The Wolf Of All Streets - USA Opens Crypto: Will Floodgates Spark the Next Bull Run? | CryptoTownHall

Episode Date: September 3, 2025

The US SEC and CFTC issued a rare joint statement giving the green light for registered firms to trade spot crypto. The goal of the event is to break down what this means for both markets and builders, particularly how it may impact market structure, liquidity, regulatory clarity, token listing, and innovation in the crypto space discussing the implications for US crypto access, the evolution of meme coins, the shift toward brand tokens, and the move to on-chain tokenization of assets. The conversation is candid, touching on market realities, regulatory hurdles, and the potential for deeper institutional and mass-market crypto adoption.

Thanks a lot. Thanks a lot. Thank you. We're going to be able to be. I'm going to be the one of the I'm going to I'm going to

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I'm going to be able to be. Thank you. Good morning, Dave. How's it going? It's going good, Scott. You know, it's funny. I was watching your show this morning, and you guys were talking about the, you know, the title,

this joint SEC CFTC release and I will point out for those who listened to this show somebody I'm trying to remember who was it called said that that is exactly what is likely to happen I personally

when I said it thought that it would require getting a new chair of the CFTC but Carolyn Pham basically is you know is running the CFTC now and she absolutely believes in this and so this is a big deal

I think that the market is going to read the news real quick, just so people know what we're talking about. Yeah, good idea. Yeah, yeah. U.S. SEC, CFDC combined forces to clear registered firms trading of spot crypto. The market's agency said in a joint statement, which is like seeing a unicorn that they make a joint statement, they're okay with certain crypto assets trading on registered entities now before carbon gruces market structure bill. I mean, we can dig into the kinds of that. But that's the idea here is that they've come together to make a statement that affect

opens the door for Americans to be able to trade on the Binance and OKXs of the world, but also allows banks and other trading venues in the United States offer spot crypto services. So the point that I'll make here, and we should bookmark this one, is people completely underestimate, and it's kind of funny that they do, underestimate how the ability to make money drives Wall Street. And I know that sounds stupid because everyone says, of course, We know that. Well, if you did, then you would understand that the entire banking complex, other

than ETFs and treasury companies and IPOs, have been shut out of crypto. What effectively this does is this says they're no longer shut out of crypto. And so the need for ETF and treasury companies is going to decrease. Obviously, if a treasury company has a valid reason to have a premium, that's a different story. And you and I both have talked about the fact that many of them do, and many of them don't, and you'll have to figure those out. But what it does mean is that offering, whether it's custodial services or trading services, to investors, it's now open. And that means that Wall Street can make money without having to spend enormous amounts of compliance to try to make a little bit of money. It is a big deal. And I don't know

had a phrase it any other way other than to say that, you know, we saw what the ETFs did to open up into accounts. But now it's open for Bitcoin. And the key is what tokens they're talking about. So there's going to be some clarity. But for Bitcoin, Ethereum and a few others, the ones that get approved ETFs for futures, it's all systems go. And so I think it's a big deal. It's not the kind of big deal that people look at and trigger themselves, oh my God, I got to buy today. But if you think about it, it is definitely telling you what's going on. Carlo, you've got to have thoughts on this one. Good morning, Scott. Morning, Carlo.

Yeah, I do have thoughts. I actually have questions, too. And as the stars have aligned, I'm going to a dinner tonight, Texas Blockchain Association in Dallas. Esther Purs is going to be there. And I'm going to ask. about this. I think this is an exciting and very forward-thinking way to consolidate agencies and to stop trying to silo digital assets and separate them from other tradable, investable assets. And anything we can do in that front, I regard, is tremendous progress. So the ability to now not tie the hands of these exchanges as far as spot. pot trading and all the legal wrangling and ambiguity and bending of logic that had to happen

previously to get there under the Ginsler era is gone. And I think this is a very, very clear signal that we're headed in a whole new and uncharted water here. Anyone else thoughts on what's happening here? Cool. I'm sure you have more thoughts. on what's happening here. All season folks would be jumping all over this, but I guess, you know, who the hell knows?

You know. Everyone's still recovering from the short week. Yeah, well, you know, it is. I was on vacation last week, so there you go. Anyway, I saw, I'm a tell I just hand up. Yeah, cool. I think I'm in the glitch guys, so appreciate that. Yeah, I'll just, as you know, Dave, that's kind of what I read into the news.

I think there's two things, which is, one, the ability for major cryptos to get listed on standard U.S. exchanges is just massive because of the liquidity opportunity there. But I think exactly to your point, the majority of the market, if you're building an altcoin, et cetera, the path to get on Coinbase can be quite difficult and arduous. and unpredictable. They've obviously opened up Dex trading to things on base, which is allowed kind of Coinbase native users to be able to access some of these tokens on base. But as a whole, if you're based in the U.S., you know, the venues to access the broader market are still quite limited with the sure velocity of assets that have been deployed. So it's really confined people into the decentralized index world, which is great.

but obviously we know it has UIUX issues and complications and maybe not built for everybody. So the ability to have on ramps and off ramps to these exchanges that have been the primary liquidity venues to the vast majority of the market and have a kind of surefire way to trade on these foreign exchanges as an American is just massive. It shouldn't be understated.

out of broader market access that that gives Americans. Who knows the timeline of when we're going to see this? But it's actually monumental and is one of the things that I think we've really needed to sort of kick off all season. And I'll just double click on one thing and pass it back to you guys. But if you think back to the loss cycle, a huge thing that fueled this was a lot of these companies, including innumerable ones. Everything from the apps, Voyager Blockby Celsius, to the larger exchanges,

allowed all of this liquidity and market participation that was extremely broad that we have then, because of all these bankruptcies and issues, been whittled down quite narrowly. So I see this as the very thing that opens up that broader market access. It's actually critical to give people access to the crypto market as a whole. I still think we just hang on the phrase depending upon the asset. You know what I mean? It's still to be seen which assets will qualify. We had that season where, you know, Coinbase got sued for listing certain digital assets

that may or may not have been securities. We're still going to just have to wait and see, I think, Scott, as to exactly what asset class fits into this. It doesn't seem like it's an open gate for FarkCoyne to get listed universally. No, we also have this, like, structural challenge with how foreign exchanges have had to approach the United States market in the past. Like, obviously, we had finance and finance, US, or FTX and FTX, U.S. OK-X, OK coin, right? So if Binance can come as a whole into the United States, is it the same platform that Americans will be trading on? Or to your point, is it the same platform but missing some assets that are geo-fenced? You know, what does that look like for some of those that we're talking about going public?

I know there was news at some point or rumors that OKX was potentially going to go public in the United States, but they're obviously a Chinese-based exchange. So it's going to lead to a lot of questions that will still, I think, require legislative clarity for market structure. I think, Scott, just to touch on that briefly, because it's just popped in my head and I kind of had ADHD. We're kind of looking at a rerun of the world is flat. only the thing that's now becoming globalized is tokenization, and it's going to be harder and harder to contain that. They're still going to insist on KYC, AML, and all that stuff if you're going to have an offshore coming in, but I think it's going to be really hard to make a case

that certain digital assets should be barred from U.S. trading while others should be open to U.S. trading because I think we're entering a new globalized digital asset, real-world asset finance playing field where you're just not going to be able to defend those cases much longer. I think that it's important to take a step back and actually understand what really is happening here. The point is that we all understand that there is a very high likelihood that some version of clarity, you know, an act will get passed that will create definitions, etc. And what I've explained to people on this site and Ron Hammond, when he's here, explains it extremely well, is once that happens, which will probably be in the fall, there is then the clock starts ticking and the agencies have to come together and start writing rules and start dealing with stuff, right? We understand that.

What we learned yesterday is that the agencies are already, they are basically, the Congress is essentially throwing the football. And when clarity gets done, the agencies will already be, have been midworking on it probably for months where things are going to go. If you think they don't have a conception of how this will work and aren't using the basic text of what's sitting out there to drive where they're thinking, then you're not paying attention to what these guys are doing. I mean, look, I have not talked to my friends there about this, specifically because I don't, you know, they can't without putting notices in the file, et cetera. going to do that to them. But I know them well enough to know that they're already thinking this stuff through. So I think that while the previous SEC has still have the scars and whip marks on people, this is a new version. And you're going to have clarity on projects that and understanding. What you're going to get, though, is you are going to get new disclosure

rules. Make no mistake. I mean, my personal pet peeve is going to be addressed. And it's going to apply to, it's going to apply to everything. And so the notion of promoting memes and governance tokens as opposed to true economic value is going to die. And that's going to be a very big deal for tokens that actually do have economic value. And the ones that don't, well, you know, so be it. I mean, if you're a meme, you're a meme, but at least make it clear. The thing is, is a lot of people put money into memes precisely because they had nothing else to gamble them. So just think about that for a second.

you know that that does matter and the nothing memes are going to die and i know i'll get a lot of hate mail if i say that but i am just going to say that the do you say that means should die can you say that i mean you know people i'm just kidding i'm just kidding i was that was that was that was that was triggering uh remark no no no it's not a it's not a trigger scott it's like not for you who was on the space yesterday talking about squirrel with hat and we all laughed and all of us are thinking great i wish i knew about this because yeah you can make some money had it's fine you know people go people go to casinos there's nothing wrong with going to a casino if you want to go personally i can't get myself to play anything other than poker or in my younger days when i had

the patience for it blackjack when i counted that's it i mean anything else is just complete bullshit but you know it's there's no reason uh to think that that things can't change now they're also you know we could have a debate about whether memes can actually monetize and the answer So there is probably, yeah, so is Pudgy Penguins a meme now? Right? No, but Pudgy Penguins was never a meme, right? That branched out from being an NFT collection that you were more of a member of. It was meant to have utility and expand it accordingly.

But your point is well taken. But Pudgy Penguins was always meant to be something more than just a meme. Right. And so the point about all this, I mean, you could bring it back to a very simple concept, which is the people that are running the agencies in the United States for the next three plus years all believe tokenization should continue to change financial markets and those assets should be available to Americans. That is what's happening. Now, we kind of know what's happening, but the market is, I mean, look, this is, you know, post-Stockholm syndrome, you know, kind of dealing with markets, right?

You know, these things aren't, we haven't had an alt season precisely because correctly people don't know which ones will actually benefit, right? Isn't that the driver of it? I mean, you talk about projects all the time, Scott, and the ones that you, I don't like to use the word shill, the ones that you promote are ones that you personally seem to believe, derive, and create economic value. I don't want to be kidding. Yeah, 100%. I believe that there's viable tech-style VC investments in the all-coin space and that some have a better chance of winning than others. Right.

But I think that, you know, it's, you get these, you get lots of things. And look, I can trigger people all day long. It'd be easy. I mean, if I want to trigger people, we'll mention, I can mention some arguments that I and others have had with, you know, XRP army people. And it's funny because I hold a little bit of XRP, and I think there is a trade there. I still do. But I made the ultimate mistake of, and then it's not a mistake because I actually believe

it, but I made the ultimate crime of calling XRP and saying it's trading like levered Bitcoin. Well, guess what? Look at the chart. It's trading like levered Bitcoin. I mean, it's as simple as that. Does that mean it will be that way in the long run? No.

Will, you know, will people start to look at the value proposition of the token vis-a-vis, you know, as opposed to the company? that's kind of where this SEC wants to drive things. So right now, I mean, you know, it's like, you know, even, you know, yesterday we had, you know, David Namdar on. And I like David. I like him a lot. He actually was his strategic advisor at one point to coin routes. And, you know, I've talked to him many times.

He's an incredibly smart guy. But he had to be very circumspect about what he could and couldn't disclose. And I know as soon as he's able to disclose things he's going to. And that's someone who wants them. disclose. So you've got a lot of, you've got a lot of people out there waiting to be able to tell their story in the right way. I mean, Carlo, I assume that, you know, when you advise projects, that's, you know, you're trying to find and say, what can you say? What can you say? Correct? Yeah. And look, I want to build on that too, because I think to your point about mean coins,

mean coins are becoming brand coins. And I was scrolling through my feed. I'm going to send you this when I find it as a DM. An interesting article that was written by the founder of Rec. brands, which is wrecked drinks. And I'm a big supporter of what OSF is doing. Scott, you probably know OSF from Real Vision. But he wrote an interesting piece where he talked about the fact that these tokens are now becoming an extension of brand identity, not so much securities, not so much an ownership interest in the underlying asset class, but as a way for people to own a piece of the brand's identity, and people love to be in social groups. So I think mean coins are evolving.

I mean, Pump. Pump.com fund token is starting to see a rebound. We're starting to see a rebound on Solana. We're starting to see some of these larger, more successful, more broadly accepted means like Pengu and Fartcoin start to see increase in their floor price. I don't think this cycle is done. I just think it's pivoting now from just pure gambling. to now more brand-centric tokens.

And now that we're getting more clarity about all this, I think it's a safer harbor where you don't have to necessarily have those difficult conversations because you're going to be able to advise projects with clarity as to what's in and out of bounds, which to your point, Dave, is what we've always wanted as lawyers in the space. I think part of that's a great point, though,

about brand tokens, because I can just disclose that I'm having conversation with two Fortune 500 companies that are looking at doing brand tokens, and they're tethering them to RWAs and experiences and other unlocks that will be a facility of holding the token. And it's done a full 180 because if you look at, like, Nike a couple of years ago in the NFT days, they jumped in and they made a flashy acquisition that they ultimately closed down, and they close down their entire Web3 division. But I think these companies now see those missteps that were made

and can come in in a more thoughtful way. And again, to Carlos point, it really becomes an extension, just like you, to use Nike as an example, you would buy a pair of their sneakers or buy one of their hoodies. This ownership of the token gives you a sense of belonging or a sense of being a part of. And so I think in very short order, we're going to see a number of household name brands.

get into the space in a very intentional way. And ostensibly, it's going to be their new version of their loyalty or their rewards programs. If I can jump in on this one, I could see this happening with AI agents interfacing with brands. There's a natural fit between NFTs and tokenized access to things with AI agents, having them, you know, talk to each other based on their access credentials, being able to use digital products, digital collectibles. It's all kind of building on itself. And then a tip of the hat to the earlier conversation,

once upon a time, I used to be able to trade on any exchange I wanted to. I used to have more freedom than what I have today in the U.S. But, you know, it's funny how things go when you start introducing markets and money and traditional banks. Yeah, but Ryan, the problem is that we've gone through how many years now where all of those freedoms were taken away from us, you know, and... Oh, no, that's what I'm saying. Yeah. Exactly. I mean, I don't think you're going to find anyone on this panel. Maybe Carlo, because he could make money from laws who wouldn't prefer a more open system, you know, where people are free to invest. And it was more just, you know, if someone commits fraud, you go after. for them hammer and tombs right you know i don't think you're going to find a lot of support for that but failing that and being realistic we're moving in a better direction that's really the

only point i i don't want i mean that was our system right like that was our that that was our system once upon a time it was our system was free that was taken away from us well now we're celebrating that it's being ripped back to us well okay you know it's sort of like yeah that that that's true, except that it wasn't what some of us wanted. The amount of manipulation and the amount of fraud that was in the system was going to make it self-defeating for broad-based acceptance. If you can't acknowledge that part of the reason FDX happened was because he was offshore, there was no regulation, nobody looking at him, he bought off people. then I'm sorry I just don't know what else to say well that was a failure of FTX right not a failure of the projects that were listed on FTX oh correct oh I wasn't talking about that yeah the project's being yeah look I'm still pissed off that you know I worked in crypto for eight years and until now when actually I think we should consider it it was literally until yesterday I knew because I was told

by people at the SEC that if we created a token, they'd come after us. And so, you know, yes, you're right. That point is very true. Yeah, I mean, I went from being able to spin out tokens and, you know, work on these open source projects to having to sit on calls with 10 different lawyers telling me all the things that I couldn't do. It's just like the evolution of the space is, it saddens me because it does feel like in a lot of ways like we've hindered ourselves just in the name of safety in the name of you know better regulation for mass adoption and not saying like that's great things mass adoption is a great thing because we all make a lot of money but it just seems like the flight path in which we're getting there is at the sacrifice

of our own individual It's made for a lot of red tape to navigate over. It's like, oh, wait, three years ago, I couldn't do this. But now all of a sudden, I can. I, this is where Bruce said. Yeah, that's Ryan, yeah. Yeah, this is Bruce's point that he always makes. And it's very sympathetic to, I think, a lot of us.

I just am so used to being. realistic that people interpret me as part as being a proponent of the machine. I'm not a proponent of the machine necessarily, although I guess there's probably some good parts in everything. I mean, but, you know, we have to, if you're trying to figure out how to invest in markets, which most of our listeners, that's what they care about, understand that there's a sea change and this notice from yesterday matters. and when you look back on it in three, six, 12 months, you're going to say,

hmm, why didn't I realize this? And that is what I actually think is true. You know, so you can take it for whatever it is. As far as lawyers go, I mean, there's some good ones. I mean, you know, Carlo and others' friends of the show. But, I mean, Carly, you spend most of your life, you know, if you had your druthers, you would prefer significantly simpler rules that you could explain and have even more clients and get more done, right?

I'm basically Michael Corleone in The Godfather Part 3. I just want to get out of defending fraud and crime and get into building. But to your point, just when I thought I was out, they pulled me back in because, obviously, this is where a lot of attention goes. But, yeah, I would much prefer to be having meaningful conversations with founders about building stuff in a regulatory compliant way and seeing them not have to sweat at night. and me as a lawyer not have to worry about every word I put in a memo and whether that's going to be the thing that gets me and the client hung up because the ground below us is constantly shifting.

So to your point, yeah, there are great lawyers. What attracted me to this space is the fact that I think that they are some of the most brilliant lawyers I've ever engaged with and they're doing incredibly cutting edge meaningful stuff and they're pirates because we're literally trying to navigate uncharted waters here. So to me, yeah, I want to see this stuff get clear because I want to get to the business of building this ecosystem. I don't want to continue to have to be pulled down by the negative press and the criminal cases. Absolutely. What's funny is we never stopped building this stuff.

We just stopped taking credit for it. You know, a lot of the engineers in the space just kind of drifted into the background. They stopped putting their names on things. They stopped being doxed because it was too much liability. So there's still people out there building. It's just, unfortunately, we just don't know who they are because there's too much risk on exposing us. Yeah, that's actually, yeah, I know people who have said that. I've heard that before many times, Ryan.

But I do think that the question of will people, will founders in the U.S. you know, really start to, to, you know, engage is a big question. But it's not really necessarily only about new business here. We're talking about, you know, just getting, you know, attracting, you know, capital into the sector. I mean, you know, there's, there's, there's, there's, there's stories out about, you know, tokenized, you know, equity, right? And people say, well, what the hell does that mean? Well, what that means is there, it's a competing system to the current system.

And there's lots of reasons why it will be superior, but there's a lot of disruption involved there and a long way, a very long way to get there. But some of that fundamental technology is going to be important, and you're going to end up with there will be technologies here that are going to look like, you know, Nvidia six years ago. And there's going to be a lot of ones that are going to be hype that are going to be complete nonsense that are going to go nowhere. And that gets people very, very excited, right? You know, because there's, there's going to be a lot of money to be made, but there's going to be a lot of money lost, too, as people start chasing crap. And frankly, that's okay. That's the way markets should work.

I mean, you know, that, I mean, you've seen that before, right, Ryan? You know, most startups fail, the ones that succeed. Well, those are great. Well, it's not always the great ones that succeed. Sometimes it comes down to sales and marketing, and it's like, wow, the shit marketed better than the good tech um but you know at the end of the day that you know stuff like the invidia like the the good tech does stay over time it's just uh how you know how far on the time horizon are you looking uh right now you know we're trading you know meme coins we're

trading uh all these all coins on salana fast and furious pumped out fun you're exactly right it's a casino um the tech doesn't matter in the short term on the time horizon here uh long-term the tech does matter, is just getting the tech to stay funded and keeping the engineers involved and not discouraged, long tough for the tech to take hold. By the way, meanwhile, back at the ranch, American Bitcoin trading halted multiple times since launching one hour ago. It went up 59%. Momentarily, this is the mining company, American Bitcoin, that the Trumps are behind that launched today. Just for those who are curious if there's still an appetite for crypto-adjacent stocks?

Or Trump-adjacent stocks? Isn't it the same thing now? Quite possibly, actually. I mean, you know, it is amusing. You know, you take half the country that will literally refuse to buy it, and the other half gets rabid and say, okay, we have to buy it. At some point, 10 years from now, people are going to look back in this era

and say, what the hell were these people thinking with their investments? I mean, it's really, it really, is funny. But, you know, look, at the same time, you know, Bitcoin is now back above 12, you know, the earth, the so-called bottom of the more recent range. I mean, who knows how long this stuff will last, you know, if you wait 10 minutes and whatever. But you got, paying premiums is something that needs to be analyzed very heavily. The direction, you can get it right. And what, and if you're try if you're a trader you could have the direction right but if you guess if you pay too much of a premium for this stuff you're going to lose uh then it's just a question of looking at it

i mean what's world liberty doing is world the token so so like world liberty token is if i'm reading this right am i reading this right yeah oh no it's it's still it's basically you've been flat since that first fall back into a range and and which is kind of what what you would want it to do right? When you agree, Scott, I mean, sitting around 22 cents. Yeah, I mean, it looks like it's basing, so to speak. You've got to imagine that the people who were aggressively wanting to sell have probably done so, right? I mean, if you're an early investor and they needed a release of some tokens to be able to sell in the market, yeah, I mean, all the volume was two days ago. Yeah, and, but it's not a failure. That's,

kind of the point. And, you know, we'll see how this goes. Look, volumes in the market are really still pretty low. You know, I made the point yesterday that, okay, today's the first, you know, yes, it was the first trading day back from vacation, but because Labor Day was so early this year, these markets are still in kind of a holding pattern. We're not really doing anything yet. I mean, I can tell you, I can see volumes are quite low right now. And so take everything with a grain of salt. yeah if you look at world liberty financials launch launched like a 30 billion fully diluted valuation that's hardly a failure if anything that is a bloated success story but i think it kind of touches on the problems that carlo was speaking to which is um you have these associated trump coins and you have these Trump-adjacent stocks and continue to sort of suck liquidity out of the

market. There is actually tremendous innovation happening in the market, especially when it comes to the AI agent sector and many AI applications, but yet these projects continue to struggle to catch a bid, to get liquidity, to get broader market access. Exchanges are very expensive to get listed on, and liquidity is really low. So then it's really a game of, to Carlos point, how long can they last until we have some kind of regulatory clarity, some builder clarity, or some market liquidity access? And, you know, I just think something's got to give here because this, all of these tens of thousands of builders trying to contribute real technology to the ecosystem,

can't really survive on 45-day, 60-day alt-coin cycles that come around every couple years. So, you know, I don't know exactly what that looks like, but I think kind of this all points to this glaring issue that's currently facing the market and builders trying to create in it. Sorry, Dave, I'm in the glitch here. Go ahead. No, I don't, I think that's exactly right.

that you know we it's it's not necessarily look history doesn't repeat yeah I'm not going to claim that most tokens are like internet stocks in the internet bubble where I have a website meant you know you you attract millions of dollars but it's impossible to look at the crypto world and not see multiple assets that have hundreds of millions of dollars and valuations that are that should be worthless i mean my favorite generally to look at is ftt you know which if you could explain why it you know i guess it's a meme now but but why should there be any value in fttt i mean can't anybody explain that a crypto token can't really die structurally i mean you know it has a market cap of 261 million that's bigger than a lot of

companies out there that have lots of people working for them. You know, it's just, it's, it's insane. You know, it's 100, number 171. So what does that tell you about every time McClone talks about millions of competitors or thousands of competitors? I would make the argument that it would be, you'd be hard pressed to find a hundred, probably hard pressed to find 50 tokens with actual value propositions that have some rational valuation that are associated with them. And that's coming from someone who believes that the entire sector is undervalue. So think about what we're saying. So yeah, you know, of course, if you're a developer, you know, what you're hoping for is that, you know, even if your project doesn't work, you'll still get compensated

because there will be value in the tokens. And that's really what's going on here. I mean, I don't know how else to phrase it. I mean, did you agree with that, Ryan? I mean, what do you think. Yeah, I completely agree with it. I would go one step further and say, I don't know of a single project where the value of the token is actually tied to the technology behind the token or what's backing the token. So many of these tokens are pumped through speculation and marketing, you know, the FTX token or, you know, whatever other tokens there might be. I watched in 2013, these developers launch a token called barbecue coin. And they drop the project like a week or two weeks later, and yet it was still on the Cripsy Exchange,

it was still on a few other exchanges, and it traded for the next three or four years with no developers, no progression whatsoever, and it just underscored this fact that it didn't even matter what was behind the token. It just mattered that there was a token. And that's what a lot of these projects are, and that's what the whole meme cycle is, it's just a token. So throw a hat on something and make money. It's like, no one cares what's behind it. In fact, the more you seem to put behind something, the less it does. It's like, throw all your money into marketing. Yeah, I'll just add to that, that a while back I spoke to a leading layer one that I won't mention by name, but they themselves called themselves a ghost

chain. And the ironic element of that is that they have a ton of marketing behind this. And kind of worse yet, they have all of these real people trying to build real technology on their chain, but nobody who's using it. And the chain itself worth billions, the projects themselves worth nothing, even though the projects are trying to do something and the chain is a ghost and is doing nothing. So you just have this complete asymmetric development cycle of perceived value versus where actual values accruing. I think long term the good tech does play out well where the tech gets adopted, people use it. The problem is surviving the hype cycles and the intermediary time where you basically have no money. Like can you hold out long enough with the tech for it to get adopted? Crypto has been very, very difficult.

I mean, I've written patents in the space. I've developed tons of tech in the space. You know, we have like truly decentralized mining systems now that we've deployed with some of these projects. We have truly decentralized AI systems that we've been deployed. You know, we're building agents. We're building like all sorts of markets. We're building all sorts of stuff. Nobody knows about it because there's no marketing.

And when nobody knows about it, then nobody uses it. No money is made. So right now it just feels like crypto always comes back down to marketing. Well, yeah, a lot of things do, but I think it's worse here. I mean, you could make very strong arguments of we talk about one particular company that tends to have the most press releases. And I'm not talking about Coinbase, by the way, you know, that's associated directly with the token. And it attracts huge followings and et cetera because, you know, they whip their followings. into a frenzy. Actually, you could say that about several. The question of, you know, how long

will that last relative to everything else? I mean, I don't know. I mean, there are many examples of firms that have done well and done very well for very long because they had better marketing than they had product, but the marketing was good enough. I mean, hell, there are fun managers out there that have consistently underperformed their benchmarks for decades that have billions of dollars of management, you know, under management. But why do they have it? Well, they have great marketing. I mean, you don't have to look to, the same thing is true in a lot of industries.

Yeah, I'll just add that the weird thing about marketing in this industry is, yes, you can't be sustained with marketing, but marketing itself has become a hyper-transactional as a marketer in this space, meaning that, you know, the projects that are investing their capital into KOLs and just spending millions of dollars on creating a hype cycle rather than investing in their technology will outperform those who are investing in their builders. I mean, I saw a post recently from a builder who said that the vast majority of builders he knows and talks to are in a worse place now than they were in 2017 and 2018. And I think that that's just really compelling.

and actually very unfortunate. So, yeah, something's got to give. Crazy, but not really that surprising. There's one other story, Dave, I want to touch on because I think it's just really cool. I'm sure people saw this, but the Galaxy Digital has launched a plan to tokenize. It's SEC registered GLXY shares in a major blockchain, which is obviously on Solana. And to my knowledge, this is the first time these aren't wrapped stocks. This is like SEC registered actual shares on a blockchain.

Pretty cool. Yeah, I saw the story. I think it could be enormous. It also could be, they could also work out to, you know, it really depends upon will, will the stock exchanges play ball is really what it boils down to, right? Because there's a lot of plumbing and all the companies are geared up in the stock market in a system where when you buy stock in your Charles Schwab account, you think you own stock. No, no, no.

And a lot of people say, well, okay, I know I don't own stock. But Charles Schwab surely owns the stock. No, they don't. In fact, the stock is all held by DTCC, and there's ledgers, and there's all sorts of stuff. So now if you have this new thing that replaces DTCC, that's blockchain, does that mean that that stock could become a bearer instrument again? It's right now trying to get a stock certificate is try it sometime. I mean, you can do it, but when you do it, you get, it's like we all have, I don't know if you all, we have, but we do.

We've been giving gifts over the years of stocks, of like a share in a company as a stock certificate that you frame it and put on the wall. So you can get them, but it's really hard. And so there's a lot to be dug into there to see where they're going with that. I'm actually curious. I'd love to talk to them about it because eventually it'll become a better way. But right now, it's really early. Carla? I think we may have lost Scott. Yeah, I would liken this right now to kind of test net season for this because I was talking with Sandy, who runs digital assets for Franklin Templeton, and actually proposed this very question about how far are we from fully tokenized tradable assets on chain. And, you know, she said that there's going to be a lot that has to be fixed on the existing infrastructure because the current tradfai rails. are not built for this. So I think this is great. And I think this is a move in the right direction.

And I liken it more to sort of a test net to see if this can actually be pulled off. When will it be universally adopted and we'll have 24-7 trading? I think we're still a ways off because there's just so many pieces that need to coordinate in order to make that happen. And that system was not built. It's kind of like we're still in dial-up and we need to get the broadband. Yeah. I mean, look, the first dial-up was, was it T-0, you know, or overstock? I can't remember. Yeah, it was Patrick Binds, T-0. I saw him present that to us in 2014. And it was actually, he was ahead of his time. It was an amazing platform he felt. I just, I don't think it ever saw the light of day. Well, I thought there was one equity that got put on it. Look, his reason for doing it, which is somewhat valid, is that the stock loan, stock, borrow shorting system in the equity market is a complete cluster fuck. He's not wrong about that.

He attributed short sellers to, you know, why his stock was down, et cetera, and that that's probably not true for lots and lots of reasons. there's tons of conspiracy theories there. But the fact that we have in the stock loan system today, when you can short a stock by saying, I have a locate, which is I know I'm going to be able to borrow it, and then you don't have to actually deliver it for a couple of days later. Whereas in crypto, if you want to sell something short, you have to borrow it first.

And, of course, in crypto, it's a lot easier to understand whether or not you have it because it's tokenized. It's there. It's real time. And it can be verified. Whereas in the current system, you can't even verify it until you actually settle it so it's it's there's a lot of reason to believe the tokenization will be better but my question and i think it's the same as yours carlo and and you too

ryan is how does it work with the the rube goldberg setup that we have today that is basically a shit on a duct tape uh using some mainframe technologies to augment what was paper certificates sitting in a vault And that really is what it is, right? Yeah, I feel like so many different projects have tried to digitize, whether it be like titles on the blockchain for property or stock certificates. It just seems like such a huge uphill battle that is anything regulated, anything government controlled to get it digitized and efficient. You know, maybe an international market might take the lead on it.

It seems like Dubai started digitizing, you know, birth and death certificates and all sorts of stuff on, you know, blockchain or centralized digital systems. It just doesn't seem like the U.S. is the one that's going to lead the charge here. And I think part of a problem, too, Dave and Ryan is that you have the settlement delay here. You know, equities don't settle instantly. They close out at the end of the day. And then at some point after the trade, you see the asset or the return. on the asset come into your account, in order for this to work, you'd have to have instantaneous settlement, and that means unreversible transactions, that that is stuff that's just going to be

scrambling brains and tradfai as far as how do you, wait a minute, you're going to settle instantly. We're not set up for that. And that's where I think when I was talking with Sandy, I think that's the biggest problem is the settlement layer just needs a complete overhaul. And that's like laying broadband overseas underwater. We're going to get there. but it's going to take time. Well, I think half of what you said I disagree with completely and half I agree with. So let me explain. The technology layer, yeah, you're 100% right.

You know, we have mainframe computers. I mean, I think that there's code that I wrote for Morgan Stanley in the 80s that's still in production. I was told this a few years ago and I have no reason to believe it's changed. Okay. So let's just start with that. So there you're right. There's a lot of changes that are going to need to be made. This is not going to be easy.

But the ultimate way assets are going to trade liquid assets is not going to be instantaneous settlement any more than they do today. In the world of crypto, when you trade spot Bitcoin on any exchange, it doesn't settle unless you ask to settle. You can trade in and out and settle up when you ask for it and let's let them hold it in your name. There is no reason why you can't do. And there's a lot of efficiency for market makers in particular. You look at how all the bigger market makers in crypto operate if you want to trade with them directly. Whether it's eight hours or 24 hours, they all have sessional settlement. Why would you do that?

Will you do that? Because it's not really leverage, but it makes sense. That amount of friction that you put in the system if you demand immediate settlement will create the failure of the system. The current equity system works better. the issue is what's a day is it an eight hour period some random eight hour period or is it a clock period

you're going to have to work that out and there's nothing wrong about that but you don't have there's nothing inherent in crypto that says you have to force settlement instantaneously you just have to make it available for on-demand settlement and that's perfectly reasonable

you go in and you buy and you know you're done and you want it to settle to an account make it get your finality and be done you know you're going to keep trading over the day you don't want every trade to settle that's insane i mean really insane i could give an example so like for example coin routes we traded you know i have a lot i'm doing some tCA reporting on how well we've done but we've traded multiple billions of assets in orders of over two million dollars in an order we've had multiple orders of 20 million dollars sizes. Those orders ultimately end up with hundreds, if not thousands of small

executions. The cost to clear and settle every one of those individually as opposed to in the aggregate would be extreme. You're not going to do that. So it's important to understand that there's, and by the way, in crypto you don't have to anymore. It's not forced. So people should understand that you want to be able to do it on demand. And that's fine. But the real problem is It can't handle that on-demand settlement, and it can't handle real-time either. So it's basically, if I'm understanding that, it's basically like L2-based settlement where you just batch settle everything, and then you bring down, on the crypto side of it, you bring down the gas fees by doing it in big batches, which is how they accomplish this L2 speed and low-cost latency.

Is it kind of analogous to that? Well, yeah, I think that that was the template for people doing. that is how TradFi works. I told you there's a shit ton of duct tape in the system. But, you know, it's metaphorical duct tape, obviously. But yeah, I mean, it is that. And you want a flexible system to be able to do that. The trick is blockchain to get finality is incredibly powerful. The other things you're going to be fighting just so you know is that the hedge fund community and in fact the investor community writ large doesn't want the world to know what they're buying until they're done right because transparent blockchain is going to front run things well if you can

if you can do fidelity every day okay that's not so horrible but right now keep in mind you have 30 days for a lot of filings before you have to disclose stuff or when you make when you file it and and big thresholds. So yeah, you know, like everyone knows about the Galaxy Digital Trade because they put it out publicly, right? You know, they, but there were rumors about that trade, not just rumors. People were watching the wallets move. Well, no Tradfai holder wants to see that happen.

If you're, let's just say you're an asset manager that does, and I don't want to start naming them, but there are asset managers that have very concentrated positions. If a concentrated position starts getting liquidated, people start to notice, and if the asset manager, and if everyone can see that it's a wallet that's associated with that asset manager, they're as good as doomed, right? They pretty much are forced to sell it as one big block and just take their lumps, as opposed to selling for very, very little market impact if they can stretch it out over a period of days or weeks. And so, yeah, there are some issues that are going to have to be worked out. There's no doubt. Hey, Dave, I just wanted to add, I'm not sure that people really care, the vast majority care about instant settlement.

We may be putting too much on this. The normal user isn't looking for that, right? They're looking for entry and exits. I wonder if we're making more of this than we need to. I still do not understand the value that this whole concept of tokenizing stocks really brings, other than 24-7 trading. Well, it brings three things. So let's be clear.

And 24-7 is-can I just finish my comment? Sure. Just the things that you guys are saying, no trade on the planet is going to open his book to an open-source blockchain. Okay, why would you do that? It's not a requirement. You don't show you sharts to everyone. That makes no sense whatsoever. So I just don't, I think that this is more,

hey, look, we're going to digitize everything, but nobody's figured out a way to make any money from it to provide a service that's valuable to anyone. And my sister doesn't care about settlement. She just wants to know that Fidelity's got her stock. And it's either a buy or a sell or a hold. I just don't, I'm just not a buyer of this whole idea. Okay, well, I'm going to convince you in a few, in less than a minute.

So you're right. Let me know how I can invest, too, because I also don't know how to do that. Yeah, well, it's because it's not there yet. I mean, the biggest differences between tokenizing and the current system will be in the expense of clearing, which is not as cheap as you think, and around the world is particularly not. The U.S. has gotten it down to a pretty mechanized basis. But the biggest ones are full multi-currency without having to pay ridiculous tolls like we do for ADRs and GDRs. It's instantate, it's on-demand settlement if you have a custodial situation where you can understand and

control it. It's knowledge, if you're the company, the issuer, of who owns your stock. right now you don't know right now we've had all sorts of proxy issues and it's 24-7 So it's low-cost it's multi-currency those are the big reasons it will happen But I have made the point repeatedly that it's going to take longer than people think because of exactly what you just said You there has to be ways to so that people can't see what everybody else is doing because when you can see what everybody else is doing then the market is not an efficient trading market people people will need to you and it's the same reason we have dark pools you know and I could go into that chapter verse having invented a couple of them you know I understand how they work and a lot of

people believe oh my god they're evil and they're this they're that no what they are is no trader the the first dark pool were the pockets of the people who trade in the new york stock exchange so you're right so your point area is extremely important which is until it becomes economically better for people no one's going to care and the real problem is they have to fix the ability to hide what you're doing. So that's why you're not going to go 100% on chain. Does that make sense to you? Yeah, and I think it's going to take a long time.

I don't understand the galaxy play. It's sexy, but where's the money at? I think that the reason for the galaxy play is simple. If I'm, and I have not talked to him, nor do I really know him enough to talk to him. But it's actually smart, really smart. So if you're Mike Novogratz and you want to be the golden sacks of the tokenized era, what's the best thing to do is to be the firm that understands all where the plumbing is and work out all the issues with how this can become a more efficient, better global system.

And then start courting global issuers. But in order to do that, you need to have somebody who's going to be willing to put up with the pain of dealing with all the issues that you were talking about and others. well who better to put up with the pain than a company with their own stock that's my suspicion it's completely my guesswork i have no knowledge whatsoever but i think that it's if they're doing it for what i just said it's smart and you know Alex Thorne and some others are off and on here you know people feel free to DM me and tell me if i'm if i'm out of my mind and i'll retract it if that's not the case but i suspect that that's what's going on does that make sense to you

Gary? Okay, well, I guess that's it. Well, we're at 1115. You know, Scott's not here anymore. I think, you know, we kind of went off on this and, you know, we'll see how things go as we're still in the post-summer doldrums. Not a whole lot going on, but it does look like markets are a little bit buoyant here. Not too much. Anybody else have any clothing thoughts?

Or have we done beating this one to death? Buy more Bitcoin. Yeah, well, I agree with that. I've been doing my best to orange pill strangers for the last week and a half. I think I got a few of them. Okay, well, with that, we will see you tomorrow morning at 1015 on Crypto Town Hall. Thanks, everybody. Thank you.