The Wolf Of All Streets - Is Anyone, Anywhere Actually Using Crypto? | Live Panel With Seth Hertlein & Katie Talati

Episode Date: April 27, 2023

Live panel with Seth Hertlein, Global Head of Policy at Ledger, and Katie Talati, Director of Research at Arca.  https://twitter.com/SethHertlein https://twitter.com/KatieTalati ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget    ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

As you can see, if you're watching and not listening, I am sitting in a hotel room in Austin, Texas at ConsenSys. And ironically, so are both of my guests, even though we're speaking here in the metaverse. We could have actually gotten together in the real world and probably used some sort of technology to have this conversation. As I was saying to them before we started, the mood for me, but we'll talk about it at ConsenSys, is a bit dampened. It's much smaller. It seems there's a bit less excitement, obviously, than there were in years past. And there's probably many reasons for that. But it led me sort of to the idea of digging in with today's guests of how many people are actually using us. For all of the excitement that we have about crypto, is it actually seeing any level of adoption? I've got

Katie Talati from ARCA and Seth Hartline from Ledger here to discuss. Guys, you don't want to miss this one. It's gonna be great. Let's go. look tired and dark. But here we are once again at Consensus. I'm just going to go ahead and bring the guests on right now. Guys, we could have just done this in the lobby. Yeah, I mean, I think we're only a few blocks away from each other right now. Yeah, we could have and it would have been horrible echoey sound everywhere too. I'll probably get that out of my AirPods anyways. And Seth, I literally saw you on the floor of Consensus yesterday. Listen, we don't usually talk about real-time events necessarily on a Thursday roundtable, but I think that what we're seeing here maybe echoes around the industry and is probably a good litmus test

for what's happening. Seth, I saw you yesterday much smaller and not that crowded so far. Would you agree? Yeah. I mean, the main show floor consensus it wasn't empty but um you know i've been to to you know other you know other crypto conferences in um you know in in bull market times and you know you can barely barely get in the door so it's um you know it's it's a it feels a bit muted um perhaps uh you know appropriate for uh for a

crypto winter but um there's actually, I mean, you know, the exhibit spaces are all full and there's a fair amount of people walking the floor. Katie, were you over there yesterday at all? I do think that a lot of people are going to be there today, to be honest, because I arrived yesterday and I think most people I know were kind of, you know, slowly filing in. Yeah. You know, they now separate consensus into like three days of programming. And the first day is like pro passes only. So it's a bit more like institutional focused. And I think the like today and tomorrow are going to be much more like retail. So I think you could see a lot more people, you know, arriving.

I do think there are a lot of people here. I don't know if the conference attendance is as high as it was last year, but definitely a reflection of, you know, market sentiment and kind of just, I would say even overall interest in like the space right now. I would say it's a hotel room in Austin. So if, if, but if that's true, that, that, that is, that is definitely true, especially at the last minute, like I'm sure you guys did exactly like me. But just throwing the numbers, I think I heard last year that they reportedly had 25,000 people. I was here and we were shooting podcasts the entire time live and we were on the third floor in a room which was way out of the way. And this year, it seems like the entire thing is just on the first floor in one very large room, including the event stages. And they've said they sold 13,000 tickets. I take

everything in crypto as like a spicer, you know, judging the size of a Trump event. So I'll give it 5,000 or 6,000. But listen, I think that that's fine. I think there are obvious reasons. Another thing that I noticed anecdotally was that last year when I was here, a bulk, I would say, of the projects that were sponsoring or advertising were NFT projects and smaller crypto coins and foreign exchanges. And this year, the foreign exchanges lawyers have told them they cannot have a booth because they cannot advertise to Americans. I've heard that from multiple people that I know. And it's very much large and familiar names that have booths on the event floor.

So that's a glaring difference to me. Do you see the same? Yeah, I mean, I think a lot of the, you know, a lot of the exhibitors that were here last year may not even exist anymore. I agree. Yeah, I agree. Katie think a lot of the exhibitors that were here last year may not even exist anymore. I agree. Yeah, I agree. Katie, were you here last year? I was. I haven't seen the exhibition hall this year and seen all the sponsors, but that would make a lot of sense if some of the bigger exchanges, because those are generally the bigger spenders. Last year, I remember Binance, they hosted the opening party.

They had the biggest booth. Like they were just handing out so much stuff. Like everybody was wearing like Binance hats and t-shirts everywhere. Yeah. So, so clearly not the case. So, so listen, that led me, as I said, to sort of today's topic when I was talking to Misha, the producer today, who said, what do we want to talk about? And it kind of got me thinking, like, who's actually using this? And listen, I'm a bull, obviously, right? But I think it's important to be sort of intellectually

honest, assessing where we're at and where we're going. So listen, Katie, you're the head of research, right? You probably do pretty deep dives into this data and what's happening. Are we seeing an uptick in actual usage of these blockchains? Are we still sort of in that iterative idea mode? So we're seeing, I would see a mixed bag. I think that, you know, if you're kind of looking just at like basic layer one data, like in terms of like usage, active addresses, wallets, fees, like those are all way down from like 2021 levels. But at the same time, if you look at some of the kind of like newer, I would say entrance,

for example, like Arbitrum and Optimism and ZK Sync are seeing like outsized amounts of transactions relative to like overall transaction volume on Ethereum. Specifically, I saw like a really great chart a couple of days ago from Blockworks and they were measuring DEX volumes on Optimism and Arbitrum as a percentage of activity on Ethereum. And they're actually accounting for the majority of the Ethereum activity just from DEX activity specifically. The other thing to indicate on those two is that the pools on Ethereum, like the trading pools on Ethereum that are seeing the most

activity in the last week were like the ETH Pepe pool. But then on these layer twos, like the pools of the most activity were like ETH USDC, which you have to think is like, okay, maybe people are actually coming here using, you know, swapping their USDC for ETH or vice versa, and actually like using you know those tokens productively on these layer twos so that is kind of like one I guess data point that's potentially hopeful Pepe I've heard that I've already heard the name Pepe in 10 casual conversations here which just tells me we've learned nothing and that's not burn it all down but so but the the implication there that the bulk of the volume we're seeing

is on DEXs, whether on layer one or layer two, is that still the primary use case is speculation, right? It is. But also we have to remember like DEXs are just one of those kind of like, I don't want to call them public goods necessarily, but they're one of those like really basic like building blocks for any of these decentralized ecosystems. Like if somebody's coming in and they need USDC to go somewhere and buy something or they need to lend it out, they need to start with ETH, right? Because ETH is also what's going to pay for your gas. So it's kind of like where it does depend on where in the ecosystem the money is going. Supposedly though,

DEX activity is a good monitor of like actual activity on chain. But I mean, I think, but I would agree. I think, you know, the biggest issue right now is like, we still don't have a ton of use cases outside of just pure kind of like trading and speculation. Seth, what do you think? Yeah. You know, I think, you know, that's, that's broadly consistent with, you know, with what I've heard as well. You know, I understand that exchange trading volume is still considerably down from 2021 levels.

I think not up somewhat from when Bitcoin was at 16, but still fairly low. It may be interesting if some of that volume has moved from exchanges to DEXs and more natively on-chain. That might be a cool consequence of the down market. But I agree with the point that aside from the familiar trading-based uses, we're not seeing at this point a ton of other uses that are bringing new people in. I will say, though,, there are some promising starts. I think it remains to be seen, you know, if they pan out. But it's hard to overestimate the impact that, you know, Starbucks partnership with Polygon through their loyalty program with an NFT-based loyalty program could have. I mean, if you considered all of the money sitting in people's Starbucks apps as a bank, it would be one of the top banks in the country. And so far, the customer feedback that Starbucks has gotten from their program has been overwhelmingly positive. And so I think, you know, we've seen a number of sort of big consumer brands dabble with NFTs and some have sort of pulled out or pulled back.

It seems like Starbucks is really pleased with how their program is going and likely to stick with it. I think Nike is another, you know, big sort of big name consumer brand to watch in this space. They're doing a lot of really cool stuff with NFTs and that is definitely going to grow. And, you know, so I think we might start to see, you know, particularly from these consumer facing companies, you know, some adoption that brings people in in a way that that doesn't feel so crypto. And, you know, so I think there's a there's some green shoots and some some reason for hope there. Yeah, I think I think talking about the potential is uplifting and I think there's plenty of hope. And I actually don't think anyone's really wavered on that.

You know, so I just think it's hard to dig into the data now if you don't have that lens of viewing what it could be in the future. But Starbucks, I mean, that's a very, very big commitment by them to utilize this technology for that program. And they wouldn't do that, I think, like flipping flippantly or on a whim. So I do think that that that is important. Yeah. And I will say, like, I felt like last market cycle, like if we're looking at four years ago, like 2019, all these huge enterprises had been announcing like, yeah, we're going to use blockchain and we're going to do this and that. And they had all these ambitions. And a lot of them kind of ended up being basically nothing at the end of the day. Whereas I feel like this cycle, we've had a lot of kind of like more mainstream brands or,

you know, Fortune 500 companies commit to doing something on the blockchain. And in most cases, they've kind of followed through with those, you know, those promises or those strategies. We have seen some pull out, though. You know, Facebook is like totally pivoting away again from from like this metaverse concept. I think a lot of companies are dropping any, you know, metaverse divisions or ambitions. But I think that, yeah, looking at, you know, loyalty program for Starbucks or, you know, Nike kind of using like the Clone X collection and kind of, you know, continuing to iterate on it is a really good model. I think as one of these corporates figures out like what is going to be like that winning model for them with the use of an NFT, a token, like kind of engaging their community, you're going to see

others kind of come in and copy that model and just use it across like their brands. I agree. Do you think that to any degree then AI has been what's taken the shine off of crypto? And by the way, guys, I apologize. I'm literally like tethered to my phone using internet and I can see it's giving me a instability warning. So if we glitch, that's my fault. But do you think that any of this is because AI has sort of replaced that side? I mean, literally Meta went wholesale branded Metaverse. And now we're hearing about their earnings call about their AI division and everything that they're doing in that space. So it's got to be something there. I just think in all parts of tech, there's always a flavor of the month or there's always some exciting theme that everyone's got

to jump in on. I think the promise of AI right now is super interesting, especially if you look at even how information is accessed today and how it will be accessed based on kind of like the stuff that Google and Microsoft have been working on. But I, I also like anybody who's come to me and they're like, Oh yeah, we're an AI crypto startup. I'm like, okay. Yeah. Like what exactly, who are you catering to here? And it just seems like it's a $250 million valuation because it says GPT in the name. Like, come on, man. Long Island blockchain iced tea, right? I mean. Yeah. Or it's like, oh, God, even in like a year and a half ago when everyone was putting like NFT strategy or whatever into their deck. And that was just like money was getting

thrown at them because nobody really understood what NFTs were. They just understood that they were like explosive in the way that they could be used. But Seth, I think you made the best point then if you're looking at it through that lens, is that this only works once you don't have to say NFT strategy at all, right? Like once we've abstracted away the crypto side of it is the only side time that we will actually get adoption. This is just our rewards program and it happens to be built on a blockchain, like your phone is built on that technology or TCP IP or, you know, the Internet. I don't care how the phone or Internet IP or, you know, the Internet.

I don't care how the phone or Internet works. I just want it to work. I don't need my rewards program to tell me that it's blockchain based or NFT based. Right. Yeah, I think that's exactly right. I mean, you know, the people that are here at ConsenSys, you know, want to do crypto for crypto sake. Most people probably don't. Right. They want their they want their Starbucks rewards. They don't care how they get them. If Starbucks can get them to them in a cooler, more fun way, they're sure. Great. But and starts with with with companies and brands sort of dabbling with, you know, with NFTs. And, you know, it was, you know, it was the shiny thing that everyone chased, just like they're all chasing AI, you know, right now. I actually think part of that is sort of due to timing. Right. Chat GPT just sort of got lucky, right? They, you know, were sort of discovered at the moment, you know, shortly after, you know, FTX when the

whole world was sort of disgusted with crypto for a little while. And I think that that gave them a window of opportunity. They still are, by the way, they still are discussed it with us but yeah but it's uh it's interesting um that's uh you know you know i've heard a number of stories that you know around whole sort of communities that you know sort of actively don't want to be associated with nfts even though they like the nft product and i think gaming is a great example of that like the gaming community is like openly hostile to nfts but they actually want to own their in-game items right so they actually want nfts but they don't want to be associated with it at all and it's almost like a branding exercise yeah we just if they're just talking about their

in-game assets it's totally fine right and yeah they just don't want to be called if they were just called skins but you could sell them just like anything else in the game, then we'd be pretty good. Right. There was another thing. Listen, I actually have it up on my screen. So talking about the users and adoption, another reason I brought this up and is one of the things I see all over Twitter. We're talking about it all the time is Noster, right? The big decentralized competitor to Twitter. All the Bitcoin maxis are super engaged in this. So if we're just talking about the real numbers. So yesterday I dug into the metrics on that, talking about abstracting away and what people care about. This to me is

just proof that people don't care about their privacy and decentralization. They don't really care what Twitter is doing with their data. I'm going to literally just bring it up. This is the real time statistics for Noster, which is supposed to like change the world and save the planet. Daily active users is about 8000. I think, to be frank, my average day on Twitter probably has more daily active users in my comments. Weekly active users, retention of all users 30 days after signup. Now, listen, this isn't crypto, but the crypto people love this because it has, it's basically the same underlying technology. I mean, literally falls off a cliff.

Nobody stays after 30 days. I mean, it's just astounding. It just shows you that like, but that, so that can illustrate the point that maybe not that many people are using it, but it also really illustrates the point that people don't care about the blockchain or decentralization part, your average mainstream person. Just talk. Yeah, those, the statistics are really interesting about Nostra. It's been on my to-do list for a while to set up an address, and I've just never gotten around to it. But I think the point you're making, Scott, is that it's not about the technology, it's about the experience. And even if the technology is objectively certainly sort of owning your own, you know, being able to own your own account is a cool thing. Yeah.

And, you know, it actually has some real world application, you know, as we've seen from, you know, some of the censorship, you know, uproar, you know, that happened on Twitter. You know, I think there's some real utility there. But if the experience isn't good, it doesn't matter how much better the technology is. No one's going to use it. And if there's no one there and it's a ghost town when you sign in and you can't have fun exchanges and conversations, that's what it's for. And so people are going to leave. I think that's what the data shows. It's a bit of a chicken and egg problem, right? I was literally just going to say it's a chicken and egg problem. Like how can you have a community there to keep people around? Right. Listen, I have an

account and I think conceptually it's extremely cool, but it's just easier to use Twitter. So, but so Seth, that brings me to the next thing, obviously. So you have the data on self-custody, obviously. You're the head of global policy for Ledger. We saw all these collapses last year. Talking about are people using this? What have you seen at Ledger as far as, I mean, literally, just so you could talk about, I guess, device sales uptick in interest? And then when talking about user experience, you have literally the guy who invented the iPod. The guy who designed the iPod has designed your new wallet.

So you clearly believe in UX, UI simplicity here. So can you talk about that? Yeah, no, thanks. Thanks for the question, Scott. Yeah, so, you know, in the immediate aftermath of FTX, you know, our sales were up over 700% for a period of time after that. I don't remember exactly how far, how long the spike lasted. And we'd seen that before, you know, when there are other sort of disruptions, you know, we saw it. So there was an exploit in Solana's software wallets earlier in 2022. And we saw a spike after that.

You know, obviously, when all the, you know, Celsius, BlockFi, Voyager, when all those sort of went belly up, we saw spikes after that. But like nothing compared to after FTX. And, you know, so it, you know, it's a bit of a sort of a blessing in disguise for us, I guess, but, you know, people remember safety and security when things go wrong, and they tend to forget about it when times are good. And, you know, so that it's actually a sort of a strange thing that we tend to do better as a company when, you know, when things go wrong elsewhere. And I hate that people have to sort of learn those lessons the hard way to be reminded of what they really probably should have been doing all along, which was self-custody and not relying on untrustworthy intermediaries. But, you know, the tumultuous events of 2022,

I think, did encourage a lot of people to start to self-custody and to be more conscious of security in how they interacted in Web3 and digital assets. And, you know, so, you know, as a company, you know, Ledger definitely prioritizes improving UX and UI for people. You know, the easier we can make the technology, the more innovative we can make it, of course, without sacrificing security, because that's paramount. The more people can come into the space and have a good time. And so, you know, we're best known for, you know, the Ledger Nanos, which are, you know, the little sort of, they sort of look like a USB stick. They're totally not. I hate using that example, but that's what people associate. The new device, the Ledger Stacks, which we announced in December, our first new hardware in about three years, was designed by Tony Fadell, who is the inventor of the iPod and the first three generations

of the iPhone. Very, very illustrious career at Apple and now is sort of freelancing and just doing the projects that he wants. And he was really captivated by the idea of uh taking you know crypto custody and security and and putting it into um you know a a physical design that was a joy to use that was his motivation and why he wanted to work with ledger and so um stacks is a very different form factor than people will be used to from a Ledger device. It's about the size of a credit card. It has a full wraparound e-ink touchscreen. And so instead of the little clicky buttons you're using an iPhone. And it's really designed for the NFT user, although you can secure any digital asset with it. But that e-ink touchscreen allows you to display any of your own NFTs as sort of the cover of the device.

And that wraparound feature on the spine, you can actually customize and write whatever you want to on the side of it, which is really cool. So, you know, inside the security architecture is identical to what's in the nanos because that's a battle tested technology that's been, you know, in the market for eight plus years and attacked any number of ways and never broken. And so we didn't want to change that at all. And so really what changed is the user interface and putting it into a more familiar format that I think people will really enjoy using and showing off. I think that's so important and so cool. Katie, I want to ask you then, to that end, we've seen since FTX and all of these collapses, obviously, I think one of the big stories has

been sort of the end of the bank collapses, to be honest, is this utter lack of liquidity in the market in general, right? We've seen, we saw these sort of massive outflows from exchanges. And I think people literally, there's just a lot of people don't have an account they can deposit fiat into crypto right now. Do you think that part of that story is this move to self-custody? Or do you think it's literally just like the rails are broken and people don't know what to do? I mean, because we do have pretty historically low assets on exchanges sitting on centralized exchanges. I think it's a combo of both.

So I think the first problem is that, yes, the trust has been broken, but because it was so many retail investors, a lot of them have chosen to just withdraw from the market entirely versus saying, hey, I'm going to go to a decentralized exchange and trade from there. There's also trading from decentralized exchanges. Like, yes, it's not a terrible user experience, but it's still really difficult when you think about it because like it requires you as a user to then go either get a hardware wallet

or figure, you know, or trust that you're just going to use MetaMask and have that like hot wallet extension that's online all the time. And then, you know, you're taking your assets off the exchange to that wallet and then you're connecting that wallet to a decentralized app like a Uniswap to trade on. So then, you know, if you're thinking about then like kind of like who is actually going to do that, it's really only people who are like a little bit more incentivized. Either they've got more crypto, more experience. I do think we've seen kind of a move to DEXs. But if you look at like the historic like centralized exchange volume to decentralized exchange volume, just like as a pure percentage, like the high actually that they hit was like

early 22 in terms of like that decentralized exchange volume making up like the bulk or making up like a really high, I think it was like at one point, like 10%, 15% of all exchange volume. But now like, you know, you haven't, like you see, you keep seeing blips in the data around some of these events. March, we saw a ton of instability, right? And volatility. So volume spiked. Same thing in November last year, same thing last summer and May, June, but you're not seeing that like sustained. Like it basically the chart is kind of like trending down, but then like you get these like random blips in the middle, like for one month at a time. So I think that, you know, a lot of people are definitely choosing to use

decentralized exchanges more heavily, but I think in general, like there's just a lot less people trading than there were 12, 18 months ago. Isn't that just a great buy signal, right? It means we're at the bottom of the cycle and they'll all come rushing back when Bitcoin prices are $42,000 to $50,000. When you get to the point where people are like, just like, oh, like crypto is like dead. Like, this is the end. I'm like, yeah, this is definitely like we're getting to the bottom here. Yeah. I mean, people forget in the previous cycles. Yeah. It was miserable in, you know, 2018, I guess, and into 19 when things went down. But the worst part was all of 19 when nobody cared and I was just screaming into the void. Right. And everything was like sideways and no volume and choppy and it was just dead,

right? But that's, you look at any technical analysis chart or theory about markets, that's accumulation. And that's when you're supposed to be, I'm not making any financial advice here, I guess it's about the market, but that's accumulation. Yeah. I mean, that was the year where I basically- I don't know if we, I think I glitched and froze there for a second. I said that, I mean, 2019 was like, yeah, nothing happened. I think I glitched and froze there for a second. I said that, I mean, 2019 was like, yeah, nothing happened. I think like the whole market was basically flat for the year or like up 6%, nothing crazy.

But that was the year that if you look at like really what were like the innovations, like Uniswap launched, MakerDAO launched, like you started to get like this, like, you know, DeFi kind of starting to, you know, come to the forefront here. You actually had usable dApps. That's why, so, I mean, even though it's like a bear market and we're going to have maybe, you know, a little bit more prolonged activity of not much going on in terms of like prices and volume. I think that this is the time though, when you can kind of root out and find like the cool new technologies that are going to really like drive the next wave of activity. Yeah, I think there's no question. And that's, that is the repeated theme of anyone I talked to in the last year is that all the best things are being built in the bear market and always are.

And whatever we see emerge, whenever the cycle does change, it's going to be all the things and people who survived and kept sort of iterating and innovating now. And that's, I mean, Seth, I mean, that's exactly what you guys are doing by launching this new wallet, of course. I have to pivot, Seth, to regulation here. I mean, you're the head of global policy. You probably want to talk about this as much as you want to bang your head against the window over there at this point. But, A, what does it mean to be the head of global policy? You're not at an exchange, right? You're a hardware company at the basic. And what are the conversations you're having? I mean, literally, when we asked you to be on this, you're like, well, I'm about to talk to an EU official and I'll be done at 930 and then I'll come over.

It's like, this is what you're doing all day, right? Yeah, no, it's funny you mentioned that. Yeah, just before I joined you on the show, I was doing a call with an EU official in Brussels from Austin, Texas. So that's a little bit of what it means to be a global head of policy. But yeah, you know, is obviously a French company. But, you know, we sell, you know, products in, you know, 180 plus countries around the world. And, you know, many of those countries are, you know, thinking about different ways, you know, to regulate, you know, digital assets. And, you know, so it's, you know, it's important for, you know, for us to, you know, be part of those conversations, you know, or at least be aware of what's changing. You know, and so obviously, you know, as a, you know, as a wallet provider, you know, the issue that we're most focused on is around self-custody and preserving and protecting the right

for people to choose to self-custody their own assets if they want to. So that's always our number one issue. And it may sort of seem obvious, people should be able to hold their own property if they, you know, if they want to, of course, you know, you get to do that, you get to make that choice with almost any other kind of property that you own. But it's not necessarily a given in blockchain and in digital assets. We've seen a number of legislative proposals, both in the US and in Europe, that, you know, sort of really challenge, you know, self-custody and whether people should be able to do that at all. You know, I think, you know, governments, you know, they like what they know and sort of what they can see.

And in, you know, one of the fundamental innovations of blockchain technology is, you know, self custody, the ability to hold your own assets directly, which, again, sort of seems obvious, but in, you know, in, you know, in traditional finance is really hard to do, you know, unless you're, you know, sticking cash under the mattress. And, you know, so so the, you know, the entire traditional financial system and thus all the regulations that have been built up over decades in the traditional financial system are based on an intermediated model where there's some company or business that is providing a service or, you know, holding your assets for you. And so that's what the regulators know and

what they like. And there are attempts to sort of force digital assets back into that mold, which, of course, sort of destroys one of the fundamental innovations of the technology in the first place. And so that's sort of educating around that is one of our key priorities. Right. So there's obviously a threat to self-custody. I think that people don't think about. But the other obvious side of that is the threat to privacy. Right. Not only do you have the right to hold your own assets, but maybe you believe you have the right to hold your own assets without everybody knowing that that's your wallet or your own assets. And I would say that's the part that at least visibly seems way more under threat. I mean, I have no idea if it affects you guys, but the Restrict Act is

astoundingly terrifying in the United States, right? But if, you know, Ledger or Self-Custody becomes one of those apps that you're not allowed to access. I don't think that would happen, by the way. I'm not saying that, guys. Yeah, no, I don't either. But, you know, but I agree, you know, conceptually, the, you know, the Restrict Act is, you know, is very scary. You know, it invests, you know, the executive branch with, you know, really sweeping new powers to sort of, to make, you know, make choices for people to, you know, decide what they can and can't do and can and can't see and can and can't hear. And, you know, it very quickly gets to, you know, a place of, you know, government censorship, which, you know, of course, is goes directly against, you know, our First Amendment and, you know, the ability for

Americans to, you know, freely speak and decide, you know, speak and associate and decide, you know, who and what they want to, you know, issues they care about and people that they want to hear from. So, you know, there's another bill in the U.S. that is similar in direction as the Restrict Act, but it's actually much more focused on digital assets. And that is a bill that's been introduced by Senators Elizabeth Warren and Roger Marshall called DAMLA, the Digital Asset Anti-Money Laundering Act, which is, you know, you've probably seen, you know, Elizabeth Warren's campaign photo that says she's raising an anti-crypto army.

It's, you know, it's not subtle at all. I'm very scared of the army of 90 year olds. But yes, the anti-crypto army, right. They're coming for us. But in any case, this bill, you know dressed up as trying to deal with money laundering. But it's really not in any true sense. It's directly aimed at preventing layer one blockchain architecture from being operated within the United States. It would make it effectively illegal to run a node to operate a Bitcoin miner or an Ethereum validator or maybe even a wallet. And so I think a lot of the industry hasn't been paying enough attention to those types of bills in terms of how they engage with policymakers.

And so I certainly have been sounding the alarms on a couple of those things. Yeah, I mean, Katie, like you're at a fund, right? You guys are registered fiduciary in the United States of America. So how much is all of this of a concern for you? I mean, it's a huge concern more so. I mean, even some of the stuff, Seth, that you were saying, you know, that the government's thinking about doing or wants to do like with the Restrict Act. I mean, to me, that sounds like that is the definition of an authoritative or authoritarian regime. So for me, I mean, it worries me personally. I mean, as a fund,

I can tell you that even though we operate within the guidelines set forth for the SEC, we are an RIA, there's still unclear rules around really specific stuff such as custody. And my biggest frustration since starting in the space has just constantly been that there is no regulatory clarity. And we are really trying to shove this, you know, square peg into a round hole of crypto. And it's just not the same. And I don't know, I was going to ask you, Seth, like, do you get the sense that when you read some of these bills, or you see some of these things that do these people even understand the technology enough? Or is it because they don't understand it, they just want to regulate it and, you know,

push it out, like push it out of our, out of our borders? It's a great question. You know, so there's, you know, broadly speaking about the U.S. Congress, there's a small group of like champions, like, you know, congressmen and women that actually truly understand the technology, what it's all about, the promise that it has for people and are like on board. There's a there's another small group of, you know, sort of over my dead body types. Right. You know, raising an anti crypto army types and they're never going to be on board. Right. They understand it enough to know that they do not want that, right? They don't want people to have freedom

and agency. They want people to be dependent on the government and big corporations. And, you know, so the anti-freedom crowd is never going to come around. But there's a big group in the middle that just doesn't know enough, right? They haven't sort of made a decision yet. And, you know, I think, you know, the industry and the community needs to do a better job of reaching out to those policymakers and sort of sharing with them the reasons why, you know, why they should be, you know, pro-digital assets. You know, but unfortunately, it's hard because we're still a new, young, small industry trying to build and achieve adoption and get more users to come in. It's hard to set aside a large budget to engage on Capitol Hill the way the banks do. And so there's just not

a lot of us doing the work. And so what that sort of tends to lead to is we spend all of our time focused on a handful of members that are on key committees and totally ignore everyone else. And so then all they hear about are the headlines. And so things like last year, things like FTX don't help us because their only impression of the technology is, oh, I heard about that. A bunch of people got hurt. Right. And, you know, so we have, you know, going to the hill, you know, calling and writing their congressmen and women and, you know, evangelizing. Yeah, I mean, I totally agree with that. I think even I was disappointed in this last week. If anybody is a fan of like John Oliver's like weekly comedy show, he did it all on crypto and he talked about FTX, Celsius. And gosh, what was the third one?

But but like he he basically was like they're like he does usually take a balanced approach. But I was kind of upset. I was like, but you didn't highlight the other side, which was like pretty much everybody heading up each one of these products was, you know, bad actor, that there's no regulation to protect investors because we have, you know, a regime that hasn't been like receptive to that. So it's definitely, I mean, I totally hear you, Seth. It's such a frustration that like, we can't, you know, even just educating, like, you know, educating like our congressman is not like a huge priority. But in general, I mean the general public, like I can't, I still remember sitting down at Thanksgiving with like a family friend and they were like, crypto, so is it all a scam?

Is Bitcoin a scam? And I was like trying to explain the difference between like Bitcoin and FTX and like- We were doing so well. We were doing so well till last year. Even with legislators and regulators. I know, I know. Even the tone in Washington. I mean, I keep saying it and I always ask the guests,

but Sam himself set us back, I think Novogratz set to be two years. I think maybe more. But if you were meeting with him, if you were meeting with Sam and there's pictures of you posing with him, now you literally just have to be anti-crypto because you have anger on your face and it's politics. you posing with him, now you literally just have to be anti-crypto because you have anger on your face and it's politics.

It's just so sad. Because that could have been such an easy conversation at Thanksgiving last year if not for those things happening. Guys, I have to call it because my internet is flashing and I think we might lose the stream. But maybe the three of us

can continue this conversation privately at the coffee bar downstairs. So I appreciate you guys so much for showing up. I know it's a bit earlier here and we all have a lot of things to do. So awesome. And this is a really great conversation. Everyone else, I appreciate you sticking through my technological issues that we always have when we attempt to do this at a hotel. I do hope to see both of you guys at Consents.

Everywhere else, I will be streaming again tomorrow through the thick and thin of the hotel internet. Please follow Seth and Katie. Their links to their Twitters are in the description. And I'll see you guys, both of you two, and everybody else later. Thank you so much. Thank you, Scott.

Thanks, Scott. Bye. I can't even end it. I can't even end the stream the internet's so bad it's frozen you guys can sign off here i'm gonna remove everybody at least