The Wolf Of All Streets - China Problems | Binance/SEC Hearing | FOMC | Crypto Town Hall

Episode Date: September 18, 2023

Crypto Town Hall is a daily Twitter Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in the crypto and bring the biggest names in the crypto space to share their opinions. ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Alright guys, so Twitter is having issues today. So just a heads up for everyone. Scott, can you hear me? I can hear you. I'm not sure you'll be able to hear me. I'm literally uh, Yeah, you're in a plane. Yeah, you're in a plane. You're still in the plane, aren't you? Oh, you just jumped out. Oh, no, you didn't. You're here. 26 hours, but I'm arriving now. Well, but the plane has landed, hasn't it? Yeah, I'm on the ground. The only space I missed last week was when I literally couldn't connect to my plane

and you guys saw I was having major fun. Yeah, we're going into the plane. All right, man. When you get out of the plane... Oh, my markets are doing good. We're over 27K. When you get out of the plane, let us know

and we'd love to know how the weekend went and give us kind of a recap. Let me send an invite to Ran. There he is. Oh, Ran's here as well. Get a recap of Singapore. But Ran's here. Epic. We've recap of Singapore. But Ran's here. Epic.

We've got John. Yeah, I'm just going to mute you, Scott, because your audio is – I can't mute you, of course, but the audio is bad. And, John, we've got the Binance story today, which we're going to dig into as well. You've got a very – you tweeted a book, John, telling us everything. I know. Longest tweet I've ever read in my life. Longest tweet I've ever read in my life.

I know. I know. Everybody hates that. But what am I going to do? longest tweet i've ever read in my life longest tweet i've ever i know i know everybody hates that but what am i gonna do you know i'm just i can't be pithy and uh quick and i just can't be that way when i'm talking about a very complicated and you know john john it's a lawyer thing financial proceeding it's a lawyer thing because you know lawyers have to justify their fees so you have to write a lot so you can say okay you know i worked on this for lots of hours therefore i can charge right isn't that that's how it works isn't it yeah it works really well except i don't charge anybody for anything i don't have a single crypto client i don't make a nickel from anything but it's in the training it's like it's how you train you know actually john hold John, you said you don't have any crypto clients. Why is that?

No, I don't take anything relating to the cryptoverse. I just, you know, it's just something that I talk about online. I talk about on Twitter and I write a lot about, I've taught, you know, at Georgetown Law School and Duke Law School for the last 20 years. And I'm just not interested in doing any crypto related work. John, do you own crypto? Why? John, do you own crypto? No. Do you own crypto?

No, I don't own any. Well, I own like $50 worth of Dogecoin that my son and I bought when we were investigating one of the scams at the local Safeway at a kiosk, a CoinMe kiosk. Have you ever? And I documented that. Have you ever? I mean, have you never owned have you ever i mean if you never have you never

owned other crypto other than that the documented scale no i've never owned crypto wow okay super interesting yeah mario maybe i don't own it because i don't believe in it you know i don't own anything but you don't have to but john john you don't have to believe in it like even if you don't believe in crypto you know there's a possibility you're wrong and crypto proves you wrong. That logically is a possibility, correct, John? There's a logical possibility that I'm wrong about crypto. No, there's not. Oh, wow.

Okay, you're very adamant with your beliefs. What I was going to say is that if you think 70%, 80 it's going to go to zero or your beliefs are all true. But then there's that 20%, 30%. So it might still be worth taking clients that will pay you in case that 20% to 30% is correct. Am I right? The best thing is that everything goes wrong because that's when there's going to be

lots of lawsuits, right? I mean, there's plenty of work out there. I get calls from people to be an expert witness on the side of people suing crypto entities almost all of them i got calls for that especially i wrote an article in the new york times about how celebrities should all uh be worried for some of the things that they i was in john's room yesterday when he was talking about securities law it seems like his brand is he's just an anti-crypto guy and all of his arguments seem to be shaped around

that so i don't think he could own crypto and still get the kind of work he wants to do as an expert witness i don't get any work like zero bilge nada nothing not a penny you also don't really seem to understand the regulation very well for a lawyer okay well okay well guys guys i'm sorry guys before we get into guys i I'm not going to tell you, Mario. Unless you mute that guy, I'm just not going to participate. I'm not interested in hearing that I've got some kind of engagement farming going on. I've been in this business for 35 years, the juxtaposition of business, blog, technology. I don't make any money from this.

If you're engagement farming, you're doing a bad job. I'm doing much better engagement. Me and Ran are doing better engagement farming than you are. Ran, since I heard you packing your bag, man, and before we kick off, what I want to do is kick it off with you actually. Get an update on the markets. It's been a pretty good few days. And then Singapore. So I had a discussion with Scott last week, end of last week.

And he's talking about the sentiment is very different in the east and singapore versus the west and there is no bear market in the east when you start talking to projects that are raising money and not having the difficulties that others let me summarize it for you so the last couple days in singapore have been really invigorating and energizing you know like i was demotivated i mean i wasn't i was i was demotivated by the industry because of, you know, regulation, legislation, just bad sentiment, bad momentum. But being here in Asia for the last couple of days really, really, really invigorated me. I want to say that the energy and the turnout at this conference was better

than the energy and turnout that I've ever seen at any crypto conference ever, including the big ones in the United States in the bull market. So that's like just to give an idea of how vibrant this was. And the sentiment here is certainly not the sentiment of any kind of bear marketing. These guys are building. These guys are serious about it. I mean, they obviously talk about regulation, but for all intents and purposes, regulations on the right track here. And the vibe is very positive.

There were some big announcements while we were here. Jeremy Allaire's announcement with Grab is huge. I mean, I don't think people comprehend just how big that announcement actually is. Tell us, what's the announcement? So they announced, so Grab is an Uber app, an Uber-style app in Asia. But I think it's kind of what Uber wannabe.

So it's like one app where you can really do that. You can order food. You can order a cab. You can order different kinds of cars. You can get packages delivered. And it's really like the one app in Asia that a lot of Asians use as a day-to-day app for getting shit done. What they're doing is they're integrating a WebFlea wallet into Grab,

which will allow people to spend crypto. I think specifically, they're starting off with stablecoins, but to spend crypto using the app. That was a massive story for adoption. I think if I'm not mistaken, Grab's got over 180 million users. Second adoption announcement that came out while we were here,

which is maybe not directly related to Asia, but if you think of Ton, Ton launched the Telegram wallet. And that, you know, you got Telegram with what, 800 million users? I don't know what the updated numbers are are but they've got a lot of users and um and uh they've now got a a crypto app a crypto wallet which is uh which is kind of which is easily integratable into telegram so like you can use your telegram with an easily integrated crypto app crypto wallet which is going to make sending money using Telegram very, very easy. Now you take that and combine that with the bot movement that's actually happening in Telegram, where like I've seen some great bots where you can, they trade crypto for

you automatically. I've seen some bots that which allow you to game or gamble automatically using Telegram. So you can play roulette, you can play, you know play casino games directly off your Telegram. And I think there's another little adoption card that's given. So that's the first bit of my Asia summary. The second thing that's happening in Asia, and something which I covered on the show today, was there's a massive demand pressure in China for Bitcoin and for gold. And that people are willing to pay, are paying huge premiums for Bitcoin. In fact, I saw prices

quoted like $35,000, $34,000. Remember, it's peer-to-peer. So it's like, you know, it's not traded on formal exchanges, traded peer-to-peer. And the reason why that's happening, we think the reason why this is happening. So just interestingly enough, people are willing to pay a premium for Bitcoin. They're willing to pay a premium for gold and they're willing to pay a premium for physical gold over paper gold. So they're willing to pay like 5% premium for gold gold as opposed to gold that's on paper, so to speak. And the reason why that may be happening is because the Central Bank of China, the PBOC, is clamping down on people taking money out of the country. So there always have been exchange controls in China,

but they're kind of saying, look, there's too much money flowing out of China. We can't have this money flowing out of China. And what they're doing is they're starting to clamp down on the money that's leaving China. And so I think people are starting to scramble into Bitcoin and gold. And that's, I think, one of the things that's causing this Bitcoin pump. So that's the summary of Asia. Right, right. Yeah, a question. And before we go to the panel, and then maybe good to get in the market update as well, right? Because this is looking pretty good. Last time you were here, prior to Singapore, it was a lot more bearish than it is now.

But the question I have is, when you talk about sentiment at an event, you know when you go to an event, you get a bit of hype. You're bearish, bearish. When you go to an event, you're meeting people, you're seeing all the activity,

you become bullish again. But can you compare the event in Singapore to events to events uh in europe or in the u.s is there much difference like projects really because scott said he talks to projects and they he's not easy but they're raising the money quickly they're not having almost the same speed as the bull market yeah so that's so marit like you know i i know very well how to tell the hype the conference hype from from real substance in conferences and i can tell you that what's going on here is not just that conference hype it's like things are happening things are happening here in asia also again as i say to you like you know i've been to many conferences this is if not the best one of the

best conferences in terms of attendance and size and number of exhibitors that i've ever seen it's it's it's as big it's it's much bigger in terms of exhibitors than Bitcoin 2023, when Bitcoin Miami, it's much bigger, it's orders of magnitude bigger than ConsenSys this year and ConsenSys last year. So you're talking about possibly what I think for me may have been from an exhibitor point of view, the biggest conference in the world, from an attendee point of view, the biggest conference in the world.

From an attendee point of view, they say they had about 10,000 attendees. So, I mean, you know, go and work it out. They had 3,000 people trying to get tickets who couldn't up to a week before. And it was also three times as large as the same conference last year, which at the time I said was the best conference I'd ever been to. That's crazy. And the last question, Ryan and Scott, maybe you can touch on that one. And then we'll go to the markets and we'll discuss the Binance story right after. The next question, and Ryan, you just got a bit of feedback, is why that difference, why that contrast in in the east versus the west and then if there

is that bullishness in the east and why aren't we seeing it in the markets maybe we can say we're seeing it to an extent i think the last few months i think what you have when it comes to vc funding for example the liquidity is still low yeah so one is i don't think that that vc funding schedule is reading the vcs the real vcs in asia to be honest like i think when think when I looked at the VC funding and I looked at, like, who they're reading, and then you go look at the people making investments in Asia, I'm not sure that they are reading. I think they're reading, there is a skew towards Western VCs, number one. Number two, you're asking why I think it's happening in Asia.

I think they have a lot more regulatory clarity. I don't think that it's perfect. I think there are a lot of countries and laws and licenses which are being carved, you know, like created now, but the momentum is in the right direction. So, in other words, you know, maybe all the laws haven't been drafted yet and aren't in place, but certainly the momentum, the direction of the laws is in the right direction. And so, people aren't worried, you know, they're optimistic about where the regulation will land up. They're kind of in the process of regulating now and not in the process

of resisting. And that's the difference. Scott? Yeah, I agree 100%. I think there's just no fear. In the United States, you go to any conference, I've joked over and over again, consensus this year, I'm pretty convinced that 30% of the booths were accountants and lawyers. That's not usually a good sign for the health of the industry. And you go to Singapore, nobody's worried about anything. They're building everything they want to build. They're not concerned with getting in trouble for it.

And the environment is just very positive. Cool. Guys, I want to dig into the market to get a quick update last time we gave an update was friday since we don't do weekend shows you know bitcoin is looking to be doing well you know we don't have garethie but i think the next level um uh the next the support level now is 26.5k um and then hopefully we'll start testing the 29k but maybe guys you could dig into a bit further because me and Marcus are not friends. James, Scott, Ran, we'd love a quick market update. And then we'll dig into the Binance story.

James, do you want to go first? 29K, then 21K, B2C corrective wave, and then new ABC, new waves up. And then we'll be going towards like 40, 50K. And what are your thoughts on the green candles we've seen over the last three days? It's the A to B corrective wave, so it's a

bounce to 29k, then final wave down to 20k, 21k. And you think that will be the low? According to area wave counts and stuff. Also, I wanted to comment about Singapore. I was at the event as well. I talked to the CEO of Bybit, the lowest wave market. According to Elliott Wave counts and stuff. Also, I wanted to comment about Singapore. I was at the event as well. So I talked to the CEO of Bybit, the second biggest exchange, and I think the biggest exchange in Singapore.

And they've got all-time high volumes. They released their debit card. But now they're pushing the debit card very hard. So there's people like Binance is getting their debit cards and MasterCard taken away, while Bybit in Singapore is releasing and pushing their debit cards. And like Ren said, a lot of business, a lot of money coming there and a lot of projects. I talked to one of the biggest lawyers that represents the Bayer Europe polis, and they're

seeing massive influx of US companies moving into Lithuania because of the regulations in Singapore. So it's like the US is pushing everyone. And that's, yeah, it's going to keep pushing. That's what happens, I guess. It's like blocking the internet, crazy. Ryan Scott, just on the market over the last couple of days. So look, we've had this green candle in Bitcoin. I mean, I'm not going to predict the future in terms of like, I'm not saying this is part of an idiot wave

and it's going to go back up or down I think for now there's lots of buying pressure it's looking very green it's very much so far a Bitcoin pump so it's not hasn't filtered down to altcoins Bitcoin dominance was at 50.2 last time I checked so that's where it is

just interesting just to note a few things that Bitcoin is not pumping but the dixie is also above 105 now usually when you get a very strong dixie obviously risk assets go down we're getting bitcoin at uh 27 300 or whatever it is now and the dixie is um at 105 the last time the dixie was at 105, Bitcoin was, I think at 20,000 and that was in March. And the time before that,

that the Dixie was at 105, Bitcoin was at 17,000 or something like that. So, you know, what you're seeing is you're getting, you're seeing Bitcoin gets stronger in real terms because relative to dollar, whenever the dollar is at 105, Bitcoin is trading higher and higher and higher relative to the dollar.

And that's, I mean, that's pretty encouraging. What it shows is that, you know, Bitcoin is not fluctuating because of dollar fluctuations. It's actually really getting stronger. So I think that's just an interesting point. And remember, we've got FOMC this week. So you've got a strong dollar going into the FOMC meeting this week. And we haven't had an FOMC meeting for two months.

So I think this is going to be, I think what the market is telling you is that they're not expecting a rate hike this month but they are expecting a hawkish pile coming out this week. Yeah, and I was just listening.

I've got a video here. I was just going through it again. Kathy Wood was doing an interview with CNBC not talking about markets today but putting their predictions for Bitcoin. And I watched the video twice to make sure the numbers are correct. So her bull case for Bitcoin is $1.5 million. Unrelated to the FOMC, I'll get into that in a sec. $1.5 million, the bear case is $625,000.

Now, she uses – and it kind of links to what we're discussing now. She thinks that we're leaning towards the bull case. She didn't give a time frame in that interview. And then she linked it to what happened during the Silicon Valley collapse, the regional bank crisis, and how Bitcoin was seen as a flight to safety during that period. So it makes it sound like – and we also saw in the last few days the correlation between the equities market and crypto isn't there over the last few days. And finally, it broke at a time where we want it to break because, you know, recently the markets haven't been doing too well. So now we're seeing that Bitcoin or crypto could end up breaking away from equities markets from risk assets, if inflation keeps picking up, interest rates keeps getting higher, there was a discussion in a previous space that this could risk the recovery later on.

But if that correlation breaks, continues to break, then we could see crypto still do well. Scott, I want to get your thoughts on this particular point, your thoughts on the market, and I'd love to go to the lawyers on stage to get into the Binance story, Scott. I think we should get into the Binance story because I'm grabbing my luggage.

Cool. John, I read a part of your book. It's a great book. But if you could give us a quick overview, just to kind of recap it for the audience. So we're talking about the SEC lawsuit against Binance. So this is the SEC, not the DOJ because there is no DOJ lawsuit.

Someone's just dropped out. And the reason the SEC is suing Binance is... Actually, John, you can give us an overview. Why is the SEC suing Binance? And what are the documents we've seen over the last couple of days? Sure. Great question. So with respect to Binance, when I taught securities regulation and cyber at Georgetown for 15 years, and I've been teaching at Duke for the last five years. And I've never seen a case like what's going on in Binance. It's constantly amazing me. Remember, Binance is very different, Mario, from Coinbase and all the other litigation that we've seen, most of the other litigation, because the SEC is seeking something called a temporary restraining order

and an emergency asset freeze. That's what the SEC sought initially. And the judge sort of said, wow, that's a lot that you're asking to freeze the assets of this international financial behemoth. How are we going to do that? And they figured out a way that the two parties came together and came up with an agreement as to how to freeze those assets and how to set the stage for things like expedited discovery, which means there's a very short amount of time that the SEC that Binance has to respond to SEC requests. John, just sorry to interject, but as far as I understand, they didn't come up with a way to freeze the assets. They mentioned that finance should almost lodge a guarantee, so to speak, or they should – just for the American assets, if I recall correctly.

I don't know. Yes. Yes. Yeah. Thank you for clarifying that. We're just talking about U.S. assets. And that's what makes it so different. Again, when I was at the SEC, I probably brought the group that I led, we probably

brought maybe a dozen or two dozen TRO and asset freezes, but nothing remotely close to what's going on with Binance. It's usually a smaller company run by four or five people, and you were worried that they were going to take the assets and run. So you literally went in ex parte. What's ex parte mean? That means you're not telling the other side. They get no due process. And you go to the judge and you say, this is so bad that you can't tell the other side what we're doing. We're going to go and freeze all of their assets. And then when the judge grants that order, that person can't even go out and buy groceries the next day. They're violating the order. So that's typically what an asset freeze is. But this situation is completely different. The other thing that makes it very, very different, you know, as opposed to Coinbase, which is your traditional SEC case, doesn't allege fraud. And that in that sense, it's not traditional because most SEC cases usually allege some sort of fraud. The SEC alleges that Binance was operating as an unlawful exchange, an unlawful clearing firm, an unlawful broker-dealer, and also orchestrating a fairly massive market manipulation scheme.

So what is the SEC doing now? Well, it's hard to know everything that's going on because a lot of these motions have been filed under seal. What's that mean? That means they file them with the court. The court can see the motions, and the motions are typically, there's maybe 20 or 30 or 40 exhibits attached to the motion, and also a are typically, there's maybe 20 or 30 or 40 exhibits attached to the motion and also a declaration. And what's a declaration? That's when the primary attorney responsible for the investigation or responsible for what's going on during the litigation sort of

explains everything that they know. And then that's used as sort of a document that the SEC will cite in its motion. So I was usually the declarant on most of the TROs that we brought. And it would be a lengthy, sort of a lengthy document that would talk about all the bad things that the defendant was doing and why we needed the relief, whatever kind of relief we were seeking. But this time, these documents are being filed under seal. The SEC just filed another motion today under seal. And you don't know why it's under seal because the motion asking it for it to be sealed is also under seal.

So occasionally this judge is apparently unsealing certain documents, which is what happened last week and what led me to write that treatise online trying to explain it. And I'll try to be really quick. Yeah, but when it's filed under seal, you said this is very uncommon for the SEC to do. And that could be linked to either a DOJ investigation or witness protection. Is that correct? It could be. I mean, in all my years at the SEC, I never filed anything under seal. Occasionally, you might file something that's redacted because there's critical company information there that the company doesn't want anyone to know and you

don't care that you know. But generally, you're the SEC. Everything you do should be made public. You know, the world should know what's going on. When you're a criminal prosecutor, which I also was, oftentimes you will file things under seal because, you know, maybe you're seeking a search warrant. Maybe you've got a grand jury proceeding going. Maybe you're investigating some giant conspiracy or maybe you've got a cooperating witness and you file the indictment under seal, which is one of the things I suspect is going on in Binance. So all of those things can happen.

But on the SEC side, I never in all of my years, and no one I know has done that. So why are they doing it? I mean, there's a million guesses, but go ahead. I've got another question for you, John, as you give us a quick recap. So another thing as well, as I was reading your book and other, and I'm joking, your posts and other posts as well, the SEC accused Binance of, quote,

providing only approximately 220 documents, many of which are unintelligible, screenshots of bank account information, documents without dates or signatures, and letters from counsel, and tables that appear to be prepared for purposes of this litigation without any supporting evidence or verification by an individual with knowledge confirming the accuracy of the information. Can you tell us more? Is that just a legal strategy? Is that pretty common? Does it indicate anything? Okay, great, great question. You can never know for sure, Mario, exactly what's going on. But the leader of the defense team is Bill McLucas and Wilmer Hale. Bill was my boss

when I worked at the SEC for my first maybe six or seven years. And they have an extensive team there of litigators. They're probably the best securities defense team, as far as the SEC goes, in the world. There was more former SEC people work at that firm than any other firm. So they know exactly what they're doing. But, you know, if their client says, hey, this is all we have, then that's all they produce. Now, remember, strategically, a defense firm, a law firm might write all kinds of things. They might take the opportunity in that motion to write a press release for their client because it's a good opportunity for that. They might take the opportunity to really,

to keep the SEC honest, to make sure that the SEC knows anytime they ask for anything, they're going to get all sorts of objections. But I think you're right, Mario, in that it is unusual. That part is incredibly unusual because it seems laughable to me that there aren't better documents available. The SEC got 6,500 documents from the auditor of BAM of the U.S. John Schist, surely as a lawyer, you know, these games that are being played by Binance and they want to exhaust the SEC. I mean, there was even, I think, a movie. What was the movie where they arrived with trucks full of... They said, you want data?

It was the movie of Dope Wars, I think it was. Right, right. I saw that. I mean, this is a typical game that people play, right? Well, you know, usually it's the other way. They back up the truck and give you so many documents that it's impossible. Yeah, exactly, exactly. I've had that myself. So we were suing someone and they started offering. So I'm really bad at law, but we were suing someone. We wanted the order to come in within days, so like an injunction or something along those lines. So if the court had too much evidence, they're like, all right, guys, we cannot make a decision in this one-hour hearing or whatever it is. We need to go through the court system, which takes months to go through. So what the other party did is they sent so much evidence.

They had a really weak case, very, very weak. But they sent so much evidence just to overwhelm the court, and they couldn't make that decision, which goes against what the Binance is doing here. So is it like – is there two strategies that you could do? Either you give too much evidence to the judge that makes it very difficult they said they gave 6 500 documents to judge most most of which were most of which were actually like screenshots and unsigned documents well no no no wait wait i'm sorry no they got two they got 6 500 documents from the auditor and i think that that that their auditor, that's always a big danger. The two biggest dangers you have in risking contempt are providing information that's fake

and also not providing information. And so if your auditors are providing all kinds of documents to the SEC and they are internal Binance corporate documents, yet Binance is not producing those documents, it's evidence that Binance may be flouting the judge's order. So the SEC threatened contempt, and they mentioned those facts. And I think, you know, this is very typical, though, I don't want to say that this part is anything unusual. Whenever you're in SEC litigation, and, you know, I spent most of my career in that space, including the five years after I left the SEC, I ran the DC office of a data breach response firm that also did e-discovery. So Mario, it used to be if you backed up the truck, it was a problem.

Like a big case I had, there were 600 boxes of documents and I was the only one who was responsible for looking through all of them. And I had maybe two weeks to do that. So it was ridiculous. But nowadays, you submit everything electronically, you can use artificial intelligence and all kinds of search engines to kind of make sure that you're you found everything you need. So the backup the truck strategy doesn't work. In the case of an SEC versus a big firm, it works if you're if you don't have the money to hire an e-discovery firm to gather all that data for you and put it in a database. I want to go to... Sorry, John.

Yeah, go ahead. I wanted to kind of... Go ahead. I'll let you finish off, sorry. Okay. So I was going to say that this is typical of discovery disputes that happened, except this is in the context of a TRO, in the context of expedited discovery. So these same kind of disputes are going to go on in the Coinbase action, but they're

going to be, you know, they're going to be protracted over the course of a year or two. And, but in the case of Binance, it all happens very quickly. And the judge assigned a magistrate, and that's not unusual either to oversee the discovery dispute. And that's what today's three o'clock hearing is about, but you can bring up anything at that hearing. You can talk about all the different problems you've had and you can try to work that out with the judge. For example, Binance has only produced four witnesses and they said they don't want to produce the president.

They don't want to produce the CFO. And I think everyone in the room is going to know that that's laughable. If I'm investigating a fraud, I need to know whether that's laughable. If I'm investigating a fraud, I need to know whether the people at the top know about it and what they know, when they know, and how much they know. It would be malpractice. I mean, it would be ludicrous not to talk to those people.

It would also not be the SEC's mission is to protect investors and to bring those to justice who are violating securities laws. So that sort of dispute is going to come up today too. Go ahead. I've got a question and I see David's hand up. So David, I'm going to go to you for this one and I want to go to Zach as well. And then after we discuss Binance, I also want to dig into the China story, the Chinese economy. We do have Gordon, we've got David on stage.

It's an important discussion to have. It's probably the second most important discussion after Binance. David, whatever you want to comment, but also my question is, are we past the stage where Binance matters that much? A year ago, Binance was everything. If something, any fight around Binance, the whole market freaks out. Today, I think we've become immune to it. Either it's been priced in and or Binance just represents a much like the market has already um you know has already compensated for that risk of Binance getting hit hard the Binance no longer being here in a couple of years um so I want to get your thoughts on how important the Binance story is now so first of all I just want to say I'm in the airport looking for Scott with a sign that says

welcome home and I can't find him so I question whether he's really getting his luggage right now. Cause this is what I, this is how big of a fan I am. Now you have to go. Scott takes, uh, Scott takes, he went through Turkish airline.

So I can't go to the main, main airport, man. Well, now I'm just gonna go get my own flight. So I'm literally walking on a plane, which is the only reason I put up my hand, but I,

two things about Binance. One, today is an absolute nothing burger. This is just par for the course litigation. So like there's nothing going on today that's pretty special. This is just, you know, it's kind of funny. We talk about how John, you know, who's like guessing a little bit older than I am, that he got 600 boxes. Nowadays, you just get information dumped on you, large swaths of data. So the fact that Binance is producing nothing, that's the biggest

issue here. You know, I got a bunch of I got the class action against Binance, I got other cases against Binance. This is just their operators. This is just what they do. And it's their MO. And at the end of the day, this is just going to be a litigation strategy. I truly believe that what's happening right now is the crypto cases have gone so positive for the crypto companies. People are getting a little greedy. And we're going to see someone get smacked down. And I think it's going to be Binance that gets smacked down coming up in the near future. And they're going to get not sanctioned, but they're going to be told to overproduce certain

core documents that are going to be very meaningful to Binance's litigation with the SEC. But from that perspective, I think Mario nails it. If Binance goes down tomorrow, I don't think it's as bad as it once was. I think everyone's almost, I don't think the FUD is necessarily real. But I do think that what we're seeing now is people have kind of priced it in that Binance might not be around in the future. And I think there are people who are starting to say that might be a good thing. That might be a good thing if we have more legitimate, fully transparent companies out there. Not only this, I don't think it's a good thing for Binance to cease to exist. Again, we don't know what they've done or they haven't done.

For them to cease to exist is not a good thing, or at least in my opinion. But an argument can be made that it's a good thing. But it's definitely a good thing. It's like you're saying Google is going to just disappear and go down. Binance is one. It's like in the top 50 companies in the entire world. Yeah, but it's got the market. But James, the market share just dropped significantly very quickly.

And we've seen in crypto. Yeah, but they were there. They had $35 trillion of volume in 2022 and 2021. Put that in perspective, Apple makes $4 billion a year. These cases are an existential threat to what they're doing, right? There are two issues with Binance. The first is the issue that all of the crypto exchanges have, which is there's this giant unsettled question of which tokens are investment contracts, and therefore, do these exchanges need to be registered as securities brokerages? And if so, is there a path forward, the SEC is going to allow

these exchanges that have been operating, you know, in that eventually illegally, in order to convert into some sort of new legal regime where you can trade security tokens. And I think there are a lot of question marks there. On top of that, it seems like we have a lot of evidence that in the Binance case, there's going to be DOJ litigation as well. There's going to be a criminal side to this. I think that's why we're seeing all these documents filed under seal. If there is one, Zach, when do you think it will come out? I mean, hard to know exactly, but I would think in the next year or two would be a safe bet. There's probably a grand jury investigation going now. And they don't want to step on's probably a grand jury investigation going now. And they don't want to step on that.

So grand jury investigations are secret. You don't get to see what's part of it. So they wouldn't want to tip off the people who are being investigated. Zach, isn't it very unusual for the DOJ to delay this match in a case like this? Or is it normal practice? I think it depends on the complexity of the case, right? So the DOJ is going to decide what they want to seek an indictment for, right? Is this going to be against CZ personally?

Is this going to be against the American entity or the foreign entity? There are probably interesting questions of jurisdiction here, right? It's pretty unclear where Binance Maine has been based at different points in time. And there are probably really difficult legal questions, right? About, you know, if there's securities fraud, they're probably very sensitive lines about was the underlying activity subject to SEC or CFTC jurisdiction? Would did they violate this or that criminal rule? Were they involved in money laundering? You know, I think there are all of these difficult questions that could lead to sort of a slow ramp up to an indictment being announced. Can I just say that slightly differently?

Mario, can I just say that slightly differently? Because I agree with what Zach just said. I think that I said this recently. A year from today, the question is, is CZ shaking hands with the president of the United States? Or is he having handcuffs slapped on him? And it's crazy that either of those two things are possible. And does it, so Zach, another question for you, does it really matter for crypto now? Yeah, I mean, I think it would matter for prices, right?

If we had a, you know, Binance getting fully attacked by the DOJ and the SEC, you know, especially if we had adverse rulings, like there might be forced selling, there could be lots of FUD, you know, will crypto or Bitcoin survive Binance going out of business? Yeah, I think so. Right. And if it didn't, it's not worth anything in the first place. And I think, you know, something like Bitcoin, especially where, you know, there are lots of exchanges, there's not the same securities law question around it. I think that has very strong footing, even in a post Binance world. But I think you'd be naive to say that binance going under criminal indictment wouldn't have any effect on prices you know especially for the assets where

a lot of the liquidity is on finance and especially for things like bnb i think the longer it takes i think longer takes the less the effect on prices we're already seeing volume in the us move back towards coinbase we're seeing volume here in the east move to the OKExes, the Bybitz of the world. So I think the longer this takes, if you're right in your assumption, and I think you may be right that it could be a year or two. I think by the time that happens, the industry will be so well insulated that it won't be such a problem anymore. You know what I mean? I mean, we'll see. But people tend to be driven in waves by fud who

knows what the the market structure will be at that point i just think this is a headline that a lot of sort of trad five folks who have a lot of money and can move the market will glom onto that you know this is an easy short and you know crypto is dying etc etc right i don't think that matters for long-term investors but like. Like an international tech company that has a massive international tech company with millions of users around the world. If the US attacks them, what happens in the other areas? In Singapore and other countries, Binance is growing. So how does that exactly work? Does anyone know this?

Well, so if the SEC claims they have jurisdiction because binance had us users including binance main right so you can violate us law even if you're not physically based in the united states and and the sec's powers and the last question for my end the powers of the sec uh zach and i'll go to you john to kind of give us final thoughts um when when a country is not based in the us obviously binance is a pretty large company so so they've got a lot of jurisdictional powers but if a company is not based because we were talking about this last week and the sec cracking down on all these startups in the nft space and other uh other sectors in crypto um and then the recommendation that couple lawyers made is

that hey do not base your company in the u. But then the SEC does have jurisdiction. If you're based outside the US, then you still accept money from US investors. Yeah, Gary Gensler's made clear, even if US persons are using VPNs to access some offshore crypto service that they view that they have jurisdiction. No, but I mean, but do they have the ability to enforce

if a company is based outside the US? Because their abilities are more limited. Yeah, I mean, practically, you'd have to drag someone into court, but with a company as large as Binance, that's not going to be a problem, right? Like they know who to find. John?

Yeah, I think so. My guess is, I think Zach's right that the SEC is not going to back down just because of some international jurisdiction issue. However, I've worked on a lot of international cases at the SEC, and they're very complicated because you either have to work through treaty, through memorandum of understanding, or informal arrangements. You know, we often had people in our office rotate through from other countries, and that made it easy for us to conduct investigations relating to those countries. But the point I wanted to make, Mario,

that when you're talking about this potential criminal case against Binance, I don't know about the impact on the crypto market or anything like that. But I can say this. I've never seen a company with so many, a young company with so many senior departures, senior executive departures. And what does that mean from the SEC and FBI and DOJ perspective? Well, traditionally, when I worked on cases, most of our cases had a joint criminal component. We worked with AUSAs. We had an FBI agent embedded in our office to work with us. We met with them almost usually weekly to talk about the cases that were going on in parallel and to pitch them new cases. Because let's face it, the SEC bringing a case is like, it's even worse than what one of the Winklevoss twins said, when they said it's a glorified parking ticket. It's even less than that. I spoke at a Fed conference last week, and the general counsel, Paul Graywall, was on a panel at the Fed talking about how to do crypto right. And he was, you know, again, in the Philadelphia Fed building. Now, whatever you think about that case, that company is an SEC defendant for the essence

of what they do. So putting him on stage, he's almost wearing that SEC case like a badge of honor. So it's really the DOJ cases that matter. And when you talk about all those senior executives, I know exactly what's going on, because I was part of it when I was investigating those kinds of cases. The AUSA calls these senior executives in or the FBI goes to visit and says, look, I have a list here of everybody who I want to cooperate. Your name is at the top here.

Do you want to cooperate with me or do you want to risk being prosecuted? We have a grand jury convened. We are executing search warrants. We have all kinds of things going on. Do you want to risk all that and not cooperate with me? If so, tell me in the next five minutes, and then I'll move to the next name on the list. So the opportunity, and you saw this happen with FTX, where suddenly all the Alameda people were all cooperating.

And I predicted that. I said the day that SBF was arrested, all these other people are going to be cooperating because these are traditionally, like Scott was saying, these are accountants and lawyers involved in the space when suddenly confronted with the idea of going to prison is terrifying. I've seen it. I've witnessed it. So you can get these cooperation agreements, I think, fairly quickly, and you can get incredible information. So somebody is just drawing you a roadmap. If there is wrongdoing going on, someone's drawing that wrong roadmap from above.

That's all the point I'm making. I'm just imagining the shock factor. Imagine the guys at FTX, Binance to a lesser extent, of course, but just imagine the guys around Sam. FTX is dominating. Sam is considered the Jesus of crypto all over washington um and and the market is in a massive bull market and they're printing money and they're having the time of their life they feel like it's some of the luckiest people in the world you know a year later um you know ftx is gone the market's collapsed and sam is uh is most likely going to jail and

then they all start turning like the the whole mindset the change in their mindset every bull market versus bear market like you you drop back down to reality now obviously ftx is an extreme extent binance to a lesser extent that applies to every single company like everyone's in like that massive rush where money's coming in from everywhere you got all these friendships etc they're like hey the law says this but we could do that we could break the law this way or that happens every bull market and then when the bear market kicks in, suddenly reality kicks in. We see that with NFT projects. They're launching this.

You can't do anything. Happened in 2017 as well. Will likely happen in the next bull market. And then the market, the bear market will come back. Regulators will come. And then everyone will be back down to reality. It's the same routine all over again. Yeah, because those victims cooperate and they surface

and they're ticked off and they hire their own lawyers. And the other lawyers like David Silver come in and really start getting everybody terrified because there are incredible facts that they – It's our fault. I'm going to take responsibility actually. I wasn't in the media game in the last couple of bull markets. I started in this bear market, NFTX mainly or before that um at the beginning of the bear market so i never really did shows during the bull market but next time i do so it probably won't be popular i'm not sure if ryan and scott would like it but what we should do is that in the midst of the hype

john we get you on we get david silver on and we just freak everyone out at the midst of the hype i don't think it will have any impact i I think everyone will ignore us. Our numbers of these shows where we try to scare people in a bear market, in a bull market, and try to remind them of what will happen, I think we'll get the lowest numbers. But I want to give it a shot in the next bull market. Simon, I want to get your quick thoughts. And then I do want to get into the China story with the panel. I think it's like the, for me, it's even more important than everything else we've discussed so far.

Also, Simon, since I've got you here, can I play a 36-second clip and get your thoughts on it? Sure. That sounds competitive. Tell us your thoughts on Binance, and I'll get that clip ready. It's more about price prediction. I've got the clip here.

There we go. It's Cathie Wood giving you price predictions for Bitcoin and referring to the regional bank crisis and talking about Bitcoin being a potential flight to safety if the economy goes downhill. So let me play that clip for you, Simon. Get your thoughts on that. Binance, and then we'll get into China. Bull case is, I think it's 1.5 million. The base case is 600, I think it's 625,000, something like that. Now, one reason we've actually internally, our confidence has increased towards the bull case

is because of what happened during the regional bank crisis in March. What happened? Bitcoin rallied from 19,000 to 30,000. Why did that happen? That was a flight to safety. That is the insurance policy that we are talking about that we believe everyone will want at the end of the day. So it just talks about essentially Bitcoin being a flight to safety and that hasn't been proven during the regional bank crisis. I want to get your thoughts on that, Simon, because John does not like the statement. Yeah, sure. Well, short term, if there was a banking crisis, you'd expect Bitcoin to be correlated as a short term risk on assets.

So you'd expect that. But during the last one, we did see a bit of a rally and that was caused short term. But for me, I think just like Cathy, you know, I'm a long term person on Bitcoin. And I'll say the same thing I've been saying for, where are we now? 13 years now. The Bitcoin has three adoptions. The ability to own your own money. Anything that demonstrates the ability to self-custody your own money leads to people discovering Bitcoin.

The ability to transact at scale, peer to peer. So anything that leads to the censorship of one's money leads to people discovering Bitcoin. And then anything to do with the whole inflation and the Ponzi scheme. Cathy's saying that the flight to safety as a safe haven has already been proven thanks to the regional bank crisis. So Bitcoin can already be called a safe haven asset. At least that's how I understood the statement. Do you think that's a bit premature or have we reached that stage yet? Because David also disagrees with that statement.

Well, it is for me. It's been a flight to safety for 13 years now. No, best of all, Simon, it is for you because you believe it. to safety um for 13 years no best guys no sorry it is for you because you believe it i'm saying has that been proven now no well it's just a question of how long does it take for more people to realize and that's what the last 14 years have been and that's why it's been in a 14 year bull market that's what i'm saying i agree with you something like do you guys realize that now there's politicians and lawyers and SEC people? In the beginning, it was some kids programming stuff. Now, you know what I mean?

Presidents are talking about it. But David, I want to go to quickly David. Why do you disagree with that, David? And I'll go back to Simon. No, I mean, it doesn't. Look, I'm a crypto bull, a Bitcoin bull as well. I manage a crypto fund. But at the end of the day, it's a schizophrenic asset right now in terms of the way it reacts vis-a-vis macro moves and macro concerns. It certainly does not function as a safe haven asset all the time. And I'm okay with that, but I'm just being honest about it. Yes, I agree with the last point just made

that the base of holders and investors is broadening. And in theory, it should be a safe haven asset. And it has at times acted that way, but it's certainly not doing so consistently. And that's okay by me. That's where the opportunity lies. That's why it's undervalued. But at the end of the day, let's be honest in terms of where it is today. And get your quick thoughts, John and Simon, and then we'll continue. Sorry, I got a dog today in the back. I apologize. John, Simon.

Thanks. I can't really speak to the market. I don't believe in the integrity of most of the market data relating to crypto. But putting that aside, if there are those who do believe in it, I think that there is incredible criminal use of crypto. And I can hear the whataboutism. Well, fiat is used for crimes too, or the internet is used for crimes too, so let's ban those.

Well, the orders of magnitude that crypto is used... But John, we've seen, Gene, and I'm really sorry to interrupt you, but I'm sticking to this point. Last time I asked this question, but because I find it very important, like there's two options right now. We could see the inflation keep picking up and risk assets keep getting hammered.

That's option number one. And that's not good for Bitcoin if it's still seen as a risk asset or Bitcoin becoming a safe haven, a flight to safety and still experiencing a bull market despite inflation picking up. So you don't think Bitcoin will ever become an inflation hedge i yeah i again i'm not enough of an economist to comment on that i'm just telling you that there's a specialized unit at the sec that does crypto a specialized unit in doj that does crypto a specialized unit in fbi that does crypto in the secret service in the irs law enforcement he's asking you about bitcoin not crypto john he's asking you about bitcoin answer the question i i don't i'm not differentiating between them i'm not so my you should you really should well so you can keep

interrupting me or i can make my point you'll go go ahead john but i i appreciate it and this will be the last point i make because i want you guys to be able to talk, and I appreciate all your perspectives. I'm not trying to talk any of you down. But what's going on are when you look at things like ransomware that just happened, MGM and Caesars was attacked. Where I teach at Duke, North Carolina was attacked with the Colonial Pipeline. People couldn't get gasoline. They couldn't get home from the airport. I think human sex trafficking, if you look at this book about SBF that just came out a few days ago, and you take a look at just how horrific the use of stable coins and crypto and Bitcoin and others. And Bitcoin is, but for Bitcoin,

there would be no ransomware. And I'm a ransomware expert. I've been doing ransomware cases for almost maybe six or seven years now. And I hold a ransomware conference every year with a partner where 30 or 40 experts from all around the world come to talk about ransomware. And all the different law enforcement agencies talk about ransomware and talk about how but for Bitcoin, it would not exist. Wait, so ransomware wouldn't exist if Bitcoin didn't exist?'s outrageous exactly exactly it's not absolutely come to my conference and listen to everyone who talks about ransomware you don't have to okay yeah i've managed there were 1251 ransomware attacks reported in suspicious activity reports in 2022 for 1.2 billion in ransomware payments not a nickel of that was ever recovered. Not a single one of those ransomware attackers

were ever captured or brought to justice. And all of those payments were made in Bitcoin. Every single ransomware matter I've ever worked on involved Bitcoin. You can't make a $5 million ransomware payment without Bitcoin. Guys, guys, guys, before getting into it, James, I want to move on from the Bitcoin story. I see Gordon's hand up.

So let me go to Gordon, Simon, and David here as well for the final story that I want to cover. And that's China, the Chinese economy. Not long ago, everyone was talking about China. It was the most important news for a few days. And then it kind of disappeared. No one talked about it anymore. But now I'm looking at the agenda. I've got some five key points on why we should still be concerned about China. for a few days. And then it kind of disappeared. No one talked about it anymore. But now I'm looking at the agenda. I've got some five key points on why we should still be concerned about China. So China's stock index is at the lowest level. China's VC deals dropped by

more than 30% since last year. Evergrande plunged 25% again. The yuan is at yearly lows now. And gold is trading at a premium in China. So there's multiple indicators that shows china's economy is still in trouble i want to get more thoughts on this cord and i want you to go first and we'll go to david and simon um and go ahead and get your thoughts on china and then link it to crypto if you can and what it means for crypto david simon same question to you guys as well yeah hey thanks for having me i did want to address the the crypto question um there's a number of topics, but just real quick, just an insight I have. If you notice what happened in March of this year is with the bank bailouts, effectively, you had the other credit facility and the BTFP,

right? Both of those were, quote, emergency lending facilities that were initiated by the Fed. Over two weeks, the Fed's balance sheet grew by like $430 billion, which is roughly 43 years of growth in two weeks. I think that is the main reason why you had a resurgence at Bitcoin, not that Bitcoin is a safe asset. I think it's just liquidity in the system chasing assets. When you have that jump in liquidity, you have a jump in speculative assets to include Bitcoin. So with that said, with respect to China, I think the issue in China is quite simple. It's not simple, but I think the explanation is quite simple. We noticed that the most recent stimulus they did was effectively they cut the one year prime rate by 10 basis points, but they didn't cut the five year prime rate, which has more of a correlation to real estate, which, as we know, and I'll share some data points, is in a state of collapse. And, you know, everybody's been calling for China to stimulate for the past two years.

But we believe, as we said on CNBC recently, they can't stimulate. And the reason is, if they widen the rates gap, or they, quote unquote, kick the can down the road, you'll have a bigger yuan devaluation or capital flight at a time when geopolitical hurdles to inbound investments are rising. So I think that's why you're not getting the significant stimulus that everyone expects out of China. And I think that's why you're going to continue to see

a significant decline in China's economy overall. And we could talk about a number of data points we track. But I think one data point I'll give is, and I can give a few if you guys want, but the most important is their property market because effectively China's property market is bigger. Their real estate market is bigger than the US stock market. And if you look at what happened in basically March of this year, there was a huge jump in the 100 property developer monthly new home sales year over year. That number jumped to plus 85.5% year over year. That was in March. And then in April, it was plus 0.47%. And then in May, June, and July, it went negative. In May, it was negative 26.8%. And June and I'm sorry, July, I'm sorry, June, July, August, it went negative. And then July,

August, it was negative 33 percent. August, it was negative 33 percent. So the point is, there was an initial blip in the property data. Everybody got excited about and that blip has turned back into a dismal showing. Property is the lifeblood of China's economy. They need to stimulate, but they can't because their currency is collapsing. And I think that's just going to resonate in more of, you know, pundits saying they're going to stimulate them but they can't because their currency is collapsing. And I think that's just going to resonate in more of pundits saying they're going to stimulate them not stimulating and more negative data. You can look at export data, et cetera. But Gordon, what does that mean for the global markets and then for crypto? And Ryan made an argument last time we were talking about China, is that they'll be forced to do quantitative easing and start

printing money. And that will be good for risk assets. It will pump liquidity back into the markets. They will do what the US did during COVID. Is that a possibility? And if you can link it to crypto, it'd be great. And then we'll go to David and Simon. Yeah, sure. I think that would be great for crypto. It would be great for all risk assets to include stocks and home prices, et cetera. The point is, I don't think they can. Again, you have geopolitical hurdles that are causing inbound investments in China to collapse, not just geopolitical hurdles, but also internal hurdles with these new policy shutdowns, et cetera. So the problem is you have money already

leaving China, right? You have a number of investments in China that are trying to get out. If they stimulate, the currency will fall further and thus accelerate the money leaving China. So I think they're in between a rock and a hard place. I don't think they can stimulate for that reason. They can't allow the, you know, a widening in the rates gap that we already see. So if they were to stimulate that, that widening would accelerate. So I just think that China is going to continue to see weakness. And I think that it may even turn out to be worse than Japan's lost decade. And this isn't consensus right now. So with respect to what that means for crypto, you know, at the beginning of this year, one of the main reasons why, in our view, you saw a resurgence and an acceleration pre-bank crisis and risk assets was because the PBOC's balance sheet in one of the weeks, I can pull it up, but it jumped like $350 billion in one week.

And they typically do that at the beginning of the year to shore up the banking system ahead of the Chinese New Year. But nonetheless, that money found its way into a number of risk assets. I don't think you're going to see that again anytime soon. And as such, I think China is not going to contribute to, you know, liquidity expanding. One other thing I'll note, if you look at the liquidity of the top 10 central banks, it is collapsing. I could pull the data up if you guys want. But the past two weeks, you're talking about over, you know, just around $200 billion declines in global liquidity. Clearly, you know, the Fed is doing its thing. They're draining liquidity. But you have to look

at the other global central banks. And the key declines were clearly from the ECB and the BOJ. But you've also seen declines from the Bank of England and then to a lesser extent, the Bank of some of the other central banks, a much lesser extent. But the point is this, more liquidity, crypto up, less liquidity, crypto down. And with China not able to stimulate and global central banks pooling liquidity because of inflation, I think crypto is going to have some headwinds. But hold on, guys, there is one factor you guys may not be looking at and that is, you say more liquidity, less liquidity, but there is this foreign exchange problem in China

where if China tightened up on their foreign exchange controls, which is the ability of people to move money in and out of China, which is what they've done now, which is what I believe actually caused this pump, you may actually get a run into Bitcoin. As I said earlier when the show started, I know there's quite a few people that weren't here when it happened, but China's paying a premium on gold, a bigger premium on physical gold,

and a premium on Bitcoin, and also a premium on USDT right now. So, I mean, one thing you should factor is if China starts draconian measures of tightening, which will tighten foreign exchange controls, that in itself could cause Bitcoin to pump a lot more. Yeah. So I think whatever happens in China, you got Bitcoin, you can look at Bitcoin through two different lenses.

Bitcoin is a risk asset where you need China to pump money into the markets, what Ryan already talked about a few weeks ago, for Bitcoin to do well or Bitcoin becoming a safe haven, which is the argument that Ryan just made. David, I'd love to get your thoughts on these two arguments and then maybe your thoughts on China in general. I know you and Danish probably discussed it in the finance show. And then Simon, kind of wrap it with your thoughts on how that will impact crypto markets in the short term, not in the next 100 decades. David? Yeah, so I'll echo what you just said, frankly, which is volatility in China is good for crypto. I believe so. I think, first of all, having been in markets for however long I've been in it and having looked at China and trying to figure it out, I think it's a fool's errand

for a U.S.-based and capitalistic-minded person to try to figure out the Chinese government's movements vis-a-vis its economy, right? I mean, clearly there are troubling signs in terms of youth unemployment, but in terms of levers that the government has to pull in order to stimulate, right? They don't necessarily need to go ahead and inject money. I mean, they just went ahead and reduced the amount of cash that somebody has to put down on a home

from like 80% to like 60%. And lo and behold, and we in this country, we're used to, I don't know, we can go out as low as 1% down if you live in Arizona and you're borrowing from Zillow. So there's lots of ways for them to go ahead and stimulate their economy. And I wouldn't go ahead and try to figure out exactly where they're going. Remember, they just want to make sure, first and foremost, they don't have any social unrest, more than anything, and that the powers that are in control stay there. I think vis-a-vis Bitcoin, come back or crypto generally, as I said, I think people in China wanting to get their money into some other currency, rather than having it in the yuan because of their concerns at home is always a good thing.

Right. So therefore, any sort of concern around the weakness in the yuan is a good thing on the one hand. And on the other hand, if they have a risk on environment, if their market is flooded with uh with money printing you know risk on assets are favored and so therefore that some of that will go towards crypto so i think that that's a good thing so therefore last point i think that you know any flux that we're currently seeing is a good thing uh for crypto you know vis-a-vis china uh simon uh i want to go to you. And we do have Andrew that just jumped in. And Andrew, I know we brought you in to discuss the Binance story, which is not that big of a story.

And we've gone deep into it already. So it'd be good to get your thoughts on crypto in general instead, right after Simon. But Simon, we've had different arguments on what China's economy issues could mean for crypto. I'm guessing you're going to be, in the short term, actually,

in the long term, obviously, you're going to be very bullish for the same reasons as always, and I'd agree with most of them, if not all of them. But in the short term, how do you think China's economy, if the pattern continues and we start seeing more and more cracks, how do you think that could impact a potential crypto bull run next year? And I know you don't like doing price predictions, etc. It's more from a macro perspective, looking at fundamental impact to the crypto industry.

Yeah, sure. So I spent a lot of time in China and I did my whole trip with no cash, WeChat Pay and Tether. And that was the whole thing. All of the people that were business people, we transacted and Tether and that was the whole thing. All of the people that were business people and we transacted in Tether and if I wanted to transact with a taxi or a local shop we used WeChat Pay and it's fully digital and it will transition very nicely into a central bank digital currency which already makes up just under one percent of the supply and they'll roll that out more and more and more. But the

whole point with both America, both China and the global economy, is that we all make a almost career out of sitting here on Twitter spaces speculating what's going to happen next so that traders can figure out how to outp um and get better than expectations or lower than expectations and figure out what to do from there and tying it together of how it really affects bitcoin is that the reality is is that everyone that wants the market to pump is a quantitative easing maxi um and anyone that wants to control inflation um decrease assets because they didn't get on the ladder and they got shafted um by the by the system um there are quantitative tightening maxis so that you can crash the economy and get the real estate back to real prices and so we don't have a

real economy we are in global um you know global dependency upon central banks and i have no idea we can sit here and predict um but i have no idea what the monetary policy and central banks are going to do and so to me it comes back to i like maths and code i like a monetary policy where i can see exactly what's going to happen and i can predict exactly into the future what exactly the the supply will be and that's where it comes together and going back to john's conversation of you know of course bitcoin created the ability to do ransomware just like the internet created the ability to do ransomware but i like the compromise of being able to transact peer-to-peer own my own money and if i commit crime I create an immutable record of my crime on the internet. You know, seven years ago, somebody stole 119,000 Bitcoins from Bitfinex,

and now they're going to prison because they created an immutable record when they tried to spend them. And I think that's a net improvement of if you're going to commit crime, you create an immutable record that someday will come back to bite you and uh uh andrew good to have you how are you i'm good thanks for having me on i'll keep it short and sweet as it as a result so i have three three three and not only by now i've got three questions for you give us your thoughts on the on the issues in the chinese economy um your thoughts on crypto in general last few days have been good uh last few months have been choppy but there's been a lot of news so good recap and getting your thoughts there and then lastly will be to get your um thoughts on binance and probably the question

i have there is does it really still matter um or binance does not matter as it did before yeah so let's start with binance i think um i wouldn't go so far as to say that finance doesn't matter. Although I do think at this point that some level of, you know, finance taking a serious hit from the DOJ is baked in the cake. I think it's priced in. Sure, I think that day that things are announced, whatever they happen to be, there's going to be some turbulence. Maybe it lasts a couple of days. But listen, the United States in particular has thrown the absolute kitchen sink at Bitcoin, crypto exchanges.

You know, they've effectively run off, you know, all the exchanges in the United States, sent them overseas. And what has Bitcoin done? You know, it's effectively stayed fairly stable and certainly above the highs of 1718. And that has become the new floor, right? The highs of 1718 have become the new floor. So Binance and its potential taking more bruises and maybe even a fatal blow, I think in reality, that's assumed at this point. If it would have happened at the time, three months, four months after FTX, that's a different conversation. But right now, it's been a year since FTX essentially. And so in my mind,

you know, it's crazy. But Andrew, Andrew, it's, it's crazy. It's crazy how fast things change. I remember you on stage and I asked you that same question back then.

Like what happens? And you and Simon and you guys were both making similar ideas. Like there's not many big players left in crypto. We had DCG, we had Tether and we had Binance. And if any of them falls then we're in for for you know worse than an ice age i can't remember the term that that's not well i like the term but now now we have just chipped out but you know regulators have just kind of intentionally obviously brought binance to sneeze or at least reduce binance's market share which is good for decentralization good

for any industry and obviously today today, if Binance goes, we don't care as much anymore. Yeah, listen, there are other exchanges that have positioned themselves to take market share. Well, they have been taking market share from Binance for the past six months. I saw some data on Twitter a couple of days ago that has shown that Binance has lost market share

you know over the last you know six to seven months that's not a surprise to anybody given the the the issues surrounding them um but at the same time i really really love uh something that eric for he said a long time ago and i i posted this, and it has very much to do with Bitcoin and what Bitcoin is. And it's they can point their guns at two plus two, but it's still going to equal four. So, you know, Bitcoin is algorithmic, Bitcoin is math, right? So it doesn't matter if the United States is if it's a UAE, if it's in Europe, if it's Antarctica, it simply doesn't matter if it's the United States, if it's the UAE, if it's in Europe, if it's Antarctica. It simply doesn't matter. Bitcoin is. And so conversations around crypto, those are much more nuanced and complicated questions about what will be adopted, what will break through, what will find a living place for crypto to thrive and to make good on some of its promises

as it relates to changing finance we haven't gotten there yet other than bitcoin um so we'll see uh but eric verhees's commentary about it being about math and it doesn't matter what what kind of gun you point at two plus two, it's still going to equal four. There's going to be, you know, continued turbulence. I've seen some more commentary on Twitter associated with, you know, there's large institutions that are making some real changes to their asset allocations based on potentially what they see you know coming down the pike you guys have been talking about china um there's some there's some you know clouds there's definitely some clouds associated with economic conditions uh across the globe you've got um you know a united states election coming up um you know that will be in the forefront over the next 12 months um there's there's there's

lots to consider and as it relates to to bitcoin being a safe haven we're going to continue to find that we're going to find we're going to continue to find that out you know we all know on this call at least we all should know on this call after years and years and years and years of the truth of it is that over time bitcoin just goes higher right like if you buy every single dip time and time and time and time again you benefit right you can't argue with that you really can't so um you know there's some unique stuff on that point sorry sorry andrew andrew and on the safe haven argument you know i played the kathy woods clip earlier she said that bitcoin is you can even say that the you cannot

make the argument that bitcoin is already seen as a safe haven after we saw what happened during the regional bank crisis is that i think that's i do think that's a fair argument although here's the nuance to that argument it probably can't be your only safe haven right if she's she's not she's probably not making the case that you liquidate your entire portfolio, you shove it into Bitcoin, and you're going to be safe. I don't think that's the argument that she's making. I think it's part of a cluster of safe haven-ness. I'm certain that isn't a word, but I'll use it anyways. But it's not the only safe haven. In my mind, it's the most sound money safe haven, right?

But at the same time, it's probably not the only safe haven. So that would be my answer to that question. Yes, it's a safe haven. It's going to be a safe haven. And so it's just a question of what does that look like over time? What does that look like in terms of the clouds and circumstances that may avail itself, worst case versus best case? Generally speaking, reality always lies somewhere in the middle. I also agree with Simon in terms of his thoughts on the larger global economy. It's a propped up instrument at this point. It's a question of, you know,

will that propping continue to hold its architecture? I don't know. You know, if I knew that, I probably wouldn't care to be on this call and be doing something else. Just for the audience, I want to ask you just one thing. If you can go on your phone pretty quickly and just check the red logo on stage

and follow that red logo, it would be great because we're going to be hosting shows very, very soon from there. You know, I appreciate the panel. We've discussed three key points today. We went through the China hearing, sorry, not hearing,

the Binance hearing is going to happen today. You know, my conclusion is, you know, John's tweet goes deep in depth on everything we know so far and his take on it. We had a bunch of lawyers on stage and they all had different perspectives. My conclusion is it just does not matter as much as it did. Until we see – we start finding out more details from the likely DOJ investigation and any new revelations that we don't know about, we're not speculating about. For me, at least, the Binance story does not matter

as it did before a year ago. And we've talked about the predictions, FOMC predictions for this week. And lastly, the Chinese economic problems, which to me is the biggest story of the day and the point that concerns me the most when it comes to crypto and the global economy Ryan Scott

before we wrap up the guys are going to be back by the way so they're both at the airport right now and they'll be back tomorrow I guess I hope and we can start accepting sponsors again this week so anyone that wants to come on the show DM any of us

or just DM the red logo on stage as well, any of the four of us, and you'd be able to come on the a with kind of a package where we work with projects to get them listed don't message scott though he's not involved in this if you want to get listed on a sendex message me ran or crypto town hall we'll work with projects get him listed on a sendex and uh you know offer an entire service over many months um to get liquidity going and so if you want that hit us up otherwise that's it for for today ryan scott you guys already on the plane or you can talk? I'm just about aboard, but it's all good. I've been here. Great.

We'll see everyone tomorrow, guys. See you, Ryan, Scott. All right, guys. Bye. I'm in the car and it's pretty loud, so that's probably all I got. What's up, Bacar? You're in, man. All right, guys.

Appreciate it all. And we'll see you again tomorrow morning. Thanks, everyone.