The Wolf Of All Streets - Charlie Shrem, Bitcoin Legend on Surviving Life in Jail, the Failures of The Criminal Justice System, the Early Days of Bitcoin, Being Hacked, the Prevalence of Trolling, the Halvening and More

Episode Date: April 23, 2020

You can't tell the story of Bitcoin without telling the story of Charlie Shrem. Charlie, Bitcoin Legend, host of Untold Stories and CEO of CryptoIQ and Scott Melker discuss life in the early days of Bitcoin and crypto, the insanity of life in prison and the lessons learned, the failure that is the United States criminal justice system, going from being a millionaire to working a minimum wage job and back to being a millionaire, being a target of hackers as a famous person in the space, the toxicity of the crypto community, the upcoming Bitcoin halvening and its implications and more. --- ROUNDLYX RoundlyX allows you to dollar-cost-average into crypto with our spare change "Roundup" investing tool, manage multiple crypto exchange accounts in one dashboard and access curated digital asset content and services. Visit RoundlyX and use promo code "WOLF" to learn more about accumulating your favorite digital assets when making everyday purchases and earn $4 in free Bitcoin. --- VOYAGER This episode is brought to you by Voyager, your new favorite crypto broker. Trade crypto fast and commission-free the easy way. Earn up to 6% interest on top coins with no lockups and no limits. Download the Voyager app and use code “SCOTT25” to get $25 in free Bitcoin when you create your account --- If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe.This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

What's up, everybody? This is your host, Scott Melker, and you're listening to the Wolf of All Streets podcast. Every week, I'm talking to your favorite personalities from the worlds of Bitcoin, finance, trading, art, music, sports, politics, and basically anyone else with an interesting story to tell. So sit down, strap in, and get ready, because we're going deep. Let's go. I'd like to thank my sponsors, Round the X and Voyager, for making today's episode possible. We'll hear much more about them later on in the episode. This podcast is powered by BlockWorks Group, the only events and podcast production company I trust. For access to the premier digital asset conferences and in-depth podcast content, visit them at blockworksgroup.io.

I promise you will not be disappointed. Today's guest has been a fixture in the crypto community since its inception. In fact, it's quite literally impossible to tell the story of Bitcoin without telling the story of Charlie Shrem. The yeshiva boy from Brooklyn turned Bitcoin exchange CEO turned convict turned hero of crypto legend. Once one of the more polarizing figures in the crypto space, he's now seemingly loved by everyone in the community and is someone I'm very lucky to call a friend. I can't wait to hear more of his story and share with all of you. Charlie, thank you so much for taking the time to be on the show. I'm really happy to be here and I'm more happy that you launched the show. Well, thank you. You were definitely a huge part of that, actually. You were one of my

early cheerleaders and encouragers, which was very helpful since I was a skeptic, of course. So you started the crypto exchange out of your dorm room at Brooklyn college, where my mom actually also went to school. Oh, that's so funny. This is a Herculean task that even the most risk thirsty companies have avoided due to the insane amount of regulation, particularly in this country. So was it naivety, balls of steel, or something else that led you to make that decision? I'll tell you this. I'll tell you this. I remember launching BitInstant and I remember we were doing a lot of money. It was maybe like tens of thousands of dollars.

We were doing more money in transactions with more customers than many small banks would do on a given day. And this was like we were only like a month or two into this. Now, picture this. I'm like this 20-year-old, like you said, yeshiva boy. Like, I've never even traveled out of Brooklyn, you know? And I remember sitting in my cousin's living room on his computer, not even my own computer, reading about FinCEN's requirements for anti-money laundering and money transmitting laws. Like that's where I was learning about all this stuff as I was running a money transmitter, basically like basically a money transmitter company, I think, right?

I still don't know all the laws, so I don't know, but it's kind of crazy. So it's not that I was like ignorant on purpose. I simply really believed that i really simply believe that you that that in any industry you can just throw shit at the wall and see what sticks as long as you're not like stealing from people or killing people or like harming them or i mean that was my moral fundamental belief i grew up in yeshiva that's what you know do others to what you how you'd want to be you know done or whatever it is so So that's what I always thought. I always followed my own moral code.

So as I was running BitInstant, I was following my own personal and moral code. Now, where I ran afoul was, this is where my naivety and my ignorance fell to the wayside, what had happened was, is that eventually I realized that people were buying Bitcoin on BinInstance and then using that Bitcoin to go on this place called Silk Road to then buy things. And although like 80% of these things were cannabis, there were still 20% of other shit. And there was some really bad shit too. Now, because I knew that people were buying bitcoin to then go on and then re you know to rebuy stuff on on silk road my moral like thought process was well like why should i care what people are doing with the money or the asset

or whatever they are buying from me why should i care care? Like, what is that my response? Why is that my responsibility? And I almost like, rationalize that in my head. And a lot of people still rationalize that and say that, like, that was right. But you know, obviously, that's wrong. And it's illegal. Yeah. But if a bank gives someone a home equity loan, and that person takes out 100 grand and goes and buys drugs to sell to someone that bank doesn't end up in jail, you know, the banker doesn't end up in jail you know that the banker doesn't end up in jail what's the difference yeah i mean furthermore banks put you know at it's but it's not just that it's banks will put atm machines that dispense five and ten dollar bills in street corners that they know where drug dealers or drug deals are happening um listen the

long list goes on it's not fair to compare me with the banking industry because you're just going to find tons of examples and i've even had federal judges that i've had dinner with that have told me that my crime was stupid but on the flip side i don't like to minimize it because my crime was real it was illegal i broke the law and then i served the time and then that time was not negative time. I use that very positively in my life. So I don't like to minimize the crime because then it's minimizing the time. You know, I did the crime. I did the time.

I'm moving on. I did my debt to society. That makes sense. And not to minimize the crime, but it's kind of seems like and funny. So we had Mike, your partner, Mike Kimmelman on the show, and we talked about how he was sort of, you know, they made an example of him at a time when everyone, you know, the system seemed to want, you know, fall guys, basically. I mean, do you feel like to some degree, even though what you did was, I guess it was illegal technically, do you feel like they were looking for someone to take the fall for this sort of nascent new industry and technology and they want to make an example of you i think your question is better answered by the unbiased uh viewer and listener who can look at all the data look at the timing look at all the information look at my arrest and come to its own conclusion

if i answer my question your question then i'm like uh biasing that control you know that control room or whatever so So, um, that makes sense. Let people decide on their own. Yeah. So I'd imagine that every kid wakes up at some point in their life and a cold sweat, uh, having a nightmare about ending up in prison and what that would look like,

especially, uh, I guess nice Jewish kids like ourselves with, uh, with, you know, uh, that certain moral code that you sort of spoke to before.

Um, I mean, can you tell code that you sort of spoke to before. I mean, can you tell me what it was like? Yeah. Your first day in prison and beyond. Leading up to it, you like say to yourself, like you try, you start to like, it's not going to be that bad. I'm going to become better out of it. It's only a certain amount of time, but I mean, there's no way around it.

Prison sucks. Like it just, it just really does suck. And it's not, it's not so much the physical place that sucks too. And it's not so much the people that really sucks. And it's not so much the guards that like really, really, really sucks. It's just the time. And it's, it's the time that you got to sit there and do nothing it's knowing that you have to work every minute of every day to not say to yourself for the rest of your life that i wasted that time and it's a very difficult thing to do and it's very difficult to like keep yourself busy but if you really work hard at it you can do it the story i remember the first day i walked in there my lawyer had introduced me to this guy told me this guy's name and said when you get to jail the first thing you do is go find this guy he's going to get you some some food he's going to teach you you know he's going to introduce you to his crew and you're going to be part of his crew like there's another inmate yeah another there there are such thing as prison consultants they exist and they do

hook you up before you go in to make sure you know security financially you have a crew you have a group of people that are going to be as close to your so like my crew or people that were as close to me in i hate to say it but like skin color background growing up and moral and social values those Those are the people that your crew is. And I hate to say that, but that's what it is. It's just what it is. So, you know, so I go in there, it's my first day and I saw him. He's older guys.

One of the oldest guys there is like 75 years old, 80 years old or something. And I remember saying, I was like, hey, dude. I was like, hey, I'm Charlie. Like, you know, such and such connect us already. I was like, I just got here here i had like a rucksack you know behind my shoulder all my shit and uh and i said can i sit with you for like an hour and talk to you like i don't know what to do i don't even know where the building where my bed is like there's 5 000 acres where do i go he whips out a little freaking like little book he goes i'm free next week. And the thing was, is he wasn't joking.

He was actually, he's one of the busiest guys I've ever met. And months later, I found myself actually being busy as well. You create routines. You go to, you have a job, you have services. You like, okay. So there was this one inmate that I never would speak to. But every at four o'clock we played gin rummy together for an hour and we would talk small talk and we would talk about our lives and we but we never never would speak outside of that he had his crew and his circles and i had my crew my job my circles we wouldn't see each other but he was he would he

lived two cells away from me we both like playing gin rummy and we've somehow figured out that we both like playing gin rummy with a cup of coffee at four o'clock every day and we had nothing in common i mean he was a flight attendant who got caught with cocaine up his ass but i mean that no seriously like that's a thousand percent like that a great guy but i guess so prison is a weird place because on one side you have your crew, but here I am. Another story is like on my first day, they bunked me with, and remember, I grew up a religious Jew and I left the religion, but this was before. I remember they put me with the imam, like the leader of the Muslim, the spiritual leader of the Muslim community in prison. And it's a very large community.

So I think they did it as a joke to see like how it would play out. Joke's on them. We actually, he became one of my best friends. Like we were very close for the whole time. Like one of my closest, cried on my shoulder when he got out. And he was in for 26 years. So joke's on them. But it's pretty

funny how that all played out i mean what's like the craziest thing you saw while you were in prison i mean you know we all see on tv uh no no children here i saw two i saw two things happen that i saw i saw a lot of things happen but the the two things, I saw two violent things. I saw one person die because he was high on K2 and heroin and ran into a brick wall. I saw that. And that's an image you don't want to see again. The second thing I saw was I literally saw someone with a lock in their sock and just whack someone over their head over a seat in the TV room.

So this place wasn't the white collar resort, I think, that people probably imagine. I mean, it was a real- That's a fallacy. Does that exist? No. Every prison has white collar criminals from Supermax to, I mean, you can look at Ross Ulbricht potentially as a white collar criminal.

He's in a Supermax ADX Florence, right? It's not based on like that. It's based on where you go is based on a security level. And the way the Bureau of Prisons does it is it's a scoring. It's a score. And your score is a lot of factors. There's a whole book like this big. By the way, I wrote this book once mastering the basics

of crypto i literally give it away to people if anyone wants this book mastering the basics of cryptocurrency that i wrote it's really good it's like 300 pages i did it for friends and family i'm giving away for free or whatever it's not even i use it i use one as a mouse pad that's why i'll make sure we link that there's literally yeah there's literally uh i did it for friends and family because i was tired of people asking about bitcoins i just here here's a book it's like just binded at staples it's nothing no frills but it's nice um so anyways there's this book that has all the scoring and the scoring is basically it has like you know based on your age your crime were there weapons involved violence first time offender, blah, blah, blah.

There's all these different things, but that's where it defines where you are. And there's also time. So where I was is actually, we call it the coffee filter in a way, because what it is, is it's a catch all. So my prison is the prison you go if you have a very low security level, or you started off somewhere really, really high and you eventually made your way down so it had i had criminal i had murderers rapists i had all those people but they were just like or like at the end of their time so they were like mellowed out like imagine someone like like those movies you would see where like like in a mental institution they're just like mellowed out you know like no one could see this is why it's not a good idea to do podcasts and

videos because i think you see me. So I'm like, the viewers can see my emotions, but they can't. He was showing a comatose person laying off to the side, sort of giving up on everything. So, I mean, to that end, these people that have been there forever, do you believe that it actually rehabilitates and changes them? Or are those just people who basically become hardened by this prison life and can never really go back to real society? That's a fucking awesome question.

Anyone who has to deal with the criminal justice system, rich, poor, black, white, male, female, doesn't matter who you are. If you deal with the United States criminal justice system, I don't care if you're a billionaire, I don't care if you're a celebrity who only went to prison for 10 days. If you had to endure the criminal justice system from the moment of arrest to the moment of sentencing to the moment of doing your time to probation, that process that you're being handed off to various agencies and

people where literally your balls are in someone else's hand every other week where that person can control your future and your life, that feeling, you guys know that feeling. I know you know that feeling. It's a shitty feeling when someone has the future of your life in their hands. Every single person that goes through the criminal justice system has to deal with that trauma. And I use the word trauma because every single person that I know that went to prison is still seeking help for PTSD, myself and my wife included. It's a very, very, very negative thing. Now, on the other end, we do need a criminal justice system. We need to punish people for crimes. We need law enforcement. It's very important for a society. But I think that the system is fundamentally flawed in how it treats people.

And it is, and I will tell you with a straight face, there is no other institution in our country that is so easily greased with money. If you have money, your stay in the criminal justice system and your ability to not have to go back is like your chances are so much greater. Whereas if you don't have any money and if you can't afford a lawyer and if you don't have a community to go back to, and if you don't have a support system, that's why the recidivism rate is so high. It's because these people that are trying, I have so many friends that tried so hard, so hard. And so the last day they were getting coached by myself or other friends or, you know, like not like I was in a position to be coaching people, but just, you know, more advice. But they didn't want to go back to those old lifestyles. They didn't want to go back

to stealing cars. I remember he's like, I remember I had a friend who was like, I was like, dude, you are such a good mechanic. We built a whole business model that he was going to be a VIP car mechanic where he would have all of his stuff in a truck and then if you had a Ferrari

or whatever and your car was broken, you wouldn't have to take it to a garage. He'd come to your house. Great business model, right? Easy. What's the overhead?

It's just you and tools. All the knowledge is in his head. The guy could have made a lot of money. I found out like six months later, he got rearrested for the same fucking thing. I'm like so frustrated. I don't blame him because I blame the community. I blame the lifestyle. I blame the people that were responsible for his-entry into society, whether it's his own lawyers or his probation officers or whoever it was, or his friends and family that are around him.

These people or her, these people are very risk and our country is not going to be better until we deal with this. I mean, where is someone supposed to go and what are they supposed to do when you just release them back out on the street? They're a felon. They can't get a job. And like you said, they're also on probation. So, you know, there's a very strict rules around what they can do. It's a clearly a big problem. So let's talk about then when you got out. I know that you went and got a minimum wage job. Is that correct? Yeah. I got out. I made the decision with my girlfriend at the time, who's now my wife, that I wasn't going to go back to New York, which is where I was born, raised, lived, grew up, and was arrested in and had my trial and my case and everything for a lot of reasons. One of the reasons is because all my demons were there, and that's where all the negative in the light in my life happened so and that's but the problem was that's where all my support was so when i got out i asked to be released to pennsylvania and when you are you can't leave that like town for like six months so you're very when you're released to a a community you can't leave that community like it's your movements are you're basically, when you're released to a community, you can't leave that community. Like it's your movements are, you're basically in prison for an extra six months, but you are outside.

So your movements are monitored. You have to submit a schedule the week before where you're going to be every minute of the day. So if you're going to be home, or if you're going to think you're going to go to Dunkin Donuts from four to four 15, he put that on the schedule. schedule like your minutes are and they call you up and they do random checks insane so it's kind of yeah it's kind of crazy um but yeah i got a job as a as a as a dishwasher and uh then ran food and um i didn't want to go back into bitcoin yet i didn't want to go back into Bitcoin yet. I didn't want to even go back into the tech world. In fact, even me, who I believe that I had

like a pretty good, you know, mental capacity going into this, I didn't tell anyone that I was released. The only people that knew was like my wife and my mother-in-law and my brother-in-law and his wife. That's it for the first six months because i wasn't ready to come out uh to the to the public yet like even to my friends and family because i was weird like i was like a weird person for the first few months it's hard to explain but there's like a re-entry that you have to kind of go through because you you become so imagine living in like

imagine living in like what you're living in now you're saying you mean isolation imagine living in isolation imagine you're the only one doing it and imagine doing it in a prison and imagine doing it for a year year and a half two years and then imagine and with no communication to the outside world and imagine having to like re-enter society on the first day. It's very fucking difficult. I remember walking into the gas station when I get out. I was in my prison clothes and I had a change of clothes. And I walked up to the guy at the gas station and I was like,

Hey man, I just got out of prison. Can I please change my clothes and your bathroom? And my wife goes, Charlie, why the fuck are you telling him this guy? Just tell him you want to use the damn bathroom you know like but that's how weird i was i went up to the guy at the gas station attendant i started telling him that he's got out of jail why would i do that but i was just weird i can't explain it i mean it makes a lot of sense so i mean what was it like then i guess i mean you had this transitional phase but what was it like going from being i mean literally a millionaire to being a dishwasher going from being a millionaire to a dishwasher and now that i'm like i think a millionaire again going to the second time around was a lot better um but losing

it all sucked was very humbling losing it all um losing it all and going to prison was really really really really really bad but um you know i don't know what else to say about that so i wash dishes every day now to be honest so i think we've all become toilet cleaners and shower cleaners and dishwashers so i mean touching then on you know obviously what your monetary situation was after after being indicted and going to prison i remember when we were in vegas we were at the Voyager booth, and they had this huge Bitcoin chart. And it had stickers that you could place on the wall to show when you first invested,

when you sold, when you got wrecked, when you made money, all those things. I remember vividly, you were putting stickers all over the board, obviously, but you commented about your time in prison and how jokingly it kind of made you a forced holder because you didn't have any access to the internet the internet you didn't know okay so i'll give you the perfect example imagine if you had like a hundred bitcoin when the price was twenty thousand dollars and imagine if like for some reason you just like disappeared off the face of the earth you know and like your bitcoin were frozen and then imagine we went through this whole bear market, right? And imagine if, you know, like now imagine if like in a day from now or a year from now, or in two months from now,

we go back to like 50,000 and then you just magically show up again. So imagine being able to have missed that whole bear market. That's what happened to me. When I went to jail, the price was like going for, the price was like at eight hundred dollars it was like at the thousand dollar mark and then when i was in there the price went as low as like 180 and then when i finally got out it was finally turning that curve back up to like four or five hundred so it was like an ultimate hold i was very but i only had like 16 bitcoin that's the thing my my finances are very public uh have always been because i was like sued last year. So that made it even more public.

But I also filed financial statements every month for three years post-release. So you have to file them to the government as part of your probation. So it's kind of cool to track my own financial life of like seeing it go from like this to like this to like this to like finally now a little bit, a little bit more. Looks like a Bitcoin chart probably. Yeah. But it's not just financials. In my own personal life, my mental stability, because I was already somewhat of a, you know,

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Right. So you just touched on that everybody kind of knows your finances because of the process that you went through. So, I mean, that touches on being a public figure in this really sort of insane space. I honestly understand why so many people remain anonymous. I mean, I've had a bit of a taste of hacks, SIM swaps, threats, all the things that we have on a daily basis. And being doxxed obviously makes you a target. You're one of the most visible people that we have in the crypto community. How do you deal with like threats, your security on a daily basis,

both personally and of your actual, you know, crypto holdings and protecting yourself and your family? Assume that you will be hacked. Assume that you will be hacked. Assume that you will be simjacked. Assume that you will be, that every conversation is being listened to. Always assume that. In 2017, when I first got out of jail,

I was very fortunate because my Verizon account was separate from my wife's verizon account because i had suspended my line while i was in there and she was still maintaining hers so we had to like separate the accounts so when the hacker went to get our account in 2017 um the sim jacker he inadvertently went into my wife's account but he couldn't connect and get into mine so he got her number and he was able to like reset her icloud account you know like her computer was bricked her phone got bricked we lost access to her email of facebook totally royally fucked everything but the hacker didn't have any ability to get anything financial so he texted me from her phone number saying like, hey, Charlie, I know who you are. I want 30 Bitcoin and I'll

give you like her life back. And I said like, fuck you, you know, and I was able to, it was a shitty situation, not going to lie, but eventually we did get everything back. That taught me a very important lesson. And then years go by and you know this, only weeks ago i wake up at 1 30 in the morning two o'clock i think to go take a piss remember i texted you that remember we were talking the next day yeah and i got a text from verizon your phone number has successfully been ported no it said like your pin number has been changed immediately i knew what was happening and i woke up my wife i was like courtney someone just took my number i went i took my myself off of wi-fi to check and you can see if you're off of wi-fi it won't show you lte or 3g anymore it'll just show you like the bottom surface exactly the notes i was like fuck my

numbers gone i checked my i connected to wi-fi started seeing password reset emails to old aol email addresses that i used back in high school. Why am I telling you this whole story? The first lesson taught me that to remove every ability. So as I was going through this and the hacker was resetting and I was calling Verizon and they were closed. So I was like, shit, I can't even port my number back for another six hours. This hacker is going to have my number for another six hours before I can call Verizon. I was freaking out but but there was

like a big semblance of me that knew that i was pretty much okay data and financially because i'd already done all the protections way in advance i had removed my phone number from a recovery ability for all my emails i removed two-factor authentication for all my exchange accounts on my cell phone. So he was only able to get, luckily, just like two or three old AOL accounts that I don't even know what the password is. I don't even use them anymore. Yeah. And I'm very lucky. And I'm going to plug my friend here. My friend Haseeb runs a company called Dontport.org.

I just got my SIM card from him, actually. I've been talking to him for months and I've been like the latest person. But he literally just sent me a SIM card. it came in the mail and he's my next call after we talk you need to have him on your show everyone needs to have him on this guy literally single handedly is solving this guy Hasib is so crazy

because no one really knows about him no one knows that he was actually one of the first people to commercialize the Bitcoin ATM. Do you know that? He's the first person to actually take the Bitcoin ATM and make a business out of it. You won't see that anywhere on credit. Like no one will give any credit for that. You won't see that written anywhere.

Why do I know this? Because I was there. And I'll never forget that. Like he was a first person. He launched that company. He sold it. But good for him, you know. But what's the name of the company? Hasib's company. He had a you know but um what's the name of the company

hasib's company he had a company i don't remember the name of the original company i know now he's also um rebranding don't port bid access that's the name of it access but he he coined the term bid atm b b btm and this was back in 2013 that he joined y comedy 2013 he joined my commonator for bitcoin atms bid instant we're still in business back then i gotta have him on the show And this was back in 2013 that he joined Y Combinator. 2013, he joined Y Combinator for Bitcoin ATMs. BitInstant was still in business back then. I got to have him on the show. Yeah, same. He's definitely heavily on the lineup.

And so he basically saved you. I mean, you were secure, but he saved you from the infinite headaches that come with re-changing every single password in every part of your life. Yeah, but how do i know that i how do i know that i had every account covered how do i know that there was an account somewhere that how do i know that he couldn't have used my number to like text message my bank

at six o'clock in the morning like with my number he could have done something i i'm pretty sure of it hasib saved my life. Literally. Yeah. So he was there back then. You were there back then. I got to ask since I was not there back then. You've been a part of the crypto community since literally the beginning. Has it always been this negative with trolling and tribalism or is that something that grew with the popularity and addition of new projects and communities. Toxicity is fairly new. Toxicity used to be trolling. So the way the first semblance of Bitcoin toxicity that I ever saw, excuse me,

the first toxicity, the first aspect of trolling that we saw in Bitcoin came from like basic teasing. Just the community eventually developed a subculture and people started naturally creating memes and teasing each other and eventually bad actors start creating personal attacks and then then you have personal attacks with a purpose you had the uh big blockers and the small blockers both sides in the civil you, the big Bitcoin civil war, blah, blah, blah. Both sides used narratives, you know, use narratives and then at the same time used toxicity to further their own,

you know, gains. And that's, that's kind of where it really, really, really came to light. But before like the whole Bitcoin civil war, there wasn't much toxicity, but at the same time, you kind of almost ask of like, if like that was inevitable, you know, it was going to happen regardless. Yeah. I mean mean do you think that that happened because you know you got the ethereum community and then obviously the xrp community and the link marines and and so on and so forth and everybody sort of just you know becomes a maximalist for their own but it's kind of interesting how it's kind of interesting how the how the how the ripple community the xrp

community uh changed and it's funny that you mentioned that because i've been very reluctant to have ripple on my show for a very long time um and i still am but the founders of ripple are some of my good friends david schwartz arthur brito chris larson, Jed McCaleb, like such brilliant, brilliant, great people with good hearts like Arthur Brito and David Schwartz are the undercredited founders of the Ripple Ledger. And honestly, crazy people. I'm talking to David Schwartz after this because I want to really have him on the show, but I'm very reluctant. But I think if I were to have them on the show, I would focus on why did the XRP community become such a toxic community or not toxic is not a bad word. I want to understand why they became so hostile. That's what I want to understand.

I want to, why did that community become so hostile? When did that happen? And that's kind of like what I would focus on with him. Do you have any theories on that i mean is it because that people view them as you know centralized as opposed to decentralized and working with the banks which is sort of you know opposed to the original ethos of bitcoin you ever see uh you ever see like uh i think it was like the fast and the furious when they're in miami yeah of course do you remember the scene when they were like i think it was like the Fast and the Furious when they're in Miami. Yeah, of course. Do you remember the scene when they were like, I think it was like Ortega or whatever, and they were in the club and he put a mouse on the guy's chest and he put a bucket over it and lit a fire.

And eventually the mouse, so the guy, they put a mouse on a guy's chest, they put a bucket over it. And then the mouse starts eating. And the mouse eventually, because he's cornered, he's nowhere else, he's eating through the body. And mouse don't eat humans. Why am I breaking up this story? That's how I feel like the XRP community felt and why it happened. Because they were put in a corner. You know, when the Ethereum community came out, it wasn't as hostile because Ethereum outright had said,

and Vitalik had outright said,ereum is a is a complement to bitcoin ethereum is not well originally ethereum is not money ethereum is a smart contract ledger and ethereum is a natural complement and a natural like next level to work in conjunction in a crypto industry alongside bitcoin so a lot of people are like negative on ethereum or really like it's kind of stupid because they're very different things. So that's whatever. When XRP and Ripple first launched, it was seen as like,

and it was positioned against, and you ready for this? This is what I'm realizing. Not only was it positioned against a, like Bitcoin 2.0, but it was at a very, very important time in Bitcoin's life. It was at that time that Bitcoin was ride or die, make or break.

It was during a time that Bitcoin was finally coming out of its shell. It was seeing VC support. It was seeing mainstream media support. This was about like 2012 2013 2012 2012 and we were seeing a uh like a a real resurgence of our subculture in the normal world but also like bitcoin was growing um and ethereum was growing and bitcoin ethereum were growing together uh well ethereum wasn't even really a thing yet so i take that back but But when Ripple had launched, I think because the timing was seen

as like, what are you doing? Why would you launch this thing that can take away from Bitcoin at a time when Bitcoin's development is so important? So that's why the negativity, I don't think anyone has ever said this. This is like very new.

I've never heard this, ever. But these are my thoughts. Because again, I can't think anyone has ever said this. This is like very new. I've never heard this, ever. But these are my thoughts. Because again, I can't back this up because I was there. So it's only, I'm the source. So take it for what you will. Believe me or don't. I always tell people. Well, I mean, you can only have your own interpretation, but you were there and nobody else was.

I mean, that's why I asked. So some things that are happening now that I think are really interesting. I read today there's presently more than $3 billion in stable coins sitting on crypto exchanges that hasn't been moved into cash. I mean, do you think that this is exceptionally bullish for the future? I mean, it's so much money is sitting there in cash equivalents waiting to buy Bitcoin. You know, you actually have more of a trader background than I do. So I'm curious to hear your thoughts on this. Well, I mean, I think it's really strange that it hasn't been moved off. I mean, why would you sit in something that still, I mean, has an inherent level of risk,

especially if it's sitting on an exchange and not even gaining interest. You can move it somewhere, you know, obviously to any DeFi platform and be gaining interest on that. So to me, it feels like it's there for a purpose. I think that a lot of institutions and industries are seeing that potentially the dollar be very strong coming out of this coronavirus epidemic. And I think everyone's waiting to see. Because at the end of the day, money just wants to make more money. So I think that money wants to see

if they'll make more money in Bitcoin or if they'll make more money keeping it in dollars. Those are their choice or bonds. But everything else is shit. Everything is shit. Yeah. But you want to hear something interesting? I read an article yesterday

showing that real estate prices in Florida are actually not moving. and i was like how the fuck are they who's buying right now they haven't dropped at all the reason is is because everyone took the properties off the market yes all the agents are home so it's not the supply like demand has dried up supplier you can't buy if you right now said i want to buy a house on the beach with this, this, with a, with a cornife oven or the fucking subzero fridge. If you want to do that, you couldn't do that right now. There's not enough supply real estate market has lacked both supply and demand to some degree. You know, it's usually a balance between one outweighing the other. And that's what determines price. I mean, now people can't even get a loan if they tried. And like you said, people aren't even trying to sell or can't sell if they tried.

It's an insanely unique time. So I want to talk about Untold Stories. It's my favorite podcast. You know, I listen to it religiously yeah thank you thank you so what what compelled you to start the show and and what's the idea behind it i started the show uh like like blatant honesty um there's always like an idea that i'll have but i'll simmer over it for like months maybe years so the concept and the idea behind the show was like something that I've wanted to do for a long time and I've always like tried to start

I've always false started I've even recorded shit episodes over the years like randomly that I'll never release and no one should ever hear them two things two things caused me to start this show one was the the Winklevoss litigation that I was going through.

That had more of an emotional toll on me than my criminal, like my, not only me, but like my wife too, on us. That had more of an emotional toll on us than my criminal case, because at least in my criminal case, I knew that I was guilty. You know, I knew that I had done something wrong with my criminal case. So at least I can like, I made peace with myself very early. But here I am having to like,

defend myself and spend a lot of money to do it. And it was very, very, very, very difficult to do. So I was seeing, you know, therapy, I was seeing a therapist and my therapist told me, he's like, Charlie, you're too idle. Like you don't,'t you haven't you've too much time on your hands and all you're doing is calling your lawyers every day all you're doing is rereading all the documents all you're doing is just spending so much time on this case when your lawyers have a handle you're paying them tons of money let them do what they do he's like you need to do something and we spent a lot of time trying to figure out but eventually the idea this whole idea concept was his idea uh and then the second thing that happened was my good friend steve capone who at the time was the chief marketing officer of voyager

now he's the um i think he's the cmo at uh at fidelity right he's a good friend of yours too i know um he um he introduced me to jason yanowitz at block works and i told jason this was a time when a lot of people were like very didn't want to work with me because if i had lost this case i would have a huge judgment against me so a lot of people were like 30 million dollars or something right exactly i couldn't even dude i couldn't even get i i couldn't even open a bank account like it was easier to open a bank account as a felon couldn't open a bank account when you have a pending case against you so think about that if you sue someone even for the most frivolous thing right now if you go i want to i hate this part i'm going to sue them you could so fuck up their life just while the case is pending its first hearing how fucked up

is that yeah i've cursed more on this show than i ever do that must be emotional okay because reed's gonna let it out let it out but um but yeah so that that's you know it's it was an interesting thing how it all it all kind of played out so the show launched out of that but um the the feedback from the show has been just unbelievable and I just, it's just been so much fun to do and I really, really, really, really love it. So the show is therapy in some sort of way. I mean, it was a way to obviously, you know, stopping idle and stop focusing on all the negative and be positive. But I mean,

to that end, you've sort of given everyone else in this space, a platform to tell their story as well. I mean, to that end, you've sort of given everyone else in this space a platform to tell their story as well. I mean, hence, I guess the term untold stories. But it's been a really incredible thing to listen to because I don't think that most people understand what it was like sort of in those early days. And you've really exposed that. A hundred percent. It was more for like education and entertainment purposes not to like expose stories or anything like that but it just kind of happens but i find myself having to like edit

out some stories because some people will make these outrageous claims and about like how things had started and if i wasn't there then how i can't like put that out so i have to like now finding myself in almost like a journalist position of having to like double verify stories and it's very frustrating i mean but are you able to double verify those stories because you can just call a friend and be like dude we were there like did this happen someone told me that vitalik someone literally told me that him and vitalik had actually come up with the idea for ethereum in a jacuzzi in like aspen and the guy who told me this is like not you know like he's

a very public person he's not someone who's prone to lying he has no incentive you know i believe him very much but the only other person who was there was vitalik and vitalik's not going to admit to that so like what do i do uh You don't tell the story, I guess. You just told the story though. You just left the name out, but okay. I don't care. So then let's talk about- It's my show.

It's your show. You do whatever you want. Yeah, we can talk about it. Let's talk about Crypto IQ, which is the other project that obviously you've been working on for years. Can you tell me more about it? Crypto IQ is the longest running business i've ever owned

i've i just realized that now three years over three years that's longer than they didn't sit still in business yeah and what are you guys doing in case people don't know yeah so sorry so crypto iq launch crypto.iq launched in 2017 as a newsletter you know your basic newsletter education company um i was writing a newsletter for my friends and family. I wanted to sell it simple. Eventually we launched a lot of other products. We didn't go the trading signals route. We did more of like the trade room routes.

We have a great product that everyone loves. And we charge like we're very specials out. So depending on the day, it's between a hundred and 200 bucks a month. And, and I always have free trials, but you basically have access to me, my staff, my traders, in our Discord room, in our Telegram room, in our chat rooms.

We put out the newsletters every day. We put out reports. You can ask us to write a deep analysis of any coin or token for you. We do Zoom happy hours a few days a week. That's all. You become part of Charlie's ecosystem for $100. It's great. Crypto.IQ.

Then we just launched an awesome product that I'm like so happy that it's successful because I was so nervous that people wouldn't like it. But essentially, I have a trader who trades for me. He's my trader. Great guy. And we basically trade Bitcoin, Ethereum, and a lot of other coins and tokens. We trade on Binance and Bitmex um futures and spot now i launched a software that with your own binance account or your own bitmex account in your own account with your own money you can follow my traders

trades i don't need your i don't need your password i don't need any of that i don't need your like uh i don't need your like you know your withdrawal api key i just i'm just our trader just is going to trade and you are authorizing your software to follow our trades and people love it because it's a few hundred bucks a month for access for the software it's not an algorithm right it's a real person and you're talking to him so this is not a we'll guarantee you 2x you're coming into our into the room you're talking to the traders we have a bunch of them they're putting in the trades you're choosing to follow them in real time or not follow them and people love that because it's like in the spirit of voluntarism and like i'm not touching your money i don't want to control or touch

anyone's money ever again but at the same time I allow people to earn money off of my own knowledge and I can earn money off of them paying me. So everyone wins. Always a good time though, because you inevitably end up with that one or two people who are never satisfied no matter what you do, even if they make money or they turn you off for a minute to change their stop loss and then they lose money and all of a sudden they're blaming you so it's a i i know from personal experience but that's an interesting space to be in when you have people and their emotions and their their money at risk

but it sounds like you guys have somewhat controlled that you know we've had issues where where i'm gonna say yes and no at the same time. Because the way it works is that as soon as you sign up for a subscription, one of our staff here in my Florida office, well, they're home now, are going to call you. And they're going to walk you.

So tell me what other service does this. Before anything, you'll get emails, but we call you. Because you're paying 500 bucks a month, you know? So that's what needs to happen. And our traders emails but we call you because you're paying 500 bucks a month you know so that's what needs to happen and our trader and our and our traders are going to call you and walk you through the settings and one of the settings is how much you're willing to risk at most for a loss so you set that as a percentage in the software and the software is so easy to use um it's literally so easy to use so you can most

people will say things like five percent and you know this as a trader that means is they're willing to at most no matter what the trade is they will never lose more than five percent of their whole portfolio right it also means they can't gain more than five percent so we allow people to do that so because of that it limits everyone's losses and everyone likes that. But honestly, not honestly, but like we put out, we put out every month, we put out like the training results. And so far every month has been positive.

We have one month where we only broke even, but every month has been positive. And we mostly swing trade, uh, within a day or two, we closed the trade. So, um,

it's good. Everyone likes it. Awesome surface. So you touched before on, uh, when you're doing untold stories surface. So you touched before on, uh, when you're doing untold stories and you obviously have people that you, that, that tell you stories from the early days that may or may not be true. Uh, which immediately I thought of Craig Wright, of course. Um, but I mean, do you have any idea who Satoshi actually is or have any theories?

Not, not Craig Wright. Yeah, definitely not him. I think it's a group of Wright. I think we all know that. Yeah, definitely not him. I think it's a group of people. I think there's a group of people that were involved in the whole Satoshi circle. But do you think these are people that you actually know and you just don't know for a fact that it's them? Yeah, I think definitely you and I and many other crypto folk have come across these people.

It could be the CEOs of companies that we know of today that were part of that original Satoshi group. Yeah. And being there in those early days, I mean, what was it that originally really drew you into Bitcoin? I mean, like we talked about, you were just a college kid, right? Yeah. What made you decide, hey, this is what I'm going to spend all of my time and life on. I'm not going to go out and get a real job. By the way, I was the same kind of person. I have just not, not, I'm unemployable almost, I would say because of my attitude, but what,

what, what made you focus on Bitcoin? I think it was, you know, I, throughout college, I never knew what I was going to do. I never knew what I was good at. I knew that I had the really good ability to problem solve, but that's about it. I wasn't a good test taker. I was just a good problem solver. You put a problem in front of me, I'll figure out how to solve it. I don't know, somehow.

That's really good in business, but what does that mean? Bitcoin was natural. I just felt it was something that potentially could be an industry that I would have a leg up on because I would be the first one. And it was worth the shot. So you basically had the guts to go for it early and you were young enough that you knew that if you completely fell on your face, you'd be fine. It wouldn't be a big deal. Do you consider yourself a Bitcoin maximalist? No, I don't like that term. I'm ideological. I call this the Charlie Shrem school of thought. I've probably said this a billion times on my show.

So I believe in something called the path to decentralization. And what that is, is all coins, tokens and projects that want to be part of our ecosystem or be called a digital asset or be called a cryptocurrency fall on this spectrum and where they fall on the spectrum uh is defined by a lot of metrics like basically how decentralized are they now or how centralized is the project in the coin token now and how and what what is that what does that blockchain have that'll get that blockchain more decentralized down the road or what what's in that that'll make it more centralized down the road like maybe it's decentralized now but it'll be more you know more centralized in the future all coins and tokens exist on this on this spectrum uh bitcoin is the farthest

uh and it's my belief that will be always the farthest and the strongest and longest one that will be on the most decentralized, the most censorship resistant, the most checks off every box, the strongest, most secure chain forever. As long as cryptocurrencies exist, Bitcoin will be that. That doesn't mean that there won't be others that will be close to its strength at the same time, especially as we develop new things and grow and change and update. You'll see a very healthy ecosystem. Bitcoin will still be the Mac daddy, I think, simply because it was the first one.

And symbolism, as you know, symbolism and money is everything. Everything. Money is literally all symbolic anyways so simp you know like symbolically if bitcoin becomes lower in value or in market cap than any other cryptocurrency it's my belief that the whole thing will just collapse like all of crypto that's a very very big fundamental belief and i don't know if people agree with me i absolutely agree with that do you agree with that absolutely 100 and it's hard it's hard to even argue with, I mean, because you even see what a slight price swing or change in value of Bitcoin does to every other asset in the market.

I mean, exactly. So I don't think there's any question there. Did you ever expect that Bitcoin would be this widely recognized and normalized in such a short period of time? You know, I didn't think it would take, it would be this quick. I think, I thought it would take like, like a very, very, very, very, very long time. You know? You have survived every Bitcoin halving before. What do you think that this upcoming Bitcoin halving looks like? What does it mean for the space and especially in the context of the current economic crisis? I think that the miners and people that are at risk to losing money for the price of Bitcoin

not doubling because there are all the miners, all those businesses that are in that position are already prepared for it. And I know this because I've spoken to a lot of these miners on my show. And so they're already prepared. But at the same time, don't look at it as the price of Bitcoin needs to double on day one. You have to look at it as on day one, the supply and selling pressure of Bitcoin halves. So even if the amount of money that's being printed has just halved. So even if like the demand of Bitcoin simply stays the same, the price of Bitcoin has to double based on simple market economic dynamics. Simple, simple economic theory.

I'll take it. Or Bitcoin dies. Seriously, or it dies. Right. And there's got to always be fear. That's what I love about it. Yeah. I mean, having there's got to always be fear. Yeah. I mean, having, there's got to be some innate

fear for programmers. It just doesn't work and something goes wrong with the programming or something. Right. Yeah. Perfect. Well, everybody finds you after this. How can they keep up with you? Um, the best way to keep up with me and to follow me is to check out untoldstories.com or the best thing to do is to, uh, follow me at Twitter at Charlie Schrem. I'm so easy to get in touch with. I love emails. I try to respond to them all. I really, really do.

I focus on it. Please don't write letters to my house though. People are still doing it. Well, there was a time when I was just a dude emailing you and you responded. So I can vouch for that for sure. Yeah. All right, man. Well, thank you so much for your time and for being on the show.

I definitely learned a lot. I think everybody's going to really enjoy it. I'll talk to you later. Bye-bye. Let's go. Hey, everyone. Thanks for listening. New episodes go live every Tuesday at 7 a.m. Eastern Standard Time.

Links to our Apple and Spotify channels are in the show notes. You can also follow me on Twitter at Scott Melker to continue the conversation. See you next week.