The Wolf Of All Streets - LBRY ATTACKS SEC | FBI & DCG? | Crypto Town Hall

Episode Date: September 8, 2023

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

Hey guys. Yo. Hey man. I didn't co-host you, my bad guys. I was just inviting everyone. How does it feel to be wrong, Scott? I'm always wrong. And Ryan, actually both of you.

How does it feel to be wrong? How does it feel to see that TVL and Frantec hit an all-time high? It doesn't make it useful. It just means that degenerates are going to degenerate. Mario, remember I had a slight change of heart when I introduced the credit card payments. I said, there is a chance that if they keep increasing utility,

they suddenly may come out of it. But I'm still, I tried to jump onto it today. It's impossible to use. It's one of the worst user experiences I've ever had. That's expected. It's only what, a few? You know why I think it's not really accepted? Because the reason why it's not a good user

experience is not anything to do with blockchain. It's actually got to do with basic functionality of using a chat and being able to chat to people. It literally has no utility. You can't do anything in that chat. Yeah, I mean, you find the same thing, right? Yeah, but the utility is the exclusivity of joining the chat

though and then the feature of the functionality will be added over time come on if they that that is a ridiculous ridiculous crypto only concept can you imagine if okay let me say this can you imagine if facebook had launched and the only thing you could do was sign up like you couldn't actually talk to anyone. You couldn't post news. How about if Instagram launched but didn't have photos yet? You don't launch until you actually have a product that people could use. It's literally just a reason for people to pump and dump using their own egos and make

a bunch of money. That's it. It may add utility, but it was not built or created with the utility in mind there's yet another thing where it's like uh like yeah let's make a dog coin and then three years later make a metaverse for that stupid dog coin okay moving on from the metaverse dog coin and we've got jeremy on stage i think the story is talking so as scott was talking, you saw his frantic price

plummet. It can't go any lower. I'm fully at the floor. It's amazing. Well, yeah, I mean, soon you'll be paying people to listen to you. I'm actually doing it now. I'm trying to use it more and more. I'm just doing some silly stuff.

I literally took a photo. I never sent selfies of me, which sounds very dumb. I'm like to use it more and more. I'm just doing some silly stuff. I literally took a photo. I never send selfies of me, which sounds very dumb. I'm like, fuck it. Let me do something I never usually do to see if people hate it or like it. So I've started doing Outcoin daily. I think I did something similar. Foot pics are nudes. No, no.

I'm just taking a photo of me in the red light room doing the space. And I just send it. Try, the space. And I just sent it. Try, Scott. Scott and Ryan. Yeah, I just did it. Try, Scott. Try taking a photo and Ryan, do it now. No joke.

Take a photo and post it on Frentech and see what your audience thinks. You still have a lot of coin holders. And see if they like it. I said you want more photos. Bro, you do. I'm taking a picture of my feet right now. Are you being serious? No, please don't. Please Are you being serious? Please do.

Please do. I own shares in you. Please. Me too, Scott. I want them. As a shareholder, I want them. I vote yes. I think your vote is vote yes. Scott. Go ahead, bro.

Ted, I think your vote is vote yes. As Scott – Go ahead, Will. I just lost a connection there for a second. But when somebody buys one of your keys, they actually have the rights to you and whatever they want from you. You're losing connection. But I want to kick it off while Scott gets the connection back. I want to kick it off. There's a lot of news today. It's actually a very busy day. Nothing too major is what we've seen over the last few weeks but just a lot of interesting snippets we got the the library i think jeremy you're suing the sec

did i get that right we are appealing the sec's decision appealing the sec decision is one of the major stories i'll talk about the four major stories we have today so we've got library appealing the sec decision obviously after recent rulings uh it gives them after the the ripple case uh it you know makes your case likely stronger jeremy so it's going to be interesting to discuss that we have a crypto token being developed by jp morgan that we're going to discuss and that's different to j Morgan that we're going to discuss. And that's different to JP coin. We're going to discuss that. Another one is there's a headline here by Reuters that DCG and Barry Silbert are potentially under an FBI investigation. I'm very careful when I say this because I could see how it's obviously I've been the victim of it being used improperly.

But we'll dig into it a bit further. And again, FBI investigation doesn't mean much and could be used loosely but still worth discussing and we know there's a lot of meat there and it is worth discussing and lastly sushi and the head chef jared were recently served with an sec subpoena we do have jared on stage as well it's gonna be an incredible day there's other bits and pieces in news i'll mention three other big pieces of news that we won't go too deep into the imf telling nations not to ban bitcoin we covered that yesterday and we've got frentech hitting an all-time high in tvl the reason i put that as big news is because we've talked about it i posted my feed it's done oh my god and and

lastly is a ant group china's ant group which is the owner of alibaba is launching a blockchain called zan how decentralized etc and We'll discuss that in a bit. We'll dig into it. I just vomited a little bit in my mouth, bro. I just saw the first picture. I'm frantic. Don't do it, man. Don't do it.

It's loading. Don't do it. They're skinny feet. It's worth it. Your coin holders are skyrocketing now. I can see your coin holders are skyrocketing. Look, guys, we do have a serious list of topics to discuss today. Oh, shit.

Why don't I have a key? I do have a key. All right. Cool. Oh, shit. It is your feet. Bro, you actually posted your feet. All right, man.

On that point, I lost my trail of thought. Let's dig into it, guys. Honestly, I swear. I never thought i i dislike feet that much until i saw those but guys look we have an incredible panel very serious panel here we are talking about scott's feet um i want to dig into the so scott ran uh maybe randy can start giving us a quick overview and we've got jared here on stage and jeremy on stage i want to start going into the these two stories the library appealing the sec hey Hey, Mario. I don't mean to interrupt, but

ahead of that, since we have Eric and Chris here, should we just do a quick market update and talk about what happened sort of with Bitcoin last night before we dig into those stories as more people come in? Usually I'd say yes. We had a bull market last night. Yeah, we had like a six-hour bull market. It was crazy.

We had a bull market. Were you asleep or what happened i don't look at the markets man unless you guys force me to for the show basically went up a thousand dollars and as usual uh retraced the entire move oh yeah i can see retrace them all like you guys must be so depressed i retraced it all um yeah we could do a quick market update we just have such a great panel today so i want to jump into the panel quickly um but yeah i meant to do it with eric and chris by the way yeah of course of course not us so let eric you want to go ahead give us your thoughts real quick and then chris inks uh on what we're seeing in this market why we can't seem to sustain any sort of move and and

basically just what's going on yeah sure so as far as what happened last night it's still within the same range statistically speaking um that i've been posting about since about uh the first of september um if you actually go to my most recent uh tweet or post or whatever the hell it's called nowadays is it is it you right now bring it down and back up go ahead eric all good man all good um yeah so uh actually made a tweet about it today same range that's been going on for the past uh week now bitcoin operating within within 50 of its historic returns so nothing's really changed there just tested the high of it yesterday pretty much almost to the t so um that was an insignificant move as far as i'm concerned

and my prior analysis that i've been sharing on this on these spaces for the past few weeks now still is is what I'm looking at. Risk to the downside. You know, it is it is more likely to be bearish within this next week leading up to the 15th of September. That's the quad witching. And then after that, yeah, my model will start to switch around and show a little bit more of a bullish bias. But for right now, it is still risk to the downside. If there's going to be downside, highly likely it happens within this next week. And namely, or most likely to happen is going to be Thursday as well. So that's really all that I have. Yeah. Chris, what do you... My mic was not working. Chris, what do you think? Does that align with what you're thinking right now? I mean, we obviously discuss this pretty regularly, but I'm pretty suspect that every time we see a price move up, it's immediately smacked down. We even saw that with Grayscale,

right? Grayscale wins, massive move up, immediately back down days later. Yeah, yeah. I mean, I agree pretty much with what was just said. The only other thing I'd like to add to that is we continue to hold here at that at last August of 2022, that mid August swing high. You know, I've been talking for a year now that that was what we had to overcome, not just with crypto, you know, that's the Bitcoin there. And then with with the stock indexes as well. And so we've continued to hold there. You know, we hit that again there. It looks like February or so. And then we finally broke through in March. We dropped down in June, rallied back up.

And we've been down here August and September, right around that same area. The only other thing I've noticed is every time we are getting rejected there, we're getting a significant buy down at the lows at that support area. So I don't know that necessarily that I believe it has to break down. I think though, like the other gentleman said, I do think that if it's going to happen, you know, the risk is definitely still to the downside. And if it's going to happen, it's probably going to happen here pretty soon, you know, next week or two. But overall, you know, again, I don't see this as bearish or anything. I see this as just a simple pullback on the larger timeframes.

We're still up 50-somewhat percent of November of last year. And so, you know, yeah, it's just continuing to do that. If it doesn't break down, it's going to catch the market completely offside. And people are going to be too scared to jump in until it's breaking out, you know, above 32. And at that point, you you know it's just going to feed it to rally on up in 40 if it does that so yeah yeah yeah my take is that uh this is just that year before the halving and nothing nothing matters news either way or price action and it's gonna just uh naturally start heading up soon i think you guys i think i think you guys are

gonna get your faces melted by some God candle because I think everybody's written off 2023. I keep saying it. And I think that I saw Eric's chart and Eric's chart was showing that he was talking about, uh, look at the gray scale, but,

uh, margin, the gray scale discount chart. And he heard that there is news coming. I mean, Eric, isn't that what your chart was leading to? Yeah.

I mean, the gray scale or GBDC is, uh, clearly showing a lot more of a bullish posture in them. Well, Bitcoin, for example. So to me, that's an example of, well, show me the charts and I'll tell you the news. So someone knows something, someone's making moves, and we're seeing it right now. Yeah, by the way, just to say, I don't think i'll get my face ripped off but chris is definitely very bullish so i don't think he'll get his face ripped off if that happens because we speak quite often and uh i know chris you think that the 40s and 50s are very much in the cards before the end

of this year oh yeah definitely i mean um i think that's a good possibility um especially with everybody you know again uh once you go through multiple cycles across different markets, you know, you just see the same thing repeat over and over again. And, you know, we're just, you know, we're coming into a year out of the, you know, of the bear market low. People are still in disbelief. And, you know, if you look at Bitcoin, we usually rally about 61.8, 70.5 off the swing low percent.

And so that would still get us up there into those mid-40s, low-50s, as what we've done every time before, before we did a decent pullback and then kind of did the breakout. People seem to want to wait until price gets to the new all-time highs before they call it a bull market. But again, we're 50%, 55% off or above that. But then, Chris, why do you think we keep selling all these good news? Like we're seeing – we were talking about this yesterday and a couple of days before.

It's like every piece of good news – I'm talking like major, major news for the industry just gets sold off very quickly or the market barely moves. Yeah, well, you know, generally what you're looking at is when you get to market extremes, whether know, the highs or the lows, but especially on the lows there, what you have in these areas or these ranges is that you have these tests. Everything is a test, right? It's a test of supply, test of demand, depending if you're at the, you know, at the highs or the lows. But what you notice is, again, that we keep getting caught at that, you know, last year's mid-August swing high, that $25,000, $26,000 level. And that continues to, you know, to provide support. We're not actually breaking down. So we're getting a rejection, but no follow through.

And right now, until we see follow through, I think it's really important to make note of that. You know, I tell our members all the time to, you know, not get overly excited and think it has to do whatever you think it has to do. What you want to do is watch the price action and watch the volume and look at where it's coming in. And so, you know, we're continuing to test those lows, but demand continues to show up. And so, you know, when you're at these these ambivalent stages or these areas, you know, again, where people are kind of giving up or they're just bored or disinterested, you know, the market doesn't continue to carry down, you know, the push through. Now, it doesn't mean it can't go down lower. But for right now, it's continuing to hold there. And until it actually breaks down, I think you do have to be wary of a potential, you know, all of a sudden a push higher that's going to catch a lot of the

market off guard. Because like I said, most people here right now in the market are thinking, OK, it has to go down or they're just they just give up i don't care anymore i'm bored it won't go up uh i'm not even paying attention at the moment so yeah you know there's a good possibility we could catch people off sides on that rally so um you know you got to be careful about further downside but uh until then these are just tests of of uh of the market down to these lows right now yeah and then goes to to ryan and scott's point uh yesterday a couple days ago is that you know similar to the last bear market, it'd be quiet, quiet, quiet, all the good news will come, but the markets won't react,

and then suddenly it just blows out and everyone thinks it's coming out of nowhere. But it's actually all that good news coming all together and the market reacting to everything all at once. But I think, Scott, we do have Jared and Jeremy on stage. It's the two major stories, so I think this is what I'm excited to get into. For sure. So Jeremy, obviously, you guys are the big news today. What I found so interesting, of course, was that I think we can all agree that Library in the first round was somewhat the sacrificial lamb of the industry. You've told the story many times about how you basically, you went in and registered, you know, come in and meet with us, the SEC's old narrative,

you did that, and then they sued you. And obviously, you guys lost. At that point, it seemed like you were winding down. And now, obviously, it comes back that you guys are appealing, which to me means you have more money and more reason to believe that you could win. So can you walk us through that a bit? Sure. Well, the most fundamental reason that we're appealing is they got it wrong. This decision was wrong. The way that it was found would implicate not just us, but almost any other company in the industry. And we've already seen that the SEC is interested in using this ruling to go around and try to beat up other companies and other people who didn't do anything wrong. And so, to perspective for the industry, I think it's absolutely necessary. I'm not going to get into

all the details at this time as to what's allowed us to think that we're committed to doing. And we think it's good for both the future of the library ecosystem, as well as the cryptocurrency space generally. So you obviously think that this is a fight then on behalf of the entire industry, because they're trying to use you as precedence is what you're saying. Basically, you had the loss, but then now the SEC can go and use that and say that anything similar

is effectively an unregistered security offering or in some way not compliant. Yeah, well, look, I'm an honest person, so I'm not going to say that I'm doing this out of pure altruism, but I do think it is something, we're doing this for the interests of ourselves and our users. But I do think it absolutely has positive effects for the industry at large to not let this case. To reiterate it, the judge in our case said that

it doesn't even require communication, that simply any entity that holds tokens, if you hold enough of them, and he didn't define a standard. But in our case, we were found guilty of small dollar sales when we held around 10% of the token. So someone bought $20 worth of the token. We had evidence that they directly used it because it'd be money. We're not, we're not competing with Bitcoin. We're trying to build decentralized social media and you need the token to do things like you know create a handle and create an identity on the network and this kind of stuff and the judge said that even though this

usage is consumptive um because theoretically some other person and he couldn't point to one but some theoretical other person might be using it non-consumptively. So therefore, even these clear consumptive purchases, clearly consumptive, people signing an affidavit as well as blockchain evidence that it's consumptive are still securities owners. And this is just crazy. And so, you know, I want cryptocurrency to work. I want cryptocurrency to be something that I can use as a United States resident. And so, you know, we think that this is necessary to work. I want cryptocurrency to be something that I can use as a United States resident.

And so we think that this is necessary to do. Jeremy, if I could speak to that. How much money do you think you're going to need to appeal this case with the SEC? How much money have you got? What do you intend to do

for any shortfall? Just interested to understand, because to me, taking on the SEC is one of the hardest and most expensive fights you can take on. Yeah, look, I agree. And I actually would advise other entrepreneurs out there if they can avoid it to, you know, to not get in a fight with the SEC. But it just it doesn't seem like there's, you know, another way out out of this other than what we're doing. And we have received, you know, we have some commitments that we think are going to allow. I'm just wondering, like in your head, like with articles that CZ put aside a billion dollars to fight legal cases. I don't know if that was true or not true.

And probably those articles are exaggerated. But I'm just wondering, like in your your planning and maybe don't even allude to how much you've got, but what do you think is going to cost you? Well, I know the SEC is listening. They go around, they go around following me and listening to the things I say. So I'd rather not than things that I don't need to give them. But I actually think that this is not going to be... Look, it's expensive. Lawyers are very expensive.

But I don't think it's going to be something that we're not going to be able to handle. It's not like the first. Exactly. So the marginal costs from here aren't quite as large. How do you want Our first round, it was approaching $5 million was how much we spent on legal fees. And how much did Ripple spend? Hundreds, right? So obviously, you guys didn't have the war chest for a full fight against the SEC.

Yeah, but Jeremy, talking about Ripple, can you just explain to the audience and to me really the basics? How could the decisions be so different? How could Ripple be considered not a security on secondary sales, but then you guys be considered a security? What are the key differences? And obviously, your lawyers have probably looked into this and have given you advice. What are some basic things you could explain to us? Well, the biggest difference is that the rule of law isn't real uh so this idea that there's objective law or that these things are objective is just a completely fake notion so

what happened in the ripple case is their judge uh got we said one thing and in our case another judge said another thing these are laws this is like uh you know you have laws that govern sandwiches and then someone invents a hot dog or someone invents a you know an open-faced sandwich it's just it's just all arguing there's not this this idea that there's some objective answer that exists is ridiculous i mean even now you can see you can listen to lawyers you're supposed to be the smartest people in the world arguing about what the implications are and they don't agree with each other because it's fake right this idea that these things are clear it's completely fake you're these are people these are these are shamans who are interpreting texts that are

completely vague that are completely clear these are priests this is not code okay and so the answer is well you hope you get different priests who find different things in the text right because this is it's politics it's not real a lot law is not real okay this is one of the biggest things i learned like this idea of there being law that's objectively applied is completely fake notion politics. It's not real. Law is not real. Okay. And this is one of the biggest things I learned. Like this idea of there being law that's objectively applied is a completely fake notion. Throw all of that away. If you're an entrepreneur, you can break the law the right way. We have two lawyers on stage. I would love to get their takes right after, but Jeremy, we have Jared who's right next to you. And Jared is on the receiving end right now,

where the SEC is taking action. There's a subpoena served to Sushi, and we'll talk about that in a bit. But the question I have for you, one more question, Jeremy. Did you guys, so before the XRP ruling, did you guys plan to appeal if XRP won the case? So you're muted, by the way jeremy and my question was that planned in advance of hey you guys are like all right cool if xrp wins or xyz happens we're gonna appeal what was that decision made after the xrp ruling the xrp ruling was certainly a favorable like we ever said hey we're gonna we going to base it off of what happens there. Because you guys were

winding down before the XRP ruling and not sure. I assume that means that you weren't planning to appeal. So we think that if Library Inc. has a judgment against

it, that it's better off that that entity sort of becomes a damaged entity. We always thought that the future of the library ecosystem, the future of Odyssey, I mean, Odyssey is still being used by like around a million people each day, that the future of these products was bright regardless. And so it was really just a question of where to move forward is, and we now feel that it is appropriate for Library Inc. to continue this case.

And talking about that paradox, Scott, maybe you could refresh the audience about the news we were talking about a few days ago. I think it was last week, and it was positive rulings favoring DeFi. Now we're seeing the SEC take action against Sushi. Maybe, Scott, you can give a quick recap for the audience. I'm trying to remember specifically what you're talking about, but we definitely have the fact that the CFTC today, which is not the SEC, obviously has effectively had judgments with three separate exchanges or decentralized exchanges for offering derivatives and leverage trading to Americans. So we're definitely seeing some now an uptick there

and probably more of this. I'm referring to something, I can't remember what it was, Rand, not sure if you remember, there was some positive news. We're talking about how that's great for DeFi. And when I can't remember what protocol it was, it was determined to be decentralized. It was a private lawsuit where a judge found that the decentralized protocol wasn't an actor in the relevant way and that this was peer-to-peer code. And so that you would not regulate the code itself

for the smart contract as a broker. Wasn't it Uniswap? It was a class action against Uniswap? Yes, yes, it was. Yeah, of course, of course, of course. Now we're talking about SushiSwap. So maybe, Jared, you can give us a quick recap of more about the subpoena, what it means, and maybe comparing to Uniswap winning the class action lawsuit.

Hey, can you hear me? We can. We can. Good to have you. All right, great. Just a quick point of clarity. Our lawsuit isn't recent. It was back in March, and there was quite a news cycle about it,

so I didn't want to kind of misinform the community and think that there was a new one it's the same one but um yeah i mean there's not my ours is a little bit different compared to libraries um and so like i can't really talk about it to be honest uh we released um like an faq back in i think it was the end of march on the sushi forum that talked about like the points that the that uh i guess we're up for like public disclosure that's really all i can say about it i can speak generally about like yeah let's say generally about it if you if you can't obviously dig into specifically what's happening with sushi at the moment, you obviously since March, effectively everything has changed with how regulators are approaching people, who they're attacking, how they're attacking them. So, I mean, what do you think the general status right now is sort of on DeFi, I guess, specifically in the industry versus regulators. It's my feeling that we're actually starting to see things move in a better direction,

that the pendulum swung a bit too far, and maybe you were a victim of that. Before you answer that, I just want to ask if you could just add into your question. We had a discussion this morning, and we said there's actually no such thing as DeFi, because all the front ends of the DeFi protocols are actually owned or registered to people in a certain country. So, I mean, it's great that we think we're transaction, transacting with a decentralized protocol, but in reality it feels to me like there's no such DeFi because even when you

think you're, you're, you're interacting with a DeFi protocol, you're interacting with a centralized front end, which is registered to someone. I would disagree with that assertion, mainly because it depends on what type of front-end you're serving. So you've got decentralized storage protocols that allow you to serve front-ends. Are you talking about a UI front end or a command line interface?

Well, let's talk about like Uniswap or SushiSwap just as an example. I mean, the protocol itself is decentralized, but the front end that I'm interacting with is registered to someone, isn't it? It doesn't have to be. It depends on what kind. I mean, if you're using a Web2 front end

and you have a UI that you've built out that you're using the port in and access the protocol there, then you may have... Well, I mean, let's just be a normal user who goes onto his Google Chrome and he goes www.sushiswap. or www.uniswap.

I mean, that's the average user's experience of DeFi today. I mean, that's the average user's experience of DeFi today. I mean, that's 99% of DeFi users. That's how they're using DeFi, isn't it? Actually, the majority of DeFi users are algorithmically driven. I think one of the reasons, going back to the trading issues that you see, is that when things pump or you have like positive price appreciation or dumps or whatever uh that's algorithmically driven right now because the lack of retail to provide that

liquidity is is pretty much completely absent um so you know for us for are they are they connecting directly to the protocol via an api not going through any kind of front end, which is centrally traceable, so to speak? You dropped out, Joe. I'm bringing him back up now. Joe, you dropped out. I sent you an invite. I mean, while he's coming back up,

if anyone does have the answer for me, because I'm really confused about this whole defi thing and you know the sec keeps suing people or subpoenaing people and that i'm just kind of wondering like is there really defi if the interface or the entrance to defi is through a way to world yeah jared is back up and that you know eric vorhees did a tweet on this. He said, Sushi created a legal entity to reduce liability. Don't let lawyers talk you into incorporation unless you want to be a corporation. If there So, yes, it's sometimes a weird look to have a Delaware C-Corp when you're claiming to be a decentralized entity. But you'd probably rather that than your name on the SEC lawsuit. I mean, limited liability protections exist for a reason. I think Eric's point is coming from a purely philosophical point.

I mean, I shared his libertarian views. I'm a libertarian. I think in practicality terms, the reality can look different than the philosophical view and i think the point where we are in crypto is having to operate in between the practicality of of the status quo of how governments view financial products and this technology and and ultimately uh you know our end goal for for what this technology, the purpose for why it was created. It really sounds like... Go ahead, Jared. Sorry. No, Scott. Go ahead. Sorry.

I was just going to say it really sounds like the answer is don't do it in the United States. And we've even seen, obviously, like Antonio from DYDX sent that tweet last week or a couple weeks ago saying, basically, if you're a builder in the United States, just leave. Come back when you have something that's fit for purpose in five or ten years.

And that's the way to do it because there are jurisdictions. Listen, they're going to still come after you, obviously, if Americans are using the platform, etc. But it seems like the big lesson here that we've learned this year, which you wouldn't have known doing these things in the past, is just go do it in a more friendly jurisdiction, play regulatory arbitrage, and get the fuck out of the US. Scott, I really want to try and understand something. I'm not being facetious. I'm actually really trying to understand this. Let's take a protocol like AGMX. And I'm just using AGMX because there's a lot of decentralized perpetuals protocols in the markets. And I'm assuming that GMX has some kind of IP blocker that won't allow U.S. investors to participate or to use the exchange. And, I mean, I'm also assuming a lot of U.S. people have got VPNs and they use VPNs and they log on to the exchange and they use the exchange. Question is, in that case, who would the SEC go for? And again, someone needs to educate me.

The platform. We've seen this. We've seen this with Central. Zach is right here. Zach, do you want to answer that question? Yeah. Zach, do you want to answer that question? Yeah, the answer is absolutely the platform. And the SEC has been very clear that if U.S. persons are using VPNs to access a protocol overseas, the fact the protocol claims to be overseas does not mean the SEC doesn't have jurisdiction. I think that's bullshit, but that is their viewpoint, and that's how they're going to enforce it.

How do they track the platform? How do they track the platform? This is what I'm struggling to understand. If it's a decentralized platform and it's owned by no one, because decentralized means it's owned by no one, then who are they tracking down when they're sending the summons to or the subpoena to or whatever they send? Yeah, they look at who built and who operates the platform. And in some cases, there are very clear answers to that question. Whether there's officially a company behind it or not, there's a group of people, right? There's a team behind GMX, even if they're not legally incorporated and they're not docs.

There are people who, you know, build that protocol. Would you say there's a team behind Monero? Would you say, like, for example, would you say there's a team behind Monero? And the reason why I'm asking is I'm trying to understand, like, at what point does it become so decentralized that the SEC has no one to go for? Like, yes, the answer to that question is somewhere around Ethereum, right? The SEC is kind of on the fence as to whether Ethereum is sufficiently decentralized, such that ETH is a commodity. Probably the answer to that is yes. But if you're less decentralized than Ethereum, like you're not safe just because you claim to be decentralized. The only thing

they truly bar US persons in a way that the SEC will leave you alone is to have whitelisted addresses, which no one wants to do because it will ruin your product. That's the completely confused view of regulation that implies that there are real standards that exist. That's not what happened. Ethereum is legal because it was early enough and got tangled up enough with enough important entities that the government won't go after them. That's why it's so hilarious that despite what Ethereum did, which is objectively worse than so many other companies did, including my own, it's legal because they played the political game correctly. It's not, again, there is no objective standard.

That is fake. You've got to throw that idea away that's i think i think you're just you're just wrong you're you're just wrong about that right and like look libraries are super they did an idea no no no very very clearly did things far worse than i come to look i don't want them to get in trouble i don't want anyone to get in trouble. But there's no consistent standard here. Okay. We never even did an ICO. That's what I'm saying. Why would they go after us but not Ethereum? Because it's tangled up with enough important entities.

They had ties to the SEC. They did things in such a way politically. Look, this is the education I went through. I thought that there was objective law. That is not true it does not exist it's politics all the way down i think i think on that point yeah let me respond and maybe yeah i would love you to respond i want to add one thing to it's like why didn't they take action against ethereum's ico so they became decentralized after the ico

because it was too long ago there's a certain number of yeah so the quick answer to the ico it was too long ago? There's a certain number of... Yeah. So the quick answer to the ICO, it was too long ago. It's past the statute of limitations now. But I think the critical thing to understand here is the legal reasoning behind why ETH is not a security is a different type of argument than in the library case. So ETH is about, are you decentralized enough that if you're betting on ETH to go up, you're reliant on the managerial efforts of some particular group of people like Italic or the Ethereum Foundation in order to make that investment pay off and at this point the sec seems to agree that like those efforts are not essential in the library hold on

in the library case this is about consumptive utility so this is a different type of how we argument that people are buying a digital asset, not as an investment, not in the expectation of profit, but to use it. They're buying it as a consumer product for its consumptive utility. And what was important about the library case, it was the first. So back in the ICO boom, people released all sorts of quote unquote utility tokens, but the utility wasn't built out yet. It's we're raising money from you now, then we'll build something and then hopefully the

token will be worth more. In the library case, there was extant utility, meaning that the token was actually usable for its stated purpose and the SEC went after it anyway. That's why that case is so important and why I hope you guys went on appeal. Sorry, this is just not true. We're talking to the SEC daily. We're in negotiations with them still. This is not what they're saying behind closed doors. It's central to why we are appealing. This is just not the SEC's position. That's what the judge said in the case.

That's not what the judge said in the case either. That is not what he said. I mean, and it's certainly, and anyway, this, okay. And you're reading it incorrectly, but this is, this is about what the, you're making claims about the SEC's behavior though, the justice system you're saying how is the sec being the judge in the district court the judge is also a a highly political government official uh like that's what i'm saying it's politics all the way down judges are objective judges are

political appointees that are there to do political things they're they're not they don't there's no rule of law they're not computer programs federal judges are lifetime they're lifetime appointees they're like lifetime political appointees lifetime and it's fake that doesn't work that's what i'm saying it's fake that this is a pretend thing we are taught. It is not true. It is all a lie. Listen, this is this is, in fact, a very nuanced question. I'm not sure you're serving the protocol. Look, it's really important for our industry that you win. I think calling judges fake is not the type of behavior that's more likely to have you guys prevail in the court of appeals. Zach, I've got a question for you. You're admitting that I'm right. If a judge would consider that I called him fake in causing it, it's fake. Thank you for agreeing with me.

But Jeremy, would you say that it's just people being people? So like the legal system is there, there's a system, but it's still run by people. And those people could be emotional, could make emotional decisions, could have egos that are hurt. So it's like a mix of two, there's a system, but it's still run by people. And those people could be emotional, could make emotional decisions, could have egos that are hurt. So it's like a mix of the two. Let's say that.

Let's not teach. I was taught all these things about laws existing and judges calling bone search. Let's not, let's say it's all people. People can't be logical and consistent. It's all about, it's all about politics. It's all about getting people to like you or playing political games, curing favor behind scenes, bribes, forming connections. It's all about getting people to like you or playing political games, curing favor behind scenes,

bribes, forming connections. That's how the law works. Even in the United States, tell the law works everywhere. So let's not pretend. And I'm, and I'm going to do you a favor.

Cause you said the SEC is listening to you the whole time. The SEC, just a message for you. Like Jeremy, what you're hearing from Jeremy now is just, it's frustration. He's just angry with the way you've handled crypto. So don't take that into consideration

in the court. I think everyone at the SEC is a sociopath. I think they're evil people. I think people should, if you meet an SEC official, you should treat them like a rapist or someone who abuses children. You should have disdain for these people. I'm sure your lawyers

would not appreciate you talking like this in public. I'll go. I've got I'm sure your lawyers would not appreciate you talking like this in public. I'll go. Look, I'm going to jump in. I've got a quick question for you guys. And Jared, that kind of links back to you. Is there any article by Decrypt covering the story, which I know it didn't happen today, but they talk about one of your DAO members, Test One, and they were wondering if the SEC

sent the subpoena directly to you in order to bring enforcement action against the dow itself because such groups i'm going to read out exactly such groups typically operate without a centralized entity and prioritizes a flat government structure governance structure using smart contracts in other words that you personally i know you can't probably comment on it specifically maybe a general comment would be good maybe getting carlos and zach's thoughts on it as well but our are DAOs, should any DAO members be worried? When do we consider decentralized autonomous organizations as decentralized?

Yeah, that's a great question. I think there's a lot to it. Absolutely loaded. The first part of that of whether or not i think that uh anyone in any dows anywhere um look the sec any any government regulator as far as i know and i'm not an attorney um can subpoena anyone and if you're a u.s citizen like i am then you're more likely to receive a subpoena uh you know just kind of again as the status quo i think um i still yeah i still want to get to the i want to get to the bottom of like at what point does the SEC really have no one to go for? Otherwise, to me, there's no such thing as

DeFi. We're playing in this field. We think we're all decentralized and we're trading on these decentralized exchanges. There's nothing different between this operation. Really quickly, Jared, sorry to interrupt, but I just want to point something out really quickly. Ran, if you looked into the story of the CFTC today,

they went after Open Inc. 0x and Deridex. And 0x. Right, right. But what I found the most interesting actually was that Coindesk reached out, I believe it was Coindesk, to all three for comment, and they could not find someone at Deridex to offer a comment because they couldn't literally find who it was or what they were doing. Yeah, so this is, again, what I'm trying to get to.

Surely there is, either we all agree that this thing that we call DeFi at the moment is actually not DeFi at all, and there's nothing decentralized about it because it's maintained by teams which are very easy to get information from, or we say there is DeFi, and this is what DeFi looks like. And say if the SEC does want to go for it or the CFTC does want to go for it, I suspect, and Scott, I may be wrong, but I suspect that the reason why they went for no one is because that protocol has probably ran out of money in closing.

And I don't know. I don't want to express information. I'm saying that's pretty much what happened. Easy wins. But guys, guys, we're trying to answer the most difficult question is like when is it when is something decentralized enough i think it's not about i just don't think it's black and white i think that's the problem i think that people get caught up in centralized versus decentralized and it's always a sliding scale and there's a ton of gray in between because saying other than bitcoin east monero maybe bitcoin east monero maybe i don't like coin maybe doge which are all by the way most of those are proof of work um but they're

not platforms there is a specific platform from a securities law perspective there is a specific answer to this question right a platform is sufficiently decentralized that the token is no longer a security if when someone is buying the token and expecting a profit from the token, they cannot reasonably rely on the efforts of any particular party, right? So take Bitcoin, for example. If you're buying Bitcoin based on your ETH. I think ETH is also not a security. I think that you're not essentially reliant on ETH's efforts at this point for number to go up. Are you reliant on the ETH Foundation's on the eth foundation's efforts on consensus's efforts yeah i don't think eth is a security but like you know you go one step beyond that i think like cardano probably is and xrp probably is is bnb a security i would think yes i would think if you're betting on bnb it's you're reliant on

binance being successful and cz being successful so we're saying is... I just want to be clear. I just want to be clear before I hand in my letter of resignation to Banter because maybe this is not actually worth fighting for, but we're saying in this whole industry, this whole movement which was built and designed to become decentralized and disintermediate

centralized intermediaries, we have two tokens and maybe a third that are decentralized. I'm going to jump in here because I think there's just a clear disconnect between how you view a protocol being decentralized and how you view a token being decentralized. Ran, you got a hot mic. Ran, you got a hot mic. Ran, you got a hot mic.

Jared, go ahead. So, Jared, you're echoing what Scott says, that you cannot trade a token. Right. You can't say Ethereum, Bitcoin, Doge. Those are coins, right? It's very much more difficult for someone to start, let's call it, whatever it is,

whether it's centralized, decentralized, start a company, a protocol, something that people are using to trade these coins or for loans and all these things without it and find it to be 100% decentralized. But like I said, it's not black and white. It's an infinite regress of logic to say that something is not decentralized, right? Because even if you solve all these problems Rand's talking about, you end up on an Amazon web server, right? And so it doesn't mean that DeFi isn't real. It just means we have to be realistic.

There are always going to be pain points where things have to rely on centralized platforms or centralized companies to make it work. But that doesn't mean we don't try. Hold on a second, Scott. I'm just trying to understand. The reason why we want things to be decentralized is because we want to be able to do whatever we want to do. I use the word whatever in the legal sense of the word.

When we want to do it without centralized intermediaries, we also do it because we want to maintain some kind of pseudo-anonymity through using our addresses versus using our real identities. That's why I want a decentralized world. And we also don't want governments to be able to intervene and sway and pressure the protocols to either service us or not service us, etc. But if you're like Tornado Cache, I think Tornado Cache is probably the best example of all of them. So Tornado Cache, as far as I understand,

the devs actually destroyed the keys and had no access to the protocol. Okay, so that's the way that I understand Tornado Cache. But the front end was hosted on a centralized server. And therefore, once the US attacked Tornado Cash, there was very, I mean, there were ways to do it. And my team actually worked out some ways to do it. But to the average user, that would have been impossible to be able to do,

like to connect into the protocol, you know, not using a front end. I mean, 99.99999% of people could never do that. So Tornado Cash is a separate issue, right? What we were talking about before is, is something decentralized enough that it's not a security? That's a very high bar. But then there's a separate question of, is something non-custodial enough or peer-to-peer enough that it's not a money transmitter. And that's really what's issue in these DeFi protocols and the Tornado Cash case. And that honestly is the thing we should all be more focused on. And I think the bar is lower there, right? Like at

least the guidance that we seem to have before that's getting challenged, unfortunately, in the SushiSwap case is if it is truly just code, if it's peer-to-peer and there's not an intermediary that has control of money, that money transmitter laws don't apply, that you don't need to go get licenses in KYC, everyone. And that is the precedent I think that we're fighting for, which is separate than the securities law question, which is really the more important question for freedom on the internet. That's Yeah, that's a really interesting, I think, take on it. And that's what I'm kind of the point is that decentralization or DeFi can't just be a catch-all, right? There's so much nuance here and every single platform is sort of

approaching it differently than each. Dave Weisberg, I saw you had your hand up. I don't know if you had a comment there. Yeah, I was actually going to say something very similar. I think that, well, in securities law or with the CFTC, I think the issue is, are you in the flow of money? Is the code in the flow of money? And if so, who gets that money? So if you're talking about an exchange where you're paying a fee that the exchange, the people who wrote the code are collecting because they have access to that smart wallet, those are the people who they're going to come after. If it's US investors, and in the case of the CFTC, are they offering peer to peer trading in

derivatives? If it's pure peer to peer, and you know, they're not taking a fee as part of as part of the contract, I think that will be very difficult for the CFTC to do anything. But if they are taking a fee, then there's some human taking that fee for enabling person, US person X and US person Y to transact with each other in a derivatives exchange. Yeah, I mean, one could argue that that is that that is an issue. So I think that that is a very important point. And I think that's very similar to what the last speaker was saying. Yeah, I've got a question for you, Dave. And I know Bruce is up here as well. You know, Jeremy was pretty passionate. Obviously, Jeremy is in the midst of all this.

And, you know, now they're appealing the SEC, the ACC winning the case against them. So my question to you is that he was very passionate about the corruption in the legal system. And that's something we discussed briefly. But I want to really ask you, I want to get more perspectives on this. How serious is it of a concern? You're about to get Bruce started. I mean, you know what you're doing here, Mario. You are calculated in what you're doing here, right?

In a way, but I genuinely wanted to ask the question because Jeremy's passionate. Jeremy's been on stage many times, always been very calm, very calculated, you know, talked about different things. But the way he started, you know, he was very aggressive against the SEC and said some pretty serious allegations. And Zach even jumped in and said, look, Jeremy, I think it's best not to say these in a public forum. Zach said it as a lawyer. Yeah, but the reason I want to bring them up is…

He said he just had the guts to say what everybody else already knows he's just i don't know that but right now i don't i don't know that that's what i mean like i'm in the middle i like i generally don't think the sec is that bad i think there's corruption there i'm definitely not on the bruce camp and i'm not on the on the john reed stock camp like i'm somewhere in the middle and then i was pretty vanilla to say but that's generally the truth can i I answer your question, Mario, because I've gone through this a bunch. I mean, look, I don't believe it's corruption. I do, however, believe that there's institutional bias. Before this administration, the SEC operated,

and this is going to sound bad, but I don't mean it to be bad. They operated in a situation where they thought something was wrong. Once they had that thought in their head, almost every firm that was on the other side, found it better to settle, admit no wrongdoing and move on. Because the expense of fighting the action was going to be more than the fine in most cases. And and if you lost then you paid twice and in fact you lose if you're a firm you operate you know i look i work for big firms right you know i was a city group and there were at least two different places where we settled where i violently believed we were in the right uh and and and i'm pretty sure we'd have won but it wouldn't have mattered it's called a victory if you spend 10 million dollars fighting a lawsuit and you end up paying a $500,000 fine instead, which is better? And the

answer is it's better to pay the $500,000 fine and move on. And so the SEC has operated in that. That has been for years. So if anyone in the SEC has something that they think on a technical violation, they could go after it. And in fact, it turns out to be a pretty good funding source for them. Although they don't actually keep the money it goes to treasury the fact is it tends to be profitable and everyone kind of just assumes the cost of doing business it is however when you weaponize it against small firms in the in in crypto it has taken a dark turn and i think that's what jeremy is reacting to he's reacting to the fact that it's not city group anymore now you're talking about a a firm where it's an existential risk. They've destroyed his company, Dave,

like whether they're in the right or wrong, they've destroyed his company. That's right. And that's the point. The point is regulation, and people don't understand this, and this is where I'm about to tee off Bruce, where I know he's going to agree with me. Regulation used like this is a tool for big companies to keep small companies from competing. And we should always remember, and politicians should always remember, that small company is the engine of growth in society. And so when you, it can weaponize the SEC. And until this administration, big companies kind of liked it. Because after all, you know, it's a, yeah, if I can afford to pay, you know, what, $2 billion a year in fines, or I'm going to have to pay a hundred million to compete with all these

firms that are going to make, it's going to be much harder on them. I'd prefer to pay 2 million in fines. I mean, you know, it's just, it's just pure economics, but this administration has taken it to a different level because now in addition to destroying companies like Jeremy's, uh, they're in lawsuits with all the big boys and it's getting worse and worse and worse because they're trying to implement a different agenda and it's hard for me to to understand because the behaviors are different this admin this administration is being is about to be in lawsuits with all the private equity titans of the world all the big market making and and trading firms of the world the big asset managers of the world, all the big market making and trading firms of the world, the big asset

managers of the world, and the big banks of the world over various market structure and everything else. David, and I want to jump into Zach on this one. It's different, but it's also sad. It needed to be this different. We needed the incumbents, the herd to come into the space for the SEC to start to slowly ease off, hopefully to ease off. But when the space was

trying to innovate, companies like Library trying to do the right thing, the SEC did the opposite of what we wanted it to do. And Zach, I want to look, this is a narrative that has always been the same narrative in our spaces. And most speakers, almost all of them agree that there is an agenda to the SEC. But I do want, you know, John Reed Stark is one of the few speakers that kind of disputed that. Zach, do you have a different take to this? Like, is it true? Like, do we just treat it as fact now? The SEC has an agenda. They're not just trying to do the right thing. I mean, look, the SEC does have an agenda. I think primarily its agenda is,

A, it wants to be the prime regulator of crypto as opposed to the CFTC. And it seems like Gary Gensler is actually hostile towards the industry as a whole and doesn't see it as producing a lot of things of value. And they very publicly staked out in all of these cases, including library, a very, very strict interpretation of how the Howey test applies to things. And so there are two paths forward if we're going to have to deal with that. I don't think that you can come to the SEC, honestly, in good faith and try and register. There's no path to register, right? They disingenuously say, you know, these things are crypto securities, and there's no infrastructure really for crypto securities. There's not a path forward there. So either we need new legislation, right? We need Congress to step in and make new rules that apply to crypto. That would be, you know, my first choice. That would be really good for the industry.

And we've seen very good bills by Cynthia Lemus and Kirsten Gillbrand and out of Don Beyer in Virginia. Those are pretty good crypto bills. The problem is there's not a lot of legislative push behind that right now, or we can win in the courts. And so that's what we're trying to do now. And there are really important cases out here, the library case about where the line is for consumptive utility versus being an investment vehicle, the sushi swap case that you talked about in terms of who's a money transmitter, you know, when is something truly peer to peer versus when are you providing services by writing code. And until we get the legislation we need, I don't think that like interfacing with the SEC is going to be the right path forward, because they're very clear, but what they want to do the industry, we need

to actually beat them in court. And Bruce, I want to go to you this way. What Zach just explained, he's articulated it pretty well, but it also shows the beauty of the US system as much as many of us like to criticize it. You've got the SEC, you've got an organization that has a certain agenda, that has a certain view of an industry, but then there's other checks and balances. You've got the courts that are seemingly doing the right thing. You've got Congress is passing bills that are more crypto friendly, mostly bills that are crypto friendly. So there's, you know, the system is not all dependent powers, not all centralized within

the SEC. So we'd love to get your thoughts on this, Bruce and Carlo. And of course, I want to go to Eleanor afterwards as well. Yeah, I mean, it is good that we have checks and balances, we still have some kind of freedoms in this country. But I agree with Jeremy that the courts are very corrupt as well. You know, it is political appointments. I think lawyers have a combination of, you know, maybe because it's their industry, they just really, really want to believe in it. They want to believe the stuff they learned as young law students, like, you know, Constitution

and America and it's, and it's justice. And, you know, it's part of the identity for lawyers, you know, that, you know, justice is blind, and, you know, all these things. Without relying on that, the entire fantasy collapses. And unfortunately, that's, I think, Jeremy is right. It is a fantasy. You know, the judges are corrupt. The judges, even the ones that aren't corrupt, they're just as much midwits as everybody else. They believe the same nonsense that the propaganda and the media says about all kinds of different topics. And there's all kinds of different, you know, court cases where it shows that the judges, you know, just don't have a clue. You know, I think the people, you know, as far as like whether it's corrupt or not, you know,

there's sort of three camps. There's people who are part of it who obviously, you know as far as like whether it's corrupt or not you know there's sort of three camps there's people who are part of it who obviously you know pretend it's not corrupt there's people who don't know how it works and then there's people who do know how it works and they're afraid to say so so so it's like pretty much every single ceo and lawyer that i know behind the scenes says the same stuff jeremy says you know the only people who are out there saying, oh, they're not corrupt, those are just people who are afraid. People are afraid to say that these guys are corrupt, but they're clearly, clearly corrupt. Gensler is absolutely, completely, and totally corrupt. He was partnering up with Sam. Sam Bankman Freed had unprecedented access to him. He led him into his office. He's friends with his lawyer.

Sam's lawyer was also Gensler's lawyer. Gensler is friends with with Caroline Ellison's dad. I mean, he is a corrupt, bad actor. And if the SEC people are listening, like Jeremy said, why don't you guys clean up your own house? Why don't you guys go bring an action against your own scammer who's in charge? Why don't you clean up the industry like you say? If there really is SEC people on there, why don't you do something about it? Why don't you go clean up your own industry, clean up your own house instead of wrecking one of the greatest job creation innovation engines in the world? Bruce, I mean, I think, I mean, it's pretty obvious at this stage that,

you know, the SEC is corrupt and motivated by things other than what's right and what's wrong. But I think the one faculty that actually has come to our rescue actually has been the courts. You know, XRP, Ripple, Ripple SEC, Grayscale, you know, even Uniswap. I want to look, I'm not American. I want to say that I think what I've learned now is that anything to do with a government organization, whether it starts with FDA or SEC, any three-letter

organization that is in the US is probably one of the most corrupt organizations in the world. But it seems to me like when things do go to court, something happens. You know, like when things do go to court, something happens. Every time we get to court, not every time, but a lot of the times when we get to court, right prevails over wrong. Am I right?

Yeah, I think the courts have done well. And I think, Ran, you make a good point i think it's one thing to rail against the sec but it's a different to rail against the judicial system which i think largely i'm sure there's problems i'm sure there's political sides to it as jeremy said nothing's perfect but i mean the court system has largely as of late certainly gotten these things right they have i don't think there's any reason to be railing against the court system when the decisions that we wanted to see with very, very rational decisions from judges, very coherent, clear, that they understand exactly what they're judging. I think we should applaud that for now. I can't say that won't change. I can't say the judicial system doesn't get things right, but find me a better place to offer this check and balance to the SEC. And by the way,

to be clear, just to bring this full circle, the CFTC, one of the biggest pieces of news we had today was that the CFTC went after these three protocols. They offered them small fines, but once again, we have basically the CFTC or a regulator, not the SEC, saying we're going to regulate by enforcement against these platforms. They're not necessarily admitting guilt, but they're going to pay the fine. And now we have some sort of, I dare not call it precedent from a legal term, to stop these things in general. That seems to me to be the overriding tactic here of all of them, is go after low-hanging fruit to some degree, but also a couple big names here and there,

which then stops everyone else from even trying those things, whether those people were guilty or not. Go after Kim Kardashian, influencers are scared. Go after a huge DeFi protocol, nobody will build DeFi, right? Go after a huge exchange, no exchange will dare try to launch in the United States. I think that's really the tactic.

Yeah, that's true. I mean, hopefully this regulation by enforcement will backfire and will, I mean, it'd be great if we had just a stack of legal victories that kind of clarify it. You know, the industry has been looking for clarity. You know, I do push back a little bit on the idea of, you know, we need new rules. People have been saying this for almost 10 years now. And I remember, you know, there was hearings,

people came up and said, like regulators, we want to be regulated. We need rules. We need the clarity. And I think that's a mistake because those rules tend to be bad. You know, even the, you know, the Loomis-Gillibrand bill, I mean,

that just adds a bunch of bureaucracy, nanny state nonsense. What we need is, we don't need less, you know, we don't need more rules. We need less rules. We need less regulation. We need less nanny state bureaucrats in our business. I see Dan down there laughing at this. I guess you would think that it's good to have more. I'd love to have him explain why. Have him come up if he thinks it's fun. Go ahead. I'm here. We need more.

Maybe his contention is we need more rules. I mean, the system is a complete and total disaster right now. I mean, for all the reasons Jeremy mentioned, we shouldn't be sitting here obsessing about is something a security or not based on rules that were written by people whose parents went to school on a horseback. It shouldn't matter whether you're security.

Jeremy shouldn't have had to waste five years and $5 million with the SEC. We should just say, sure, securities are great. They're a wonderful wealth creation vehicle. Things like equities are some of the most brilliant economic inventions in the history of economics. Let them work and let the market decide what they're worth. That's it.

That's all you need to do. You don't need nanny state bureaucrats in here. Bruce, that's true. But you need new legislation for us to not have to talk about 80 year old court cases right but why does it need new rules why not just have something that strikes out these old antiquated five-year-old rules uh but uh because that's currently the law we need it to change right that's what i'm saying repealing stuff deleting laws is the solution not not more than a state bureaucracy

but bruce it requires new legislation to delete that you said you'd like the gillibrand bill the gillibrand bill has have you read it it has all kinds of i'm sure you have it has all kinds of new positions and you got to get this checked and you got to file this form you got to have this overseer over here in this board in this group it's creating a bunch of nanny state bureaucracy we don't need any of it i would love i would love a libertarian free-for-all i just don't think that's what's going to get through congress and i would rather yeah but this is the problem we can't have a libertarian thing so let's just make more bureaucracy and more piles on of more junk we don't need more junk it doesn't do anything whatever steps in the right direction

we can but it's not the right direction to add more nanny state bureaucracy. That's the wrong direction. That's exactly why we're in this situation, because people did exactly what you did 85 years ago. Nanny state bureaucrats sat around in some fancy office and said, I know what we need to do. We need more clarity and more regulation. Yeah, yeah. I definitely think we get your point. I just want to give Don a chance to respond. Yeah, the reality for me and for other people is that if crypto was full of good actors and we had seen continued progress without people pulling rugs, doing the wrong thing over and over and over again, everybody is a capitalist when it affects other people and a socialist when it affects themselves. And the reality at this point is that crypto has been full of bad actors over and over. Fix your house first unless you don't want to be regulated. It's super simple.

I mean, look, let's say there are always bad actors, guys. You know, whenever there's a toss pots of money people always go after it and while you know look there's clear if you're a libertarian and and nanny states that look i agree in philosophy but at the end of the day there are bad actors and to say there aren't it's the same people who want to defund the police the fact is fraud is what they should go after now do i think that the sec should spend 90% of their budget going after technical violations and not fraud? Of course not. Do I think that fraud should be there should be serious looking at it? Do I think that information should be required to be

accurate? Do I think that misleading claims should be prosecuted against? Yeah, actually, I do. Now, does that mean that we need a whole nanny state bureaucracy? Actually, I think you could do it with a lot less with the current budget is probably much bigger than it needs to be to do what they actually need to do. But the truth is, is that in crypto, the current rules literally are completely unworkable. And so there's no way not for fraud, right? Here's where Bruce is right. You don't need new laws to go after people that are actively engaged. Oh, that's true. That's true. But but look, look at FTX, for example, right? You know, they were Bruce, I wouldn't phrase it the way Bruce did. But but he's not wrong. The fact of the matter is, we had this huge behemoth that was

putting names on stadiums, and everybody thought they were too big to fail, because they were in all the politicians that the whole time they were stealing money. You know, the fact that there was never investigations or audits is ridiculous. It's absolutely ridiculous. And people, you know, you talk to normies, you know, my brother is a financial advisor. The first question that got asked for six months after FTX is how the hell could something so big have not been investigated? How could nobody know they were betting client money? That's a very important question. There would be hundreds of those. It was the same problem. Yeah, exactly. I think there should be some regulation and there should

be some enforcement. And all that those of us who argue for new rules are they should damn apply. I don't think we need excessive intermediation. There's at least two levels of intermediation that crypto can potentially get rid of. And getting rid of intermediation, by the way, gets rid of potential bad actors, right? Because those are extra people who are extracting economic rent. So the point isn't that we want this huge new bureaucracy, Bruce. The point is what we actually want is less bureaucracy, but clearer rules. Because vagueness, opacity is how bureaucracies grow. And right now, the rules are clear as mud. And there is no, forget clarity, there's no clarity, there's also

no way for them to even function. And so the key point here is opacity allows that nanny state to grow unchecked. Clarity actually is what decreases it. I'll stop my rant now. I think the clarity can be, you're allowed to do, you know, have freedom. I mean, the system worked much better before we had a lot of the rules, probably 90% of the rules are from the last 20 years. You know, the system works quite well without them, you know, and I think I just think that, you know, new bills like this Loomis bill, I mean, I like Senator Loomis, I think she's great. She has libertarian leanings, but the bill is terrible. It just adds more bureaucracy.

We need bills. The bills that I would like to support are ones that delete stuff, something that says this is no longer a law. Get rid of this thing from 1934, 1935 and 1941 and all these antiquated things. Those are the kind of bills we need, not new bills that add 80 pages of new stuff and new bureaucracy and new things that the Jeremy's of the world have to comply with. You know, and that's what most of these efforts have been done. Most of these lobbyist groups, industry groups, which by the way, just for anybody listening, a lot of those are scams. These industry groups that are these so-called pro-crypto PACs, they donated to people like Maggie Haslam, who was the person I ran against up here in New Hampshire, who has a 98% similar record to Elizabeth Warren. So you had me versus somebody with a 98% similar record to Elizabeth Warren.

And the person with the Elizabeth Warren clone record got $5 million from a so-called pro-crypto pact. Not everybody's going to agree with me. Not everybody likes me. I get that. But there's no person on planet Earth who can look at me versus Elizabeth Warren and think that of the two of us, she's more pro-crypto. That's just not reality. So there's a lot of scams in this whole thing. There's a lot of stuff that's just designed to create a bigger and bigger bureaucracy. What's so bad about freedom? What is so scary about freedom? Just let people buy what they want, have good protections for fraud and things like hacking, which by the way, I mean, how weird is it now that if you don't dot

an I on a piece of paper, you could face jail. But if you go and hack somebody for $5 million, it's probably not even going to be investigated. I mean, I know clients and people who have called the FBI and said, hey, I've been hacked out of a million dollars. FBI pretty much, it's like, oh, my car was broken in San Francisco. They're like, oh, well, sucks for you. Yet, meanwhile, they'll chase people to the ends of the earth for not doing paperwork. That's just a fundamentally broken system. We should focus on actual theft and actual fraud and leave everybody else alone.

Let them do what they want. Markets aren't that scary. Let the market work and let people do what they want. Tear down all of these stupid rules because they're going to come down one way or another. It's just a matter of whether the United States collapses first or not. Carlo, you have had your hand up for a while. Go ahead. Yeah, look, I think what we're seeing here is we're seeing co-equal branches of government doing what they're supposed to do as intended by the framers. We have the legislative branch

trying to bring regulatory clarity because they clearly see that this practice of enforcement by regulation is failing the industry and it's failing the players in the industry. Jeremy's frustration is evidence of that, as well as other people who have openly commented about what's going on here. I also think that we have the judicial branch, which is doing its job, which is intervening and is making rulings in these court cases. And I have to agree wholeheartedly, these rulings have been very consistent with the rule of law and precedent. And I think the courts are approaching this in a very measured way. And I'm grateful that we have the courts to intervene, because what we have is we have the

other branch of government, the executive branch, which through its regulatory enforcement practices, is trying to stake a claim on new technology based on old precedent, and trying to aggressively regulate this new sector based on these old precedents. And we can clearly see that this is having very destructive consequences for the entire crypto sector. So I think we need to trust the system. I think we need to trust the judges that they are going to prudently review these cases. Because remember one thing about federal judges, yes, they're politically appointed because they come through Congress and they come through the political process, but they are appointed for life. And they are very well aware that their decisions will be scrutinized on appeal. And having done this for a long time, I know that federal judges, when they write their opinions, give very careful consideration to how it's going to be viewed on appeal. And that has always been a check on what judges do.

I don't think judges inherently allow personal bias to in any way influence their decisions because they know their decisions will be broadly scrutinized david silver we got uh our whole team of lawyers up here i mean where do you stand on this i just joined like two seconds ago ask me a question and i can articulate a point that's probably wrong that quickly well then uh we'll just uh keep moving on from there and come back around because i do want to talk about this fbi and dcg situation that we're seeing i mean jay grayscale genesis dcg the amount of news or stories that we've seen around them in the last few days has been absolutely astounding uh basically genesis suing dcg who is their own parent company for hundreds of millions of dollars after their

bankruptcy genesis winding down their institutional otTC desk, which I did not know still existed after the bankruptcy. Now the Winklevii, basically their comments about Barry Silbert's actions leading the FBI to investigate DCG. And then, of course, amongst all that, we have Grayscale and GPTC pushing for conversion to an ETF. The amount of stories around DCG here is absurd. I would love the panel's takes on what's happening now here with DCG, specifically, if there's any wrongdoing potentially and criminal action could be coming down the pipe. Maybe nobody wants to dare talk about that besides me. Ran, have you looked into this deeply? Am I alone?

I'll jump in for one second. I'll hop out a little bit. You know, the interesting thing to me on the DCG and the Winklevoss twins, it's almost like 2017 with the ICOs. Aren't we late to the game here? Like, why is the FBI? I mean, the Winklevi didn't hold back, you know, when they alleged that, you know, Barry was committing fraudulent acts, that Barry was lying. You know, where were they before the investors got hurt? Like, you know, this is like things people ask me all the time now.

Like, where's the settlement agreement with Gemini? And, you know, what's going on with Earn? You know, the point is, yeah, so the FBI is investigating. The Winklevii already put this out publicly. They already did this. Why are we so late to the game? And why aren't the people, why aren't the FBI doing this? Where's the proactive aspect of the investigation?

Where are the regulators doing their job proactively? Same place they were with FTX, having lunch with Gary Gatlin, my friend. Exactly. I mean, like the Winklevoss twins did someone a tremendous favor. They did the community a favor. If you're going to believe the Winklevii which I do in this particular instance they put out there that this was a fraudulent that they were people were misled this should have been years ago not today I mean it's it's just sad that you know some someone that's looking to buck up is going to

solve this problem after the barnyard animals have left the gate. I'm going to try and speak New Hampshire for Bruce. Yeah, Ram, were you just trying to make a comment? I was saying that we're there with the same place they were with Gary Gensler, the same place they were with SPF. That's the only comment. Yeah, but I mean, we have obviously the big story being that the DOJ may come down on finance down the road. And we've heard plenty of narratives now with time that the same could be said for DCG down

the road. So here, let me ask this in a different way. What do you think the implications would be if DCG actually had any legal action coming against them for the market but would this be meaningful or has it wound down enough that it wouldn't be a huge deal i mean what do you guys think ran i don't know if you can compare you can compare the two like i think dcg and and i think the magnitude of dcg is 99 already priced in. And I think, like, I don't think that they could find enough to close DCG down, you know, hit them over the knuckles.

I think with CZ and Binance, it's like a different case. It's like they're looking for something much bigger, like money laundering and shit. Like, that's very different. At the end of the day, I'm going to agree with Ran, ran which i hate to do it's the coinbase versus binance there are very different issues you know if the fbi is investigating barry or dcg for and especially if it bleeds into grayscale somehow i mean dear god i mean it's at the end of the day like you know i just don't think that we're talking about, I think there's a difference between guys who use large companies who use really good lawyers and who protect themselves

legally to do something legally and be challenged on the legal side of something a la Coinbase versus what the accusations against Binance are, where they're being accused of money laundering and fraud. I hope, and I have no inside knowledge, I hope Barry is not on the fraud side. I hope he's on the Coinbase side where we're talking legal issues and whether lawyers, expensive lawyers and Barry maybe bent the law, maybe did something. But I'm hoping these are questions of law, not questions of money laundering and fraud. Yeah, I mean, I don't have the thread pulled up now. But one of our regular guests, Andrew, a B abacus, did kind of a long thread, or at least a tweet outlying all of the sort of things that are alleged here against DCG. And he sort of ended it,

not to quote it exactly, but incest or fraud, you know, being the question, because they obviously knew 3AC was winding down, they knew Genesis was winding down, FTX, all these in advance. During that time, they took loans from their own companies, they bought back GBTC, just a lot of very sort of, whether illegal, I have no idea, but questionable activities within the organization at times when, you know, they probably had knowledge of what was happening in the industry and others didn't. I mean, you know, David, I know you can't speak on it specifically, but if they know that Genesis is winding down into bankruptcy, which they did, it's their company, and then take a massive multi hundred million dollar loan from that company that they know is going

bankrupt and winding down. And that loan's interest doesn't have to be paid at all until the entire term, the entire loan is paid back. What does that look like to you? Well, I think it's the difference of what it looks like to what it is. So I think at the end of the day, there's the obvious. I mean, that loan looks really bad. But again, we all knew about that when Gemini, when the earn program blew up and the accusations started flying.

And Barry, to his credit, came out and put forward and said, we've done everything you're supposed to do. Thank you. We've done everything you're supposed to do from a legal perspective. There have to be some real inside, like, you know, and in this day and age, text messagings, Slack, you know, background, all these electronic communication forms. It's just a form of eavesdropping. And if the eavesdropping proves to demonstrate that Barry knew what he was doing and negotiated contracts in bad faith where he had fiduciary obligations to protect his investors, to protect the clients and to invest and protect people.

He can be he could face problems a la what we think CZ is facing so far. And I like the incest or or fraud. I so far I haven't seen anything that's making me sweat on this one yet. So far, I like the incest or fraud. So far, I haven't seen anything that's making me sweat on this one yet. Doesn't mean it's not coming. You know, my favorite term, yesterday's crypto heroes, tomorrow's crypto felons. You know, he's a hero. I don't like seeing my heroes taken down. I hope he's not on the fraud side of this

i think that's just for the and scott it's important to say that there is no investigation that the authorities have not commented which is pretty common um so it's important to note that as far as i'm aware because i looked at here a spokesman for the federal prosecutors declined to comment the sec fbi and gemini did not respond immediately to question or comment authorities have not accused dcg or silver of any misconduct andini did not respond immediately to graceful comment authorities have not accused dcg or silver of any misconduct and investigations do not always lead to charges also it's important to note uh that um i think the reason that we said that there could be an investigation is that i think the wink of us twins got a call from the fbi asking him questions is that correct it's kind of unclear i mean the Winklevii have been making sort of claims and waving their hands aggressively about all of these things in multiple letters and such.

And I think that the implication is that that activity has caused the FBI to start looking at it. Yeah, we should have them on the show. I think they've messaged me a while ago to try to get them on the show, to come on the show and bring in Barry. But obviously, Barry wouldn't come but be good to have uh the Winkler Vi twins come on the show uh to discuss this because it's been dominating the news for a while and it'll be good to get their take not only on this case but on crypto in general um so I'll uh I'll message them but um it was pretty good show today wasn't it Scott yeah I absolutely loved it I'm glad you How was lunch? Not happening yet because I'm still on Spaces. And I heard that Frentech blew up after you posted your feet photos.

Dude, disgusting. Makes me think so much less of the platform yet again. Although it's kind of just amazing and hilarious. I posted my foot photos and I just happened to go check back and apparently my keys are worth double they were now that my disgusting feet are on Frentech. Yeah, and I think Rand's account even benefited from your feet somehow. I think that's what Rand said in the group. So let's maybe post what's next after feet, Scott. You got to always level up.

I'm just going to now use Frentech as Instagram. I'm just going to take random horrible pictures of things in my house and post them up with no context and just use it as an instagram feed i was expecting something else not instagram but instagram goes um i think that's it we can wrap up the show perfect yeah i think we're good man that was a great show cool run beautiful thanks for a great take all right guys um it was a great show and want to give a shout out to the sponsors if you're on your phone you should go go. Again, DOP, we've had them. If you care about privacy on the blockchain, which, funny enough, to wrap up the show, where's my note here? Because one of the pieces of news I wanted to mention, I thought was not major enough, was Vitalik talking about how one of the main issues on Ethereum is still scalability being one and privacy being another. Well, we've got the solution pinned at the top.

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