The Wolf Of All Streets - Major Bitcoin Custodian To Fall? | CZ Court Case | CryptoTownHall

Episode Date: June 8, 2023

Binance, Coinbase and the rumor that a major custodian is going bankrupt. Crypto Town Hall is a new daily Twitter Spaces hosted Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in 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 $10,000!  👉 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/   ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget    ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

All right guys, so let's kick this off. Maybe Randy can give us a quick overview as always on what you covered in your show and then Scott will do a market update. Okay, so look, we covered the fight between CZ and the SEC. It looks like that fight's getting dirtier and dirtier. We covered the DNs and stuff like that. And it looks like that fight's really going to get dirty. The more I read it, the more I think that maybe a DOJ announcement

could happen. And I guess if we just have to prepare ourselves for it. So that's the first thing. The second thing we covered is a coinbase against, SEC against Coinbase. Specifically, we focused on the fact that Coinbase have come out and said, we're not ending our staking service, and we're not delisting these tokens that the SEC are selling our securities, and we're actually going to go and fight. And that's the first time that I think anybody has actually gone up against SEC with such a figure. Brian Alston has come out and said, look, we're going to get this job done.

So that's another thing that we spoke about. But we did focus on the dirty tactics that the SEC is actually adopting in a clean fight. When I say dirty tactics in a clean fight, the fight could be a clean fight. Go to court, determine whether it's a security or not a security, determine whether you should have registered or shouldn't have registered, and then let's get legal precedent that would have been a clean fight but the non-clean part of the fight is that the sec know exactly how much money coinbase is making because coinbase has filings and what the what the sec is doing is they are using multiple weapons to cripple coinbase in the fight so what i mean by multiple weapons first cripple Coinbase in the fight. So what I mean by multiple weapons,

first thing is cut the banking so that people can't deposit money onto Coinbase as freely. Second thing is declare a whole lot of token securities and therefore, you know, hope that Coinbase will delist them so that they can't make the trading revenue from them. Third thing is keep watching Coinbase's financials because Coinbase is a listed company and obligated to post financials. And then you'll realize just how much money they're losing and just how hard you have to push them to get them to a point where they tap out because they run out

of oxygen. So we covered that. And then we looked at the macro events. We looked at two events, which the market is, you know, we've been so busy in crypto world that we forgot that next week we've got cpi data and straight after cpi data but the famc um on the cpi data the cleveland fed is forecasting a massive drop in inflation from 4.9 to 4.1 or 4.13 that's a massive drop in inflation and they're even forecasting a bigger drop in inflation the following month, back to 3.2. So on the inflation front, it looks like the Fed may actually stop increasing interest rates for this FOMC meeting on the 14th. And that may actually be the Fed's first pivot, so to speak. So that's it.

Ryan, just a quick question. I know we've got David Bailey up here. And David, we've got a lot of questions for you, man. But before that, Ran, you talked about the DOJ announcement coming this week. I know there were rumors that the price action we saw yesterday with BNB relates to that. Has there been more clarity on that point? Anyone else come up with the same rumors,

or it's just that one source that we were debating behind the scenes? There are multiple rumors, and that's always the case and you know that just because they're rumors doesn't mean that it is true but when you read when you go you know i've had time to now read through all the accusations and allegations as well as i read through katherine coley's um who was the xco of bin I read her testimony, which was a whole lot of pages. And look, like there's a lot in there. And I can't judge whether it's true or not true and what the excuses are, but they've just got a lot of incriminating or things that could potentially be incriminating.

You know, like there's just a lot in those documents. And, you know, I think that, you know, the DOJ... If I were the DOJ and I thought that these things were true, I think I would have enough to go from it. That's not to say, you know, sometimes the DOJ wouldn't do that or they'd wait for the case to play out. Or, you know, the DOJ is not under any time constraints here. You know, they can keep

this going for a long time they can wait to see the outcome of of what happens uh in the sec case so um look it wouldn't surprise me if there were i hope there won't be but i wouldn't surprise me in the least if there were scott any quick thoughts before we go to david and maybe a quick market update i mean everything's flat in all markets right now. So looking at Bitcoin down 1% to 26,417 with Ethereum at 1848. I mean, stocks, nobody cares, but literally everything within 12 bps or something flat. So the S&P up 0.12%, crude oil down 0.58%. Not really much to talk about there.

And I think we should probably start digging into the topics at hand. David, man, how are you? Hey, what's up, fellas? Yeah, you caused quite a stir there. I'm not saying in a negative way. It's justified. But man, you've become the top of Twitter in the past 24 hours. We pinned the tweet, obviously, above.

Major custodian about to declare bankruptcy without last-minute bailout. Take your Bitcoin off exchanges, even Bitcoin-only platforms. Now, I don't know if you're inclined to tell us who that is, if you were, great, but I have a feeling not. But can we just dig into this a bit? Because, obviously, in the current environment, we need to take things like this very seriously. Yeah, and hold on one second.'m turning off my uh fountain outside i'm uh just making a little bit of background noise here hold on i wish i had i'm gonna by the way

scott scott this is where david this is where david blocks me because i'm gonna pressure him to try to get a name give him reasons why he should share it um and he's gonna get pissed off and block me just a heads heads up, Scott. No. I had a fountain. Don't you have a fireplace, an indoor golf range? Yeah, but I'd probably have a fountain that I can turn on and off. Whatever, man. Yeah, we have dreams.

Let me read out who he thinks the custodian is. Let me quickly read out the tweet for the audience. So David tweeted 15 hours ago, Major custodian about to declare bankruptcy with that last minute bailout. Take your Bitcoin off exchanges, even Bitcoin only platforms. Again, even Bitcoin only platforms. That's the part that got me. The last part was the one that you mean. Exactly, yeah, yeah.

Same here, Sam. He hinted. There's hints there. Go ahead, David. Yeah, wrong by the way. I don't want to say the firm's name and, you you know if you go read the comments it does seem like i people uh you know there does seem to be consensus around this probably already but the rumor of prime trust i'll go ahead and say it i mean the rumors the only reason i didn't want to say a company name is because they're not dead yet

and uh you know the information that i have is that they're not dead yet. And, uh, you know, the information that I have is that they need to receive $25 million in funding, um, by, uh, the start of business on Monday. So, um, you know, that's five business days from now or two business days and two days over the weekend. So, uh, a lot can happen in four days. And so I don't want to permanently damage a company's name while they still have a fighting chance. But yeah, it's unlike maybe an exchange going under, a custodian going under, I think it's a bit more unique

because they power a lot of different platforms. So even if you trust the exchange that you're using, even if you trust the team that you're working with, even if they're not taking a lot of the same risks as other exchanges, if they share the same back party, back office custodian, then you can still be exposed to the risks and issues that other platforms have, even if your exchange doesn't do it. So this particular company, they power, they're a custodian for a lot of companies. I don't know how many are still clients. I know they've been under distress for a while. I think it got to a critical situation after the FTX blow-up.

I know that they've been peeling off and losing them since because that distress was known. But it does seem like maybe the events in the past couple of days have accelerated things. Yeah.

How did the events accelerate things if you can dig into a bit more detail and and explain um what a custodian is just for people that are new in the space yeah so a custodian is is basically a a company that provides the service of holding your Bitcoin that's designated to you in a like arm's length third party way. So, you know, you have exchanges that are also custodians where they hold their own Bitcoin. In my opinion, you know, there's trade offs to the model. Like there's a reason why you typically separate an exchange from a custodian. Mike Belchie from BitGo talks about this a lot. So there are reasons why you don't want the exchange to be the custodian, a.k.a. FTX. But then at the same time, there are reasons why you do want it, a.k.a. Cash App, because you know at the end of the day,

Cash App is the one custodying your funds. Cash App is the one taking accountability for making sure your funds are safe. So, yeah, in terms of like what could have accelerated over the past couple of days, you know, if you look at this firm's client list, some of the companies that have been hit in the past couple of days are the clients of this firm. So, you know, if there was an acceleration of maybe certain companies leaving the market,

perhaps that means a critical revenue source was lost by this firm. Perhaps it could be more nefarious as companies pull out customer holdings. If there was a hole in a balance sheet somewhere um you know maybe that can be revealed i think we don't have enough information about what's happening right now uh and i think we're gonna have to kind of wait and see but i think the appropriate reaction for people to have listening to this just be risk off and take possession of your keys. David, can we talk about what a bankruptcy for a custodian would actually mean? Because it's very complicated. Right, because a company could theoretically go bankrupt,

but they should still have all the assets custodied one for one. So in theory, they should have never dipped into custody assets, right? Correct. So in theory, that's correct. And I'm working from the assumption that that's what happened here. I have heard the rumor mill has been swirling for months. Maybe there's more to the story than what is typically supposed to happen.

But I would operate from the assumption that they did what they were supposed to do and customer funds were totally segregated. There is questions around what happens in the event of a bankruptcy of a custodian. And it's complicated, way more complicated than you would think it would be. And some of it comes down to state by state regulations um you know uh if there is a hole in the money uh uh is there any clawbacks that it gets very complicated and uh in fact the oh god man this i'm doing such a poor job of of to... I don't think so. I think it's exceptionally...

There is one blog post that was published by the company in question right after the FTX blow-up happened. And it was basically a question of what happens if we go bankrupt? And there... of like uh what happens if we go bankrupt and there which yeah anyway so uh what happens if we go bankrupt and you know let's just say their answer the blog the blog post answer they wrote was uh uninspiring uh to say the least um it would depend on state-by-state regulations. There's not clear precedent. It is extremely uncertain

who actually has a claim on the assets, who actually owns the assets. Yeah, so not a super inspiring blog post, and then about 10 hours after they published it, they deleted it. Oh, that's great. We love that. Yeah, so right.

So digging in there, the company could theoretically go bankrupt even if they had the assets backed one for one and segregated. Those assets theoretically could become a part of the bankruptcy claim. And then we go down this. Yes, the money's there, but how long until people gets it?

Who gets it scaled out? In what manner? Dependent on what regulator or legislation? Dependent on the state jurisdiction? It's extremely potentially messy. Yeah, exactly. And David, what would that mean for the ecosystem? Looking at, obviously, best case scenario, they get bailed out and you know we continue business as usual if that that does not happen um how bad is it and

what are the repercussions um hard for me to assess that uh it is a fairly large company and the company has a variety of different products i don't know who the customers are of all the different products uh you know they were a very successful business and I do feel for them. I know they're CEO and, you know, I know that their hearts are in the right place of what they're trying to do. So, you know, I think there's going to be a lot of service disruptions and, you know, you have more than just

custody provided as a service here so um you know you have on ramps you have you got to go through the list of all their different products that they have so uh you know i think in the short term disruptions i think in the long term um or in the medium, all their clients are going to need to go find a new home. So in one sense, there's an opportunity there for competing vendors that maybe aren't turnkey, but they provide one slice of what this company offered to pick up new business and new clients. Yeah, I can say right now, David, looking at,

this is from a tweet, but we're also checking their website to vet this. But a year ago, effectively, it says Abra AGO. I don't know them. OKCoin, Swan, Trust Token, OnRamp. But Swan has already responded very clearly that they left Prime Trust if we're talking about Prime Trust as a custodian. So there's only, I mean, that's 16 down to five in a year. Well, I have to think that they list all their clients on that page. Correct.

Five more. Like I said, we're just going by literally their website. I have a few. I mean, I think the first thing is that their client list is outdated. Yeah. And they lost it. I see. And I think, you know, I don't want to spread the FUD circle

into other companies or other clients, et cetera. I have been kind of monitoring the language on some of these blog posts or some of these announcements that different people have put out um there is a small amount of ambiguity baked into those uh i that i might just kind of say intentional ambiguity because no one quite can be certain about what happens here um but again, I would just advise people, even if everything seems hunky-dory, to take the maximum conservative approach. I think there are a few things to note this year. I think there's a few things that we need to talk about here.

The first thing here is, in the bear market, there will be casualties. The bear market, interest in crypto is at an all-time low. And the fact that they cut off the banking on-ramps and off-ramps and they reduced liquidity and the happenings in the last couple of days, that scared a lot of people away. And a lot of people being scared away means they're selling their Bitcoin and removing them from custodians.

And I think that this is the first of a series of um ethical and honest uh bankruptcies if it happens and when i say ethical and honest yeah we had the ftx's and celsius but this is like this is a business that probably has great intentions and probably did everything by the book but you know when the when the market changes so quickly um if they don't raise funding they're probably gone second thing that's probably worth talking about jerry's it feels like there's an undertone of trying to get the current trying to clear the grounds so that the current financial institutions can actually capture the space so it's almost just like they want all the crypto companies gone the big exchange is gone the Binance that you is gone the coinbase us gone all those gone so that they can then come in and almost do it with the

incumbents that have been paying and have been loving and I wouldn't be surprised if we get a announcement from JP Morgan and if we're going to if we're going to announcement from from from other such companies. I don't know if it's just me that feels that. I'd love to hear from other speakers. And who has been telling you this? It feels the same thing. Who has been telling you this in these spaces

and has been laughed at? Kim.com, but he hasn't been laughed at. He hasn't been laughed at. No, I told you guys for the longest time that this crypto war is coming. The US government has no interest in any competing cryptos. They're going to roll out their CBDCs, and they want to have full surveillance abilities against financial transactions, and they want to be in control.

So they're not going to allow any decentralized cryptos, even Bitcoin, to exist. So what you are seeing now has been coming for a long time. I just pinned a tweet, ran above that I sent on 11-15-22 right after FTX, just so you'll know that I agree. Wall Street is going to sweep in and buy up our entire industry for pennies on the dollar. Watch. Who said that, Scott? Who said that? I did. Oh, okay. On November 15th, right after FTX, because to me, exactly what Ran just spoke is sort of the nefarious intent.

What Kim.com is saying here, obviously seemed readily apparent. That's if I'm assuming they want the industry to exist. But I think that it, and rationally, I think these regulators and legislators want control. And we all know that obviously they're in bed with the banking system. So you would have to imagine that if crypto is going to exist, they would prefer to exist within that system. Dave, I saw you had your hand up. Go ahead. Yeah, I mean, look, speaking as someone who worked on Wall Street at these firms, in the belly of the beast, as it were,

for the better part of 30 years, there's a couple of points that are important here. The first is that the government is not monolithic. We saw a very encouraging tweet from Richie Torres yesterday from a Democrat who breaks with his party in many things, admittedly, but is generally see both banking consolidation and all market consolidation in the hands of a few players that they can whip and drive and get power from and donations from. dominant. It's a very powerful now in ascendancy faction, but it's not necessarily dominant. So we'll see how that plays out. But it is really important to understand the second point, which is that the Wall Street firms that we're all talking about are absolutely awful at innovating. And so what they always do, and look, when I worked for Citi, we bought multiple firms. They

actually, a company called Lava Trading, they bought for 300 some odd million dollars. They proceeded to break it. And it went from profitable under their stewardship to losing money. They asked me to go rerun, actually fix it. I did and turned it back to profitable. Then I left. And three years later, it was bankrupt. And they basically closed it down.

This is fairly typical on Wall Street. Their ability to innovate is awful. So if you read between the tea leaves, what does that mean? If in fact they are successful and they have Wall Street ownership of all of the crypto industry, expect the US digital asset market to basically die in the vine and we will be left in the dust as the rest of the world transitions to digital assets. I mean, it's not dying on the vine as we speak. Isn't it dying on the vine as we speak? Well,, it's not on the vibe as we speak. Isn't it dying on the vibe as we speak?

Well, certainly it's not. Every company is moving, but the point is, is that what I just said is well known to multiple people in politics. There are multiple people in Congress and the Senate who understand what I'm basically saying about dynamic. To crush American innovation is a bad thing. Now, I am still, maybe I'm being a Pollyanna, maybe I'm just more hopeful, but I do believe at some point,

saner people will end up in charge. I hope Kim is wrong, but the threat is absolutely right. Look, here's the great opportunity, guys. Let me just chime in real quick. I think the democratic party completely underestimates how big the crypto scene is now and by doing this they are setting themselves up to lose the presidency lose the house and lose the senate like if they are going through with

this and it looks like they will they're going to completely fuck themselves. But Kim, I want to challenge you on that point. I want to challenge you on that point. Yes, I believe that a lot of people have bought crypto. So I think that if the stats are correct, one in every four households in the US has bought crypto. But the stats are also that 90% of people that have bought crypto have actually lost money. So we don't know if it's 90, but we think it's about 90. The official stats are about 70%. 70% of people that have actually bought crypto

have actually lost money. So I know that we are a bunch of crypto bros on Twitter and that we are all very passionate about this movement, but we're a very, very, very small minority when it comes to the vote, right? And I think that by knocking the prices down, demotivating us all further, I think there's a very small subset of us that actually will stay here with thick and thin and that believes so strongly in the technology

for thick and thin. I think the average person that actually bought crypto is bought it to try and make quick cash, came to crypto, lost, actually hates the space, but kind of couldn't give two shits about the space. They came to the casino, they put their money in the casino, they didn't realize it was a casino, they thought it was a hot air balloon and it only goes up, and they lost money now i don't think that for the vast majority of people other than the x million people here on crypto twitter i don't believe that for the vast majority of people crypto is actually a vote issue i think for us it is but i think in the big scheme of things this is a very calculated move by the democrats um to say look you we don't, this is not a very big community, especially if we weaken them further, we can justify to them, you know, that, you know, that we,

that crypto is a bad thing and most people lose money, et cetera, et cetera. And I must be honest, I'm not sure that, I'm not sure that it's such a voting issue. I wish it was, but I'm also really... We made it easier for... Kim, let me add two things to it, Kim. We invited them with FTX, with Luna, and recently with the recent pumping meme coins and Pepe. We're inviting regulars.

We're like, hey, we fucked everyone else. We fucked the retail market. Please come in. All right, so, Ren, I disagree with you for two reasons. Number one, you know how tight elections are in the US. It doesn't take 77 million to change who's going to govern. It takes a much smaller number. And I think the community that believes in the future and the independence of decentralized crypto is big enough now to make that dent. Then in addition to this, you cannot forget what CBDCs are going to do, what they are going to try and implement here. And more and more people are waking up to what's happening in the United States, you know, with the proxy war, with the way the economy is going, you know, all the things

that are taking place, you know, you just see a trend here of people not having any more faith, any trust in the government, in institutions and in agencies. And if you combine that with an aggressive crackdown on a massive crypto community, that is also, you know, don't forget, it's not just the US, this is a global movement. And people online, you know, they are hurt we have fortunately the situation on twitter now where you know the community can talk openly and freely and you will see the magnetism that the the enthusiasts about crypto will have to change the world in 2024 so if you think that this is not a major issue politically i think you are miscalculating that. Before you answer, Ryan, before you answer, David, I wanted to go to you.

So I'm going through the comments and just for the audience, if you don't know already, the bubble at the bottom right corner is how you can comment and ask us questions. People are asking, people that just came in, if that custodian does fall, and I know you've answered it already beforehand and you can't predict the outcome but if they do fall what does that mean for the entire market and not just bitcoin just crypto in general vc funding and and other areas of the of the ecosystem nfts etc yeah i think it's another blow um i i, you know, if they were doing things how they were supposed to, customers won't lose funds, which is the kind of the critical key thing. Like we need to avoid there being another,

um, you know, more consumer damage. Uh, and so hopefully, you know, they can be, uh,

wound down if that's what it comes, uh, to be. And, and, uh, you won't see any kind of devastating headlines. If there's a hole in their balance sheet caused by FTX, you know, that will be a sad situation.

And I'm not exactly sure how to answer the question. I will just piggyback on the political question. We fund an organization and co-found an organization called the Bitcoin Policy Institute. And so we spend a lot of time working with different political factions around this topic. I can tell you that the latest polling that has come back is that crypto has a negative impression amongst voters right now. Bitcoin has a neutral impression amongst voters right now. Digital assets has a slightly positive impression right now. Anti-CBDC has a very strong positive view right now. So that's actually why you're seeing all these politicians come out with an anti-CBDC view. It plays very nicely. And then I totally agree that crypto and our focus is on Bitcoin, but

Bitcoin is becoming a very serious political theme. There's very few political topics that don't have pre-existing fault lines where there's already a 50-50 divide over the topic. And so this is fresh terrain to battle over. And there are voters in critical states that are up for gaining. And at the Bitcoin conference, we had multiple presidential nominees come to the conference because they see the growing influence of influence of this community um from both political sides and we were in negotiations with um uh what's his name a guy from florida uh desantis we're in negotiations with desantis to come uh speak and give a policy presentation on uh bitcoin and cbdc's um up until the very last minute. So this is going to be an ever-growing political theme, but I do think crypto has a negative impact right now. There's also a lot

of people wanting to cover their ass because they took money from crypto. Turned out that the people who gave them money were scammers, and now they want to be perceived as tough on scammers. Yeah, David, just listening, sort of unpacking what you just said. What is the actual statistical metrics behind? What does slightly anti-crypto mean? Slightly in favor of Bitcoin, extremely against CBDC? Can we put numbers to that? Because I'm wondering how fast those numbers could flip. Listen, we all know that, frankly, if all of a sudden, which I don't think is going to happen, we jumped into a massive bull market, those numbers would be wildly different. And we know that all those people

that hate it and lost money would be buying it top once again, because that's what people do in markets. Because it seems like certain politicians have jumped on that exact survey you're saying, right? Slightly negative crypto, that might be enough for the Biden, Smith, Warren, Gensler to go all in anti. But slightly favorable Bitcoin, we're seeing quite a few presidential candidates not ever mention crypto, but talking about Bitcoin in a favorable light. I would like to chime in real quick, if I may, because this is very important for everyone to understand. The only reason why there's any negative notion about crypto is because we have allowed this great innovation to be turned into a fucking speculation casino

when it was always meant to be utilized for people to have an alternative financial system. Once we stop gambling with fucking crypto and trying to rip people off with fucking pixels, this whole thing is going to become our savior. And that is... Right, but that's not going to happen. I agree with you, but that's not going to happen

because people are gamblers, right? So, like, we have to talk, I think, I 100% agree, but I think we have to talk in the reality of where we're at. And I'm not going to pretend that we're not going to make the same mistakes in the next cycle. Yeah, well, the key to winning the crypto war that the U.S. government has unleashed now is utilization. Speculation needs to be a sideshow and utilization needs to become the focus of the crypto community. And once we achieve that, there's no shutting it down.

Yeah, David, so what are the metrics behind that? Just really quickly, Joe, I still want to get the answer to that question, because I'm just wondering how quick, how close to neutral that is. So the the I was given this information, like, let's call it two months ago. So, I mean, you know, this all moves pretty quickly. I don't remember the exact numbers off the top of my head but like this is pretty close approximation like a negative 10 point favorability rating on um on crypto like a one point favorability rating uh on bitcoin um which basically you take the unfavorability you take the favorability and you you subtract them against each other to see what your net

favorability is the favorability of digital assets like 5 points and then anti-CBDC like 20 points and when you're talking about digital assets is that effectively asking about NFTs as a separate asset class from

crypto? no, no it's all encompassing yeah it includes it's crypto it's just a different word for crypto that they haven't heard in the same the you know these they're just asking crypto at minus 10 but uh favorable to digital assets really uh shows you what people think of crypto versus bitcoin and and i'm wondering where that more favorable view is weighted because that seems like it makes it just a semantics on the language. It is. It is. I mean, it's just like this, the polling that

politicians do, you know, like what term should I use to describe? Should I call it crime or should I call it like, yeah, it's just classic politics and low information voters that are just weighing it on their on their, on their inference from words. Um, uh, yeah, so, um, uh, I, I think it's, uh, it is definitely like on the, on the political topic du jour, um, like two groups that we've been working with, um, uh, club for growth, which is the second biggest republican super pack uh in the country is very strong on this on this topic um and they just formed a political action group a c4 um club for

growth plus tim ryan who's a democratic independent congressman uh who has a lot of connections in the house was like a former whip and then, um, uh, Biden's campaign manager from the last election. Uh, so you actually have, uh, basically the moderate Democrats and the conservatives, the free market conservatives teaming up,

um, to really champion, um, champion this, this industry, uh, in DC. And they definitely see the political opportunity

and scott just to give an update for the audience so this kicked off with david bailey's on on stage right now um if you don't know david's uh we could check out his bio just on stage to kind of get the credibility behind the tweet and why we're covering it and the tweet reads the following major custodian about to declare bankruptcy without last minute bailout take your bitcoin off exchanges and then the last bit is even bitcoin only platform uh platforms and our guess is prime trust but this is uh just a guess that's why we're not putting it in the headline and they've got 48 hours i think david um to try to to get how much money do they need to keep running? I was told $25 million by start of business Monday.

Now, I'm hearing this from investors. And so it's possible that that timeline is off. And any insight into the... Heard anything about the meetings with investors? What's the sentiment? Like, I remember when FTS was looking for dollars last minute, a last minute bailout, we heard pretty quickly that it wasn't going well and that we saw publicly a lot of these investors pull out.

How's it looking here? I know a lot of it is behind the scenes. I mean, all I can say is that we're a media company and when you're coming to us for funds, that's not a positive sign joe i'll jump in yeah i mean i think but people but people were saying that survey they just don't understand the link between things and about people about politicians wanting to stop scams you know there's a there's a nigerian prince that's been using email for a really long time

that's scammed actually a lot more than Bitcoin. But they're not banning crypto. They didn't say, hey, you cannot use those cryptos. They say, follow existing rules and regulations. I don't, like, I push back when people go crazy at shitting at regulators because it's a very easy thing to do, a very popular thing to do. But I don't understand, like, if there's existing regulation, I understand that it's not perfect. understand the ambiguity i understand that could have been

clearer earlier and a lot of people trying to play by the rules brian armstrong being one of those people but then to come in and say hey you know you didn't ban email why are you banning crypto they're not banning crypto bitcoin is still legal when we're comparing to china china banned crypto they were a lot more aggressive a lot of people are giving credit to China now for finally starting to open up slowly. Still, the US is more friendly than China when it comes to crypto. So I think we just should just stay realistic.

But Mario, they're trying to make it as difficult as possible when they can easily solve all these problems with these centralized exchanges by launching an ETF, which they haven't done. You wouldn't have so much money on Binance or money on FTX. Majority of the wealth in crypto is in Bitcoin.

That would have been an easy fix, and that's not what they're doing. So to me, this is a war on crypto. They don't want it to compete against the dollar the way Kim said. I disagree that it's a big hoarding issue. What does that do when it comes to competing with the dollar? Because a lot of the tokens that are considered securities, that has nothing to do with competing with the dollar. Well, they don't want an alternative financial system.

Right? Can I just weigh in on this real quick? Politicians don't really give a fuck about what's happening. They don't really care about people competing with the dollar. They don't even about what's happening. They don't really care about people competing with the dollar. They don't even think about that stuff. They don't really care about people getting scammed. They just care about being perceived as being okay with

scams. So it's all a perception game for them. All they really care about is money donated to them. That's how the incentives in D.C. work. I don't mean that in some way, oh, they're all corrupt. Though you can maybe frame it like that. I mean it like they're just thinking about how do I keep my job?

How do I get reelected? How do I say the right things, the right platitudes? And how do I get enough money in my campaign coffers so I can run again? And so for them, solving problems is not actually

how you get the most money into your campaign. The way you get the most money into your campaign. The way you get the most money into your campaign is to leave problems open-ended and then go to the people who are stakeholders to those problems and be like, without me, your problem can't be solved. And so that's why you need to support my campaign. That's why you need to put money into my pack, et cetera. And so... I agree. Perception is everything, David, at work in marketing.

The thing is, when people really start believing in Bitcoin is when countries try to put a CBDC or inflation goes double digits, like you're seeing in Lebanon or Turkey or Argentina. All of a sudden, everyone loves Bitcoin. Until that happens, they don't. It's a non-issue.

Actually, they love stable coins and they send them on Tron, but that happens, they die. It's a non-issue. Actually, they love stable coins and they send them on Tron, but that's a different conversation. Trust me, I think they should love Bitcoin, but if you actually dig in, what people in countries with hyperinflation

generally want is dollars and they usually send them the cheapest and fastest way possible security to be damned. But I don't think that's the future, but that's just the factual reality. But Scott, if you look at Turkey, it's different.

If you look at Turkey, it's different than Lebanon. Like Lebanon, yes, they are going for stable coins. You look at Turkey, they're going for Bitcoin. They're using Bitcoin like a savings account and stables as a checking account, let's say. Almost. Newer countries that have been switching over.

But, great, trust me, I'm a Bitcoiner. I'm just saying, if we're looking at it factually, yes, in theory, we love to talk about people using it as their savings account, but most people in hyperinflating countries don't have savings. David, I know you're jumping in. They need money to transact every day.

Look, bringing you back to topic, David, how is the ecosystem going to look in the next six months? Now with the news that broke today, we saw what happened with the war escalating with Binance and Coinbase and potentially the DOJ announcement coming this week. Are we going to see Wall Street take over crypto?

And how is that? Is that a good thing, a bad thing in the short and medium term for the ecosystem? Again, short and medium term, because I know long term, it's not a good thing. You know, I don't know how to answer that question. I can just, like, my impression with Wall Street is, like, there are some Wall Street firms

that are very savvy, and they are long-term bullish on the space. There's a good number of Wall Street firms that they are just herd followers as well. Like, they're such big companies, they're basically, companies. They're basically like their own political entity with political stakeholders internally. And the things that people care about at those organizations is not to lose face, not to lose political capital

internally at their organization. And when they see shit like this blow up, it's a bad look and they don't want to put their credibility on the line internally. And so I don't think that this is some concocted strategy by Wall Street to take over crypto. I think there's a lot of firms right now that are begging a Wall Street firm to come take them over. That's right. I just, for the record, even when I sent that tweet, it wasn't the implication that it was

like some evil conspiracy. I just think that Wall Street wants to get in and they're going to get it at the bottom when this contagion is at its peak. Yeah. And there are very, very, very legit Wall Street firms that are in heavy on this, like heavy by now. Yeah. And and and Glenn Templeton simpleton yeah there's like yeah exactly that that caliber and there's there's probably 50 of them you know uh and they're not going anywhere and uh they are eyeing what what things to do but it's not like there's thousands of them you know it's not like this is a widespread thing it's it's really just the savviest sorry so I was...

And I was going to go to Ran. Ran, did you hear my question? My last question? Ran? I didn't. Sorry, I didn't. I was trying to get onto the spaces. All good, man.

With the escalation of the war, how is the ecosystem going to look like in the next 6 to 12 months if Wall Street comes in, which is what we're speculating? Look, I mean, the one big concern is

that they've got to resolve this whole what is a security and what is not a security. And I think that, to be honest, I think that's the biggest fight. That's the biggest fight in the world is this what is a security and what's not a security. If they are right, when I say if they're right

if they win in court that all of these tokens are actually securities uh that changes the whole landscape because most of these tokens then become almost unusable let alone you know not tradable because you know the rules of trading securities in the united states are so are so complicated and so limiting that it's it's limiting that it's a bad thing. So I think that's the first thing that has to be resolved. But I think regardless, I think, you know, here's how I see it. I think... Before you continue on that point, sorry to interrupt, but on the point of them becoming

unusable, so why are we seeing that reflect in the price? Like I'm going through those tokens that were considered securities by the SEC. They mostly recovered from the drop they experienced along with the market. And the drop wasn't that catastrophic. Because the battle is a 5-7 year battle. This is not a battle

that's going into court next week, Tuesday. This is a battle that's going to take 5-7 years to possibly resolve. The XRP case has taken three years and it's not even really, really, really in court for the biggest fights.

So I think that's the first thing. The second thing is think about it from a regulator's point of view or think about it from a political party's point of view, who has been lobbied by the banks and the financial institutions. I mean, we know that the biggest money behind DC today is drug companies and financial services companies. I mean, that's not a secret. Everybody knows that.

So you think about it from their point of view. When crypto was too small and not really threatening the institution, well, then what they did was they said, oh, look, let them play around unregulatively. Let's see what this becomes. The minute that we hit the couple of trillion dollar market cap, these guys turn around and say, oh, hold on a second. Hold on a second. This is really something. Okay, now, how do we get it? Well, let's mess them up with regulation. Let's weaken them. And then you can kind of buy the,

you can pick up the pieces for pennies and the dollar in certain liquidations and stuff like that. And so I think that can be an end game. That can be an end game here, is to just transfer this into you know into the the incumbents the ones that have spent so much time lobbying that could be one of the one of the games here so to speak um you know not saying it is but certainly something that's plausible say that much and then hey uh i go ahead david i i totally agree with that take. The question is really about securities laws.

All of these tokens are securities. I mean, I hate to be like that point blank about it, but they're all securities. The problem is that our securities laws are broken and out of date, and we need to have new securities laws. And I don't think there's any issue with someone launching a token that's a security. Let's go one step back. Let's go one step back.

Let's work on the assumption that every single one of these things is a security. What does that mean for a network like Ethereum? Given the fact, let's play this in two parts. They go to court, in the court, the ruling is that all of these tokens are indeed securities. What does that mean for the usability and the usage of blockchain in the United States? And I mean, let's just look at it from a Solana point of view, because maybe Ethereum will be excluded, but let's just say Solana point of view. So the validators can't

stake the tokens because it's very difficult to stake securities. The holders can't use them to pay gas fees. The users of the dApps can't use them to pay gas fees, right? Because what are you going to do? You're going to pay 0.00 something Solana. I want to just use the network to do multiple transactions. Every single time I do a transaction, I want to just use the network to do multiple transactions. Every single time I do a transaction, I'm actually transferring a security, which right now,

if I'm not mistaken, in the United States, has to go to a registered broker dealer, blah, blah, blah, blah, blah. So it makes, it kind of makes these, I don't know,

maybe I'm wrong, but someone, maybe someone in the US can enlighten me here. Does it render the networks useless? Well, where it really blows them up is it means all the exchanges

who want to not be regulated like a securities exchange will need to delist. The liquidity will dry up. The on-ramps will become more difficult into those networks. And the value of a network that no one uses

in which the price is going down because there's no liquidity of it like that you have like reverse network effects kicking in so i actually think that whoever is deemed not a security there's going to be massive consolidation around those assets so if it's ethereum and bitcoin are the two things that are not securities um you know which there are some central points of failure in ethereum that that ethereum community needs to be worried about but if those are the two then i think you see a consolidation around those things and that's where all the securities issuance happens because these securities that are being issued aka tokens they rely on the liquidity to work okay now let's go

a little bit slightly let's go once let's go one step further. What happens if in Asia they're not securities and then the US really realized that they're falling behind in the blockchain technology game? What happens then? Well, that's the dynamic we have right now. I mean, hopefully have an administration change or something. Yeah, well, I think that... Also, let's just go one step back and say

right now we don't actually have that because Hong Kong is just opened up, right? Just, just, just, just opened up. You got Japan just, just, just

changing the tax laws. So right now we're not in that, it's like the beginning, beginning, beginning stage. Fast forward two years from now, let's assume that everything's going well and these networks are actually being used. How does that change things? Well, it doesn't make these things not securities, but it does ratchet up the pressure of changing the securities laws. And I think if you have a market like Hong Kong where this stuff is blessed to happen, you're just going to have massive but it does ratchet up the pressure of changing the securities laws and i think uh if you have a market like hong kong where this stuff is blessed to happen you're just gonna have massive

regulatory arbitrage you're gonna have every project based out of hong kong people are just gonna use vpns which is the status quo already and uh any laws that are passed in america just will come in effect but like when you see stuff like what happened was happening with binance i mean they're fucking calling cz i i mean i had an interesting situation for cz to be in but that's the game that they've been playing and the u.s government is basically saying uh-uh none of that so you know i i i the u.s does take a perspective like their laws supersede all other nations laws and they apply everywhere in the world and if you get big enough you're going to have a target on your on your back um so i don't know i think it's uh it is an interesting dynamic did can you dive into that a little bit i know that you just uh dm you had some thoughts dave weisberger if you're there go ahead yeah i mean

i think that david bailey you're making a distinction without substance in terms of securities outside the United States. The U.S. is the only place on the planet that has two different regulators for different types of investments. Everybody else is the same. But the real issue here, and it's a core issue, and you started, you were around the edges of it. I've been having this argument on Twitter with a couple people today, is that token projects, whatever you think of them, are trying to do something that is literally impossible to do in the United States under securities laws for very technical reasons. And the reason that's to do with accredited investor rules and the way that the securities registration process works. So we have things like pink sheets and stuff where really very, very loosely regulated,

easy to register stuff that can trade on platforms that are sort of restricted, but they're there, people can buy them. But what you cannot do is register a security in the United States like this and let anybody trade it. For the first year, it has to quote season. During that time, accredited investors are the only ones who can trade it now if you look at almost every token project the they're using these tokens to incentivize this the good use not the rug pulling dumping you know shit coining and there's a lot of crap that goes on i'm not not defending all of it but the core use of incentivizing developers incentivizing community members incentivize users most of those people they're trying to incentivize are not accredited investors. And that's

why token development in E2S is so damn hard. And that's why they can't register. They can't register because there's no easy way to do it, but that's the issue. Dave, I want to ask a question and again, for the audience, we get the questions from the comments, so make sure you comment there. The

question to you is that if this is going to take, as Ryan said, this is going to take years to settle. He mentioned five to seven years. So what happens in the meantime? I don't understand. What does that mean for the startup ecosystem? What does that mean for projects that already have a token, that are working on tokenomics and token structure? If we have this battle going on that is pretty much

essential for them, what will happen to the ecosystem? It's moving offshore until people in the United States actually rally behind the actions, some version of the bill that was proposed last week. I mean, look, I'm not a conspiracy theorist by nature, but I do believe these actions, these filings happen to take the narrative away and take the oxygen away from what was a very unique action by multiple two congressional committees to work together. But the truth is, Mary, you hit the nail on the head. This, at the core of it, is about incentivizing innovation and development. And I think Tom Ambers understands it. I mean, he's been very clear about it. I think Warren Davidson understands it. He's been very clear about it. I think Patrick McHenry understands it. He's been clear about it. I'm not sure that Richie Torres doesn't understand it. I think maybe he does because based on his quotes today and he's a Democrat, I think that Christian Gillibrand last year kind of said this sort of stuff.

So there is hope. But the fact is, is if you're trying to, if the toolkit in the global economy to incentivize open source development is tokenomics and the U.S. bans it, that is not a good thing for U.S. innovation. And I think that may be one of my biggest understatements. Well, before everyone goes, so while this is a bleak outlook for everybody, just a reminder that we're still here for anyone that does have a startup and that's freaking out right now, do hit us up. And I know probably not the best time to mention it, but I think it's a good time to mention it, that we're still pretty active in the ecosystem.

And if you want to hit us up to work with us, to be incubated, do so. You can DM me, Scott, or Ran. And that kind of leads to my next question. And Dave, maybe you could take that one or maybe you have something else to say. But what happens to VCs then?

Already drying up since FTX, down 90-whatever percent, over 95%. I think, Ran, you mentioned. So now what happens to the money flowing into the space? And AI seems to be sucking a lot of it out of crypto as well. I was just going to make an AI joke. Yeah, I mean, look, VCs

are a different... Sorry, I want to shut up before you go there before you go there i want to ask you a question you mentioned some democrats and you mentioned some republicans but i keep hearing the same names i keep hearing cynthia dumas i keep hearing patrick mchenry i keep hearing warren davidson um what percentage i keep hearing Tom Emmers. What percentage of senators and congress people do you think right now

actually give a shit about crypto and are positive versus what percentage do you believe right now give a shit about crypto and are negative? I have no idea. Do you know that? That's one of the reasons that name maybe i was just gonna say i was talking a couple well i would say uh uh the answer to that is do they care or not the the real question is do they even understand it and um what i wanted to say uh was um just

for a couple minutes if you look at the history uh in the united states you know we had the great depression then you had a major banking crisis and then in 1933 they uh made it illegal to own gold okay so now modern day the bottom line is is this u.s empire we have is in decline. That cannot be argued. And the US dollar is at threat, okay? Because we basically essentially have run out of road to kick the can at this point. So what we saw in the restrict act, when they called it the TikTok bill,

we had hours and hours of spaces on this where they inserted language in there that could have declared crypto or digital payment as a national security threat. So they tried to sneak that in there. So we know. And then you had Lindsey Graham on TV. Back to your question, Mario, is he didn't even read the thing, but he was a co-sponsor of the bill. So these guys are just given marching orders. They don't even understand crypto or what they're doing, but they see it, I think, as what Kim.com says, as a potential threat to the U.S. dollar.

So they're going to go after companies like... I don't think they care. I'm going to be honest. I don't think they care either. They're just going to vote for whatever they're told to vote for. And at the end of the day, if it's a threat to the U.S. dollar, they'll do everything in their power to ban ownership or tradability of it in the United States. I'm going to push back. Don't be naive to think it won't happen. Because they'll do anything to defend the US dollar. I don't really care about the US dollar because there's no real de-dollarization going on. There were a couple of headlines in the last month.

But the reality is that those headlines have also died down at the moment. And that the one currency that potentially they could be moving to, which is the Chinese yuan, if you want to call it that, isn't a viable option. And everybody in the world knows that they'd rather be on the U.S. dollar than be in the Chinese dollar.

I totally agree with you there. And it's basically done. I totally agree with you there. And I think the de-dollarization talk is a little overblown in the short term. But I think in the medium term, things could unravel more. I don't want to go down the political path. Scott, before Danish starts to attack all of us, can you just remind the audience of what we're covering? And David giving us his time earlier to come and share more details on his tweet regarding the custodian, the next custodian

to potentially fall, and then we'll go Danish to go angry at all of us. Sure, yes. The topic here is that a major custodian in the crypto space could potentially be facing bankruptcy, sparked by a tweet by David Bailey, who's still here. Major custodian about to declare bankruptcy without last minute bailout. Take your Bitcoin off exchanges, even Bitcoin only platforms. I think the latter part of that was the one that was shocking to a lot of people because I think the perception has always been that Bitcoin only platforms

are completely safe from the contagion. So I think that that one got a lot of people amped up. Danish, I missed you this morning, buddy. I'm sorry. I wasn't there. Before Danish comes in, why aren't you talking about Gary Gaines being an advisor that is so funny yeah I forgot you they are surprised I mean come on

this is the way it works wanted to run man before tell the audience they can give us the facts what do do we know? The facts The fact is that Gary Gensler in 2019 Before he got this role Approached, allegedly According to Binance's lawyers, allegedly approached

Binance to be an advisor And his pitch was that he knows the law And he knows how to get around the law In the United States And he and his pitch was that he knows the law and he knows how to get around the law in uh in the united states um and he and he met cz for lunch eventually in japan we covered this on my show today that he actually met cz for lunch in japan in 2019 now why do i think that's that's great what happened what happened right what happened today did cc that's very... And what happened? What happened? What happened? Did CZ say no? Well, what happened was I think CZ said no

because he was never appointed as an advisor. So, you know, I guess, yeah, I guess maybe this is a little bit of revenge. But, I mean, there is something else here that I've actually asked our researchers to do. And what I've asked the researchers to do is to go and make me a list of people that used to work in government organizations and where did they land up when did they landed up working for the drug companies or the financial institution companies

or the banks because i know it's a big phenomenon specifically in the united states where people for example work for the fda and then a couple years later where are you well i'm working for science though i'm working for the drug companies or something like that and so i think it's like you know like i even know to be honest i even know that jay clayton who is the previous head of the sec is actually an advisor to a crypto fund i'm not going to mention names but he is actually currently an advisor to a crypto fund uh among some of the things that he does now. So, you know, it's the same games. It's the same games that are being played here.

It's the same games that are being played here. Over and over and over again. Anyway, Danish, I know I'll catch you off there. No, no, it's okay. I'm trying not to do what Mario said I was going to do. So I will try my best. I want to make Mario look bad. But I will say the name, what ran already kind

of said what i was going to say but um but this there's been this bullshit narrative around de-dollarization that the u.s is in decline decline against who like who is in who is on the other side of this now i will danish i actually agree with you on the de- of this? Now, I will say- Danish, I actually agree with you on the de-dollarization thing. I do think that is overhyped. But the US as a nation and even Europe is in decline versus who. It doesn't really matter. But is there an alternative to the US dollar right now?

No, there is not. So this concept that the US is going to go after crypto because they're worried about the dollar being the reserve currency is like i will remind everybody that people were up here in good faith i hope trying to act like bricks was gonna be a thing they were trying to make fetch happen remember and it didn't so just one... I'm one of those people and I can defend... The point I was trying to make was trying to shore up more deposits by

not making it whatever illegal or whatnot to own crypto. That's all. Not as a de-dollarization or whatnot. Don't try to defend bricks, Joe. You're going to get annihilated on this stage. I won't get annihilated. You know why?

Because you keep saying that there is no de-dollarization happening. So then why was 80% of the global reserve currency the U.S. dollar, and now it's 56? And now we have another competitor that's coming up, which will take more percent. Yeah, exactly. I was like, you just made that up, Joe. Instead of...

No, I do say so. Hold on, hold on. Guys, guys, IMF... I've just got a chart. I've got a chart here. And up, yo. Instead of saying, no, I do this. Hold on, hold on. Guys, guys, IMF. I've just got a chart. I've got a chart here. And again, I'm not the expert here. I've got a chart that one of the team members sent. I think one of your team members ran.

In 01, the usage of dollar as a reserve currency, it was at 72% in 01. It went up to 73 or so percent late 01. Now it's at 59%. So there is a drop there and I'll send you the chart. It's in our group, Ryan. I'll send it to you now, Danish. And it keeps dropping. So the

decentralization is already happening. I'm sorry, just Danish. IMF. Right now it's happening because of the Euro. It'll have to... Danish used the source card. Bloomberg posted it. happening because of the euro it'll have to hold on no no no no no don't use the source card bloomberg posted it the source is the imf it's pinned above as a reserve currency is on the decline i think what that means and i stand corrected here is that it is a chart that

shows the central bank holdings foreign exchange so this shows this shows the foreign exchange hold on hold on rand complaining the difference rand go ahead i can do it too but rand go ahead holdings in u.s dollars the percentage of total allocated that's what this chart is showing so and this is by the central banks it's not by trade we know that trade is majority but isn't that an indication why isn't that an indicator uh ryan yeah we were talking global reserve though we weren't talking about trade so i don't want to switch the conversation let's go back let's say guys guys guys ryan go back go back go back to cz let's go have fun go back to to gary gensler applying to become a an advisor to binance and what how does that relate to the story we're seeing now is it just a coincidence or is there more to it than that could it be a personal revenge i think there's

a show called billions and and jenera has a similar storyline to that. It's like the crypto billions. Maya, Maya, Maya, Maya. What we are... I can't keep saying this point and hopefully I'm going to say it again and I'll say it again for the last time. Gary Gensler is a puppet.

Gary Gensler has sold out on his own beliefs. I'm going to tell you why I think that. He is a sellout because, as I said to you before, there is absolutely no way in the world that you can create a course and lecture the course at MIT unless you're absolutely, absolutely passionate about it. Do you know any lecturer at an Ivyy league uh college or ivy league university that can create and lecture a course on groundbreaking anything without being absolutely passionate about it it's impossible it is impossible to do shit like that then you take that and you say okay he was passionate about it he came in and now he's gone he's gone completely negative against

crypto. What does that mean? It means that he has sold out his own personal beliefs to get ahead in his job, so that maybe he can go from here to being treasury secretary and maybe replace Yellen and maybe go even further. These are people that are playing the system, they're playing the system for a job. These beliefs are not Gary Gensler. But Ryan, his beliefs matter, isn't he? He might, again, that's going to sound very stupid and the audience is going to go crazy on me.

But isn't he, if crypto breaks the law, things that are considered security should act as securities. If Binance did the wrong thing, action should be taken against them. So Coinbase, what is the sec um suing coinbase for listing securities and and the sec has said multiple times even prior to gensler all these remember in 2017 2018 all these icos are securities they've been saying this for all for this entire time so why now we're making it sound like suddenly they've shifted when the narrative has been the same throughout i know they've been ambiguous we're making it sound like suddenly they've shifted when the narrative has been the same throughout? I know they've been ambiguous.

They haven't been as clear and they've been very slow, but the narrative hasn't changed. I think that to be honest, I think they're doing the right thing when it comes to Binance. I know it's not the popular thing in crypto,

but they do this to the banks all the time. And I just read an article that Wells Fargo paid $3.7 billion in a certain settlement. Now, that's i just read an article that wells fargo paid 3.7 billion dollars in a certain settlement now that's you know in financial services that's part paying fines is part of what you do there we were in crypto there were companies that were offering that were operating uh maybe not too good not as keen as they could maybe it was because they believe that the laws were gray

and the law obviously believes that the law is not gray. And Gary Gensler is doing what he needs to do. And it just passed. So what's the issue, Ryan? You asked. The issue is with Coinbase. And the distinction, Mario, is it's not that the

SEC has been ambiguous. It's that it is impossible. There's a big difference. It is literally impossible to have tokenomics under securities laws because the laws are outdated and they don't allow for it. So go.

Yeah, but if you decide, okay, if it's impossible and a a company and a bit in the Startup decides to do it complain about the law, but if you know it's impossible and you're saying it's a puzzle It's clearly impossible years as he said it's that this is impossible Then if you break that law, which we all hate and the SEC takes action What is so complicated about this? Well, we have to talk about Gary Gensler applying to go to buy an ass and loves crypto, he doesn't like crypto, he's a puppy, he's not a puppy? Because just the same reason that this is, it's amazing that we're five years in, but five years ago, people, Hester and others saw a need for, saw that there was a brand new business model that was encouraging enormous

amounts of innovation and yes, a lot of fraud. I want to be clear about that. And the fact is, and this is the point, when you regulate as opposed to what you're doing is you're using a scalpel instead of a sledgehammer. The idea is to make it clear and distinguish between firms that are firms or groups that are legitimately building and people who are basically pumping their bags and rug pulling out the people after they sell it to them. And when you go to do blanket bans, you can't do any of that. That's sort of like why FTX happened, pushed offshore. But Dave... The regulations actually create the fraud because

they basically force companies that want to do tokens to contort their token to make it not a security. And to be not a security you have to... You basically, as a model, cannot make a profit. And so they force companies to build this rube goldberg

machine in order to make some bullshit justification that they're not a security when everyone realizes that these are fucking securities and if they just said hey you're a security and here's a straightforward framework for you to be able to abide by every team would actually prefer that structure and then okay like uh imagine how what a shit show the Fortune 500 would be if you made all the Fortune 500 companies have to claim that they're not common enterprises, not make any forward-looking promises to investors, not generate a profit,

and they had to, like, somehow make their price of their stock go up without generating a profit. Like, everything would end up being a shit show. David, you're rightly so. You're criticizing the laws. And I think it's hard to disagree with this. But what I'm perplexed by is how the SEC taking action is suddenly the US government declaring war on crypto.

Now, there's other things that the US government is doing that is questionable. And the Restrict Act is probably one of the best examples. But the action we've seen from the SEC, whether it's Coinbase or Binance, I just want to say, isn't this expected considering what we know so far in their narrative since 2017? Mario, you can tell when you're dealing with a good faith regulator, they provide clarity. You don't need an email, a stamp to send an email. You don't need a broadcast license to post a video on your website. And if Congress won't make special rules, good faith regulators tell you how to act within the existing rules.

Fair point. Okay. And they would have taken that meeting with Brian Armstrong. Exactly that point. I was just going to say, why doesn't he sit down with Brian Armstrong? Right. And why when Coinbase walks into the office because they say, just come in and talk to us and says that they want to list a product, ask exactly how they should do it. Do they get sent out zero clarity and then get the threat of litigation if they launch without any clarification as to why it would be illegal and why they can't get a copy? Just for the not good faith. By the way, did you see all the coins that Binance is delisting? They include, I think MKRs, MakerDAO, isn't it? There's ApeCoin, there's 1inch, Aave.

They're all being delisted based on the list I've seen. Have you looked at it, Scott? Have you gone through it? Yeah, it's a monster list. I've been going through it. And curiously, if you take a look, it's almost all... There's nothing left. USDT pair. take a look, it's almost all USDT pair.

What's left? What's left? It's dead. Binance US is over. They're winding down. I think that's pretty clear here. Yeah, have you gone through? Has anyone gone through what tokens will be left on Binance US? Anyone? We should ask in the research

group. Yeah, probably a head full of tokens. Yeah, we can probably find... I mean, it's crazy. And what's the problem? Hey, guys, I got to bounce. I just wanted to say thanks for having me up here. Enjoy the energy on this basis. And if anyone is based in Puerto Rico

hit me up David let me do David let me ask you let me ask you one question before you jump off bullish or bearish and what are your thoughts on on the markets response to the to the action by the SEC bro I've been in Bitcoin 12 years now I I'm always bullish. And I'm totally focused on Bitcoin. And I think if you're focused on Bitcoin, you can't go wrong. And so I'm always bullish. And you got three laser eyes in your profile photo. So I'm not surprised by the answer.

I appreciate you coming in. And if there's anything new to add, do send it to us. If obviously we're able to share it here openly in the space. And you're welcome anytime on stage. Thanks a lot, David. And scott you recommended we invite cory and and cory accepted the invite cory thank you for accepting i appreciate it hey what's up mario hey scott how are you man what's up man your your guy's name is being involved constantly in dms and i know that no worries for clarity and there's nothing i hate more than

having a conversation or seeing someone's name without having them here so obviously we wanted to get you up immediately i'm gonna be here for about guys for context for you yeah i mean introduce yourself no it's fine i'll be here for about probably 60 seconds because i'm about to drop off my kids at school and uh in a canyon and i'll lose reception. But yeah, I mean, for us, this was really simple. We started looking at basically custodian, you know, diversification back in Q4. And for anyone that doesn't know, basically the reason that you use a trust company as your qualified custodian is because you can create individual legally owned trust accounts for every user, which means that in the event of the broker or the exchange or whatever fund company failure,

and in the event of the failure of a trust company, the assets are legally owned by the account holder. So that's why you want to set it up that way. So for us, there's no in between. There's never any sense that we would want to custody Bitcoin as swan for our users. You either get people to self-custody or you put it with a qualified custodian with those legal protections. So I just wanted to kind of point that out as the reason that we set up that way. Now, the number of people that can actually set up individual trust accounts and open them basically instantly via API is fairly limited and doesn't include any Bitcoin only custodians, right? So you're talking about, you know,

BitGo is almost there, but not quite. They still require you to have Omnibus, which means you need your own MTLs. Fortress has it. ZeroHash kind of has it. PrimeTrust was the leader as far as functionality and having that legal setup for obviously the last number of years. But anyway, we just thought it was important in the wake of the collapse of FTX and all the crypto scandals last year that we diversify. So we started working with BitGo in Q1, started moving some states and some users over there where we could, basically only on the high net worth side because they actually had to open up

a BitGo account as well. And then we started working with the Fortress team a couple of months ago. And for us, this is basically just a geographic coverage decision. So when we lost New York about two years ago... Oh shit, I thought

I was literally taking my shirt off while the space happened. I thought I kind of ended the space by accident with, like, my headset. My heart just dropped. But I think he's in the canyon. To wrap it up, I just want to say, Scott,

I want you to wrap up. Everything was just discussed in this space and the news of the day and what Corey just mentioned. But before you wrap it up, I just want to remind the audience, let us know your thoughts in the comments. Also, hit us up if you want to come on the show.

Oh shit, we're going to start doing Shark Tank pitches. I've convinced Ran and Scott to accept. So hit us up if you want to come on those or you want to work with us, with IBC The Incubator or sponsor the show. Just DM me, Scott or Ran. And Scott, just give us, I think we should do this in every show,

just a final overview for anyone that missed the beginning. What did we cover today? And what are your personal final thoughts because everyone cares about your special opinion well my special opinion is that uh i want to see gary gensler who's renovated i want to see what he listed as his hobbies um but very very valuable very very funny very valuable stuff everyone's laughing but that that's what we need that's what we do i see i see donnis laughed you know but i paid him um so and beyond that obviously the conversation here and it's pinned up in the nest with david bailey's tweet major custodian about to declare bankruptcy without last minute bailout take your bitcoin off exchanges

even bitcoin only platforms we decided to focus on that with David here to get some clarity. Now, to be very, very clear, nothing we ever discussed is financial advice, and we did not officially get a name out of him. The conjecture across the board, and it is just conjectures, that that is Prime Trust. We dug through who Prime Trust custodies. 16 different customers were listed on their website. We know that may not be up to date a year ago. Now there were only six and swung, which is one of them. Corey, just as he dropped into the canyon, made it clear. We know for a fact that that was crossed off the list and they were not one of them. So the concern here, obviously, is that the messy legal proceedings that would come from a bankruptcy, even if the custodian has all of the

customer assets, could take a very long time to resolve. Could be state by state, jurisdiction by jurisdiction, country by country. I'm assuming they're all largely US, so that might not be the case, but really could get very ugly, even if they have the money for the way that it's released. So his recommendation, as it should be anyone's, I think, at all times. Effectively, take your coins, put them in self-custody, not your keys, not your coins. The original ethos of Bitcoin, I think everyone agrees with that. I can tell you in my DMs and in our groups, I've gotten a lot more information that needs to be vetted.

So I think we'll probably rehab this conversation to a larger degree tomorrow alongside some other things but I gotta get a lot more clarity there but I think really I'm pretty amazing that we were able to focus on that singular thing and the implications of it. Yeah and I know you want to talk about the fucking drama with CZ applying to

join, no CZ wasn't it, Gary Gensler applying to be part of, to advise Binance but that's a pretty lame story and you started with the conspiracy so I'm glad we didn't cover this shit um and you're not wrapping up the space on my end you know this reminds me of the ftx days not because this is similar to ftx is not even close um but just because you know the breaking news happening live on spaces but it's just you know i used to say before because i've been watching ran's channel for i don't know how many how many years back in the old days um and i say ran is the best host and i'm second um that was my ego speaking but

now scott leading the show is a fucking beast so uh just hats off to scott didn't know you'll end up because i remember your first space was pretty lame bro like you could hold on to it really quickly because it's so it's so different to youtube and i never said it to you because we weren't as chill as we are now but yeah i'm like jesus like so funny how someone could be so good at youtube should go you should go listen to my original podcast holy shit it's the cringe worthiest uh content you've ever heard and actually my first podcast of all time was katherine coley from binance us and i had this like long list of questions and no matter what she said i just went down my list of questions it was horrible yeah it is uniquely challenging to manage 12 people here with the research teams

in the background and all of us sort of discussing you guys have no idea how much is going on in the background to produce one of these spaces deal with all the guests and it's it's i mean it's absolutely mind-boggling i'm used to just having a one-on-one or one-on-three conversations with people about unicorns and puppies and how great crypto is. Yeah. And to end it, we are expanding. So we've got a whole team, me, Rand, Scott, expanding the Crypto Town Hall to YouTube, podcasts, etc. So there's a lot coming.

And yeah, it should be fun. Appreciate you all. We'll see you all tomorrow. It's Monday to Friday, whatever time it is. See you tomorrow. Bye, everyone.