The Wolf Of All Streets - Is Tether/USDT Still Safe? Tether CTO Paolo Ardoino + Week In Review

Episode Date: December 2, 2022

Amidst the collapse of FTX, how safe is the backbone of crypto - USDT/Tether? I talk to my frequent guest, Paolo Ardoino, CTO of Tether. Also, I will review the biggest news of the crypto week: Kraken layoffs, SBF PR campaign, Apple NFT fees, Fed rate hike slowdown, Animoca's $2 billion Metaverses fund & BlockFi bankruptcy. Paolo Ardoino: https://twitter.com/paoloardoino ►► JOIN THE FREE WOLF DEN NEWSLETTER https://www.getrevue.co/profile/TheWolfDen GET UP TO A $8,000 BONUS IN USDT AND TRADE ALL SPOT PAIRS ON BITGET FOR ZERO FEES! ►► https://thewolfofallstreets.info/bitget Follow Scott Melker: Twitter: https://twitter.com/scottmelker Facebook: https://www.facebook.com/wolfofallstreets Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c #Tether #FTX #bitcoin 0:00 Intro 1:35 Paolo Ardoino 1:57 Circle vs Tether 4:15 Tether gonna die? 9:35 Tether redemptions 12:50 FTX, Deltec & Tether Connection 14:40 Audits & FUD around Tether reserves 20:10 Why Tether is not doing the audit 22:56 What do Tether reserves consist of? 24:15 The future of Tether and stablecoins 27:55 Wrap up with Paolo 30:30 Jobs report! 31:50 Kraken Cuts 30% of Workforce 33:00 Layoffs tracker 35:08 Coinbase Disables Mobile NFT Transfers 38:00 $2B Metaverse Fund 39:00 BlockFi bankruptcy 42:00 SBF PR campaign went wrong 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.

Luna collapsed. Three Arrows Capital collapsed. Celsius went bankrupt. Voyager went bankrupt. BlockFi went bankrupt. FTX collapsed. Well, what happens any time there's any sort of negative news in crypto for, I don't know, the last half a decade? People start to speculate that Tether must be going under. So of course, every time we hear that rumor starting to bubble, we bring on Paolo Arduino, the CTO of both Bitfinex and Tether to talk about what is going on there underneath the hood. Also, after I talk to Paolo, we've got the Friday week news in review, a lot of which probably will focus on the fact that SPF is getting the soft treatment from the mainstream media. And frankly, it seems the crypto media is not doing a much better job. We'll talk about all of that.

I've got Paolo momentarily. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel and tap the like. Let's go. and you can count on the fact that people will flood tether no matter what happens in the crypto market no matter how good or bad things are it's a persistent theme and undercurrent in the crypto market i'm going to go ahead and bring on palo right now palo how are you good to good to see you hey scott thank you for having me again of course the palo gave us a warning that he's that he's uh traveling with uh somewhat spotty Internet and extremely windy trees, as you can see there in the background.

But we're glad that you were able to make it out to do this. So, listen, I mentioned this to you right before and I want to show this because I just we found it hilarious. We we Mike Misha, my producer, reached out to Circle and asked if they would do a panel with you guys. So he said, one more question. We eventually would like to have a debate between Circle and Tether. Let me know if Dante or Jeremy would be interested in a panel with Tether Palo Alto. We know. Thanks, Misha. This was the response.

Hello, Misha. We would not be interested in a panel with Tether, but appreciate the opportunity. Circle and Tether are not a direct comparison. It's like comparing apples to Play-Doh. A debate sets the stage that we are alike enough that we stand on common ground somewhere and we don't share that view. Appreciate the offer and hope you understand the position.

What do you think of that? Well, they are right. We are not alike. I mean, Tether has, you know, almost 10 times, well, today almost 15 times the trading volume per day. Then USB-C, the usage is insanely higher. We are actually building products and services.

And we build something that actually is helpful for people in the merchant markets and developing countries. We are not the servants of Wall Street. So, yes, it developing countries. We are not the servants of Wall Street. So, yes, it's true. We are not the same. Yeah, but I bet that if you were asked to sit on a panel about stable coins with them that you would happily do that. I mean, the real offer was that we do roundtables every Thursday. We have people who are in the industry discuss.

It just seems, I mean, listen, I laughed out loud literally every time I read the apples to play-doh just because it's a funny statement i might start using it but i think that that's a bit uh a bit crazy oh look i would i would uh be happy to talk uh in a panel with them i mean i would talk to rocks um can i be the play-doh in that situation because i like play-dohs you know um you can you can actually have fun you can build things you can you know it's it's useful right so apples are you know especially in these days are um those companies that tend to have monopolies and charge people 30 for monopoly on on on uh on devices so you know

let me be the play though then oh that makes perfect sense. My kids love Play-Doh, but I hate cleaning up Play-Doh, to be honest. I'm not the biggest fan of Play-Doh as a parent. But let's talk about, though, obviously the new round of Tether Fund. I mean, is there anything else here? Is this literally the same exact cycle where people dig for the same information, never really find anything? I mean, are you seeing a different situation or is this just more of the same? So let me give you my two cents on this whole story, right? So since 2017, all this Tether is going to die thing has been always in the news, right?

Every downturn of the market, you know, has been always in the news. We have been fingers pointed at us for basically our entire life, you know, company life. And every time happened that another company failed. Right. So we are seeing recently, right, this year especially, it has been extremely obvious, right? From May afterwards, we have seen Terra Luna, of course, started this entire craziness. I think that you invited me on the show back then. Then we had Celsius.

Well, first three arrows, then Celsius. Then we had FTX, BlockFi. Now we have Genesis and VCG, right? So what these companies have in common? These companies have in common that we're considered the mighty heroes of our industry, right? So FTX was considered like the messiah

of the exchanges. Then we had Celsius and BlockFi, great lending companies. And then, of course, Genesis and DCG, you know, best lenders in the market with the best risk management, you know, super solid and stable. And everyone of these companies had to quickly go and run and raise capital, otherwise they were going belly up, and most of them actually went belly up. So I think that, in a way, Tether acts or is used by mainstream media, but also by other competitors, as a way to deflect the real problems that they have in their own backyard.

So every single time it happens like this, I mean, at some point, Tether FUD is becoming a meme. How many times we are hearing people crying wolf. I mean, you are the wolf of all streets. So, you know, they are crying wolf and expecting Tether to have problems. When, you know, Tether since last year was June 2021, had 30 billion in commercial papers.

Everyone was saying, you know, it's all ever grounded. Tether will die. And we proved that we were able to reduce those commercial papers, right? One after the other in the following months, we reduced $30 billion. We moved everything in T-bills. Right now, 82.5% of Tether is cash and cash equivalent. That is what our community asked.

Of course, we can do more. We can go to 100%. And that is our goal. But the reminder of that, you know, of our assets are extremely over-collateralized assets, not by FTTO, that crazy stuff, right? We are not the companies that offered loans to Adameda or FTX, like many of the companies that are now desperately trying to raise capital or are in in desperate financial situation

or went badly up. We never did those type of loans against like, you know, pinkies where collateral, right? So that to us is like the basic of risk management. And yet you have these companies that are, you know, even public companies like Voyager, right? They are similar that did all this crazy lending.

Imagine if Tether did something like that. Tether, yes, was in the news. Tether did a loan back in time with Celsius. It was a big loan. It was extremely over collateralized and when we had to to liquidate that loan we were able to liquidate that loan and give back even part of the money to the sales that is risk management that is taking seriously the job of a stable coin but in general the job of a company that is not here to make an extra buck, it's here to provide a service to an industry that

this company was really helping to create from the beginning, from the get-go. So yes, again, we are not the same with Circle because we were there basically at the beginning of this industry. We helped to shape it and we are the ones that are helping to make it more resilient and stronger. If people have to keep pointing the finger at us over and over again for the next 10 years, it's fine.

It won't change our strength, it will not change our solidity, our stability, and so on and so forth. We prove that to regulators, we have healthy discussions with everyone. Yeah, that all makes perfect sense. I would imagine that every time one of these platforms fails, though, and we've seen it in the past and I've had you on,

that you get an increase or spike in redemptions, right? Just because people are trying to exit the crypto market, whether that's specific to FUD or not, people just move to cash and lose confidence progressively in crypto. Has there ever been an issue servicing those redemptions? Have you seen a larger spike in redemptions since FTX went down? So never had Tether never refused one single redemption. All the redemptions had the owner at $1. So we had two major moments in redemptions.

As you know, again, you had me after the 12th, 13th of May 2022 on your show, was the Terra Luna crash. So Tether was able to redeem $7 billion in 48 hours. And that was amounting to 10% of our reserves. No bank was able to do that in the history, in the recent financial history. And over the following month, like until the mid-June, we were able to service $20 billion in redemption,

was around 25% of our market cap. We went from basically $84 billion to $64 billion in a matter of a month without any problems, right? Without the blink of an eye. So recently, so after that, after mid-June, just to give you a little bit of history, redemptions kind of paused. Tether grew up around $5 billion to $69 billion,

while our competitor, the one that you mentioned, went down from $55 to $45 billion. Now they are sitting around $43 billion. So our current gap counts around $22 billion. So the interesting fact is, as you mentioned after FTX, of course, the panic in the market started again. You know, Tether is considered the gateway of this industry. So you can see also in the trading volumes, right?

So we trade today $29 billion, so around half of our market cap, while our direct competitor, Circle, is trading $2 billion, so basically quite less than their market cap. So pretty much we are trading more than 15 times. So you can see that the trading volume is an indication of the utility and the actual adoption in the market. And so if someone has to exit the crypto markets, of course, exit from a tether rather than our competitors,

just because there is much more liquidity in the market. And so it's fine, right? So our entire job as a stable coin is you know to uh to work with um supply and demand right so if the market needs a stable coin it needs liquidity and once tether they are coming and buying tether if they want to exit the market our only job is to giving them back the money if they want the 100 percent of tether, we are going to give them back their money. And the next story that I've been hearing, which seems to be the new FUD, is the connection between FTX, Tether, and Deltek Bank. Now, I don't suppose that I'm an

expert on it at all. Can you just talk about what what deltech bank is and what the connection there is or is not so deltech um is one of the banks that that is using is not the only bank that that is using is you know public information of course uh we are um so alameda has been a customer of tether both deltech uh i think that um it's public information. They published a letter in the past days. They don't have any exposure to FTX or Alameda. Tether has been probably the first company that was asked if they had exposure to FTX and Alameda, and we didn't. To be clear, Alameda was one of our biggest customers, but every single transaction was transactional. It means Alameda was buying tethers with dollars.

We were delivering the tethers that's safe, right? So we have the backing of Alameda was using those tether for their own reason to trade wherever and so on. So it doesn't pose any threat to tether. The fact that they were our biggest customer. They're just a customer who was buying tether. So there's no, what they do with it after that is effectively not your business. Exactly. That makes perfect sense.

How many banks does Tether work with? I mean, I think people have this perception that Deltech is the only bank, and obviously that's not the case. Right now we have four major banks, but also we have smaller banks that we use for, you know, for in part custody and payments.

Yeah, and so I think one of the maybe positive trends, people will argue about this, that's come out of the FTX collapse and all these collapses has been proof of reserves. Right now, there's a large argument about what proof of reserves really means for an exchange and whether they're listing their liabilities and whether they're misleading.

I mean, is that a trend that you see coming to Tether where you're going to feel more compelled to share audits or share exactly what your reserves are and where things are? Do you think that you've done a sufficient job of that? So I think we did an efficient job of that. I think that, of course, transparency should always be a bar that you keep setting higher in order to provide more transparency to your community. So, you know, just an interesting thought, and I'm sure you have followed yesterday

the Twitter spaces from Sam and also the interview that he did on Wednesday. Sam suggested that they had audits, right? And they were fully audited. They were respecting the gap audit and so on and so forth. So Tether is actually aiming to get an audit. We have said several times, unfortunately, timings are not the fastest. So we would like to be faster than what we actually are. So I said it publicly multiple times that still this is our top priority.

So we know that we can get the audit. Unfortunately, what happened with FTX is not making things any easier because, of course, there is more scare from auditors in providing audits. But this will not stop us. We will pursue and we will continue to work towards our full audit. So that is the first statement. The second one is that the industry standard for stablecoins is attestations. So attestations are not worthless.

They are already providing a good understanding of our reserves. Our plan is to always go towards an increased number of TBL holdings. We proved that, right? So we started with basically, you know, almost zero one year ago and one year and a half ago. And now we are 82.5% cash-in-cash equivalent. Of course, again, the path is, and our interest is always doing better. But nevertheless, we have the attestation from a top five accounting firm

that is better than any one of our competitors. So everyone was making fun, and that was part of the Tether Fund in the previous months. And it's interesting how the Tether FUD keeps shifting gears. So first was Evergrande. We basically wiped out the commercial papers. Look at how the FUD works, right? First, they tell you that you are not backed because you have commercial papers.

And then you publish the type of commercial papers you have or the ratings, and they tell you that you have ever-grande commercial papers. And then you prove that you don't have ever-grande commercial papers, and you state that you can reduce commercial papers to zero. And it takes some time. So we took almost one year to reduce the commercial papers to zero. Now, of course, they see that we reduced the commercial papers to zero, and now they change the narrative. And they say, well, but, you know, Delta. And now we proved that we have a strong banking relationship, both with Delta, that didn't have any exposure to FDX and Alameda. Of course, they were customers, but no exposure.

And then, yet, they moved the bar to something else. It's always moving the bar. Why? Because they need an RTI that is deflecting from the real problems of the industry. So Tether did something that no one was thinking about, that was redeeming 10% of reserves in two days, 25% of reserves in two days, 25% of reserves in 30 days. No bank ever was able to do that. So rather than praising the stability of Tether

that just doesn't have... So one thing is having an attestation and audit that is really important. No one is discussing that is paramount paramount, of paramount importance. But hard facts are important as well, right? We are the only company that proved that was able to achieve that. We have hard facts.

We survived to so many Black Swan events. Where is the media talking about that, right? The media is writing puff articles on Sam, on DCG, on all these companies that failed, and yet they are still looking at Tether. So I think that the reality is just like Tether is this black sheep that will be perceived as a black sheep because I'm Italian probably and I don't deserve to be in the Olympus of the might people, but it doesn't matter. Our work is servicing emerging markets and developing countries. Sorry for the rant, but I had it in my head.

No, I appreciate it. And I want to touch on something you said. You said that FTX has made it more difficult to get that immediate audit and that that's sort of changed the timeline. Why are auditors scared now, as you're saying, to audit, Tether? Why would the FTX situation

actually make it a longer process? So to be clear, we have and we are confident that we will get the audit. So it won't change the fact that we will get the audit. And we are sure that our auditors will continue to do their work to get to the full audit. So it doesn't change that. But keep in mind that there are no clear regulations. So the problem, the real problem is that if you see the top four accounting firms, they are not auditing stable coins.

There is no stable coin at an audit or even an attestation for accounting firm. The reason is that without regulations, without clear regulations from an important jurisdiction like US or Europe, the auditors will never sign off on a piece of paper that says that you are completely fine. For the simple reason that if no one tells them what rules they should abide to you know why they should take the risk right these are enormous reputation or risk for them and so what i'm saying is that of course the ftx blowing up you know this this uh extremely praised company that was supported by you know football stars by you know wall street everyone

was supporting them you know they suddenly blow up it really doesn't help right doesn't help the narrative of crypto it's not just about tether having more difficulties everyone will have more difficulties regulators will trying to bash everyone in crypto. We as a state are fine. We will keep proving that we have all those regulators. We will keep proving that we are increasing our transparency and so on. We will keep working towards the full audit. It's fine. But what I'm saying is that things like this don't help. And the fact that the media doesn't recognize who are the bad actors all this time along doesn't help. Of course, if you start paying big checks

to be here and there, of course, you can see why this is happening, why media is turning their eyes somewhere else. But it's stressful from a certain point of view, but it will make the industry stronger in the long run. Yeah, you said that 82.5% is covered by commercial paper, not commercial paper, excuse me, by short-term treasuries, cash and cash equivalents,

which theoretically means that if people redeemed 82.5% today, you would be able to redeem that. What is the other 17.5% and is the goal to eventually move all of that to cash equivalents? So it's secure loans by extreme over-collateralized assets. Why the over-collateralized? We are talking about more than 150% to 200% collateralization by extremely liquid assets. So we also, if you go on the public attestation, there is some precious metals. But that's definitely the goal is to keep increasing that percentage. So we started from zero one year ago, basically.

Well, not zero. I should correct myself. So we started from zero one year ago, basically. Well, not zero. I should correct myself. So we started from a lower number. Of course, in TBLs, we had just commercial papers. And we kept increasing that number to 2.5%. So we feel confident that if we have to pay back everything, we will be able to pay back everything in a short amount of time, no matter what, even with our current situation. I know we only have a few

minutes left. I wanted to just shift gears a bit. Obviously, I think that one of the more positive silver lining narratives that we've had is that somewhat crypto-native services have survived and it's really been the centralized platforms and stuff that have failed due to human error. Do you think that with the central bank digital currency coming, which we I think all know is going to, and more demand from regulators, that that could be a threat to Tether? Or do you think that it would be literally the opposite, much like we've seen some moves to DeFi and to self-custody, that people would go to something more crypto native because they lack trust in the more

centralized platforms? So that's a good question, right? So we should separate between stablecoins and I think general crypto. So stablecoins, I think that, I'm not sure if you agree with me, but we should get over a little bit the concept of decentralized stablecoins. So everyone that tried to create a big decentralized stablecoin kind of failed. And the biggest current decentralized stablecoin is going TBLs as well. So, you know, that's kind of interesting, right? So everyone, until the beginning of this year, was like crying, like, you know, about the decentralization of Ether and, you know, the top competitors.

But suddenly, you know, either they blew up, the decentralized stablecoins blew up, or they are actually following our steps and going in TBLs. So this is extremely interesting. So my point being that stablecoins and centralized stablecoins are there to stay. Because there is only, if you want to have a connection

with traditional finance, stablecoins are basically the way. So, of course, it's all nice and easy when you are dealing with only crypto. But the reality is that stable coins are, you know, the gateway to crypto also in DeFi. So, you know, it won't change anytime soon. I think regulations will start cracking down on, personally, from what I see. I don't want to fight. I don't want to create any uncertainty just from what I see, I don't want to fight and want to create any uncertainty. Just from what I see, there is some concerns about, you know, this entire discussion about many tokens being considered and potentially being considered securities that will bring a ton of regulation potentially. So I think DeFi might not be exempt from requirements

that centralized exchanges and counterparties might have. So point being is that DeFi lending platforms, I know that some DeFi lending platforms are already looking into adding KYC and whitelisting in order to be prepared for that occurrence. Because, you know, anti-money laundering rules and so on might be applied also to DeFi. So I think that regulations will completely change the shape of our industry. Interesting enough, though, the common denominator between all the regulators is that Bitcoin is considered in a different category where Bitcoin is basically simple as money rather than being a financial instrument

and product. So that's, I think, the biggest achievement. So my feeling is that Bitcoin is a category by itself. The rest is we have to watch it closely. Stablecoins are here to stay and will be probably even more regulated in the future as the entire crypto industry. Good. There you go. Thank you so much, Paolo. I know that we're up to your time here and I really appreciate you even while traveling, which I know you don't often do out of Europe, you said. So it's interesting that you're getting around the world at the moment. And I was going to ask you about your time in El Salvador, but we'll save that for the next one

if that's OK. Happy to jump again on your show. Thank you again. Awesome. Everybody, please go follow Paolo. We really do appreciate it. I know that you spend, it seems like,

a big portion of your life when you probably want to be building and doing work, answering questions from the community and sort of disabusing the FUD. And we appreciate want to be building and doing work, answering questions from the community and sort of disabusing the FUD and we appreciate that you constantly show up

and are willing to do it. Thanks, Scott. I really definitely prefer coding, but I also like depending on my companies. We'll take it, man. Thank you very much. Thank you. See you guys. Guys, thank you so much. In the comments, I see a lot of you contributing

and asking questions. I want to be clear. I know that the environment in crypto right now is extremely contentious and everyone expects every podcast host, live stream host, Twitter spaces host to be an amateur lawyer pressing a witness in the Supreme Court, but that's not what we're doing here. These are our guests. We want to talk about the topics, but this is not the same as a Twitter spaces with SBF where you want to get down to the nitty gritty and details of a clear crime that was committed, right? That's not what we're doing here. And I understand that that's the impression that we all get now from every single guest, but it is not my job to accuse people of things

when there's no evidence to accuse them of anything. The fact is, as Paolo said, right now what you have is a company that has weathered all of the FUD thus far. I think we all remain skeptical of every platform in crypto and you should do so and make your decisions accordingly. But if we take them at their word, they're well on their way to an audit.

And we do know that Tether is a fundamental and massive part of the crypto space. Nuara said, well said, Scott. That space was embarrassing. I'm going to be honest. I was in there for about 15 minutes. I almost puked in my own mouth and then I exited. Scott, that space was embarrassing. I'm going to be honest. I was in there for about 15 minutes. I almost puked in my own mouth, and then I exited. We talked about that at the beginning. I'm going to get to that at the end of the news. We'll talk about SBF here at the end. But let's dig in right

now to the weekly news and review. We're going to cook through it. Actually, today, right after this, I have the honor of interviewing Plan B again, which was one of my most popular podcasts of all time. I'm psyched to have him back. So that'll be coming out soon. But here we go. U.S. adds 26, 263,000 jobs in November as labor market stays hot despite Fed hikes. Jerome Powell is so pissed right now. Too many people have jobs and they pay good money. It's terrible. Got to get rid of those jobs, make people homeless and poor so that we can pivot. We're still in a world where bad news equals good news. And if you want your stocks and assets to rise, you need to unfortunately, apparently hope that people lose their jobs and that we see signs of a weakening economy. The expectation was

200,000. 263,000 actually smashes that expectation. Major, major, major print to the upside. Bad for markets, apparently. I haven't even looked, but I'm going to imagine that the SPY right here, yeah, down. I mean, it closed yesterday around 407, opened today at 402 as a result of that news. 3.7% unemployment, that number remained unchanged, and there was even a slight increase in wages. So now we have to cheer for our friends, family, and countrymen to lose their jobs so that our precious stonks can rise. Cracking cuts 30% of workforce amid crypto winter. Remember, this is a week in review. Some of this we may have mentioned or discussed briefly before. But yes, the crypto exchange is laying off 1,100 people after saying it was in hiring mode earlier this year. Here's the quote.

Since the start of this year, macroeconomic and geopolitical factors have weighed on financial markets. This resulted in significantly lower trading volumes and fewer client signups, Kraken said in a blog post. to make sure that they continue to exist into the future by cutting costs is necessarily a sign that there's anything wrong with that company. It's probably a good decision. And Kraken, not the most popular exchange in the world. If they scaled and the market changed, then obviously they need to scale back to their previous levels. And this is not just something that's happening in crypto. It's not just something that's happening at Kraken. 2022, major layoffs grow. Here we go. This is a Forbes list that they've had a running list of people doing layoffs. Gannett, of course, that's USA Today, Detroit Free Press, layoffs. CNN, layoffs. H&M, layoffs. That just gets us to Kraken there, layoffs. DoorDash, AMC, HP, Carvana, Neuro, Roku, Cisco,

Amazon, Asana, Disney, Jewel, Barclays, Redfin, Meta. That only gets us back to November 9th. Salesforce, Zendesk, Chime, Lyft, Stripe, Twitter, Opendoor, Upstart. That's November. That's November. That's who's laid off people just in the last month or so. Absolutely incredible. But that's what happens in bear markets. That's what happens when people scale up and higher and there's bloat and markets are going up. And that's largely what happened to a lot of crypto platforms in the past. Not that they had to end up firing people, but they collapsed for a similar reason. I've talked about this before. I can speak most probably informedly, is that a word, on Voyager, right?

We all remember when Dogecoin went absolutely nuts. That was really, even though it was a bull market, it was really about Dogecoin. Retail flocked into crypto exchanges looking for a place to trade Doge. Voyager was one of the huge benefactors of that. So they got hundreds of thousands, if not millions of new customers in a matter of a week or two, had difficulty scaling up, had to hire tons of people just to be able to onboard all those people and service them. And then those people were getting yield on their coins. And then what do you do when that

yield starts to disappear and those customers no longer want to trade Doge? Well, that's when shit goes bad for your company. Then you start to do risky things like give nearly $700 million uncollateralized loans to amateur 30-year-old philosophers who can't afford to buy the yacht that they put a down payment on. I'm not talking about 3AC. Yes, I am. Talk to those guys. Yeah. So this is not just a crypto thing.

We are seeing firings down the line because we are in a bear market entering into a recession. This is a crazy story. Coinbase disables mobile NFT transfers, citing Apple's App Store policies. If you do not read my newsletter, then honestly leave. No, I'm just kidding. Don't leave. I need you. It's not that many of you.

We need you all. But you should read my free newsletter. As you can see right down, it's in the daily description. Yeah, you can subscribe to my newsletter. It's completely free. This is what I wrote about in the introduction, right? We've seen a long history of Apple's predatory ways in the App Store. This is not the first time.

Obviously, Epic Games and Coinbase in the past. Elon Musk has been very critical of late of the fact that if you want to be listed in the App Store, 30% of the revenue goes directly into Apple's pockets, right? I think most famously, Fortnite was removed from the Apple Store because they said, F you, we're not doing it, right? There have been companies that have pushed back in the past. Coinbase, when they had their Coinbase Earn product, which was not a yield-bearing product, Coinbase obviously had the product where if you did educational lessons, you would earn small amounts of crypto. Well, App Store didn't like that users were getting paid free crypto for

learning things. So they pushed back and made it an endless maze and almost impossible for anyone using Apple and the App Store to be able to access Coinbase Earn. Well, now Coinbase trying to just allow you to send your NFTs back and forth. Well, Apple wants 30% of the gas fees. First of all, the gas fees are not earned by Coinbase. It's the gas fee to use the network. It's a toll, right? So that doesn't make any sense. And you know what makes even less sense? You know what makes even less sense?

There's no way on Apple to accept crypto payments. Here you go. For anyone who understands how NFTs and blockchain work, this is clearly not possible, Coinbase said. Apple's proprietary in-app purchase system does not support crypto, so we couldn't comply even if we tried. So for now, we have a dangerous precedent being set that anything crypto native, even with gas and transaction fees, Apple's going to get their 30%. Apple wants the whole piece of the apple pie. And listen, Elon Musk had a lot of criticisms of Apple about that 30%. Other things,

but yeah, he's over it now because he went on vacation. Elon Musk went to visit Tim Cook, took a really nice picture of the pond and said, we're good, bro. It was a misunderstanding. Must chafed at Apple's App Store policies earlier in the week, but not so much anymore. Took a quick trip to Epstein Island. I mean, to, um, or did it slip? Took a quick trip up to the Apple campus, met with Tim Cook, and apparently we're all good. 30% is fine. Yeah. Yeah. So, yeah, 30% says Victoria Kaye. Yeah, Lon was tweeting about it.

Yeah, he was tweeting about it, but now he is cool with it. Cool with it. NFT investor Animoca Brands to start $2 billion Metaverse fund report. The company will unveil the fund called Animoca Capital with plans to make its first investment next year. Now, this is not their first multi-billion dollar rodeo. Animoca is the biggest player in the NFT space and in the metaverse space. Very interesting that they think that even in this environment right now, they can raise $2 billion more to invest in the metaverse.

That is a lot. They said it will be focused on everything on digital property rights so that piece of land that you paid two million dollars for that's worth 23 at least somebody be able to prove that it is yours but let's look i mean if you guys are curious about animoka brands this is their blockchain projects i'm just gonna kind of quickly scroll obviously the most famous at the sandbox but these dudes are i mean they they own everything out here. I mean, this is a very fractional small list of what they got. But holy man, this is a huge thing. But I love to see the fact that there's still $2 billion willing to plow into this. BlockFi went bankrupt. That's

probably the biggest news of the week, although I think everybody knew that was coming. BlockFi, but they have $355 million in crypto frozen on FTX. The attorney confirmed in the first bankruptcy hearing. And that's on top of the other $671 million in loan to FTX sister company, Alameda Research. Alameda has defaulted on the loan as well. Listen, honestly, it gives me a near aneurysm every time I try to dig into any of these things. I'm personally triggered by my own situation with Voyager. And frankly, I just want to puke when I think about any of this. But the incestuous relationship that was happening here between BlockFi, FTX, and Alameda is really hard for me to reconcile. I'm not trying to FUD. I'm not trying to give my own necessarily opinion. It's just very clear that something strange was going on here. I mean, as you can see, BlockFi had hundreds of millions in funds on FTX, but BlockFi was going to go out

of business and received a credit facility from FTX for $400 million. But then a huge part of this is a $671 million loan from BlockFi, which is how they earned their yield probably, to Alameda. Doesn't it seem like FTX could have just cut BlockFi out of that and just kept giving bones to... How do you borrow $400 to give the dude's cousin $671? Can anyone make sense of that to me? I just don't get it. Maybe I'm dumb. Maybe I'm dumb.

I am an American. They think we're dumb. Look, I got my USA jersey. Played in the Netherlands tomorrow. I'll be golf Maybe I'm dumb. I am an American. They think we're dumb. Look, I got my USA jersey. Played Netherlands tomorrow. I'll be golfing during that game. Maybe I'll wear that jersey while I golf and try to get it on a screen. Yeah, listen, it's very sad that BlockFi went out of business. We have another 100, 200,000, haven't confirmed the number yet, of creditors now who have a horrible taste in their mouth and have lost all the money that they had sitting on one of these platforms. And I hope that's the end of it, man. I hope that is the end of it.

Miguel Hernandez says the cousin pays more. That's probably true. So next story. Well, BlockFi's rise and fall a timeline in case you just wanted to track it. There's this article on CoinDesk. You guys can go look it up, but it offers the full timeline of how this happens. All of the money that they raised, all the problems that they had, the $100 million fine that they got from the SEC after being fined or blocked by a number of state regulators. I think the most hilarious part, if there is a silver lining, is that they still owe the SEC $30 million, and that is now in the bankruptcy proceedings. And now, listen, I mean, that's the

core of the big news from this week, I would say. We got this opinion piece on Coinbase, and we can talk about it. I would actually love your guys' feedback. I'm going to be the first to say, yeah, I didn't listen to the spaces. I listened to some of it. I started. Mario was asking some reasonable questions. SBF was doing his normal tap dance around the issues. Then Kim.com interrupted with some very valid questions. Mario got pissed that Kim.com interrupted. Then some dude named Chet dove in and literally just went as if he had watched too many episodes of Law & Order and started getting super emotional. And listen, man, I guess I could say I'm a professional interviewer at this point, but it's not easy to interview someone who's on the spot who you believe has committed a crime. That's different than just having a conversation. I love having conversations with people in this industry generally about positive things. We focus on so much negative.

The last few weeks have been so trying, I think, for all of us because you can't live a normal, happy life when all you're doing is focusing on negativity of your work life or of this asset that you're so passionate about. But it is very hard, to be fair, to just sit down. What do people expect any journalist to get out of SBF? What do you expect? Do you think that SBF is just going to come out and tell the whole truth all of a sudden when he's been lying to everyone this entire time? He's talking his book. He's saying what he thinks he needs to say to win the favor of the community and we're giving them the opportunity to do so and listen anyone would take that interview i totally get it but yeah we criticized the puff pieces from the new york times wapo those are

absolutely ridiculous i actually thought that uh the good morning america interview uh stephanopoulos and that sorkin from new york. I thought they asked the hard questions. The problem is that SPF didn't answer them. And if we believe that he was going to then show up on fucking Twitter spaces. And start just incriminating himself and giving more information, no, but the proper approach, I will just say in the future, not with SPF specifically or any of those. Got to just have a conversation with people, man. Nobody's going to open up if they don't feel comfortable. They're not going to open up if they feel like they're being accused or it's confrontational or you're yelling at them.

You can't get emotional in this job. Even if you are emotional like hide it, man, or be emotional in an appropriate way that shows the person that you're actually listening to what they're saying and that you disagree and want to have a friendly conversation about it. I don't think you can jump down someone's throat, start screaming at them and then get mad when they don't incriminate themselves of crimes that will put them in jail for the rest of their lives. So I think at this point, I would take a Sam interview and I would talk to him. Of course, of course, did in the past. I would now. But I don't think anyone should expect to get a different narrative moving forward. We're all everyone's going to ask him the same questions. Everybody is going to get the same answers. And then everybody else is going to jump in and criticize whoever did the interview afterwards. Right.

I saw you guys even being critical of me when I was talking to Paolo. Paolo, I'm not going to ask him a question where he's going to tell you something nefarious that you believe is happening with Tether or that is going to get him to tell me the exact date of their audit. Like, what do you guys want? I'm not telling you like specifically. I'm just saying I believe that when I talk to someone, I ask them appropriate questions. We get the answers that they're willing to give and we move on with our lives. Yeah. KO says, influencers are sucking off SPF for an interview. But that's what it does because it's about engagement. And what happens, this is not like, I'm not faulting Mario or any

of them. Like I said, I didn't really listen to it. But if you want to get answers out of someone, you have to have a one-on-one comfortable interview where you have an actual conversation. You can't have eight, nine, 10 people on stage screaming at each other and screaming at him because they want the spotlight. And they're concerned about how many Twitter followers they'll get out of

being up on stage. You know? Yeah. As he says, this is not the Jerry Springer show. And I think that's kind of what it is. Robert S says, don't call yourself a journalist journalist if you're not willing to ask tough questions. I don't know if that's specific to me or to anyone else, but I don't call myself a journalist.

I've never even thought to call myself a journalist. Podcaster? Is that a journalist? I don't know. But I was just a dude who has conversations about things that are happening in crypto, and it's awesome. Yeah. The information at the end of the spaces from the company Alameda Bankruptcy was the most interesting part. Shocking, too, said Koala Man. I actually missed that. I didn't see it.

But listen, there's no question that SPF committed fraud. How many ways are you going to ask the question, did you co-mingle funds? What the, $8 billion to $10 billion literally disappeared that were customer funds. Like, we don't need someone to admit something when all of the evidence is there. And it doesn't matter what he says.

We have the actual fact that customer funds are gone. And what we now have devolved into is parsing every single word that SBF has to say and criticizing every person who asks the questions because we're not getting the answers we want. The answers are there. The money's gone. The company's in bankruptcy. You don't need to listen to the words. You can just follow the facts.

Yeah. Yeah. Black diamond off the grid. The only person did well interview with SPF is Tiffany Fong. Yeah, we had her here yesterday. She did. She did a very, very good job. A lot of people saying Rand had the best questioning and follow ups. That's because Rand has been doing this job for decades, right? It's been talking to people talking about crypto. And, you know, I think as Ran sort of alluded to, people were like, you were being easy to him and being nice. Well, the way you attract flies is with honey. Be nice to somebody.

If you show up and you're just an absolute dick, nobody's going to answer your questions. Miguel Hernandez says, do like Shaggy and say it wasn't you. I literally made that reference to something about crypto yesterday to Emmy, to my wife. I was like, hey, she's just pulling a Shaggy saying it wasn't me. It wasn't me. Yeah. Picture this.

We all know. Yeah. SBF got offended when kim asked him about throwing his girlfriend under the bus yeah i mean that's the thing is like i think we're at a place now where everybody wants to like be the one to throw the big zinger to break the big news to be the one who asked that question but like did you really think that sam was gonna be like yeah you know uh it's it's caroline's fault and she's my girlfriend but she did it i don't know man that's all i got that's all i got so guys monday we were supposed to do it last monday but we have it confirmed

next monday macro out for the rising stars of twitter talking about macro i'm really trying and it's very hard because first of all i disappeared i went on vacation for the entire week of really when the ftx thing was brewing and when twitter spaces were getting 30 000 followers if If it shows you my disconcern about my level of engagement, if I was smart and I cared about being the voice, I would have showed up probably and continued to do a massive clickbait headline to bring on every conspiracy theorist. But I like my sanity, so I just went on vacation and didn't capitalize on that. And I think that now I'm really trying to focus. It's just very hard because this is the news, but I would really

like to shift gears back to more positive things. Because none of this has anything to do with crypto or with Bitcoin or with Ethereum or the use cases or blockchain technology. It has to do with a fraudster who committed fraud, right? It happened to be a crypto exchange, but Bernie Madoff didn't need a crypto exchange. Enron didn't need a crypto exchange. This is a tale as old as time of human greed and hubris, right? So I would like, although I don't think anyone will watch, but I would like to start talking about positive things. Headline, Bitcoin saves baby unicorns in the metaverse. That's going to be Monday.

But no, we got macro alf on Monday. I think it's going to be great. And I would really like to start to bring some positivity back to this space because it's deserved. It really is. It really is. There's a lot of great things still happening in the crypto space, and it's time for us to start talking about them. Christopher Walker says, more about the Oven Mitt Monday, Scott. Oven Mitt Monday. I bought this at Epcot Center. Saw it there.

It was so cool. So we did that. And of course, my other toy on my desk is the Liquidator. The Sam Bankman Freed Liquidator. Anyways, that is all I have for you. Good weekend. Enjoy watching the world cup. Can the United States beat the Netherlands?

Could it happen? It could happen. It could happen. Go to a draw and penalty kicks to get it over with. Uh, Armando asking when discord could question. I'll give you an update that I'm not supposed to give. So I built an entire Discord, paid all the money for it, started to hire people, and then the ship went

down, man. As I've said, I have no qualms about telling you guys I'm effectively running a no-income business at my own expense. Launching a Discord just to do it for the community, which I would love to, is at my own expense. Right? Costs tens of thousands of dollars to properly launch a Discord on a monthly basis. But I do still want to do it. And so I'm talking with some platforms and a way to partner it and make it something extremely unique and valuable and not just a place for people to fucking argue and spew conspiracy theories. So it will happen. No, it's not. He says you'll donate. So I don't want your guys money. That's not what that's not what

I want. That's not the point. Right. I want a place where we can have constructive and positive conversation and where I can continue these conversations. We could talk about the streams. We could talk about the podcast. And more importantly, the way I want to do it is where I provide agnostic, unbiased, non-human, up-to-date market data for you guys. Like, you know, really be up-to-date on the news when it's dropping, charts, data, all those things. And so talking to some platforms about doing that. If you alienate your guests, they won't come back on.

Yeah, funny how that works, right? So yes, we will. I want to see the chart section there. There would obviously be a chart section, but the return on investment, the ROI, risk reward of being a person in this space and sharing charts right now is extremely low. Extremely low. Anyways, that's what I... Can you get Saylor back for an interview?

I've asked and he didn't respond, so I will ask again. I'd love to have Saylor again. Also, I guess, Curious, would you prefer a Discord or a Telegram? I think Discord's better. You guys can tell me in the comments another time. Guys, that is all I got for you. I am out of here. Let's go.