The Wolf Of All Streets - $52M Curve Hack Explained & Why The Worst May Not Be Over Yet

Episode Date: August 1, 2023

Michael Fasanello, Crypto Compliance Officer at AnChain, joins my stream to explain the recent Curve hack: what happened and what are the consequences for the DeFi ecosystem. In the second part of the show trader Charlie Burton will share his thoughts about the market.  Michael Fasanello: https://twitter.com/Bl0ckchainMike Charlie Burton: https://twitter.com/charliebtrader ►►MELD MELD will bring to bear the full power of decentralized financial instruments to the masses. Banks are at the heart of the economy, MELD will become a new set of banking tools that are by the people and for the people. 👉 https://bit.ly/meld-early-access  ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

DeFi darling and blue chip, blue chip platform curve. Finance was drained for roughly $50 million with a lot more at risk. And of course, the risk of the CEO and founder being liquidated on a $200 million loan that was taken in shitcoin CRV that he used to buy two mansions, which should collapse all of DeFi. And if that wasn't enough, Richard Hart has been sued by the SEC for securities fraud and, of course, launching unregistered security right before his movie that's going to embarrass all of us is coming out. And in the meantime, balled a token on the new base protocol from Coinbase, pumped 4 million percent, and then rub pulled and died before people could even access base protocol. And now people think that SPF or someone from Alameda is behind it. And crypto is

fucking embarrassing. I'm going to talk about it with Michael Fastenello now with Charlie Burton in the back to look at charts and trades. Didn't want to get up out of bed this morning when I read the news, but here we are. Let's talk about it. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get Let's go. like that button because wow man this place is embarrassing becomes harder every single day to defend the concepts the protocols the people my gosh it's the endless endless endless exploits and hacks and bad behavior by a bunch of young rich people who do not give any shit about you. Do I still believe that it's the technology of the future? Sure, of course. There's incredible things being built, but man, are people taking advantage of it. And once again, it is retail that will suffer

and be hurt by all of it. Now, listen, all all this is very technical, way over my head. As usual, we need a guest to help us explain. I've got Michael Fassadello. Welcome, man. How are you? Yeah, it's great to be back with the Wolf again. That's one of the only reasons I got up this morning, Scott. Well, it's funny you pointed out right before the show as we were talking is if we want to talk about embarrassments, I think last time you were on, you went off screen off screen and spf came on screen yeah he followed me or i followed him one or the other well we we thought he was amazing at that time though right that was the the best guy you could get it was the way night for sure i i will tell you the one guy i never had on the show was richard hart i canceled a podcast with him at one point and he was in my DMs and hexagons were attacking me and telling me that I had to get him on.

And we were tempted. We're a smart guy, but I dodged that one at least. But we can talk about that later. First, I want to dig into the curve here, right? Because there's a lot to parse. I think a lot of people viewed it as just another exploit but as we went further down the rabbit hole you realize how sort of incestuous all these defy protocols are and that there really is sort of systemic risk if one of them fails or at least fails or gets exploited in the wrong way for people didn't see curve finance trained to 50 million while crv token sinks 12 and latest defy exploit this is you know last updated in the middle of the night last night. So price action has obviously changed. There's a ton of buying right now. I'll show it on the chart later, a ton of volume. But still, I mean, this became dangerously close and still could be a big

problem. Can you just give us the really broad strokes on what happens here and why it matters? Yeah, absolutely. High level executive summary. So July 31st, yesterday, Per Finance suffered an exploit draining roughly $70 million. The root cause was what's called a zero-day compiler bug in the Viper language, which is used to write

curved smart contracts. I'll break that down a little bit. Zero-day bug is basically when a bug is found by an attacker and there's zero time for anybody to respond to it. So no incident response, no attempts to mitigate. That's the zero day piece of it. The compiler bug, basically, it was a time lock or a lock that should have locked down

the re-entrancy from the protocol was faulty. So re-entrancy, imagine, you know, in its broadest context, somebody trying to jump from one subway train to another, doors are open, you know, trains are going moderately slow, easy to do. Re-entrancy locks would have caused basically a closed-door scenario where the person jumps and no matter how slow the train is going, couldn't get through. Re-entrancy also, if you go to a bank teller, you try to take out a certain amount of money, they're going to go back and check the balance in your account.

In this scenario, basically while the bank teller was checking the account to see if there was sufficient funds to remove, the attacker was already pulling money out of the drawer. So that's the basic high level so everybody can understand what's going on here. Yeah, as I have it here, re-entrancy is a common bug that allows attackers to trick a smart contract by making repeated calls

to a protocol in order to steal assets. A call is authorization for the smart contract address to interact with the user's wallet address. So basically just repeatedly attacking this wallet and taking out the funds until it's empty. And now from what I heard, the good news here is, oh, and by the way, you talked about Viper language. And that's basically the bridge between Python and EVM. Correct. So it allows. Right.

Right. So all way over my head by the guys. By the way, guys, this is me just doing the research to try to figure it out myself. So why does this map like in context of DeFi? Obviously, you have these DeFi pools where you have Ethereum and then you have that native token and people are using that to lend and borrow stable coins. Yeah. Yeah. I mean, in 2022, you know, our company researched the numbers and it was like four billion, four billion in exploits. DeFi acts alone.

Forty seven percent of those were through smart contracts. So almost almost half of that was like one point eight billion were through smart contracts. Almost half of that, it was like $1.8 billion, was through smart contracts alone. This is no small issue with the space. As much as DeFi wants to be the alternative rail of finance, you've got the sins of the flesh in traditional

finance. You've got the greed and all that stuff. On the other side of it, when you pull all the humans out of it, then you've got to worry about the code. Is the code right? Because when the code messes up, there could be major major problems like we're seeing time and time again in DeFi. Right, so for all of

the hate that we get from regulators and from the outside to some degree, it's deserved because DeFi clearly isn't ready right now. At this point, why would you put a ton of money into this? And the funny thing is that I even was one of the ones who said the argument,

you know, when we saw CeFi collapse, Celsius and Voyager and all these, well, DeFi came out like a shining star because the loans were, you know, people had their margin calls. It was liquidated in an orderly fashion, like, chuggedged on smart contracts, but these smart contracts can be hacked.

Yeah. Yep. I mean, there's three ways that this can sort of proceed in a healthy fashion. So there's got to be improvements to smart contract auditing and testing procedures. I mean, the Curve hack proves that bugs can slip through even the most robust checks,

because Curve was no small player in this field. I mean, they do their due diligence, they do their audits, and they usually have everything all buttoned up. So this is just one of those scenarios where the hackers happen to find something that nobody else found, and it's not uncommon. There's always going to be a better coder, there's

always going to be a better hacker, and there's always going to be a more vulnerable protocol. there's always going to be a better hacker, and there's always going to be a more vulnerable protocol. Auditing methodology has to continue advancing. Second thing I'd say, implementing responsible vulnerability disclosure policies that give the developers enough time to patch bugs before the exploits actually occur would be helpful. Wouldn't have that zero day situation. Um, and then lastly, you know, trying to, trying to have something in place, um, you know, that, that gives you a holistic, uh, security, uh, uh, protocol instead of just, uh, mitigating attacks as they come, have something that's actually able to, you know, detect and deter these things.

Yeah. I think here's my biggest problem is that I fully support obviously free markets and people doing whatever they want with their money when they understand the risk. But the risk here is completely unknown unknowns that somebody who's making a loan or taking out a loan cannot understand or assess. How do you assess the yield? How much yield is worth the potential of a hack that you can't address that you know requires you to trust the the platform yeah no it's almost like if some you know somebody's going to be issuing a loan they should be performing the audit on the uh on the the protocol itself of the native chain that they're looking to loan against right

yeah open the books in this situation. Normally, that would be a little bit questionable, but I think in this circumstance, you need to start doing that. Yeah. This is from Curve Finance. As a result of an issue in Viper compiler inversions, whatever, these are the pools that we have. CRV ETH, AL ETH ETH, MS ETH ETH, PE ETH.

By the way, this might as well be in Chinese. This is so stupid. Why do we need all these ETHs? I understand why, By the way, this might as well be in Chinese. This is so stupid. Why do we need all these ETHs? I understand why, by the way, but come on. Another pool potentially affected is Arbitrum's TriCrypto. Auditors and Viper devs cannot find a profitable exploit, but please exit that one. So the good news here was that it was only pools with native ETH,

which are actually not the most popular. So if this had happened on the SC ETH or whatever all these other ETHs are, I have no idea, pools that were direct for EVM, we would have had a much more massive exploit. So this was on the cusp of being a much bigger deal. Yeah, they basically exploited the gas pools. If they had exploited the ERC-20 tokens,

I mean, this thing would have been so massive, it would have pulled down the whole house. The whole house being all of DeFi? That's the broader stroke, yeah. Yeah. Okay, so let's talk about why everybody's actually freaking out with this on top of what we've already seen here, right? I'm going to go through these. Curve founders, 168 million stashes under stress, creating a risk for DeFi as a whole. So there it is, right? This guy has pledged. This is the, okay, this is the genius that we're talking about who created this and is smart and protected and CRB has great people. 34% of CRB's entire market cap, He has pledged in a single loan that would be liquidated at 37 cents. Right?

On Aave, I think, largely. Yeah. And why did he take out this loan? To buy two mansions. It's office space, you know. Office space. Two mansions in Australia. Here's the house, if you guys are wondering.

They're next door, though. So, you know, one for your girlfriend and one for your wife. I guess. Maybe for when I can get on board with. Well, I mean, okay. So, yes, I'm not doubting these people are smart, that they're building these things, but this is

hubris on an astounding level. Obviously, you never believed the token would go to 37 cents. It required a major exploit to send it even close. I believe it bottomed at 48 or 49. But does the guy creating DeFi not realize that using the bulk of the supply of a token that you effectively got for free as the founder for massive loans to get dollars is maybe a bad idea? You said it. Absolutely.

Okay, so let's talk about what FTX did with FTT and how this is not so dissimilar. No, I don't think it is at all, right? So they were borrowing against their own native token and certainly commingling customer funds as well in order to do that. And in this scenario, it's everything except, I guess, the customer funds as well in order to do that and in this scenario it's everything except i guess the customer funds right yeah so basically they create a token you then give yourself hundreds of millions of dollars worth it worth of it and then you use it for a massive loan so what would

happen if crv was liquidated here? This is a smart contract, guys. This isn't the situation where if a billionaire is going to get liquidated or margin called, they call the bank, work something out, they'll send over some more collateral. Come on, guys. You know me. I'm good for it. My yacht over in the Caspian Sea will

cover it if you guys need. That doesn't work here. If you hit that trigger price, it's a wrap. Okay, so what happens? what do you got for me scott well you okay sorry yeah i i mean it sells off all of this crv on the open market yeah as far as i understand it so you dump 34 of the fly of the supply of crv immediately on a completely illiquid market where there's no interested buyers, right? The buyers are setting a floor above here to prevent this liquidation, right? Because Justin Sun stepped in, as usual, by the way. I think I read that Justin Sun got to buy the tokens

of OTC at 41 cents when it was trading at 55 cents. What a hero, right? But he stepped in. There's a huge floor on Binance below this, but if this got liquidated, CRB goes to fucking zero. Aave goes close to zero. COP goes close to zero because it causes yet another liquidation cascade of every coin, including the blue chips, sending it down because DeFi can't handle a 168 or 200 million

depending on the price liquidation. Yeah, it's run after run after run. We saw that with the three hours capital, Celsius, Voyelsius voyage or all that it's just dominoes yeah i love what this person said this shit is made just making the case for sec what the fuck is wrong with all these people i was in the uh crypto town hall chat this morning if this isn't a bottom signal uh mario i i was tweeting i was messaging with everybody in there and I said, is it possible the SEC was like, sarcastically, I was like, dot, dot, dot, kind of right. You know, and I do, I've said this a million times. I hate Gary Gensler's approach.

I hate the way he's doing regulation by enforcement. I hate their approach to crypto general. But 99% of this shit is scams and it's a casino and should go to zero. When DeFi touches traditional finance enough that people are actually you know doing icos and doing uh you know formal like loans against these things uh involving the u.s dollar that's all right let the sec step in it's their territory but you know when it's dealing with just overall crypto and then just blanket saying everybody that's in crypto is looking to make money so for that reason under the howey test of security that's that's just such a stretch of the law that to me i mean as a as a previous uh well one of my

character flaws is being a lawyer so i mean to me it's just obtuse but okay so listen i i i don't even know like i don't even know that i want to talk about this but everybody obviously trying to short this uh because the natural instinct of a trader is let's go liquidate this guy and short it to zero and make a ton of money. But as I said, that's sort of put it a floor. So if you look at the CRV chart, I have right here as I click through all these things. I mean, if you were just blindly looking at this chart as a trader and not paying any attention to news. This is like the biggest buying interest you've ever seen on anything after a drop right here at support. So I get it. There's a lot of

buying interest here stepping in, but I feel like you could find other assets if you're dying to participate. But listen, now that we've talked about CRV and we know that we could have crashed all of DeFi effectively yesterday, but maybe we're out of the woods. I want to show you a movie, Michael. I don't know if you've seen this yet. No, it's a good one. But the news broke yesterday that Richard Hart, finally, being sued by the SEC, effectively the claims are, one, the obvious,

which is that he launched unregistered security, right? And so people are saying that can't be. XRP is not security. Guys, the secondary sale, programmatic be. XRP is not security. Guys, the secondary sale, programmatic sale of XRP is not security. But it's very clear that the launch of XRP and the initial sale to institutions was. People coming out,

the Stockholm syndrome in this space is insane. The hexagon is still defending him, saying that they sacrificed their money. They didn't invest it. And that's the language that Richard used. So obviously it's not a security if he says you're sacrificing your money. They didn't invest it. And that's the language that Richard used. So obviously it's not, it's not a security if he says you're sacrificing your money, but they're saying that not only did he, uh, commit the sin of an unregistered security offering. I don't really care about that, but then he then took user funds out of that and bought things like the world's biggest black diamond, some cars, famous videos of him walking out of Louis Vuitton

with all the bags, flaunting the wealth in everyone's face. And then, if you read deeper into the claim, it talks about how Richard Hart basically either himself or with other whales took the funds that were coming in these massive mali eats and recycled it in and out of the contract to look like more people were buying to pump it up further to say hey look everybody look how many people are depositing what a party come on in right so i'm seeing a lot of conjecture he'll go to jail to be very clear right now this is the sec which means it is civil there's no no DOJ. There's no Southern Department of New York US attorney yet coming after. Although if this is fraud, that could likely happen. But I want to show you a movie because apparently they made a

movie about Richard Harden. It's coming out in like three days. So let's look at the trailer and see if you feel super psyched to be in crypto right now. Okay, we are set for you, Richard. What do you want people to know about you? I got a big dick. This here is $3.1 million watches. I own the world's biggest diamond. You doubt, I do. Who is Richard Hart?

Genius. Legendary. Arrogant. Bit of a narcissist. The benevolent king. Quarter million. Hate me. Hate me. I'm farther than you'll ever be in your whole life who does this guy think he is

whatever the governments have been doing it's not worked out you've never had worse interest rates your money has never been worth less everything is getting worse and the only thing that's making it better is cryptocurrency I'm sorry to interrupt but did he just say there's never been worse interest rates?

All right, okay, here we go. It's better than the dollar. It's better than gold. It's better money. Crypto is money without governments, and it is money without banks. You're not going to meet another product like this as long as you live. Yes, every scammer in the world is going to tell you something similar. Good morning, everyone.

Are you ready to look for some fraud this morning? They are promising 40% annual percentage return. I want to make people millionaires. I have thousands of millionaires. Richard Hart's head's token is a brilliant scam. Desperation has a look to it. And when you're looking for just anything, you will fall for anything. X is going to be the new cryptocurrency. We'll take over the market. There isn't anything else out there that's worth a shit.

Everything I have worked for all my life is staking X. Do it. I'd put it all in. All what? All over our house. Are you kidding? Why is it important to you? My life is staking extra. I put it all in. All what? All over our house. Why is it important to you? I want to feel loved.

So she got a lot of love. Everyone else feel loved, right? Sure. He's the Messiah. Savior. God. That sounds like a Ponzi scheme. Yes.

That you're incentivizing John to pull money off the market. You know what? I think he just described a 401k. If the music stops, they're sitting on nothing. Next to the McNulty. That's where I'm still frustrated. What is the value? Do you want to give ratio?

No, I don't think that it's a scheme. Because I trust Richard Horne for it. It seems like some of this is just a large performance art project. And if ultimately this is all a big performance art project, people are going to get fucked. I mean you can fool a couple people, but can you fool that lady? You're lucky it works at all. She trusts you. Listen, I think you should trust me, but if you get into the habit of trusting people like me, you get the crack scammed out of you.

That's to be in movie theaters for actual human people to watch on purpose. That statement seemed good. What do you think of that? Seriously, first knee-jerk reaction to watching that? I think you're painting them a certain way, and then you turn around and look at the U.S. dollar, and it's like, what's that built on either, right? Debt.

It's a shit show all around, opinion yeah i mean i i agree i just he advertised this that the hex was going to a million dollars and that it was the first blockchain certificate of deposit here's what the i mean the sec doesn't always tweet unless they think the case is a really big deal. Today, we charge Richard Hart, a.k.a. Richard Shuler, and three unincorporated entities that he controls, Hex, PulseChain, and PulseX, with conducting unregistered offerings of crypto asset securities that raise more than $1 billion in crypto assets for investors. Here's the quote. Hart called on investors to buy crypto asset securities and offerings that he failed to register. Here's the kicker, though. He then defrauded those investors by spending some of their crypto assets on exorbitant luxury goods. This action seeks to protect the investing public and hold Hart accountable for his action. So here's my problem. I can joke that

the SEC is right, but how does this protect anyone? I agree he has to be punished, but how is this protecting the investing public? Because if you already own Hex, this is going to zero and you're losing everything. That's the thing with all the regulation by enforcement is it's not positing a solution. It's just making the government richer and making a fool of the crypto industry,

the better parts of the crypto industry, sadly, as well. It's disgusting. Finally, before I let you go, I can let you go before if you don't have any thoughts on it, disgusting and finally before i let you go i can let you go before if you don't have any thoughts on it but have you been looking into what's happening with bald i don't know too much about bald so i'm happy to listen out here with everybody yeah you can you can you can ride along for coming along for the ride so bald guys in case you're wondering was a token that was launched on base which is the new coinbase exchange which doesn't have a token now how does that even happen is the question it's pretty complicated because base basically

doesn't exist yet so people who even were able to do this were not necessarily able to get their funds out because there was no bridge but we'll start here so coinbase launched their main weight main net two weeks ago with a public launch coming in mid-August. And then someone found the contract address and launched a token called Bald based on the bald head of Brian Armstrong. Obviously, this has absolutely no value. We all know that, whatever. But yeah, that's what you get in the crypto space. So it went absolutely nuts, right? And so let me find it. Here's a screenshot of Bald up 4 million percent in 24 hours.

So there's people who are like, I put in 50 bucks, I'm worth millions of dollars, right? And saw those massive paper gains. So it rubbed completely. This is what the chart now looks like. It was at a high of 0.097, just, I don't know, like yesterday, and now at 0.006. Okay, so it's down 95% from the highs. The deployers removed all the electricity,

the electricity, the liquidity, and got away with like $5.2 million. No surprise. So this is where it gets interesting and really stupid. Obviously, this is Coinbase. Is SPF secretly behind BALT? Crypto Twitter debates. Ladies and gentlemen, seriously,

A, I don't really care. B, I'm pretty sure that they've made a big public statement that SPF only has a flip phone and no real access to the internet. But hey, we can suspend that disbelief and continue on. So as you can see, the ball deployer is definitely a Coinbase insider because they held traded a lot of CBE. That's a token that effectively doesn't exist yet and routed it through Coinbase. They are also definitely an FTX insider since they deposited and withdrew tens of thousands of STDs through FTX.

And when you go back to the Deployer Fund, these are wallets that were attached to Alameda and SBF. And then you get into the fact that the Project Serum, which was obviously the DEX that went under with FTX because they largely owned it. They rebranded their Twitter account overnight to the BaldBaseBald, which was the person behind Bald, and started immediately tweeting about it. So somebody who had access to the Serum Twitter account changed the name. They were the person who created this rug pull token, and off it went. And then you look that the biggest ball depositing wallet was one of the ones that attacked luna and ust to cause the dpeg which we know was alameda uh who was involved in it and if that's not bad enough the wallet is also linked to the uh wallet that had 40 million in donations to chinese officials which is part of the spf case that he million in donations to Chinese officials, which is part of

the SBF case that he was bribing Chinese officials. These are the wallets that sent that $40 million to those Chinese officials. So, do I think there's SBF? No, but do I think that somebody in Alameda who's really good at creating tokens and pulling things

is involved? Yeah. It's like one day. How can all this happen in a day that's crypto baby i'm looking out for that wolf token i'm sure there's like 50 000 of them there's 17 000 of me on twitter with asking you how your crypto trading is going so nothing would surprise me but listen man so this is all uh debbie downer you obviously work deeply in this space give me some positivity what are you excited about that's is going. So nothing would surprise me. But listen, man, so this is all Debbie Downer. You obviously work deeply in this space. Give me some positivity. What are you excited about that's being built outside of this complete and insane nonsense? Oh, you know, I'm really more on the side of what's being done to kind of stop some of this stuff from getting where it is. So for Man from manchain ai we've got something really awesome called web3 socket it's a security operations

center that basically would bring it would be the first uh you know sock to compliance framework basically for the crypto industry so you've got your you know detection measures your deterrent measures you've got your incident response all that stuff in one package uh you know so so for me it's like sort of how can we help projects to avoid situations like Curve and all the other ones? You know, you can't stop people from doing what they do from the human aspect, but at least from the, you know, re-enters the attacks and the flash loans

and all those different things, wallet exploits, address exploits, you know, at least we can do our part and try to make the system more secure from a protocol standpoint. So that's pretty exciting for me. Can these things be prevented or can the black hats always get a step ahead? By the way, there was a really cool story of a white hat hacker. I have it somewhere here, but who was involved in this, who basically went and drained the

pool and then sent the money back to get it. Yeah, it was the Alchemix hacker, I think, drained it for, what, $12 million? Or was it the Curve one with the $5 million? I think it was part of the Curve one. Listen, I can only dig so deep into these stories. But yeah, so there was coffee, someone, and they literally dug it, and they took the money out before the hackers could,

which I find is really interesting. But can these things be prevented? Or is it really impossible, even for companies like yours, to stay ahead of this? I think the prevention is in the like, you know, people were saying back with with the SBF finance situation, proof of reserve, proof of reserve. Proof of reserve is really just a snapshot. It's a snapshot in time. So unless you're going to do that snapshot every single day, then it becomes more of what it is, which is a proof that your reserve stays consistent. Right. So in this case, you know, do you do an audit? Yeah, you do an audit. And it becomes more of what it is, which is a proof that your reserve stays consistent.

So in this case, do you do an audit? Yeah, you do an audit. But do you do multiple audits? You should be doing those audits all the time. Keep auditing the smart contract. Keep having people look at it because eventually somebody is going to find something that nobody else did. So it's really just a matter of having these things implemented and enhancingoney laundering on crypto and things like that, we look into what's the continuous monitoring patterns of the transactions. So you want to have continuous monitoring, you want to have continuous auditing as well. And I think that's

going to be one of the major things that will help keep the space more secure in the future. I'll agree. Thank you, Michael. Appreciate your insight and your help here. And I'm going to keep sending you that video make you watch it over and over again I love it alright thank you very much have you all soon again thanks funny I see a comment over here Scott move on with more positive news or please

consider taking a break I can't change the news guys and I'm not going to tell you how awesome it is when it's not I'm sorry I'm sorry I mean you can go somewhere else you'll be missed I'm not going to tell you how awesome it is when it's not. I'm sorry. I'm sorry. I mean, you can go somewhere else. You'll be missed, though. I'd love to have you back. Anyways, so yeah, guys,

I mean, this is a shit show. Like, I'm glad that Richard Hart is being held accountable, but I'm not glad that the SEC is effectively going to crash the rest of what was left of those tokens on a bunch of people. Inevitably, it has to be delisted. People won't be able to get out. So literally, their investments are going to zero.

I actually had a slight emotional reaction when I was watching that video again. This is only the second time. Watching more closely here with you guys, seeing people say they went in all in with their house money, the guy saying his life savings are in Hex. Like, fuck. Really a disaster.

It's easy to talk about these stories and how bad it is and the DeFi exploits, but these guys are really destroying people's lives. It's pretty astounding and sad and disgusting. But hey, man, I'm sure that we'll have great news tomorrow. I was laughing with the crypto spaces, with the Crypto Town Hall Twitter spaces team. I was like, yesterday I was interviewing

a potential president of the United States. And 20 minutes later, I was having to like litigate Richard, uh, Richard Hart and, and hex. And she shows you how insane and nonsensical this space, this space really can be.

But guys now maybe on some more optimism, hopefully if we have a positive view of the market, I've got Charlie Burton, one of your guys' favorite guests. As you know know we always kind of bring on a trader at the end uh talk about what's going on in the market how are you charlie yeah i'm very good it uh yeah very i don't want to say too good now having just caught the last few minutes of your conversation there so we don't have any show the video do we i can play the video if you haven't watched it it's really good i don't know if you caught it watched it yet. It's really good.

I don't know if you caught it, but really compelling stuff. No, okay, good. Then I've saved you. You're welcome. So listen, what are we looking at right now in the market for you? I guess give the broad strokes, then we can zoom in a bit more. Yeah, well, when I was last on a few weeks or so ago, a month or so ago, we were talking about the S or so ago we were talking about

the s&p when we were talking about the s&p and the dollar and the amount of pessimism that's there it's funny how you know times change and you have to stay on top of the markets because it seems like the there's an element of euphoria starting to creep in we started to see a little bit in the aaii surveys and we're starting to see a lot more activity in the options market with retail traders buying a lot of call options so we're starting to see spikes there and so you start we're getting thinking okay maybe it's time for a bit of a pullback I don't want to start getting pessimistic or anything but because as you know we've both been bulls for most of this year but I'm a seller I'm selling stops I'm a seller. I'm selling stops. I'm,

I'm a seller. Yeah, no. So we, we agree there. I mean, I think we had the run. I, I, I'm not convinced we're going to new lows or the great depression as some of my guests are, but like, if you're trading or looking to maximize, uh, yeah, I mean, I was selling meta three 14, I guess it just topped at almost 320 something yesterday or last week. But yeah, I mean, largely I had a position in that that I had started at 200 something, bought all the way down to 100 and then bounced all the way way back up. But if in this market, you can make a 3X, I'm out. I don't really care what it does next, to be quite honest. But yeah, I feel like things are topping topping i feel like we're seeing the sentiment top where bulls are extremely excited they're uh dunking on anyone

who's been negative the fed openly saying there won't be a recession at all which is effectively impossible by any metric if unemployment goes up even slightly just a lot of signals to me that we're kind of popping here yeah and um and this what's interesting as well you're talking about the central banks there is that they're all starting to turn together aren't they the central banks so uh and start changing their rhetoric uh together it'd be interesting to see what the pmis are coming out in just 30 minutes time of the us what they're going to be coming out like but nevertheless yeah I think we're in a in a position if the stock market's come down that'll probably be supportive of the

dollar as well we can talk about that separately but but yeah it just feels like we've just in this past few weeks or so we've flipped from seeing those perma bears to people thrown in the town starting to get excited as you just said and when they start getting excited then we start having to look the other way don't we so um yes he looks right for it really we've got divergences technically do you want me to show some charts yeah let's let's yeah i would love that's what that's what we need here charts are better than the stories so we gotta do that yeah i haven't seen massive bullish bearish divergence on sbx uh a body or go ahead. Yeah.

So we've got some just technically we've got some divergences. This is just a daily chart of the S&P at the moment. It's just a CFD chart. So it just tracks the futures. So just the standard of MACD down the bottom, we can see we're diverging there. It's probably a bit clearer if I looked at the NASDAQ. So you can see the NASDAQ divergence there. But really, I love this technical channel that the S&P has been in for much of this year. And we've been riding the top end of this channel.

It's always difficult. I don't like trying to catch a high. But we did put those key reversals in last Thursday, didn't we? On the back of that, you're better than expected GDP and and durable goods orders and so where we made new highs close below the low of the private step for the previous day so a little bit of a warning there they don't always come in as you know straight away but it's a bit of a warning um so we'll just see I don't like trying to call an absolute top, but I am starting to edge that. Certainly, I would like to see a bit of a pullback.

And maybe if we start to see some selling coming in today, it might help. That's for sure. So from a technical perspective, yeah, I'd like to see a bit of a pullback here. I mean, speaking of, I mean, when I talk about divergence, I love trading with overbought and oversold RSI and just simple bulls. It's like the most simple strategy in the world. It's just really consistent for me. But I mean, you've got the SPX right here overbought. It doesn't get much more overbought on the S&P than in the mid 70s.

And you've got pretty clear bearish divergence right now that's building. So to me, it just looks like eventually RSI goes to oversold. We get a correction then we move on with our lives now i don't know what happens after that so i'm really just looking at this in the short term and like exactly through a trader's lens because i'm not i don't feel equipped at this point to make calls about like like i said market top before a recession or depression it's kind of above my pay grade we are we are starting to head into a period as well of increased volatility from a seasonals perspective as we're starting to head into

august and september volatility is you know historically starts to pick up so it does time quite nicely of where we're at but yeah i'm still of the view actually that if we do get a bit of a pullback still i'm still of a view of i want to be a buyer on a pullback um at some point now once we get a a decent or if we get a decent retracement down the s&p that's how i'm still looking at the markets myself because um i think what will happen is very quickly we're going to get to all-out pessimism after just a couple of percent pullback that's what's that's right five five percent of everybody uh we're going to zero. Exactly. That's inevitable. Yeah.

Have you been watching Bitcoin here? No. Yeah, sorry. Yeah. I wouldn't blame you. But I mean, it's getting a little more interesting right now. I mean, I think it's showing some real reason to believe there could be a little bit more downside. To me, also just a dip to buy whenever we uh finish it but but yeah go ahead yeah i know that 24 25 000 mark does look interesting again actually that was a lovely pullback zone that we when we came into there in in june but um wouldn't surprise me if we saw um some moves back down there because i know there was a stack load of orders in the 24 000 area um the i'm with you that overall i think i'm i'm basing my base case is that bitcoin did bottom um last year and so we won't be going to new lows that's how i'm that's my

overall assumption whether what with all of you know the sec rulings on the likes of and what's going on court cases wise with binance and the likes, whether we're going to rip higher this year is still debatable. But as we talked about this last time, maybe 2024 looks a lot more interesting once a lot of that is cleared out the way. Yeah, I've just been looking sort of at the Bitcoin chart here on the daily. We had this very clear range to me in the red here. Again, parish divergence with RSI, which just to me always seems to work out when you're overbought. And now I think RSI is just going to head down. And we had the break, retest, no candles able even on the four hour to close back up in that range.

So to me, this is a gratuitous short if you're just trading it. On a low time frame. Right. Because you have a clear invalidation if you're just trading it at a low time frame, right? Because you have a clear invalidation if you close a candle back up in that range. And then even this local sort of bear flag pennant, whatever, I guess we could finish drawing it here for people. That's breaking down. So I think we can get down to the low 28s, high 27s or something here as a result of that.

But I guess that's kind of boring, right? These aren't big moves. No moves no no they're not um i do think uh one market as you know i do love the dollar yeah well let's look at it because the dollar is faking out on this big head and shoulders that we thought we had yeah um i was as you know i was i was short the dollar i was long euro dollar um did manage to capture pretty much right when the dollar got down to 100. It was an obvious level to bank some profits down there anyway around the 100 area. So it was a reasonable exit, but then got trading stopped out on the rest. So I'm no longer short the dollar.

In fact, I'm long the dollar right now. Because like you say, it's a lovely fake pattern. We've had these two lows here big breakdown bar no doubt probably um sucking more shorts in and then it's just turned around funnily enough on my charts with the macd down the bottom there we're diverging down the bottom there as well this is on a weekly time frame so i do see that divergence yeah i do see the potential for some more upside overall on the dollar. And when we last talked, we were talking about the range of the year for the dollar and how we're into our eighth month into the year now.

The year's range is 6,300 pips, and yet the average range is 11,400. There's a lot to go as far as the range is concerned for the rest of the year. So I do see plenty of scope to expand its range. So it's either got to get back down to the 100 area where it made its lows recently or climb all the way back up into the 104s or more in order to expand its range for the year so i think this

is an that's an interesting ongoing story and obviously i translate that across into actually trading the euro dollar yeah so i would just say so you you so people know he's looking at he's looking at this for reference but it's the euro usd chart that he's actually trading correct yeah so yeah so we're looking we're using the dollar index as a reference point exactly and then going off and actually trading the euro so um so what i'm looking at right now is again a weekly chart here we've had a great run over the last what eight nine months or no longer uh since late september last year and maybe it's time for another retracement we've

been making what i call marginal new highs we see on the weekly charts here for the euro i'd have loved to have seen it punch just a little bit higher but it just couldn't manage it and now we've started pulling back technically at the moment um if i just zoom out on the daily chart little bit here for the euro dollar it's still within the the realms of possibility to turn back up it's technically we've not actually had a technical breakdown as yet but um i am watching tentatively i've got some position on at the moment and we'll see if it does pull down uh pull back but i must admit at the moment if you look in relative terms where you know you look at the where the federal reserve is and where the u.s economy is and then you compare it to the eurozone the u.s is is outperforming

and so the there's a structural war argument here to say well we're seeing weakening data coming out of the eurozone and actually in this past week especially with those some of that the gdp data last week durable goods us is still performing okay and certainly in relatively by far outperforming the eurozone yeah and people uh you know you have to remember that as bad as an economy can be if it's relatively better than another economy that it's doing well and that's i mean that's the whole nature of why dxy moves the way it does because you're not judging the dollar in a vacuum you're judging it versus a basket of other currencies and as long as i say it's the prettiest pig in the pen then you got to be long yeah exactly for the for the foreseeable until you know it seems that way we've got some more data

lots of data coming out this week but um but i do think I do think that there's a story here overall, as I've been saying last time, this whole story for the euro and for the dollar, that for the year, they're fairly compressed ranges and the potential to expand those ranges there, which means that the euro to the downside could be back potentially back below 105 at some point i gotta take a trip to europe yeah call me when that happens i miss you know i came to london a couple weeks ago and i was like man a couple months earlier this would have been a 30 cheaper trip yeah yeah okay the pounds done were quite well but um it's either that or or at some point we're going to see the euro extend um at high and we'll see that dollar index break 100.

But for the now and over the near term, it looks that way. I know it's on the back of a short term decline in euro dollar here and the dollar strengthened over this last week and a half, two weeks. But there just seems to be a building story going on here that uh that the u.s is in a better position currently than the eurozone and and the uk uk we're probably about to put interest rates up uh this week but we're we're struggling with stagnation stagflation so um uh the pound looks potentially vulnerable by the end of the week yeah totally agree any last thoughts before i let you go and only thoughts i'd say from a trading perspective we're just coming into august i think people one piece of advice

i'd always offer is uh lower your expectations we are going into the big summer month for the northern hemisphere countries and so lots of people are taking vacations if you lower your expectations on what you're going to achieve and what the markets may be doing through the month of August, if it outperforms, then it's a bonus. But at least then if it doesn't, if the markets go choppy and don't do too much and volatility just dampens straight right down,

then you're not going to be crying into your handkerchief wondering what's going on. Absolutely, man. Thank you, Charlie. Always appreciate your perspective. Have you, Charlie. Always appreciate your perspective. Have you back soon. Everybody, thank you. All right, man.

Thank you. All right, guys. That's it. Now I have to go talk about all this nonsense again, probably on Twitter spaces. Kill me. Budgets. What the market giveth, you got to discuss it.

I think that was in the Bible, actually. Scott, verse 2, 17, 69, 420. Anyways, guys, I'll be back tomorrow. Of course, we got Christopher Inks always on Wednesdays. And that's about it. See you guys tomorrow. Peace.