The Wolf Of All Streets - SEC Made $4.7B from Crypto | $5.6B Lost to Scams in 23 | Crypto Town Hall

Episode Date: September 10, 2024

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Morning, everyone. Happy Tuesday, September 10. Taking a quick look here at the market as we get started pretty flat. Obviously, yesterday, big move up. And now I think the market somewhat absorbing it. We got Bitcoin at $56,642, Ethereum $23.27. I mean, Bitcoin's basically down 2% in seven days, up 2% in 24 hours. I think that this is a signature September chop until proven otherwise. Obviously, we have the title here that the SEC made $4.7 billion from crypto fines in 2024 in the article, and it says marking a 3,018% increase from the previous year, if that gives you any kind of idea what the SEC has been up to with regard to crypto over the past few months and over the past year. Not that much in the news. Obviously, we had that huge eight-day streak of outflows that

amounted to about $1.2 billion from the Bitcoin spot ETFs. Now, seeing that return to net inflows, no surprise because it generally tracks the price action. I'm sure all of you saw that Saylor predicted that Bitcoin would be $13 million in 21 years. Wow. That's all i can say to that one of course the other thing in the title we got here 5.6 billion lost to crypto scams in 2023 and i think in the article i read that it was about 50 50 percent of all money lost but only 10 of the claims so obviously the people who lost money in crypto lost a whole bunch a lot to unpack here um i guess let's talk about the scams simon folis either of you guys are you surprised by this number i mean it's a pretty whopping humongous number 5.6 billion to crypto scams in 2023 according to the fbi

yeah that's an outrageous number, to be honest. Even the amount by the year. I mean, if the SEC is up 3,000%, did you say? Yeah, that's in their fines, obviously. And Terraform Labs was a huge part of that. That was 4. There you go. I'm reading into it now. So Terraform Labs is 4.47 billion of the 4.68.

Oh, come on. All right. Well, we see you got to read the whole article. But didn't they find Binance 4.7 billion as well? Yeah. Maybe it was at the end of 23. That was in 23. All right.

They got their 24 figures to come. Yeah. Maybe it got paid. Yeah, pretty misleading headline. Amazing. As I read into it, you know, doing diligence here. But still, I mean, this number from scams is pretty massive. And it was up about 45% from 22 to 23.

Although I guess that's not a particular surprise that that would be increasing with the size and interest in the market. Yes. Did they do a breakdown of the top scams? There is no breakdown of top scams? I haven't. There is no breakdown of top scams. All it says, well, it says confidence-enabled scams, pig butchering, you know, nothing. There's no specific ones, but sort of just the kinds. And I think we've all seen it. Tons of phishing links, things like that. And I'm sure all of us, since we're here, know people who have in one way, shape, or

form been scammed in the crypto market. But like I said, what I found interesting here is crypto scams accounted for only 10th total financial fraud complaints last year, but nearly half the losses. Yes, I'm very curious about how they define a scam. So, you know, if you were in Celsius, Voyager, BlockFi, FTX. Those don't count, dude. Yeah, that doesn't even count. Yeah.

So this is just literally um like phishing someone stole your email or there was a sorry um someone stole your coins or there was a hack that type of those types of defi it looks like it includes investment fraud as well as what I'm reading I accumulated massive debt to cover losses from these projects yeah it does, but it definitely does not include losses from bankruptcies, which they don't consider, I'd say. And I think the two are connected because I believe that the SEC, through not, they allowed these scammy centralized companies to get as large as they did. Like Celsius was being investigated by the FBI two years before it actually collapsed and and in that time it went from 250 million assets under administration to 25 billion assets under administration they allowed it to collapse that cost pensioners their lifetime savings all sorts of um you know people are still like it cost people their lives in fact

the regulators just sat back and let that happen for two years yeah they were investigating yeah they were doing stuff for two years but they let it grow that whole time then they do enforcement through they came in and said we'll give a 4.7 billion dollar fine which they couldn't collect a con because there wasn't enough money for creditors and they took precedent. And then Operation Chokepoint 2.0 choked off all the banking to these crypto companies, which was one of the main triggers for revealing what was actually happening there by choking their banking. And then all of a sudden, all right, now it's time to approve the etfs and now we're going to create a whole industry with traditional financial players and we'll just find billions of dollars so i think it was a really good trade they fleeced out billions of dollars from pensioners lifetime sa savers, didn't protect them. They got their

record profits of over 3,000%. And yeah, everyone needs to be responsible for their own investment decisions. But all of a sudden, now regulators care about putting together decent regulations. Now the traditional financial players that they want to centralize the system. To me, I think it's just a typical regulatory pump and dump and scam as well as all the scammers from the people that were perpetuating those scams. So I think the regulators need to have a good hard look in the mirror and ask themselves, are we doing our job? I think one thing here, I'm not sure if you guys can hear me okay, but one thing here that I keep kind of telling people in the regulatory space, in the political space, is that we don't necessarily need a whole

bunch of new regulations in order to fix this problem. We actually just need mass education for the American public so they understand the products that are coming in front of them. I just don't think today still the American public is fully aware of the vast types of scams that could be perpetuated. And there's just new people coming into the market all the time. And so I, I regularly talk to those folks that are concerned about consumer protection, which actually oftentimes tends to be Democrats who use that as one of their rallying cries for why they are concerned about the space because they are concerned about protecting consumers. I was just with Ron Wyden a couple weeks ago, he brought it up again. So it is something that we really need to focus

on. I think it's a huge hindrance to the space. But the best method for stopping or preventing scams and frauds is to get out there and educate the public about the ways that they can be defrauded so that they see those red flags when they come up instead of the red flag being like oh my god i gave this guy money and he won't be he's not responding to me anymore yeah sorry um don't you think like it as in our industry we've been warning people about exchanges you know from day, from the first exchange. And what would it have taken to just allow for some of these companies to register and have the ability, you know, every regulated company that's a centralized company should be able to prove that they've got the reserves. That's an effective role for a regulator, not the whole AML tax collection, all the stuff.

But the basics of consumer protection is a centralized exchange where a consumer has no idea whether they've got that money or doesn't have that money. And yet for over a decade, they just allowed that to be an issue. And what would it have taken just to have done like the basic, just allowed the companies to have registered and prevented all of those those losses. I don't think you can prevent them at all of them. I don't

think it's I think people today still get, you know, emails where there's phishing scams, and they get scammed that way uh there's there's investment i don't mean those ones dennis i mean just the ones where if you're if you're any company regulated outside the us we're meant to if we're registered prove every year that we've got the assets backing the liabilities of all the consumer demand. That's like the basic protection, right? That's needed, I get sure, and stuff. That's more FBI. Yeah, I mean, absolutely. There should be headway made there. But I think just even the basic education around the idea that

if you send your crypto to someone, if you send your Bitcoin to someone that you can't get it back, like there's no there's no backseas in this ecosystem. And, you know, really the places where you see the vast majority of fraud taking place, it's not the people that have been in the market for a long time. It's not the people that have been in the place in the market for the medium amount of time, although you see a jump there. It's always these new participants. I mean, some of the new participants, they're coming and going all the time. When I talk to them, I'm just blown away

by their lack of education and understanding of how the system works. And that they think that someone can actually come, you know, help them get their money back. Once they've sent it to someone, they're like, how do I reverse this charge? Like, sorry, you can't like that kind of basic education. If you can help people understand that in mass, that if you send your crypto, you will not get it back. It's not possible for us to reverse those charges and like you can in a traditional system. I think that type of education, even though it seems so simple, just really helps people think, you know, for a second, like, hey, you know, I may need to be a little more cautious when I'm approaching where I send my Bitcoin to my digital assets. Now, there's a ton of other stuff, like you said,

Simon, too, as well with regards to consumer protection that you can do from a regulatory perspective. But I think there is just not enough education. There's not enough consumer education on these products, and there should be a lot more. Yeah, we were talking about the SEC before I pinned a tweet, not to pivot, but this one just blew my mind. I don't know if any of you saw this, but Caitlin Long posting, OMG, look at Gensler's internal comments that the SEC mistakenly posted publicly. So it looks like Gensler just gave a speech. They obviously post the transcripts of the speech.

They forgot to take out the internal comments from the speech in which there was a line here that said, I strongly recommend that a sentence be placed here or somewhere in the first part of the speech to reassure markets that you're not making the speech because you think there is an imminent crisis. And now they've taken the entire speech down. Joe, if you were the SEC's lawyer, what would you be telling them right now? I mean, they made a mistake, right? People make mistakes. That's why there's erasers on pencils. But I do want to go back for a second here about the comment about education, which I understand the sentiment of that.

Just look at the facts, though. OK, last year, tens of billions of dollars were sent in Zelle scams to the traditional banking system for people all over the place. All sorts of Zelle scams had nothing to do with crypto. And people, regardless of the level of education, get defrauded. People are taken advantage of. People make very stupid decisions in the heat of the moment. And the banking system is designed with protections in place to make them whole. Banks have reserves set aside. There's regulatory place to make them whole. OK, banks have reserves set aside.

There's there's regulatory obligations to make them whole. The problem uniquely in this particular space is that there isn't an easy mechanism to do that with assets like Bitcoin. Right. Once it's gone, it's gone. There's not a reserve to make it whole. And no amount of education is going to prevent people from doing stupid things. It's just part of the system.

And it's particularly dangerous when there's no reverse button like there is in the traditional banking system. And there was a comment earlier, which I think it illustrates sort of the lack of understanding of the space when they said something like, well, these companies should just come in and be able to register. There's no mechanism for that to occur. That is not an SEC problem. That's a Congress problem. Congress's failure to act, like many issues in our society, is causing significant

problems because there's no route to come in and say, oh, we're just going to become a lawful exchange that's registered properly, and we're going to have disclosure, and we're going to show that we have all the proof of the funds. Nothing like that exists. And you can fault the SEC. But the reality is the SEC has one tool for enforcement. Go file a lawsuit. And when they go file a lawsuit, it takes years in court. And if they don't have the facts to support the lawsuit, the lawsuit gets dismissed. So it's very easy to criticize regulators and enforcement agents for going out there

and saying, oh, they let all this happen. If you were in their positions and you actually recognize the tools that they have been empowered with through Congress, you would appreciate how difficult it is for them to maneuver and force 1930s and 40s era regulations on a space that completely is completely different and try to, you know, they're forcing a, you know, a round peg into a square hole in the current legislative framework. And you can fault the SEC and all these regulators all you want. But the problem lies at the foot of Congress. Yeah, I mean, I think it's fair to say that we need clear legislation, but regulators, I think, Joe, also have been a little overzealous here. Well, hang on a second, but that's different. I mean, you're saying they're overzealous, and I agree with you. I think that's a point. The point someone else is making, and I didn't catch who said it, but they were saying, oh, this was all caused by them not getting involved in doing things earlier. Well, that's the exact opposite. You're saying they

should be more zealous. You say they should have been more proactive without the tools to do so in an appropriate fashion to balance the competing concerns. So pick and choose what you want. You want them to be more zealous or you want them to be less zealous because you can't have it both ways. Yeah, I think it's just the difference between, so I'll give you an example. So the example I was given before is they were investigating Celsius for two years. The FBI was, not the SEC. Sorry? The FBI. The FBI.

You understand the FBI is not the SEC. They're a different brand. Of course, yeah. So the FBI is investigating Celsius for two years. The state regulators are investigating them for a year and a half. The UK FCA is investigating them for approximately two years. The SEC had one year. And in that time, it went from approximately 250 million assets under administration to

23 billion. And there wasn't one request to find out if they could actually back if those assets were backed. What is the law that says they have to back the assets that they're writing as credits for people? What is the law? Well, there you go. So they were offering securities. There isn't one, right?

Well, they were offering securities, so it falls into securities regulations. Hang on. Do people in the room think that they were all offering securities? Do people think ETH is a security? That's not what they were offering. They were offering an investment contract and money management. Correct. Correct.

And the mechanism that the SEC has, as I mentioned earlier, the sole mechanism is to go file a lawsuit and get embroiled in litigation for several years. That's their mechanism. So what did you want them to do? Okay, so what you're saying is that there's nothing they can do? No, I didn't say that. I just said they could do something. They can go file a lawsuit, which is what they did. And then Scott, which I agree with him, point just for the record, they'll be accused of being overzealous. You mean, yeah.

So, yeah, I understand exactly what you're saying. So billions of dollars is just lost. Well, blame Congress, blame people like Elizabeth Warren for blocking sensible regulation and new legislation that we need. OK, for one of the fastest growing industries that we all care about. Blame Congress, blame the proper people that sit and don't, you know, just, you know, shake your finger at Gary Ganser, who I'm very critical of. I don't agree with what he does. Right. But I understand why they're saying, OK, you guys are the only people that can do anything because we can't get anything through Congress because our Congress is completely dysfunctional. Which begs the question, when does our Congress become functional? Go ahead. Yeah, I think when it comes to the SEC and Gary Gensler,

they're very selective with who they choose to go after, I find. And if you look at the SEC's mission, it's to protect retail investors. But from what I've seen over the years, they've destroyed retail investors by going after projects like uh xrp um pulse chain a few others and just making up as they go along laws that don't even exist and dragging projects through the court for multiple years while the price of their token gets destroyed and retail investors get destroyed in it as well um only to most of the time lose the case or you know like in in the case of ripple it was three years they took them through through the course just to deem them not a security

um so i i i think what they do is wrong they you can't be selective you can't be like well we're going to go after this company because we'll probably make a load of money by fining them at the end of it um like eos raised 4.2 billion um find 23 million and continued on um i don't think that's right i think there should be a better way to go about it. And you shouldn't be selective. And, you know, I don't know if anyone else in the space here, what they think about Ethereum and whether Ethereum is a security or not. the Howey test, didn't Vitalik promise people profits? Didn't he raise money promising people return on their investment? I think he broke most of the Howey test rules, if I'm not mistaken. Yeah, you're getting to the crux of the argument. And that's what has been determined in the course that the token, the general direction it seems to be going is that the token in itself is not a security, but the offering of those tokens to investors is a securities offering. And so Vitalik did do an illegal securities offering without registering a Form D.

And it was done at a time and place when that wasn't pursued. But then the whole case of the question of is the token itself a security that went through different iterations because it started as proof of work. So firstly, it was sold as a token as an investment contract with a promise to receive a token into the future. That was this first form. The second form was that it was a proof of work token tradable on an exchange, which was the secondary market. And then also Vitalik and the other co-founders had a pre-mine that they could sell. So those are all different transactions. And then it transitioned to proof of stake. And then the idea of what is the concept of staking arose. So it kept changing form. And this is kind of one of the differences between Ethereum and Bitcoin

is that you don't really know what Ethereum is going to be into the future because it keeps changing. And therefore, is that dependent upon the efforts and management of others? Well, you know, that's a very tricky question to ask, right? Thanks for the explanation. That was really insightful.

Yeah, and really confusing for retail, right? So you have to be an expert to unpack these topics. It's very, very hard, I think, for the average person to understand these. But Dennis, since we have you and we just talked about kind of, I think Joe very eloquently discussed the challenges that regulators have, because we have a lack of legislation, you're kind of one of the people driving the effort for that legislation. So maybe you can give us sort of an update on how you're feeling about the odds or chances of getting federal, more federal Bitcoin, stablecoin, crypto legislation on the books?

Obviously, you've been working at the state level, and how that might be handicapped for either presidential candidate winning as we have the debate tonight. Yeah, definitely. Well, I'm excited to, for the first time ever, have a presidential election where we can actually make a decision on who we're going to vote for based on their positions around Bitcoin and digital assets. I mean, this is a first for us. It's a very exciting time. On the policy front, certainly right now, it is in a standstill, especially until after the election. Everybody that I speak to, whether they be, you know, in the House or the Senate, staffers, you name it, generally, they're all sort of just kind of

saying that, you know, they're looking towards the election and seeing who is going to win, everybody's just gearing towards winning right now. And they're going to, you know, make their determinations on next steps after the election. I think that's, you know, sort of a semi prudent path forward, you know, generally, you don't want to get into negotiations where you're in a, maybe a better or worse negotiating stance. And then the election happens. And those, you know, those positions change, those stances change your ability to negotiate changes. So, you know, I pretty much predict that nothing's really gonna, I mean, pretty easy prediction, but nothing's going to happen between now and the election. Now, after the election and going into sort of the lame duck session where, you know, obviously you're going to have a president that is not going to be president anymore.

You're either going to have Kamala Harris or Trump be taking over the Oval Office. And, of course, as depending on who wins, it's also going to highly influence the direction of the House and the Senate. You know, a lot of people have talked about how those will flip flop, and that you'll see a Senate that gets taken over by Republicans and a House that gets taken over by Democrats. It's a little bit of the dynamics of the races and just sort of who's up for election. But the amount that Republicans or Democrats win by really highly depends on their ability of that top tier candidate, the person running for president, to get the vote out. They talk a lot about down ballot. I think one of the major drivers for why

Biden chose no longer to run and Kamala was put into that position or eventually took over that position is because so many people down ballot, let's exclude the conversation around donors, but so many people down ballot are worried like, oh my God, people are not going to be excited to show up for Biden. And I am in a swing district or I'm in a plus 2D district where I'm going to get blown out of the water because nobody's going to show up for Joe Biden, who no one was excited to vote for and felt that generally his health and his mental acuity were headed in a wrong direction. So now that you have a Kamala and you have a Trump, you have both sides energized, both sides excited. I think it's going to be a true battle down to the wire. Sounds like a lot of the conversations are revolving around Pennsylvania and what's going

to happen in that state. A ton of focus is being placed on Pennsylvania as the bellwether state for who's going to win this presidential election. I did notice recently that Chuck Schumer, Chuck Schumer was, you know, he did a lot of interesting things recently. I think people have really gone, haven't appreciated the moves that he's taken. He was one of the ones that led the effort in the Senate to repeal SAB 121, although, of course, that was vetoed by Biden. He also was pushing really hard to see other legislative efforts occur. And in that Crypto for Harris podcast, webinar, I guess you'd call it, he said that he

was going to be dedicated to getting something done by the end of the year. Now, he also did come out with a sort of list of different things that he wants to get done by the end of the year after that webinar occurred and crypto was not on there. So I think it's really up in the air whether or not the current Senate Majority Leader, Chuck Schumer, is interested in getting something done this year for crypto. There's signs on both sides of the aisle for that. I think certainly if Trump wins, Republicans are going to want to wait till he takes over and everybody comes in in January and they have a lot more power. You know, really, really is going to come down to the election ultimately if we see something get done by the end of the year.

But becoming less optimistic of something happening by the end of the year by just a few sort of fringe events. But that could always change very rapidly, especially if Trump were to win and Democrats feel motivated to get something done, cram something through, and somehow they're able to negotiate that on the Republican side in the House. Great summary. And listen, I think Polymarket had it at like 5%, I would say almost 0%. But do you think there's any chance that Bitcoin mentioned in the debate tonight? happening around whether or not the mics will be muted. I find it absolutely fascinating. It used to be that, you know, the Democrats were worried about Trump's mic being muted, and now they're worried that he won't be muted. And so I think it will be an opportunity for the first time for something like crypto or Bitcoin to be mentioned, when it might not have

been otherwise brought up by the debate, the hosts of the debate, so to speak, right? Like it may not come up as a question, but given the amount of times that Trump has been willing to mention the issue, I wouldn't put it past him to bring it up on the fly and try to use it as a wedge issue against Kamala Harris, who hasn't yet to say anything super positive or super negative about the industry. A lot of people hoping for a crypto reset haven't yet have yet to see real evidence on her side, although we've seen mild evidence from some of her staffers. of excitement from people within the Democrat Party, folks that support Bitcoin and crypto, to see if they can get something done, which is just as exciting, if not more exciting,

potentially than a presidential candidate being supportive of an issue, is the people willing to actually stand up and go fight and make sure their side really does pay attention to this issue. I haven't seen this much motivation by folks that consider themselves to be opposed to Trump in a long, long time for crypto and Bitcoin. So that energy there is a really big part of what makes people change their tune on these issues. I mean, it's definitely what caused Trump to change his tune on Bitcoin. You know, he went from calling Bitcoin a scam to saying that, you know, he is going to be the crypto king and make America the best place in the world for Bitcoin and crypto. And a big part of that is the people around the that person that are pushing and motivating them to jump on the issue. Trump certainly took advantage of that and has been way out in the lead on the issue. And but we'll see if maybe Kamala can catch up.

Yeah, there's part of me that thinks that maybe we sort of had the moment where this was going to be a big part just remain silent. And this may not be really a thing, right? Kind of was a thing that maybe won't be a thing. I mean, that's it seems like that would be the smarter move for them if they already feel like they've lost this voter base, which they may view as irrelevant or small, and they're not going to get it back by, you know, half assed gestures. Yeah, that's a really good point. And I do agree with you, to an extent that we may be past the window of opportunity. Now, presidential elections are absolute madness. And we all know how totally insane this time gets as we get closer and closer to the election. I mean, it was in this timeframe that we saw the FBI announced that they were investigating Hillary Clinton. So I wouldn't put it past sort of the opportunities for potential,

you know, political black swan events, so to speak. I wouldn't put it past us to come up with a way to make ourselves be a part of the national dialogue again. But yeah, it's sort of post Bitcoin conference, I think we're starting to see a slightly lower focus on the issue, which probably also is better for the Trump campaign as well. Like generally, you don't want to be so hyper focused on an issue that isn't a kitchen table issue for the average. Especially if they just locked it down, especially they locked it down. Yeah. Yeah. Why even push?

Yeah, that's right. You don't you know, I've said this several times before, and I'll say it again, if your candidate is only talking about crypto, they're probably going to lose. So it's good that he, you know, if you're a Trump supporter, and you want Trump to win, then it's good that he not be so focused in the media on crypto, especially as his family is getting ready to launch a project, I think it's probably better for them that they let this issue go off into the darkness and maybe let his family get into the investment side of things. But from a political perspective, there isn't a whole lot to be gained by continuing to talk about the issue, except for potentially in a debate scenario where he may want to use

the previous administrations, which of course Kamala is a part of, as a way to sort of bash her over the head in the middle of the debate without her being able to predict what kind of questions or things he might say. That's a very common Trump tactic is to just sort of bring things up out of the blue. So I wouldn't put it past him to bring it up as a way to go after her campaign and show Americans why he is the preferred crypto Bitcoin candidate. Yeah, that all makes perfect sense. And I think that's a comprehensive sort of overview of what we can look for coming forward. And we don't need to beat it to death. And we do have Fulis and Wick here. And it used to be we talked about price action basically at

the beginning of every show, but nice to have two analysts here to discuss so just want to quickly talk about what's happening with the market you know i and we've seen obviously that september historically reported everywhere with seasonality is the worst month for bitcoin historically the worst month for bitcoin is down an average of roughly four%. So really a nothing burger. And then if you look at the Octobers and Novembers of the past, they're up 20, 30, 40% on average. So I think a lot of people either anticipated or were at least open to the idea that we would have this post having summer doldrums. We've certainly talked about it a lot here. And even though a lot of people were

right, saying, listen, we're going to be choppy and slow after 74,000, I think people are starting to heavily doubt or have less conviction in the move that comes next, which I think is part of time-based capitulation and boredom. But it does seem that there's a consensus that something does come next and it will be bullish. So, Wick, I would love your opinion and Folas on where we're at right now with Bitcoin price action in the market. I guess the broader crypto market as a whole. Yeah, I can jump in there. Thanks, Armin, Scott. Yeah, I mean, it's interesting. I think so.

You kind of hit the nail on the head there you said there's a lot of fear in the market a lot of people are saying you know why would this time be any different the last three or four bounces sorry the last three or four uh big nuke events we've had we've just seen uh bounces that failed to put in new structural highs and then a new low coming in you know a month or six weeks later um i think the big difference this time and the reason why i'm maybe cautiously optimistic is that the last three let's say the last three big moves down we've seen out of this call it a range call it a descending channel whatever you want um we we had one in may we had one in july and one one in august all

coming roughly around the start of those months. The first one dipped to 56K, then to 53K, and then 49K was the most recent on bloody 5th of August, bloody Monday. But all of those happened kind of over the summer where you would expect the order books to be a bit thinner. And maybe, I mean, you know, it's the one thing you should never do in crypto is say that this time is actually different. But I do think that things are, the paradigm is shifting a little bit, right? We're coming into the period of the year where you would expect the order books to be a bit thicker, right? More market participants engaging with price on both sides, right? We're kind of coming to the end of what you might have expected for the post halving chop period.

I think if you look back at the last three halvings, in each case, there was a lengthening period of time after each halving where we got choppy downtrending PA before we kind of got the up only that people associate with post halving periods. It's also kind of coming into, yeah, you're right. Seasonality. Uh, typically we've seen Septembers have been bearish months, uh, for crypto, especially the last, the last four Septembers. I think I read something this morning, um, that in the last four Septembers, the lowest come in, uh, the first 10 days of the month. Um, in the last four Septembers, we rallied until about the 19th, uh, in three of those four times. And then we chopped for the final few days of the month before kind of coming into a bullish October. So it's one of those things where I think there is a lot of pessimism and a lot of, let's say, maybe fear, uncertainty in the markets at the moment but i think that the the the the cards are kind of slowly uh coming in favor of maybe some upside or at least some relief into

the final quarter i will say the big caveat for that for me is there are there are macro events at play that i don't think anyone and i think if anyone tells you they have a good feel for how those macro events are going to play out i think they're lying there are macro events at play that I don't think anyone, and I think if anyone tells you they have a good feel for how those macro events are going to play out, I think they're lying. There are macro events at play that I really don't think anyone can say with any kind of certainty which way they're going to fall. Things like the, you know, potential US recession. You know, we have a very important FOMC coming up later this month. You look at, you the the the uncertain situation in the middle east which is maybe quietened down a little bit in the last few weeks but as we all know like that's a tinderbox and it doesn't take much to set it off so there's a lot there's a lot going on in the

let's say in the kind of the the global financial landscape not just financial but even you know geopolitical uh that we can't really put uh you know, you can't look at it and quantify it and say, okay, well, there's a X percent chance that this plays out. And if that happens, then there's a Y percent, you know, we're going to get this kind of move. So I don't know, there's a lot, I would say that's where the fear and uncertainty comes from, for me, is those macro events. But I mean, looking just from a technical point of view, looking at BTC, looking at the markets, I honestly think I would not be surprised to see a bottom form in the next few weeks and for us to actually see some kind of bullish Q4. Or at least that's, I think that's looking more and more likely with each passing day.

Yeah. And from the market structure perspective that you talked about, really interesting, all those sort of sequential lows. We've got lower highs and lower lows, which many people view, obviously, as bearish market structure. But $52,000, this recent low, $52,500, whatever it was, above that $49,000 low could end up being the first higher low sort of in this sideways market that we've had since the all-time high. So basically basically if we get back above 65,000, then all of a sudden, you have a higher low and a higher high and structures changed. What are your feelings on the market right now? Yeah, it's very interesting. You know, all the points that this guy brought up are very valid. You know, we are in the same type of

historical cycle with Bitcoin, where it goes sideways. At the same time, you know, September since 19, I think 28 for regular trade five markets have been very bearish during election years. So that's kind of what everyone was watching. It's kind of a risk off month. What's very interesting to me is right now, if anyone goes to my profile, you can see that on the lower timeframes, we've actually hit some confirmed bottom setups, which have pushed us a little higher. On the weekly chart, we're also printing a reversal setup. And what I'm looking at right now is something that Peter Brandt brought up, which is a brilliant technician. If any of you guys want to go follow him, there's a megaphone pattern, which is technically normally a bearish pattern, but I'm looking to see if this reversal setup and bottom setup in the lower timeframes can push us up to that higher end of that megaphone pattern, which would be around $66,000, $67,000.

Because we really want to break out of that. Another thing that I'm watching as well, to give a little bit of a bullish argument, because that's a bearish pattern, is that liquidity data is coming in and it is starting to strengthen. OK, I think one thing that a lot of people get wrong with this liquidity data is that you must realize it takes a minute to work through the system. Right. But it is getting better. So I'm looking forward to this month of September ending. We historically normally have a very strong November and December months. And then at the end of December is when you kind of just start to pay attention because a lot of the funds and institutions start to go risk off because they want to put good numbers on the books. So, yeah, I'm looking forward to getting past September. I'm trying to see if this setup will get us to that high end of that megaphone. that once we're past September, then it's interesting because this guy also brought up a good point that normally the first week and a half of September are historically down, putting the lows, right? So if we can get past September, I think that will give that liquidity

enough time to work through the system. And I'm looking for a confirmation around the end of September that we actually pick up. And that's also around the 18th, I think is when we get the FOMC, which usually is interesting because usually we get a reaction from that day. And then the next day we get a reaction from the reaction until we really see the real signal play out. So I think that's lining up for me for something that I'm watching is really just the end of September to see if we get that bullish price action. We really want to break out of this megaphone to the upside. So right now it's's just a mixed bag. And you are right, we are putting in higher, lower highs and lower lows, but it is in this megaphone pattern. So I'm just trying to bide my time to get through September. And then look, if we get those good signs coming through

end of September, beginning of October. Totally. And yeah, I just find it sort of amusing that we've had this fear, you know, the crypto fear and greed index that we often reference. It was at 30, it was 22 last week. And it's like, if you looked at the exact same price for Bitcoin, you know, three or four months ago, you were at greed. So it just shows you what the amount of just the time without price going up breeds fear in the market, which I just find to be an astounding human phenomenon. Not surprising, but still really interesting. Yeah. And to that point, Scott, so I like to break down for you, probably know this, and a lot of people follow me on this. I like the structure of stage analysis. And what we see is that you have four stages,

you have the basing stage one, uptrend stage two, then another basing stage three, before you either go into a stage four downtrend or continue upwards. Now those stage three basings is where we're at right now. It's a sideways consolidation pattern, which tends to shake out more people than an actual stage four downtrend, right? And this is why we're having all this greed and fear going all over the place. Because, you know, in a stage four downtrend, you fall a lot faster than you rise, most people get trapped. And they just hold on, right. But in a stage three, where you're having this volatile consolidation, because of crypto, you know, Bitcoin's a 50 vol asset, this shakes out so many people. So I think in stage threes, it's normal to see that

fear index just go all over the place. And it's the worst. It's the worst stage to me, in my opinion, because people just tend to give up, right? They're wrong sometimes, they're right sometimes. And eventually, they're more wrong than right in these stage threes, and they give up. So if we can get past the stage three, I think we'll be good. And I am looking for a breakout to the upslide for a continuation stage two. So that's my framework, but it makes sense with that fear and greed index in the stage three. Yeah, it makes perfect sense. So, uh, John, what's up, man? Got, uh, the JP Mullen up here also invited, uh, the Montre count up buddy, but first of all, like we're excited to talk to you. And, uh, obviously we did that interview on the street, uh, in Austin. Awesome.

And I'll talk about what, yeah, talk about what, uh, and I'm assuming I'll see in Singapore, but, uh, talking about what Mantra is doing here. But, uh, even before we dig into that, I mean, I have to imagine since you're, you know, leading a project and you guys are building that I've heard that these sort of downtimes on price are actually really nice because people are less focused on price and more focused on building. Yeah. I mean, I think, um, you know, for, from, from our side, you know, these little kind of bearish, uh, you know, windows are, are good opportunity to just like

kind of hunker down and, you know, deliver shit. Like we're in the, in the, in the road domain net coming up, uh up very soon. We're going to be announcing some more stuff on that probably in Singapore. But it just gives us a little bit of time to really focus and kind of get honed in on what is the next thing that we want to bring to market. And to be honest, in the summer, I live in Hong Kong. It's hot as hell out here. So a lot of people are just slower. Things are just moving a little bit slower. People are on vacation. And I think for us, it's been a good opportunity to just

really buckle down, go even harder on what we're trying to achieve and really excited for the rest of this year. I mean, irrespective of market conditions, we're trying to honestly move against the trend, I think. And sometimes these bearish moments actually give a little bit more of a opportunity to kind of like move against some of the stuff that just is floating because it's a bull market. Right. So we're actually big fans of bear markets, I think. That's exactly what I figured makes sense. So obviously RWA real world assets and tokenization has been, I would say, outside of like memes, you know, but the most serious real narrative that we've had, I think, coming into the cycle.

So obviously, it's existed for a long time. We've talked about it, but then you see the BlackRock's and the Franklin Templeton's tokenizing on various chains. So it's starting, I think, to get more institutional attention. I mean, Montre, you guys bringing finance on chain is basically your tagline. So in context of all these chains and all these people trying to do this and still being relatively small, I guess, what differentiates you guys and how does what you're building support the broader adoption of tokenization? Yeah, absolutely. I mean, I think there's a number of things that we try to focus on in order to differentiate ourselves as a, you know, RWA focused L1. And I think it starts there, which is we have literally built a layer one blockchain solution for asset

tokenization, period, full stop. That is our niche. That is our focus. We're not looking necessarily at things like gaming or, you know, you know, general permissionless DeFi too, too much. We're really focused on like, how do we bring assets on chain? And right now we've really, you know, been fortunate that with our connections in, um, you know, certain markets like we're heavily between, uh, the middle East and Asia. So I live in Hong Kong, but I spend a lot of time in Dubai. Um,

a lot of our investors, supporters, and team is also out in the middle East. And we've been able to bring on a lot of really high quality, interesting products from the RWA side of things in that Middle Eastern market, which has become quite a crypto hub over the last, let's call it 12, 18 months, where there is a clear regulatory framework on how you can actually operate, or at least some degree of a framework for how you can operate and issue these type of things. And there's an actual conversation happening with regulators. So where there's not necessarily a clear cut answer,

at least you're coming to the table and they're willing to have a discussion. So like, you know, we're able to use that, you know, bring on really massive deals. Basically we announced one that's a $500 million real estate tokenization asset. And we have much bigger ones coming. So, you know, across asset classes like real estate funds, whether it's like money markets, we're partners with Ando, we have a vault product for their USDY, you know, yield bearing stable coin product, or, you know,

tokenizing private credit funds, private equity funds, et cetera. There's all these different things that we're able to do because of that connectivity into, in the region, because of our institutional backing there. And honestly, the other thing that I think, you know, really differentiates us when we go to these asset issuers is like, you know, I've spent months and in some cases years building up, you know, relationships, credibility network. And like, they literally know, like if they're going to issue with us, they just trust that, you know,

it will work. And they trust that if it goes wrong, um, they can literally, if you would issue a RWA on Solana or Ethereum, not saying that you couldn't, you honestly probably could very easily, you know, you're not going to be able to call Vitalik and be like, Hey, what happened? This didn't work. Right. But you know, these guys not going to be able to call Vitalik and be like, Hey, what happened? This didn't work right. But you know, these guys know that they can literally call me basically at any time and say, Hey, we've got the founder of the project on the phone. Something went wrong. Let's fix it. So honestly, that trust goes a really long way,

particularly in real world assets. And it's not something that you can just like snap your fingers and have like instantaneously. Right. So we spent literally years, you know, building up licensing in the UAE, in the middle East. And again, like I say regularly, you can fork code, but you can't fork licenses. So this is something that I think really creates a defensible moat around what we're trying to do. And also it was definitely a big differentiator. It's interesting. The regulatory environment, as you mentioned, is different literally everywhere.

Yeah. So how do you run a business and approach that not knowing where or what the regulation will be at any given moment, entering a new market that could even change? Yep. It's definitely not easy. And I think that's really one of the main challenges with real world assets is you have to go asset class by asset class, jurisdiction by jurisdiction. And it is just a grind, honestly. It takes time, it takes a lot of effort. We've really found certain asset classes that have been ones that have gotten traction for us. As I mentioned, real estate is a big one.

You know, funds is another one. IP is another one. I was in Korea for KBW last week and, you know, we're looking at some stuff with Story Protocol, for example, who's like this IPL1. And it's kind of my job to, you know, basically double down when you see traction. Right. So those have been things that, again, have been able to have outsized impact in the markets where we're currently operating. But when you look at it holistically, you kind of have to be like, okay, these are certain markets where I just don't feel comfortable with the

compliance risk of issuing or onboarding these types of users or these types of participants. And these are the markets where I do feel comfortable. It boils down to which ones do you want to ask for permission from and which ones do you want to ask for forgiveness from? And that's not necessarily... On a challenge. Yeah. It's not an easy call sometimes. And there's obviously a lot of risk because in many instances, this is a gray area. There's no clear written rule. It's all new novel stuff. So again, it boils down to making sure that when

you are having these conversations with regulators that they understand that you're still going to inform them about things. You're going to make sure that you're not... No one likes to be surprised, particularly regulators. So I think that's another thing. It's just like, be communicative, be transparent, try to do things the right way. And as much as humanly possible, do try to cover your ass where you can. But it's not easy. Yeah, it sounds roughly impossible. And then something else I would imagine is not easy is building the architecture yourself, and then finding a way to be interoperable so that everyone can use this. So I guess what differentiates what you're building and how will it work with what everybody else is building?

Yeah, absolutely. So the backstory of how we even got to wanting to build a layer one for real-world assets was we were initially building an on-chain RWA exchange effectively. And we're building the first iteration of that out on Ethereum mainnet. And obviously, there's issues with scalability of transactions. And if you're trying to reach a mass audience of people, particularly retail, they're very susceptible to price. And launching anything on Ethereum mainnet will not work. This was like end of 2022, beginning of 2023. And when we were trying to build this out for the Dubai and UAE market, we're like, there's honestly not a technology stack that works.

So we just were like, okay, we kind of need to build it ourselves. So we ended up deciding to build on the Cosmos SDK. We feel like it's a really strong technological stack to build interoperable blockchain solutions that have specific use cases geared to, you know, your, or sorry, it has specific, you know, ability to create a use case here to whatever you're trying to solve for. In our case, that was asset organization, RWA, et cetera. And we built out a number of custom modules focused on that. So decentralized identity module,

a token issuance and management module, and this compliance permissioning module that effectively allows people to create effectively a compliance governance framework of sorts that you can say who can interact with different products, different assets, different pools, different platforms on-chain at any given time based on whatever rule set that you need to follow. The idea here was that in the end of the day, honestly, like the tokenization part of it, literally creating a token that represents something in the real world isn't all that hard. But transposing real world economic value and rights is really the challenge. And then being able to find those deals, being able to find people who want to legitimately bring real high quality assets on chain is a little bit more of the challenge. And then,

you know, creating an environment where eventually these things become, can become liquid, they can become composable. So I see RWA in like three phases. Phase one is where we're at today, which is supply side. So how do we actually bring on high quality assets into the primary market where people are actually buying them? Second would be, you know, when do we actually have these things tradable and have legitimate liquidity behind it? And then third would be this composability

element, like when can you use them as margin, collateral? When can you use them across different blockchain ecosystems? When can you use them in DeFi? Etc, etc. So like, this is all going to take time. You know, you did talk about how institutional adoption of you know rwas was definitely happening i actually feel like institutions have had product market fit for rwas for a while or at least for tokenization um like jp morgan has issued literally trillions of dollars of tokenized bonds on their permission blockchain in our world you know i don't really believe in permission to blockchains. So I feel like there's a better way and in a permissionless environment that's a little

bit more retail focused. We haven't really hit that mass product market fit adoption yet, but I think it's coming. With all that, you obviously have a token, Ohm. How does that play into the ecosystem? How will it evolve with the mainnet being live? Absolutely. So currently, our existing token, OM, is on Ethereum. We actually literally celebrated our fourth TGE birthday or anniversary just a few weeks back. So it's kind of an OG project from that perspective. We are launching our mainnet, as I mentioned, imminently, where effectively you'll be able to bridge your Ethereum token to the mainnet token where you then can participate in actual native on-chain staking to secure the network. You can use the tokens for gas.

One of the things that we're exploring that we think is quite interesting is actually this idea of having layer two solutions on our main net L1. And effectively what we'll be doing is creating like these enterprise layer twos that rent security from the mantra main net, the L1 that would have to stake significant portions of Ohm. And that can use Ohm as the gas token for these like big enterprise companies. And obviously our ability to bring on a lot of these, you know, high quality real estate and high quality fund deals and institutional participants gives us the ability to say, okay, we have big name participants who are going to be the first users of these layer 2 solutions where they can create

very customizable tokenization environments. Maybe they start as a little bit more like a permission network, but then they move into a little bit more interoperable proof of stake model. So that's something that we're working on. Probably a bit more of a 2025 thing. But we're pretty excited about some of the enterprises that have already signed up for this. Yeah. So you mentioned a huge real estate deal. What else are you guys looking to tokenize and bring on chain? And I guess like sort of any major developments or anything exciting you can share sort of that's coming? Yeah. So when I was at the KBW Act, I accidentally slipped this idea about Omtober. I meant to say October because we're really excited about what's coming in October, but it said Omtober. So you can kind of infer what's happening next month.

A lot of interesting things in the pipe, you know, from more real estate offerings, new asset classes, bringing on chain. We're actually tokenizing like some aviation financing opportunities, actual literal plane itself. We're tokenizing, again, pretty large fund opportunities. So whether that's a money market, a private credit, a number of different other things, obviously these all have enhanced yield through kind of additional subsidies that we'll be paying to, to, to investors and participants. And I think one of the other ones that we're definitely exploring is, you know is this idea

of tokenized IP. I'm pretty excited about that, particularly off the back of KBW. IP is a massive, massive asset class that really hasn't really had the ability to be truly financialized to the public yet. And I believe tokenization can support that. So we are definitely cooking some stuff. You know, October is going to be pretty exciting, but it will definitely kick off in Singapore next week. So hopefully, hopefully we'll see you down there and can share a little bit more because it is that's really when we can speak a little bit more freely. I asked you too early. No worries. Next week, right around the corner.

Damn it. Well, hopefully I'll see you next week, man. And we can catch up to do something in person. I love what you guys are building. So before we talk about all that, but anything like final thoughts, cause I might've missed something that you definitely wanted to tell people and you know, where they can keep up with you guys, follow what you're doing and maybe even if they're in Singapore,

what you got going on. Yeah. So, I mean, we're going to be really present in Singapore next week. A number of different events happening. So if anyone's interested, we do have an event happening on the 17th. So feel free to reach out. You know, main net, as I mentioned, is coming. We're, you know, pretty much like wholly focused on that right now. We're trying to make the month surrounding main net launch, one of the more exciting months, you know, period. So if you, if you,

you know, been excited about some of the deals, some of the opportunities and some of the partnerships that we had, you know, earlier this year, which had been pretty, pretty amazing, in my opinion, my humble opinion, just wait for what's coming. So we've got some, some super exciting stuff, new asset classes, big partnerships with, you partnerships with legitimate governments, with Web2 giants. So some really, really cool stuff happening.

And if you want to follow us, just hit us up on Twitter, on X, Telegram, Discord. And you can always DM me as well. I'm more than happy to answer any questions you may have. Amazing. Well, looking forward to catching up again in person next week. See you in Singapore. Everybody else,

definitely check out Mantra. We were trying to bring it up on stage, but let me see. It's Mantra underscore... What's the Twitter again? I was going to say... Mantra underscore chain. Chain. Yeah, that's what I thought. Okay. Mantra underscore chain. Otherwise, check out everything thought okay mantra underscore chain otherwise check out

everything else they're doing and we will be back again obviously with another crypto town hall tomorrow morning 10 15 a.m eastern standard time thanks everybody thank you john again see you guys later have a great day