The Wolf Of All Streets - Market Hits Pause: Calm Before the Storm? | Crypto Town Hall

Episode Date: November 28, 2024

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Good morning, everybody. And for those of you who are in the United States celebrating Thanksgiving, well, happy Thanksgiving to you all. Scott's out this week, so unfortunately you're stuck with me. I'm Buzz. I'm a developer in the space. He's been in the space since about 2016. Right now I am the development advocate for Shiba Inu. And honestly, just really enjoy talking all things macro markets as well as I do have a

finance background. But earlier this week, we were talking a lot about the micro strategy, corporate finance strategy. Since then, it's been a few days since we've had a show. The market's been a little bit sideways, but what I am seeing is a ETHBTC reversal. So ETH has had a good run up. Bitcoin seems to be staggering in that 91 to 99 range in the last week. It's been a little bit quieter. I remember in past US Thanksgiving holidays, a big narrative has been, OK, maybe all of these altcoins can start pumping because people are getting at the table with their friends and family. They're talking their book. They're kind of getting their family in on crypto. Some years that's turned out very well. Some years it hasn't. Looking back into 2020, which is where a lot of people are doing an overlay on the market

and making a 2024 comparison just due to the four-year cycles of Bitcoin, that strategy worked very well. We're kind of seeing about a 44% run up, which is exactly kind of what we had in this cycle, followed by a dip like we just had. And then in December, the market did very, very, very well. But we do have Fred here. And Fred, one of the other topics we were talking about earlier this week was the pump.fund news. I know it's a little bit old now, but in our last conversation, we didn't have an attorney with us. I would love to go to you first just to get your thoughts on Pumped Up Fun and what their sort of responsibility is in regards to live streaming from a legal perspective. And if you're not familiar with what happened there, basically people were taking

advantage of these live streams, doing things that were illegal, and Pumped.Fun just said, hey, we don't have the proper moderation, we're going to take down live streaming. And that likely came from just a bad community sentiment all around from crypto Twitter. So if you don't mind, I'd love to get your take on what Pumped.Fun did, because there are some markets out there that are really predicting that pump.fund is going to be banned within the us are you in agreement with that oh good morning buzz thanks for uh having me on today happy thanksgiving to everybody in the in the us or anywhere else if you're celebrating elsewhere um i guess my first question is did any of those uh uh live streams actually hit their market cap or were they all taken down?

No, a lot of them did actually bond. I mean, the live stream feature, Pumped Out Fun, came out and said that they had over 100x growth in a matter of two weeks in their live streams. So in regards to the ones that went extremely viral, I don't think a lot of those hit their market cap and then the community kind of took it into their own hands and didn't support it. But the live stream feature was experiencing that hockey stick growth. And a lot of them did actually bond and become tokens.

So, I mean, from the legal perspective and i actually should know where pump.fund is uh based out of uh but i don't um but from us i'll look that up while you're talking from the u.s perspective you know the issue is what kind of control do you have and what kind of responsibility or duties do you have to manage your platform when you have people doing some of the crazier things we've had on the live stream and so it's not always clear where that line ends and that's why we have lawsuits here in the us but the bottom line is that uh anybody either the streamers themselves or anybody who may have gotten screwed over in one of those tokens could easily file a lawsuit and come up with all sorts of novel legal theories. One of them being, I didn't want any of these guys.

I'm thinking of the guy that was in a dog cage, but I know there was other ones claiming potential self-harm. There's all sorts of legal theories that somebody could plead that, well, I didn't want this guy to hurt himself or something along those lines. And Sue pumped out fun. So I think they rightly realized that they were exposed when they were trying to mess with the live streaming feature. And probably, again, wherever they're based out of, it'll be harder if they're not in the U.S., but wherever they're based out of,

I would expect to see some type of litigation. We'll see how far it goes, but it definitely got too crazy. I would assume, and I have had a bit of a failed Google search here while you were talking, but I would assume that doing I have had a bit of a failed Google search here while we were talking, but I would assume that doing the classic Seychelles or something like that, being domiciled there, kind of like the exchange typical setup like Binance. Yeah, you know, prior to November 5th, 2024, that was a very smart thing to do was get the hell out of the U.S. if you were anything related to crypto. And, you know, that's what I was advising clients and actually just anybody that came in and wanted to do some type of consult with our law firm. It would have been great to take those clients, but I'd have to recommend,

hey, you got to go outside, go to other jurisdictions and do your thing over there. And I'm not a lawyer in any of those jurisdictions, so I was saying goodbye to a lot of clients or potential clients. But people, I mean, this is kind of coming back to what I'm very thankful for this Thanksgiving. I'm getting a lot more calls and fielding a lot more potential clients that either want to move back to the U.S. or want to go ahead and start opening up in the U.S. So I am very thankful this holiday season that it looks like we are going to get some real meaningful crypto legislation coming up in the next congressional session and really, really take off. And this is great, because I want to take all of the great gains I've made in solid blue chip cryptos and degenerately gamble them away and meme coins. I mean, that's definitely a sentiment to be thankful for. But that was going to be my

follow up question, because it's not often that we get attorneys on this panel. And I think a lot of people speculate like, oh, the Trump administration is great for crypto legislation. We're going to get new legislation. There's, of course, Gary Gensler stepped down and everybody sees that as very bullish in the market. But for builders and kind of like on my side, it still seems rather unclear of what the specifics are. And maybe we're going to have to wait for January, February to kind of see that. But your thankfulness or bullish sentiment, what is that exactly waiting for? Is it a document that says, hey, this is how a token launches within the U.S. to be compliant? Or is it something less? It's going to start out less, you know, in my opinion, and we're just going to build on a couple of key points as it keeps going forward.

And hopefully the momentum is there and all the signs from the federal legislatures are good and the executive agencies. And what I mean by that is we've gotten, I mean, the first thing to go back is just to remember that from Trump 2016 to 2020 was not pro crypto at all. And, you know, it was actually either ambivalent or hostile, at least the agency. Well, I remember him tweeting negatively about Bitcoin during his last administration and it tanking the Bitcoin price. I vividly remember that. I mean, exactly.

And his SEC under Jay Clayton started to target a lot of crypto projects right as he was going out the door. So and again, who knows if that was even on Trump's radar back then. A lot of things kind of got away from him and his administration in the first one. But, you know, he's come around and I mean, obviously, it was a disaster under Biden, but he's come around and said all the right things. So yeah, to your point, it's what's he going to do now? And he's appointing people who are pro-crypto, but not yet in the areas. We haven't seen his announcement of who his appointments are in the real big time crypto areas, which would be the CFTC and the SEC. And so we're still waiting.

I don't believe he's nominated someone for the CFTC yet. I know he hasn't done anyone for the SEC yet. But the bottom line is that we are going to see the next big yet. I know he hasn't done anyone for the SEC yet, but the bottom line is that we are going to see the next big issue. We'll see, all right, so who is the person that's getting appointed for those two roles? How pro-crypto are they? Been getting all sorts of rumors that it's going to be very pro-crypto. Once we get that, we'll have to wait until inauguration. I think that'll be the next potential pump. And then after that, we'll have to wait until inauguration. I think that'll be the next potential pump. And then after that, we'll have to see how long it takes to get some of these guys into those positions of power.

Is it safe to say as a takeaway for like builders in the space that we can say with relative certainty that it's a transition from enforcement by punishment to enforcement by communication and education at the very least? I think that's a really good way of looking at it because I think you're not going to get these wild west, sue them all and let the courts figure it out mentality that you had in the last administration. So the bottom line is that if every new Congress critter comes in and wanted to be pro-crypto, I mean, I think even if everybody wanted to get some crypto-friendly legislation, I just can't see that happening until March or April at the extreme earliest. So, I mean, that's the most likely reality is that you're not going to get the legislation in there until mid to late spring. But you can do, I mean, in the US

now, whether you like it or don't, and I particularly hate it, you can do so much outside of the legislative bounds, you know, with the executive agencies and everything that you don't have to. So we can see a lot of meaningful things happen to your point, which is just by less lawsuits and more friendly statements, even if there's no legislation. That makes sense. And I know that we have DB up here too. DB, what have you been watching in the last couple of days in the market and what's interesting you? Oh, great question. First, I got to say, it's great to hear, Fred, that the business is picking up from that side of it and because of the regulations that we're expecting.

And people are finally feeling safe to come back to the U.S. That's amazing to hear because it's so needed. There was a period of time there where we thought everything was just going to flee and we'd have absolutely nothing here in the U.S. And also happy Thanksgiving to everyone who is in the U.S. But the meme coins are still, it's an interesting watch. I know you guys were talking about pump fun and what was going on there. I was in a, we had a space, I think two days ago where we were discussing as well. I know a lot of people were unsure or tossing around the whole decentralization versus centralization aspect of it. And a lot of people weren't very happy by the decision, which can come across as very centralized. But a good point that was brought up during the space,

which I hadn't thought of, was around how they can continue to be decentralized from a standpoint of their base foundation of issuing tokens and how that works. But then have the platform that sits above it, the platform that allows the streaming and the different types of marketing and whatnot, that can be entirely centralized.

They can do whatever they want and tell people you could use this or not. So I thought that was kind of an interesting take that I wanted to share, how they can still be a Web3 company and be decentralized, but have control over certain aspects. And maybe that would have some legality aspects

that Fred could touch on. Well, that's kind of like the Uniswap model as well, right? To have Uniswap labs and the differentiation there. Fred, do you think that's a good strategy for a lot of these maybe interesting platforms? I'll use the word interesting to go about and say, hey, our contracts are all decentralized and we're just running the front end to be able to interact with these. Oh, Fred, I'm not sure he may have stepped away from his mic. So I'll circle over to Dave. Dave, welcome to the panel and happy Thanksgiving.

I think that you're in the U.S. Yep, Miami, Florida. I'm actually getting ready to go to Whole Foods and get our mostly pre-cooked organic turkey. But yeah, I figured I'd jump on as I was on my way. Do you think, I mean, we were talking a little bit about this before, and in past cycles, I know that you've been in the market for a while. We've kind of thought like, hey, Thanksgiving is a time when it can really pump our bags. Because people are going to the Thanksgiving table, they're telling their friends and families about XRP or Cardano or whatever it may be in these new unit economics coins that are low

price that could very well become the same price of Bitcoin one day. Is that a paradigm that we've kind of grown out of from a market perspective and now it's more institutionalized? I call that the cab driver paradigm, right? You know, when the cab drivers start asking you or Uber drivers start asking you about, you know, if it comes up, what tokens they're trading and they're dealing with that, that's generally the top of the market. We are so far from the top of the market. I think at this Thanksgiving, people who want to avoid politics for obvious reasons, given the acrimony that still exists and, you know, and culture clash nonsense. I do think there's going to be a fair amount of conversation about Bitcoin. I don't think they're going to be talking about dog with hat right now because, you know, Bitcoin is near a major psychological level.

I mean, I'm still scarred. Scarred is the wrong word, but I still have very clear memories of the Thanksgiving Day Massacre in 2020, where we had rented a house up in the Finger Lakes, because remember, this was deep in COVID, to meet me with my daughter so that we could go do something so that we weren't cooped up and where we were. And I decided to bring external monitors with me because at that point, you know, CoinRoute, I was customer support. You know, we're now, I was customer support. It was long before we were a 30-some-odd-person global team. The markets went absolutely batshit crazy. People picked it as the perfect time to start liquidation cascades, multiple liquidation cascades. Maybe it's because of that, and maybe that's a recency bias, but my thesis has been that this week could be, in particular, the next few days could be trouble for the Bitcoin market. But if it isn't, that the supply-demand dynamics are going to

assert itself come next week and the week after. And I think that things will start looking up in a fairly interesting manner. That's kind of been my working thesis. I think that certainly people, I've been asked by normies a lot, and I always give them similar answers. I always talk about dollar cost averaging. I always talk about, you know, ask them about their, how competent they are, whether they can manage their own keys. And if not, you know, who do you trust? And, you know, to be honest, I tend to steer them towards Gemini, believe it or not, in the United States, because Cameron and Tyler, you know, basically with the earn program, they made everybody whole. And to me, that's a that's a level of trust that I think matters. But, you know, I don't despair.

You know, I don't disparage Coinbase or Kraken either. So, you know, I think that Thanksgiving is really kind of a low liquidity time in the market. People did what they were going to do in the markets on Tuesday and Wednesday and then kind of left. And Friday is a joke that it's even open in the United States. It's a half day and almost nothing ever trades except for if there's options expirations that are going on like weekly options. It's a good take. I did get rugged for a little bit. Dave, can you just give me a thumbs up and make sure that you guys can hear me?

Okay, perfect. I'm back. I missed about half of that, Dave. We're having some issues with X today, so I apologize there. But we also have Preston who's up here. And Preston, before you joined, we were talking about how Pump Fund was banning live streams. And just we had Fred up here who was talking about what potential implications to that may be. And it's unique to have a couple attorneys on here and would love to get your take on Pump.Fund because I know one thing that was a hot topic last week was the polymarket of whether or not it was going to be banned in the US. Like, do you see a path forward with PumpFun and specifically live streaming and how that can pose a larger issue? Yeah, this is actually my minor.

If crypto is my major, social media is my minor. I've represented a bunch of different social media companies around the world regarding content moderation issues in particular, and in particular, foreign government take down requests for content that's stored on American servers. So like, this is kind of like I do this shit for lunch, I really enjoy it. So pump funds problems, they're really there are two sets of legal problems they have. The first one is that as far as I could tell, their basic website blocking and tackling just wasn't there. So like they had a website, right? Were there

terms of service? No. Was there a privacy policy? No. Was there a copyright and DMCA policy? No. Was there like any way to contact them other than by a telegram support channel? No. And so when you have like, is there an easy way for law enforcement to get ahold of them? No. So when you look at that from the outside, it's like, this is these are really easy wins, where all you have to do is spend about 1015 hours of legal work, and modify, you know, the site template, and then bang, congratulations, you're done. So that was those are, that's an easy fix that just hadn't done. And I was really puzzled why none of that had been done.

The second component is really the more regulatory component in terms of how they could be banned or for what they could be banned. The social media piece of the puzzle is really unbannable in the United States unless they're doing they also I mean, so content moderation obviously is a tricky one. The US generally doesn't require anybody to carry out content moderation of any sort, except that you have to remove illegal pornography. That's it. So anything else pretty much if someone's going and posting a death threat on Twitch, or Facebook Live, or any or, you know, Twitter X or something like that, there's no liability for the service

if they're just a passive host, a bulletin board of that content. So there's no liability there for pump fund in the United States, except, of course, if there's illegal pornography. And I have no idea whether there was. So then you've got the issue that they're actually not an American company. They're reported to be a UK limited company. And in the UK, you have significantly stricter content regulation regimes, particularly around defamation, which is a notice and some type of unlawful act, threats, racial discrimination, and hate speech would all fall under those categories. And so they'd have to have a content moderation apparatus in the UK to pull that down.

Then, of course, there's the crypto component, the crypto piece of the puzzle, which is that they're basically acting as a conduit for large quantities of crypto um you know going to various meme coins and i honestly i think they're probably safer in the us than they would be in the uk at this point um for on that point so yeah it's a tricky it's a tricky situation i think the basic website blocking and tackling could be fixed by pretty much any technology lawyer um with very with a very minimal amount of effort i think kind of mixing the crypto with the social media element complicates things because obviously crypto is regulated differently in every jurisdiction in the world social media is regulated differently in every jurisdiction in the world those regulatory regimes don't necessarily align with one another all the time.

And moreover, you get a more permissive. So let's take the US and the UK as an example. The US is more permissive right now, pre-Trump actually being in office, on social media. It's the most permissive social media jurisdiction in the world. And so for that aspect of pump funds business, the U.S. would be the best place for them to form. The U.K. is more permissive when it comes to crypto, right, or certain functions that are performed on crypto. And so from their perspective, the U.K. is probably a better jurisdiction than the U.S. And they combine the two in one application. It's clear that there hasn't been a lot of structural thinking that's gone into understanding how they, you know, which service should be provided out of which country, subject to which terms. And so I think it's all fixable ultimately, but like they just need to sit down and do it. $75 million a month in revenue over the course of the last three months and not do what you're

describing as 10 to 15 hours of legal work to kind of get this up to speed? That's a really good question. I don't know what the answer is. They can certainly afford the best lawyers in the world with that kind of money. They may have trouble finding some of the larger law firms. Larger law firms tend to be very risk averse, particularly when it comes to content moderation, and particularly when that those content moderation touch on anything controversial, right? So there was, there was issue of like racist content, like that's the kind of thing that's going to cause a US law firm in particular, to, you know, to really consider long and hard whether it's going to proceed. The reason is that when you run the conflict search and every partner in the firm

sees the name of the company that you're seeking to onboard as a client, they're going to talk to their other partners and they go, do we really want to represent this company, which is such a lightning rod? That's a consideration. With $75 million, there's no reason why. There are lightning rod and um you know and that's that's a consideration so they may you know but i with 75 million dollars there's no reason why there are one-man shops that could do a lot of the basic stuff that they need done and there's no reason why they couldn't have had it done um and done correctly like so like it's just i look at that and i'm just baffled that they don't have a team

of like like if i if i were making 75 million dollars a month i would be spending probably at least half a million if not more um on legal like generally speaking it's like 100 bps 200 bps is what you expect your legal expense to be and so maybe they've been you know coasting making lots of money they haven't been sued nobody's come after them or figured out how to but like that's the kind of stuff where when you're making that kind of money, you want to scale up your legal team because when you have that big pot of cash sitting somewhere, guess what? If it's not a regulator, right. And it's not a country, some plaintiff is going to come after you because they say, Hey, there's a big pile of money there. Let's come up with a cause of action and see if we can get our hands on it. Like either by winning a lawsuit or by more likely filing a nuisance lawsuit, having someone make the calculation that the nuisance lawsuit isn't worth their time.

And then what we do is, you know, after the nuisance lawsuit is filed, we get a settlement out of them to make it go away. So like, that's, I'm, I'm really surprised that it's honestly the only it's, it's shocking to be blunt blunt that they didn't have terms of service, a privacy policy. And like, that's another big one, privacy stuff. If you're holding user data, and they almost certainly are in the form, like every post that gets put up is going to have some user metadata in it. It's going to have IP addresses.

It's going to have things like that. The treatment of that information is treated differently in every single one of the US, you know, the 50 states in the United States where that service is accessible. So they're going to have, in particular, their revenue numbers mean that their, and their user numbers combined, my guess is they're probably over the threshold for the CCPA, which is the California Privacy Act, so in the CPRA. So like, that's one thing. And then they're also going to have EU GDPR and UK retained GDPR that they're going to

have to comply with. And there's some very specific requirements there as well. So the privacy stuff is actually probably more complicated. I mean, it's not impossible. Again, this is just something where you need to hire a privacy lawyer, sit down, you look at every chunk of data you collect on every single person who uses the site, you then disclose what you're collecting in a contractual document, your privacy policy. And you say, this is how we do it. This is how we use this information. And these are your rights in relation to the information, right? But like, that's like 10, 15 hours maximum, right? To do that exercise once you've got privacy counsel

involved. So like, if you assume, you know, $1,000 an hour, a lot of these problems are fixed for less than 30 grand. Like all of their, like the basic, basic things are fixed for 30 grand. And it just, it's amazing. It's crazy. But Fred, that was the line of thinking that you were going down, right? With, with potential plaintiffs and in a lot of these illegal live streams, I'm calling them illegal live streams. That may not be the, the right word for them, but people who are threatening to have self-harm and people that are buying that coin and helping it bond or helping it get to different market cap levels, maybe out of a reason of not wanting the person to harm themselves or something like that, that

people who bought those coins may have a case. Well, on that one, from a purely social media regulatory perspective, sorry, Fred, I know that that question was addressed to you. But on the social media regulatory piece, having someone post a live stream, let's say I go on and I say, okay, purely hypothetically, you know, I don't have compromising information on Hillary Clinton. I don't intend to kill myself. This is just me, the law professor, giving the very blunt example. Let's say I go and set up a pump fund account and I go on there and I say, my little dog here, Zorro, who's dressed like a, like an octopus. I'm going to, I'm going to throw him into the water and try to catch him with this fishing pole because this I'm actually, my Twitter profile is me dressed as a fisherman with the dog

dressed as an octopus. So let's say I'm going to throw the dog in the water and it's icy water. It's really dangerous. And unless my coin goes to 10 million MCAP, right? And I do that. Now, the site, unless they specifically requested me to do that, or materially develop the content in question, they are not going to be liable for that live stream. So we're talking about quote, unquote, illegal live stream, the live stream in the US is not illegal, right? That's a publication, the right of pump fund to host it is protected by both the first amendment and something called section two 30 of the communications decency act. Like they're not breaking any rules. If I'm threatening to engage in unlawful conduct in this case, it would be cruel, you know, animal cruelty, right. Would be the unlawful contact. What pump fund should do

is they should have some terms of service posted on their website. They should have content standards posted on the website. They should have a moderation and they don't have to have this, right? By law, they are not required to have this. They should have a content moderation function where people can flag it. And then they should say, okay, well, you flag the content and we have a content moderation team that works 24 hours a day, very small, that will take down the most extreme content, right? And there are thresholds where you can say, very small, that will take down the most extreme content, right? And there are thresholds where you can say, we're only going to take down content, which

is clearly illegal, right? There are only a couple of websites that do this. Gab is one of them. Parler for a while was another one. There are other websites like Facebook, right, which have very restrictive or Instagram. Instagram won't, and Facebook won't allow Smith & Wesson to have a page on their site. So Smith & Wesson is a US firearms manufacturer because it violates their terms of service. And so you can have either really woke or like blue sky, right, where you can't talk

about gender issues on any level that's anything other than accepting of radical gender ideology in a way that contradicts that ideology without getting banned. So there's this huge spectrum of possible content moderation options. And what we generally see is that even the most like liberal in the classical sense of the term, even the most open websites, which have the most or the least restrictive content moderation policies, will draw the line where they say, listen, if you're using our platform to break the law, we're going to fucking ban you. And so that's something where pump fund just like didn't even have that. It was just like,

listen, this is a free for all. Everyone's going to be able to do what they want. And technically, right. You are allowed to do that again, subject to the very limited exceptions where certain types of pornography have to be removed. But if you're going to do that again subject to the very limited exceptions where certain types of pornography have to be removed but if you're going to do that what you're doing is you're creating a public relations nightmare down the line because what happens if someone doesn't get the joke that it's supposed to be ironic and nobody's actually going to do the illegal thing and then someone posts a stream where they actually do the illegal thing like they're vulnerable in all kinds of ways i don't know who they use for their web hosting. I do know that their domain host is GoDaddy,

and GoDaddy is notorious. If a website is engaged in this kind of stuff, they will lose their domain registration so fast. It'll make their head spin. They'll say, you've got 24 hours or less to find a new domain host, and you've got to switch over to the domain. So they're not sufficiently familiar with the environment around platform deplatforming. And it is not as bad as it was in, say, 2018, 2020.

Back then, all kinds of people, all kinds of websites got deplatformed right and left. Gab got deplatformed from a bunch of different platforms, from practically every piece of Silicon Valley in payments, infrastructure, and existence. They also got deplatformed from banks, right? This is public information that their founder was posting about. They were part of Chokepoint 2.0. And what would happen is that federal bank examiners would go to these banks and they'd tap the bank on the shoulder and say, you know, your camel score, your risk score is going to get worse if you keep hosting this company, so you might not want to do it. And then they'd get a letter two weeks later saying,

oh, by the way, and they got chased off of like half a dozen banks or something like that, five or six, Stripe, PayPal, Coinbase even banned them. So that was a different time. Now I think the risk is somewhat attenuated because Elon has blown open the Overton window. That notwithstanding, they're still using this infrastructure, which has a history of banning stuff. So the minute that someone does something bad, you get two things happening. One is that they're going to lose a bunch of service providers, which might slow them down. Although they have so much money that I expect that they'd be able to find any hosting company in the world to host them

for the right price. And two, they get all kinds of law enforcement attention. And that's very expensive to deal with. Because what happens is you start getting subpoenas, you start getting search warrants, you have feds all over your site. And that's totally normal, totally to be expected. But the way that you address that is you discourage the illegal content from being posted in the first place, not because you're liable, but because it's good corporate citizenship to do so. And if you fail to control it,

you're going to get all kinds of bad attention. There are going to be congressional hearings. So they haven't really considered those, you know, they're growing like crazy. Good for them. Like they're, you know, it's a successful service. I think it's something like 65 or 70% of all Solana transactions are currently the consequence

of what's going on in that website. And far be it from me to begrudge an entrepreneur for being successful, right? But there are things which, if they look at the history of what's happened in social media in the last eight or nine years, there are lessons they could be picking up, which would do two things. One, it'd make their service more resilient. Two, it'd be fairer to their users because they'd be disclosing their terms fairly and disclosing the way that they

use data fairly. Three, they'd be complying with regulations more effectively. And four, they'd be de-risking, right, from the possibility of adverse media, which will prevent them from getting banking services. It could prevent them from getting payment processing services. It could prevent them from, you know,. It could prevent them from having payroll providers. So if someone carried out a shooting, right? That's happened probably a dozen times over the last couple of years where you've had social media used to either propagate manifestos. So the Breivik, Anders Breivik in Norway or Sweden, I can't remember off the top of my

head. There was also the New Zealand Christchurch attack was streamed on Facebook Live. There was the Buffalo attack that was streamed on Twitch. And so you have all of these incidents that have happened in the past. Or January 6th, right? Parler was deplatformed because of January 6th, even though a lot of that happened on Facebook and WhatsApp. So if finally something bad happens on your services, every media outlet in the world is going to pay attention to you, it's gonna look really bad for

you, it's gonna look really bad for the industry, the crypto industry generally. And so if you there's just stuff you can do to prevent that from happening, or when, for example, let's say something bad does happen, right? And someone says, Hey, something bad happens on your site, what's your policy? It is entirely possible, right, that you can operate a system where if federal or international law enforcement says we've got an emergency data request, there's a service called Codex, which I'm very familiar with, which is absolutely excellent. And it's basically a portal to law enforcement agencies, which verifies that a law enforcement data request is actually coming from law enforcement,

and then gives you the ability to respond to law enforcement on a very, very rapid basis. You know, instead of batting around emails and, you know, checking validity of things, it's just like, cool, we know that this is a valid request. If you get a request from Codex, I know some companies that will turn around an emergency data request in under 10 minutes, right? So you can you can have those things in place, we say, listen, our policy is illegal stuff comes down, if we get a law enforcement request about something illegal, you know, we will respond within 10 to 30 minutes maximum. And in addition to that, you know, if we find something which is manifestly illegal, so we're actual live stream of crime occurring in real time, you know, we have developed the contacts with law enforcement,

so we can immediately report it. And, and then as a consequence, we're being a good corporate citizen, we caught it, and we helped, you know, this illegal thing stop happening. And so like, all of that is doable, right? And it's all doable with a team of like four people or three people, and they just haven't done it. Go ahead, Alex. Let's see. Get your hand up. Yeah.

As you can see, obviously, Preston's crazy knowledgeable on all this stuff. I've dealt with this a lot. I used to run a user-generated content site, and everything he said is right on. And I think, especially towards the end there, he hit on a really, really, really important part of this this which is the perception of being a good corporate citizen um this is the reason that you know people might you know we're complaining a lot about exactly what he's saying i was a parlor post january 6th parlor getting the platform when all of the conversation uh in advance of it was happening on facebook and there's lots of different examples of this

and um i actually brought this up too with perhaps there's something more recently with crypto i think this had to do um oh this had to do this came up with telegram too when the telegram founder got arrested the difference between facebook and telegram and facebook and gab and all these in parlor in these situations is they gave away for law enforcement to it they set up this context wherein it did not look like they were encouraging and wanting these things to happen on their site and they gave away for legitimate government agencies to try and interact with them around it and prevent it when it did come up and so if you do that if you do you have to take those basic actions

to make it clear that you are trying to be a good corporate citizen. And if you do that, it becomes, it's much less likely that either the press or the government turns on you, kind of, and basically says, like, you're encouraging this, you're wanting this to happen.

It's not even, like I said, it's not about the facts of how much of it does or doesn't happen there. It's about whether people think you're trying to skirt your way around the rules to enable it to happen. That's absolutely right. And like the level of engagement that you can have with the government there is unlimited, right? So, you know, I've represented a number of companies in this space. And in multiple cases, you know, inbounds come from a foreign state and they've said, hey, or a US government agency. And they said, so what's your policy?

Generally speaking, it's actually Twitter historically was, I don't know what the situation is pre-Elon, but Twitter historically did not have a very proactive approach towards collaborating with law enforcement. And you get a lot of points by saying, listen, even though we allow stuff that your country doesn't like in an emergency, right? Call us, like, just tell us, like, just be like, listen, there's something here that really concerns us. And we're worried about it.

And, you know, tell us about it. And then what we'll do is we'll engage. You know, there are times when, you know, sometimes, you know, it's 1130 PM on a Saturday night, something comes up, it concerns you, you file a report, you explain the circumstances. So every report that you file, like an FBI tip, it gets triaged and put in like a Salesforce style funnel. And what happens is at every level, so they do the initial review. And if it's sufficiently concerning, if you've labeled it as like a terrorism threat or something like that, it gets escalated, it gets escalated, and then gets like goes through three tiers of reviews. And everything that you submit gets reviewed. So if you are running a site like pump fund,

right, and you have a guy whose sole responsibility it is to just like put police the site for stuff that's obviously flagrantly violently illegal and there's something which is really concerning you can get a response from the fbi i think the fastest i've ever gotten was 15 minutes so i submitted a report at like 11 30 p.m on a saturday night my phone rang at 11 45 being like cool this is an emergency disclosure request we need that data right fucking now and it's like like, cool. What email address am I sending it to? Send it to this. Bang.

You send it, you're done. It's called the National Threat Operations Center. They're based in West Virginia and TACR and TOS. So there are ways where you can demonstrate to the government of the United States, to the government of the United Kingdom, to the government of France, Germany, et cetera, that there are two sets of rules. Yes, we're going to be a low content. We're going to be a low moderation website.

Yes, our users are going to post stuff that's outrageous. But no, when the rubber meets the road, and we actually have something which presents a genuine threat to public safety, that we're going to be on the side of public safety every time, right? Like, yeah, haha, the internet's fun. Haha, this is a stupid meme. But ultimately, if someone's going to get killed, or you know, an animal is going to get hurt or something like that, and like something which is really not allowed, we're not in the business of hosting that. And if you don't do that, what happens is a lot of service providers, I think Kiwi Farms is really the best example.

Kiwi Farms is a is a site. Kiwi Farms is a site which was set up. It's an internet forum, which focused on an internet personality named Christian Weston Chandler. And I'm not going to go into details. But if you know who Christian is, you know, suffice it to say, it's some pretty messed up subject matter that's really old internet lore. And they were allowing people to, And they were allegedly allowing people to stalk other people on the site. And even they got lost Cloudflare as their domain host. And they were offline for a really long time because of the perception that they weren't going to be playing by the rules

and that unlawful content was going to be permitted. Whether that is a true assessment of the facts or sort of like a propaganda narrative that just managed to get up to, you know, Cloudflare CEO is a matter of some dispute. But managing perceptions and being able to back up that perception with some real evidence that you've taken the time, right, even though you're in the US, you're allowed to be as loosey-goosey as you want because American free speech permits it when it comes to content moderation. Doing those basic things, if you don't do the basic things, your business is going to have a very difficult time surviving if, for whatever reason, the eye of Sauron decides that it's going to look at you. Follow-up question, Preston. Are you apprised with the whole peanut-the-squirrel situation? If not, I can do a bit of a summary because Mark Longo was, I believe he's actually put a lawsuit in against the peanut that was listed on Binance.

We did a long three-hour space the other night about this, but I'd love to get your take on whether or not he has a case there, because there are a lot of meme coins coming out of Pumped Out Fun that are using other people's name and likeness. Are you apprised of the peanut situation? I'm familiar, of course, with the martyr Peanut the Squirrel, who was, of course, killed by the state of New York. I'm not familiar. Is it a copyright lawsuit for a photograph that they're using of Peanut?

I'm guessing that would probably be the cause of action. Correct. It's a copyright lawsuit using the photo and profiting off of his name and likeness. And there's probably been about 10 Peanut coins that have propped up. The leader is the one that's listed on Binance, reached a $1 billion market cap. Mark was not involved in that whatsoever. I see, Gareth, you have your hand up. You may have a better summary than I.

Go ahead if you do. I don't, but I was going to say I think Chill Guy went along a similar path in the last week where the people that own the copyrights or the rights to the images are going out there and laying claim to that and saying, hey guys, you can't just make these meme coins and profit off a brand or a copyrighted image without getting the necessary consent. This whole pump.fund thing has been absolutely crazy and Cointelegraph, we've covered it at length over the last couple of days. We also did some YouTube content on it. Honestly, it's been crazy to see and my two cents worth just on it was that if you allow people to create a live stream completely uncensored, you know, like you have to have really amazing tools to make sure that you are able to

keep track of what people are doing. I mean, Twitch and all these other amazing, you know, live streaming services, even YouTube, like that's the hardest part about offering that service, right? Is making sure that people aren't doing crazy things on live streams. I mean, I remember working on radio quite a few years ago, when there was an infamous attack on a mosque in New Zealand. And that was live streamed on Facebook. And I actually physically saw the end of the live stream myself. So, you know, you have to have such good controls in place. And like you it's like giving a pyromaniac a stick of dynamite

and a lighter you know like here's the ability to launch meme coins and here is a platform that you can live stream yourself have fun do whatever you want to do you know it's it's just crazy and the same thing goes like no one's really moderating what images and what likenesses people are using to launch these meme coins right they just go and do it i mean i've played around with pump fun you can launch a token in like less than two minutes it's it's so easy children can do it and they were doing it i mean we've all seen the viral meme of the kid rug pulling rug pulling and well not ragging but you know like dumping all these tokens on on everyone thanks for the 20 bandos you know like this is a pre-teen kid literally dumping and

making twenty thousand dollars um on a load of meme coin speculators it's um yeah for me it's a recipe for disaster i don't think it needs to be regulated to death but um it's certainly been an interesting social experiment and it very quickly went somewhere weird and concerning. Well, I think on the peanut thing, to the extent it's a copyright lawsuit, this is exactly what I was talking about, about basic website blocking and tackling. So a squirrel, generally speaking, is not going to have name and image and likeness rights. Particularly a dead squirrel is not going to have nil rights that are enforceable by his estate or by anybody else. But if there's a picture of Peanut, which was taken by Peanut's owner, which is being used to market a meme coin, copyright comes into being whenever a creative work is is basically recorded onto a medium of tangible or intangible form.

So if you have your iPhone and you take a picture of your dog and you say, I'm going to make a meme coin about the picture of my dog, what happens is you are the copyright holder for that image, right? Which means that if someone then takes that image and makes money off of that image willfully, you can, assuming you've registered the image with the copyright office, you can then bring a lawsuit, a federal copyright lawsuit, to enforce your copyrights in that image. And for willful violations, there's statutory penalties. I can't remember what it is off the top of my head, but it's quite substantial.

So in that case, let's just say, let's assume for sake of argument that that's the case. Pump Fund is hosting that image, which means they're also a contributory infringer. So in order to, the US has a regime called the Digital Millennium Copyright Act, the DMCA, and there's a safe harbor and protective regime under section 512C of the DMCA, which states that if you are a social media website, right, hosting, or if you're a website hosting user generated content, you know, one of the things you're also liable for is copyright infringement however if you follow a certain procedure which involves registering uh a cop you know the notice details for your agent for service of process with the dmca office right or the copyright office so you have to file a registration

you have to renew it every three years it costs like 20 bucks it's not expensive and you have to file a registration, you have to renew it every three years, it costs like 20 bucks, it's not expensive. And you have to post a copyright policy on the website. And you have to allow people to submit takedown requests for copyright infringement. And if you wish, you can also permit what are called DMCA counter notices if someone disagrees with the takedown request, and you have to follow this statutory procedure for implementing this. If you do all those things, then you're not going to be held liable for contributing to copyright infringement as a result of someone posting something on your site. So in order for Pump Fund in relation to this peanut meme coin to benefit from the safe harbor, they need to A, have the policy, B, post the policy, C, implement the takedown measures and an easy means for someone to contact the company to submit a DMCA takedown notice. D, they have to act promptly when they receive that DMCA notice. And when we say act promptly, it's like DMCA notice comes in, that's top of the pile, right? That's like, do not pass go, do not collect $200. This has to be dealt with within

24 hours. And then in addition to that, right, you need to enforce it. Because if you don't ban, you need to have a policy which states that you will ban repeat infringers. And then if someone is a repeat infringer, you know, you actually have to turn around and enforce the policy. Otherwise, they'll say, you know what, you're just really in the business of copyright infringement. And because you're allowing these people to keep coming back on your site again, and again, and again. So that's basic, you know, a copyright policy is a couple paragraphs long. Implementing the workflow is not hard in terms of the notice and counter notice procedure. And this is just basic stuff that they should be immunizing themselves from, if they were being competently advised. And if not, right, there's a big pot of

money sitting there, which plaintiffs attorneys, you know, focused on, you know, IP enforcement and copyright trolling could go after, right. And they've just simply not availed themselves of the shield, which they could use to prevent that lawsuit from getting at their giant pot of money that they've earned over the last couple of months. So it's like basic. Again, this is basic stuff. Every website that hosts user-generated content, no matter how small, is going to get advised to do this right off the bat, like immediately. It's the first thing you do before you even open your doors for business, and they just haven't done it.

So going back to the original question here just about there is a polymarket market put up. And they just haven't done it. that it was going to be taken down. I think that number has gone down quite substantially since they removed live streaming. But with the words that Preston, Fred, Gareth, and Alex, you guys have all kind of touched on this, is it safe to say that it's probably not going to be taken down? And that was kind of my takeaway, and that there are some very simple things that can be done to just make them more compliant from the Web2 angle?

Yeah, I mean, I think, as Prestonston has pointed out these are pretty easy fixes overall and so the fact that they took down the live streaming i think it shows that they they realize there's a lot more money to be made by making some small fixes and keeping the website up uh and are moving to do that. I'll say that when Preston was speaking, I was thinking of my cousin Vinny, specifically when the judge tells him that's a lucid, intelligent, well thought out objection, overruled. All I was thinking, Preston, was a challenge of how I can sue one of these companies and figure out a little way to get all that mountain of money that you've been talking about. So I think, I mean, everything that Preston said is spot on. But, you know, the big thing comes down to is what could you, when you have all these failures that they didn't do, some of the key points in, you know, can you get a jury to give you some of that huge money? I think they'll get hit with something and there'll be

some litigation, but I think they're going to survive and continue on. I hope so, because like Preston said, that's one of the main drivers of volume over there on Solana for those. So for those who are holding Solana and live Solana, there seems to be a very entangled relationship there. But we do have a sponsor today, and they did just get up on the stage. It's BlastUp. So BlastUp is a launchpad on the Blast blockchain. I believe you guys are the only launchpad as well. And we have Den here who's going to be speaking on behalf of BlastUp today.

Den, do you mind transitioning us here and just giving maybe an overview of what BlastUp is and then we can dive into an AMA. Den, just mic check. We can't hear you if you're trying to speak. Nothing, Den. You might have to, so it looks like we lost Den. Well, anybody have some final thoughts on the Pumped Out Fun News as we wrap up here? If not, I think we'll wrap it up there, and happy Thanksgiving to everybody who's in the U.S. Happy Thanksgiving, everyone. Happy Thanksgiving, everyone.

We'll be back tomorrow, same time, 10.15 a.m. Eastern time. And don't eat too much turkey because I'm sure there'll be some new narratives to touch on in the market. So thanks, everyone, for joining. And we'll see you tomorrow.