The Pomp Podcast - Charlie Shrem, Founder of Crypto.IQ: The OG Stories of Crypto

Episode Date: July 8, 2019

Charlie Shrem is the founder of Crypto.IQ, and one of the earliest proponents Bitcoin. In this conversation, Charlie and Anthony Pompliano discuss the early days of Bitcoin, what it was like building one of the first Bitcoin companies, what he experienced when he was arrested and put in jail, and how crypto has changed over the years. You can listen to Charlie's podcast, Untold Stories, here. -----BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. -----If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Charlie Shrem is the founder of Crypto IQ and one of the earliest proponents of Bitcoin. In this conversation, we discuss the early days of Bitcoin, what it was like building one of the first Bitcoin companies, what he experienced when he was arrested and put in jail, how crypto has changed over the years, and Charlie shares a number of great stories that I found both informative and entertaining. I really enjoyed this conversation. Charlie was super forthright and entertaining, and I hope you enjoy it nearly as much as I did.

Before we kick off this podcast, first a word from our sponsor BlockFi. As many of you know, crypto investors store their digital assets on exchanges or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their investment holdings or build overall wealth. With the new BlockFi interest account, users can now securely store their Bitcoin or Ether at BlockFi and receive 6% annual interest paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out BlockFi.com slash Pomp. Again, that's BlockFi.com slash Pomp to sign up and start earning crypto today. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by

Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Super excited. Bang, bang. Charlie Shrem, thank you very much, sir, for coming on this is going to be probably one of my favorite episodes so i appreciate you uh spending the time of course thanks for having me all right you are a uh you are a bitcoin og let's talk about life pre-bitcoin though what uh what'd you do beforehand uh before you ever

discovered internet magic money you know i didn't even know what og had stood for until like extremely recently um original gangsta i guess but i always thought like og was just that acronym that didn't really mean anything no man you're a legend you are a legend what so i grew up in i grew up in brooklyn um i grew up in brooklyn and um actually for 12 years i trained i went to like a very religious yeshiva and i was supposed to actually become like a rabbi um i studied a lot from first grade to 12th grade i was in like very religious school and i did the whole i was extremely religious orthodox i kept kosher didn't eat my first cheeseburger till i was like 20 years old um you know i was very very uh religious and into that until i heard about bitcoin no it's not

really what happened but um eventually you know over the course of a few years and i one of the first i'm actually my first family member to ever go to college i went to college and i started like thinking for myself and not thinking from what people were telling me what to think and that opened up a whole world of socioeconomics and the study of humans and why we do things and how we do things. And that always intrigued me and interested me. And I started questioning the religious faiths that I had known growing up. And that kind of changed my whole life. I started traveling a lot. And then my first startup when I was in college, besides for fixing people's printers and things like that, which I would charge like an hourly rate for in high school and first year,

year of college um you know like people would call me up our router is not working i go and you know i just have to unplug it and replug it back in and they'd say like oh what do we owe you i said well it took me like two seconds so whatever you want like 50 bucks was awesome because back then no one really knew how to like operate wi-fi or networks you know like a linksys or netgear router was um was so basic and we're talking about like the early 2000s and then um my first startup um i didn't even know what the word startup had meant i never heard that term before because i didn't grow up in the startup world or the silicon valley world i was just a brooklyn boy um was my cousin called me up and he said hey you're good with this internet stuff right and

i said yeah and i'm i'm i'm the year i'm this is the summer between high school and first year of college okay and i said yeah i am i know this computer stuff and he said um all right well we have all this extra crap in my warehouse because he saw he had digital camera stores he had digital camera stores all over new york you know nikons kodaks uh speakers microphones guitars you know like all audio equipment that you'd see in the on fifth avenue on broadway when you're a tourist in new york all that stuff and so he um he said i have all this extra stuff if you can put it on the internet just get rid of it for me i'll you can have it at cost keep it in my warehouse you sell it you come in you tape the boxes yourself ship it and you just pay me for

whatever my cost was and i said sounds great i'll try it out i'll try it out you know so i launched a company called dailycheckout.com and if anyone goes on youtube and they type in charlie checkout daily checkout, you'll actually see some really embarrassing videos of me when I was like 17 or 18 years old, just doing these stupid product reviews of like dental floss things and shavers and electric toothbrushes and shower radios. And it was like so embarrassing. People will play them at dinner parties and stuff like that to embarrass me. But it worked and it was one deal a day. So I had 15 cameras there. I blow it out, 15 cameras in one day. I'd sell the shit out of it and then move on every day a new product this was pre-groupon this was pre um any of these

deal-a-day sites this was about the same time woot.com was starting woot ended up selling to amazon we were a deal-a-day site and then eventually a lot of other local companies that has stores that had a lot of crap laying around this and charlie call us up um come by and see what you want you know and i would go and literally scour their warehouse for stuff and i don't have to take on any any supply because i would i don't take on any inventory because they would hold it for 24 hours for me. I'd sell the crap out of it. And then I just buy from them what I sold.

And then I just ship it out of their own warehouse. And then eventually I started working with some drop shippers. But it was like a deal a day, one deal a day. And I would do things like, for example, shower radio for free, just $5 shipping. My cost was a dollar. It costs a dollar to ship. So I make three bucks on it.

I love that. Charlie Checkout is the greatest nickname of all time. it was so i i can't believe it was so stupid some of those videos i cringe when i watch them like i didn't so the problem was i don't know how to use half the products that i was advertising the reviews for so like i was selling a one of those reed diffusers i had no idea what a reed diffuser was so here i am like on camera trying to like take apart i'm like what are these sticks for and then there's the juice and i think the juice goes up the stick and i don't really know what's going on here but it's a great product and it's free just pay

shipping. So crazy. And what was the kind of evolution of that? So you started out with the cameras and then you started doing other products and stuff. And how big did it get? It got pretty big. We had a few people working for us. I think our top sale, we sold five or 6,000 pieces of a router one day. That was one of our best sales. And it was great because that paid my way through college. I wasn't thinking of like exit strategy. I just said I was making money. I was making $600 a week, which for a 18 year old kid was awesome money. And I was i was in i went to city university of york and um paid for school and i had a my own car and i was financially independent in my first or second years of college and it was great um and it was

just kind of like it got automated like just mundane kind of boring and then while i was running that is when i discovered bitcoin around like 2011 and i remember i had fell in love with bitcoin i wanted to do something bitcoin related there was no money in it bitcoin wasn't trading really anywhere and i told my my cousin joey who owned the daily checkout with me i said joey like i'm done yeah sell sell the company figure something out you know like you you run it i need to do something with this bitcoin thing i need to figure this out because i don't have time for for selling you know i don't have to i'm doing the videos and that's when it really went downhill because people love those videos but i was so engulfed in bitcoin i had no passion anymore

to do those product videos anymore so i just started doing bitcoin all the time wait hold on Who, do you remember the first time you ever heard about it or kind of interacted with Bitcoin? Yeah, I had a, so at the same time I had this, um, this site that I started with, uh, this Norwegian kid and this, um, this kid from, um, this kid from, uh, uh, Manchester in the UK. And it was, um, it was, uh, called extreme root.net. And it was like a, kind of like a gray hat forums where you just talk about hacking and,

and you know root kits and and sql injections we never like did anything but it was a very um it was a very um well-to-do forum like it was it had a lot of activity and i had this when i was in high school and then uh we had an irc chat room uh and we had our irc network that we owned it was called evilzone.org and it was us and a bunch of other guys that that ran evil zone and we were one of the largest rc networks other than freenode i think it still is around uh evilzone.org i'm not sure what's going on with it but we had irc we were in a lot of ir i was in irc a lot and for those of you listeners who don't know irc was like the original chat network irc was where you can go on your computer log in and it was like the decentralized um chat chat system where you

can log in and be you know somewhat anonymous hide your identity but also talk to other people you had no idea who they were where they were it wasn't like aol instant messenger it was um just irc and there was a bunch of different networks and servers and channels and you could talk to people and it was in one of those irc chat rooms when someone had started talking to me about or talking in general about bitcoin um i don't have a date pinned down i should have well in hindsight i didn't we didn't really know how big bitcoin was going to get but i wish i had written it down or like have some records of it um because it could have been a cool chat to read about because the chat went something like this where um we were talking about bitcoin and i'm like all right

so what's the big deal it's just like a downloadable version of paypal and the guy is like no no no it's not really like that because i had everyone knew my story i was helping this uh there's not often in israel for uh terror victims like raise money in the u.s for for kids who wear their um their legs were blown off and terrorist attacks and stuff like that so we're helping them buy prosthetic legs it was part of a charity that I was involved with growing up and I had helped them set up a PayPal account to accept donations because when they go on the road a lot of people were using PayPal in like 2004 2005 but then PayPal froze the non-profit uh their PayPal account because they were an Israeli non-profit and they had a they had a kid who was actually ended up

being in the um the Paralympics in London and he he was in in the U.S. in Long Island actually because there's a very, very big fitting place in Long Island. I forgot the name of it, but it's where you can get prosthetic legs and get them fitted and everything. It's huge in Long Island. I forgot the name of the town. So he was in town and I was in Brooklyn.

So I was hanging out with the kid and his new leg was like charging in my room. It was so funny. My mom would be like, hey, Asael's leg is charging in our living room right now. Like, what's the deal? Yeah, it was creepy a little bit, but we have to pay for the leg.

And what happened was PayPal froze the account. and i flipped out because i'm saying like this is their money how could you they got donations this is their money and paypal wrote us an email and i have the regime it's like no um we've determined that you're not a real non-profit and you can't do this you can't raise money so the money is frozen for 180 days and after 180 days you can have the money but you're banned from paypal for life and i was livid because here i am this was a negative representation on me because i was the one who told them to accept paypal as donations so i was really embarrassed to be honest with you and when he so i was like always against paypal from those days because of when that happened

and so when when um this person you know in 2011 was was talking to me about bitcoin i was like well so it's it's just a downloadable version of paypal what's the big deal and um this guy explained to me that no unlike paypal the the the ledger or your account i forgot how exactly explained it but he said your account is actually on your own computer i said okay so i literally downloaded it i saw like you know the the the blockchain was actually on my in those days download the blockchain would take 10 minutes there wasn't much to sync um and it was actually there um and so he explained to me that when he sends me a transaction he sent me a bitcoin or whatever it was when he sends me a few bitcoin to test it out the transaction doesn't actually

doesn't only in real time update on his ledger and not only on my ledger but are also updates on the dozen or so other people who are running the bitcoin software in real time and that just completely blew my mind i mean because when you see that right you've got to understand probably i don't even fully get what's going on but this is different and is potentially very powerful right i didn't understand mining i didn't understand i didn't understand any of it i didn't read the white paper and it could have been a scam a hoax but the fact that how cool it was it was just cool to see that this transaction and when i had created a bitcoin address that bitcoin address was on a in someone else's computer that was the cool part how hey charlie

i law i create a bitcoin address only software and all of a sudden and my friend joe in new jersey my friend joe's computer he downloads the software after me and he opens it up and and he can check the explorer and see my stare with the transaction that was cool like that was so cool it still is cool right what up all right so so you you're you get fascinated with it and you say all right let's get rid of the uh the daily deal site what do you do uh first when you go into bitcoin um just join the forum so in the beginning um it's a great question i never really talk about this but in the beginning actually my first job in bitcoin was i would buy uh airline vouchers on craigslist and then resell them for bitcoin so i had this little side business going where

a lot of you like had a flight that you were that was delayed in in those days now it's different but in those days like jet blue american whatever would give you like a flight voucher that you can redeem for yourself or you can actually like give it to someone and they can redeem it on jet blue or whatever for a flight a lot of people would resell them so if you had a 500 flight voucher you can probably sell it on craigslist for like 400 bucks so i would go i'd buy 400 bucks and then i'd resell it on bitcoin forums for like 450 and that that's how i originally got into bitcoin i was just selling on the bitcoin forum um for like 400 jet blue vouchers for like 100 bitcoin whatever it was i love it i love it and so as you're doing that uh using bitcoin just because

you thought it was cool or literally thought it was just better way for payments what was the the genesis or did you actually think it was going to appreciate value no so no one really thought it would appreciate in value but what what bitcoin was in the beginning was you're using it's hard to like quantify it but you're you're using a you're using a financial system that's not like controlled or created by or um that's um i i wasn't even thinking like manipulated i wasn't thinking all those economic terms you know then i was still like a college student right so i can't tell you, oh, I was thinking about, you know, like a debasement of currency. I wasn't thinking that stuff yet. I was still a kid, right? I still am a kid, but I wasn't thinking that stuff. So it

was like more of just, it was cool. It was cool to be using a payment system that was on forums, that was being used by like-minded people like myself. You know, I grew up in a very religious bubble where the internet was not really used. So the internet was my family. The IRC chat rooms were my family. These were people who got me. They understood me. So here's now a financial system where I can increase my financial, as my therapist says, my financial independence by now utilizing this alternative financial system. And that's why I kind of fell in love with this because it was a way for me, for Charlie to become more of my own person and not a person that someone else wanted me to be it's crazy and so as you're doing this right and you're using bitcoin um at what point

do you discover uh silk road so silk road was something that was already there i think around the time of 2011 i believe um and it was kind of like the um silk road is kind of like the the neighbor down the road that you know is selling drugs but you just kind of pretend that doesn't exist um that's kind of like how everyone thought of slick road back then um some people were very like for it some people were against it um i wasn't really either i was just it's there it's it's something that's negatively affecting bitcoin and it is what it is um and frankly i didn't really i didn't we didn't really pay much attention to it um back then but eventually um i realized that there were customer of bit instant which we could talk about you know

BitInstant, my company that were buying Bitcoin and then like reselling those Bitcoin to people who wanted to buy stuff on Scrooge. Got it. And so the reason why you knew this was because you had BitInstant, maybe just tell everyone what it was and why you started the company. Sure. So around mid 2011, I met on the Bitcoin forums, I met Gareth Nelson, who had talked about an idea of making it much easier to buy bitcoin and gareth is a brilliant um welshman in wales who between his like heavy welsh accent and his um um asperger's i him and i can never understand each other so in like a three-year business relationship with a multi-million dollar company that was very successful we probably spoke on the phone a total of 15 minutes in like

three years we did everything was like over irc everything our whole business relationship was over irc but it was his idea to actually he originally bit instant was called fast mount gox pay and the idea was what the the really the only liquid way to buy bitcoin back then was through mount gox magic the gathering online exchange um which your listeners probably know about and everything and that was really the only way to buy bitcoin there's a few other ways like Tradehill and some other ones, but the one with the most liquidity and the most market share was Mt. Gox. So what would happen is to actually get Bitcoin on Mt. Gox, you'd first have to fund your account. Mt. Gox only had bank accounts in Japan. They didn't have any accounts in Europe

or in America or anything. So every single customer would have to wire money to Japan and Mark Karpelis would have to manually approve the wire. So at best, it would take like four or five days to get a wire and that's if when you walk into the bank they don't convince you that wiring money to some guy in japan is a bad idea so you can imagine like the onboarding of bitcoin was really really really difficult the only way you can get it was by working forward getting service someone paying you or trading with someone but there was no like say all right i want to buy some bitcoin right now how do i do it there's no none of that there's no coinbase there was it was nothing it was mount gox um so the idea behind bid instant was hey what if i keep like

10 grand in my mount gox account and if you give me money here in the u.s minus a fee i'll transfer money from my mount gox account to your mount gox account so then you can buy a bitcoin that was the original concept of bid instant and so originally we had we had signed up with um a company that had maintained bank accounts at a bunch of different banks and they had the software where you can deposit cash or a check into their bank account and then they'd alert me that this customer deposited this amount of money our average ticket was maybe three four hundred dollars and then when you do that we would get a notification in our software that you deposited money and you had already come to our website in advance saying hey i want to go and deposit

three hundred dollars at wells fargo this is the location i'm going to use the software would say okay, deposit $300 and 72 cents. And based on that, they can tell which transaction was for which person. And when my software would tell me that, we then transfer the $300 minus 3% or whatever it was to your Mt. Gox account. And when we first launched in 2011, 2012, we were doing tens of thousands of dollars a day. Well, a week at first, but then a day. And we needed to raise money. So, um, went into like every VC in Cal, this was like, this was about, uh, maybe like October, 2011, November, 2011. I went to Cal, went to California. I went to every VC and I begged and I begged and I begged. I went to every VC in New York and I begged and I begged. I said,

please, like, let me take a loan out. I'll pay you back against the company. Look, the money is just for flow. It's just sitting in a bank account. I'm not like spending it. Um, whatever terms you want but this company is growing it's growing so quickly my mom had given me a loan um and i couldn't i couldn't raise vc money so then eventually um i went on the bruce wagner most people don't remember him but he was he ran this something called the big uh my bitcoin and the bitcoin show and i think he actually ended up exit scamming a lot of people but he um had a had a uh a talk show like an internet talk show and so i went on his show and i literally got on my knees and I said please like anyone who has money and that's when a funky guy named

Roger Revere called me up on Skype like two hours later and said just tell me where to wire the money I'm in we'll do the details later and he wired like $120,000 or something like that and he was the first investor of BitInstant. So he literally heard you basically on the internet talk show pitch BitInstant and reaches out to you on Skype you got like what is that conversation like when he reaches out he he skyped me he said hey i'm you know i'm this guy roger veer i own this company called memorydealers.com i live in japan i live in tokyo and i love bitcoin i'm so interested in it and i heard i watched your show your episode and from what i understand this is what you do and i live down the block from the mount gox offices so i'm comfortable with mount

gox and so if you're going to keep money at mount gox and i can invest in that then i'm in how much you need? And I said, I only need about a hundred something thousand dollars. He said, okay. And the deal was he ended up getting like a decent, um, percentage of the company. I think we've only valued the company at like a half a million dollars back then. It was like a super low evaluation, but I didn't, again, I didn't know what I was doing. I don't, I wasn't a VC. I wasn't an entrepreneur. I don't even know if I knew what the word entrepreneur was. Um, I was just kind of going with the flows learning on the way. He gave you a hundred K for like 20% or so, you know, some, some double digit percentage of the company. Yeah. Yeah. I don't remember exactly the number,

but it was like that. Yeah. And he sent it to you in Bitcoin or US dollars? Dollars. Dollars. All right. So you get it. You just keep building the business and you talked to Roger a lot at that point. Not, he was just kind of a quiet investor. What was the relationship? Roger back then was one of my best friends. Um, we talked very frequently and I looked up to him as a mentor I looked up to him as the older brother I never had, and we spoke frequently, and I took his word as gold, and we became really, really, really close, and to side point, you know, like when I had gotten out of, when I was in jail a few years later, and we'll go back to the early BitInstant days, But when I had gotten out, when I was in there, I missed a lot of the early Gavin Bitcoin XT drama. So when I got out, it was at the height, almost like the very big festering, but where I just still had a lot of credibility of the big blocks versus small blockers. so when i had when i had you know very rationally made my decision to to follow you know bitcoin

core in in the original way as i perceived you know to i thought was the best way to further bitcoin he saw that as a huge betrayal and we haven't spoken since he actually disinvited he didn't come to my wedding um and it was very very very very difficult yeah that's very hard all right so that's a friendship that i wish i didn't i didn't lose but something changed with him i don't i don't know what that was yeah but he changed any any suggestion what or thought as to what it could have been uh i've had people tell me that they think he got abducted by aliens i've had people i i don't think it's that i think roger deep down is a good person um he would give you the shirt off his back he really what he would do anything for for you um he's just one of those

guys who is extremely loyal um to his friends and to his family but um for better for worse when roger believes something to be true he is extremely steadfast in that belief and nothing you say or do can change his mind um he's a very ideological in the beginning when he was like that with bitcoin he was one of the first people to really be the public wealthy evangelist for bitcoin and he would go out there and he would fund people he would say oh you're a good speaker i'm gonna get you to speak at this conference and i'm gonna pay for you to get out there he he would do he spent hundreds of probably millions of dollars of his own money to to to bring about where bitcoin is today and a lot of people who are very against him don't realize that he you know and listen i have

you know you can't say that him and i are friends now because he hates me like literally cannot stand me so i i can say this but um it's a shame because i love the guy but he he um supported bitcoin so much and did so much good things because he was so steadfast you can imagine how many people tried to talk him out of bitcoin from 2010 or 2011 up until like 2014 before there was the whole bitcoin cash drama you can imagine everyone trying to like talk him out of it and so that's that's he's you know it just became a negative thing yeah it's crazy so all right so after he invested in a bit instant what uh what do you guys do so we we had started a bit instant but instant was growing and that's when uh bitcoin kind of like started really taking some

it started getting really serious um am i really serious like bitcoin had broken a dollar and that was a big deal because now we're like one bitcoin is like parody to one dollar it started getting some real attraction and then it dumped back down to like 30 cents and i lost a bunch of money um it's i know it's crazy to like think that today where the price of big guys four thousand dollars for one bitcoin but i actually if i the most amount of money i ever lost on bitcoin was when i bought bitcoin at 32 and then it went to 36 and then it dumped down back to like 10 I think or whatever like seven or four and I sold it all out because I was like I'm wrecked I'm done really um yeah I got wrecked on that pump on the $36 pie I'm wrecked because at that

point I'd bought a lot I spent like 10 grand or whatever well I don't remember the exact number but I bought a few hundred coins or whatever it was and I got wrecked and so when you sell there are you thinking this is over like this is done yeah because how can someone how can you possibly how can i possibly go to someone and then and preached and then this thing that had just went from 36 to six how did you get back on the train just time time time it just once you know after a few months bitcoin was still just chilling out at that you know the ten dollar rate and it just and then all right we're like all right it's not going to zero it's gonna hang out you know um and so after that that was the building time it was during the

bear markets that the real building happens um during the the bull market is you kind of sit back and enjoy the ride and then when the bull market's over and you made your money or you did what you did you traveled whatever then you're like all right now it's time to build again um and that's kind of how it was in the first few of them um i remember they like the first cnn article came out about us because we were launching like a bitcoin debit card in 2012 i think it was and the mastercard called us up and canceled it you can't do this mastercard because i had stupidly on irc chat room at three o'clock in the morning tease a picture of what the bit instant debit card was going to look like and it had a mastercard logo on it and that was like stupid of me um

and so we were growing the company and everything was really going great and really going well and And we ended up getting another around like a million and a half dollars from Cameron and Tyler Winklevoss and a bunch of other investors. A lot of the crypto guys that you know, you know, I don't have their permission to say their names or not, but a lot of people that you know were early investors in BitInstant. They really helped us out a lot. So a lot of early guys would dabble in the crypto world by investing in BitInstant because we were really like the first investable company that there was. We were a real company with real staff. i was the first bitcoin company to offer health benefits that's something that i'm really proud of we had employee benefits we were the first real bitcoin company with an office in new york

in the flat iron district with hr with a bookkeeper with everything and that was um when you wanted to see like the physical manifestation of bitcoin because bitcoin was so digital you just show up at our office and people would like all right now i could see it's like all right here's the physical aspect of it yeah it's wild that you were that not only were you running the first company with those criteria but also many of the people who are well known today were around then and believers was um our just he was like i remember roger calls me up and he's like charlie you need someone to help you with like marketing and communication I was like, why Roger? And Roger's like, because he needs to shut up. He's like, you need to shut

up and just sit at your desk and work. Because I love going on the press. I would love talking and I would drop in our new products. I would do that, but not strategically. So we'd have a new product coming out, but I wouldn't do it. I'd just start talking about it. And Roger would be like, well, Charlie, you had a good opportunity to launch this new feature, but you just started talking about it on IRC. You need a marketing person. You need a person. Your website sucks. Our website was so ugly. Gareth had built it. And it was literally just like, it was something that you can HTML code in like a notepad. It was just one orange background with a bunch of texts. It was a one page, super crappy site. And so he said, you need to redesign your, you need marketing. I said,

well, I don't know anyone. I don't know how to even hire people. So Roger's like, okay, I know this guy. I met him on the internet. His name is Eric Voorhees. He's a real estate agent from Dubai and he lives in new hampshire now and he's a big libertarian and i was like i don't like him i already don't like him just from that description i don't like him and roger's like charlie hire him i was like i was like if i really know him he's in new hampshire he's like charlie i'm gonna send him to meet you in new york they're gonna like him just hire him and and he's like you know what charlie if you don't hire him i'm gonna hire him for you and i'm gonna pay his salary out of my own pocket but he's just gonna work for a bit instant that's how much you'll like him it's like okay

roger so eric hopped on a train picked him up at the train station came to new york uh i was actually that day um was something called new york tech day it was the first new york tech day it was like i think it's 2012 and we had a little booth and i actually have the picture it's adorable because it was the first time and the only it was the first time and the last time i grew my hair out and i'll never do that again now i keep my hair like a buzz cut so i had my hair growing along it was like really ugly my actually my like one of my teachers in in college was like charlie you must have no friends and i said what do you mean and she's like because none of your friends have told you how ugly your hair looks right now um because it was so bad it was so

bad it was it was like i'd use like a half a bottle of gel just to keep it down because it was like a big jufro right a big afro um and so eric came down and and we immediately became best friends um immediately became best friends that day and i was like all right roger i see why this guy eric is brilliant and so eric and roger were like very big uh libertarians um so much so that roger is probably i don't know how he defines himself i think he says like voluntarist he's more of like you know like anarchist anarcho-capitalist but if you look at like if you look at it like a spectrum like a scale from one to ten ten being like full anarchist and one being like full government lover um eric and roger are probably like seven eight nine and then and i was

like like at a five maybe like half half you know i wasn't like libertarian and from any i was like probably a registered republican i didn't really understand how damaging the government was to business and this was like this was like right this was right after the date the recession this was like you know 2008 2009 so this was 2011 um and they used to joke they used to call me the statist i got like a they take a piece of paper and on my office door at the bit instant door they would actually had a piece of paper that said status office um because i was they they joked that i love the state that i was like a statist i love the state just because i wanted i wasn't as much libertarian as they were um but really it's because i just hadn't seen the light

at that point so crazy um all right so eric starts helping out and then what happens so eric started eric started helping out and um by the way if we talk over and it's too much for like one episode you could even split into two episodes i just like talking um we're gonna talk until you're done talking all right cool so so um what was your question what so eric starts working with you and then and then what uh goes like what do you guys do after eric starts working with you so eric starts working uh for the company and we started growing i think at our highest point we had um 30 people working for the company maybe um eric and ira it was like the dream team it was like kobe and shaq you know it was me eric and ira and roger and unfortunately we you know

we had some investors that didn't like that and ended up the company you know eric and ira left and um we remained friends but they ended up starting their own thing eric and ira moved to panama and and i didn't want to move the company to panama i was still in new york um i don't want to leave my family and like my parents and stuff so that was kind of like the big the big thing um and so we we um the you know the at that point that was like the hype but once the dream team left i had to hire people to replace them and it never it never really like i lost the passion i lost the flair for that instant when i lost eric and ira ira miller so eric was our chief operating officer and ira was our uh chief technical officer alongside gareth so um because we had a we had a

you know developers in our office but gareth who was this brilliant guy who had built the company and it was his idea he was the original developer he couldn't really lead teams so what would happen is him and ira would work together and then ira would lead the development team and it was a great relationship. And around that time, you know, around that time is when Coinbase launched in early 2013. And, you know, we had some more competitors in the space. And then I remember FinCEN in March, I think in March of 2013, came out and said that the Financial Crimes Enforcement Network of the IRS came out and said that basically Bitcoin is now considered money and um companies that are operating in the space are money transmitters and we have been

trying to get money transmission licenses at that point for a while or at least get like an agency relationship with another company so if we would be like a an agent of a company that already had licenses it would be great because then we can operate and have the licenses and be all compliant and everything but um at that point we had to shut down the company because we didn't have the licenses and there was clear rules at that point so we shut down a bit instant with the idea that we were going to relaunch um and uh a few months before that i had i had founded the bitcoin foundation with roger and a few other guys and i was kind of living the living the life uh bitcoin was going through its real first major bubble to like a thousand dollars twelve hundred dollars

was the peak um you know i was like i walked around i was this 20 some 21 year old kid i acted like my shit didn't stink i got a half a million dollars in the bank or 400 000 which was to me a lot of money and i acted like i had all the money in the world and i was just traveling around for the foundation giving talks and stuff like that and then um january 25th 2014 so the first few days of 2014, I was flying home from Amsterdam from giving a talk. And as soon as I got off the plane, a bunch of federal agents walked up to me and said, Charlie Shrem, you are arrested for money laundering and a bunch of other charges. Come with us. And that was the pivotal moment of my life. And so while you're doing all of this, you're essentially, you have no clue that

there's an investigation or anything going on or you knew that they were looking at why does everyone ask me that people always ask me like did you know like how could i have like i guess it's a good question it's a good for me i was like saying well how how could i have known like you know they don't tell you if they're investigating you but i guess they do you know they kind of do sometimes yeah they do but i i know no i know i was completely in fact i didn't even know what i was being arrested for it wasn't until the next day that i was speaking to my lawyer through a glass window that i actually hadn't figured known i i didn't know what was going on i thought it was something to do with related to to the to bid instant not having

licenses wow and so all right so when that happens they come they get you at the airport they take you to you know jail or whatever and uh and do they interview you do you take the fifth like how does that go between that and the first time you talked to your lawyer to be honest it was that 24 hours was such a blur i don't when you know when you go through very traumatic things you don't remember them and it's it's cliche to say until you actually go through them but i really don't remember much of the first 24 hours like i remember like you know in movies how when someone blacks out they kind of show like darkness and then they open up their eyes and then some two second scene happens then they close their eyes and then like three hours later it's a

different scene. That's what I remember. I remember very, very, very small bits and pieces over the next 24 to 48 hours. But yeah, I was, I was transferred around to a bunch of different holding cells, different bookings, um, ended up spending the night in a solitary cell in a metropolitan correctional center in New York, um, by the federal courthouse there. The next day is when I finally spoke to my, to my lawyer and I figured out what I was actually being arrested for and the rest is kind of like history you know yeah and so so when that happens right what they just for the people i don't know maybe explain like where the money laundering charges etc like what was the genesis of all of this from the law enforcement side my case had had my case had

um come out of investigations into silk road and what what had happened was you know we had tens of thousands of customers of BitInstant. And in the early days, I was the CEO of the company. I was a compliance officer. I cleaned the toilets. I did everything. I was the only employee of the company. It was me and Gareth.

Did customer service, did everything. And so we had a customer who was buying Bitcoin from us. He was buying Bitcoin from BitInstant. And then he was taking that Bitcoin that he was buying from us and then advertising on Silk Road saying, hey buy bitcoin from me i'll sell you bitcoin and so he was like a reseller of us he was reselling bitcoin he was buying from us but he was advertising primarily on silk road to people that wanted to buy things on silk road and i and i knew that because he was sending customer service

emails when um things would fail things would not work he was sending customer service he was like referring customers to us basically and when when and i knew there was one email that i had written to him like you're bothering me you're annoying me i know you're advertising on silk road stop bothering me right now because i was like dealing with something i think i was in a bad mood that day and that's um so i ended up um you know that is against the law you can't help or be in you know even as indirect as you can be you still can't be involved in stuff that has to do with with illicit things. And so I broke that law and I ended up serving two years. I served 18 months in federal prison for aiding and abetting the operation of an unlicensed money transmitting

business. It's crazy, man. And so I think a lot of people, when they hear your story, right, you're known as one of the first pioneers in Bitcoin and building companies and infrastructure, but you're also one of the first people to be punished for actions around Bitcoin. what was the community's response when all this happened? Like, were you able to talk to anybody in the Bitcoin community after the arrest or even when, uh,

while in prison or were you kind of cut off from all of that? And you really didn't know until you got out. So when I, when I had first gotten arrested, um, I was on house arrest. So pending pending trial, I was on house arrest.

And so I lived in my parents' basement in Brooklyn. Um, excuse me one second. Um, I lived in my parents' house in Brooklyn and I was on house arrest. So the first few days were kind of like, what's going on? People don't really know to support me, to distance themselves from me. The Bitcoin Foundation emailed me and said, like, you need to resign right now, which I kind of felt a little bit of a betrayal because I had, you know, built that thing and I was the vice chairman and it would have been nice to have them stand by me. but I understood that because I wanted the foundation to be its own entity and not be pulled down by my stupidity. And so, um, you know, the, the cards fell where they fell and a lot of

people rose up and stood by me. A lot of people distance themselves from me, a lot of people in the industry. And it was really, it was so, it was so great. A lot of people, you know, cause I lived in, um, I had to live in my parents' house. I couldn't live in my apartment cause my parents had put their house up for bail. So I had an ankle monitor. I couldn't leave my house. For the first few months, I actually couldn't leave my house at all except to go to synagogue and to see my lawyers. That was it. That was the only reason I could leave my house for the first few months. I was just in the house. It's not like I had a yard. It was Brooklyn. It's just cement everywhere, no grass. So that was very traumatic. I started drinking a lot. It was very, very,

very difficult. They had, my parents had forced me to, and that's, this is a whole nother side story, but you know, I grew up very religious, but my current wife, she's not Jewish. So my parents had used the bail against me and basically said like, you have to break up with your girlfriend or we're going to pull the bail and send you back to jail. And that's a whole nother side story, but it was very, very rough few years. But the Bitcoin community to a large extent, i would say like 75 of them stood by me and came to my house and visited and you know we had like poker games at my house a few days a week and people would just show up like like one day one random wednesday like marco santori just showed up at my house with a bottle of scotch and we just

sat around and drank it you know and it was just you know really people in the industry that had to lose had something to lose by publicly associating themselves when he said we don't give a shit and we're going to stand by charlie regardless and that was really such a beautiful thing that members of the community did back then is there anybody or like any one story other than the one that with marco that you really remember is like wow that somebody went above and beyond or somebody that sticks out in your mind during that time so there was a there was a bitcoin conference and i forget which one it was a really big bitcoin conference i think it was like the first it wasn't consensus but it was there was a big conference in new york and i forgot what it

was and it was a really big conference for at the time i think it was like 20 it may have been consensus actually it was like 2014 um so i don't remember the exact which one it was but it was it was huge and all my friends were in town um you know because the conferences were the were the way of you seeing your friends you know this when you go to a conference you have all your friends who live in paris or whatever they'd come to the to the same city that you're going to be in because it's a conference and you guys just hang out and that's why you go to conferences just to see your friends and these were my friend my best friends and i had asked to go to the conference i had requested from the probation or the government you know can i change my my my house arrest just

for the day and go to the conference just to see my friends and they said no oh you can't go and i was very very very saddened by this i was i was crying i was so sad and that night like 50 people showed up at my house like they all came to my house and everyone was like people got angry at me because all of a sudden it's party at charlie's house and i didn't i didn't know about it so i didn't invite anyone they just surprised me and people were messaging me angry at me that i hadn't invited them and my parents house can't really hold 50 people and the beauty of it is that my parents house is in south brooklyn so on the train it's about an hour ride and car it's probably longer like sheep said bay area so it wasn't an easy ride for people to come but they all came

out and they brought dinner and it was like an extension of the conference at my parents house in brooklyn and it was so awesome that's fucking dope man i love that story so all right so as you're going uh you eventually go through the court process and uh you get sentenced and what like i think a lot of people are very interested uh in prison in general so maybe just give us like what was that like being in prison what do you do on a daily basis what do you kind of spend your time thinking about etc oh boy we can spend we can spend hours talking about prison um i'm like I started writing a series on my Medium blog. Hacker Noon has published some of them.

I call it A Geek in Prison. I actually started writing those while I was in prison. It was like a therapeutic thing for me. And in Geek in Prison, I've published like 10 parts, but I have a lot more written. And each one is like a two, three-minute read. So if people want to kind of read more, they can Google Geek in Prison or Charlie Shrum Prison, and they can read the blog posts. But prison was interesting.

I don't really know what to expect. um there's a lot to to know in background about how the bureau of prisons work in the federal system there's a lot to understand there's different levels of prisons there are what they call um you start at the very the very basic are federal halfway houses that's like the lowest but you can't start in a halfway house you end up in a halfway house and those are basically like former state prisons that the state has deemed too dangerous to be a prison so he doesn't get them halfway houses um but then the next level is a camp and then after a camp is you have a low a medium a high um a maximum and then a super max and then guantanamo bay

and ross is actually in a super max i think or a maximum no he's in a maximum right now yeah yeah he's in with like murderers and rapists and with like crazy people um it's insane where he is but he's apparently he's doing well so i mean like that's good he's keeping his health up and everything but so my designation was a camp and what a camp is it's basically a low without a fence and it's usually on like five to ten thousand acres of federal land so you can't really go anywhere if you try to run away um and if you do you're stupid because if you if you leave it if you leave and get caught you have automatic get five years added to your sentence so it's kind of dumb you can't be in a camp unless you have 10 years at least sorry less than 10 years left

on your sentence and you're designated below a certain point so you have the way that the bureau of prisons designates you is it's a point system so it's based on like your crime was there violence how old are you what's your background are you a member of the community and they assess your point system based on all these factors and if you're and every year every year you're in prison you get reassessed and so i was assessed low enough to be in a camp because i had less than 10 years and i had a lower than a score of 20 like a risk store score so in camps are either people of less than 10 years so it could be like white collar crimes low level drug dealers uh fraud bribery politic a lot of politicians go to camps um and then you have a lot of people

who started off actually like as murderers or whatever um that started off in maximums and then eventually worked their way down to the camp because and then they get to spend their last 10 years in a camp um because the camp is the best place you want to be so it's not true to say that camps are all white collar guys you have a mix of everyone but it's so disincentivized to be stupid in a camp like with violence because you have to because it's such a cushy place compared to other prisons that for example if you like if you have a falling out with another inmate like you're like pissed off at him for i don't know like you know pissing on a seat or something stupid and other inmates find out the other inmates will intervene and force you guys to like work it out

because they don't want if if you two start a violence with each other every other inmates gets punished too so it's like a self uh policing system in there got it and when you talk about a camp like are you sleeping literally like intense like you see in a movie is it like bear type uh you ever see uh orange is the new black yep on netflix so orange is the new black the the facilities and kind of the structure is is a camp basically where um it's like there's six foot high cement cinder block wall so they're not cells that are closed off but your privacy is like a six foot high wall and in the little cube in your cube there are is a bunk bed with two beds and then a side bed and then under the side bed there are a bunch of lockers so technically you

can have three people in a cube but more most of the time it's only two people and sometimes you can if you're like high seniority you can be by yourself in a cube got it um okay so you're in you're in you're in cubes um and you're so security you're not going to run away people do um people have but it's it's kind of stupid to do it got it and then like what what do other inmates like while you're in there do you guys go to work do you sit and read all day do you not have anything that you got to sit and just think or what do you funny because the first the first week you're in shock the first the first month you're in shock you're trying to like figure it out so um the the hardest part of prison is being productive with your time and occupying your time

and and coming out of prison better than you were when you went in and that's very difficult to do because it's kind of left up to you and it's very easy to become lazy and to then fall into things doing things that you shouldn't be doing the incentive to to be good and to be productive and to do the right thing is very it's very difficult to to do that so when you're in prison i remember like my first day i get in there and um i remember as far as i sit in there and i'm sitting on the bench and it's like the infamous bench you know after a few months when i became just another inmate and i started having my own friends and my friend groups and i was busy you know i would routinely look at bench and see a new inmate and like feel bad for that guy because

i know what he's feeling so i'm sitting on the bench and i'm waiting for my khakis and for my bunk assignment and i'm sitting there for hours and hours and most of the time in prison you're just been waiting waiting waiting waiting so i would actually i would walk around with a paperback book in my pocket 24 hours a day always because you'll never know at four o'clock in the morning they can say inmate shrem to the to the bubble inmate shrem to the bubble and the bubble is the administration center. So I got to get out of bed four o'clock in the morning and go to the bubble. And then they make you sit there for like six hours. And then six hours later, they come to you and say, Oh, it was a mistake. We don't want you just to like mess with you. So what do

you do? So I always carried a paperback book with me. Always. I actually read 137 books when I was in prison. Um, I kept the list. It's a lot of, a lot of reading. Um, so when you're, so I was sitting on the bench and it was like my first day and i have no idea what to expect no idea what to do i'm crying because my my fiance had just like dropped me off and said goodbye and i knew i was going to serve somewhere between 12 to 15 months they don't tell you your release day they keep it like on purpose ambiguous because um i don't know why actually they just you just don't know like you kind of know around when your release day is going to be but you don't know the exact day so i knew I was going to serve like a little over a year so I was like honey like don't worry you

know like I'm not going to have any overlaps like it's only going to be one Christmas it's only going to be one Valentine's Day it's only going to miss one birthday like let's just do it one month at a time we'll do this you know like only like 11 visitations and we'll get through it and we got you know um and my fiance was there every weekend every visiting she was there she didn't miss one um and so um what you would do is I'm sitting on the bench and I know I digress all the time but um guy randomly walks up to me and he's like are you a self-surrender or a transfer meaning that that i get to self-surrender myself like the judges gave me a day and said show about the prison or was i like arrested and then transferred from a holding facility and i said

i'm a self-surrender he's like all right he's like i'm gonna give you some advice he's like my name is belkin this is i'm gonna give some advice all right what's the advice he said listen the first 24 hours is the most important if you can survive the first 24 hours then you're good it's like all right you know i'm getting scared a little bit here right wouldn't you yeah so i said what should i look out for he said well the most important thing if someone leaves candy candy on your pillow don't eat it so i'm thinking this guy's joking with me like what i mean candy on my pillow you know so he gets up walks away a few hours later i got my bunk assignment to shut my bunk whatever i go to dinner you know i come back from dinner and there's like a bar of snickers in my pillow

so i'm saying myself ha ha ha this guy's like joking with me he's playing a joke and i'm like fuck it a free snickers bar so i eat the snickers i'm excited i got a free snickers so i hate the snickers later on that night i saw him i'm like hey belk and that was a funny joke but thanks for the snickers so you just spent two dollars on a stupid joke and it wasn't even funny He looks at me like dead eyes. He goes, I didn't put the Snickers there. What are you talking about? At this point, I am freaking out.

I am freaking out like what? I'm going to be someone's bitch now. That's what it signifies. But apparently, I found out that it was a joke. But, you know, like I believed him, but he didn't tell me until like three or four days later. But now for the next three days, I'm watching my back. You know, like I'm scared of the shower. I'm scared.

you know but then i realized that this is like it's not a violent place and there's none of that really that goes on here but they were just playing a joke on me that is wild it was so funny and then um and then i remember like i get to my so so i get my bunk assignment this is still in the first day i got my bunk assignment and um and i had already my lawyer had represented another guy who was actually in the same prison so my lawyer had called up that guy and said hey charlie's going to be at Lewisburg, you know, like, you know, show him the ropes, help him out a little bit, you know, like be his friend for the first few days till he gets, and you know, it's kind of expected of you. And then, so when my lawyer called me up and said, Hey, you know, my friend's

a lawyer in California and he has this client that's going to be in Lewisburg. Can you take care of him? It's kind of expected that you do the same thing. So, um, this guy, you know, he's there really nice guy. And he's like, so where did you guys, how they put me in range three cube 48 and i'm in the top bunk he goes oh you're in range three that's like the party range they all do drugs in that range you're in 48 i was like what's wrong with 48 he goes someone must be playing a joke on you he's like what do you mean he goes the imam of the muslim prison community that's his that's his cube and and he has not had a bunkie in like three years so he's going to be so pissed off that now they gave him a bunkie on top of that it's you know

on top of that someone in the administration must have known that i'm like a super religious jewish guy um so like they're going to cause like some issues here you know they're going to they're going to cause some like i don't know what and i'm just speculating because i don't really believe in coincidences so i get to my range and i'm nervous and actually i show up at the range and he's praying. And you have to understand, I grew up in Brooklyn. Brooklyn is a huge melting pot. There's no one who respects religion more than me because to be religious, although I'm not religious anymore, to be religious requires a huge amount of faith and discipline. So if I do business with someone who's religious, it doesn't matter what religion they're in, their respect

level in my book goes up automatic by like 100 points because I grew up religious and I know what it's like to not be able to eat the cheeseburger. I know what it's like to not use electricity on Saturdays. I know what it's like to pray three times a day. So, and so I have a huge amount of respect for that. So here, so I show up and I see him praying and I said, I'm not going to even like go in yet. I'm going to wait, let him finish. He sees me, I guess he saw me waiting. And after he finished praying, he's like, oh, I heard I'm getting a new bunkie or a new sally or whatever it was a new bunkie as i called it um you know this is my name and i don't want to tell these stories i don't like to use real names because for whatever reason so um let's just say

his name was um his name was hassan or whatever he's my name is hassan and i said my name is charlie he goes whatever and um and we started you know we were in after lights out it's just me and him in the bunk and we started talking a lot and it turns out he he's he's actually he's not like a he's not like a prison convert he's actually someone who was raised religious too so he actually knew what he was talking about we actually and you know he kind of joked he's like how much time you got and i said i have like 11 months left he goes oh man he goes i've been in here 12 years i came from another prison i'm 12 years i got nine months left and i'm already on my way out look see that my bag's already packed nine months left you're gonna be out of here in

like no time i said what is this guy crazy nine months it's like a whole year it's but he it was because nine months related to 12 years he was ready to go he was kissing his wife hello you know what i mean so he was just he was just jolly he was in a good mood i i don't know what it would have been like if i had met him when he had five years left but he was just always in a good mood and we it was really nice because it gave us it gave him and i something to do um talking to each other he learned a lot about judaism and i learned a lot about islam during my year in prison we spent a lot of time just talking and he i don't think i ever changed his mind on some things but but he was like fundamentally set on very specific things for example like abortion and gay marriage and

and here and you know like this is like the 2000s now you know like like gay marriage is something that we all believe is just automatic. It's a fundamental human belief. I feel like, you know, you should be able to marry whoever you want, but he didn't believe that. So I had to learn like how to have proper etiquette and manners. I had to learn how to respect him and I had to learn how to listen to his beliefs and respond to them without him thinking that I was making fun of him because then I'd get my ass kicked. And that, that was a big dose of humility training. And we became really really good friend and it actually allowed the rest of his community to respect me and they would invite me to like their breaking of the ramadan fest and things like that you still

talk to him no you're not really unfortunately yeah it's wild that you can have uh that different of a background beliefs etc with somebody and and and get along but at the same time um it is uh what you're describing is very similar to the army right yeah i was in the army and you basically get sent you don't know who anybody else is you you don't get to pick who they are you're kind of forced to get along with them right yeah you have to respect other people if you don't do that you're you're going to get your ass kicked you got to respect other people no matter who they are what they are you know exactly what i'm talking about yeah so but in in the army and you tell me because in prison it's hard to be it's hard to remain friends with people when you

get out because everyone's trying to get their life back on their feet so they don't really have time for friends and by the time like you get your shit together a year or two post-release you've kind of moved on with your life and you know you don't want to think about prison while you're at night you don't want to be reminded of it so you just don't want to call up that guy who you're really close with and say like hey how's it going yeah some people do but it's hard yeah i think it's probably hit or miss for military uh folks in that some people are best friends with those you know it's the whole uh i went to war with these guys and you know i'm their best friends forever and then some of it is uh i got out of the military and i don't want to think about it

anymore right were you in the navy you seem like a navy man uh u.s army u.s army that's awesome thank you for your service yeah it's it was fun um all right so as you get uh into the prison sentence and you know you get the last couple months left did you know what you were going to do next or you just been reading a bunch of what were you kind of thinking as uh as the time was all coming to uh to a close um so i had no idea what i was gonna do while so i thought bitcoin was um i had no idea what the next step was for me because remember i got into bitcoin while i was still in college so i didn't really like get to like do it or i got my degree in economics but I didn't really like get to enter the normal job world um and so when I'm in prison the bitcoin

price is flat $200 $250 you know like $275 then back down to $180 the price was just like it is now it was just flat for like a year and a half it didn't move so when I was in prison the flight the price was flat so I'm now worrying saying to myself all right you cannot work in crypto and you cannot work in bitcoin anymore um what am I gonna do I had no idea I had no idea what I was going to do when I got out and no leads. I, I knew one thing. I knew I didn't want to go back to New York. I knew I was like, I need to go somewhere else, figure it out. I was like, maybe I'll move to Austin. Um, I have a bunch of friends in Austin. They have a big tech scene there. Maybe I can get a job doing biz dev and some tech company or something. I want to get

out of the cold weather of New York. And I had a lot of demons in New York. My family had at this point disowned me. Um, I hadn't spoken to my parents in years. Um, and I hadn't, so I know life in New York, a lot of demons there because I got arrested there. Um, and so I, even until today, I don't, you know, I, I don't like, you know, you're in New York. I just don't like going back to New York. It's, it's hard. It's very difficult for me. I, I, I suffer from, um, really, really bad anxiety of therapists of, you know, tried to throw labels on it, like PTSD and all these different things, but I just don't like going to New York. Um, I don't like, um, landing at JFK and being there, but I do, I have to go sometimes. So I go, I go, uh,

I try to go as short as possible, but I knew I didn't want to go back to New York, but I knew I knew what I was going to do. But unfortunately that the way the rule works when you get out of prison is that, so you, when you get out of, when you get out of prison, you get to choose your city so i said my my fiance's who's now my wife she was living in and her family her support network was in pennsylvania in just a very small town near harrisburg pennsylvania and i never never even like been to harrisburg before i had no idea where it was all you know is philadelphia and pittsburgh but harrisburg is like smack in the middle of the state and there's nothing going on so I was like let me let me go there so I told my case manager send me to a halfway house in

Harrisburg and I'll figure it out and so I got released it was a beautiful day but you don't really get released what what happens is you you get transferred to a halfway house and then you live in the halfway house for six months or if you if you prove yourself you can eventually who a lot of guys do is they say i don't want to go to the halfway house they'd rather stay in prison for another six months because what's another six months halfway houses are the worst halfway houses you're now with like every designation you're with violent criminals you're with i remember i'm like i was in the first night of the halfway house and i stupidly asked like my bunkie like what he did he's like i rob banks and i was like i thought he was joking

because like who robs banks and who does that you know like haven't you seen every movie when they always get caught he looked at me he goes yeah i was actually a very successful bank robber his name was bones nice kid though um really nice guy when you get to know the idea of him not saying i i robbed a bank no he robbed banks multiple multiple like that's my profession i rob banks yeah yeah rob so you can be halfway houses are the worst and you have the the most people who get who go back to prison are because they did something in the halfway house you have no due process you have no rights if the staff of the halfway house believe that you are that they don't like you or you looked at them the wrong way um write you a shot which is like a

demerit and you get sent right back to prison not only that but you have i think it's like if you don't if you don't find a job within like 20 to 30 days i forget the exact amount of time will prove that you're actively looking you get sent back to prison so here you're on this halfway house that you can't leave and the only way to leave house is to go to work a job but the only way to get a job is to leave the halfway house there are no computers and there are no iphones so you're relying on your friends and family to hopefully find you some job where you can go because then if you find the job and you start earning a paycheck and you start to sleep at the halfway house at night and you earn a paycheck you could then give the halfway house your paycheck

by the way they take 30 off the gross and then you pay taxes on the whole thing and then you get to keep whatever's left hopefully you after that you have that you can then afford to rent your own place and then the halfway house will let you live in your own place under home confinement so You can only be at your house or at your job and you get almost, you're like an hour a week to like go to Dunkin' Donuts or something like that. So it's the, the, the, the bar dots, the halfway houses and when you get out of prison is really where the criminal justice system is failing right now.

I forget that they don't teach you any vocationals training skills. Forget that they don't do any of that in prisons, but in state and federal prison, the biggest problem are the halfway houses because they're completely under funded they're under regulated so there's no supervision from the federal government um and it's almost impossible to get a job because they have to trust you at x-con site unseen to work somewhere i'm so fortunate that my wife worked at a winery and next door was a restaurant and she she wrote them a letter saying like my husband my fiance is like a great guy

he was this big bitcoin guy you know he was um he made a mistake he went to prison can you please hire him as like a waiter or to be like your tech guy or do something you know just so he can even if you pay him nothing just so he can like get out of the halfway house because that place is so dangerous this was like 2016 so it's only like a little less than three years ago so um so they hired me and i'm a dishwasher and i'm making eight dollars an hour and no tip here i am this bitcoin millionaire to washing dishes every day 11 hours a day but man i loved it it was the best job i just had just because it requires no mental thinking it requires like no it's just physical labor you sit there for 11 hours and you wash dishes and i just would listen to joe rogan

podcast or whatever it was in my headphones and just wash dishes it was a huge restaurant in a wedding hall but eventually um and so that was what i did and actually for the first so i lived so eventually i was i was going to work every day i wasn't doing anything stupid the the halfway house that are you can live at your your fiance's mother's house one night a week you can stay there and they'd call you at four o'clock in the morning to make sure you're actually there not partying or whatever um and then eventually they let me do two nights a week and then like four months in so i have two months left on my halfway house they let me actually live at my fiance's mother's house for the for the remainder of my term and that was really great

but during that time i actually didn't tell anyone was released i didn't have an iphone i had a little nokia like an old cell phone with no internet it actually was awesome because i still have the phone it's a it's a simple phone and all it has is an fm radio built into it so i just said listen to like npr all day and stuff um i didn't have an iphone i didn't have anything like that Um, I didn't have, I didn't turn on my computer for months. I didn't, I was too scared or like nervous to like face the realization that I cannot be a dishwasher for the rest of my life. So I just pushed it off, pushed it off, pushed it off. And I was content. I was content making three, $400 a week, washing dishes, um, living at my, my, my fiance's mom's

house with my fiance enjoying life just not being in prison I just enjoyed that that simple the simple pleasure of going to like KFC for a chicken sandwich was it made me ecstatic and that was like the highlight of my week crazy what'd you do after the dishwashing eventually the owner of the restaurant who still remains a good friend today realized that I should not be a dishwasher anymore and he eventually promoted me to food runner which by the way is like the coolest job ever like food running but then being the order expediter the the also known as the expo um in a in a in a very busy big restaurant the expo is the most important job for those who don't know the expo is like the conductor the expo stands between the kitchen and the line where they cook

all the food and the actual food runners and the waiters who run the food and place the orders so when a ticket comes in the ticket prints out and i have to read the ticket and tell and meanwhile i'm getting tickets or printing every second print tickets 30 tickets at one shot you know of tables tables tables i have to tell the salad guy the dessert guy the steak guy the pasta girl um you have seven or eight people on the line these are your orchestra and you have to basically know exactly how long does it take to cook a ribeye versus how long does it take to pour soup versus and how long does it take for someone to eat it because you have to put food out perfectly and if you have a two top versus a 10 top and and that went from it just 11 hours would go by in in

minutes because i'm sitting there working sweating and working sweating it was very fulfilling work because when the restaurant when you see it you see it moving and it's all you're doing it's it's a well-oiled machine. It's a well-oiled machine. The food's coming out. People are getting their food, their steaks when it's hot. It's coming out. They're leaving good tips. The waiters are happy. They're getting good tips because the people got their food out on time. And I, you know, the one out of every four dishes, one out of every four tickets, there's a mistake. And it's your job to catch that mistake. So if there's no mistakes, it's because there was a good expo. When there's a mistake, when you go to a restaurant and there's a mistake on your food,

99% of the time, it's not your server's fault. So FYI to anyone, when you blame the server, if you didn't get onions on your burger, it's not your server's fault. Your server put it in. Your servers are the smartest people in the restaurant. So it's either the expediter's fault, like my fault, or someone in the line who didn't read the ticket properly. Got it. I didn't know that actually. Yeah. And then so eventually I became the order expediter. I started they, Bitcoin started like going to like $500. I started, let me tell the world that I'm out. Let me like, you know, break the seal or whatever it was. Um, and I got really lucky because around

that time, like alts started becoming a thing. And, um, uh, my friend Ned and my good, my good friend Ned and Dan Larimer, um, had just founded steam and steam was a great platform. So I was like, all right, let me publish my geek in prison on the steam platform. And I was just earning all these steam tokens and they're only worth like six cents at a time but then over the next like few months they started pumping to like worth four dollars so i made a bunch of money on steam and that's really where i was like i was able to like jump start my new life by on steam that was like my first altcoin really i made a bunch of money made a few hundred thousand dollars on steam because i was writing for steam and earning tokens when they're worth so little i'm just

holding on to them yeah it's crazy it's all right so while you're doing that then uh how do you get to a crypto iq so um had a lot of ideas over the next few years and i didn't really know what to do i started advising a lot of companies a lot of projects tokens doing different things and just utilizing my rolodex introducing people like oh you want to um you want to be listed on an exchange or you want to have partnership with this company or you need a you need some blockchain developers you need it and i because i knew everyone um i was able to help with that so did a lot of biz dev and I wasn't really passionate about it. And then, um, I met some guys, I moved to Florida because I wanted to leave Pennsylvania, moved to Florida with my wife and got married.

And I met a few guys and they said, Hey, like we're in the newsletter business for stocks. What if we started a similar newsletter company for crypto? And I said, well, I love education, but I'm not going to do like those pump and dump things. A lot of people are doing. Um, and I said, no, no, no. We're, we're going to be like, we're going to publish, we're going to hire editors and writers and we're going to we're going to charge like 30 a month and we're going to publish quality content we're going to put out a newsletter and you can write a lot of the stuff you can tell the tell the writers what to write you can do interviews you can do all that and we launched iq about a year and a half ago and crypto.iq and it just became successful we

launched a like a trading room which is similar to an options trading room and and our customers Our retention rate, even during the bear market is at 80%. In fact, so in the trading room, you come in and we have two full-time traders and our staff in there and we're putting out trading signals, like buy sell signals of what people should do. In fact, our trading room has been performing better during the bear market than it is during the bull market because real traders know how to make money in bear markets. And so we've been doing really well, like shorting and getting in scalping and getting

a lot of these like one or two day pumps we've been doing really well with that and so it's been growing we got a few subscribers every day um it's a hundred dollars a month but and i'm gonna plug it here if your subscribers go to crypto.iq forward slash p-o-m-p pump they can try it out for a month or two for free um you know risk free and if they don't like it you don't spend any money and i guarantee that eight out of ten people will stay and everyone will love it that's awesome And so as that, what, what is your role for, uh, for the company right now? Like, what do you feel? I took the Silicon Valley TV show and I I'm the chief visionary officer.

I love it. I love it. I love it. Cause I'm not involved in like day to day so much, but I I'm still in the office and I, I'm not involved in operations, but I, um, I, I make sure that the vision is continuing to go the way I want it to go. And also I I'm very like against certain things. so i don't allow we don't do like ripple so like it's we don't i don't i don't like talking about

that i'm very against like permission blockchains um i'm very against a lot of things that it's my ideology and it's what i believe and i'm just gonna gonna do that that's just it's my company so whatever so what is the um right now like what do you think are the areas in crypto that people are not talking about or focused on but you think have a lot of value and actually people should be paying attention to the areas of crypto that are going to be very successful in the next few years are the ones that actually no one are talking about like think about it who are the companies go right now and say to yourself all your listeners who are the companies that were like really loud and all of a sudden they're like really quiet they're not talking they're not

putting on any press releases they're up to something they're building something they're doing something those are the companies and the projects that you want to be talking about uh that you want to be involved in and so a lot of a big hype thing is now like the bridge and infrastructure bridge between the wall street and crypto world so a lot of people are building up the infrastructure to allow for that um unfortunately i see a lot of people are still focused on and building out on like um onboarding offboarding speculation exchanges trading products yes it's fun to speculate on crypto i know but speculation doesn't bring value what brings value to bitcoin and for the underlying financial system is we can't forget why we're here

we can't forget why we're here in the first place and there are a lot of companies like um like for example just i was looking at twitter bit spark for example that builds a remittance platform um in hong kong we got to remember why we're here in the first place why you know like remember why you fell in love with bitcoin remember why you fell in love with with crypto what gave you that original light bulb in your head yes it was so you can make a bunch of money but deep down why do you believe and if you can figure that out and you can try to build something that furthers that belief then that's what you should be building because unfortunately during the bull markets we forget why we're here in the first place and for me why i got involved in

bitcoin because i fell in love with the idea of a financial system that's completely censorship resistant and over time i fell in love with the idea of not just a financial system but a medium of exchange of anything medical data information supply chain management insurance products any any industry that's already susceptible to graft, to embezzlement, to fraud, to safety, like dying from E. coli virus that's in your food, any industry where there's a centralized party that has something to gain by being corrupt or manipulating or debasing, it doesn't have to be just financial if you could introduce a censorship resistant system to that industry that is something that that's why i at least that's where charlie's from that's why i i'm here that's why i'm here

talking to you today that's for me everyone's different that's why i fell in love with this because i love the idea of it's not that i don't want to trust you pom it's not that i don't you're a great guy you know like i trust you you know like you have two people that are friends friendship and relationships are based on loyalty and trust it's not about what you do for the other person you know you have a friend you're loyal to that person he's loyal to you back or she or whatever it is but why do we need to have trust in business relationships if we can remove that necessity if we can remove the necessity of having to have risk and then you assign a dollar value to that risk if you can remove that in business you all of a sudden open up all borders globalization you

can trade with any country anywhere in the world you have free markets you have countries competing with each other on a fair playing field and and this is where i people kind of like at the bars or whatever kind of like turn away and tell me charlie you're crazy but i truly believe and this is i don't care if everyone laughs at me but i truly believe that bitcoin will bring about like world peace and will end wars and things like that because all of a sudden we'll have access to information and we'll stop hating people because our governments tell us to hate those people you've had a wild story for the last six seven years what do you think the one thing is that you learned that you wish other people could learn without having to go through that wild

experience humility humility is unfortunately very difficult to attain unless you're unless you go through something what i call like humility training so you probably went through it in the army people go through it in prison people go through it when they be you know did their bankruptcy when you have to go through something like a very traumatic experience like that and you know you go from the top and then you're on the bottom and you hit rock bottom um you see it a lot of former addicts and alcoholics who are doing really well they have a lot of humility and it doesn't just have to do with their addiction it's with anything in business um same thing with religious people if i meet you and you tell me i'm a uh you know um

i'm an alcoholic and i've been sober for 10 years i my respect for you immediately goes up um because that requires devotion but humility is the one thing that um i would love to see more of in the crypto space and out of all people i'm someone who also struggles with humility issues too as much as i went through i still struggle with that every single day and so i here i am talking to myself like charlie how you know be more humble but i think that um if we can if we can all do that we can we'll stop fighting each other i love it before i finish up i always do a rapid fire set of questions what do you think the most important company in crypto is do i have to answer rapid fire because i want to think about the answer you go at your own pace

the most important there's so many most important companies in in crypto right now um i don't know to answer that because i sit on boards and advise a lot of companies so i don't want to drop one that i'm an advisor of and then i don't and then they get mad at me you can't pick any company that you're affiliated with as an investor so it's gotta be that's a good that's a good one um the most important company in bitcoin right now for better for worse is binance because not that i love or hate finance and i do like uh cz champagnes out he's a great guy um but important because all eyes are on him and how he acts in the space which is very good and how he runs his company is how the public perceive how the public the global population perceives bitcoin today so if

he fails we could potentially go through another mount gock situation in a very long bear market but if he succeeds and does really well um then we'll all we'll all be very successful so all eyes are on i think cz right now and how he acts and reacts in the space i'm uh i'm a fan as well what um what's the one funny story about cz for sorry to interrupt you but um fun no one really knows he actually his his first job in bitcoin was he was a lowly developer for blockchain.info and his job was to just assign api keys so if you want an api key for whatever reason from blockchain.info you'd get a response from cz at blockchain.info that was crazy yeah and now look where he is today great guy though today uh what one regulation would you change or

improve if you could i would love to see more clarity in the tax laws because um it's very difficult um a lot of people are still like amending and re-amending and redoing like taxes that i know of because it's just it's it's so i know it's like cliche because the tax law in general is very difficult to understand that's why you have a whole industry of accountants but i'd love to see like some really good clarity and like a very simple way to pay taxes on your bitcoin because i think most people want to pay their taxes on their bitcoin they just want to understand how to do it it's fair what's the most important book you've ever read uh read oh um there there's one great book that i highly recommend to everyone it's a day in the life of ivan denisovic um it's

a fantastic book it's a very short book and it's a great book to understand what life what's important in life and the book is basically about a fictionist it was written by i can't pronounce his last name still stilly shinken i think is how you pronounce it he was an author who wrote the book while he was in a russian gulag in the 50s but the book is about a fictional inmate at a russian gulag in the 1950s called ivan denisovich and the book is just about one day of his normal 20-year sentence and it is a wonderful i'm crying just thinking about how wonderful that book it is i highly it's a very short book and i read it every few months i'll have to get it i've never heard of it but i i will i'll definitely get it a day in the life of ivan denisovich all right

before uh before we end i usually let somebody ask me a question but uh we talked about aliens first you think uh aliens are real or no yeah i i think it's i think it's selfish to think that we're the only ones in this in this whole universe or whatever to yeah it's selfish to think that so yes i believe there are life forms out there wherever they are would you rather go to the depths of the ocean or go visit space oh that's a great question i'm a water guy i would love to go down and explore the ocean floor i'm a boater i'm a captain i love i love the ocean um i'm actually my captain's license is pending i'm i'm a i'm trying to it's a long story with the with the whole tsa right now the trans whatever but yeah i love water and everything um and so i would love

to go to the bottom of the of the ocean what about you i i'm scared shitless at the bottom of the ocean i i know it's uh i think that it's uh space has always just been uh we know less about the bottom of the we know less about water and what lies beneath than we do about space yeah that that's so that's why i started asking the question is i actually think we know less about the ocean than we do about the space for sure yeah all right what one question you got for me what's your favorite thing to do my favorite thing to do how do you what do you what do you have fun doing what's your go-to when you have free time and don't say like reading or whatever like like laser tag do you like going ice skating what's your thing nah to be honest uh

there's two things that i really enjoy i don't know why i love just getting lost on youtube like that is good yeah it's fun rabbit holes and next thing you know i'm watching some stupid video about some you know topic i don't even know what it is uh and so it's got like an element of learning but it's kind of like passive just passing the time yeah um do you know wendover productions no what is that wendover productions does these videos and each one has like 6.8 million views and he's like the economics of airline class or why the northernmost town in america exists or um how overnight shipping works or um why planes don't fly faster or um i gotta watch all right wind over how maritime law works and they're all like 10 minute six

six 10 minute videos and they're all like it's so so awesome i watch them all the time i'm sold you that you just ruined my weekend yeah i know they're i do the same thing i sit i don't have you don't have a lucky's market in new york but um we have a lucky supermarket here and they're like all over like colorado california it's a it's a great supermarket but they and lucky's for some reason they're ramen they do homemade ramen station there so i go to lucky's supermarket and i buy my groceries and i sit and i watch youtube videos while i'm eating ramen by myself that's like my favorite thing to do that sounds so sad i love it no i love it sometimes you spend a lot of time in prison by yourself um and you learn to be okay with that i think most people

um don't know how to be alone for many many hours at a time think think about it like what if you were in a room with nothing to do for six hours what would you do most people don't know what to do they'd freak out like you just get bored and you go crazy but in prison that's what you have to learn how to do you have to learn how to just spend a lot of time and being productive so you almost like I miss that. You miss that alone time, just you time, pump time. I love it, man. Dude, I appreciate you spending so much time to record this. I think people are really going to like it. I really enjoyed this conversation and we're going to have to do it again in a few months and just let people keep hearing from you. All right, guys, thanks so

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