The Wolf Of All Streets - Breaking: KuCoin Criminally Charged | Crypto Town Hall

Episode Date: March 26, 2024

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Oh shit, I'm on stage before you Scott, for the first time in a long time, and a co-host before you and you're still a listener. I'm bad. So now I can talk about Scott's show and why I stopped listening to it. So this is my story on why I stopped listening to the most respected show on crypto, The Wolf of Wall Street. Number one, it's a shitty name. The Wolf of Wall Street is one of the laziest and cheesiest names I've ever seen, number

one. Number two, Scott doesn't smile enough. You literally try to smile and you always fail. That's the second reason I haven't listened to it. Number three, you don't give us alpha. I know you've got a new alpha show, but instead of you doing it, Scott, you give someone else the mic to do it. That's the third reason I stopped listening to your show.

The fourth reason is you haven't had Michael Saylor on stage for a long time. That's disappointing. And RFK Jr. And number fifth reason, the fifth reason, I'll say it when he comes back, but essentially he doesn't, there it is. The fifth reason I don't listen to your show, Scott, is that you don't show anymore. And sixth, you don't predict.

You don't predict the market. You always give us reasons of why you should never predict the market instead of actually giving us what we want and giving us those juicy predictions they're usually pretty good at so that's the sixth reason if you're talking to me i missed one through five because i glitched and had to shut down so uh i'm glad you feel those ways have you ever seen the uh meme that uh i i'm not reading all that bro but I'm happy for you or sorry that happened to you

that's me right now because I didn't hear any of what you just said I just heard number 6 and it sounded bad yeah just don't give market predictions anymore you're meant to tell us what's going to happen next you're meant to be the oracle I did a show yesterday in the afternoon I brought back

my charting show of previous cycles and went through a ton of charts and wouldn't say gave predictions but gave my analysis on which ones look good bad took requests so i'm slowly easing back into it okay can you tell us what the recap of that show how does this compare to other markets previous cycles um and then your analysis slash predictions moving forward? And did you have other panelists on your show? No, it was just me. I did a show by myself for the first time in ages. How were

the views compared to the others? Seven people watched, four of them were my first. Two were sick people who signed on and passed out. It was decent, was decent actually. I don't know, 15, 16,000 or something like that. But I think that the, you know, I, I obviously think that this is a mild correction. I have, you know,

I don't know, I don't like to give time-based predictions, but you know, every instinct I have and everything I look at says up a lot more, you know, across the board. And that will come, I'm sure in cycles where Bitcoin outperforms and certain altcoins outperform and memes go crazy, but you know, we haven't even gotten to the having yet. We're already at an all time high. And, you know, so I think that we're going to see much, much higher over the next sort of year and a half, you know, and I think we just, if you're trading it you're kind of

in the dgen side chasing the narrative of the day right so yeah the ai moves and then the meme coin moves and then last week obviously ethereum uh blackrock you know seeded their 100 million for an ethereum their token buidl that's a yield based token so really doing the tokenizing world real world assets now we see rwa products ondo and uh ix swap and a bunch of these you know mantra all going absolutely crazy sort of like you know a bunch of ai coins move when there's good news from nvidia or facebook rebrands as meta. So everything that can even claim an attachment to metaverse went nuts last cycle. I think that's what we're seeing there, you know, with, with AI and to some degree real world assets,

although these projects are really working in the real world asset space. And so I think, you know, just chasing and following these narratives is one way if you're very active in the market, the other is just to kind of, you've bought your holding and just ride the wave because it is, I think, likely to go much, much higher. I was looking at a couple of charts and two that stood out to me and I have no vested interest in mentioning either of these were Chainlink, I think has come back.

It was kind of the first mover in this entire bull market, made a massive move. And since it's been sideways for a couple of months, like chain links debt, the classic, you know, impatience in the market, but it really looks like it's flipped the key sort of resistance and support and gala games. I don't know much about it, but someone asked me to look at it yesterday and it was really a pretty looking pretty astounding at support. Those are the two that I sort of identified just from the chart perspective.

I don't own either. I'm at the moment, I own some link, actually. Very little. And yeah, so I mean, I think the market still looks great, you know, and I was really encouraged that we had the correction last week, largely, I think, because of GBTC outflows. And then all of a sudden, we have massive inflow numbers again on a Monday after the weekend. So, you know, I think we know what's driving this.

And have we seen the rotation? I haven't been looking at the markets at all, so a pretty basic question, but how have the ALTs been doing? I know you've talked about it briefly, you've given a few examples. RWA tokens have been up absolutely massively in the last few days since that, you know, black rock RWA on Ethereum news. So just one of those sort of narrative cyclical things. You know, I think it's kind of the money's going between RWA tokens to meme tokens doing their own thing, AI tokens, gaming tokens.

We're just seeing the cycles, you know, as we've seen in the past where kind of everything catches a bit in a certain narrative and then slows down and then moves elsewhere. Okay. And then the other one is obviously we've seen meme. Have meme coins corrected or they're still blowing out i haven't looked at the charts again i haven't paid much attention but i believe that there was a cool off in the market maybe somebody else here follows it

more closely can tell us uh i don't uh i don't follow it too closely i know you know a week or two ago it was absolutely insane on the uh on solana particularly i think that there's been quite a bit from what I've seen moving to base, you know, just my superficial reading of crypto Twitter is that a lot of the meme coin activity now is starting to pick up over there. Yeah, I'm just trying to

look at the 7% price changes but it doesn't show on my phone or coin market cap. Again, I'm pretty old school with this. Let's go to the panel. And then obviously we want to discuss the ETF inflows. I know that they were really positive today after like, what,

five days of consecutive outflows. Is there something we discussed? We've got the right panel for that. We've got Juan and Ryan on stage. But maybe just if there's anyone on stage, could you tell us how meme coins have been performing? I know a lot of people don't like them, but I'm just curious to see if they've –

meme coin season is still ongoing. Does anyone know? Has anyone looked at the charts? Five, four, three, two... I thought you said two. We got the right meme coiners today. Let's dig into the ETF numbers. We've got Ryan and Juan.

Guys, how are the numbers looking? I saw a tweet. Let me open it up again. Just talking about who's our investors. Spot ETF alert. Mass, how are the numbers looking? I saw a tweet. Let me open it up again. Just talking about who's at Invest Answers. Spot ETF alert. Massive formal hitting the market. Surging volume with nearly two hours left on the clock. When was that?

That was yesterday. So, yeah, we're good to get your thoughts on. Obviously, we've got more data since. So, how's the data looking? And what would you explain the outflows that we saw for five days as the markets were correcting? Is that an indication that ETFs is not as long as long term as many of us would like him to think it would like to think well well what we saw last week was the the first week where every day were net outflows that's the first week that happened every consecutive day and it totaled 887 million

in an outflows for the g for the bitcoin etf complex But that was entirely driven by GBTC. GBTC had $2 billion in total outflows for the week. So counting out GBTC, the rest of the ETFs saw inflows for the week. They were at a slower pace than the prior weeks, but of course, it was a week of outflows that the market was correcting. So it really was the story driven by GBTC. A lot of what I saw there, Eric Balchunas commented, a lot of that was driven by Genesis trading inside the DCG group selling GBTC shares. So we still saw inflows into all the other ETFs last week. And then yesterday, we saw net inflows again, 15 million for the complex. Again, this is being overshadowed by GBTC, which had 350 million in outflows.

But you look at the rest of the ETFs, iBit saw 35 million in inflows yesterday. Fidelity had a big day, 261 million. We at BitBitwise, we saw 14 million. So I don't think the trend is broken. It's just there's been massive selling and capitulating out of GBTC. But the rest of the ETFs are still seeing demand. So we don't think that trend is broken. And we think once GBTC outflows slow down, we're going to continue seeing that resumption of net inflows, which we saw already yesterday. And before continuing with those numbers and getting Ryan's thoughts on it,

can you just kind of touch on the news in London about the ETN potential approval as well? Let me just read the news here. So the London Stock Exchange has announced that it will accept applications for the admission of Bitcoin crypto exchange traded notes starting from April 8th. How significant is this? Does it show more tradify adoption? And maybe you can explain what, you know, what ETNs are and how important that is.

Yeah, I think it is a big deal. Obviously, London Stock Exchange is the biggest exchange out there in in the uk uh and these are approved uh to be traded by the fca which is the regulatory the equivalent uh kind of the sec over there uh and the fca in the uk had been pretty um had been pretty strict against crypto products for the last couple years so the fact that now they're they're approving them and allowing them to trade, I think is a big deal. It is congruent with and we're hearing about in Europe, Matt, our CIO, was at London at a conference last week. And he said the interest from investors out there was stronger than he expected. Now, ETNs are exchange traded notes. So as opposed to ETFs, which are funds that you can redeem, create and redeem shares for, ETNs are a note.

So they're a debt-based note. So you collateralize the assets by a note that then you put on the exchange and trade. So they're different vehicles. But these ETNs are, I don't really know the reason, but they're more popular in Europe than they are in the US. And they're a common vehicle where an issuer puts out a note for the assets and then you can trade that vehicle. So I think it's fine. Would that bring in more inflows then similar to what ETFs have done?

Obviously not the same numbers, but would that start bringing in European infos? Yeah, I think that will, I think, be a good trading vehicle in Europe for demand for both Bitcoin and I think they said both Bitcoin and Ethereum, right? I thought it was just Bitcoin. Let me just check again. I believe it says Bitcoin and Ethereum, but yeah. Okay, there you go. Yeah, so I think it's positive for the European market. And since we've got Ryan here, what I promise we'll do,

and we haven't done before going to Ryan, is just getting Scott and Ryan to talk about what they've discussed in their shows. Your charting show, not sure if there's any other shows, any other interviews that you did that will be interesting to kind of sum up for the audience. And Ryan, I know you did a show

and it's bullish as fuck across the board you shared a lot of data in chart after chart after tweet after chart so he's got full bull market mode um so we'd love to get your thoughts as well what you've covered on the show and your thoughts on the market yeah i think i said look if we break the all-time high then then you know the we we seem to be attacking that all-time high again if we break the all-time high again. If we break the all-time high, then I think we've got limited time until, then we should get a very strong altcoin rate. If you look at the history,

the last time that Bitcoin broke its all-time high, 70 days later, the alts broke their all-time high. That was like a 70-day period. Now, Bitcoin broke the all-time high the first time on the 10th of March. Oh, sorry, on the 10th of March. If you extrapolate that forward, it means you've got about 50 days. And if the alts repeat their performance from last time,

there should be a 50% jump in altcoins between now and the next 50 days, if we repeat the same chart. So just giving perspective that usually when Bitcoin breaks the all-time high, the altcoins tend to follow. That's one of the things we discussed. The other thing we discussed is we discussed how your portfolio needs to change

from the beginning of the market to the next part of the market. So the beginning of the cycle, we're all taking bets on Bitcoin, the Bitcoin ETF, the ETH, Dencoin upgrade, the, what else, the Bitcoin ETF, the ETH, Dencoin upgrade, the, what else? The Solana trade. But that's like, that was great for the first part of the cycle. We're now going to the next part of the cycle.

You got to look for the next narratives that are going to run. And we just quickly covered some of the narratives that I think we're going to run. And you did a, you had a whole show a few days ago, a couple of weeks ago now, about AI being 60% of the way in. I think 60% or 80% of the way through. What's your stance on AI now? Are we at the tail end of that narrative and moving to what? A's or gaming or something else?

Yeah, look, I think the AI narrative has had a good run. The thing is, you've got to imagine that the AI narrative on the main stage, in the trade-fly stage, I don't think that narrative is going away. And as we get more progressions in AI in the main stage, they're going to filter down to crypto, whether it's justified or not justified. It's going to happen. So, you know, like you can't not write. I don't believe that any of the crypto projects have – I won't say any.

There are a couple of crypto projects that have. But I don't believe that a lot of the crypto projects have the amount of value that they purport to have, if you know what I'm saying. And so, as long as you know the

terrain under which you play, and as long as you know the rules of the game that you're playing, and if you don't get out before the end of the hype, you're going to get destroyed. But I think it's good. It's a fair game. It's like meme coins.

And talking about meme coins, I said earlier before you jumped on and we didn't have any meme coins on, they've been performing. How did they go through the correction?

I haven't been watching the charts at all. And are we still seeing, I know we've seen a few big launches. I think it was like a BNB project that raised, correct me if I'm wrong,

a quarter of a billion dollars in like 48 hours. Yeah. A meme like a BNB project that raised, correct me if I'm wrong, a quarter of a billion dollars in like 48 hours. Yeah. And meme coins on BNB. Yeah, look, meme coins are amazing. Meme coins are, for me, the biggest problem right now

for me of my entire business on meme coins. And the reason is, as I said last time, I have a massive problem. Everybody in my office is trading meme coins. No one is focused on work.

No one cares about their job anymore because I said it last time, I'm saying it again this time. These guys are early on meme coins. They're making million dollar trades. I mean, today in the office two people made a million dollars on a meme called Larry Funk, which is obviously a parody on Larry

Fink, right? It's a Solana meme coin and it's called the symbol of the meme coin is BlackRock. So it's black. You meme coin and so it's called the the symbol of the meme coin is black rock so it's black you look you look for black rock right so people made a meme coin called black rock these the degens in my office bought it two people in the office made uh made a million dollars each um uh on this black rock pump it's ridiculous. It's pathetic. But how do you get a person who's been earning $5,000 a month or whatever the number is

and now made a million dollars on the meme coin? How do you get the guy to come to work? What do you possibly do? How do you get the guy to actually come to work? It happened to us a while back, not a while back, recently,

with some of our other staff where they made also a couple of million dollars on the cat meme coins. And to be honest, I can't get the guys to rock up at meetings anymore. I can't get them to contribute at meetings anymore because, well, I don't need a job. I'm a meme coin

trader. I've just made $2 million or $1 million, which for me is life-changing money. And the reality is it's impossible to get those guys to continue to work. It's just not possible. I'm finding it right now to be the biggest challenge of my business. Ironically, the biggest challenge of my business

is the fact that everyone's making too much money outside of the business. So just fire one of them. I'm going to be with no staff. I'm going to be left with no staff, which is that I need my house. The business is the business works because we have an amazing team that is motivated to make money.

The problem is that when the team's making more money trading meme coins than anything else, then it's very hard to keep a business going. All right. All right. Hold on a second. Like you can hold on to say CTO, CTO,

if you can keep your mic muted and unmute when you speak, just because you've got a lot of echo on your end. So whenever you want to jump in, just unmute and speak. I just wanted to jump in. Hi, Ran. Great to hear you. I have another solution for you for the problem. Because what often happens is that the guys take that one million

and they buy another meme coin and that one goes down And then they lost the 1 million again, and then you got them back to your office. So That that could that problem could take care of themselves, but I'm joking I'm joking, of course, but it is a little bit of a truth because it's very easy to buy the meme coin It's very difficult to sell it after it's gone up these guys are selling these guys are selling these guys are selling i watch them sell and take profits i mean i'm watching it i i know i know ryan i know you guys are doing it i'm taking it as an example of education for everyone listening here that it it is it is uh fascinating

times here where everything is pumping and it's going up like 100x, 1000x and so on. But that we've seen in the previous cycles. And the challenge is really to get out. I'll tell you what the difference is. CT, I'll tell you what the difference is. So let me tell you. I'm going to take you into the mindset of these meme coin traders. Number one, they don't give a shit about Bitcoin or Ethereum or Solana or anything that's fundamental. Okay. So let's just understand

where these guys are coming from. They don't care about anything that is Bitcoin, ETH, Solana, Uniswap. They couldn't give a shit. They don't even care about crypto. They only care about memes. The only reason why they care about crypto is because they're using the crypto rails. Second of all, so this is the playbook of a meme coin, of an average meme coin trader. They buy these ridiculous launched meme coins on a fully diluted valuation of under $100,000. And they put in very small amounts.

They put in, I don't know, they put in $1,000, maybe $2,000, right? Now, these meme coins then start running and at like 10x, they take their money back. $2,000, right? Now, these meme coins then start running and at like 10x they take their money back and then if they, you know, like they do easy 100x's, so that to go from $100,000 $40,000 to $10,000,000 $40,000

is nothing in the meme coin game, okay? At this point, the guys are up 100x on their meme coins, right? Now, what they do is, let's just use an example, they cash out $50,000 that gives them 50 more bets on the roulette. Problem is that right now the rou do is, let's just use an example, they cash out $50,000. That gives them 50 more bets on the roulette. Problem is that right now the roulette is, you can't, it's not like blockchain where you can then take all your profits and reinvest all your profits back in other tokens. You can't because you're talking about new coins that are $100,000 fully diluted valuation.

So they just go and take these small bets again. Now, the problem is that right now the odds are very much in their favor because more than one in 50 is actually paying, right? The casino odds are more than one in 50 is actually paying for a short period of time. And so right now, with the current market sentiment and what's happening in the meme coins, it's almost like a, it's like a roulette. Just think about it as a roulette and they're putting down their chips on 30 out of the 36 numbers, but the repayment odds are more than 36 to one, right?

And so it's like a no-lose roulette currently. I'm not saying it's going to be like that forever. And in fact, I really hope that it would end for the reason that I've told you, because I'm going to get down to the serious business of actually running a business and not trading meme coins. But right now, as it stands, no one in the office cares about the business. No one in the office cares about blockchain and Bitcoin and Ethereum and so on.

They care about Larry Funk, Gtop, which is Andrew Tate, Bink, which is Bonk's sister. That's what these people care about. You know what I mean? It's wonderful times. It kind of reminds me a little bit of the ICO boom in 2017 and so on. Even worse than NFTs. Even worse than NFTs.

NFTs were like a tough time for us. This is much worse than NFfts yeah it's a fascinating times i mean if looking a little bit what happened that time what happened was that it started accelerating in numbers do you see anything of that happening that it gets like 10 times as many meme currents the week after and so on and that it gets diluted? Thousands and thousands and thousands and thousands and thousands of meme coins launching. You know, but it's early days and right now, unfortunately,

the people that are close to the fire have like a real competitive advantage. And, you know, it's like us. The reason why we make slightly higher returns in crypto is because we're so close in a market that has huge information asymmetry. And we're

very close to the source because we're spending a lot of time doing research. We have a slight advantage over most other people that are trading, right? And so in meme coins, they've got their own little scenario, which is exactly the same, right? So the closer you are to the buyer, the closer you are to narratives and the big Twitter accounts and you know who to follow, the more chance you've got of being first. And, you know, these guys are spending, instead of spending time in the business, they're spending the majority of their days

actually trading meme coins. And getting meme coin alpha, they call it. It's alpha. I love it. Love it. Yeah. Scott, I know you want to go to the rest of the panel. I think we've covered meme coin pretty heavily. Probably should do another space on it this week

considering there's a lot of where the hype is, along with RWAs and gaming and AI. But I do want to go to Juan and finalizing the discussion on ETFs and Ryan getting your thoughts afterwards. And then Scott, I'll let you take over maybe telling us what you've discussed on your show, on your other shows, and having it back and forth with the panel. Juan?

Oh, yeah. I'll let Ryan comment on the ETFs. I don't have too much more to add. But what I did want to say outside of the meme coins, on the RWAs, I think what is notable for people to pay attention to is that the announcement from BlackRock wasn't just big because it's BlackRock, but because they're launching that yield token on the Ethereum network. And likewise, additional to that, which didn't get as much coverage, there's another tokenization platform called Libre developed by Laser Digital, which is Nomura, the Japanese bank's crypto arm.

They're partnering with Brevin Howard and Hamilton Lane and launching a tokenization platform as well on the Polygon network. And what's notable about those two things is that prior to these announcements, the majority of the tokenization pilots that big traditional asset managers and investment firms had been doing, like Apollo Global and JP Morgan and others, were on private blockchains. And these are the first instances that we're seeing big announcements of not just pilots, but actual funds. And they're coming on public blockchains. And these are the first instances that we're seeing big announcements of not just pilots, but actual funds, and they're coming on public blockchains. So I think we've moved from the piloting private blockchain phase to actually coming online on public blockchains.

And I think that is a big difference. And I think it really signals that this RWA trend has legs and is going to be built on public blockchains. And I think that's a big deal about it. Did you want to go to Ryan, Mario, to finalize as well? Look how sad you sound. Go ahead, Scott. Go ahead. So sorry, man. So sorry. Ryan, please.

Sir. Love the energy today, Scott. No, I think that what I'm seeing right now in the Bitcoin ETFs is really interesting. And just across the overall interest in Bitcoin and Ethereum from institutional investors is kind of surprising. I was at an event in Washington, DC last week. This was a, uh, like a, uh, one day conference for high net worth individuals, private equity managers, family offices. And we were talking, I was on a panel about alternative investments, real, uh, commercial real estate, private credit, private equity. And then I was the, the, you know, Bitcoin guy, uh guy on the panel. And I was having some

conversations, not only with the other panelists before, during and after the panel, where they were extremely skeptical of Bitcoin and crypto. I was having a bunch of discussions throughout the day with a lot of investors, a lot of high net worth individuals, family offices. And I just feel like we're so early. That was my major takeaway is that while we all spend all of our time or majority of our time thinking about Bitcoin and crypto and analyzing the charts and watching price movements and how much Bitcoin has Michael Saylor bought this week, the majority of the investing world is not paying attention quite literally at all. So many of the people I was speaking to said that they have no interest in Bitcoin. I mean, they were talking about Tulips and Ponzi schemes at this event. And so to me, just zooming out, I think that the interest we've seen so far

from investors into the TTFs are both retail investors who are allocating their 401ks or their brokerage accounts who maybe previously were doing it through Coinbase or didn't want to do it at all. Or we're seeing those individuals at big financial firms, like those one or two people at different RAs or financial advisors that are really sold on crypto, they're making allocations for their clients. But the majority of the investing public isn't even thinking about investing in Bitcoin yet. They're not even

to the point where they're considering it. They still think that we're in this bubble, this crazy tulip mania bubble. And so for me, that was kind of a two-pronged realization. One, we're so early. And two, we have so much room to grow and we have so much more interest down the line that's not even beginning to look at crypto. And yet we're sitting here at all time highs. So I think, I don't think we're going to see a lack of interest in Bitcoin ETFs going forward. I think we're going to continue to see interest grow over and over again,

month after month. Why would they possibly think it's a bubble when we have Pepe's meme coin and Elizabeth Horan and all of their cousins pumping like mad on the Solana block? I mean, where would they get that idea? What, why could they have a negative perception? No, they, they, no, no, they're talking, they're not, they're talking about Bitcoin.

I'm kidding. It was a joke. It was a joke. I'm just, I'm just saying that, uh, you know, we, we have, yes, I don't think they're aware of Elizabeth Horan, although I will say Elizabeth Horan just for the sake of saying Elizabeth Horan. Um, I don't, I don't think that they're necessarily aware of that. But it's just funny that we do have sort of the self-inflicted wounds or self-inflicted shooting ourselves in the foot when it comes to perception for those who do take a look at the market, I think, deeper. But I don't think that meme coins are the reason that some of them have not allocated yet to the ETF.

I think it's probably perspective from last cycle. They're still thinking in terms of SPF and Voyager and Celsius and FTX and such. But do you ever have to talk about meme coins in meetings, Ryan? Do you have to ever explain what's happening over there? Oh, I did have a conversation with a woman on last week who said her son was finding all of these tokens on TikTok and Instagram and making money off of trading them. And he explained it to her basically like pump and dumps. And so I'm trying to sit here and explain to this investor who has been managing money for 30 years. I'm trying to make some sense of it.

Oh, it's actually a tokenizing culture. And yes, some are scams, but some of them are... There's real momentum behind them. And I just felt myself thinking like, what am I talking about here? I can't believe it's come to this. I'm literally explaining what dog with hat is to some financial advisor, and then trying to convince them to invest in Bitcoin because it's a store of value and a multi-trillion dollar asset. It's, it is quite a wild, a wild time to be in the market.

Yeah. I mentioned I was on Yahoo finance a couple of weeks ago and just coincidentally they had Senator Lummis on right before me and they were having this serious conversation with her, you know, about legislation and what she thinks of the regulators and what's coming. And then the anchor just hit her with a question about meme coins. And it was like the most cringe moment sitting there backstage, watching her have to like speak for meme coins who are defended or even have an opinion on it because, you you know she was making a comment on

crypto so that perception is at least out there slightly right uh that was obviously it was going insane at the moment but uh why does a u.s senator have to like defend she didn't defend them by the way but uh defend the idea of meme coins when she's speaking positively about bitcoin you know so i do think that uh that's probably a challenge when we have these bubbles. But to your point, I think slowly these people are just going to have their perception change and come online and they'll be forced to by their customers, I think, with time. Mario, aren't we supposed to be talking about the halving in less than 30 days? Go ahead, Ryan. Sorry. Yeah, we can't. I wanted to, just on the meme coin side before

ZeroHedge or someone else kind of goes to the halving of the markets in general, my perception, I've said this already, my perception has changed. Like we've had the first bubble, the second bubble, the third bubble. When we talk about these utility tokens going through a bubble, I'm not eating, we talk about them being a bubble, but we also understand that there's use cases that, you know, that are probably too early or overvalued. And I'm in

a position now where I think having those discussions, Juan, I know you probably don't agree, but I think very soon you'll be having those discussions in a serious setting where meme cons just represent decentralized communities. I know it's hard to imagine right now, and it took me and Ran, I think, took a bit less time, but it took me a while to get to that realization.

I think they're going to be here to stay, not only through this bull market or previous ones, but future bull markets as well. So I've kind of made it, added it to our business model as well. We're doing, you know, almost daily shows on them as well. I think that I want to just reiterate a couple of things when it comes to meme coins.

Number one is, I think that I need to remind you that when CryptoKitties was launched on Ethereum, everyone was up in arms. It was the biggest, like, hoo-ha in the whole world where we all said, why are cats clogging up the Ethereum network? This is not what the network's supposed to do, et cetera. Fast forward one cycle forward,

we get, you know, that's the beginning of NFTs. And NFTs today, you could argue, are like one of the most impactful technologies that the world, you know, is experiencing. Or certainly, you know, we're in that trajectory. Second of all, for many, many years, humans have wanted to take a bet on culture. Fashion outlets take bets on culture all the time. Restaurants take bets on culture all the time. You know, and for years and years and years, humans wanted to take bets on culture all the time. And for years and years and years, humans wanted to take bets on culture,

and they needed bet specialists who were bet specialists on culture. Now, what meme coins is, the way that I look at meme coins is, it's the world's biggest roulette. It's the world's biggest culture roulette. There are millions or hundreds of thousands or thousands of mean coins at launch. You put your chips on the ones that you think are going to come into popularity quickest. And through that process, you learn to identify influencers. You learn to identify who has influence, whose influence actually works and stuff like that.

Now, I don't know how this ends and I don't know where it goes and I don't know any of that, but I do know that this is more than just degens buying and selling Horan coins. You know, like this is going to develop into something much bigger. I think that this is V1 and I think that we're currently experimenting with V1 of culture roulette, but I think that culture roulette

will actually turn out to be something completely different. I don't know what it is. Don't ask me, well, how do I think it plays out actually turn out to be something completely different. I don't know what it is. Don't ask me. Well, what I, how do I think it plays out? Because I have no idea. Just like when they invented crypto Achilles, they had no idea that it would be the platform for all ticketing and all identity and everything else. I don't know where it goes, but I do know that we're onto something here.

Maybe it's just the evolution of the casino, Ran. We've talked about this, you know, in the past, but maybe this is just becoming the way that your average person doesn't have to line on to play online poker or show up at a casino they can just gamble and have fun you said you were having a great time doing it it's a lot more fun but what would you yeah i think not only a lot more fun i think there's more to it than that like i mean one thing we cannot discount is that there is everyone talks about use case use case you get use case well the whole use case of what we're building since day one is the concept of decentralization. Well, those communities,

I started speaking on projects when we did a show a few days ago, and they'd come up and they'd say, there's one project, I won't name it. And they're like, Mario, the founders launched this token, and that's not the only one that happens all the time. They launched a token and they're rugged. They're gone. And the community's building it. There's no big whales. There's no one making decisions. We building it as a community and they are creating a GoFundMe campaign. They're creating a charity. They've got the, the, the, the co-founder of one of the top 10 tech companies backing them.

I'm trying not to name a lot of things, just to kind of keep it less chilly. But then the whole point I'm trying to make is that this is decentralization. Like they're building all this and there is no point of failure there is no team there is no office there's no VCs there's also no value I understand no but the value hold on

let me push back on Scott what he just said but that contradicts what I said in the beginning I said the decentralization is the value then you'd be like alright cool but I don't get it decentralize what well this is, the decentralization is the value. Then you'd be like, all right, cool, but I don't get it. Like, okay, decentralize what? Well, this is the cool thing. It is about value. There's no value in the meme coin. There's no value. There is.

They're building. Eventually, the narrative of the community is nice, cool. You're betting on a community. It's funny. It's fun. That's one thing. I think there's space for that. But on top of that, I think it evolves into something more. Looking at the ecosystem, like Doge being an obvious one, these ecosystems are evolving into more than just a community that stands for that. But on top of that, I think it evolved into something more looking at the ecosystem like Doge being an obvious one. These ecosystems

are evolving into more than just a community that stands for something. I want to argue with you on a couple of things. The first thing is Doge is no longer a meme coin. Doge is...

Yeah, that's semantics. No, no, no. I'll tell you why. I'll tell you why. I think Doge was a meme coin when it revolved around the cute dog. The truth is that

no one cares about the cute dog anymore. It's all about Elon Musk integrating a monetary system into Twitter. And truth is that no one cares about the cute dog anymore. It's all about Elon Musk integrating a monetary system into Twitter. And that is the power of Doge today. Doge has lost its memedom and its meme coin community.

Doge is no longer a meme coin. It was a meme coin, but it was decentralized until the richest man in the world made it his pet project. And now they've lost all the values and the culture of the meme, And all they care about is the integration into Twitter. So that's the first thing.

The second thing is... This is... This is the right, but you kind of made my point. Like it started off as a decentralized community and you answered Scott's points. Like, all right, what's the value on top of that? Well, you can call it a meme coin.

You can call it meme coin 2.0. That decentralized community is building something very slowly. CryptoKitties took for ages to get to where we are a lot of them so some meme coins today are based on culture i agree some some of them aren't some of them are just short-term bets on where people are going to go and it's just they jump from one to other to other to other and it becomes a game some coins i agree with you you could say that they're cultural coins but less and less they're becoming cultural coins. And more and more people are just moving to buy narratives.

So I'll give you an example. Let's take Larry Funk, which is the parody of Larry Fink and Elizabeth Warren. And there was another one today. And before I even talk about this one, I want to put all the disclaimers out there. Number one, I don't know who created it.

I suspect that it could be someone linked to someone at the office because I saw the guys playing with it today. It's the Mike Tyson and they spelled Tyson T Y T Y T H O N. Now I walked past someone's desk today and I saw that they created the Twitter account and the Twitter account, I don't know who created it, but they were messing around with the Twitter account. And it was the Mike Tyson Twitter account.

And what it is, it's like a parody on Mike Tyson's lisp. And so that meme coin, when I looked at it, I thought, hold on a second, is the fight between Jake Paul and Mike Tyson, maybe that token will run as a result of it. I want to just, again,

give you another example like that. The Elizabeth Horan, when Powell was speaking and one journalist asked Powell about Elizabeth Warren, the Warren token jumped over like 200% or 100% or whatever the number was. What I'm trying to show you is that this is like Mike Tyson is not a cultural token. I don't relate, but it's a bet on something that's about to happen, whether he beats Jake Paul, doesn't beat Jake Paul, says the funny things during the fight.

It's not about a community. I don't think there's a Mike Python community. You know what I mean? I think it's just a bet on what's about to happen in narratives. Yeah, I think this is how it starts, right? I think this is the first step. And then from there,

it evolves into what you can call MemeCoin 2.0. It starts as a job. But very few. It evolves into a community that stands for something. Very few though. Exactly.

Very few of, very few of startups we invest in me and you, Scott, end up delivering and bringing value to the ecosystem. I think that, that, that, that,

that point applies to anything really special. I think it's the other way around. I think it's the other way around. I think number one I think version one was meme coins around communities and I think that version one will continue to live

for like we will get meme coins around communities but I think now we're in V2 and V2 is just a gambling casino which I don't need to do with any affinity to the community I have zero affinity to my pattern and I've went and bought the token just because I thought it was funny.

And because I thought that DJs are going to ape into it. And I have zero, I don't feel part of, I never will feel part of the Mike Tyson community. And I never want to, I'm just betting on the fact that people will take the same bet and I'll be able to exit. And I have zero emotional affinity to it.

But this is, but this is, but this is, yeah, no. But this is, yeah, I know, but this version of meme talk is sustainable on a bull market, unsustainable on a bear market. And what becomes sustainable afterwards is people that take that community and build something on top of it,

like that Elizabeth Horat talk. They could end up all together teaming up, creating a fund and backing John Deere. So now you've come full circle to where we were last week when i said to you this is this could be a replacement for nfts that is more accessible to the masses and you brushed me off and you said if you think meme coins are going to replace my punk you must be crazy and i said to you mario this is much more accessible to the masses if you're saying if you're saying that these mean they're completely hold on they're completely right they're completely different use cases

you're comparing an unfungible token to a fungible token. You can't have meme tokens represent assets in a game. They're completely different use cases that cannot be compared. I think they both have, there's a bit of overlap there when there's a community. You can build a community on top of NFTs or tokens. We agree there, but it cannot replace the punk because they're completely different use cases. So I think we agree on that point. Mario, I think you're stuck in last cycle.

And I don't think you're wrong. But last cycle, we didn't have that many meme coins they were on centralized exchanges it took a while to get signed up and so you got doge and chip and all of those have been building so i do agree with you that one in ten thousand one in ten thousand one in ten thousand of these may end up with a real community that builds something but to rand's point those were being launched with a community. These are being launched just to play hot potato, make money and move on. And they won't exist in a week. But that's a pump and dump. It's a casino pump and dump. That is what these are.

Exactly. So that's what I'm not interested in. I'm not interested in the pump and dump talkers you can call meme talkers. I call them pump and dump talkers. I'm interested in meme talkers. I have a solid community that care about the message and they don't mind if they don't make money as long as they're supporting a certain cause. Making money is a bonus and they end up building something on top of it. And if it's 1 in 1,000, 1 in 10,000, 1 in 100,000, I'm fine. So I think we're talking semantics. I'm just anti-pump and dump meme tokens. I'm pro-decentralized meme tokens that end up building a community and that community doesn't have founders or whales. And if in some ways that has advantages over the model that we mainly invest

in, which is us three and that startups with a token through a VC around privately, because there's downsides to this and that centralization, that doesn't exist on meme tokens. So I think we all agree that our perception of meme tokens has changed. And what's funny is before going to Alexia, he's been waiting patiently, is that I was talking about one of the meme tokens and the co-founder of one of the top tech companies,

and I'm talking about, I said top 10, I'll say top five tech companies, is listening here and he's listening to the same narrative and he's kind of rallying that community, similar to how Elon rallied the community around Doge. And that's something I just learned a few days ago. And I think we'll see more of that where the community is decentralized, but they're rallying around a certain message.

Now that message could have a centralized entity like Elon. But I love these discussions, but maybe go to Alexei, Scott, Ryan. Thanks. Just to bring in a slightly contrarian opinion here. I think what we see with meme coins is, I mean, I prefer probably meme coins because I know what I'm getting into. And then a lot of the vaporware out there, I mean, at least it's really honest about what it is. We have 99% of the new projects that come out in crypto are vaporware. Shilling the same ZK, shilling cross-chain, shilling Bitcoin L2s without having anything,

and they lie to people. At least in MemeCon, you know what you're getting into, and I do feel that that's a genuine and very important difference. Of course, there's tons of scams in MemeCon that will promise you everything, but generally, as a user, it's MemeCon, so you know what you're getting into. It's literally expected of us. Yes, but you know, right?

But you know that you're getting into that. Exactly. That's the massive yes but you know right but you know that you're getting into that exactly that's the rules you know the rules of the game i honestly feel can i be honest you hit the nail on the head i feel way less anxiety getting into a meme coin than i do getting into a project with a project i'm consistently skeptical will the founder deliver the tech is he gonna rag me do they have too much of a treasury? Do they have less of a treasury? Fuck, when I play meme coins, I'm chilled. I'm relaxed.

I'm not on guard. I know what I'm playing. Yeah, you also don't feel guilty selling. You also don't feel guilty selling, more importantly. I buy and I sell and I couldn't give a shit. I feel zero attachment to any of the communities. I think we've got to be careful, Ran. I think we all agree.

We're all, I don't know about Scott, but I think I'll put Scott in the same basket. We're all bullish on meme coins as a concept and potentially building utility. I think we've just got to be careful where we support the concept of decentralized communities without supporting the concept of pump and dump groups that call themselves a community.

So I think this is what's important in Bullmark because I think we all agree on that particular point. That's why up with. Just to let you know, there was a massive token not long ago. I was mentioning this last example, and I'm not naming tokens. There's a massive token a long time ago. Valid team, great concept, great theme, et cetera. They launched. It didn't go as planned. They just pulled their liquidity and walked away. Now, I know that you can say it happens with startup projects, but it's less likely. And the community is welcome to add their own liquidity and take over the project.

And then it becomes a fully. Exactly. Exactly. I have zero expectations. I have zero expectations from the founders. Once they've burnt the LP token or whatever, once they've put in the liquidity, I have zero expectations from the founders.

I don't expect any of them to deliver anything ever. And all I care about is that culture will swing towards this thing. And if it does, great, I'll be able to exit. And if not, then my money is going to zero. And let me tell you one thing, right? I was a very bad poker player. I still am a very bad poker player because I don't have patience. And poker is a game that requires a lot of strategy and a lot of patience.

I think I'm relatively good with a strategy. strategy i'm ready to be bad with the patience right i found a game where i can have much more fun and make much more money uh using using you know the elements of strategy that i'm you know pretty good at um and and it's much cheaper i don't know like it's it's just another game you just got to see it as another game and not have any expectations from delivery of teams, which is what I was trying to say to you last week when you kept saying to me, you meet the team and you do diligence. I don't give a shit about the team.

I couldn't give a shit. Just deliver the meme coin, launch the meme coin. Launch? So it depends. It depends, yeah. So you got to make sure the team, the DD is making sure it gets to that decentralized level. When you say you don't give a shit about the team, that's a decentralized meme coin. I think that's what

we're aiming for. So as soon as it's decentralized, everything you're saying applies and I'd agree with. Once it's centralized, you can argue it is a meme coin, but this is where the concern lies. And the space we did two days ago, three days ago, just kind of went through a lot of different indicators on how to make sure the

meme coin is a decentralized community. There's no risks of a, you know, a sales tax or a liquidity pool not locked, et cetera, or centralized token holders or sniping at the beginning, all these indicators that could run to the average Joe that can't, that doesn't know how to do on chain analysis. It doesn't know what to look for. But yeah, once it's decentralized, run a hundred percent. Now you're part of the community,

you're an investor. If the community wants to all dump, great. If the community wants to build something, good for them as well. So, yeah, maybe go to Steve or Seb. Hey, guys. Can you guys hear me? We can, Seb. Well, first off, I really appreciate you guys having me on. And also, I appreciate this conversation. I think it's important to touch on the fact that I think the utility

is definitely questionable. The way I see things is that this is just the evolution of deteriorating currency. I think when you look at, say, the 1970s, when value was definitely in play and growth and tech kind of struggled in a high interest rate environment. But as we've seen more and more monetary intervention, more and more manipulation as the cost of living is rising, as it's hard to get ahead, it's hard for people. And I think people increasingly look to try and take risks. They look to try and take bets on things. And this is just the evolution of kind of deteriorating currency. People are just looking to try and put their money in a small little game

where hopefully they can get a million dollars back, because otherwise they have no hope. When you're earning 15 bucks an hour, you can barely support a family. And so I think from my perspective, I think many of the altcoins many of the meme tokens there is very little utility if any and i think people are just looking to try and squeeze some little hope out of their life so can i ask you can i say can i ask you a question so you just reminded me of something that andreas i can never say his last name who we all learned a lot from when we got into the space early, early on. So anyone who's OG would know who Andreas is. And one thing he talked about, one of the indicators for me to get into the industry in 2016,

he probably talked about it in 2014, 2015, is that the utility of a token ending up becoming a meme token. Now, he talks about that being, you know, I think it was colored tokens on Bitcoin, getting technical. But essentially, tokens representing a community. Where now, if you want to create your own community, you do it through a token, you decentralize it by distributing it fairly. Isn't that, that's from a Bitcoin maxi, definition of a Bitcoin maxi.

Isn't that the definition of a meme token? I'm not talking about a pump and dump token that's centralized, that's rugged, et cetera. That's a decentralized token that stands for a community. Isn't that, wasn't Andreas just explaining a meme coin on top of Bitcoin? I think it's a tough one. I don't know the conversation specifically.

I think, you know what, like my background is like I'm passionate about kind of development psychology, how we kind of interact in the world. And I think that when it comes to community, community is something that I think is incredibly important, especially in the physical realm. And I think that the challenges, I think when people try to monetize something, it eventually ends up losing kind of that drive, ends up losing that kind of authenticity. And I think the challenge is, although I think I'm not saying that there's no communities out there, decentralized communities out there that really have that authenticity. I think the majority of them, people have simply just tried to monetize them and it's just degraded any form of utility

that has the potential to. I think this is a good example to make a good comparison to make is uh social tokens and i'll use big cloud as the og social token protocol and when it was you know back in his heyday so what happened back then is what rand said like you know if a token's based around jake paul and jake paul wins a fight that token pumps and there was a sense of that on big cloud so people would buy a token listening to a certain personality they wins a fight, that token pumps. And there was a sense of that on Big Cloud. So people would buy a token that synced to a certain personality. They win a fight. They announce a certain milestone.

The token pumps. So that had that aspect that's based on a narrative, on a community, or on a person. And then you had, and there was even an Elon Musk token. There was a, I can't remember the rest, President Biden, Obama, Trump, everyone. So if Trump becomes president, the token pumps. So that's not based on utility.

It's more gambling, like Scott was talking about. But then there was also utility being built on top of those social tokens as well. And that was people saying, okay, if you own that amount of tokens, then you can get access to my group. It's centralized utility, but it's utility. So it kind of had a mix of theme-based or narrative based, a community based, uh, price fluctuations and buyers. And then I had buyers that actually believed in the person or believed in the utility that was being built on top of it. So me, of course,

it's kind of an example of that, except the utilities decentralized rather than centralized around a certain person. That's not how I look at it. I think it's got both merged into one, the community. I don't give a fuck about anything, but the cool community, the cool dog with a hat, and people that once it gets to a certain level, such as a market cap, the community starts building value on top of it. And I think this is more valuable than a founder creating value.

A founder could just walk away from a project. A community is a lot harder for the whole community to walk away from a project. So once it gets to that level, I think it's really interesting. I think it's also important to ask the question, which is like we are naturally a product of our environment and i think that if money over time is losing value we're no longer incentivized to save we're incentivized to consume and that's why we're seeing environmental devastation that's why we're seeing kind of breakdown of family bonds because parents having to work more because their money is worth less but But I think the question to ask is, if prices through technology and advancements and productivity and whatnot

should be falling at kind of 5% to 15% per year, if we were to, let's just say, hypothetically adopt a currency with a fixed supply like Bitcoin, then naturally we would have a currency where over time, even after full adoption, we see prices fall. So we're incentivized to save simply in the currency. And I think that if you would have a currency where over time your purchasing power increased and life got easier, would we see meme coins even exist? Because I wonder if this is a product of, again, it's a deteriorating currency that is incentivizing people to take risk. And so I think that's a bigger question. And I wonder what your response is. If we were to have a currency with a fixed supply globally, and it was becoming easier to get by as technology advanced do you think you would still have meme coins

yes i'd love you to take that question i don't think it's complicated i understand what seth's saying and i do believe you know to what he's hinting at that you know bitcoin would be a superior global currency but i think people gamblers are going to gamble and humans are going to human regardless of fiat or otherwise go Go ahead, Rand. Some breaking news. I know that we used to break in for breaking news. I don't know if you guys saw this, but KuCoin, the prominent global cryptocurrency exchange, KuCoin and two of its founders criminally charged with the Bank Secrecy Act and unlicensed money transmission offenses. Similar charges to the Binance CZ charges. They allege here that they essentially serviced U.S. customers knowing full well.

So this is U.S. Attorney Damon Williams said, as today's indictment alleges, KuCoin and its founders deliberately sought to conceal the fact that a substantial number of U.S. users were trading on KuCoin's platform. Indeed, KuCoin allegedly took advantage of its sizable U.S. customer base to become one of the biggest and largest exchanges with billions of dollars in daily trades and trillions of dollars in annual trade volume.

But financial institutions like KuCoin that take advantage of the unique opportunities available in the United States must also comply with the U.S. law to help identify and drive out crime and corrupt financial schemes. KuCoin allegedly deliberately chose not to do so, as alleged, in failing to implement even basic anti-money laundering... Sorry, I lost my place here.

But yeah, essentially, it's very similar to the Binance charges the, the, the binance charges, the price of the KuCoin token has just moved down like 3% and nothing, no, no great shakes. Um, yeah, but just probably worth mentioning, probably worth just pointing it out. Did you say which authority was sorry. Southern district district of New York. Oh, okay. let me fix that. Fixed.

Yeah, I think we should get some lawyers on stage to send out the invoice that's going to break this down. But why do you think it only dropped 3%? When did your news break? If you could pin it, it would be great as well. It broke now. Why did it drop 3%? Because I think there's precedent and the precedent is bad. I can tell you why, because BNB is double where it was.

And as Rand was probably going to say, I don't think, A, I don't think people fear the United States government the same way that they maybe did a year ago. But B, if there's precedent that it would be a big settlement and someone turns himself in and the business continues on as it was in finance. I'm not saying that's what will happen, but I'm saying people just don't panic sell things anymore in the same way. You guys saw yesterday, right? The ripple, uh, the SEC is asking for $2 billion for ripple and XRP pumps immediately,

but up. Right. And so like that's how this market now reacts. It's a meme coin. It's become a meme coin. Ripple's a meme coin. So, you know, meme coins, the more mistakes they make, the more they pump. Yeah. We need lawyers for the Qcoin thing, I think, or maybe that's something we'll be able to do tomorrow. But question, maybe Steve or someone else could comment on that, especially the impact it could have on track to find money, whether they give a shit.

But the question is, Binance's settlement was, some called it a slap on the wrist, but how much did they have to pay? Does anyone remember how much CME Binance had to pay? $4 billion. $4 billion. So I don't know anything about CME Coin's coffers,

but we're not talking about Binance here. We also wouldn't think about the same-size penalty. I mean, you're talking about completely different, you know, I think the penalty is similar to, you know, they kind of probably want to mock you of the profit that you made on the US people. You know, that's pretty much it. Look, I think what's going to be very interesting is CZ was very public and he was very, you know, you know, he wanted to defend,

not defend himself, but he wanted to defend himself and keep himself kind of like clean. I wonder if the Kukul guys are going to do the same or will basically just say, look, we're going to give a shit.

We live in China, wherever the hell they live. You know, you want us to come and fit just in China. We got Preston back. We needed a lawyer. Yeah, I just sent him an invite.

Preston, did you hear? Ryan, if you can pin the tweet, Preston, I appreciate you accepting the invite so quickly. Did you hear the news about T-Coin? No, I'm digging now. I'm digging now and I'll be able to look at Eleanor Terrence. I can't pin the tweet, but just look at Eleanor Terrence.

I'll do it. I brought up a different one, but I'll find Eleanor's. It's pinned above. Yeah, it's pinned above. I mean, unfortunately I have an appointment at 11.30 so I can stay for exactly eight or nine minutes. What's the charge for the eight or nine minutes? Well, just before we start.

So the score is cryptocurrency exchanges formally charged with BSA and unlicensed money transmission. So I'd have to read the indictment, right? And here it is. So unlicensed money transmission. So KuCoin, if memory serves, let's see. AML program. Should we give Preston a minute to read?

Give me a second. Yeah. And Preston, it seems the gist of it is allowing American customers. Right. I mean, that seems to be the core of it, unless it goes deeper than that. And there's actually some like wrongdoing as to what kind of activity they allowed beyond that, which we kind of right and ran. I mean, refresh me but with binance there was also that like they were allowing or potentially where the mass money and yeah and all

that there were the texts between i mean allegedly between cz and the head of compliance and i mean there was a much look also they pretty much wanted to make an example of the biggest you know that i know that that never admitted but yeah they wanted to make an example of the biggest um yeah i mean i really hope yeah i mean you know the yeah the yeah i mean i suppose probably gonna just be another fine and then a negotiation as to whether the founders are gonna go to jail or not all right i right. So I'm back. So this looks like KuCoin is one of a couple of exchanges that generally speaking, relied on a no KYC approach or what was alleged to be a no KYC approach in order to grab market share. It was able to do this because if you'd navigate to KuCoin from a basic US IP address, it'll turn around and it'll

say, hey, you're not allowed to use this because you're American, right? And you go, oh, no, I'm American. Isn't that terrible? So what I'll do is I'll just turn on a VPN and then I'll go access it that way instead. And I'll provide, if I want to have certain trading limits increased, what I can do is provide either false credentials or foreign credentials or something like that. So there are ways for Americans to get onto KuCoin and trade on KuCoin historically. Now, operating a cryptocurrency exchange in the United States is generally speaking, regulated as money transmission, which requires two things. You need to file federally and you need to be registered federally with FinCEN. You need to file in any state in which you do business,

including New York and California, for example. California is about to have a bit license style super regime for registration, much like New York does. And if you don't do those things, you're committing a violation of federal law. Moreover, if you don't maintain adequate KYC AML procedures, so that's identifying who your clients are, making sure you know where they come from, making sure you know, you know, the source of the funds, making sure suspicious activity reports are routinely filed with FinCEN, which is the Financial Crimes Enforcement Network, part of the Treasury Department, then you can get in really, really, really, really very big trouble, right? So essentially, if you're going to be servicing

Americans, if you're not going to be servicing Americans, you need to make really robust efforts to ensure that Americans aren't circumventing your systems and then accessing, sorry, my little puppy is jumping on me. I know, but I'm on a call. So you need to make sure that if you want to make sure Americans don't access your system, then what you need to do is you need to KYC them out, which means it's something that you can only rule out by determining everyone who uses your system is American or isn't American. So it's not enough to say, well, we blocked US IPs. You need to actually get your offshore users to provide passports, bank statements, that sort of thing, which can confirm, A, that they're not a U.S. national and B, that they're not based in the United States. Because if you're an Italian in the United States and you're accessing the platform, if you're Irish in the United States

and you're accessing the platform, you're still in the United States and you're providing those services to the United States. So this looks like to me to be a fairly straightforward. Hold on, hold on, hold on. I have a have a question so i'm let's say i'm south african and i'm in a trade and i'm coincidentally visiting the united states and i want to close my trade you can't you're not you should not be able to close that trade from within the united states well that's a lot of incentive to travel to the United States. I mean, there are lots of incentives not to travel to the United States, but that would be one of them. Preston, let me ask you a question. Don't you guys see that you live in China with a better marketing department?

Do you not see that you live in China? You're preaching to the choir. You will find no disagreement from me on this point. Preston, I have a question. I think I know the answer, but probably pressing on people's minds when we see cases like this by Nance KuCoin, is there any risk to the American user who circumvented, you know, by using a VPN or something, the systems in place to use those exchanges or the onus and culpability all on the exchange itself for allowing them? This is a requirement on the exchange. I mean, if you're using an offshore exchange in order to engage in illegal conduct rather than lawful conduct, then that's something

you need to be worried about. But generally speaking, these laws exist to protect Americans and American consumers from the depredations of unregulated offshore exchanges who may not have operations in the United States or people who can have hands put on them in the United States or posted security bonds with the relevant state authorities so that those obligations, they or their users are secured. So if you're using these things for criminal purposes, and for example, you're not reporting your taxes, that's going to be a problem for you. If, for example, you're just using them for lawful trading, it's not really something you need to worry about. Right. Exactly what I thought.

We never saw them go after a single average American finance user in all of this, correct? So, I mean, and if you don't pay your taxes, you don't pay your taxes. It doesn't really matter where you made the trade. Relevant from the Binance point of view is that Binance has been put under direct supervision by an independent financial supervisor. And moreover, they've agreed that they're going to file, as part of their settlement with the Department of Justice, Binance is going to file all of the suspicious activity reports they were supposed to file for the last God knows how many years. So essentially, Binance is going to be making those filings. So if there are suspicious transactions in the past, which Americans

were involved in, those are now going to be reported to the federal government as part of the settlement with Binance. So with this, I expect that there may be a similar trajectory. But, you know, TBD, I don't know how KuCoin's founders are, you know, whether they're going to be like CZ and decide to just, you know, take, you know, take the take the months or years or whatever he's going to serve and then move on with his life. You know, it says here the two founders remain at large. And if they're in China in particular, I think extradition is something which would be very, very unlikely. But there's a lot we don't know. But I think this is very much following in the mold of the precedent. And this is not judicial precedent, but rather sort of procedural precedent that was set by the Binance case. The charges are very similar and the fact pattern is very similar.

And I think the lesson is for exchanges, you know, have a robust compliance regime and make sure that if you say you're not servicing the United States, that you do so by ruling out Americans on your service by doing adequate KYC. So if these founders decide that they're not going back to the U.S. to face the music, just walk me through what their restrictions are for the rest of their lives. I mean, can they travel to Dubai? Can they travel to South Africa?

Can they travel to Europe? Will they get arrested? Just walk me through. I'm trying to understand from their point of view whether they're actually going to go to the USA or basically just say, you know what, thanks for playing the game. We're not coming back to the US. Thanks for playing. I think it unlikely if they've gotten to this point and they haven't negotiated a settlement that they're going to be keen to come back to the United States. It bears mentioning when the Binance indictment was announced, the settlement was basically already baked in. Unfortunately, I have to jet. But interesting development. I think the headline conclusion, I think, noncompliance with US rules for a long time was a competitive advantage that some exchanges thought they had over

exchanges that were doing KYC. And so as a consequence, they had more volume, more cryptocurrency on them. I would suggest that that competitive advantage going forward is likely going to be eroded, which will likely benefit smaller and more compliant exchange operators. Unfortunately, though though i have to jet we lost our crack legal team we have stephen there are i mean stephen is a is a lawyer by profession there's one on tv steven are you there i'm here what was the question can you hear me like uh can't can't get steven on and probably uh i would say steven can you hear us we can hear him we can't hear him but we can't hear him sorry steven's asking you what was the question so tell me what the question was and i'll tell Stephen. Well, I said we had lost our

crack lawyer squad of one today. We used to have like five or six on every panel, but you said Stephen's a lawyer and he could probably comment, but we were just talking KuCoin. There was no specific question. Any comments on KuCoin's

criminal charges? Yeah, I mean, I think they would have gone after more than the Bank Secrecy Act that they did. I mean, that was kind of like what they did with Arthur Hayes. I mean, granted, he was a U.S. citizen, but they're using the long arm, and they're just basically going after all of the different exchanges. But this one doesn't seem as serious as Binance in any way. And I also, I'm not sure I would agree that they don't have a settlement or some kind of outline

in place, because when they usually announce these things, they already have some kind of basic idea in terms of how they're going to settle this. The idea that somebody doesn't care about the United States and they can just avoid the U.S. is kind of nonsense. The U.S. is going to get them one way or another. In one of their jurisdictions, they can't just go from non-extradition country to non-extradition country. So my anticipation out of this is maybe some large fine and six months of home arrest or something. You know, I don't think this is a, this is not a big,

to do like the way CZ was. So, so are you saying now that, I mean, there's, there's a lot of other exchanges. I'm not going to mention names. Cause I don't want to, you know, I don't want to be like a bad person, but a lot of other exchanges have been exactly the same thing in the United States. Do you think that they're going to go after all the exchanges? Or what's the way forward? Are slowly, slowly all the dominoes going to fall?

Yeah, I mean, it's a game of whack-a-mole. They just go after the large exchanges. And then when that exchange gets knocked down and they basically – let's see, their game plan is to go after the exchange and then to get inside the exchange. So they're not making sure the exchange is compliant. They've got people on the inside. So what they'll do is they'll do a deferred prosecution agreement, which that's generally where you say a couple bad actors in an entire company, but you don't want to take down the whole company. And so you put a compliance program in place, and then they'll have their people on the inside,

just like they've got effectively, you know, Binance right now is run by the US government, in essence, right? And so they don't have to worry about compliance. And that's what they'll do to each one of these large ones. So if another one lifts its head up, and it gets large in terms of volume, that's what they're going to look at. And then they'll go after that one too. So if there's small ones, I don't think they're going to care so much about. All right, Scott, back to you, sir. I have no idea what anyone said. So, uh, I missed that entire part. Uh, and I don't think I need a synopsis. I think I know kind of where it stands. I have a feeling we'll dig into this more tomorrow, Rand, wouldn't you say?

And we probably generally have covered it. I think we'll know more as we see press conferences and get a few more lawyers opinions. Let's meet, I guess let's meet again tomorrow. Yeah, let's meet again tomorrow yeah let's meet again tomorrow guys we can go ahead and wrap obviously we got some glitches here hard to co-host when you can't hear the guests so we're going to

come back tomorrow 10.15am Eastern Standard Time see you guys then bye and thank you