The Wolf Of All Streets - CZ can't return to UAE, Ark sells $5.3M of Coinbase | Partner: GoldDAO

Episode Date: November 28, 2023

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Hey man. How's it going? Your excuses are worse than my dog ate my homework. Every time my Wi-Fi cuts out at least once a week my Wi-Fi cuts out and you say you're based in the US.

I'm in a random island that has no extradition with the US. Yes. It's called Florida. Yeah, sure. How are you? Segway to what?

Oh, to... Yeah, it is a good segway. Now that we're talking about extradition. Yeah, exactly. CZ is still in the US. He's not allowed to leave yeah i think that's nonsense man like i it's i guess we'll talk about it more but seems like complete garbage the guy completely turned himself in settled a deal the expectation

was that he could go home and they're just gonna keep him here but he can do whatever he wants just in the u.s i don't really get it yeah uh is carlo yeah carlo's up lawyers up as well guys what what do you make of this yeah i mean i don't i don't know that if he could go to somewhere that has an extradition treaty like if he's possibly facing sentencing and he's probably got hundreds of millions of dollars somewhere and he's going somewhere without an extradition treaty i mean it's not blasphemous to me to say that's not okay. But, you know, I agree with your sentiment. Like, he should be able to see his family.

And it's the expectation, I think, at least from what was reported, was that, you know, he was turning himself in. And amicably, they made a deal, and he knows he's coming back. He already came to court of his own volition in the first place. Just seems like overkill. Look, it's up to the federal judge. The government apparently, for whatever reason, didn't work out the terms of his release in the plea agreement. And they proposed a release plan and the magistrate judge approved it, and then the government decided that that was not restrictive enough. I agree with you, Scott. He

came of his own volition. He could have just cooled his heels and hung out in the United Arab Emirates, where it would have been difficult to extradite him. Also remember that under the court's order of release conditions, if he were to not appear, that would trigger a separate criminal offense for violating his release conditions. And I don't think he would jeopardize his future in that way. Yeah, that's exactly my take, lawyer. Yeah, it's just, you're all all right it's just discretionary right so the judge said you know no and that's just you know all these factors are important but there's a lot of discretion there and the judge said i'm not sure you'll come back if you're sentenced

and so no but hold on is this final now is this like final no it's not in front of the court correct what happened is the magistrate judge who took the guilty plea and set the release conditions entered an order. The government then filed a response to that order. That goes to the district judge. The district judge is going to be the sentencing judge in this case, and they have the ultimate say in everything. So the district judge issued an order this morning, or I think it was yesterday afternoon, late afternoon, saying that he is going to revisit this and take a close look at all of it and make a final determination. So it could get set for a hearing if the judge wants to hear more evidence. But according to the words of the judge's order, having considered the briefing

and the files and pleadings herein, the court determines it will review the decision of Magistrate Judge Brian T. Brian A. I can't even begin to pronounce that name with all due respect to the judge, Tushida, I believe it is, permitting defendant to return to United Arab Emirates pending sentencing pursuant to conditions of his appearance bond. So he has stayed that condition of release pending further review. OK, so it's not final. It's not final. When initially when CZ pleaded guilty, they were talking about a maximum 18 months in prison. And then yesterday, I saw something that came out from the DOJ that the DOJ is actually seeking like 10 years in prison. So maybe just some clarity as to like what the

maximum is at the moment. Happy to clarify, Rand. So there's guidelines for these offenses. And I've been involved in these unlicensed money exchange cases under 18 U.S.C. 1960. And they do carry a maximum penalty of five years. He has multiple counts in the information that he pled to. Then you look at sentencing guidelines. And the estimated guideline range, according to the plea summary that was released, is 18 months. But remember that the judge has full discretion to hear argument from the government anywhere up to

the statutory maximum. So that's the maximum that the government is proposing that could happen here is the 10 years. The 18 months is the estimated guideline range, and it'll be ultimately up to the judge where the judge decides to land on all of this. Now, I want to understand something. So CZ obviously had a big decision to make as to whether or not he's going to come back to the USA or continue to live, should we say, on the run, right? He had to make a big decision. Did he, is there any way that before he made the decision, he had closed door meetings with like, I don't know,

the prosecutors or whatever else where, where in those meetings, they said, look, if you come back and you plead guilty, then, you know, we will, you're not going to serve more than, or we will only push for X, Y, Z? Or is that not how it works? Is it all completely transparent? There's two options when it comes to federal sentencing. A defendant, and to answer your question, yes, I do believe there were definitely closed door meetings between his defense team and the government that led to this ultimate decision for him to not consider resisting and staying in the UAE and resisting

and seeking extradition back. But there's two ways you can resolve a case in federal court. One is by way of a plea bargain agreement where you have a guideline range. And then there is an 11C1C plea agreement where you can plea to a set amount of time. You can actually sign a plea agreement contract where you agree to 18 months. Both parties time. You can actually sign a plea agreement contract where you agree to 18 months. Both parties have to agree to it, and then it's up to the court to ultimately approve it at the time of sentencing. That option doesn't appear to have been elected in this case by the government. They instead wanted to plea him. Now, he did get benefit of the bargain here because they could have charged him with much more serious counts, like money

laundering, which would have increased his guidelines. But I think given the size of the bargain here because they could have charged him with much more serious counts like money laundering, which would have increased his guidelines. But I think given the size of the forfeiture and fine that he agreed to pay, he did get the benefit of that bargain to limit his exposure at sentencing. But there was no written agreement that I am aware of to a set amount of time. Okay, fair enough. Fair enough. Scott, Mario, any further feedback here? Sorry, one more thing, I'm finding this so insightful SEC, so CZ still has the SEC on his back Is there a chance that the SEC uncovers more criminal findings, number one and number two, the SEC filed

or wanted to file something that was going to remain secret. I don't remember what the name of that process is called, but they said, we want to file something that actually remains secretive. Do you think that that had anything to do with the charges that were brought to CZ? I don't think so. I think the SEC wanted to file certain things under seal because they did not want to impede the criminal investigation that was going on. And I think there will be finality as far as the Department of Justice case goes, because generally in plea agreements, the government agrees not to prosecute a defendant for any non-tax related crimes that are relevant conduct to the offense. So I think this plea agreement covers all the conduct the government wants to punish him for, unless new stuff arises as far as future crimes. But I think for the past acts he's committed, I think that this plea bargain agreement will bring closure to his U.S. criminal charges, and then it'll be up to the SEC to whatever decision they want as far as sanctioning him and Binance. Okay, so probably he'll get a penalty from the SEC, probably they'll

pay another fine at some point, a civil fine and settle it, right? That's like, I mean, I know you can't tell the future, but it seems like that's the route that it's going, right? I can't see much logic in continuing to resist on the SEC side, especially given the devastating blow that Binance has suffered as far as their ability to do business in the United States. I don't know that there's much worth to fight about anymore. So it's very possible they may just reach a compromise here and agree to a sanction. Wasn't a big chunk of the SEC case dependent on the idea that there was commingling of funds or that there could be a level of insolvency or that Binance had done some things in that direction. And DOJ pretty

much clarified that that wasn't the case, even when CZ tweeted. Yeah, I mean, that was definitely a driving allegation in the SEC's complaint. And DOJ doesn't appear to have gone down that road. I think they were more focused on the avoidance of anti-money laundering measures under the Bank Secrecy Act and the ignoring of users in the United States bypassing through VPN. And the company's sort of not necessarily cracking down on that, which was the drive of their criminal prosecution. Right, which were historical actions and things that nobody was really even alleging are currently happening at this point anyway, seemingly, when they were in a less regulated environment,

now obviously have become under a spotlight and probably more compliant. It just seems like the SEC case at this point holds a bit less water. And if the SEC's goal really is about what Americans can do and what's allowed in the United States, they outright killed Binance US just with the allegations in the first place, and Americans aren't using Binance. So it seems like there's not much there at this point. Not to mention, given, what is it, five years of very strict oversight of Binance by U.S. officials, I can't see any more greater consumer protection than that. I mean, they are under complete transparency now and under total requirement to comply and open their books to the United States. Right. Do we think that by anyone here,

Rand, maybe you, do you think that Binance US has any future? I mean, from what I've seen, they have no banking relationships, the volume's gone, but could it come back? I think it's actually, I think that actually, as part of the, what do you call it, as part of the conditions, Binance US actually has to shut down. I think that's actually, that was actually one of the conditions. So I think it's actually- Yeah, it wasn't clear if it was Binance US shutdown or that quoteunquote binance couldn't operate in the united states if there's still a belief that there's separate entities so when i read it and i don't remember how i read it because it's a couple days ago i think i read it as if finance has to leave the u.s so they can't serve

u.s customers i don't know maybe maybe right maybe it was that binance international can't serve u.s customers yeah i don't know if anyone has clarity right. Maybe it was a Binance International concept of U.S. customers. Yeah, I don't know if anyone has clarity on that, but I'll look deeper into that. But it was, you know, they killed Binance U.S. without due process or proving anything simply by making the allegations and then having the banking relationships cut off. That's fine. That's fine.

I mean, that's pretty much like if you think about it um it's very similar to like um like the bank the banks if you think about the u.s banks the u.s banks are really strong in the u.s and then if you think about the eastern banks like hsbc hsbc just isn't that strong and it's you know you can just you break it up into countries and territories and you know some organizations are better than others in certain jurisdictions and that's just the way it's going to play out for crypto as well yeah i i understand that i just think it was somewhat unfair that with unproven allegations in the civil suit they effectively just murdered the platform entirely but maybe that's my uh

perspective i i think that you uh deserve due process Show me the man and I'll find you the crime. And I'll find you the crime. That's it. I mean, Binance, they can't allow Binance to operate in the United States. Hold on. That's unfair. Can you hear me?

Yeah, you can hear me. That's unfair. With all the information we have, we can't say, find find me the man find me the crime also i wonder all right can't hear me scott tell ryan tell ryan you can't hear mario i think is that correct no i can't i can't hear mario just take me down this platform out for fuck's sake yeah so what i was saying is just very unfair what ryan said i was gonna go to arthur hayes as well so i'm glad ryan went to it um and as i bring up ryan let me just quickly give a shout out to the sponsor we've pinned their tweet at the top and it's a very

simple use case one that makes sense essentially tokenizing gold gold's been doing really well over the last few months gareth i'm not sure do you do you invest in gold gareth or purely crypto and equities no i'm a big investor in gold, Gareth, or purely crypto and equities? No, I'm a big investor in gold, especially based on what I'm seeing in the charts, based on basically the same reasons why people are bullish on Bitcoin. I'm very bullish on gold overall. So again, the printing presses, whether it's in a year or five years, are going to have to be started up again. And while Bitcoin is more of a speculative alternative to, you know, to safety,

the digital gold, if you will, but I think that gold is just kind of, it's been the store of safety for thousands of years. So I am a big investor in gold. Your thoughts and anyone that wants to check out gold DAO, I'll talk about them in a bit. But your thoughts on tokenizing gold, democratizing access to the asset? Yeah, I think it's definitely a way to do it. I don't know a whole lot about the inner workings of it. But honestly, any way that you can get the average person out there to have more access to buying or diversifying their own portfolios, I think is a no brainer. Sorry, we're bringing them up later.

Yeah, we're bringing them up later yeah we're bringing them up we're gonna get them in yeah it's really interesting i want to ask yeah we're gonna ask questions yeah go ahead sam i was i was asking david's questions go around i have a couple of thoughts regarding tokenizing gold i've thought about it long and hard and i've often asked myself the question as to whether tokenizing gold is a good thing or a bad thing and so this is what i realized there's two reasons there's three reasons to tokenize gold is a good thing or a bad thing. And so this is what I realized. There's two reasons. There's three reasons to tokenize gold.

The first reason to tokenize gold is to allow easier access for, for on gold than having to buy it via an ETF or via a U S market. That's the first one or a market. The second reason to tokenize gold is to get access without having to do KYC. So some people, you can buy tokenized gold on the DEX without doing any KYC. The third reason to tokenize gold is to be able to trade gold specifically on weekends when the gold markets are actually closed. So if you look on the weekends and you want to trade gold and something happens on the

weekend and you want to put your whole portfolio into gold, I think it's almost impossible to do it. But now with a gold backed token, that's the one avenue where you can actually be in trade in and out of gold in times when all the markets are actually closed. And I don't know exactly what the time zones are, but there's a lull every weekend where markets are actually closed and you actually can't trade gold. That's the thing. I mean, that's a good case for tokenized, obviously, stocks. I mean, basically anything tradable. Sure.

So that for me is the... But why, Baran, why do you think hasn't gained... So this is one of the most obvious use cases when it comes to the blockchain. Why do you think hasn't gained traction until recently? Because I think that there's major risks when you tokenize gold. The biggest risk is if you tokenize gold, what you want to know is that there's a proof of reserves for the gold that's being tokenized somewhere.

So if the company tokenizes a billion dollars worth of gold, you want to make sure that they actually have got a billion dollars worth of gold, number one. Number two, you want to make sure that the company can't lose. If they have Number two, you want to make sure that the company can't lose. If they have got gold, you want to make sure that the company can't lose the gold. So, you know, there's one thing about governments seizing gold that's sitting at a central bank or somewhere like that.

But there's another thing about, you know, a government swooping into a company and just saying, you know, we believe in asset and ethically, we're therefore taking all this gold and we're seizing it. And that can happen, right? We've seen that. And so I think that one of the biggest risks with tokenized gold is that the government says, we don't like what you're

doing. We come in, we freeze all your gold. We've not got your gold. Now fight us in the court for the next hundred years. Good luck. Have a nice day. Alex, do you have thoughts? Yeah, hey guys. Alex, before you go, just do sex. I was talking to myself. Ryan, so essentially

the custody problem, and that's what I want to ask the guys about before we go to Alex. The custody issue is your main, your only concern when it comes to tokenizing gold because I just cannot see any other reason why the use case doesn't make sense. Custody, do you actually have the gold that you say that you have and how well

can I trust it? And two is regulation. Is the regulator coming in and saying, I'm seizing this gold and tough luck and then you can go about it. We'll ask the sponsor those questions later in the show. So the sponsor's gold dial with pinned

their tweet at the top. If you want to check him out, I would appreciate him partnering with the show. Alex, go ahead. Sorry. Yeah, no worries. Thanks for having me. You know, I think when it comes to tokenized real world assets, right, where the tokens themselves represent an IOU to an

off-chain asset held elsewhere, I think there's been obviously this is something people people try to do for years at this point. I really believe there's quite limited demand today. I think the market hours thing is interesting. That's a good point, I think, Ran. Outside of that, I don't think there's any advantage for the most part to holding, say, a token. What about, Alex, but what about democratizing access? Anyone can buy could buy the it just becomes a lot easier without having to go through the existing banking banking system yeah i mean i think with all the tokenized assets it's the same thing with

like you know treasuries on chain like you're servicing a market that has say a metamask wallet and that's a it's a it's a market it's a global market there is perhaps easier access particularly outside you know advanced economies to you know downloading a metamask and getting some bitcoin or usdc or something like that or eth and then using it to access some other financial product but it's that that's a small market like so so my point is is like to absent the adoption of regulation that allows this at scale and to interact with the traditional financial system all the tokenized products are effectively just catering towards crypto wealth right or or global so so there's some positive there but it's yeah small on the flip side though yeah i don't

disagree necessarily on the flip side though we're seeing pretty big uptick in activity on real world assets being tokenized on private blockchains between these institutions. Right. So there's sort of seemingly a gap between those two. You're saying if you tokenize it, it's really for the crypto audience. But then there are, you know, JP Morgan Onyx and BlackRock settling with Barclays, you know, tokenized money market. There's real use cases. I think that that's just not necessarily investable from the public side. Yeah, I think if we rebuilt the traditional financial system from scratch, we would absolutely use distributed ledgers and blockchains. There's no doubt in my mind that they're better for settling, you know, trades and clearing. But I think, you know, if you look at

some of those examples, they're mostly innovation theater today, in my opinion, right? Like, there's really no reason that BlackRock or, and JPM or Barclays and JPM need to use Onyx, right? And I think if you talk to the folks who built Onyx, they'll basically say that, that it's sort of a test run for one day, if they're able to actually open the platform. I mean, I think there's positivity there from a technological standpoint i just think you know primarily because the traditionals can't really do it yet um i just don't like i think the etf wrapper is effectively the same as tokenized gold like you know if you look at the the spider gold etf like it's just a matter of whether you have access to that then i can't trade the etf when the markets are closed and that's that's three days of the week two and a half days a week yeah that's true like i closed. And that's three days of the week, two and a half days of the week.

Yeah, that's true. Like I said, I think that's the main difference. And plenty of people can't access it. Yeah, and plenty of people can't access it. Alex, I tend to agree with you that most of this institutional, quote, adoption is really just a test just in case, but it is interesting to see the names and the size of the institutions that are trying it,

right? I mean, you have to pay attention when you see JP Morgan, regardless of what Jamie Diamond says, utilizing Onyx, Franklin Templeton, tokenizing treasuries. It's only $370 million worth so far, but that's real. Now you see an announcement between JP Morgan and Apollo, I believe yesterday. I mean, these are literally the most reputable largest institutions on Wall Street, at least they're dipping their toes. For sure. I mean, if you look at Franklin Templeton's thing, right, like that's not democratizing access, all of that is like fully KYC'd on chain. So there's, there isn't like wide access. Let me just give you a quick story about this thing called the Wall Street paperwork crisis in the 60s, which is what resulted in the creation of centralized clearing in the US, which we now know as the DTCC. So after, you know, World War Two, and the baby

boomers, there was a massive boom of investing on Wall Street, something like, I forget the exact numbers, but an enormous amount, and they were still, they were still settling bilaterally, and there was no netting, and they were using paper. So for example, with no bilateral netting, like if my broker sells 100, you know, shares shares of IBM and your broker buys 100 shares of IBM from me, rather than just netting it out to zero and updating a ledger in some location, they would literally shuttle my broker's 100 shares in physical form across Wall Street, and then your broker would send another 100 back. And there was so much activity that literally certificates were getting dropped in puddles and left on desks. And it became such a hassle that

the New York Stock Exchange used to close every Wednesday at noon. So literally four hours of trading were cut out of the trading day just to give broker-dealers the opportunity to catch up marking their books and keeping their ledgers intact. It was such a problem that 25% of broker-dealers went out of business during this time simply due to paperwork problems. And that is what led to the creation of a centralized intermediary to handle this. We would have preferred, of course, to act peer-to-peer. That's what we did. But we didn't have the technology to make it possible. You fast forward to today and you realize, wow, we really do have that technology to make it possible. That's why the DTCC wrote a paper in 2016 arguing that they themselves should be

disintermediated by distributed ledger technology. But it hasn't happened. And that's because 50 years, 60 years of regulation and plumbing has gone into making this the current system. So you just have to imagine how big the hurdle is from a technology adoption standpoint, a switching cost standpoint, and a regulatory standpoint to actually get us beyond these pilot phases between Apollo and JPM and stuff. And again, keep in mind, Christine Moy is head of digital assets at Apollo. She ran Onyx at JPM. So this isn't like, it's not like they randomly came up with it.

Yeah, like, so these are early pilots. I think it's very bullish for the adoption of blockchain. I hope that these private enterprise ledgers eventually, either through a bridge or some other thing, like connect to the open internet of blockchains. That's not in sight though today for the vast majority of these things. Patrick? Yeah, there's a couple other benefits to tokenizing these assets,

as long as they're on public blockchains. And the first is that you can actually turn non-yield-bearing assets into yield-bearing assets. So it opens up the possibility that eventually you could have tokenized gold and you could lend it out or you could somehow be a market maker for it, some sort of automated market maker, which would be a clear advantage over simply holding gold because then you're actually earning yield on it. And the other advantage is, again, to use in DeFi applications, but as collateral to take out an instant loan. Yeah, the existing financial primitives in DeFi are incredibly powerful. So

like there's clear reason to move whether it's gold or other assets into, you know, a financial ecosystem in which open source software developers are building, you know, these building blocks, like that's a huge positive. I just don't think we're very close, unfortunately. Yeah. And even on the private blockchains, just speaking of JP Morgan Onyx, the same example, not that I'm pushing for this by any stretch, but one of the main things when they were asked about why they did this, you know, that first transaction of that money market fund between BlackRock and Barclays was a cheaper, faster, but also exactly what you described, which was even for them privately to be able to use it quickly as collateral,

which is really, I think, compelling for larger institutions. Mario, this wasn't even supposed to be our main topic here, but I'm really actually enjoying it. I'm also enjoying it. It's something that I haven't thought, haven't thought I've spent some time thinking about but it's actually very interesting very interesting to hear it yeah

Ryan you were you were talking about Arthur Hayes I want to talk about that one his comments on on CZ's treatment and he made comparisons to can't remember which bank

that got fined less they did worse than what Binance did and the CEO kept his options and retired in peace i can't remember the name of the bank i'll mention this it's called every bank in history good job and they made comparisons to 2008 they were got brian and then kristin i think it was wendy wendy crypto wendy wendy oh just give me one second um hold on um hold on a second. Wendy.

It's HSBC. HSBC and Goldman. Yeah, so HSBC, Goldman. I think there was one more. I'm just going to check the article. But the point is the same, though. He's talking about how crypto is treated very unfairly. But this goes against what we've been talking about,

what other panelists, other lawyers have been saying, that it could have been a lot worse for Binance, could have been a lot worse for crypto. So which one is it? Yeah, it's interesting. I do think that to some degree, maybe like there's a bit of unfair treatment, but I do think the point that we made and kind of concluded, as you said last week,

was actually that this, what happened here with Binance was very similar to the kind of settlement you would have seen for a Wall Street bank for something similar in the past. Would they guess for the CEO as well? That's what I was going to say. I think maybe the unfair treatment is of CZ and not of Binance

as a whole. Yeah, okay. Fair enough. Because CZ was directly involved. So the guy, Arthur Hayes, the guy, Arthur Hayes says, did former Goldman Sachs CEO Lloyd Blankfein get the same treatment as GS under his reign? Helped former Malaysian Prime Minister Razak and financier, whatever his name is, to steal more than $10 billion. Jesus, that's the one Malaysia development scandal. But Goldman Sachs sits in meetings with the – Golden Sacks is making policy.

So it's very different. Kristen, I thought you were jumping in on that particular point. Kristen? Yeah, sorry. I don't know if you even want to talk about Binance that much anymore, but I had a question for Carlo and for Lawyered. Go ahead. Yeah, so I've just been surprised at kind of, I hate to use the word sloppy, but it seems like that the plea agreement and the consent order, there were discrepancies in terms of

how long the monitorship would be imposed. Like it was five years, I think, under the plea agreement and three years under the consent order. And then when this comes out that they haven't agreed in advance to the travel restrictions, I just question, like, was any of that intentional? Like I was talking to John Reed Stark the other day about, did they deliberately not address this travel restriction, um, in the plea agreement because they knew he wouldn't agree to it? And so I just wanted to get your take. Like, I'm a tax attorney, so defer to criminal attorneys, but there's nothing that says they couldn't have agreed to the travel restriction in the plea agreement, right? Well, you know, generally in my experience,

the way that this usually goes down is when you have a defendant that's agreed to waive grand jury indictment and plea to an information, first step is you go to court and you get arraigned on the information. So he elected to go to court and appear on this charging document and enter a plea of guilty. The court then addresses the issue of release on conditions pending sentencing. So I don't generally see an conditions in the plea agreement, because now those are more areas that could later be attacked and chipped away at. There's two things that happened in that court appearance. One is he appeared on the charges and pled guilty. The other is the determination as far as pre-trial or, in this case, pre-sentencing release conditions. So I think it was probably something that was definitely discussed. The monkey wrench

in all of this was that the Tree Trial Services Report, which is done by the Probation Office, apparently, from what I read in the filings, had recommended this restriction. But the court is free to either accept that recommendation or ignore that recommendation, and the court listened to both sides and made its decision. Now it's being obviously taken up on further review. Yeah, it's interesting, too. I forgot about that, and I read this morning that I think the government came back and said, we didn't really say that the pretrial or suggester advocated it, but they recommended it. But yeah, it would be up to the court's discretion. Do you think it's notable that there's this discrepancy, like John Reed Stark and I were discussing, there's this discrepancy

between the terms of the monitorship, three years versus five years. It seems like they would have had this really buttoned up. I mean, given how long this has been in play, it just seems odd to me that there's this discrepancy. And I assume that the monitorship would last the five, the longer of the two. I would have thought the longer of the two as well. I know that there was a lot of confusion. And I confess, I was initially confused because I did see reports of three years and I saw reports of five years. I think it's five. Can we all agree that it's basically five and that there was five and somebody aggressively corrected me yesterday that it was three. So I think we're still in the not quite sure camp. There you go.

They're going to say it's the longer of. I mean, that would be my guess. Ron? Yeah, I was just going to weigh in from a D.C. side here, at least from what we're seeing on the buy-in situation, because all their lobbyists are gone now. There's a buy-in to U.S. folks, but they hired them, obviously, during the SBF explosion literally a year ago. And SBF wasn't wrong when he said that there was a reason why CZ couldn't come to D.C.

And it's because this has been going on for about two or three years now. But one thing, at least on the topic we were just talking about more, like their monitoring of Binance itself. We've been talking to a couple of folks over at FBI, DOJ, and they have admitted that Binance is just a honeypot when it comes to illicit finance, and they would rather have it open in terms of being able to monitor all those transactions for just finance syndicates across the spectrum of the illicit finance space. But there's actually pretty much kneecapped it

from a U.S. side for quite some time. So I'm curious to see how it goes on. But Binance has no friends here in D.C. on the Republican side, Democrat side, Congress agencies. But the law enforcement folks we've talked to, it's pretty interesting to hear that they want to keep Binance open

solely for just monitoring all the illicit transactions flowing through. So then the implication there, Ron, is that you said it is a honeypot, not that it was a honeypot, right? Because I think that there's been a bit of assumption that a lot of this happened in the past and was not actively happening at the moment. And then I guess there's also needs to be differentiated whether this is known to Binance or it's just something that's happening sort of on the platform.

I like your first question though, Scott. Ron, if you can focus on that first part of the question. Very interesting question. Is it still a honeypot? Is it recent transactions, recent customers, or is it just the past? It seems to be recent, especially when it comes to the China-FedNal linkage that Elliptic highlighted, the Hamas one thing that's been happening. I know Tron's also involved in that as well, but they've been monitoring. Uh, and again, I know Tron's also involved in that as well, but, um, uh, they've been monitoring this for quite some time. Uh,

and they think that keeping this open, we'll still have a lot of folks go through this on the illicit side, unless they pivot to another exchange or something to that effect. Um, but, you know, they could have gone a lot stricter and a lot more heavy handed on this. Um, we'll see if that happens, but,. But from the law enforcement side here, they decide to keep it up more functioning and just to keep this at least monitoring the current transactions are still going through and they're aware that folks are going to pivot to other exchanges. But it's been it's still a honeypot for them, at least right now.

Then the second thing is the implication there that finance is aware that these transactions are happening, or is this sort of – Yeah, and Ron, let me get to another question because, again, I spoke to myself. And you said that funds will just go to other exchanges. What does that all mean for other exchanges? Could we see the DOJ, the SEC announce similar action against smaller exchanges, or they've made an

example of the big ones and they'll probably wait for the new ones to change their ways? So they're definitely trying to make an example, at least on the illicit client side of things. But as we're seeing through other, you know, enforced actions from other exchanges, again, those are mostly focused on securities versus commodities, you know, illicit securities, unregistered securities, what have you, with Kraken, Coinbase.

I'm sure there'll be several more other exchanges getting sued by the SEC in a matter of months. It seems to be an all-out war here and not slowing down anytime soon. But they are aware that other folks will go to other exchanges. Again, they largely are offshore. And we've seen sanctions played from the Treasury Department to other offshore exchanges. Most notably, Hydra was one that got sanctioned recently.

There was also the Bitsalato one. Everyone thought that was in Binance last year and, or this year, I guess in February, but it was actually Bitsalotto, which no one really heard about in DC. Um, but they're trying to send a message obviously to the rest of the international exchanges that a DOJ, our balance can extend past the United States and we are willing to hold you accountable and also potentially detain you. So, um, it,

it is definitely a warning shot to folks who are looking to maybe onboard some of the more sketchier folks, even if they are offshore with the night saints. That's really interesting. Yeah. I think we've butchered the story. No, I was going to ask about why the hell you put the arc. Did you change the title? No. Arc selling $5 million worth of Coinbase.

Why is that newsworthy? Like they sold Coinbase, they bought Robinhood. Why is that a big deal? Coinbase is doing well. Yeah, Coinbase actually made an eight-month high. Yeah, response to Binance. I think that this is a technical trade by ARK. I think that Cathie Wood has been outspokenly bullish, obviously, about Coinbase and very much so about Bitcoin.

Has some of the most hyperbolic price predictions for the next five, 10 years of anyone on Wall Street. She's probably the most bullish person you'll find. But they trade. Right. And I think if you look at Coinbase right now it just hits uh 18 month high around 120 i think i'm not looking at it right now 119 121 somewhere in that ballpark and it's massively you know overbought if you're looking at technical indicators it's just had an incredible run so i don't think uh anyone should be surprised that kathy would would take profit it's a good

lesson for people though you know in viewing things through a trading lens versus an investing lens. As an investor... You could still... Sorry, go ahead. Yeah, because she still holds... It's not like they sold their entire Coinbase position. They're taking profit on buys that they made down below

and still believes that Coinbase will go much higher eventually. But she's actually trading... It's a reminder. As the market recovers, you can still be but but it takes some profits off the table i think this is the the the lesson that matters there's something that people forget yeah you can see it's got it peter is peter at it i just thought peter lifted his mic go ahead yeah i would also just mention that they've actually had outflows again in the past few weeks so they're still very close to the smallest number shares outstanding they were getting inflows a couple of weeks ago. That's returned to outflow. So she

made just about ARK. Sorry, Peter, are you talking about the ARK specifically or coin? Yeah, the ARK fund. She also has to manage those as well. So presuming she had outflow, she had to sell something. So maybe she chose that as well. So it's a little bit different. And it is a little bit interesting to me that despite kind of this resurgence of the Magnificent Seven, despite Bitcoin and all these other things, ARK shares outstanding are still near their all time lows. So that fund itself really just hasn't attracted the buzz that it once had. So I think she's going to have to manage that. I mean, it was absolutely annihilated in the drop. I mean, one of the worst before, you know, I think that's one of those that just overshot to the moon. I mean, one of the worst before, you know, I think that's one

of those that just overshot to the moon, but the correction then was so much more dramatic. But I think that Kathy, to some degree, just really went from the ultimate hero of Wall Street to just absolutely, you know, being beaten down and the impression of people of her just being at all time lows. I mean, really, you know, she took a real beating.

And I've got to admit, I've actually been long arc for the first time in the last month or so. So I've been buying low forties or whatever, and it's a name that I hated way back when, but it feels like if we're going to get some sort of resurgence of crypto, if the IPO market can come alive a little bit, that fun should actually do pretty well so gonna keep an eye on it yeah so mario that's the reason i think it's

just any time you see someone selling something that's doing well it becomes somehow newsworthy and people track it very closely yeah can you link this to a quick market update i know there's not much happening today but just a quick overview i think we should do in every space gareth dropped out but maybe you patrick peter and others could uh but just a quick overview. I think we should do it in every space. Gareth dropped out, but maybe you, Patrick, Peter, and others could give us a quick overview. I'm not sure if Ryan is still here. Can you hear me, Scott? Yeah, I'm just opening up. You've caused me to actually stand up. Oh, good. Peter, go ahead. Go ahead, Peter. Peter, go ahead. Perfect. Again, I think we're going to see strength across markets coming into year end.

What I think was really telling, though, last week when NVIDIA announced earnings, the stock sold off, but the markets actually did reasonably well as a whole. So I think you want to start looking, and I don't know whether this is going to apply to crypto, but certainly I think it's going to apply to the regular market, the laggard. So you're starting to see the Russell 2000 do well. You're starting to see the equal weight S&P and the equal weighted NASDAQ outperform the market weighted indices. So I think you're going to see a little bit rally into the laggards in regular markets into year end. I don't know whether that's going to translate into crypto where you might see some buying into some of the less interesting names. But it does feel like there's some speculation there and people are putting their money to work and they're trying to capture a move in the names that haven't moved so that's what i'm looking for in the year end i think a lot of hedge funds are very caught very long the kind of big well-known names short everything else and i think that's

starting to get corrected a little bit so look for that to squeeze into your app that's kind of my view aren't peter aren't a lot of them also still just sitting in cash and praying for a dip yeah and it's looking like that dip's not going to come i think so still just sitting in cash and praying for a dip? Yeah, and it's looking like that dip's not going to come, I think. Isn't that usually what happens? Yeah, I feel like there's a lot of people who are just missing it, right, completely, and have missed the run all around because of the bearish, overwhelming bearish sentiment that this correction has to come.

Eventually will, but we'll see if they're liquidated before it does. But Mario Rann was pretty like a good part. I think last week I had to justify being long, kind of quoting, you know, Wayne's world. So I thought that was immature. And if this keeps going, I'm still probably going to be recommending long and I'm going to have to go down to Beavis and Butthead level of maturity. So it feels wrong. There's so many reasons to be short markets and risk, but I think that's just the wrong trade right now. I think we're going to get the squeeze into year end. And for Rand, you were pretty aggressive about thinking this was a good time to sell as of yesterday, though, right? It depends what side of the bed Rand wakes up on. So yesterday was a bad time. I also think it's really important to attach a time frame. I think it's really important to attach a time

frame, right? Because you can remember like two or three weeks ago, he was saying in many where, you know, Pepe is running, this is the end of this run, right? And so that was the end of it for a week, right? As an investor, that's a blip, you don't care. But once again, if you're trading and you're looking to, you know, play the crypto washing machine and reallocate to something else that you think will pump next, which I don't recommend,

then it makes sense. Then it makes recommend. Oh, still can't. Then it makes sense. Then it makes sense. So, I mean, we've seen altcoins somewhat, you know, we still see these massive moves, but for the past couple of weeks, the big names that had moved have somewhat consolidated, right? I mean, Bitcoin's chilling around 37,000, having a lot of trouble with that 38,000 pre-Luna level. I don't think any surprises there. It just feels like this is, it's the end of the year low volume low liquidity some things are going to go left and right but the market in my opinion is just holding its breath for the etf and then we'll then we'll see which direction it's really going

to go yeah yeah i i'd agree with you there all right let's go to i want to talk about uh to gold can you bring them up scott let me let me uh see uh that's. Can you bring them up, Scott? Let me see. While we're bringing them up, Patrick, are you seeing more interest when it comes to tokenizing real-world assets? Because I know there's a lot of hype behind it after Singapore. Absolutely. If you look at the on-chain growth of total tokenized real world assets, especially U.S. treasuries, it's easily one of the fastest growing categories of DeFi this year. Still relatively small, even in terms of crypto, you know, where we're talking, depending on what you count, we're probably talking low billions, but compare that to a year ago when it was arguably in the low hundreds of millions range, that's a huge, huge increase. So that's a stand in the way. How's the regulatory landscape now compared to

before? I would say other people can speak much better to that than me. Can anyone jump in? Carlo, maybe you can jump in. I'm just on you. Alex, how's the regulatory landscape when it comes to tokenizing real-world assets? Because this industry, along with gaming, which is my favorite, seem to be gaining most of the traction and potentially leading.

Actually, I want to talk about the metaverse today. We'll do it tomorrow because there's a bit of movement there. But they seem to be leading this potential war on. Law'll do it tomorrow because there's a bit of movement there. Let's see if we're leading this potential bull run. Your mic has gone robotic, Mario, but yeah, the metaverse is back. Okay, we got him. On the regulatory clarity side, we're seeing gaming and tokenizing real world assets potentially being the two narratives that lead the next bull market.

I'm curious if there's still hurdles that we're not taking into consideration. So there are. I'm working very closely with a company called Infineo. It was actually working on tokenizing insurance, whole life insurance policies. And I'm starting to see what the obstacles are and they're overcomable and we're working on all those things. And it's just amazing to see all of the things that in the future will be tokenized and, you know, whether or not they're all accredited or traded on DEXs and, or, you know, what

new companies will come out to help facilitate all that. It's all just so um revolutionary and um the regulations in the states are actually when you get down to it pretty accommodating when it comes to trying to tokenize something you know in the end of the day it'll all have to be done right but you know I think a lot of those risks like when it comes to allocation or where where the gold for example is held those problems exist in in the traditional world, and they get blessed by the SEC so you can feel better. And I think you might have that in the tokenized assets

too. So you'll see that come into play all over the place. Anywhere you can put an investment or invest in a thing. IP for example, you're going to be able to invest in intellectual property, maybe a sports career. It's all going to be tokenized.

I agree. And since we have BitDAO, not BitDAO, GoldDAO, GoldDAO, I've got a few questions for you. And anyone from the panel that wants to ask some questions, Alex, I'll let you jump in for some quick thoughts on that. And then we'll go to GoldDAO afterwards. Please go ahead. Real quick, Mario, thanks.

I think that the rise in treasuries on chain has been driven primarily by a search for yield among crypto investors. There's nobody that I know that has access to traditional markets that's like oh thank god i can buy treasuries you know on a dex today so it's really a more story about the rates environment and and issuers moving to where people are and demanding saying there's there's some market here of people that want yield but have crypto native wealth just a quick example of this is like if you think about the curve founder remember when he had the there was questions about whether his curve uh loans on ave would get liquidated like if he could have taken those curve

tokens and and borrowed cash off them at say fidelity he certainly would have like there's the the defy today is servicing crypto native wealth. And I think there are significant regulatory impediments when it comes to putting things like securities, which, you know, IP and other things may be on chain. There are big questions about possession and control under the custody rule. There are issues about clearing and settlement. There's no recognition in the U.S. of any of the clearing settlement or trading platforms in De U.S. of any of the clearing settlement or trading platforms in DeFi. So, I think until we have, I think fundamentally, from an issuer standpoint, it's doable. I think

the market infrastructure and trading infrastructure is effectively not recognized in the U.S. And there are significant regulatory actions in both legislative and sort of guidance related that make DeFi very, very tough to use legally in the US. Alex, I was going to say, isn't it a bit of an indictment or at least should be eye-opening, CRP tokens should not be used widely as collateral, right? You say that you can't do it, obviously, in TradFi. There's a reason for that. And we saw it with FTX, right? So DeFi carries, if they're going to take altcoins as collateral carries a tremendous amount more risk than collateralizing assets and traffic right

and it just just is a quick list of things that are unresolved and currently impediments to using defy generally in the u.s where you have the broker rule which effectively imposes bsa k yc amlL requirements on any facilitative service, quote unquote, which is most of DeFi. And they're not stupid. In the IRS's guidance, which is hundreds of pages, they talk about whether protocols have upgraded in the past, right? And that being a thing that would justify them needing to upgrade to support this.

You have the expanded definition of an exchange under the National Exchange Act by the SEC, which encompasses most of DeFi. There is going to be an emergence absent, you know, more real work done in the US of effectively pirate finance and that is illegal in the US on chain. chain and then and then some some hopefully some legal defy that emerges the real problem is that other jurisdictions like the uk and europe have done a lot of work to either in the case of europe's uh mika create a bespoke regime that that addresses crypto or in the case of the uk the fca has said no we want to shoehorn it into the existing regulations but here's a giant pile of work that explains how to do that the sec has basically taken the uk's position without doing any of that work so there are huge gaps in the regulatory framework for for using defy in particular in the u.s that will inhibit the adoption of tokenized assets in the u.s and the near we we have gold now you guys are going

through it as we speak um i want to start with the first i know randall Scott and others, anyone on the panel that has a question, put your hand up. Anyone in the audience has a question, put it in the comment section or check the pinned tweet. I'm outside. Sorry for the background noise. But guys, first, before we ask you the questions about tokenizing real world assets, challenges, opportunities, etc. First basic question. What is tokenization? What is the tokenization of gold just for the average Joe that doesn't understand it? Hello, everyone. So thank you first for having me here in this crypto town hall AMA. I'm Julian Ernie, the CEO of DowLink, the company that is initiating the gold Dow. And I'm now

with Dustin Baker, the tech lead of the project. And there is also julian liu our economic advisor so uh for your first question mario i will let dustin uh answer it okay so hey everyone uh thanks also from my side um so your question yeah what is the gold what is the project it's um it's a big project between multiple entities who are involved in this. And the overarching goal of this is to tokenize gold and to create a US dollar stablecoin that is fully backed by physical gold that we store in vaults here in Switzerland. And we do this in three phases. So we did the first phase already a couple of months ago. We basically tokenize physical gold in forms of NFTs.

And this physical gold is stored in vaults here in Switzerland, which are periodically audited by independent auditors. And that's also kind of a partly answer to one of your previous questions. And then with this first phase... The custody question is like, previous questions um and then with this first phase the the custody the custody questions like well if you if custody in Switzerland is different to custody in in some Eastern European country known in Moldova for example yeah exactly um so having this in Switzerland um it's also a big benefit and um on top of this then we have the the second phase of this project which is um the the fungible gold token

uh which basically allows any holders of the the nfts of the gold nfts to swap them for gold tokens or gldt is what we call them at a ratio of one gram to 100 gldt and why we're used doing this is basically to fractionalize this the gold nfts to make it more liquid and then actually usable also for d5 projects and one of these applications is then the third phase actually where we are going to launch the us dollar back stablecoin which is fully backed by the gldt by this gold token and we thereby create a us dollar peg stablecoin which is fully backed by the GLDT, by this gold token. And we thereby create a US dollar-backed stable coin, which is fully backed by physical gold. So you've got three categories, three pillars to what you're building, correct?

Yeah, exactly. You've got the gold-backed stable coin, you've got the NFT, and you've got the fungible token, correct? Yes, yeah yeah in the end that's those yeah okay and then why so so can you just explain again because i was i'm on the move so cut out a bit for me can you explain again the difference between why have the nft and a fungible token we understand the stable coin i think it's a pretty clear use case um i want to understand the regular the any regulatory hurdles you have when it comes to a gold backed stablecoin and the risk of custody.

But why have a fungible token and NFT was the use case for each? Thank you, Mario. So if I may chime in. Hi, everyone. Thank you for having me. I'm the economic advisor of this project. So the question is, why do we need to go to NFT? I think this relates to I think it was was, um, one of the speaker,

I think Ryan mentioned this, the proof of reserve, right? So how do you build trust? Why would people trust that you really have the gold? Why would I trust you that you are not missing using, uh, our gold, uh, with a gold NFT, you know, for every gold bar, the gold bar has a serial number for every gold bar. We use the origin technology to mint one gold NFT and this gold NFT, for every gold bar, the gold bar has a serial number. For every gold bar, we use the Origin technology to mint one gold NFT. And this gold NFT stores a high resolution picture of this gold bar and also has the

serial number of this gold bar. So if users hold the gold NFT, you can redeem for the real physical gold bar 24-7. If there's not enough gold bars or these gold bars are misused, then the users will find out. So this is the first step why we have the gold NFT to build the trust. This is how we solve the challenges that, you know, faced by most of the gold tokens. Gold token is not, I would say, a crazy, crazily innovative idea. It's very easy when you think about tokenizing gold rwa you would think i took a nice the real estate stock and then the next thing you

would think is go right but why we don't see so many uh or why don't we see the massive adoption i would say one of the reason is the the proof of reserve i think good empty can solve this problem so that's why there's one more layer of this gold nfc before we meet the gld token i have another question on the thread why mario you're sounding you're sounding robotic again so didn't you want to ask about the fungible side the the token itself outside the nft is that correct what's the purpose of it? I think someone on the panel was questioning it earlier. What's the whole goal of it?

Is that just purely to allow it to be available 24-7 to trade? So I think that's one of the reasons. So it allows you to trade gold 24-7. Secondly, I would say gold is a good stock value. If you see the purchasing power power of the us dollar over the last 20 years the us dollar has lost 50 percent of its potential power so the goods let's say if you spend one million to buy some goods 20 years ago now it costs you two million and the the loss of the potential power is eroded by the inflation we all know that so the federal reserve they target two percent inflation rate and we see actually since 2008 the inflation rate has been

higher than two percent most of the time and in comparison gold price has increased more than three times in the last 20 years so gold is a good stock value that's why we you why we tokenize gold and make gold more accessible to people. Okay, so accessibility being one of the main... Okay, accessibility. Other than accessibility, what is it? Is accessibility going to lead to more liquidity? Any other use cases beyond accessibility? Yeah, I would say that's the second innovation of the Gold Ball project is that it also makes gold a payment token. If you look at Tether Gold and Pax Gold, they pack one token to one ounce of gold.

And the price of one ounce of gold now is around $2,000. So if you have one Pax Gold token, you go to buy a coffee, which costs, let's say, $3.5, and you do the calculation, how much is that? Maybe 0.00175, right? It's not a good payment token. And with GoldDock, first you can buy one gram of gold NFT,

and you send it to a swap smart contract, and then you can mint, you are your own central bank now. You can mint 100 GLDT token, the gold token. And now since one gold token is packed to 0.01 gram of gold, meaning one GLDT is around $0.60, this is a bad payment token. So that's the second, I would say, usage of the gold token. It is also a payment token. We clearly distinguish

the utility of of gold first it's a start value you buy good ft you have a start value you will see the price appreciation over time secondly the second token you can swap the gold ft for gld token you can use it as a payment token and every 100 glt token you can redeem you can you can swap back to get this one gram of gold nft right so this is the second utility it's a payment token and third gold token the price is more stable than i would say most private assets like ether bitcoin and this makes gold token a very good collateral for d5 So I would say these are the three utilities of the gold tokens. That makes sense. And then how does the gold DAO work? How does the DAO structure? Maybe I

can answer that question. So the gold DAO, it's running entirely on the Internet Computer Protocol. And they have this DAO structure that they call the SNS the Service Nervous System so this is a built-in DAO structure that DFINITY has developed to decentralized entire applications and the gold DAO is running on this and basically what we're doing is we're handing over the control of the smart contracts which are called canisters on icp and we're handing those over to the sns to this gold dow and then the community will actually

be governing the whole whole project and all these individual contributors that we have in the project they're going to be part of this dow and then entire DAO will decide on the direction of the project and the implementations and also the evolutions of the smart contracts. How can somebody participate in the DAO? Sorry, go ahead. I just want to understand how someone becomes a part of the DAO or participate. The gold DAO is issuing its own token it's called the gold governance token and basically by either contributing in the sns sale which will start next week um we are you can take part in the dow or afterwards by purchasing the gold governance on

exchanges and then locking them up in uh in theO and then that allows you to participate in the DAO. Do you have any deals with any exchanges yet? Because your whole use case is about liquidity, so obviously getting exchanges early on is paramount. Yeah, so we're talking to exchanges. The gold NFT, this is already launched, this is live, this is running on the Yumi NFT marketplace. This has been running for a while now. The gold token, this fungible token, this is still in the development phase right now. So we're going to launch this in the near future.

So when we launch this, we will have it ready with exchanges and people can then actually directly go and purchase the gold token. Okay, makes sense. And then the gold stablecoin, the gold-backed stablecoin? Yeah, so the gold-backed stablecoin, this is the third phase. So this will come after the gold token. So here it's similar. So we are right now in the development phase of this.

And once we will launch that, we will have it also directly listed on exchanges. So it's really fully available to anybody to use it. Scott, do you know much about how's PAX Gold going? Kinesis Gold, PAX Gold and Tether Gold? Good question. how's the tax gold going kinesis gold packs gold and feather gold good question i actually i would love to maybe maybe these guys even know i i don't know the metrics on how successful those have been those products obviously exist if i may tell me a little bit here about yeah i know a little bit about packs gold um they you know you could like um buy a certain amount of gold and then they will it's sort of like taser instead of using bank they are using like some gold vault you can send some gold

of course from some gold easier they um uh recognize and then that will mean the packs gold for you but there's like a minimum threshold um for you to to mean the the tokens tax code tokens and with a gold door it's a different so um it's i would say it's more decentralized you don't how do you i didn't uh sorry man can i ask you again how does the tax gold work exactly i didn't understand um so the patch code is the one token pegged to one ounce of the gold. Yeah. Right. Okay.

Yeah. So they, I would say they are the main issuer. They could, they buy gold when they see there's a demand. They buy gold store in their wallet. And then that means the corresponding amount of tokens and then release it in the market. That's a much clunkier process than obviously Tether. You can see why that needs to be improved if you need to deliver physical gold to them to then get the token in return. How big is the market cap at the moment? I'm trying to understand the adoption of Tether. TESGO is around 500 meeting and also also test gold is also around 500 million.

I think they have some sort of bottlenecks, mostly because the two challenges I mentioned before, one is how do you prove that you really own this gold? And they are not misusing, right? You could pledge this. Are they audited? Sorry, I might jump in. Sometimes it's just going to get more clarity for me and for the audience.

But are they, because you guys are based in Switzerland and you're audited, are they also audited and where are they based? And the reason I'm making that comparison is I'm comparing you to the market leader and see what advantage you guys have above them and why you guys would do better. Yeah, I'm no expert in Pax Gold and the Tether Gold. From my research, I found that they are best also in switzerland london also somewhere else they are also audited um but the thing is auditing is one thing um that's a one layer proof of reserve but still you know with the token with a gold bar you store in some world it is audited you can still use this gold bar as a collateral you can still get loans from some banks right you cannot prevent the misuse of the gold bars. And then with the gold bar, the gold

dollar, the innovation part here is with the gold NFT, everyone can redeem for the gold bar at any time, 24-7. And this really prevents the gold NFT user from misusing your gold bars. You know, like if some user, they go to your head of course and say, hey, now I want to redeem for my gold bar with this serial number. And you tell the user, hey, wait one week because we need to produce. Then you know there's some trouble, right? Makes sense. Yeah. I mean, Mario, for a lot of people who are into the idea of NFTs before the PFP explosion, this was the reason why, right?

I mean, even this same kind of use case for supply chain and obviously for proof of ownership and existence of real world assets. So I think that's a really nice added layer over the PAX Gold, which is about 470 million market cap. I looked it up. So big, not huge. Yeah, I'm just saying, how could you guys get a bigger share of the market? How could a gold backed stablecoin compete with the likes of Circle and Tether? That's a very good point. So I would say like the second challenge of this kind of gold tokens is that this gold token, they are more like a stock of value.

It's not a payment token. One token is equal to one ounce of gold. Now it's around $2,000. It's the amount of... That's for the... Yeah. Okay. And then compared to Tether and Circle, they have their deposits, bank deposits, right?

So you have to trust the issuer. Secondly, you have to trust the bank. They won't like a Silicon Valley bank that could default, right? Then the USDC would be pegged for, I think, around two or three weeks to $0.90 because the Silicon Valley bank was at the verge of bank default. So with the USDG, the gold-backed stablecoin, you know that gold is in the reserve. It's audited by KPMG. And secondly, you can redeem at any time.

You know that there's really like a proof of reserve. Secondly, the collateral. If you look at like USDC and USDT, their collateral are the USD bank deposits and the USD is losing purchasing power. But the GLDT, this gold token you pledge as a collateral, they are not losing the value. In the contract, they are appreciating over time. So let's say now you believe more in gold than in fiat currencies printed by any government in the world. You can buy some gold token,

and then for the daily usage, you still want USD pegged dollar. So what you can do is you can buy gold NFT, you swap them for gold tokens, and then you pledge gold tokens as a collateral. You can mint the USD pegged gold token. That's our first trade. It's a USDG. And then in pledge gold tokens as a collateral. You can mint the USD-packed gold token. That's our first trade. It's a USDG.

And then in a few years, you can pay back your debt. You can still get your GID token back. And this GID token price is packed to the gold price. So this is appreciated over time. So I would say that's the two advantages compared to USDC and USDT. First, you don't need to trust the banks. There's a better proof of reserve. Secondly, your collateral is...

That's a good selling point. That's a good selling point. Okay, you don't need to trust the banks. What do you trust more, gold or the banks, the banking system? I like that one. Last question I have for you guys. I know we're a bit over time, so I apologize. But why IP?

Why Internet Computer? ICP. ICP. ICP. Let me take that. I mean, there's various reasons for that. So it depends really on which side, on which part you look at the project. So, for example, for the NFT side,

we're using the Origin NFT protocol that was developed especially for real world assets and the benefit of this is that so it's running on icp and it allows us to store all the assets related to the nft directly in the nft so all the certificates all the auditing reports they are directly in inside the nft so it's really fully fully transparent and decentralized on on the icp and icp is really one of the only blockchains that allow us to do that and then then on top of that now with the gldt with the gold token um it will allow us to easily also go cross chainchain because ICP or DFINITY, the foundation who is developing ICP, they've integrated Ethereum and are also working on other blockchains to basically be able to easily bridge assets to other blockchains.

So this is really one of the key features why we decided to build this on ICP. Did you guys take any grants or investment from the DFINITY Foundation or any of the ICP-related entities? No. Let me quickly chime in here about the three phases we are doing now. Phase one is Golden NFT. We already launched that a half year ago. And then the second phase is a fungible GLDT token that we're going to launch in the next couple of months.

And then the GLDT, yes, now it's launched on ICP, and ICP is integrating other blockchain, and we also will do the multi-chain by ourselves. So we think GLDT will be a very good payment token and the collateral for d5 so we want the gldd to appear in all the major blockchains layer ones and layer tools um yeah cool no i appreciate it i think it's good overview scott i don't have any other questions do you have any other questions no me either i think it's uh really really compelling really interesting are you are you interested in it i think it aligns i think it a lot i am investing gold but i think it aligns well uh with the kind

of compelling narratives for the next cycle right i think rwa is really uh going to be what real world assets what we're going to be hearing about constantly for the next two to three years and so being ahead of that in this cycle, I think it's going to be really useful. I think, I think, can we, can we stick to real world assets and not start saying RWA?

It's not me, man. I paid for three letter titles for literally everything. But if you were, I've been in any conferences in the past few months, it's RWA everything. It's, it's what it is.

You have to give it an acronym before it kicks off a bull market. Every time something. We can't get it on Saturday. We can't get it to be made fun of on Saturday night live, unless it has a free letter. Exactly. I think it's a good overview. I apologize for going over time and appreciate gold Dow for coming on.

If anyone wants to check them out, they're on the panel, but so you could check the link that's pinned at the top. And I think that's it. It's a good show and we'll see everyone back tomorrow, Scott. See you guys tomorrow. Thanks. Bye, everyone.