The Wolf Of All Streets - Breaking: Zhu Su Arrested | ETH ETF Approved | Crypto Town Hall

Episode Date: September 29, 2023

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Yo, can you hear me? Hey man, yeah, yeah, I can hear you. Scott, I was trying to see if Scott can hear me, but he seems to be glitching. Yo, did you see the news about Jusu? Scott, can you tell me if you're still here? I can hear you. Can you hear me? Yes, we hear you.

Yeah, yeah. Did you see the news, Ryan? I know Scott did, I'm not sure if you have. I've just seen it, I've just, just, just seen it. That Jusu's been detained, apprehended, arrested. Arrested. He's going to jail for four months. Yeah, and apparently from what I read, I don't know if, I mean, I've only read one article, and it's because the liquidator's been struggling to get information. They're kind of saying, look, we'll put you in jail or what, until we get information.

Literally lock them in a room so they can't dodge can't dodge the paperwork anymore wow that is crazy how how serious how serious is this because four months doesn't seem like a lot it's like a break away from in singapore they cane you if you spit so this doesn't seem like the hugest sentence possible in that country but unless it's like a four-month detention, but there could be more coming. I'm not sure if there's more to it than that. I don't have a lot of information. I'm only reading the article that we have,

and it says, to know the joint liquidators of CIO's capital confirmed that this afternoon, Mr. Suzu was apprehended at Changi Airport while attempting to travel out of Singapore, following a committal order grant by the Singapore courts against him. The joint liquidators had applied for and obtained the committal order against Mr. Suzu on 25 September as a consequence of his deliberate failure to comply with the court order obtained, which in essence compelled him to cooperate with the liquidators' investigation and account for his activities as one of the founders of CRS Capital, its former investment manager.

The committal order granted by Singapore courts sentenced Mr. Zhu to four months imprisonment. A similar committal order was granted against the other co-founder, Carl Livingston Davies. The committal order against both Mr. Zhu and Mr. Davies direct any police officer to arrest them and bring them safely to be in prison for four months. As a result, Mr. Zhu will be held in prison to serve his sentence of four months under the criminal order, during which time the liquidators will seek to engage with him on matters relating to 3RS Capital, focusing on the recovery of assets that are either property of 3RS Capital or that have been acquired using 3RS Capital's funds. The liquidators will pursue all opportunities to ensure that Mr. Zhu complies

with the full court order made against him for the provision of information and documents relating, and its former investment manager during the course of this imprisonment, and thereafter, and may make application for further court orders as required. Throughout the process, the liquidator's priority has been recovering the assets of 3H Capital and maximizing returns for its creditors. Mr. Davies has

also committed for four months, but his whereabouts remain unknown at this point. Independently, effective 13th September, the Monetary Authority of singapore which has the responsibility of regulating investment activities prohibited mr zoo and mr davies from conducting regulated investment infrastructure activities in singapore for nine years each so the

the last part i think we actually knew about that was uh that was as i said i think we spoke about on the 13th of september but the the the I mean, and again, I don't know anything about Singapore law, but it seems like they were not cooperative with the state liquidator. It seems like the liquidator was trying to get information as to where are these assets and stuff like that. And maybe these guys weren't cooperating. And then, I mean, as a result, i think what the liquidator has done now i said okay we went to a court and the court said look if they're not being cooperative put them in

jail for four months and then you can have a conversation with them when they're in jail so it doesn't sound to be that serious unless there's more to it like it's just lack of cooperation you go to jail if you cooperate but then at the same time kyle is they could they didn't apprehend kyle because they don't know his location uh so someone posts somewhere so i think it's clear that suzu wasn't particularly worried if he flew back to singapore publicly and was flying publicly right back out of singapore so i have to imagine there's a bit of a shock to him because in a country like Singapore, they're going to know you're there, they're going to know your flights, they're going to know you're leaving. So clearly, he didn't think that he was going to be apprehended,

you have to assume. Yeah. Yeah, I mean, if there's any lawyers in the audience that can kind of shed a bit more light on being apprehended for not complying with the courts when it comes to liquidations. But if there's nothing more than that, would you guys agree with my assumption that this doesn't seem to be that serious? Well, I mean, you've got to think about why haven't they complied with the with the um uh what's it called of the of the liquidator why haven't they complied with the requests of the liquidator so you know one reason why they haven't complied is maybe they've given everything that they've got and the liquidators

are happy that's that could be a reason another reason is they haven't complied because they just felt that maybe you know they were above needing to comply. So it's almost like, well, what do we need to comply for? You're a liquidator. You work shit out. You know what I mean? Like, you know, we don't need, we don't need to help you. You know, like if you think about how SBF and what happened between SBF and John Ray,

John Ray actually kind of said to SBF, like, I don't want your help. Like, get the hell out of here. Just leave as quickly as possible. The more you're interacting with staff staff the more dangerous you're becoming you know what i mean so i think we need to you know like i don't know what the um what the uh uh the reason is that they that they that they weren't compliant and i i guess that's that's the part that now needs to be resolved and i'm just looking at don't they have a token for their exchange that's listed's the part that now needs to be resolved and I'm just looking at don't they

have a token for their exchange that's listed so there's a token for the open next exchange which is I mean it's pretty much now worth 50% 50% yeah is it just me or did it drop I don't want to say but it is is it is the one I'm It's OX. There's one that's dropped by 26%. Is that it? No, it's dropped by 42%. It was trading at 0.026 and now it's trading at 0.013. So it's dropped by about 50%. But I don't think that that's real because I don't actually think you could sell this

because I think it's completely illiquid. So i think this is what you're probably getting on volume no yeah coin market but says your volume at 2.7 million i'm just gonna send a screenshot in our group in the motivating group if yeah if you look at the if you look at the uni swap um uh liquidity there's like zero liquidity you probably pretty much can't sell anything yeah but they've got but they've got the they're about it says not what about flex it's yeah like the flex token is worth zero because it's not there's no it's not actually linked to the exchange anymore it's like it's almost like a token that's expired if you want to call it that did it convert or did like i mean i know you were you were a buyer of flex obviously what what happened on flex job guys hold on flex it i know it's saying you're saying it's dead but down 81 today flex coin is down 81 percent no unless it's a different flex i'm not

sure there's probably 17 flexes this is crypto no yeah there's some random one yeah but the open exchange one like if you like the drop is pretty look at the chart drop is pretty pretty big drop and it looks liquid but then again it says 96 liquidity is on uniswap it's not liquid i'm looking at it now i'm looking at the volume on a ten thousand dollar a ten thousand dollar transaction you're gonna get a huge slippage here on uniswap i'm not i'm on uniswap now i'm looking at it you can you're gonna get so how's how's it's pretty much the volume it's probably it's pretty much worth nothing because i don't think there's any bias. That's pretty much where it is. For open exchange?

For open exchange, yeah. I mean, I think... Quickly. Sorry. Go ahead, man. I was going to ask Josh Frank. I mean, obviously, you look at this stuff, you maybe have the tie pulled up. I don't want to put you on the spot, but can you give us any clarity on this?

Thank you. I appreciate it. You're welcome. You know, you can count on me. Do you happen to have any color on what's happening with the tokens? With the Flex token? What is the token actually called? I don't even know what a ticker is.

Flex and OX are the two tokens. It's actually, it's only OX because Flex, there was a period when you could swap your Flex for OX. And if you didn't do it, you're basically, well, okay. So it's OX. And if you didn't do it, you're basically, well, okay, you're out. So it's OX solely. Got it. Yeah, but I was under the impression that OX was actually doing well.

Flex had done exceptionally well. I know that at the very beginning. Everybody was shocked. That was when we were in Dubai and 3AC was on kind of their quiet roadshow at the mall in February, raising money for OX and then doing OTC deals with Flex. Funny, at that time, the biggest argument,

and maybe it's still a valid one that Kyle made, Steve McClurg was actually going to be here today and I crashed his meeting with them, which I've talked about quite a few times. Kyle's sort of argument was, hey guys, look, nobody's ever arrested us. We've never gotten in trouble. Doesn't that say everything you need to know? And that still holds water ran here i don't know that

was obviously what they told you as well i think look not to not to defend the guys but i think what they said was that there's no fraud charges against them right and stuff like that and i think i mean again we're going to be critical of the news here this is not a fraud charge this is just saying look you weren't cooperating with the liquidator we This is not a fraud charge. This is just saying, look, you weren't cooperating with the liquidator. We compelled you with a court order to cooperate with the liquidator. You still weren't cooperating

with the liquidator. Therefore, go to jail. And now the liquidator can have you in jail where he needs you. And I think if you read the article again, it kind of says,

you know, they can apply for more court orders if they're required. You know, so I think that's what it seems like, for sure. Can I ask, Ryan, why is volume so high on CoinMarketCap? I mean, I guess if you take it on CoinMarket, but I'm looking at CoinGekko and $3.1 million has been sold today? Yeah, it looks like all the trading has been on Uniswap.

I mean, the thing's not listed on any legit exchanges so it looks like somebody sold a million bucks worth and the price dropped by like 40 and then recovered oh wow yeah um i mean yeah i'm seeing i'm seeing the same thing i'm seeing the same thing and i guess you're asking why this is a highly highly highly illiquid token and you've just had a news headline that the founder was arrested i don't think that that that would be very good for a for an illiquid token and you've just had a news headline that the founder was arrested i don't think that that that would be very good for a for an illiquid token you know what i mean it's just uh not great yeah i mean the the top 100 holders hold 91 of the supply of the token for perspective there's only about 4 000 holders so it's not like that many people are holding this thing

so what what happened ryan i know you were talking about it earlier like last i remember is when um i was looking at the headlines back a few months ago and and you know we were joking around how these guys after what they did with three arrows capital they managed to launch open open exchange and it was a great idea and they seemed to getting a lot of interest in doing well any idea what happened afterwards the exchange not get well did not do well not many users i mean look the exchanges look i mean i'm not very very very close to the exchange not do well? Not many users? No, the exchange, I mean, look, the exchange is, look, I mean, I'm not very, very, very close to the exchange numbers because I don't watch them on a daily basis. But the exchange, as I understand, was starting to gain momentum. They were starting to do quite exciting things. And actually, to be

honest, the token was performing really well. Like the token has actually been the really, really good performer up until about an hour ago when the founder was arrested. So I don't think you can judge and say, okay, because the token's down 40%. If you looked at this token at 14 minutes ago, no, sorry, not 14 minutes, 20, 28 minutes ago, the token was at 0,024. And I think that's quite a big number.

That's about a couple of Xs higher than it was a couple of months ago. And then again, obviously in the last half an hour with the news of Sue being arrested, obviously one buyer has gone and sold a million dollars worth of tokens, destroyed all the liquidity on Uniswap, and now obviously there's no buyers. I mean, I don't know how many people are standing there with a buying order going, hey, the founder's just been arrested.

This is a great time for me to actually start buying this token. That was probably Sue on the way to the courthouse. He was selling on his phone just before he got out. Yeah, but the question is, it seems Shoshri is saying there's just one big seller of a million dollars worth of OX tokens, open exchange tokens. I don't know. Go look at the transaction history, the DEX trade history. I don't know i let me i go look at the transaction

history the dex trade history i don't know if it was one seller or multiple sellers there's a lot of way either way what you got to remember with these tokens mario these are tokens that trade in a decentralized exchange and the way that these tokens trade in the decentralized exchanges you have a liquidity pool a liquidity pool is people effectively that uh are willing to put up tokens to be liquidity now there's a very limited amount of people that do that it's not something that happens you know there's not hundreds and thousands of people that do it's quite a limited amount of people that do it so as soon as someone as soon as someone sells yeah but it's a million it's a seller it's a million dollars worth of tokens it's not like a small sale um that's why i'm it looks

it looks like i mean look it could be one seller. I mean, I'm not looking at all the individual wallet addresses. There's a ton of transactions like 1,000, 2, 3, 4, 5, 10,000, 20,000. But I mean, it's hundreds of transactions that are occurring. I haven't seen a single, obviously, it could be split up, too, into multiple transactions, right? So the biggest transaction I saw was 40 grand so far over the last 15 minutes or so yeah um because the reason the reason i'm digging into this guys is just to understand because at the end of the day i look i look at the market for answers like whatever i wonder is this serious is it not serious the markets

this is not a good look at the market because as as I say, this is not a perfect market where there's lots of buyers and lots of sellers. There's only one place, effectively, where you can buy and sell this token, and that's Uniswap B3. And as I say, on Uniswap B3, there's limited volatility. If you give me two minutes, I'm going to step into the office of my trader, and I'm actually going to quickly give you the numbers so just that you can understand how illiquid this trade is actually at the moment. Yeah, while you're doing that, maybe, Scott, I was inviting speakers as we're bringing up – I was inviting speakers as Ran was reading the details on the arrest.

I'm not sure if you were focusing on it, but maybe give an overview for the listeners on what we know so far when it comes to Jussu's arrest. Yeah, I think Rand gave a pretty good summary. He was in Singapore, obviously, was apprehended at the airport, apparently on his way out. It seems that this was likely it came from the liquidator who allowed the Singapore police an order to apprehend them and safely bring them to jail for four months. And the implication here from what we're reading but guys these are the early reports nobody knows anything let's be honest but is that they've been basically dodging liquidators and the liquidator was able to get him in jail for four months so that he could sit them down and have his time and understand

what's happening with the with the process basically it does not seem like this is a criminal or fraud thing initially, that it's likely just that the liquidator and the police got tired of chasing them and took action. I mean, that's the impression that I'm getting here. That's exactly it. That's exactly it. Sorry, I just checked. My traders

are not here. They've left already for the day, so I'm not going to be able to get you guys the market. Josh had it. If you just go on Uniswap really quick going to be able to get you guys the the the well josh had a market josh had it i mean it'd be if you just go on uniswap really quick um and you just look at uh you know like swapping 100 grand in uh in in tokens to eth you're looking at like 30 slippage that's pretty wild and and and as it drops more that there's going to be less liquidity so it's sort of a self-fulfilling prophecy there, right?

Yeah. I mean, you could just look at the liquidity. You can look at the address of the liquidity pool and track the liquidity over time as well. Perfect. I mean, Mario, it seems like beyond here, we start to get into conjecture. Speculation. I hate to do that. Yeah, I think pretty much just, again, for those listening,

we must just reassure there's no fraud charges. There's no fraud charges. There's no criminal charges. It's just a corporation thing. I actually just wonder now where Kyle Davies is. I mean, as far as I know, Kyle Davies was in Dubai. I wonder if he's still in Dubai. Dude,

he's at the mall in Dubai, raising money. Last place I saw. He was on CNBC this morning, actually. Was he really? I didn't have a chance to watch the interview, but let me see if I can find the link.

Oh, really? Wow. Really? Is that, is that, is that a real thing or is that you're being facetious? Yeah, I think he's being serious. No, no, no, really serious no no really he was he was actually yeah he's actually on cnbc i saw him like this morning let me see if i can find it where is kyle davies i mean he's

literally sitting right there in front of the screen on cnbc seems like they could figure that out um all right cool i think we've covered the story well anything else to add from the panel Thomas? Hey guys before we move on to the rest of the agenda yeah just on the from the bankruptcy side or from the insolvency side I mean we've been active in the three hours bankruptcy

or insolvency and they're called bankruptcy and BBI and it is a little frustrating as a creditor I mean because the Taneo seems hell-bent on getting information from Kyle and Sue and they really haven't been super cooperative. So, of course, they tried the U.S. court, tried to hold them in contempt, and now this action in Singapore. So it's not that surprising. I mean, I'm not a Singaporean criminal attorney, but hopefully it'll help.

I mean, there has been some good developments, I guess, with the world coin sort of ico uh for uh for three arrows creditors but i think a lot of claimants will you know i don't know they want people arrested they just kind of want answers so they can get to the bottom of uh of it and you know all these actions cost a lot of money so question real quick question what's the market right now on 3ac claims like what are they selling at it's like eight to ten cents on the dollar wow those are bad what's a mount gox claim now i know you and i were talking about that uh like 80 cents on the dollar but it's a little different because you got the uplift in bitcoin yeah that yeah they actually get the benefit of bitcoin rising right that that

makes total sense wow what are ftx claims selling for now surely surely three iris capital uh creditors would get the uplift if any of any investments that uh three iris capital is holding you do but like under u.s bankruptcy law you're capped at the dollarized petition date value. And it's possible the same thing could happen in the BBI. But you would have equitable arguments as a creditor to get that uplift as you're talking about. Those are those equitable arguments won in Japan. But I don't know if they would win in the U.S. court just because there are a lot of other investors below you. Like, let's say if creditors are made whole and dollarized petition date value.

Like, what if i'm a series b investor or whatever you know i'm a i'm a toronto's teacher's pension and i invested 400 million dollars in ftx once the creditors are made whole wouldn't i wouldn't i have access to that now i guess three hours is a little different um because there aren't any well there aren't any equity holders that are not insiders um not that i'm aware of but there are other debt holders that are probably behind creditors like think the starry night guys and the defiance guys i mean they're trying to fight that but um they're going to have divergent interests on those things why do you think he's not complying with the with the uh with the request from the liquidators and is that common uh it's not super common most people have to play ball they're

they're either american or they have they're in jurisdictions where it's hard to not um uh play ball but you know delay delay delay is uh you know a litigation strategy i mean i mean if no matter what actually went down with kyle and sue and three arrows i mean the liquidators you know intimated that he's going to sue them for the deficiencies you know trading while insolvent that's the big claim he has against kyle and sue so uh you know he's going to argue they were insolvent for much longer than they did and they took in money from people while they were insolvent and under a lot of jurisdictions well and the vvi jurisdiction you can you can look to the person that was trading and it's it's illegal to trade while you're insolvent in a lot of jurisdictions, well, in the VVI jurisdiction, you can look to the person that was trading. And it's illegal to trade while you're insolvent

in a lot of jurisdictions. So it's criminal. It's a criminal act if you trade while you're insolvent. I don't want to say it's criminal. It's definitely civil. I think trading while you're insolvent in most jurisdictions is actually criminal, to be honest.

It is in a lot of jurisdictions. I mean, I wouldn't say not in the States. We don't have quite that same idea. We have what are called fraudulent conveyances. So any activities you did, so like all the FTX litigations that Liquidator is bringing, John Ray is bringing, he is saying, hey, the company was insolvent and he was making all these investments. We want to unwind all those investments.

That's the way the American code looks at it versus a little bit in some other jurisdictions. Of course, they have fraudulent conveyance, but they don't have this idea of trading while you're insolvent. You have to owe us a deficiency type of thing towards directors and officers. And just to be clear,

the CLS entity is a singaporean entity right i mean the liquidation is in the bvi i think they're based in singapore but i think the actual entity is offshore so the question is the question is if if uh if uh if entities in the bvi where would the why wouldn't the liquidator be a bvi liquidator this is where i'm getting confused like i can't imagine you know uh in entity in the states but for example the liquidator being a i don't know a jamaican you know like i'm just trying to work to just work out how singapore actually fits in here i i think they had some singapore corporate structures and they operated out of there but as um someone just said, they were set up or registered in the BVI.

And that's why the liquidation is happening there. Some people refer to it as COMI. What does it stand for? Basically, like where you're substantial, either where you're incorporated or where your substantial operations are is where you can generally file. Josh, you said you had some color privately on the ftx claims is that correct oh yeah just the uh you asked earlier it's trading about 43 cents as of two days ago a lot of the reason it's up so much as the anthropic shares that they own now that uh amazon uh invested four billion dollars in anthropic uh i mean it's up from i think you know like earlier they were trading at like seven cents obviously they fluctuated a lot but they're up to about 43 cents in the dollar right now pretty good just to comment on that

yeah those are institutional grade claims so there's a little bit of a bifurcation in the market guys so like anything like sub million dollars is generally trading like 20 to 30 and anything uh north of call it two million dollars three million dollars or probably even smaller but let's say two million dollars ish is trading 30 to 40 the 40 number and the 42 number those those are for very you know you know five million and up type claims with little to no preference exposure you guys are smart you guys noticed that every every every single every single not every single but most of the key players in the last bull market and people we've respected and many of us looked up to obviously sam being the most obvious example but i'm not going to list the rest of them. Are either on the run, jailed, or under investigation.

Yeah. I mean, crazy. And then we sit there complaining when regulators crack down on the industry. Like, we haven't done too good of a job. We're fucked up pretty bad this time around. I do think the differentiation that Rand made before is important here. Because I'm already scanning Twitter, obviously, for the news news and seeing a whole bunch of people putting up thumbnails that show doquan and alex mishinsky and spf and then throwing suzu in there and it is a different kind

of situation here as far as we know right now this is not a fraud claim or a criminal claim as far as we know so i just do think listen i'm not saying it won't become one i'm not saying they did anything good bad otherwise i'm just saying it's very important that people don't let this runaway train go uh believing that that makes them all the same just because they've all had some sort of apprehension or arrest you're really you're really saying this to crypto twitter yeah of course because you know they're going to run with it and it's going to be memed out and i think that's that's nothing we could do yeah that's natural and fine but it is you know it is important to differentiate between the different kinds of crimes and situations dokwan is is already under arrest he's in jail isn't he he's actually getting

released he's actually being released sometime in in october we're talking about the release from the um is it serbian prison i think it is and uh montenegro i think montenegro so i actually if you funny enough if you look at the price of lunar sea lunacy which is the the old lunar token uh it has been going up in the last couple of days and i read an article that one of the reasons why it's going up is because the community is anticipating. And I read an article that one of the reasons why it's going up is because the community is anticipating he's released from prison, believe it or not. So that,

I mean, released, released on bail or released. How, why? So he's being released. I don't know if he's being released on bail or being released, but he's being released from the,

from the prison in, in Montenegro or whatever. But I don't think that. Yeah. But it's be, is he going to prison in another country, in Korea or something? So there are... I think there's a warrant of arrest out for him in Korea.

I stand to be corrected. And I'm not sure if Korea and Montenegro have an extradition agreement. Let me check. He wouldn't be arrested if there was no extradition agreement, no? I think he was arrested for different charges, and I think the charges had something to do with, like,

passports, being in possession of fake passports, multiple passports, something along those lines. I think that's what it was about. Let me check if they have an extradition treaty, and they will know. Yeah. Yeah, I mean, I think going back to Scott's point... There's no bilateral

there's no bilateral extradition treaty in place between montenegro and south korea it's based on chad gpt so take that with a grain of salt which is yeah but i mean that's probably why he found himself there otherwise there otherwise why do you think uh you know korean national who where he where the world was caving caving in found himself in in montenegro you know i don't think he went there for the white sand and the white beaches. Yeah, but hold on, hold on. There's another article here by QZ.

Do Kwon, so let me open it up. So that was June 20th. So that was a while ago. Do Kwon was jailed for four months in Montenegro but faces 40 years in South Korea. And then it says, so he was under arrest for forging travel documents.

He spent four months behind bars in the Balkan prison. And then it talks about, Montenegro must decide about Do Kwon's extradition, both the US and South Korea. There's the US as well.

Let me see if there's an extradition with the US. I'll just check that if Montenegro and the US have an extradition. So while I'm checking that both US and South Korea have been vying to extradite the alleged crypto scammer from Montenegro for orchestrating the 40 billion dollar downfall of Luna blah, blah, blah. South Korean

prosecutors that so South Korean prosecutors have been leading the investigation to the into dog one told Bloomberg earlier this month, Quan could be trialed in both countries and potentially spend his sentence first in one and then the other well spite a little variety will spike the life okay so it's gonna get worse hold on it's gonna get worse because montenegro and the u.s do have an extradition treaty in place so in other words like based on what the limited information we've read now in the articles that because the article says that the headline of the article says montenegro lacks extradition treaties with both you okay so another source says there's no extradition treaty between

the u.s and montenegro so anyway we'll leave it at there i think we've covered it enough it goes back to the point that everyone's either under arrest on the run who's left on the run there's not many that are left on the run even that turkish guy got caught the exchange got caught i think also in montana why was he caught the turkish one do you guys know i know you're talking about i know he was recently he was recently arrested and i i remember he commented based on that how many years would sam would free get i think scott you commented about that sc Scott, yeah, yeah. That's something Scott would say. The Thodex cryptocurrency. 11,200 years sentence in Turkey.

Chill sentence. And he was arrested in Albania. Where is everyone going to these countries? So he's in Albania. Dokwan's in Montenegro. And we don't know where Carl Davies is. But again, we're not putting them in the same basket, just to be countries. So he's in Albania, Doquan's in Montenegro. So, and we don't know where Carl Davies is,

but again, we're not putting them in the same basket, just to be clear. But Scott, I think we could, we could move on. If we've got more updates

on this, we'll, we'll cover it. I think we should talk about the Ethereum. There's nothing else. Yeah, I think we should move on

to the Ethereum futures ETF. Some good news. Quickly. Go ahead, man. Yeah. So, we could just give the quick update. Obviously, there was a lot of conjecture that an ethereum futures etf would be approved in the united states next week uh so much so that van x started aggressively

running an advertising campaign trying to raise aum when it does go live pro share is also likely to get live on monday uh and bitwise also likely to get live on Monday. And Bitwise also likely to get live on Monday. But what's interesting here is that Valkyrie, who actually won the race, and Steve McClure was to be here, I had him on yesterday, that they were supposed to be in first place. And all of a sudden, the SEC moved a number of companies ahead of them, basically preempting them for Monday instead of on Tuesday. And we all know that with ETFs, there's a huge first mover advantage and being first is very important. What seemingly happened here, I spoke with the Bloomberg guys and with others, what seemingly happened here yesterday is really interesting because Valkyrie had a Bitcoin futures ETF approved, obviously BFD,

which they had approved two years ago, and they were the second mover, right? There was a billion went into BITO, 72 hours later, Valkyrie was approved. They did 100 million in AUM. Those were both top 15 launches ever. The Bitcoin futures ETF was number one ever. But what Valkyrie did here was they basically approved, they applied to convert their Bitcoin futures ETF into a blended Bitcoin and Ethereum futures ETF. But that still wasn't going to happen until Tuesday. So what they actually seemingly did here was get an updated risk disclosure that sort of circumvented the approval on Tuesday and allowed them to buy a very small percentage of the fund in ETH as of yesterday and today, up to 5%. And then when they get approval on Tuesday, which is very likely, then it will be able to go actively manage from 50% Bitcoin to 50% Ethereum.

So effectively, they found a novel way to get the first approval that they were going to be getting in the first place. So now we do officially have Ethereum futures available through an ETF product in the United States. Notably, it did literally nothing for price, which I don't think is a surprise at this part in the cycle. And we've seen futures ETFs actually be tops in the past. But officially, as of today, you can go get exposure to Ethereum futures via an ETF in the United States. It's absolutely huge news. Wasn't it expected news? Expected as of the last few weeks and listen like the the argument here obviously is that there was already bitcoin futures etfs approved um and so it was very

hard to deny an ethereum futures etf when that structure was already approved but here's the story that nobody seems to be talking about that i just want to kick around maybe with the panel there's been a lot of conjecture that the SEC, after losing to Grayscale, would go nuclear option and basically unlist or delist the Bitcoin futures ETF, right? We knew that they're going to have to give a new reason to reject a spot ETF, but their other option was to just say, you know what, you're right, we approved a spot futures ETF for Bitcoin, that was wrong, and we're going to retract that. I have to imagine that that argument is now that was wrong, and we're going to retract that. I have to imagine that that argument is now dead in the water if we're seeing Ethereum futures approved, because now they would have to also retract all the Ethereum futures ones that are

going to be approved next week. So I think that that's actually an important narrative, and it's really not being discussed. But if I'm missing some nuance and anyone knows, that would be great. But yes, it was expected over the past few weeks, Mario. No, I mean, because you said that, you know, you're not surprised that the markets didn't react much, but if it was expected, then it would have been already priced in. But my question to you, Scott, and then the rest of the panel, just feel free to jump in or put your hand up,

is what does that mean for the markets? Like, why is that such good news? I think it just allows for institutional investment in Ethereum for those who are looking for it, which is something that they largely could not get before. And like I said, next week,rie, they sort of consensus was that they think a successful AUM for these products combined would be maybe roughly 300 million in the first few weeks or month. And like I said, to put that in context, in the Bitcoin futures ETF that launched, of course,

in a bull market, not in a crab market like this, there was 1.3 billion in the first two weeks or week. I don't want to be quoted exactly, but we're talking about something that would be about a sixth of the size over a larger timeline. A, because it's Ethereum and there's smaller institutional interest and B, because it's just that part of the market. So I've got time. And Sean, I want to get your thoughts, Tom's thoughts, Joshua's thoughts as well. I see Mike is there. I thought you dropped out, Mike. And get your thoughts as well, Mike, like with this news that we're seeing right now, what do you think that means for the markets?

And why do you think the markets are not reacting as positively as we'd expect them to? This is Mike. I'll definitely do my views on it. To me, this. Yeah, I guess I'll jump in here. I think, Tom, yeah, you can't... I don't think you can hear me. There's a bit of a glitch. You can't hear Mike. So I'm going to bring you down, Tom, and bring you back up.

Mike, go ahead. And I'll bring you down and back up, Tom. Top of the market. A spot ETF has always been interesting because almost no matter what, when you start a new ETF, you have to seed it. So you can seed an ETF

with anywhere from $25 a hundred million dollars is, is generally typical. And we have 10 ETFs or so on the board. So, you know, a billion dollars of spot buying in these markets is, is really meaningful. So I think that's why everyone's just looking for the spot approval. Okay. Perfect. Now, finally, yeah, that was an interesting glitch. Yeah, go ahead. He was a listener and still talking. Interesting. Yeah, I know. It's happened once to me months and months ago. So Tom, I'm just saying you need to come back up. Mike, go ahead. You're responding to this and then I'll give the mic back to Tom.

I think we have to be careful with all the focus on ETF launches and futures. This stuff is inevitable. It was things we predicted years ago, which is all happening at once. The problem is it's happening in what might be considered a bear market. We've had a bounce. So to me, it's the macro that's the 10. Everything else we're really speaking about is more is we have positive beta to the stock market it's starting to roll over and there's still negative liquidity so let me just give you some facts the last two times the fed pivot bitcoin swoons bitcoin plunges preceded those pivots that was in 2018 at the end and then of course with the uh with the covid plunge bitcoin led those and it's just the way it's happened. So I look into the future. Where does the market tell me for liquidity? Fed fund futures in one year are around 5%. That's not telling me there's any sign of liquidity.

And prices are still drifting lower, markets higher. And then I look over, OK, what's the relative performance of, say, the Bloomberg Galaxy crypto index? It's still underperforming relative to, say, the Bloomberg Galaxy Crypto Index. It's still underperforming relative to, say, the Russell 2000 Index. I use that because they've had very similar patterns. They're rolling over. They're still heading lower from the peaks. They've been consolidating. The key question is, what's the next catalyst to go lower? So to me, I think what's happening is the market's getting ready for this recession. it's just a matter of time and then

you look at things like the bond market fact the last time we had a big you know when you had a big swoon in bond yields in 1987 was a good example that peaked the week before the crash how about crude oil crude oil has been spiking lately it peaked in 2008. That's right when things started to roll over. So to me, the macro is as virtually all risk assets have gone up this year and virtually all risk assets have rolled over this quarter. What happens the next quarter? My point is our analysis recession should kick in in this country. It's already started in Europe and crypto should follow that low. In fact, Bitcoin's leading status should head low. Now, I'm not saying this because I'm negative.

It's a happy Friday for everyone. I'm just pointing out facts of where markets are going. You basically need, I think, in Q4 for the recession not to happen, for the stock market to recover and potentially for liquidity to be turned back on from the Fed. Otherwise, the macro for Bitcoin is quite negative.

Yeah, Sean. Yeah, I think that's a good macro overview and perspective. Sean, I want to focus on the ETF here still, obviously. How are you guys viewing this at Fundstrat? Yeah, so I mean, similar to Mike's sentiments around, you know, whether it's a catalyst or not. We definitely still think that the macro setup is definitely more important than just having these products out to market. Obviously, it's not going to change the direction of asset prices, but we do think it can influence the magnitude of moves, right? If more people, if it reduces friction for people having access to products that provide exposure to spot prices,

obviously that's a good thing when macro does turn. ETH futures, I think the significance is actually greater. I think someone alluded to it already. I think there's a greater significance in terms of what this means for the regulatory setup going forward. It certainly puts the SEC into a much tighter corner as it relates to the spot Bitcoin ETF. And frankly, it just continues to erode their reputation when it comes to regulating the industry. So I still think macro is more important. I certainly, I think I've made my views known

that I have a differing view on the macro outlook for equities and crypto specifically than Mike. But in terms of what will drive flows, certainly an ETF isn't a cure-all for that. Yeah, clearly. I mean, you can see it in the price, right? Jacqueline, what do you think about this? Hey, yeah, thanks for having me on. I think going off what Scott said, even if the market didn't respond too much to this positive news, or to this news, it is positive in a way for market players and financial institutions that want to get into the space. I think anything right now that gives crypto a green flag is a leg up for the industry opposed to the delays we've seen, or shoot downs of applications to spot related things. I think Mike also raises good

points that we have to be careful about this because it's not the highly anticipated spot investment product. Like, yes, it is still positive in a way, but it's for futures and the market really didn't respond as much. I'm not an analyst, so I can't really speculate on like the price movement. But as Mike said, like looking at the macro environment, there's still a big question mark around liquidity. Yeah. And Mario, that means we should definitely talk about the fact because it actually, I think, happened after the show yesterday that we saw sweeping delays on the Bitcoin spot ETFs, right? So there was a lot of conjecture. We had Bloomberg saying 70% chance of a 2023 approval. Gary Gensler put that to bed really, really fast, literally 45 minutes after he was sent a letter by four members of

Congress to approve a spot ETF, he kicked the can down the road on ARK and now kicked the can down the road on effectively the rest of them, Valkyrie, BlackRock. Listen, if they're kicking BlackRock down the road, we're not seeing an approval in 2023. I think he's a very, very safe bet. And you can make an argument that the market didn't react negatively to that news either. So we've got to point out when the market doesn't react to some positive news, we've also got to point out whenever it doesn't react to negative news as well. And let's consider this negative. We do have Carlo here. So maybe Carlo can maybe, as we wrap up later on, we kind of get an update on Jusud. Not sure if you've looked into it, Carlo. Give us a bit more light. And again,

all the reports we're reading, they're just reports. Could all be wrong. He might not even be under arrest. We have no idea. So just to be clear, everyone, I will take every report out there with a grain of salt. But before pivoting back to Jusu, Scott, I've got to ask you a very simple question again. I know the answer, but I want to question it a bit further. Is that why does an ETF matter? Why does the industry need an ETF? There's a number of reasons but the the biggest one obviously is that there's a certain class of investors and certainly real and certainly investment advisors who do not have a way to

in a risk managed manner offer bitcoin and these products to their customers and institutions that can't afford to cold storage or worry about custody. I mean, look at Prime Trust and Fortress, for an example, and can't afford to risk custody. They all need a product that they can actually utilize safely that's insured and to buy in their equity account, you know, on Charles Schwabab and that's how they can get exposed yeah scott scott i'll just who's sorry who's tom is a tom is a listener speaking again which is a magic trick that he seems to have but if it works i don't know how you're doing it tom but yeah go ahead you're listening to all of us but yeah go ahead man sorry can you guys hear me yes we can yeah

but just to get i'm gonna i'm gonna give you something i'm probably gonna regret but right now we cannot mute you or remove you from stage. So you cannot control the show if you like. So please use your powers. Go ahead. Okay. I'll say something real quick and then I'll hop out and come back in. Yeah.

So basically it's really important for a number of the reasons Scott outlined, but I think it's a little more nuanced than that. So if you're an RIA or if you're a financial advisor, right, and your client says, hey, I have 1% Bitcoin. You say, okay, great. You have it on Coinbase. I can't see that. But more importantly, I don't earn fees on that. So if I have a way as a financial advisor to give you your whatever, 1, 3, 4, 5% position in Bitcoin, I can get my fee off of that. So I'm incentivized now to actually entertain your, you know, your crypto fantasies and all that. So I, so it's an easy way for you to put that in. And I don't know if I got cut off before, but the other thing on the institutional side is, you know, the ability to actually put it in large portfolios for pensions, endowments, foundations. You know, my previous life, I advised

a lot of those people and, you know, you can say, Hey, VC fund, you know, here's my money, go invest in crypto. But it's a lot easier to say, like, hey, I'll just buy this Bitcoin ETF. And, you know, I'll give you, you know, pension fund 1%, and, you know, I don't have to think about it. But I know it's custody safe. And I know it's now sort of sanctioned, at least by the US authorities enough, they were able to give an ETF. So you're gonna have buying on both sides, both from the retail side. The question is that that argument made sense to me a few years ago, but now custody is no longer an issue. It's a huge issue. It is a huge issue. Yeah. To this day. Do not remember us covering the prime trust story where a regulated

custodian committed fraud to cover up losing private keys. And now we have Scott Purcell who left Prime Trust going to start Fortress and Fortress got hacked for $15 million. And Ripple just backed out of the deal to buy them when doing their due diligence, just like BitGo backed out of buying Prime Trust. Our trusted regulated custodians can't even keep private keys safe or protect your money. We have a huge, huge problem with risk management

and with custodians in the crypto space. Yeah, I'll add to that. I spoke to one of the top 10 largest hedge funds in the world literally yesterday, which they have a crypto team and crypto operation and just they cannot find a custodian. They need a qualified custodian they need a qualified custodian there's no one that they want to work with i mean they want to work with a bony melon

or a state street or a large traditional custodian but because of uh sat 121 which is the sec's you know rule which basically limits the ability of uh you know publicly traded u.s bank to offer crypto custody services because it requires them to hold equal US dollar collateral to the underlying crypto that they're holding. Because of that, none of these large traditional custodians can offer crypto and they're hoping that offshore banks can offer. But guys, the reason I thought was no longer an issue because we have, didn't Mellon announce, so let me go into it. So Bank of New York is adding crypto to assets that it holds as a custody manager and again, Deutsche Bank is all making an application to do the same in germany yeah but but but bny melon is limited by sab 121 so in other words every dollar of crypto that bny

melon wants to custody they have to hold a u.s dollar on their balance sheet which means you're foregoing five percent yield on that through treasuries so you know that that that product i i don't know the exact aum of the custody product but they're not it's not available like you know maybe a couple preferred customers of bny melon have access to it maybe a hundred billion dollars but it's not it's not really all they can't offer it i mean they're they're it's this stupid because of the requirement to have a to have a dollar for every dollar you hold. It just makes it very financially just not that viable to do at large scale. And then go find $10 billion in cash to match those assets. She's not going to do it.

That's crazy. So I'm guessing Deutsche Bank will have to do the same thing. No, because Deutsche Bank's not. It's a problem with American banks. But I don't think Deutsche Bank is alive yet with custody. But that's what I said. No, no, no. They've made an application.

Yeah, yeah. So I think once these offshore banks or like, you know, real UBS, Deutsche Bank, whatever, whoever it ends up being, HSBC, whoever ends up offering these services, I think that becomes interesting to hedge funds and it's something that they can trust. But a lot of these funds, you know, they don't want to do business with the crypto native custodians also keep in mind i mean they have no balance sheet right like you know what happens if one of these crypto native custodians get hacked like they've only raised 50 million dollars 100 million but what about what about coinbase is it what about coinbase's custodial services yeah i mean i you know like i think there are a bunch

of people that do trust coinbase but from speaking to a bunch of largest hedge funds in the world, some of them, that's not enough. It just depends on their risk management team and what they're willing to do. I think these guys, Boney Mellon and State Street and these other large custodians, that's who they want to do business with. Do I, Scott? other large custodians i mean that's who they want to do business with all right scott i was just going to say it's just to be very clear custody is still a huge problem yeah and and so i was going to ask you okay i was going to ask you like do you still think it's a big problem like i've just pointed out melon i point out deutsche coinbase yeah and it's still a huge problem this is just yet another example of things that will cycle through and be solved with time. It's just we're not there yet.

You know, I hate to use the meme that we're still early, but we do know that they'll find a way. The Bank of New York, Mellon's, I'm sure will find a way to get those rules changed, right? And if a Deutsche Bank or something does come in. But we're already sort of, I think, in this moving towards a bifurcation of either self-custody, which individuals should absolutely do if they trust themselves and want to really hold these assets, and then everything else moving to, quote unquote, trusted, regulated, insured custodians on the other side. And I have a feeling that'll be a complete washout for a lot of the sort of crypto native custodians. I mean,

I think there are some that are still very well trusted and respected. You mentioned Coinbase, I think BitGo very highly respected and highly touted. So I think there'll be a place for everybody. But it's only if you're public. And obviously, there are others that have talked about offering cryptocurrency services. And also, once these guys move in, right, like these large traditional custodians, they're going to offer like Bitcoin and ETH, they're not going to offer anything beyond that. And there's going to be some, you know, there's going to be demand beyond just Bitcoin and ETH. I mean, you know, they're... So what's next? In terms of a futures ETF, what's next? Now we have Bitcoin,

we're about to get ETH. What would you expect to be next? Bitcoin spot ETF. No, no, in terms of futures ETFs other than Bitcoin and ETH. What do you... You've got an altcoin ETF. So we did,

before we saw the Ethereum futures ETF, we did see a 2x leverage Bitcoin futures ETF approved. So, I don't know, Josh, maybe a 2x leverage Ethereum futures ETF would. So, I don't know, Josh, maybe a 2x leverage Ethereum futures ETF would be next. I think he's asking if there's going to be an altcoin ETF. I don't think so. Yeah.

I mean, unless it's like something like Litecoin or BCH or something which just, you know. Right, but what futures contracts will they buy to put in the ETF? You have to be able to go out on the market and buy futures contracts to put into the ETF. 100%. CME is only Bitcoin NEET, right? So CME would have to list other assets. Yeah.

So Mario, to be clear, it would require futures to exist for these other assets before a futures ETF can buy those futures to create the ETF. So right now we only have Bitcoin futures. People might not remember that BITO when it launched, which was the Bitcoin futures ETF, like I said, they did a billion in AUM effectively overnight. And they literally couldn't find enough futures contracts that were short dated to fill it. So they had to go out to 60, 90, 120 days to buy the contracts, which means that it becomes an extremely volatile product versus the spot underlying asset the idea of the etf obviously in general is to track very closely the spot price of bitcoin and the further dated futures you have to buy to fill the aum the less it tracks it and that's why

we've seen it massively underperform spot Shitty product and terrible for retail. If the SEC wants to protect retail, they would obviously approve a Bitcoin spot ETF, but clearly that's not their intention. Just to add a bit here to the question as well. So I've spoken with, and I don't know if I'm a speaker, listener again, but hopefully that got sorted out. I've spoken with VanEck, also spoken with Fidelity, and they are in the very early stages of trying to find out what customers actually want in spot products. So they're not even putting that stuff on their roadmap yet.

It's really just Bitcoin, Ethereum, and then based on customer demand, we'll start exploring the other assets. But it hasn't really been there for them. The demand hasn't been there for them to really start exploring those yet. Sorry, I was not eating, my bad. Tom, by the way, you're a great speaker.

We'd love to have you more often. Scott, I think we've covered this well. We can do the recession space on Monday. Can I ask Carlo about Jusri if he's read into it or you prefer not? Good morning, Mario. Good morning, all. Thank you for having me on. I did briefly look into it. And I have to agree with you, Mario, it is too soon to tell. I'd like to see more confirmation on what's going on. But of course, the three arrows collapse was a major, major turning point in crypto. And it was tied into what happened with Luna, and certainly had a huge ripple effect in the space. So any new developments in this case,

including detaining one of the key players in that company is certainly something that I'd like to look closely at and see where it goes. And is it another question I have, like, is it common to detain someone for not playing ball with the liquidators? You know, I would have to think that this detention is somehow tied to violation of a court order. Yeah, like a contempt of court. There's got to be some judicial authority. Similar to a contempt of court. Yeah, the contempt of court would give the authority.

It doesn't make you a fraud. It just means you're not listening to the court. Exactly. I can't tell you in detail, but I can only speculate that's what the root of this is. Okay. Cool. I think this is it. Joe, I brought you up. You wanted to make a point on ETH. I saw your messages kind of screaming at me, disagreeing with what we said. Yeah, it's just the next ETF. If you look at Purpose in Canada, one of the most popular ETFs is the Ethereum yield ETF, which is basically writing covered calls. It's one of the reasons why I really liked when Optra started in crypto,

because it's a wealth management secret of the ultra rich to simply write covered calls on their assets to earn a yield. And you're getting like 14% yield to 19% yield on writing covered calls on ETH. And this ETF has performed extremely well. And I think if they had, I think at the high, they had $150 million in AUM, which is high for Canada. I think that would probably be the next step. And I think it would be really good for a lot of people. Joe, you know what else?

It's a strategy people aren't aware of. Yeah, Joe, you know what else I've seen floated that's really, really interesting. And I don't think it can be done legally now, but something that could be for the future is that

as these are being actively managed, especially if we get spot ones, that then they could obviously stake the assets that are in the ETF and earn that yield as well. Yeah, imagine staking, getting STE, using Lido, staking, getting STE, using STE to then write covered calls.

You could probably get like 20% yield, which is amazing for people. This is what I see the future is for crypto to replace the financial system where you basically have almost a savings account. If Ethereum eventually becomes less volatile, you basically have a savings account that pays you a very high yield by helping you support the network. Yeah, I mean, that's even a level above what I was considering. If you consider the quote unquote safe, you know, from one of these Wall Street products where they simply, you know, if it was a spot Ether, they take the spot Ether that they bought for the AUM and then they simply stake it and earn the 3, 4, 5, 6, 7%, whatever it is at that time. That would still be a huge 4%.

I mean, that would still be hugely compelling, I think, for someone to earn the yield on that ETF that's a spot and safe product. This is what gets the boomers onto crypto without knowing they're in crypto, I believe. Great point. Mario, what do you think? I was just looking at the open exchange token. It's gone pretty wild. It went down like 50%, no, 40-something percent.

No, 50. And then went back up all the way, recovered almost all of it back at the same levels. Yeah, somebody spent $47 and pumped it back up 50% of the job. You got to make that same joke. You bet me to it. But then it went up, dropped all the way back to, no, but the volume is it's $4.3 million volume. We keep talking about there's no volume.

It's $4.3 million. It's not great, but it's not like some altcoin with no volume whatsoever. I think the bigger story is the founder risk that we continually see in the crypto space, right? You're not only investing in these things in a project, you're investing in the person at the top of it. And that's been a pretty bad bet in the last year, as we said. When are we going to invest in the Wolf of Wall Street's coin? Gary is listening. Shut up. The Wolf coin.

Actually, I'll go to Frentech. Let's go Frentech, see your token. I think this is it for now. We've covered everything. We'll be back. There's more breaking news on anything major. We'll just cover it on the weekend, but unlikely there will be any. And we'll see everyone on Monday.

Agree? Yeah, great job. Thanks, guys. Thank you, everyone. Cool. Bye, everyone. Thank you so much. Bye.