The Wolf Of All Streets - Crypto Slides | Fear Grows Over Stablecoin Legislation | Crypto Town Hall

Episode Date: May 6, 2025

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Morning, everybody. It is Tuesday. I seem to be losing connection. Sorry, I'm having a glitch here. I'm not sure if you can all hear me or not. If not, let Dave take over. But we've got crypto slides fear grows over stable coin legislation. I had taken long on my show this morning and she really broke this down. Obviously, we had a bunch of Democrats seemingly turning at the last moment over the last couple of days, potentially putting a wrench in the odds of stable coin legislation getting through seems like we're still going to be okay. But a concern there, obviously the topic today when talking about the market, everything pretty much flat oil under 60. But you know, Nasdaq down 1%, Bitcoin

roughly continues to trade right around 94,000. I guess we can start with the stablecoin legislation. Zach, you're always on top of this. What are you seeing? What I am seeing is there is a, you know, I guess probably what a lot of you have seen, there's a panel of Democrats who are defecting last moment here. Here's that he's talking. Can others hear me? I hear you. Okay. So there's a there's a group of Democrats who are who are saying they're now not going

to vote for the stablecoin bill. They're being a little bit vague about, you know, from a policy perspective, what they want to see different. I think that is because this is politically motivated, the two concerns they are raising. One is that the stablecoin bill will allow for corruption by the Trump family because World Liberty Financial announced that they are going to do a stablecoin. And so this is a anti-Trump move, a way to bring attention to what the Trumps are doing. And I think that's sort of a political agenda. The other stated concern is around anti-money

laundering provisions. Now, the Genius Act that's being voted on actually is pretty strict in terms of anti-money laundering. You're not allowed to have any kind of stable coin in the United States unless it has the technology to allow it to be frozen by court order. You have full Bank Secrecy Act protections for creation redemption of stablecoins. And really the only thing you could do differently is to add AYC to peer to peer transfers, which I think would be a terrible idea. It would basically turn regulated stablecoins into the kind of surveillance nightmares that CBDCs are.

I don't think that's in the offing. And so the question is, what could give political cover to these Democrats? I do think, you know, based on her comments, Elizabeth Warren is behind this. She doesn't like the crypto industry. She's using the World Liberty Financial as sort of a cudgel here to drum up opposition. What can give cover to the Democrats who were previously going to support this bill to change their mind? Another thing that people are looking at

is industry support behind this bill. So far, the major players, and Gries and Horowitz, is strongly coming out in favor of the DENIUS Act. Coinbase is giving somewhat tepid support. I think Coinbase's beef with this bill is that it doesn't allow for yield bearing stablecoins. And so, you know, they're focused on the update to fit 21 market structure bill coming.

And they would rather a better version for them with the stablecoin bill that allows basically, you know, treasure securities on the blockchain, which the genius act doesn't. Altogether I think the, you know the sponsors of the bill are pretty optimistic. I think it still will go up for vote on Thursday and it still probably will pass. But the real question is what will provide the political cover for moderate Democrats to get back in the pro genus act camp? Well, Scott's not here, so Austin, why don't you go next? Sounds good. Yeah, I want to pile on to Zach's comments and say, I think there's a couple of dynamics at play here.

One, if you look at some of the Democrats coming out against this, these are the same people who in the prior Congress were pushing bills like Damlan, Chansey, which back to your comments do essentially create a surveillance nightmare, right? That's saying let's take the current financial system only make it orders of magnitude more invasive with the way that we want to design things, some of which are, to be honest, just functionally illiterate, not even possible at blockchains. It raises to me the question of was support from some of those folks always fake and were they always lying? And this is going to be a political tactic to try to jam those in at

the last minute. I think the folks who are kind of caught in the middle on the crossfire, and the ones that people should watch to determine if this is going to pass, become the more junior Democrats who came in saying the right things. If you look at like Diego, you know, he had an A from Stand With Crypto. There was a lot of support from the industry for him. So if he were to backtrack now on this bill over at best vaguely formulated policy concerns or pointing at the Trump or liberty thing without, I would say, making a better argument as to why the opposition is or addressing the core point that some other Democrats have raised of if your concern is corruption, wouldn't

you want things regulated here instead of offshore? Seems like you have that one backwards. Then I think what's really going to happen is this will be sort of right out of the gate, the allegedly pro crypto new Democrats sort of stepping on a landmine immediately with the industry because stable coins are certainly the lowest hanging fruit. And I think the tactical mistake for Coinbase is if you can't get stable coins, you're definitely not getting market structure. So focusing on that as a second step when you cannot take a first step seems I would

say counterproductive. Yeah, I mean, one of the things about this whole scenario, I mean, yeah, I really hate to get horribly political and considering I think the center right and center left actually are more in common than either of us, you know, Austin, you know, have with the extremes of the parties who tend to be in control. But it's pretty clear that if Gallego defects and is willing to fill, go so far as to filibuster, which obviously is the only way the Democrats can really stop it, is by filibustering, cloture, blocking, you know, etc. If they're willing to go that far, then we're 18 months away from another election cycle

and stand with crypto is gonna effectively be pushed to say, listen, we can't trust you if you're a Democrat, because here you go, you're less than six months away. And don't think that that's not part of the calculus. So I think that's why the Thune basically thinks that he will get it through because he doesn't think that they'd be willing to take that step considering what happened in the last election. I mean, what do you think?

Do you think I'm crazy about that or just overly optimistic or what? I don't think that's crazy. I mean, look, if I was a center right Republican, kind of a functionalist trying to work with my colleagues across the aisles. So let's, you know, thinking of crypto say that I'm somebody more like a TILUS, that I am one of the firebrands, like really far to the right who just wants to eliminate the entire BSA. What I would do here is kind of exactly what they are doing, which is force a vote to see what is actually going to happen, right? Like, do you want to put people like Diego and Kim in the position of if you guys really want to go vote against this and demonstrate

to everybody that there are only two Democrats in the entire world we can trust on crypto, and they're Jill LeBrand and Richie Torres, then feel free, you know, to go put your name on that, but it will have dire consequences for you in the next election. I think this is why I said earlier I'd watch the junior Dems, because here's a point where their interests, their personal interests, and likely the interests of, call it the up and coming members of the party, diverge from some of the senior leadership. Like Elizabeth Warren is willing to go down with the anti-crypto army ship because at some point she's going to be out of Congress. You know, we'll see

how long she continues for, but she's already well into her seventies. That's not true of somebody who's just joined and is looking at a long career. And so here is where if you're a Republican doing tactical politics wisely, you're going to try to drive a wedge between these two groups of people, or make them betray the people who they thought were their allies, and then essentially wait the deck in your favor for the midterms. I'm catching up. So continue, please. Yeah, well, I can't see who I can't see hands or anything. So from anybody, but yeah, there's not yet. I'd like to hear someone's perspective on how this impacts the kind of more on-chain crypto native stablecoins like DAI or some of these other kind of synthetic collateral based stablecoins that are used as part of different DeFi protocols.

Like does a non-favorable, like say it goes in the direction of a non-favorable environment, does that kind of unleash a wave of innovation and opportunity around some of the more native on-chain stuff or what do you guys think the relationship is between those? Well, I'll hop in there as somebody who's been looking closely at that.

I would tell you, so ignoring the language in stable, which I think is pretty bad for some of the on-chain implementations, but I also think doesn't survive in its final form. So leaving that aside, if you look at Genius, what's really going on there is they're trying to draw a distinction between what is a stable coin and what is not a stable coin. And so what you're going to have happen relatively quickly in the United States, if that passes, is everything within the stable coin box can keep calling itself a stable coin and operating the way it was. And everything outside of that box probably rapidly needs to change its name and how they do like descriptions of products, consumer protection, etc. That is to say, I would not want to be running around calling myself a stable coin and saying that I'm safe if I wasn't something that fit nicely within the genius box.

Now, that's not to say you can't do it, but it is to say maybe you should be very careful about what you call yourself and what consumer representations you make. On the other hand, to your point, I think in either case, given the new administration and given the way things are trending, so long as you're not committing fraud or lying to people about safety, they've seen significantly more tolerant about letting people experiment. So really what I think this is boiling down to in the current administration is a question of just consumer protection. Where my fears are is if in 2028, we get President Elizabeth Warren, without legislation passing, there's nothing

that stops us from flipping back to sort of the Biden administration anti-crypto version. Adam Fossum I think that's true. And I think that's an accurate description of what happens if the bill passes. But if this bill doesn't go through, at least for now, the status quo is that stablecoins are legal. There was a existential legal threat to stablecoins in that the SEC theoretically could say that they're securities. And I actually think there's not a terrible argument under the law that they are securities. But the SEC has already put out a memo saying that they do not consider non-yield bearing stable coins security. So we know that's not going to happen, at least in this administration.

And I think when the bill is being negotiated here, the main effect of federal stable coin legislation I think is not that it will change the existing incumbent stable coins all that much. It's that it will give the regulatory clarity needed to like traditional financial institutions to get into the game, right, where you start to see BlackRock coin and, and, you know, Bank of America coin and all that stuff. That's the big change that this bill unlocks. So I think from the industry's perspective, and certainly from Heather's perspective, you know, the best alternative, the BATNA, right, like if

this bill doesn't pass, you're actually in an okay spot and there's only sort of so much you should be willing to eat in terms of onerous provisions that could be added. You know, I think the bill as it stands seems like a reasonable ish compromise, but I don't know why you would go further to appease this block of Democrats. I think the one thing that I'd add to that is that if the bill passes and people have to rename your yield bearing instruments, that the real question will then be pre-market structure bill. Will the SEC grant no action relief for the people to call these tokenized money market funds and be allowed to interact with the stablecoins?

And if the answer to that is yes, then it's going to open up a lot of new business models and help them. But I completely agree with Austin. I actually gave this advice to a project that is a nascent project that calls himself a stable coin. But I basically said to them, listen, you know, what you're doing, it's not a stable coin based on in this language. You might want to just think about this renaming, but opening up those sorts of products and increasing the velocity and access from traditional finance into them could be a very big deal. So I view the this legislation as being incredibly helpful to those products, presuming they don't do anything dumb and they represent themselves in the right manner.

The other big problem we've had in the United States is getting banking access for stable coins. And part of sort of the difficulty and the T thing is you want these things to be backwards compatible to the old system and work with a new system on blockchains. The other side benefit of the stable coin act is it's going to tell you know all the very large regulated financial institutions and take like a JP Morgan a Bank of America that one. JP Morgan, a Bank of America, that one, you can launch your own stable coin if you want, you know, within these rules. But more importantly, you can bank the stable coins that currently exist if they're following these rules and it's fine. And I think that's an underrated point here as well.

Yeah, when you say that Austin, are you talking about, and I think the answer is yes, being able to use stable coins inside of products, whether it's Zelle or Venmo, et cetera, effectively, instead of using the ACH, older systems migrating your payments infrastructure to something that's faster and cheaper and lower risk. I mean, that's half of it. Honestly, I'm a little bit less excited about that

and that I think all of that's just going to go to stable coins anyways, regardless of what people think in the long run, I'm also saying very basic things like they could have bank accounts with me and I can do 24 seven ledger entries between different people so they can mint and burn at all hours, I can do things like, well, I don't know if I know a stable coin has a ton of treasuries, give them essentially repo lines against all that stuff to make mint and burn orders of magnitude more efficient between all the statements and issuers. There's a lot of fundamental banking things that need to happen on the backend with the reserves that are very boring, fixed income-y stuff that people don't think about. I say that as somebody ran an over 20 billion stable coin at one point, that

stuff is the brain damaging part. And having really first class banking access there would be incredibly helpful. Yes, I am trying to see who's everybody's showing as a listener for me, as usual, just to make it as interesting as humanly possible. So I don't know if you got into it while I was off. But do we think that there's a fear or any risk right now for the tethers or offshore crypto incumbents to be excluded from this legislation? As Caitlin Long kind of put it on my show this morning, there's a huge line of crypto native

companies now actually in line to get banking licenses like Coinbase and such who are going to obviously want to participate in this stable point economy. So I guess the question is, how does this actually shake out who gets to participate and who doesn't? We love everybody's thoughts on that. Zach. I don't know if there's anything know, could affect foreign stablecoins. One is a blanket prohibition on basically being in the United States at all in any capacity if you do not have the technology to be able to respond to court orders, right, to be able

to freeze and confiscate when there's a lawful order to do so. But that's not directly a problem for tender. They have that technology. They're already complying with those court orders. So do so. But that's not directly a problem for Tether. They have that technology. They're already complying with those court orders. So I don't think that's an issue. But then there is this basically anti-Tether provision. It was added to the latest version of the bill. I think most people understand that to have been added in response to lobbying by Circle.

That says, in three years, if the OCC can, you know, takes issue with Tether's governance or any foreign stable coin issue with governance, with their responsiveness to orders with their reserves or really anything that the OCC and its broad discretion decides, they can require all centralized US exchanges to delist Tether. So that could be a problem, but as long as Tether maintains the technology

to be able to comply with lawful court orders, you can still exchange Tether peer to peer. It's not a prohibition of Tether being held or used in the United States, but it would be a prohibition of exchanges listing it, which is pretty significant. So I'd say- Yeah, I was just gonna say, yes,

we know that the primary usage of Tether is speculation on foreign exchanges, right? Right. Tether's main use case, well, both speculation and store of value. Well, I think specifically store of value in places where it's otherwise hard to get dollar access. And I expect that to continue. It's not a ban on Tether. It would not shut down. Yeah, that's not happening at this point. Yeah. Austin, then Dave. Yeah, I do want to add a little bit of nuance to that, which is the bill doesn't just say you have to have the capability and says you actually, you know, have to be responsive. So the hooks in that bill would basically ensure that tether is going to have to comply, which usually means

pretty quickly and like by sharing information among other things with US law enforcement for all of these things. They currently do to some extent what's not clear from the outside is exactly how far that goes. So one thing that I would sort of caution slash remind people slash point out there is that could be, you know, a pretty big, uh, window into the activities of feather because the U S government, you know, treasury is going to have very broad discretion on what non-compliance is there.

Yeah, I think it's worth pointing out why Heather is listed on crack in and corn base, et cetera, et cetera. Uh, had to do with, and it kind of makes it almost irrelevant from a user perspective, obviously very relevant for Tether. And that's because once Silvergate and Signature were assassinated by Elizabeth Warren and Hunter Goons, that the ability to trade the dollar pairs, Bitcoin dollar, Ether dollar, etc. were really, really hamstrung, particularly on weekend periods, etc. And so a lot of liquidity migrated to the Bitcoin tether pairs, and so the US

exchanges listed the tether pairs in order to compete to make it easier for people who couldn't compare the two pairs on their screen and do that of a simple arbitrage The upshot of all this is with a stable a properly function stable coin regime What you'll see is in the US being able to get money into and out of dollars will will that weekend problem will go poof? based on what Austin was saying and what I've been talking about. And so within three years, honestly, I'm not sure that Tether needs to be listed on US crypto exchanges. You know, from a user point of view, obviously, Tether themselves will want to be here, but you'll end up with a situation where it doesn't really impede the market.

And I think it's important to understand that the reason that it took off and gained even more importance was, and this is funny, the irony is Elizabeth Warren effectively helped Tether become the most profitable company on the planet by doing what she did. And by reversing that to allow instantaneous movement of dollars 24-7, much less allow instantaneous movement of dollars 24-7, much less of a need. Yeah, and maybe one outcome with Tether specifically, because I just looked at per DeFi llama, there's $240 billion of stable coins across all chains. And 79 billion of that is tether on Tron. And so maybe with that, like if there's things that tether, you know, if they want to tap into markets that put these requirements on them, maybe tether, you know, because tether

on Tron is different than tether on Ethereum, right? And so maybe there's some kind of, I don't know if that'd be kind of like global arbitrage or just how they treat their stablecoins that they issue on chains that are primarily for international, like South American or South Asian markets. Maybe the stablecoins that tether themselves issues in those markets remain different in terms of their operation and what types of legal interoperability that they will maintain. Maybe there's some type of bifurcation there at some point. Yeah, I think that makes sense.

Either way, I think we can probably move on from the stablecoin conversation. I think everybody here is in consensus that we still are likely to get something done. I mean, is that fair to say? If Caitlin believed that when I talked to her this morning, I think it's pretty sure because she's obviously a skeptic and has been on the wrong side of a lot of this over the years. So I'm confident, I just hope that they get it right.

I mean, it could be worth discussing where they could get it wrong, but nothing in the act seems glaringly terrifying. I mean, Zach, have you had anything before we wrap this up that like, needs to be glaringly either omitted or fixed in the proposed stable or genius acts? No, not at the moment.

I would say the terrifying stuff is more in the in the realm of the Samurai and tornado cash situation currently. And maybe that's worth discussing. What do you see that's terrifying there? It seemed for you know, I've been sort of a casual observer of the news over the last week because I was traveling, but it seemed there was some sort of favorable news on the samurai side beyond the or beyond the fact that are you talking about? They covered it up basically? Is that was that the story? Zach, you're glitching. I think it's your your mic. Yeah, unfortunately, can't hear Zach. Is anybody else on top of that news? Yeah, I'll hop in if Zach glitched out.

Basically what happened is, so there's an entity called FinCEN, who's in charge of financial guidance rules, essentially, their job is to tell people how to comply with the laws in terms of things like money transmission. And they had a meeting with the Department of Justice about samurai wallet, and one would also presume tornado cash, where they basically told the Department of Justice, hey, your money transmission theory does not hang together and is contradictory to the guidance we've issued

because we focus on, you know, who actually has control of funds and custody of funds. So FinCEN, the branch of the government responsible for promulgating guidance on how to do all this stuff, told the DOJ, we don't think your charges are justified by what we, the government, ourselves have said. And the DOJ, helpfully ignored them, went ahead and filed the charges anyways, and that appears to have covered that up. Because if you're thinking about your duties in criminal prosecution and under Brady, that probably should have been disclosed to the defense in both

cases during sort of the preparation stage for the trial and they did not do that. So it's going to be very interesting to see how this shakes out, but this is shades of what was happening with debt docks versus the SEC in Utah previously that did not add well for government. So yeah, if I can add a little bit more context. So the first like important, much more positive piece of news we got was about a month ago on April 7th, the DOJ through deputy attorney general Todd Blanch put out a memorandum saying that they would not do more cases like tornado cash and like samurai wallet, right? They did not want to do regulation by criminal prosecution. That's not how our system is supposed to work, right?

The Congress is supposed to make the laws. In some cases, we have agencies that promulgate regulations after a notice and comment period. But you're not supposed to learn what the law is by the government throwing people in prison. And that's what happened when nobody understood the Bank Secrecy Act to apply to non-custodial tools and the DOJ took the position anyway that they could imprison developers for launching non-custodial tools. So after that, the defense counsel and samurai said, listen, prosecutors, this case is inconsistent with your bosses's stated priorities

here. We need to pause the case and you need to consider dropping it. The prosecutors actually agreed to that and so there was a stay on the motion briefing and the prosecutor said they're deciding whether or not to drop the case. At around the same time, in response to what's called a Brady request, so Brady is an old Supreme Court case that says that if the government's prosecuting you and they have a piece of evidence that is exculpatory, meaning it makes it look less likely that you are guilty, they have to turn it over to you so you can use it in your defense. In response to a specific request by the defense counsel for did the prosecutors talk to

FinCEN, we learned the prosecutors, sorry, the defense council learned about a month ago, we all learned publicly yesterday, that in August of 2023, which is six months before the Samurai Wallet case was brought, and it was around the same time, I think the same day that Roman Storm was arrested in the tornado cash case, the prosecutors that would go on to bring the Samurai Wallet case went to FinCEN, and they said to FinCEN, hey, we're thinking of charging these Samurai Wallet developers with running an unlicensed money transmission business. Now, what does it mean to be unlicensed? It means you didn't go to FinCEN and get a license.

And FinCEN, since 2019, has had guidance out saying, you know, who they think needs a license and not. And so they said, listen, here are the facts of Samurai Wallet. Are they a money service business? Are they a money transmitter under your regulations? And if not, we want to charge them criminally with failing to register. And FinCEN said, no, we do not think this is a money transmission. We do not think this is a money service business. The prosecutor said, okay, thank you very much. They ignored that. Then six months later, they brought this case. And despite the fact that the judge

in this case has a rule that you have to turn over any Brady material within two weeks of either the indictment being brought or that information coming to light, this information, which the prosecutors had six months before bringing the case, they basically hid, they concealed, till this recent Brady request post the Todd Blanch memo. Right? So the crime here, the principal crime that these guys are charged with is running an unlicensed money service business, unlicensed with FinCEN. FinCEN doesn't think they did money transmission. The DOJ says that you can't bring these types of cases. And it's been a month that this case has sort of been on pause while we've been waiting

for the prosecutors to make up their mind about whether they want to keep trying to imprison these software developers. And it's a pretty shocking scenario, both deeply unfair, obviously, for the individuals whose liberty is at stake in this case, but also it's much bigger than them. If a judge, notwithstanding Fincen's beliefs, decides that a non-custodial tool can count as money transmission, then that could... we talked before about the Damla bill, Elizabeth Warren's bill. Elizabeth Warren tried to ban crypto

through this bill called Damla that did so by treating everybody in the crypto space, whether you're a node runner or a miner or someone who operates a DeFi front end or whatever, as a money transmitter, knowing that it's impossible to comply with those laws and therefore, other than maybe holding Bitcoin through an ETF, you basically can't use crypto in the United States. We could get that same result through bad case law created by judges here.

And so, you know, this is, I think, like the most important thing going on in crypto right now. It's critically important that at least the money transmission charges, but really all the charges here should be dropped. And the value of all of these instruments that we're talking about, I really do think derive from the fact that we can have these peer-to-peer bearer assets that depend on the Bank Secrecy Act not going to sort of self-custody. Austin.

So I'll hop in and say, I think it's important to draw some distinctions as we discuss this between the case with tornado cash and with Samurai. So in tornado cash, I basically agree with almost everything that was just said. I do maybe think there are regulatory theories that could apply to this conduct, but all of them come from the world of software development. They do not come from the world of money transmission, right? That is to say, if you start creating things that are primarily used by criminals and making profit off it, blah, blah, blah, blah, blah.

But that's not going to put people in jail for the most part. The one thing I want to point to in this, you know, kind of is evidence of how insane the overreach was under the Biden administration and how the goal was exactly as was just said, essentially to find a backdoor way to ban crypto, is that in the Samurai Wallet case, my reading of the materials, if I was thinking as a prosecutor, is that there's actually a pretty good conspiracy to commit money laundering charge that exists in there. And to be clear, that does not rely upon any sort of licensing, like not legal advice, but it's illegal for all of you if you're

in the United States to launder money, just period, full stop. That's a thing two legged humans cannot do. And that is a charge that does not rely upon licensing, it relies upon conduct. And in the case of Samurai, there are certainly some things you could point out that I'll say raise questions. So when you have that and then you go and deliberately put in this money services business type arguments that since then has already told you that they disagree with, I would also suggest this is continued evidence of the lawlessness of the Biden administration, where now we're getting stuff piling on here, and Operation Chokepoint, and what happened with the SEC to the point that, you know, I, as a person who cares deeply about

rule of law, start saying if this has happened in like four or five different cases, at what point do we just need to investigate this? Yeah, but Austin, like, why haven't they just dropped this? If they now know this, Vincent sort of DOJ controversy this possible grounds to just throw this away. Well, it should be grounds to throw the case out. Like the Brady violation alone is enough for many judges to just pump this thing into orbit. But two, this is continued evidence that in a lot of these regulators, you have

people on the ground who don't really think they're answerable to the people in charge of the agencies that are just doing what they want. You know, definitely been a problem at the FDIC, for instance. So if I get to nitpick on two points. So one is, it is not, and this is a real nit, it's a nitpick on two points. So, one is, it is not, and this is a real nit, it needs to be a Brady violation, it needs to be post trial, it's pre-trial. However, it is a violation of criminal procedure rule 5F for which the judge could take any number of remedies, including dismissing the charges. I think more likely here, and what I think a lot of us are advocating for, is a political

resolution where the DOJ and especially Deputy Attorney General Blanche go to SDNY and they say, listen, you've screwed this up. This is going to create bad case law. This is not in keeping with our principles. And so make the case go away. I want to briefly, though, address the conspiracy charges. So aside from this money transmission charge, the defendants here and in tornado cash are

charged with conspiracy to commit money laundering. In order to be guilty of that crime, the elements of that crime, you need a specified underlying act, some criminal activity, where you knew that that specified underlying activity happened. You helped that person hide money. And then because it's conspiracy, you agreed with others to help that person hide money. You actually don't need to have successfully hit it because it's a conspiracy charge, but you have to have known that someone was doing an underlying activity and you have to purposefully have helped them.

The only fact I have heard in this case that people point to on this conspiracy charge is what sounds to me like a bad joke, but you could take it however you want, where the developers tweeted after the 2022 Russian sanctions, some of you will remember, where we like froze a lot of assets of Russian oligarchs and we froze Russia's T-bills, the developers tweeted, you know, welcome new Russian oligarchs to, you know, our coin join. The real, that really seems to me like a joke, even if you're not taking that as a joke, having that alone prove that they intentionally want to help people break the law beyond a reasonable doubt seems like a real stretch. I think the money laundering charges are a lot easier to make stick if you also have the illegal money transmission charges because the whole business

is illegal. But I think if you force the government to take this to trial and they have to do a fact intensive case where they prove what was in the defendant's mind, where it meets this bar for conspiracy, I think that's a real uphill battle. And really that charge, I don't think could have or should have been brought in isolation. Wow. That was exceptionally thorough, Zach. Thank you. I really wasn't up on this, but it seems like we're so focused on legislation and regulation at the moment that we forget that some of these

cases are still outstanding because we've sort of had this narrative that the SEC was dropping everything, but this isn't the SEC and this is still massively important for the future here. What are the odds you think they get this right? I don't know. I'm very close to this right now. I really hope the DOJ gets this right. I don't think the prosecutors at this point are going to do the right thing on their own, and I don't think that the judge is super likely to do it.

But I think we've got at least 50% or better odds that the DOJ will intervene, given that, like, I really think at this point, allowing the case to go forward, especially in light of, you know, the prosecutors wrongfully withholding this Brady material, it's just so counter to what the Trump administration has said they wanted to do, and such a clear example of, you know, Biden-era regulation by enforcement,

that I think there are, you know, pretty decent odds that the DOJ will do the right thing. Are there cases regarding this tornado cash specifically outstanding outside of the United States as well? So this is specifically an issue under the Bank Secrecy Act, which is a US law. There is the Netherlands tornado cash case, which is a completely different law. And their case would never stand up in the US. Basically the theory of the criminal case in the Netherlands is that the developer Seminoff wrote software that he know could be used by criminals and he didn't add features that

would stop that, which that type of legal theory would squarely be unconstitutional under the First Amendment in the United States. That is unfortunate what's happening in the Netherlands. The precedent doesn't matter to US crypto users in the same way as these two Bank Secrecy Act cases. Austin. Yeah, I'll pile in with Zach there and say, I think unfortunately, the tornado cash developer of the Netherlands is probably guilty under the laws written in the Netherlands, but that is a commentary on the law in the Netherlands. Hilariously, one of the things that may work hugely in our favor is if we get this right and the DOJ intervenes and all these charges get withdrawn and Europe continues to go down

the path of essentially maximum state control, we could be stealing even more tech business from Europe over time into the United States. It's a big competitive advantage. Interesting nuance. I know, Buzz, we're going to get ready for a separate conversation in a moment with a sponsor. I want to ask Robbie a question. Robbie, were you at Token? I didn't see you, but I saw you at... I can't hear Robbie. I'm not sure if you all can. No, I can't hear Robbie. I'm not sure if you all can. No, I can't hear him either.

It's unbelievable. Robbie, you'll have to drop and come back. This has happened to me about 10 times today. If it makes you feel any better, I missed the entire first 10 or 15 minutes trying to get on him and couldn't hear anyone. Buzz, were you there? Yeah, can you hear me?

I can hear you, yeah. Were you at the conference? No, I wasn't there, but I know that a lot of Mario's team in IBC was. I heard they threw a pretty big party at the RC board, speaking positively about you were there. Yeah, that was my,

I literally was there on my way to the airport at that specific event, his party. My flight my way to the airport at that specific event, his party, my flight was at two o'clock in the morning. But yeah, I wanted to get Robbie's take on the conference, but it seems he's not there. I also think we don't have the sponsor up on stage yet. But is there anything else right now that's sort of on your radar as we bridge this gap till they come up? The one thing that's a little bit mean coin, but did you see the Zerebro dev?

There was a lot of drama going on around that. And Zerebro was obviously one of the hottest AI tokens of, I mean, I almost said last cycle, but it was just a few months ago where it was Zerebro, Truth Terminal, and a few other tokens that were taking off. And since then, the token tokens gone down almost 95%. And supposedly the developer actually took his own life and in the meme coin space, they've been creating coins trying to commemorate him

and some other talks about his wallet still being active and purchasing these meme coins. So I know that I've been wrapped up following that narrative this morning. It is quite sad. I mean, I hope that he did not take his own life, but just kind of goes towards how dark sometimes this space can really be.

That's totally off my radar, but that's wild. And is the conjecture that that happened because of the price action or criticism or? Yeah, definitely. He was Zerebro was definitely a project that a lot of people were excited about three or four months ago, right along the lines of AI 16 Z and True Terminal. And Zerebro was actually the first project to use AI, an agent to set up a validator on Ethereum. So that was part of the innovation that they did.

And he worked closely with the Shaw from AI16Z, but got a lot of flack because the token went up to, I think it was around a $500 million market cap and was down about 95%. I believe they even got a Binance listing at one point, but just a lot of flak towards the developer and the conjectures. That's why he took his own life, but it's also conjecture that it may not be true.

But in these cases, didn't most of these tokens have the same drawdown? It's not unique to them. No, it's not. I think Zerebro was one of the tokens that got hit the hardest because it pumped the hardest too. So there was just a lot of criticism thrown his way. Also a 22 year old kid just fresh out of university. So quite sad.

Yeah, I saw that and it almost kind of further kind of confirms how some of these kind of more exotic spaces in crypto, I think they really are a canary in the coal mine to broader global psychology. I'm not assuming that it's fake, but just that general angst that people have, that really high pressure, and then the pressures of kind of like the online mob just coming at you. A coin goes down because people rotate out into the next thing because the game in that space is just rotate to try to be in the first 1% of buyers and once something's exhausted. So it's like just you know, just that that that anger, even if it's like misdirected, like combined with just like general angst and kind of uneasiness. Like, I think that, you know, and this is the second time that a kind of meme coin personality had.

And then there was apparently there was a video of this one you're talking about with, I think his name's Jeffy, but there was a couple months ago, there was another one where someone took his life on camera. And I think something about, send this coin up, like just that kind of crossover between, just high risk speculation as a way to like, cope with general angst and just some of the really negative outcomes that can come from that. It is quite sad. Yeah, I definitely hope that the story is not true and he's okay, but definitely speaks

towards being a little bit kinder in this industry. I hope it's not true, but on a more positive note, we do have a sponsor today. Chris, before I do my intro here, do you want to just give me a mic test because we've had some issues today with mics. Okay, let's try. I hope you hear me clearly. Yeah, loud and clear. Before we get started, Mario's company, IBC, does marketing, incubation, and investing. Sponsors on this show are sponsors working directly with his company, IBC does marketing, incubation and investing.

Sponsors on the show are sponsors working directly with his company, IBC, not necessarily Crypto Town Hall, Scott or myself specifically. So Chris, as we're getting started here, why don't you give us an elevator pitch on PayExcept? Yeah, okay. Let's get started. Three years ago, we asked a simple question, what if you could carry an entire financial system in your pocket without a bank, without middlemen and without borders? That is how PayXApp was born.

Fast forward to today, we are launching the next generation of our platform, which is a Web3 wallet. And it's not just a wallet, it's a self-owned financial operating system with pay to tap payments. So you put two phones together and you make payment. It can be in fiat or in cryptocurrencies. We cut out the card processors. So we do nothing with Visa or Mastercard. We just cut them out and have our own blockchain to do the transactions. With that proprietary blockchain we are able to process over 65,000 transactions a second. That's like the speed of Solana but we have our own blockchain. And we build also a full payment terminal just on your phone. So we are available at the moment on

just on your phone. So we are available at the moment on Google Play Store and I hope next week we will also be on Apple phones so everyone can be payment terminal and get accepted cryptocurrencies and stable coins. So, yeah, it's... Well, I'm a developer in the space and have been since about 2016. I can definitely understand the challenges of getting on the iOS store. I know Android is a lot easier, but definitely wish you all the best in getting on iOS because it's not easy. Yeah, it's a pity because they ask a lot of questions about do you have license, which exchanges are you using. So they ask a lot more than Android. Android is also looking of course about this because it's cryptocurrencies

and we're also planning to become a Web3 new bank. So yeah, they ask a lot of information, cryptocurrencies and we're also planning to become a Web3 new bank. So yeah, they ask a lot of information, but we are almost there because we already now were two or three weeks busy with with Apple to get on the stores. And yeah, we are close to that one week, I think, and then it will be also up and running. That's awesome. I remember during the last cycle, doing some contract work for a, an NFT marketplace that was trying to get in the iOS app store and the account rep at Apple just could not wrap their head around how you can sell digital assets,

but Apple can't necessarily get 30% of the revenue. So if you're buying an NFT for $10,000, it's a peer to peer transaction and Apple just wanted their claws on that 30%. So kudos to you for getting that across the finish line. But I was looking at your materials and for anyone who is tuning in, I did pin a tweet from PayExcept up into the nest. So you're welcome to click their profile and follow along during the AMA.

But it seems like multi-chain expansion is definitely something that you guys are prioritizing on your roadmap. Did you want to speak a little bit about that? I found it very interesting that you guys are even prioritizing DogeChain. Yeah, I think we will put more blockchain into the application, but we must start somewhere. So today we have onboarded Ethereum, Binance Smart Chain, Solana and the Dogecoin as well, giving users seamless access to both high liquidity and low fee networks. On Ethereum we are also having the alternatives, blockchains like Optimism, Avalanche and that layer two networks used to get low fee experience. Today if you look at the gas prices it's also low but there were moments that you paid around 100 dollars to do a transaction on Ethereum.

But, okay, over the next months from now, we will add more blockchains. That can be new blockchains, upcoming ones, small ones. Just we own our own infrastructure, so we can put more blockchains to the application. And that bring, of of course fresh liquidity pools, unique debt integrations and local communities together with it. And in that way, we hope to accelerate our ecosystem and get the broad wallet adaption

to support all these multi-chain architectures. Well, I have a role within the Shiba Inu ecosystem. I often see a lot of folks from that community follow me into spaces. And I know that all those folks would be very excited about you guys integrating Shibarium, which is the Shiba Inu L2, and would certainly support you guys quite a bit if that were to be integrated. So I appreciate the multi-chain approach there. But you guys are also really doubling down

on stable coins for payments. And like what I see here is that you already have a thousand plus assets and a lot of different stable coins. So is that a big part of your strategy to integrate most stable coins to capture some of that payments market? Yeah, I think it's easier for the merchants to have stablecoins also integrated because it's a one-on-one conversation. One dollar is one dollar. So with Bitcoin, you never know, it can go up or it can go down, but when the merchant wants to convert it, it can be 20% up or down.

So that's a big risk for the merchant if he sells something. So it's better to have it directly in stable coins. So that's why we are having a kind of stable coins like USDT, USDC, DAI, BUSD, among others, which are directly can be hold into the wallet. But what we do also, that we do the conversation for them. So if they receive stable coins and they say in the application, we want to have directly

in fiat converted, we also doing that. So they have less risk about fees, conversion rates, etc. And the stablecoins that we embed are also embedded into our ecosystem. So you can put it also on credit debit cards, crypto debit cards, and also for merchant payment gateway. So they can directly also see, okay, pay me a stable coins or whatever is accepted with the merchants. So I think it's good to have that integrated as well.

Also it's easy to, it's just enable instant cross border settlements and it's remove also the friction of FX conversions. So it's just giving away for merchants to accept stable coins, cryptocurrencies or whatever you want. I love it. I also see that you guys are focusing on what's said on your materials, comprehensive asset support that would cover RWAs like tokenized bonds and stocks. What is your strategy to tackle the RWA vertical? Yeah, it's just a part of the wallet which we have because we have crypto, you have memes, you have a lot of tokens which we accept and real world assets is the next big thing what will come besides NFTs.

So that's what we are onboarding at the moment and also the big parties are like BlackRock are focusing now on the real world assets. So that's also a way to get them into your wallet. You must store them somewhere. So that's what PayExcept is all about. So what we do is we bring the regulated yield generating assets into the DeFi ecosystem, which we have. It can be through partnerships, but at the end, we want to support the tokenized real-world assets like treasury bills, like copper bonds, real estate back tokens, people can put

artwork into pieces and put it on sale as a real-world asset in PayExcept. So that's what we all developed in the last years and maybe in the future there will be also more new asset classes to integrate. So we just want to get the newest innovations into the wallet. And I think also if you look in the near future, why not tokenize companies or stocks like Apple, like Tesla, you name it and have it all in one wallet. So that's our vision which we have with PayExcept. Are there any specific AML or KYC controls in your infrastructure that allow you guys to scale to enter verticals like tokenized stocks or anything like that? Yeah, we need to be apply on the regulations, but also need to have the license

because you cannot just do security tokens, which are real world assets. You need license for that. So at PayXcept we, at first level, we are looking for our smart contracts, which we are developing. Are they audited? And we do it with companies like Surtex

to make sure they are really secure and they are not getting hacked or, the assets are away, that we want to prevent. So we hire really top level audit companies to make it very secure. Also AML and KSC protections are there. And for transactions, we integrate artificial intelligence to look at are there strange things happening?

Is there somebody which wants to hack the system? That kind of thing. So that's all in place to make sure we meet the global standards. On the license level, we are now busy for the United States because we also opened our US headquarters three months ago to have a money service business license. In Europe at the moment, we are busy with Lituana to have a VESP license to offer our services.

So we are in the final stage to get that. And I hope at the end of this year, we have these licenses. On the long term, we want to have an e-money license so we can also give bank accounts to people from our app. And that's where the nice things are happening because MoonPay is an option now to onboard on-chain or off-chain. But if you can do it all in one application to say, okay, I have 1,000 USDT in my wallet and with a click, I have it on my bank account. So that's a huge advantage of the platform which we are building today

and regulations and compliances are part of that to have it very good security and integrated. And you guys recently just announced your Series A which was led by Mach 5. I assume that was part of this expansion to be getting all these licenses and build out the technology. Did you wanna talk a little bit about that series A investment round? Yes. We did three years of development. We built our own infrastructure,

built out the blockchain, built out the app, everything we did by ourselves. It was a three years development. So from a technical side, we are up and running. We have everything in place. And now we are into the major ground growth phase to expand into the markets in Europe and into the United States.

And that's why we opened last month our series, which is led by Swiss company, Mer5, to get this all up and running, to finance it and to expand the company into the markets because it's the next stage. It's nice that you have the technology, but it's also nice to have the community, the merchants and the users. You need to do marketing for that and you need us to have big deep pockets because components are banks which don't like what we are doing because we're taking their customers away. We do it without Visa and Mastercard because we have our own blockchain which can replace them. So it's not a small

thing what we have and for that we do our series at the moment to get enough finance to take on and to do the global expansion at the moment. As part of that expansion you guys also talked about upcoming features like invoice billing or subscription payments. Do you have anything else that you'd like to highlight on your road map that people could be excited for over the next coming year? Yeah, on the website we have already a big roadmap which we place, okay, this is what we have done in the last three years and this is what we are going to do in the upcoming three years. So we at PayXcept, we are more than just a payment wallet.

We want to do more. We want to have everything in the wallet and on application. That's why we built the drills for it by combining crypto debit cards to have a multi-chain wallets, tokenized real world assets. And also we want to integrate artificial intelligence because we are thinking it will be a huge role to say to the artificial intelligence agents at PayXapt. Hey, I want to go on holiday.

I think about this country. What do I need to open? How many money I need to save for that. So there's all unique features which we are building at the moment and which are on the roadmap and a lot more because pay to tap payments at the moment. If you look at banks, it's mostly business to business. And what we are doing is we are making it available for everyone which have a mobile phone. So if your neighbor have a phone with pay, except that you have it, you just

can make a payment, whatever it is in fiat or crypto. So that is what we really want to integrate to become that application, which is doing it all. to become that application which is doing it all. And for the long term, we want to become a full Web3 new bank. So let's say a RevLoot, but then in cryptocurrencies to support everything what's possible on the digital asset side. Wonderful. I appreciate you for joining today. For people who are tuning in, make sure that you click on the PayExcept account up here.

I've posted a tweet of theirs up into the Nest. In their bio, you can go directly to their website, make sure that you're following those official links. But Chris, as we're wrapping up here, is there any specific call to action that you'd want listeners to do? Whether it's download the app, visit the website, join the community or anything like that? Yeah, I think the best is to go to the website,

which is payexcept.net. There you have a button to the Google Play Store to download the app. All information is there for personal use, for business use to get more about what we are doing for the device space. So everything is there. So yeah, I would suggest visit the website and learn more about us.

And I'm happy to hear more from the community about what they think about PayAccept. Wonderful. Well, it's payaccept.net. Again, their account is right up there in the nest. So if you want to click their link directly, just go to their profile there and make sure to give them a follow. But Chris, I really appreciate you joining today and introducing PayAccept. Any final words?

Yeah. Thank you for the invite, invite of course to be on your show. And yeah, I'm looking forward for building out the application to be on more shows of IBC Groups. So yeah, Seth, I'm happy to be here. Well, kudos for everything that you guys have been able to build thus far. Congratulations on the Series A. I hope that we get an update about you guys getting successfully into the iOS App Store, because I know that's no small feat. So congratulations on that.

But for everyone who's tuning in, thanks for tuning in and we'll be live tomorrow again at 10, 15 AM Eastern time for Crypto Town Hall. So with that, everyone have a great day. Thanks, Chris, again for joining.