies they were in some business deal and the defendant never paid and so i guess they were in the netherlands maybe so um the plaintiff

Starting point is 01:23:38 gets one of these pre-judgment attachments in the netherlands wouldn't have been able to get that in the states um it's again it's very hard to get those wouldn't have been able to get that in the states comes to the states and what domesticates is what it's called that judgment and so you know we generally our courts generally give credit and you know full faith and credit to foreign judgments that you know look look like they're on the up and up right you can challenge them not from north korea right you can challenge them and say there was you know your due process was violated in that proceeding um so so this judgment gets domesticated turn over the bitcoin um and u.s marshals actually came to this defendant's house to ask him for the private keys and he

Starting point is 01:24:31 gave him the finger i mean figuratively yeah and didn't turn it over and so this this guy is being is going through contempt proceedings now in federal court for not turning over, you know, I don't know anything about the facts of the case. I don't know, you know, what, you know, whether or not the allegations are true, but that is an instance where the court is going through contempt proceedings

Starting point is 01:24:54 because someone is not turning over private keys. So 15, 20 years ago, you know, pre-Bitcoin, the only thing I could think of that is any what similar would be like if I had some massive safe. Exactly. right in my apartment or something and i had a bunch of cash and they came and they said give us the code and you're like i'm not giving you the code exactly yeah they probably just take the safe and like break it open you know or whatever like there was still crack it eventually yeah even if

Starting point is 01:25:20 uh you wanted to make it harder for them this is that on steroids right and it feels uh very different yeah um so now so now if if we're you know proponents of this technology we have to acknowledge that this is not this is an externality that for an individual who's being wrongfully sued is great that i can protect my my funds you know i had you know i've told this story before but you know i had a client whose father's gold coins that she was bequeathed and kept in the safety deposit box were um seized to satisfy her husband's judgment um in a case where she wasn't a defendant and he wasn't even an account holder on the box but he had access to the box and so the courts basically inferred yeah that you know he had access and they belonged to him and those

Starting point is 01:26:19 coins could be used to satisfy so for someone like that who wants to store value and not have it seized under the color of law because it happens it's great the flip side is though you know the money judgment transfer of value to um administer justice is like a really important thing to society right before we had this system you know it was just go to the king and he's going to tell you you know what the judgment is yeah right and and like or or it just goes back to like you know i have to resolve my disputes through conflict because there's no other way right this money judgments are very like you know safe orderly you know you know they generally give process to everyone to have facts determined and and if you're now going to remove that

Starting point is 01:27:09 linchpin from the justice system of being able to satisfy money judgments through you know garnishment on intermediaries, where you have recalcitrant defendants, you know, it has the possibility to stymie justice and to prevent justice. So that's an externality that we as proponents of this technology need to acknowledge and realize, like, Bitcoin doesn't fix everything, fix a lot of things, can also break some things in the process. I think, you know, the society we eventually get to with mass adoption is on the whole better but there's a lot of growing pains between now and then and so we should think about those negative externalities and how to maybe avoid them and how how we can facilitate systems um that that can accommodate you know that help

Starting point is 01:27:59 us get on the right path to our you know where we're going yeah that makes a lot of sense and in um you could see good and bad coming out of that right yeah and again it goes back to that neutral technology that's you know being used for good and bad this episode is brought to you by unstoppable domains they've partnered with blockchain.com to create nft domain names ending in dot blockchain it's the perfect ending to show that you're a believer in a decentralized future the blockchain.com community can join a short wait list to get one for free at blockchain.com slash waitlist slash blockchain domain free nft domains provide all the benefits of premium Unstoppable domains, including fee-free lifelong ownership. If you don't have a blockchain.com

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Starting point is 01:29:22 NEO exchange under DEFI. For more information or to subscribe to receive company updates and financial information visit their website at valor.com that's v-a-l-o-u-r.com i got a question on twitter i've already told you this question i want you to look at it first uh and let me uh put a big caveat on this is uh i don't know the individual they were uh i think i'm pretty sure it was a pseudonymous account and they dm'd me and they said uh right after the alex jones judgment And they basically said, this opens a can of worms. This is insane. If somebody can hold a media publisher liable for saying something that they actually do not believe to be true, then their words, not mine, essentially was, well, then every media company on earth should be held liable.

Starting point is 01:30:15 and explicitly pointed to, I believe you mentioned the Hunter Biden laptop story of like somebody who is publishing it may have thought it was really real, but they were saying it wasn't or whatever. So crazy characters involved, lots of complexity. But if we just pull out of this for a second, what was interesting to me,

Starting point is 01:30:36 and I didn't want to engage too much because I didn't know who this person was. I was like, I have no idea. But what was fascinating was this idea of uh free speech uh but there's an element of like publisher versus private individual and then um the moving of belief and what i mean by that is like if somebody says something and believes it to be true when they say it and they keep repeating it but at some point they change their mind then it feels like then they could become liable which you know however that plays out but

Starting point is 01:31:08 How do you analyze the Alex Jones kind of entire judgment with mainstream media and at least the perception, I think, from the average American being like, oh, they're lying to us. Whether that's true or not could be debated. But has the game shifted now a little bit after this or is this just implementing old rules? I think what's interesting about the,

Starting point is 01:31:33 I guess it's not interesting, but the Alex Jones judgment is actually, he actually defaulted on liability okay explain what that means so the whether or not he was the court essentially adjudicated him liable without him defending because i think he was like dragging his feet on a lot of a lot of uh discovery issues and didn't turn over a ton of evidence and was just stonewalling for years and years and eventually courts get fed up with that because it is an obstruction of justice essentially and um they will default you meaning you you you're now you're now liable liability is determined now we just have to decide how much you owe

Starting point is 01:32:17 so he essentially forfeited his right to defend himself interesting on on yeah defamation from a legal proceeding standpoint they made a claim he could have defended himself and maybe been victorious or not right but he just decided for whatever reason not to do that right he was just stonewalling so you know that's that's an interesting caveat to whenever we're comparing this you know this case to anything else is that um liability was a foregone conclusion based on alex jones's actions within the litigation okay um now you know in terms of like just general defamation law right i mean there's there's a few you know truth is a defense to defamation if you know opinion speech is a you know defense to defamation because that again gets into um free

Starting point is 01:33:10 speech right you know something that's you know if if i call you a you know shit coiner that's my opinion it's not i'm not calling you that um so so that's that's another defense that could have been raised um again the allegations and you know the statements that were made were like were a really tough statements right that he was making about these parents of you know because it wasn't just about the event i think it was also about individuals and it was about individuals themselves said hey now you're talking about us right in and attacking them when they went on you know and gave interviews on television as crisis actors and and things like that um that would have been really hard to defend if i'm part of his defense team you know that's because like

Starting point is 01:33:58 truth is a defense so like what you're gonna try and you know prove that this person was an actor like you're not you're not gonna do that that was that was a lie right so his situation uh has a lot of emotions attached to it which right but we kind of pull away from the emotions and we just look at it if he had showed up to court and not stonewall or whatever and he just be like that was my opinion does that like absolve him and he could have said whatever he wanted it because it was his opinion or like how does the court look at opinion verse like i don't care what your opinion is you can't say certain things yeah there's again it gets into it's like a really like gray area when you go into that opinion um interesting calling someone calling someone

Starting point is 01:34:35 a crisis actor um is it seems qualitatively different than calling someone an asshole right you're you're because now what you're doing is you're um there's this like concept and defamation law of like you know the the reason that you're being harmed is because your status in the community is being denigrated um by that you know presumed fact you know that statement that's being offered as a fact um so yeah it would have been a it would have been a tough situation he was in a tough situation he would have been on the hook uh he put himself in a situation yeah he did yeah but yeah let's be let's be clear let's be clear if i were on his defense team i would have talked about a lot of crazy stuff on this podcast i was gonna make

Starting point is 01:35:26 sure people understand that i am in no way defending anyone's actions i'm simply trying to understand what kind of what some details are uh if we take that a step further and we say to ourselves okay uh one of the things that you always hear and i think actually elon musk tweeted about this a couple weeks ago he was like oh it's really hard for public figures or people that you know that are in the news or whatever to prove this defamation stuff um and it was around uh the article about him sleeping with sergey brin's wife oh right right yeah and he was like well she's not a public figure like maybe she could go after them but like basically you know i can't he's a public figure yeah how do they determine that in the sense of like if the parents in this situation

Starting point is 01:36:03 who i think as far as i think everyone would analyze are not public figures right but then they go on television and they're doing interviews on national television like how does a court look at like what becomes a public actually don't know the answer to that question that's a good question i actually don't know the answer to that it would probably i mean i'm sure that it's going to be case law dependent on whatever jurisdiction you're in but i you know it's probably going to be looking at just general general press coverage of somebody you know like do you just walk out on the street ask 100 people right 51 or more no than like your public figure yeah that's a good that's a good question i don't know the answer that one the reason why i think of it is um uh

Starting point is 01:36:40 it's separate from that case uh it's almost like you know a-list celebrity like definitely public figure like d-list celebrity maybe not this does get litigated like there is there is case law out there on this like who's who's a public vendor because that's that you know that's one defense is like oh no you know that plaintiff is a public figure so you know the the standard game on yeah it's like it's like game on yeah um so yeah that's uh and if we go back to the question this person asked me in terms like the mainstream media they have legal teams they've complied you know they've got all this stuff that they're trying to do things the right way hopefully um could they be held liable like if they wrote an article saying something and somebody else at

Starting point is 01:37:22 the organization didn't believe that thing is that like a legal liability it can be it's really difficult because you you have to it can't really be an oops right it can't be like you know the the investigative team you know did its diligence and put out this piece and then come to find out there was additional information that we learned after the fact and then you know now probably probably newspaper has to retract at that point maybe you know there's actually a really good movie about this set in miami with um with uh paul newman absence of malice oh i've not seen that yeah you should go check it out because it's a great time capsule of miami in like the 70s and you look at you know i mean it's shot like on location here and so like you know he's living

Starting point is 01:38:12 like in the bay downtown on a boat and like there's nothing around right yeah it's just totally wide open um but yeah there was a movie about this and like you know sally fields was a reporter and like reported on like i guess his uh relationship to like the mob or something like that which turned out not to be true and like it was yeah it's an interesting movie and it's called absence of malice because you know that's that is part of what you're looking at uh in defamation cases when um you're going after a a public figure or whatever and you know you've got to prove uh or malice is actually what you don't have to prove it's a public figure right it's it's just the public figure

Starting point is 01:38:56 actually I think I've got that backwards but anyways it's a good movie go check out Absence of Malice and when we think about the public conversation media publishers are one piece of it celebrities whatever another piece but we talk on Twitter there's hundreds of millions of other people on Twitter

Starting point is 01:39:18 you've got all the other social networks or whatever um one of the things to me that feels uh the big question mark in society is uh how comfortable is society with those platforms moderating speech right and i think most people again not everyone but most people would say hey if you go on twitter and you're like you know i'm gonna go shoot something you know right conduct a shooting or whatever people like that shouldn't be on and by the way like law enforcement should probably be uh um giving heads up and kind of addressed if you go on and uh in march of 2020 you say i think that this thing may have come from a lab right at the time no bueno right you're literally people were kicked off like all this stuff

Starting point is 01:40:03 now there's politicians going on national television talking about it right and so if we just zoom out for a second and with the benefit of hindsight we say to ourselves oh facts can change right like literally quote-unquote truth changes based on the information we have at the time you can also look at cdc at one point said masks don't work then they say they work now the new guidance kind of is like you know everyone's good like you know it's over um how do lawyers courts platforms think about like what's true in one moment in time may actually not be the consensus truth at another time. Right.

Starting point is 01:40:45 Yeah, I think your example of someone making threats and threatening speech and inciting violence, that's a pretty good line in the sand for a platform, I guess. We're going to make sure that that's not part of our terms of service and we're going to moderate that content. Yeah, content moderation is not, I mean, I'm of the opinion that there's a lot, there's too much content moderation going on um i generally there yeah there needs to be

Starting point is 01:41:14 more of a free hand um when it comes to speech at the same time um these are private companies um that are running these platforms and um you know they can they can moderate how they how they choose to that gets difficult that's that's where there's a lot of pushback from people because it's like well no they should be treated as common carriers like you know they're they're just the telephone wires now of our society you know they should be regulated like a utility and um and then we could tweak that now the problem with that is like you're going to regulate twitter like a utility well who's doing the regulating right like now you've just given the government you know the ability to tweak what the content moderation is what does the government does anybody really want

Starting point is 01:42:04 that i mean some people might but yeah a lot of people actually in a scary way yeah um what does the government do with the telephones do they give them like again uh uh uneducated view of it would be uh i can call you and say whatever i want and the telephone isn't gonna all of a sudden shut down or you know right my phone doesn't blow up in my hand you know like there's nothing kind of crazy that happens yeah but maybe that's not true i don't know um telephones you know there's like wire fraud and stuff if you commit crimes over the over the telephone you you know it's interstate wire fraud and and stuff like that but um but it's all it's after the fact right goes to court right it's not like all of a sudden that like at&t or verizon can't show up and be like we're

Starting point is 01:42:48 shutting down your service before you've gone to court yeah i think think of them what you know the analogy is i guess to like uh to broadcasters and the airwaves and stuff like that um and and regulation of that um and you know i'm not i'm not like a you know regulatory expert when it comes to that um neither i i know there is some you know that the first amendment does prevent what the government can do to to some degree when it comes to you know allowing like you know allowing counterpoints to be broadcast on, on, but yeah, so the first amendment still backstops what can and can't be regulated there. But, you know, like, so, you know, I, I'm not sure folks, folks who say they want regulation around Twitter and, and these platforms, you know,

Starting point is 01:43:45 I think they need to think through a little bit more carefully, you know, what, what that's going of mean um and if it's just that you don't like being you know you don't like the way a platform is is you know preventing a certain conversation from happening um again i just i want to reiterate like you really won't like it if the government's doing that yeah i mean it's it it's now one can argue well they essentially are captured by the government already um they don't want to run a foul of the government um because they're huge giant centralized corporations that are easy targets for regulation and antitrust which is you know what's what's going on um a lot of noise uh on the hill about antitrust regulation and breaking up you know these big tech giants again

Starting point is 01:44:35 yeah um so i don't know how true this is but um i saw a screenshot which again you know i hope it wasn't fabricated um there was a screenshot where uh are you familiar with this guy alex uh baronson i think it's how you say his name um he sounds familiar he he was one of the probably the loudest voice questioning uh the response to covid okay uh at least one of them and uh the screenshot was notes or communication uh inside of twitter after they had visited some politicians in Washington, D.C. And it was, and I'm paraphrasing, but basically something to the effect of like,

Starting point is 01:45:19 meeting went well, their main sticking point was like they were asking why Alex Bernstein hasn't been kicked off Twitter yet. And so it kind of shocked me a little bit. Like, you don't get to see these communications every day. Obviously, there's some lawsuit or something where they probably made public. But that was like a question like,

Starting point is 01:45:38 hold on a second here. Like, we have a government official when it was unclear who government or whatever but some somebody in the government you know apparatus asking a private company about it now what didn't appear to be the claim was they were demanding kick them off explicitly right implicitly right if you're asking about one of the 330 million people who happen to use a service or you know whatever the numbers are um how does that play like like right is that's that's normal i oh i don't know but you know that's an example of like well maybe maybe if maybe if it were all out you know the regulation were all out in the open

Starting point is 01:46:17 it would be better than this backdoor regulation that may or may not be going on i mean look we know there's a lot of interfacing you know back channel interfacing that happens um i don't know it's it's a huge i don't have the answers it's a huge huge issue um you know yeah society needs to be able to communicate freely uh with each other at the same time um you know companies should be allowed to make decisions you know for themselves um i mean that's that's uh Actually, there's a case going on here in Florida right now with the anti-woke legislation that was passed where a judge, I think it was maybe in the northern district of Florida, but a federal judge here in Florida enjoined part of the legislation that prevented private companies here in Florida from requiring DEI trainings, like diversity, equity, inclusion trainings. So the government said, you cannot require this. Yes.

Starting point is 01:47:27 The state of Florida said, here's a list of essentially viewpoints that were essentially like, you know, white fragility type talking points that you are not allowed to make it a requirement that- Doesn't mean you can't do it. It just means you can't require it of your employees. I don't know. I think it was pretty broad. That's what the opinion said. It was pretty broad. And enjoined enforcement of this saying like, look, no, private companies need to be able, it's free speech.

Starting point is 01:48:01 Private companies should be able to, you know, hire folks and as a requirement, you know, have them go to whatever trainings. That person doesn't like that training. They don't have to stay at that job. Like, you know, so that's an example of where, you know, content, the government's now engaging in content moderation or is trying to, state of Florida, on private companies. And the First Amendment still prevents that. The government can't regulate viewpoints. And so forcing Twitter to offer viewpoints,

Starting point is 01:48:42 I think that's still a violation of the First Amendment. If you're going to regulate Twitter and force them to air viewpoints viewpoints that they wouldn't air themselves it brings up it's weird because we're talking about twitter which is a huge faceless corporation yeah but corporations have speech rights too yeah it's um on all the platforms they do this now uh but we talk about all kinds of stuff on this show uh spotify and youtube are the two biggest ones where i see it they will put these labels over the content. Yeah, I've seen these.

Starting point is 01:49:20 And it's not a- Usually it's like COVID, learn about COVID-19 or something. Always learn about. Which is always weird because then I'll listen to like that podcast and it literally has nothing to do with, I almost think it's like random at some,

Starting point is 01:49:32 or something. I don't know the algorithms. There's two things that I'll tell you that I've noticed recently. And then I'll tell you a story when I worked at Facebook that will, I think, give people more context

Starting point is 01:49:44 about the internal workings of some of the content conversion. so uh if we mention the word covid spotify youtube bam you're getting the the label uh there are audiences where when they see the label like oh this is going to be good marketing uh not saying that's good or bad i'm just saying like i've seen the comments and for sure people are like oh shit you got the label i'm definitely listening um which like it's some weird like counterculture like the black flag yeah like just like some weird uh thing that comes out of this stuff um but uh also uh guess what the one topic is that without fail gets

Starting point is 01:50:21 suppressed like it it's so egregious now that it's impossible to ignore i have no idea not the virus china really we put a video up really it's like a joke now right it's like what are they what are they labeling it there's no labels it just you can just see it just goes into a regular content has like kind of an average you know velocity and all the stuff it's the shadow shadow banning type thing yeah and i'm sure that there are explanations whether i agree with them or not or you know whatever and all the stuff uh but it's fascinating to watch like yeah you know when you create a lot of content on the internet i think you pretty much know uh hey if i post this it'll be popular if i post this it won't be popular right yeah you've got a baseline now and there's certain

Starting point is 01:51:05 words that just you know that they're going to get treated differently and so what does it change the way the content gets created right because then people start to say like right joke like maybe we should talk about self-censorship and every time it comes up we'll just bleep it yeah so everyone knows it but like we had not done that um but when i was at facebook uh um i uh so i'd been in the military i was working at facebook um and i worked on the facebook pages team okay uh And we had a job where we were supposed to grow the pages and all that stuff. But it was a very kind of unique position because the pages was like the top of the funnel for their business product. So you got a page, it should be an advertiser, it should be revenue, like all that stuff.

Starting point is 01:51:44 And so you'd meet a lot of people around the company. And I remember I met a gentleman, and I can't remember if he reached out to me or somebody introduced him, whatever. And he was on a different team. But part of what he did was he was very interested in content moderation, specifically around specific groups from the Middle East that had either been labeled as terrorist organizations or were questionable. I remember talking to this guy, and he was like, you have no clue. Like a video will come out, and it's like it spreads like freaking wildfire, right? And it's not just one account. It's uploaded to hundreds of thousands of accounts.

Starting point is 01:52:20 So I remember being like, interesting data point. as it is you know three four weeks later a video comes out and uh i don't want to describe it in too much detail but basically it was uh they'd capture allegedly had captured a pilot uh and they basically burned them and it was all on video and it was done in like a very uh almost like a high school football highlight tape right and there's music and this and it was just so grotesque yeah got uploaded and there was an internal thing and i saw i got uploaded right and i i went clicked on it and i remember being like man i've seen some crazy shit in my life is bad and it was just getting uploaded over and over and over and over and over just all over the

Starting point is 01:53:03 place and they had systems internally to try to you know whether it's something about the video and the metadata or whatever and just try to identify it take it down take it down take it down it was impossible right just because it's just the scale of billions of users one video being replicated over and over again just all the stuff and i remember for the first time being like oh man if there was no moderation like there was if there was nothing and it was like completely wild west you know like you wouldn't go on twitter yeah right because the videos that would end up getting so much engagement and all stuff would be the most extreme things that yeah well that brings of an interesting question right like because of the the sheer number and size of you know the

Starting point is 01:53:49 sheer quantity of content that is that is available now on the internet you know back in the 90s it was like you were on chat you know rooms and message boards and you know there wasn't there wasn't that many people on the internet it was like 40 million people or something like that like in the 90s like it wasn't more people using bitcoin yeah that's right that's right absolutely that's where we are like um and so you know the necessity such that there is one and here it sounds like there absolutely was a necessity for content moderation especially when you're talking about right violent and it was like not just hey here's violence it was everyone else should go conduct violence right right um you know the need for that kind of moderation wasn't wasn't as

Starting point is 01:54:32 nobody was you could avoid the content let's put it that way if you you knew you you knew to like you know unsubscribe from that list serve you know if too much of that stuff came up and like you could avoid it i guess and now it's it's you know with you know billions of people on the internet and on these platforms it's hard to avoid uh content um well if you think that just the newsfeed right i mean the invention of the newsfeed itself of uh if you were on myspace and i went to your profile right okay i had navigated there or whatever but the invention of like let's take all this content let's put it into one specific location let's start to algorithmically rank it uh okay still that's like people that i somehow have connected with right whether i

Starting point is 01:55:18 friended them on the page whatever but then you get share on a facebook or a retweet on twitter and now technically yes if you retweet something i followed you but the velocity at which this information can spread is drastically different yeah then you know if you had to copy and paste it and go and like it's just different yeah and so then you also get into things like i don't know if you've seen on instagram does this a lot uh it's like they'll show you a post and they'll have a little thing at the top and it'll be like uh you're seeing this because you follow this account yeah yeah you know like some every once in a while i'm like oh like good good new account you know that's why i'm like this is kind of weird that's the reason i quit instagram actually

Starting point is 01:56:03 among many other reasons but yeah it just felt it felt like i was just grist in their advertising mill yeah and it was and it sucked because like i liked you know like i'm a photographer like amateur photographer and so like i followed you know just photographers basically and like that was you know accounts that had you know good artistic merit they love you guys they got the camera advertisers that's right that's right um and uh and but it was just like yeah it was too much like it was too in your face and so now you know so applaud them for putting that out there and saying like you know hey you're seeing this because because then i was able to make a decision to not use the service anymore but so we'll see how long they keep doing that yes um yeah and i

Starting point is 01:56:50 don't know if that's something that um you know that the congress wants to do i mean you know i know they've been holding tons of hearings on you know the algorithms and mental health and social media and um you know eventually i guess congress is just going to have to try and you know pull the trigger and pass something to regulate and then we'll work it out weird to me like it like it's classic uh grandstanding to some degree oh for sure it's always like this um uh i have a nine-month-old daughter right so like uh when i see the hearings and they're like teenage girls mental health i'm like by the way yes but so is the 65 year old man who's on the same platform like they're getting the same garbage as well right and like sure i get like one is you know

Starting point is 01:57:40 self-image and body and, and you're in a kind of malleable part of your life. And like, so there, there's a difference to a degree, but in some way it's like, no, this is like a humanity thing. Yeah. Right. If you sit and you just doom scroll all day long, like that's going to fuck with your mind. It has a serious effect on people's mental health. It's tough. Yeah. And people, people are not designed to have this like constant feed of information about the

Starting point is 01:58:05 world all the time. Right. Right. Like we're, we're not omniscient. Like where, you know, we, we, we developed and we evolved in these like tiny little communities, right. Where it was like your relation, you could like max out your relationship at like a hundred, right. Or something like that. I think there's been some like studies about, you know, networks and stuff. And, you know, basically like, yeah, individual humans, yeah. Top out. Yeah, where you can really like service them and, you know, and know each other well and create a society around that without some kind of scaling solution. So we're just not, we're not meant to have all this information, but here it is. I've noticed a trend in communication that maybe I wasn't paying attention before or whatever, but I now regularly get emails and people will say, you know, hi, Pomp. and then there's some qualifier as to how i know them what they do or where we met and then they whatever the email is about and like i'm sure that you know if uh if i walked up to somebody randomly on the street 20 years ago or something right and we started talking i

Starting point is 01:59:12 said oh remember we met yeah whatever right so so it's not that like this is some brand new thing right but it's almost like there's this expectation that the people you communicate with actually may not remember you or whatever and it feels like that is uh it's sad in a way but it's just the nature of like you know how many emails do you get how many people on social media like like you can't keep track of everyone right and especially if you haven't met these people face to face then you don't so now i ask myself like damn should i start off emails with like you know and it's almost like you're like oh this is definitely my medic response right like i see other people do it uh but but it does it does change the way that people communicate and interact and i don't know

Starting point is 01:59:48 It's just a weird freaking thing. Yeah, and I don't know what the answer is. But look, the conversation needs to be had. And I think ultimately the answer is going back to the internet and avoiding content and stuff. As long as there are forums and places where people can go to find the content that is not mainstream and that is being suppressed by these platforms.

Starting point is 02:00:16 like the alternate forums exist um and maybe one day those alternate forums and the ideas on those alternate forums um catch you know more mainstream you know uh acceptance and then it shifts and the bigger platforms are now you know just like you were saying with hunter biden's laptop and you know the the lab leak theories and stuff um you know but as long as there's as long as there is a forum somewhere for ideas um you know maybe that's the answer as long as you're not totally suppressing every forum um and and you know there's there's there was gab and there's truth social and you know there's you know 4chan 4chan and 8chan and 12chan and whatever chan it's up to now like you know those like you know kind of seedy parts of the internet

Starting point is 02:01:11 if you want to call it that um exist where you know those non-mainstream ideas can be discussed um as you know distasteful as the mainstream finds them or you and i would find them um the fact that they exist that's that that's good and that should be it's there's a market for it and you know even if it's small um and so yeah because you battling network effects is hard yeah battling network effects is hard and it's it's really hard even when you know when it's a level playing field and then when the network you know the owner of the network is you know using that network you know it's yeah it's tough it's tough to beat so the place i want to uh end on um you spent a bunch of time first amendment uh many other legal issues but uh if somebody

Starting point is 02:01:59 wants to go learn more about the first amendment and kind of how it's uh its role in today's like modern society i'll give one suggestion and then i'd love to hear from you where they can go mine is just go read the first amendment yeah like like i'm always surprised like by the way i don't have it memorized or anything like you don't have to be like a you know an expert on it but like literally just go read it one time uh so you know what's in there it's probably a good starting point um but are there other places that you would suggest people to go and get educated or things that you can feel like are good resources or anything um let's see um start definitely start with uh with the first amendment and read that it's not going to give you too much

Starting point is 02:02:40 uh clarity though you know as there there are lots of provisions of the constitution that uh you know we we don't have much clarity on and and then you know funny funny story real quick about that is you know i have like little pocket constitutions that i keep around the house and you know my my son i took it to like show and tell one time for like you know it was like a memorial day or something like that something something about america and then i also have like my law books and like some treatises from law school stuff and these are like you know a thousand pages and like 10 times the size of the pocket constitution and you know my son saw and was like oh what that's that's the constitution too i was like well yeah that's all everybody

Starting point is 02:03:23 fighting over what that little book and those little words mean is is right here so um it's a great way to look at it yeah there there are tons of treatises you can go and look at that's probably too high level you know if you're interested if you're coming at it from a perspective from you know like a digital assets perspective um coin center has a lot of great explainers if you just go to their website they have a lot of education material and they've put out some really good analysis of like um dex's decentralized exchanges and the first amendment um i i would suggest just checking that out uh and see what peter van valkenburg and um jerry brito have written over there because they're pretty good at laying things out, laying out the, um, the relevant

Starting point is 02:04:07 doctrines, first amendment doctrines that apply to digital assets. That's a, that's a good place to start. Awesome. Uh, and then for you and your practice, like what do you specialize in or folks want to reach out working? Yeah. So I'm, um, uh, appellate attorney, which means, uh, whenever there's an appeal of a judgment or an order, you want to reverse it or uphold it. Um, that's where i get involved and sometimes i'm involved earlier during the litigation we're anticipating you know appeals um uh so that's i do a lot of briefing and researching and writing and that's you know kind of kind of where i came into bitcoin and digital assets as i've now started to write and research on issues like the first amendment um that intersect with with bitcoin um and so you

Starting point is 02:04:53 can you can find me bitcoinbrief.io is my newsletter legal research newsletter where i cover a lot of these topics. Um, I've written some pieces for Bitcoin magazine. Uh, if you just go to like their search author page, you can find it. Um, I'm on Twitter, uh, at W a Daniel. Uh, and if you go to like Florida bars website, put in my, my name, William Aaron, Daniel, you'll, you can call my, you can, you can, you can, I'm doxing myself, you know, I'm out there. I'm, uh, you know, here's my face. You can find my office, call my office. Yeah. I, uh, uh, I do love a good, uh, good person to come up to me uh in some social setting and say like i'm so and so on twitter yeah and my wife always laughs she's like it's always like you know like crypto panda

Starting point is 02:05:36 how'd you call that name yeah no the the again nims are important yeah it's you know we've been bashing twitter a little bit but it's great that twitter is still you know twitter's most important platform yeah uh one of the most important platforms for sure in america uh i would argue that for most people or many of the people who are listening to this from a business professional career standpoint twitter is what linkedin should have been yeah which is like that's where you actually go meet people right and you have connections you have conversations yeah and and it's like cool you know yes the whole like linkedin profile of like what have you done in your career is like cool um but the social aspect is so powerful it is it's it's really powerful and

Starting point is 02:06:22 And it's, again, because you get to stay anonymous if you choose to on Twitter. I mean, I understand it creates a lot of bots. And we've got a big problem. Less than 5%. Yeah, that's what Elon was getting, being his bot about was all the bots. But it's important that we're allowed to have the option

Starting point is 02:06:44 to go into these public spaces and have these debates anonymously, just like our founders did. They were able to publish anonymously. have these really important debates about the direction of our country and the structure of our government anonymously so that you know their personalities you know they were they were public figures some of them their personalities didn't bias people to the message they were hearing uh so they didn't get you know backlash um it's it's important that we have these these anonymous channels yeah i yeah i appreciate your time this is a fantastic oh thanks for having me i feel like

Starting point is 02:07:20 I got a crash course. And my conclusion on many of these things is like they are way more complex than people on the surface realize. And, you know, in things like Tornado Cash, we're gonna have to wait to get a lot more information before we kind of understand how it'll play out. But it's concerning times,

Starting point is 02:07:36 but at the same time, I think it's, you know, important people educate themselves so that they are informed in terms of how the direction of this stuff goes. Exactly. Couldn't agree more. Thanks so much for listening to today's episode. I really hope you enjoyed this one. Make sure you're subscribed on Apple, Spotify,

Starting point is 02:07:53 or your favorite podcast player. And if you're looking to transition into a brand new job in the Bitcoin or crypto industry, we've got you covered. Head over to thecryptoacademy.io. My team and I have been working with the top HR teams in the industry to develop an intensive three-week training program

Starting point is 02:08:07 with over 50 live events. We teach you exactly what you need to know to break into the industry, including live interview prep and resume review. Our students have been hired at over 75 of the world's best Bitcoin and crypto companies, go to thecryptoacademy.io to learn more. Again, that's thecryptoacademy.io.

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The Pomp Podcast - #1079 Aaron Daniel On How Free Speech Is Under Attack

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