The Wolf Of All Streets - Will US Regulators Kill Crypto? Expert Panel With Bruce Fenton, Noelle Acheson, Brett Harrison, Seth Hertlein, Simon Dixon, And Jeremy Kaufman

Episode Date: May 16, 2023

Twitter spaces with Bruce Fenton, Noelle Acheson, Brett Harrison, Seth Hertlein, Simon Dixon, And Jeremy Kaufman! ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►BITGET GET UP TO A $8,000 BONUS IN USDT AND GET MASSIVE DISCOUNTS ON TRADING FEES! 👉 https://thewolfofallstreets.info/bitget    ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Hey everyone, just working obviously as we do at the beginning of every space as I'm bringing up all of the speakers. Brett, I see you there, man. Hope you're doing well. Simon, nice addition. Thanks for requesting. Noelle, you should have in your DMs an invite that will immediately allow you to speak. I've also invited you. But if those don't work, please request. We're also waiting, obviously, for Bruce Fenton and for Seth Hartline. Brian Quintenz, the former CFTC commissioner, actually, just got called into something else and was unable to make it. Simon, you just somehow became a listener. I don't really understand what's happening here. The usual glitches that we have with Twitter spaces.

So just give us a second here and we will figure it out, get everybody up on stage, and we will get the ball rolling. Brett, can you hear me? Yeah, I can hear you. Perfect, man. Doing well.

What a crazy month there for us, huh? Yeah. I don't know if that's a publicly shareable story but how crazy yes yeah hey everyone how you doing sorry no perfect uh no problem at all basically guys brett and i found out that our parents were very close friends and had no idea after doing multiple conversations and podcasts yeah yeah my my mother was literally like going through photo books recently and showing me pictures of it it's so crazy i just can't believe it it's unbelievable unbelievable coincidence um so uh it looks like we've got everybody but seth up here for now so obviously the crowd will grow as we go but this is being recorded and it will be recorded for our audio channels as well so for anybody listening this will also be available on Spotify Apple which

is the way the under the wolf of all streets podcast channel still working on getting everybody up here go ahead hit that arrow button up at the top it'll allow you to share this with uh everybody get more people in here for this conversation uh which i'm really looking forward to although i gotta say it makes me want to puke at this point talking about regulation um but it seems impossible not to no matter how hard uh we we try to escape it kind of you know like godfather we get sucked back in um also just as a matter of housekeeping pretty uh big announcement for something that we have coming soon it'll be a half hour earlier 10 30 a.m eastern standard time but we're going to be

starting spaces daily starting next monday so this will now not just be a weekly thing it will be daily and it's going to be uh three of us uh doing it together be myself Mario novel obviously who arguably has the largest uh Twitter spaces and and leading the citizen journalism charge uh and the crypto banter team so we're going to commit to doing these conversations every single day Monday through Friday uh and I'm, really looking forward to that because I think there's just endless topics here for us to opine on. And I think you could argue that right now is the most important fight that we've ever had in the crypto space.

Bruce, you've probably been here the longest, right? I mean, you would always kind of allude to the fact that we've been here before, but this time, dare I say, feels a bit different because we're in that then-they-fight-you phase. Do you agree? Yeah, I think so. I mean, it is tiring. I agree with you on that.

It is tiring to just be hashing these regulatory issues over for so, so, so long. It's frustrating for us in the industry. A lot of us have spent five years, you know, hashing these regulatory issues over for so, so, so long. It's frustrating for us in the industry. You know, a lot of us have spent, you know, five years, 10 years trying to get things done. I mean, just this morning, I was on a team call and I'm like,

oh yeah, there's yet another product that we'd love to offer, but we're just not able to do it in the US. And, you know, that's pretty much the way it's been every week for forever, for everybody in this space. It's crazy. We've obviously seen this wholesale move

offshore right i mean i'm not going to pretend coinbase is moving their operations offshore sure but they're certainly uh showing at least that they're willing to start doing some operations there gemini's talked about it galaxy digital you know obviously they already have offices but it seems like we're actually seeing this exodus now. And so my fear, sort of what you alluded to, Bruce, is not only that, like, people are going to move now, but we're going to be so far behind by the time that we can come back that it'll be almost meaningless, right? Yeah. I can't imagine anybody serious about business, you know're not thinking about alternatives to the United States. I mean, I'm a poster child for American securities business. I mean, I've been registered,

it'll be 30 years in nine days. My 30th anniversary is in 30 years registered with the SEC. I've run firms. I've been a member of broker dealer. I've been a registered principal for over 20 years with FINRA. I've had all kinds of licenses my whole life. I mean, I've had my licenses way more than half my life. And I live here. I have kind of like a permanent house. It's not the kind of house you'd want to sell. And yet, despite all this, my whole career being here, I have to look outside the US. I have to, as much as I want to be here. And I went through the extraordinary work to get all these licenses again, you know, so we have a broker dealer to work in this. I just can't look at this as the only market. I mean, it's getting worse and worse and worse. There's very little that you're able to do. And the whole world is kind of moving forward

and leaving the United States behind. And the United States' advantage of like, well, you have to be in New York to be in finance. That's just not true anymore. Nobody cares about New York or San Francisco. I'm not sure. Yeah, sorry about that. Nobody cares about Chicago or New York or San Francisco anymore. The U.S. is just kind of dying. And then meanwhile, you have all these other jurisdictions in the Gulf and the UAE for over 20 years. And I'm still stunned, still stunned how easy it is over there, how friendly they are, how easy it is. You can meet the very, very, very top people at the regulators very, very easily. You don't even need to have a business. You can just have an idea and be like, oh, I want to talk to them. It would be like somebody coming to the United States and be like, yeah, I'm thinking about doing an idea in securities. I want to meet Gensler. I mean, even Brian Armstrong can't meet Gensler. You know, it's a whole different kind of

thing elsewhere because a lot of other jurisdictions are viewing this as a competition and they're trying to attract people. The United States has not looked at it that way for decades. And there seems to be, in some ways, trying to do everything they can to push people away. That's a shame. Yeah, I very much saw that in real time when I was in Dubai with you. I mean, literally, the regulators was rolling in, taking meetings, talking to everybody. And it really was incredible to see the speed at which they move. And even, you know, Europe, I think a lot of people maybe aren't thrilled with what MICA looks like, but, you know, it was approved today. And so now there is a framework there. Listen, Seth, for everyone who doesn't know Seth, I don't want to butcher your title, Seth, but he basically is in charge of all of these things, dealing with regulators, public policy at Ledger.

Right. So you have a different sort of skew here. You're in crypto, but you're selling a hardware device i actually talked to pascal your ceo last week and he was in washington taking meetings with senators regulators all day so you guys are obviously on the front of this battle at the moment what does it look like for for for you guys yeah thanks scott and And yeah, no, I'm glad you were able to get Pascal on. You know, we were we were fresh off the hill, had three days really of really great meetings with senators and representatives, Republicans, Democrats, really sort of covering covering the waterfront in the U.S. And, you know, honestly... Seth, I think your connection's a bit bad there. Go ahead. It was...

Sorry, I'll be back on what I should have said. Apologies. Two really great meetings. House, Senate, Republican, Democrat. And, you know, I think Pascal was really impressed at the knowledge base of, you know, a lot of these members and their staff toward crypto, toward the technology itself, not just the policy issues that sort of dominate. And that's a bit of a contrast to what we see in Europe. And so there's this, you know, there's a narrative has developed in the U.S. particularly, given sort of the hostile

turn that the administration has taken toward crypto. And I think a lot of people in the industry in the U.S. feel sort of persecuted, and I totally understand why they feel that way. And so there's this tendency to sort of look elsewhere and sort of look across the Atlantic and see what the EU... I'm sorry, Seth. We keep losing you. So we'll come back around when you're on Wi-Fi. I think probably makes a lot more sense. I mean, Noel, Simon, you guys are both, first of all, all the guests, you can jump right in.

You don't need to wait to be prompted by me. But Noel, Simon, you guys are both abroad. So, I mean, from looking from across the pond, I mean, what are you seeing? And do you think that this can survive in the U.S. right now with this much of a crackdown and all of this increased rhetoric? Hi, everyone. Tying in what both Seth and Bruce were highlighting. I mean, I'm based in Europe. I'm on the continent. And the atmosphere here is very, very different. We have MECA, as you said, Scott. I never thought I'd actually approve of an EU regulation. Normally the EU goes way above board. They regulate far more than they need to and they aren't very concerned about the secondary

effects. But MECA has been well received. It's not perfect. It is limiting, but it is a framework that institutions and retail investors and service providers are comfortable with. And that enables people to build. Just look at the VC investment in European based crypto funds over the past quarter. It is now dwarfing investment in U.S. funds. Tying this in together, we tend to forget. I mean, we often accuse many tradified people of being too short term and not focusing on the bigger picture. In crypto world, we tend to do the same sometimes. The regulatory crackdown in the United States is very painful and very bad news for the industry

as a whole. No sugarcoating that. But it is temporary. It's temporary, one, because Gensler is not going to be in office forever. It could be two years, maybe not much longer, depending on what happens in the next elections. And let's face it, when a recession, the incumbent party usually loses. And also because of the international competition from Europe, yes, but also more worryingly from Asia, specifically the Hong Kong crypto framework and the implicit support that's getting from China. Crypto is becoming a political tool now, a geopolitical tool even, and the power shifts are going to make many regulators on both sides of the aisle sit up and pay more attention if indeed this is going to be the future of finance.

If I could just pick up there, Scott, I'm back on Wi-Fi now. Perfect. Perfect. Yeah. So what I was saying is it is quite painful in the U.S. right now. And so there's this tendency for people in the U.S. crypto community to look across the ocean at the EU and see Mika and say, look, there's the regulatory certainty that we've been craving. But as a representative of a French company that has been involved in even the predecessor law to MECA, which is a French law called PACT, P-A-C-T-E. You know, the grass is not really greener. I mean, yes, you know, MECA does provide a level of regulatory certainty. And, you know, sort of by itself,

MECA, you know, maybe is a B minus. You know, it's directionally correct in that it focuses on the centralized parts of the market. The problem is the EU never stops. I mean, it is a regulatory assembly line, and it just pumps out regulation. And so you've got MECA, which is itself close to 400 pages long. And they're just getting started on what they call the level two text, which are a bunch of delegated authorities to regulatory agencies within MECA. That'll add another thousand pages, let's say, across three plus supervisory authorities. They're already starting to talk about MECA 2

and covering a lot of aspects that weren't included in MECA 1. And then there's a whole constellation of regulations around MECA 1. And then there's a whole constellation of regulations around MECA that touch crypto in various ways, such as the transfer funds regulation, the anti-money laundering regulation, anti-money laundering directive 6, the Data Act DAC 8, which is a tax data sharing directive, payment services directive three, product liability directive two. And, you know, these things aren't you know, they don't have crypto in the name. And so people just sleep on them, even though some of them like DACA, the tax reporting rule is explicitly and directly focused on crypto.

And then all of those legislations will have level twos. And you can quickly see we're getting the tens of thousands of pages of regulation in the EU that will absolutely smother the industry there. And this is not new to EU. The EU excels at this. This is why the EU has no big Web 2 companies. And so it's not greener over there. It just seems like it is because it sucks so bad in the u.s right now but uh as noelle said the the administrations are

temporary and the law in the u.s which is the important thing the permanent thing the law in the u.s is not changing at least i don't expect any significant legislation to move through this congress and you know so this the this administration whether it's got 18 more months or five and a half years, is temporary. And in that time, the EU will have, you know, tied its own noose with all of these regulations. And the US will come out the other side with, you know, in essentially the same competitive position that we went in. In short, you know, a much better comparatively position to industry counterparts in Europe. So, you know, I'm not on the doom and gloom chain. Which is encouraging because you're on the front line. You know, it was interesting. The first thing Pascal said to me when I asked him how things were in Washington, he said, quite pleasant. And I was shocked. Right to your point, you said that he sort of found it inspired that there were so many people on the Hill that understood the tech and actually cared about this. And that perhaps a lot of what we're seeing publicly is maybe speaking the party line or just the outrage that that sells and maybe under the hood

it's not quite as bad to your point so that was a bit encouraging simon go ahead yeah i was just going to say countering that um it depends if it's the sec or somebody else because um you know what came out is that the sec believes that it's going to take a long time and it doesn't need any adjusting so wants to shoot one into Existing regulations, which is which is all well and good as long as you're actually approving those companies under existing regulations so I What the US is experiencing is kind of what I experienced back in 2011 in the UK And so, you know, you've got like the decentralized bit, which was Bitcoin,

and then you have the centralized companies. And the centralized companies, you can kind of shoehorn, the only reason we survived for so long is because we took the opinion that, you know, funding Bitcoin companies was done via securities laws. And so from 2011, we had to change laws for two years. And then in 2013, we got registered with the UK financial company, it was called the Financial Services Authority, now FCA. So that was like a two year process, just

to get that. Now then, as as they realized we were funding Bitcoin companies it got very very hostile and so that took two years to explain and then from 2013 to 2015 we were able to do it because we had to find a jurisdiction that would support both securities for Bitcoin companies and so we've been through all of that. Now, at the same time, we started working with the US. So we acquired a broker dealer, Bank of the Future, and we started working on Jobs Act reforms. So we took what we did in the UK, and that took three years to get Reg A+, the ability to have 2000 investors and and all of those reforms but it took about four years till the u.s um crypto company could use it like block stack i think was the first one

um and uh so we you know we we went through all these reforms but the only thing we could ever get and we had a u.s broker dealer um, was that we could do it for accredited investors. So all of the reforms, all of the ways of using it in an innovative way, it was never quite possible within the U.S. But Simon, that's also true for non-crypto investments in the United States. The accredited investor laws are largely problematic beyond crypto. Yeah. So, you know, that's why we focused on Jobs Act and that opened up who could be an investor. But then it led to this big application process. You know, there was like a mini IPO.

So interestingly, it's interesting it's all come full circle to coinbase because we actually built out the broker dealer in ats and sold it to coinbase in 2018 so we know the original team that's been sat there for five years waiting for the sec to approve them to be able to use that broker dealer in ats under you know to do things as securities. So we get to where we are today. And if you look at the rest of the world, FATF said everyone's got to be a virtual asset service provider if they're in exchange. So everyone did that, and that kind of focuses on money laundering. But in Europe, they've added the whole concept of special regulations for crypto companies. And they went beyond virtual assets by saying, actually, there's the opportunity

for market manipulation and many of the things that we figured in securities laws. So they put full blown regulations in Europe around now. But then still in the US, you've kind of got this two-tid thing where they're saying, yeah, we have custody laws, we have banking laws, we have securities laws, we have commodities laws.

Come and apply. But the most reputable companies in our industry that are applying... Yeah, we know that there's absolutely no way to walk into the SEC and register. I mean, that's the biggest joke told by Gary Gensler on a daily basis.

It's absolutely absurd to assume that that's going to be possible or going to happen. But it is encouraging, I would say, at least to see Coinbase pushing back in the way that they are. Right? I mean, we have a dog in the fight at this point. And I think it's also important to point out to people that just because a regulator says something is the case does not mean it is. And there's been a ton of pushback from the United States judicial system against the SEC. In fact, if you look at their recent history on your guns, they just get slaughtered in court. And Bruce, I saw you lift your mic. And Brett, I want to give you a chance to speak too. But Bruce, I mean, they're not winning. Yeah, I mean, that's great.

It's great that there's pushback. I'm glad that Coinbase and others are doing it. And I'm glad that people are calling out what's true here, which is what you just said, which is that, unfortunately, and I can't even believe I'm saying this out loud, but the SEC chairman does not tell the truth on a regular basis. And it's so crazy. The reason I can't believe that is because, one, all my career, 30 years, I've never felt adversarial to the SEC. I felt like they were the ones who kept our industry clean and got bad guys. And I don't feel that anyway. And the second thing is it's a huge risk for anybody to say this, you know, if somebody like me who's regulated, because we see this situation now.

And we see it now with the FBI and the Department of Justice and all these vaunted institutions of power where they are politically motivated. I mean, knowing what we know now and what just came out yesterday in the Durham report about the FBI and Donald Trump, I mean, it's not out of the realm of possibility that somebody from the FCC is listening to this right now and says, oh, you know, Fenton is criticizing my boss. Let's make life difficult for him. And they can do that. But the thing is, we have to call out what's true. We have to call out what's right or wrong. This is beyond politics. This is America, our country that we're talking about. And if we have officials who are lying and abusing power at the FBI, or if they're saying false things at the SEC, we have to call that out. And unfortunately, Mr. Kessler is lying.

He's lying to the public every day when he says that, you know, he paints this picture that our industry is just out of compliance cowboys and they're not in compliance because they don't feel like registering. That's just an absurd claim. There's millions and millions and millions of dollars being spent on lawyers at almost every major firm. Very, very serious people, people who've been regulated for decades in some cases like me, you know, very experienced attorneys who used to work for regulators, you know, big, big law firms, you know, people who are being paid $1,000 or more an hour with big teams. The idea that they're all just simultaneously just ignoring these rules as if it was easy to comply. I mean, don't you think

that all these startups with tens and tens of millions of dollars, wouldn't one of those lawyers been able to figure out how to do it if it was possible? You know, the idea that Coinbase can just register or something like that, it's just completely false. And we can't, as an industry, stand by and give these people moral authority to regulate us when they're not acting morally, they're not acting ethically, they're lying flat out. If somebody in our industry lies flat out, especially somebody regulated like me, if you lie, you get in big trouble for it. You know, if a registered broker at Charles Schwab or Fidelity lies, it's a major, major problem. They're going to get in trouble with the regulators. So why are regulators allowed to, and even in their own response today, apparently they said that, you know, commissioners and even the chairman, you're not supposed to take what they say as if it's, you know, reliable information.

That's what the SEC basically replied. That's just stunning to me. That's stunning to me, you know, that Hinman can go out and say that Ethereum is not a security, and then the SEC can kind of come back and be like, well, you know, that stuff doesn't count. That's absurd. If the lowest ranking employee at my company or at Coinbase or any other company in this industry says something, you better believe the regulators are going to count that. If I had a receptionist who said XYZ investment offered by Bruce Benton is guaranteed, I'd get in trouble. You can't say things that are false. So how come we can have regulators who can continually say things that are false and outright lies about our industry and not have accountability? We really,

really must, regardless of what political side you're on, we must, must, must push back against this or we have nothing. So, Bruce, how do you explain? I don't know anyone that's been more involved in the Bitcoin and tokenization securities than you. And yet SBS was the only one that managed to get that meeting. How do you explain that? Well, you know, it's interesting because the person who appointed Gensler, the boss of the SEC, his boss, got millions in donations from Sam. SBF gave $11 million to Biden and I believe $30 million that we know of to bury his packs on the Democrat side. And then there was other senior Republicans that gave another $25 million plus or so. And then he has this access. How is that? He had a couple meetings on his schedule.

How is it that, I mean, I'm registered by his agency. I've been registered with the SEC for 30 years. We have an SEC registered broker deal. We couldn't possibly hope to get anyone to answer anything, let alone a meeting with the chairman himself. Brian Armstrong runs a company a thousand times bigger than ours. Why can't he get meetings? You know, he had meetings that went nowhere. They won't even answer basic questions. They can't even tell you whether something's tradable or not. You know, Gensler says this thing like, oh, well, you know, the exchanges should just register. Well, they have registered.

As Simon just mentioned, Coinbase has a registered ATS. I was on the board of another famous ATS, T0. You know, I have a broker-dealer. There's a whole bunch of companies that have bought broker-dealers or set up broker-dealers. So they have registered. And then what? What can you do? Try asking the SEC. If you ask the SEC, you say, okay, so Mr. Gensler said, go out and register. Well, we've done that. We've registered. And Coinbase has registered, and T-Zero has registered, and a whole bunch of others. So then what can you do, Mr. Counselor? Could you please answer that?

Absolutely, Matt. Concretely, I think the issue is not whether companies can get meetings with either the staff or the chairman. And getting the meeting with the chairman of an agency like the SEC or the CFTC, that's ultimately not the thing that gets you the concrete answers to specific problems you have. Most of that's ultimately not the thing that gets you the concrete answers to specific problems you have. Most of that is solved

at the staff level. But the problem here is concretely, if you try to, for example, do what the chair has said publicly, which is register a crypto exchange as a national securities exchange, well, that requires

registering with a particular form, Form 1 for a national securities exchange. Well, that requires, you know, registering with a particular form, Form 1 for national securities exchange. There are aspects to that application, there are aspects of the regulation that apply to traditional securities like equities or fixed income products that don't quite fit map neatly onto most digital assets maybe some but not most and so when you go to attempt to go through the registration process you end up running into these roadblocks and at that point you need answers you need answers from the staff or you answer the agency on how do you actually comply given these idiosyncrasies of the particular asset class and it's those particular questions that haven't been answered. Like, for example,

if you're going to register a security, you have to have a registered transfer agent who is responsible for, you know, like the record keeping of, you know, moving securities between the actual owners of that security. Well, in the case where a public decentralized blockchain

is essentially acting as the transfer agent, how does that public decentralized blockchain running by nodes all over the world register as a transfer agent? You can't. So there are many issues. Do you want me to give you the answer to that? Do you want me to give you the answer to that? Because Securitize did it. So they're a transfer agent.

Full disclosure, I'm a shareholder in Securitize did it. So they're a transfer agent. Full disclosure, I'm a shareholder in Securitize, and they do the blockchain-based securities, and they're a transfer agent. And the way they do that is you actually have to create a centralized database version of the blockchain, back it up on a spreadsheet, and then you have to, in case there was a hack or anything like that, you have to revert back to the spreadsheet. And that is the way you get yourself a registered transfer agent with the SEC.

They want you to default it back to the old way of doing things. Right. And that's one of 30 different exemptions you would need to the particular registration. And so I think stepping back, not that I am sympathetic to the either intra or inter-organizational dysfunction happening within our governmental agencies of preventing real rules from being written here, but I am sympathetic to the challenge that the SEC as an organization faces when it comes to digital assets, which is the fact that America has the largest securities and derivatives markets in the world. And yes, we have strict regulations there, but the existence of these regulations, these sort of clearly defined rules, has enabled our economy to grow these unbelievable participants, unbelievable products, these gigantic markets.

And the obvious concern here is that by kind of opening the floodgates with rules around crypto, it could completely alter the course of history for equity markets. Imagine if you wrote the rules incorrectly and tomorrow every single stock delisted from NASDAQ and NYSE and then reissued their stock as tokens and it was a loophole around all those existing securities rules. I completely understand the challenge in writing those rules but the goal of the organizations like the sec cfdc should be to meet the challenge of the present day head-on and figure out and work with industry partners who are obviously more than willing to work with him on this to actually create these rules and i think

noelle said it perfectly which is we should understand this as an ephemeral stage that people and organizations turn over and we will at some point return to a state where we're able to make forward progress in the U.S. and people should not just throw the entire U.S. economy out the window and say, this is never going to work here. People should be building companies here for the long term with the understanding that eventually the right people

will be in charge. And it's not going to be like we're going to be able to do anything we want. And we maybe end up with rules similar to MECA in that, you know, they're not perfect and they're strict, but at least they define the correct constraints that people can actually build and innovate here. Yeah, that's the old idea that negative clarity is better than no clarity at all, which I think everybody would prefer long gone are the days of people assuming that they'll just be able to operate in the Wild West in the United States. I think that's a lot more pragmatic than that. But I also added Alex Damsker here, who under the account here, Crypto Immersion,

who is an ex-SEC lawyer, securities lawyer, so can probably offer some color as to what's happening there. I actually alluded to the fact that the SEC has struggled to some degree in some court cases. Also, Jeremy Kaufman, I see you in the audience. I don't want to put you on the spot. I know you might just be listening, but obviously as CEO of Library, you probably have more insight into what's happening, has happened here than anyone else. But Alex, I don't know what your thoughts on the conversation thus far. So, I mean, I just came in. So, you know, I heard a little bit and came up. But so generally speaking, a couple of general fallacies that we have in this space that I generally try to address is first,

this is a very regulated space. It's just not a compliant space. The idea that there's no rules has been deepened since its inception. I've been in the space since 2016. And basically my first talk to 200 people, a packed house. That's, it was so much smaller back then. But I remember telling people, you know, look, the rules apply. And people were like, no, you know, and I just said, well, but they do. And here's how they work.

And the idea that somehow tokens were exempt from securities regulations was wrong. And that's where everything starts, right? who are exempt from securities regulations was wrong. And that's where everything starts, right? Is this idea that we love to cling to, that somehow our technology is different or special or unique or makes us somehow exempt from these rules simply because we want it to be or because we can operate cross-border or something like that.

None of that is true, you know, and all of the regulatory agencies have been super clear about that. There are problems with the regulations, but to be clear, other than ones like the counterparty rules, which make no sense, to be honest, Like a lot of these, they haven't made sense since, you know, broker-dealers are no longer the center of most of these transactions, right? They've been the center of transactions. But like most of these rules are predicated on this idea that broker-dealers are the center of every transaction. And that hasn't been true for, you know, more than, you know, a decade, right?

Like a couple decades. And the problem, right, that we have is a lot of these rules are based on this idea that there's a registered person in the middle who's licensed, who is obligated to tell the truth to retail parties, and gives them information. And that doesn't happen with like e-traders and things like that. And that there's some protection that's offered by putting a wall between, you know, opportunities and people who don't have money. I don't really understand that whole scenario. I have a long rant on it, but that's, you know, kind of that whole idea doesn't work, but doesn't work for anybody, not just in this space. The idea that doesn't work for us, like there's a couple of them, including how the custody rules work. But one of the primary ideas is this idea that somehow we're able to report on who our

counterparty is and when you think about it you know how am i supposed to say like well my other party was this alphanumeric code with a cat uh you know uh nft in it go find that person. So, I mean, I'm not entirely sure how that's supposed to work. Well, I think that part of what you say is obviously true, and you have the insight, but it's a lot deeper than that. I mean, Coinbase is a publicly listed company

which had to obviously go through the SEC, had 30 meetings discussing the products that they were offering. i i think that uh you know the truth is probably somewhere well but no but that's not see that's that's not that's not fair actually because there's this idea that somehow the sec approves coinbase's offerings that's not what happened there's no way for Coinbase to get those offerings approved. That's become very clear.

Anyone who's even attempted, I'm going to let, I see that Jeremy's here, Jeremy Kaufman. You're the poster child for this, right? You literally walked into the SEC. Am I sounding strange to you guys? Isn't it? Yeah, Jeremy lifted his mic. I sounded a bit weird. Jeremy, yeah. Can you guys hear me or his mic. It sounded a bit weird. Can you guys hear me or do I sound terrible now?

Can you guys hear me okay? Yeah, we can. I mean, Jeremy, you literally walked into the SEC with a PowerPoint presentation about what you were going to be doing, right? Yeah, absolutely. And they used it against us. So I think I actually can't even believe that there's a competing notion out there that the SEC is being remotely fair, that there are rules of the road that can be followed. It's completely fake. I spent six years. Not once did they answer a single constructive sentence. exist and that you can follow them but literally any attempt to follow them simply results in in people getting sued uh and even now even throughout settlement discussions we have uh you know we have a product odyssey that's being used by tens of millions of people each month we want people to be able to purchase small dollar amounts of cryptocurrency for direct usage and consumption how can we follow the law in doing that? They won't tell us a single thing. Not one thing. And they've made it clear that if we do it wrong,

they'll sue us again. But if they can't tell us how to do it right and they won't answer any questions, we gave them pages of plans. And they just used it against us as evidence. So yeah, I mean, they are, you should view these people as evilly as you possibly can.

They are outright sociopaths but that's what they are i love you jeremy bruce or simon either i'll give a i'll give a middle ground it's um i think i think both are right for the following reasons so if you think about it we have bitcoin and then they said i think it was 2013're going to register as a money transmitter. It's a commodity. And then, you know, we then evolve into this space where everyone starts creating their own tokens with clearly subject to manipulation,

disclosure requirements and all that type of stuff. And so I think it's true what Alex says, that there are rules for custody and the regulators, you know, money transmitters can regulate what they regulate. Custody can regulate custody. Securities can regulate securities. And exchanges can have all of these regulations exist. The bit that's missing is that if you, they missing is that when you applied for all of those, you didn't get accepted.

They didn't adjust their framework for the new technology. token offerings that want to do full disclosure and want to trade on ATSs and want to subject themselves to good practices of disclosure rather than market manipulation and pumps and dumps and all that stuff, then all they need to do is take the existing rules and approve the companies that just want us to do it in any format. Same with custody You know, it's quite simple separate client assets. Don't touch them and have good checks and controls to ensure that You know, you have all those assets and then it's illegal for them to be used. So all of that framework does exist

They're just not allowing these new companies to fit in with the framework. I mean, to be clear, I think we all, everybody on this stage agrees that probably tens of thousands of unnecessary crypto coins have or tokens have been launched that were probably unregistered securities. Right. But that but but just because that happened and there is the casino element doesn't mean it's true and you throw the baby out with the bathwater on the ones who are legitimate and trying. And to up the ante on that, we can't even get clarity between the CFTC and the SEC on what's a security and what's a commodity on some of the top assets by market cap. So there's literally no way that anybody could walk into this space and know how to go

approach a regulator yes that's cool that's it that's all they need to do they just need to say this is a commodity these ones are securities correct but they won't just play the framework that's the thing that's key what scott just said is the ones who do want to comply so i you know i push back at what crypto immersion alex said which is which is that I don't think it's about companies that just don't want to comply. Yeah, sure. In 2016, there were there's companies who were who were foolish and said, you know, oh, tokens are different. They don't they they're not subject to the law. Well, that was a bad take. That was a dumb take. Anybody with experience knew that that was a bad take. And there was a whole bunch of us who went down the other road and said, oh, no, no, no, that's a bad take.

We know this is regulated. Let's go spend millions and millions of dollars on lawyers and registrations and ATSs and broker-dealers and fingerprints and email monitoring and 10 zillion other things.

So why is it that not one single company has been able to navigate through this? We're all scammers. We're all wild ways. They have. Why do you say not one single company has? Who? Name one There's not even a registered exchange. Who? Even a token exchange.

INX is a token exchange. Oh, that's awesome. That's so great that you use INX as an example. Thank you. Let me tell you the truth about INX. We are a registered broker dealer in the United States. We are licensed to sell securities. We're licensed to sell over-the-counter securities. We're licensed to sell listed securities. INX is a licensed listed security, correct? They're a listed security that filed a full offering with the SEC, correct? Can we sell them as a registered broker-dealer? You're a lawyer. Can you give me that advice if it's so easy? Can you write me a letter as a lawyer? If I give you $50,000, can you write me a very simple letter as a lawyer that says, no, no, hold on, that says that I can sell that as a registered broker dealer who's licensed to

sell securities in America? Can I sell INX, which is a registered security in America? Can I do that? Or can anyone do that? I'll give you the the answer you have to be a special purpose broker dealer and how many of those no sir how many of no sir simon a special purpose broker dealer under the finra regulations cannot sell to retail so sorry that is what they'll tell you simon but that's not correct either there's not even one of them that's a brief right there's none but that wouldn't solve it anyway because the special purpose broker dealerdealer guidance from FINRA specifically excludes retail and specifically excludes you being able to sell that. It's for custodians only. So the fact is INX is a perfect example.

I was on an SEC call with the SEC, and I asked them. I said, well, we're a registered broker-dealer licensed to sell securities. They're a registered security. Can we sell them? Crickets, crickets. And there's not one lawyer in America. And there's not one regulator in America who can tell you if you can legally sell INX. So that's a perfect example. Even though they went through three years of work, millions of dollars, and like everything else in this, all these other companies that tried to comply spent millions of dollars on this. They have an ATS. Is it operating?

Is anybody trading them? You know, this is the problem. This is exactly the problem. Okay. Can I answer? Have at it. Okay. So the part where there isn't actually the rest of the system that's in place How about it? because the SEC's also said they hate order books. So if you can't do an order book

and you need to use a broker and it has to be a particular type of broker but there isn't a broker available, that is bullshit. I mean, it is. That's crap. I think that system doesn't work. Do they have things trading on them?

Yes. Do they have a lot trading on them? No. They're dealing with larger companies that are doing things where they're taking assets that are already trading and then wrapping them in tokens right now. Do they want to do things that are like regular offerings? For sure. Right now, is this environment actually conducive to that? Not particularly. and that's where things get really particular. I'm not saying that the SEC or any other regulatory parties are actually doing a great job.

The basic idea, though, that there's no rules doesn't work. But there isn't. There's no rules that can be actually followed. Otherwise, we would have done it or somebody else would have done it. Well, no. One second, one second, one second.

Go ahead, Brett. I was saying maybe to mediate between these two viewpoints here is that I don't think anyone is saying that there are no rules including like the Coinbases of the world or whatever. I think maybe the issue

is that, let's say like you just take all of the existing rules at face value and you want to register either a token in security or a securities exchange or a securities broker in the context of digital assets. I think the current, you find that the current climate makes it difficult to get any kind of approval. And also that there's sort of like the hazard of the more that you discuss your business,

the more likely you are to be, you know, brought in enforcement action against for having revealed aspects of your current business. And so the climate is such that as people try, the more people try to kind of comply with the comply with the existing rules, the worse it is for them. And so it's not necessarily a matter of people thinking that there are no rules, just that if you want to interpret the rules as a value for digital assets, because of what's mostly a political issue and not like a substantive issue here, and a matter of kind of who's in charge and sort of the organizational dysfunction that people are unable to kind of get through on the current rule set alone and so the ask for clarity is around kind of like uh forcing a real process by which you know digital asset companies aren't

treated unfairly in comparison to kind of other companies in the security space, given what their current rule sets are out there. Maybe that's my opinion on the middle ground here. Go ahead, Noelle. Following on from what Brett was saying, what a lot of the debate that we're having here today is highlighting. The deeper we go into the details, the more we realize that the definitions themselves have not yet been set. We don't know which crypto assets are securities and which aren't.

Agreeably, most of them probably are. But the jury is out on Ethereum, for instance, and that's a pretty important component of the crypto markets. The approach is also very different. The United States is very hung up on deciding which is and which isn't. Europe has sort of decided to not pay attention to that. Hong Kong, the same, not going down that route, just going to treat crypto as a different asset class and set frameworks around that.

This highlights very different approaches, which comes down to definitions, which also is influenced by the inherent structures. The United States has many financial regulators, Asia and Europe, not so many. That does give them a certain amount of agility, which is surprising when it comes to Europe. But there you have it. The whole thing is a philosophical question, really. What are financial regulators there for? Arguably,

they're there to protect investors and they're there to protect the sanctity of the financial system. Are they doing that today? And coming back to the question you asked at the very beginning, Scott, will U.S. regulators kill crypto? No, they weren't. Crypto is flourishing elsewhere. But until the United States gets to grip, in conjunction with other regulators around the world, as to what the question actually is,

it's going to be very hard to find the answer. Jeremy, I know that you had a point to make. Go ahead. Yeah, so I also wanted to bring it back to that original question around whether the regulators will kill crypto. You know, regulators made drugs illegal. Did that mean that people didn't buy drugs anymore? No, because entrepreneurs stepped up and they created them. They knew there was a market for a good and service and they provided it. You know, around a decade ago, I used the black market to purchase some drugs in New York City, some marijuana.

It was a better user experience than Coinbase is today. OK, it was. I didn't have to give them any ID. I took out some cash and they gave it to me. They came to my apartment where I was staying. So thinking of this as the law is reality is a completely wrong framing. And the real test is, will people be able to use cryptocurrency as free people? And it's clear that Coinbase is not going to be able to do that. The real test is look at situations like the Canadian trucker protests, where we had people that were being

debanked by their own government. We had people a thousand miles away who had cash in their pocket, and they wanted to get the cash to those truckers, and they wanted to do it anonymously. They wanted to do it with the properties of cash. And whether that remains possible will be a question for entrepreneurs. Will entrepreneurs create and facilitate experiences that make it so that cryptocurrency can remain peer-to-peer and can continue to function? But that's a question of what entrepreneurs do. It's not strictly a question of the law because the government can't just say something and make it reality. So I just wanted to make sure that

I think that's a good thing to remember when we ask about can the government kill cryptocurrency? Yeah, it's a bit hyperbolic, admittedly. I think that the better question maybe can be will U.S. regulators kill crypto in the United States? Of course, right. But to your point,

you can't kill something that anyone can use globally, and Americans will continue, at least for now, to access VPN and DeFi in endless ways that they're going to do it. So it's just going to push them into less protected and shadier sort of corners if the regulation is harder, which is the bigger problem. I mean, Jeremy, I know you're about to speak, but like look at the CFI collapses of last year. I'm certainly not claiming that Celsius, Voyager, BlockFi, et cetera,

are good actors, but the SEC certainly failed to protect the consumers that were using them in advance. No, to be clear, actually, my position is that is not, I think the regulators are winning here because the entrepreneurs aren't stepping up and delivering the solutions to bypass regulators. The entrepreneurs are still thinking in the mindset of, oh, I need to comply with the regulators. The entrepreneurs need to be thinking more like drug dealers is what I'm saying. OK, because Bitcoin did not work for the Canadian trucker protests. It did not work. By that, I mean someone who had never used Bitcoin before was

not able to take cash out of their pocket and get it to the truckers a thousand miles away. They weren't able to. They could go to Coinbase and take out their ID and show it to them, but they don't want to do that. That's not the experience that they wanted. The key word there is entrepreneurs, and this brings us to the

Bitcoin maximalist argument that if somebody somebody an entrepreneur creates something and that thing that they create is even traded on a DEX and the US says if any US resident purchases

that on a DEX then you as a person have become have created securities offering in the US and therefore you have to KYC everything in order to ensure that it's not touching the US then that that kind of breaks and this comes into that our whole definition of DeFi where there's only really one DeFi and that's Bitcoin because it wasn't created with the expectation of profits by the management and control of others with a common enterprise.

So the US have kind of covered it to do that, but it goes into the Bitcoin maximus argument, which is kind of why decentralization matters. Yeah, absolutely. Makes sense. Alex, I'm sorry. You got cut off before. I did want to give you a chance to respond. I just wanted to make sure that everybody got their points in as well. I'm not sure she's here. Can everybody still hear me? Yeah, I can. okay thumbs up if you can okay perfect perfect bruce are we the uh at the drug dealers better than coin days you know it's ironic that jeremy uses that example which i love uh because you can continue the the analogy um the reason that

icos came about is the same reason that crack came about. Crack, the U.S. has a drug war that's been a failure for 50 years or whatever. It's this failed drug war that wastes a lot of money and puts more people in prisons than the Soviet side and gulags at their height and costs us a lot of money and on and on. So they decided that cocaine was the drug that they were focused on in the 80s. And they really cracked down on it because of Miami Vice and Ronald Reagan's wife made that a crusade. And as a result, the drug dealers said, well, boy, it's really, really hard to transport, you know, 10 kilos or, you know, 50 pounds of cocaine. Let's, you know, boil it down, make it way more powerful and way cheaper. And while we're at it, maybe we'll throw in some additives and stuff and increase our profits and the addictiveness as well.

So that's how crack was born. Crack came about because of the drug war, because cocaine was illegal, because the drugs were legal, so they ended up with something worse. Crack and some of the modern methamphetamines, those came about because it's easier for drug users to bring around smaller amounts. So it's exactly the same as the ICO craze because it's so difficult to be a security

in the United States. The sad thing is we spent a lot of time debating, is this a security or isn't it? What would be nice is if it didn't matter. If you say, oh, sure, it's a security, it's not a security, doesn't really matter. If you're security, you have to tell the truth. And if you commit fraud, somebody's going to watch out for you. That would be nice. You know, just have securities rules where it's like it doesn't matter.

But in the United States, unfortunately, they're so out of touch and they're so broken that being a security becomes the kiss of death. Most people outside the U.S., the first question they'll say is like, whoa, whoa, whoa, is this available in the US? I don't want anything to do with it. Is this a security? I don't want anything to do with it. And you had a whole general, let me just finish this point. You had a whole generation of entrepreneurs in 2016, 17, because it's so difficult to be a security in the US, they went to their lawyers and they said, how do I not be a security? And the lawyer looked at the 33 Act and said, okay, strip out everything from this definition. Make sure it doesn't share dividends. It doesn't have a central management.

You're not looking at the work of others to improve it. It's not a bond. It's not stock. It's not equity. It doesn't have dividends. And they strip out everything that makes it any good. So you end up with this pile of junk. If they would have never had those regulations, we would have never had an ICO wave.

We would have maybe had a wave of profitable companies with real structures so then i mean is there a happy medium there obviously because what you're describing basically and i think it goes back to a huge problem we had last year once again with cpi is lack of disclosures if we had transparency and disclosure to your point it doesn't really matter if you're a security as long as people know what they're buying and the risks involved, right? So you could theoretically have people who only invest in something that is a security because that's their risk preference and the tolerance they're for, but you can also have Pepe and meme coins going nuts over in the casino and people can participate the same way they play craps in Vegas or buy a lottery ticket. I mean, is that basically what you're describing?

Yeah, everybody should be able to invest in anything they want. It shouldn't matter whether it's a security or not. They should be able to invest in anything, whether it's a roll of a dice or a craps table or a magic card tournament or library.com or Microsoft, Google, Facebook, Tesla, Dogecoin. People should be able to buy whatever they want. This idea that we need many state bureaucrats and that people would look at the world in 2023 with all these problems and say, yeah, you know, I really do want the politicians more in my life. That's just an

absurd notion. We don't need these pinheaded fools. Look at these people. Half of them can't even speak or put a coherent sentence together. These laws were written by people who were World War I veterans. The laws were written in 1933. We don't need these pinheaded status nanny state Karens telling us, you can buy this, you can buy that, you can run this piece of code. We don't need any of them. We could scrap the entire thing. And you go back to basics. It's against a lot of steel. It's against a lot of commit fraud. It's against a lot of lie, you know, and when you're taking money for it. And then you go back to those and that would cover 90% of the problems. And instead they put up this artificial, you know, massive machine of nonsense and bureaucracy and corruption that doesn't do

anything to stop the actual fraud. They didn't stop FTX. It was right under their nose. They didn't stop Bernie Madoff, who was right under their nose. Bernie Madoff was the rate of the biggest regulator and I wish Brett was still here because I wanted to challenge him on This he should be should be called out that your brat was on this date talking about this stuff But he was also president of FTX So when he defends the idea that it's no big deal that Gary Gensler met with Sam that fact that he was president Of FTX should be noted. You know, this is a broken system. That's an important disclosure. Yeah, that's a pretty freaking important disclosure.

And this is exactly why the world is broken, because we have corruption, rampant corruption, and people who are apologizing for it. And we have this completely broken system with a bunch of nanny state karens who are reigning on one of the most important industries in the world, an industry that despite these attacks, we've still managed to have growth and still managed to create jobs because we have a better invention because we can do stuff that couldn't be done before the invention of a distributed ledger. We can do cool things now.

And if these pinheaded Karens would just get out of the way, we could make the world a lot better and we could improve all kinds of things, not just money, but also securities and collectibles and everything else. I'm going to make pinhead Karen t-shirts for everybody who's in the spaces. That's my next business venture. Seth, I saw that you had a comment that you lifted your mic. Yeah, so I was going to say, to Bruce's point, the way the securities laws were written in the 30s is not too far removed from what Bruce described as the way things ought to be. The securities laws in the U.S. are a disclosure regime. insiders who have asymmetric information to disclose truthful information so the public can make informed buying decisions. That's the basic premise of the securities laws.

And so it's a disclosure regime. The problem is, over the decades, that disclosure mission has been whittled down and the SEC has undergone significant sort of mission creep to the point where now, you know, even though every time Gensler justifies, he talks about, you know, being a disclosure regime, but they're not. They're de facto a merit regulator, right? So what that means is, you know, they are not supposed to pass upon the merits of a particular investment opportunity, but they do.

And if they don't like it, they have myriad ways to extract concessions and changes out of the issuer, or they will just simply sit on it. It's a desk veto. They'll just not move the application, not approve it, and you just die by atrophy. So they've gone, and this is not just a Gary Gensler problem, although he's probably the most extreme example of it, but this has been happening at the S&C for years and years. They have become a de facto merit regime. And perhaps the evolution under Gensler is now they're a politically motivated merit regime, which is a drastic departure from the framework

and the mission and the structure set up in the 1933 Act. Go ahead, Simon. Yeah, does anyone know the answer? Because in jurisdictions I've dealt with, when a regulator finds an institution, it doesn't actually go to that institution. It's like a whole process of distributing those funds. In the US, when the SEC makes those finds,

do they all go to that particular institution? Essentially, is there this potential to set up the money grab scenario that we've experienced? Because, you know, completely different entity, but I'm absolutely appalled. The most shocking thing I have seen was that headline that the IRS wants to take the proceeds of crime and all of the client money from creditors by suing FTX for $44 billion ahead of all of the creditors. I mean, that's mafia. Absolute insanity. Absolute insanity. That was, of all the headlines this year, that may have been the most astonishing. And that's saying quite a lot. I think you're absolutely right. For those who don't know, effectively, the IRS has a claim against FTX and steps ahead of the unsecured creditors, which is each and every one of you or anyone else who lost money on FTX to collect that money, which means that effectively, if you're a former customer of

FTX, that you're now in line behind the IRS and the bulk of the money that was available would theoretically go to them, meaning that your claim goes down in value. I don't know the exact amount, but tremendously. No, it's $44 billion. That wipes out every creditor. Yeah. And they're not clawing back. The government gets it all.

Or more accurately, Zelensky gets it all. And Gensler gets it. It goes right back to these agencies. So Bruce, does the money go to the SEC? I'm not sure. Somebody else might know that. I know, like you said, with a lot of these forfeitures, I know it does

go to the agency. I'm not sure exactly how it goes. I don't believe it goes to funding the SEC, but I would have to confirm that. We had a conversation about this before. I can't say for sure, but I don't think that that's actually the case. So I think that most often when the SEC goes for one of these cases, it's more for a headline and for further funding. But we are seeing that the SEC is about to get massively more funding. I hate to say it, but we shouldn't rule out corruption. I wouldn't have thought this just a couple of years ago. But I mean,

if we look at the revelations and and, you know, on the one hand, it's sad to make this political and I'm not trying to make this about one part or another. But on the other hand, if you're still a Democrat and you're still in crypto, you've got to really kind of do some soul searching. I know there's a lot of people, particularly in the Ethereum camp, who, you know, kind of were very big Biden supporters. But you got to look if you're looking at Elizabeth Warren and Joe Biden and Brad Sherman and you're in this industry, you've got to kind of make a choice. I mean, you know, it makes about as much sense as if you're a gun store owner and you're I mean, there might be some gun store owners that are Biden supporters, but it just kind of doesn't make sense. It's sort of like, you know, cutting off one of your own organs or something. Right. Which may make sense to some people. I don't know.

Yeah. Bruce, you know what I find interesting is that the tone has changed dramatically over the last year. And I think we have to look at obviously FTX and SPF in particular as the likely reason for that. It's certainly not in defense of any of our our legislators or anyone in government. But a year ago, you know, we had Biden coming out with an executive order that effectively said, hey, this is a real asset class. It's important. Let's figure out how to regulate it and how to make sure that consumers are protected and said, you know, going to every three letter agency, come up with your proposal. You have six months. Tell us what you're going to be doing here. Right. That's now turned to literal tweets from the president of the United States saying that

Republicans want to, you know, diminish your food safety while we just want to take money from crypto trillionaires. Yeah. But I was skeptical the minute he asked for recommendations from agencies. I felt that was an attack. Because when you go like, hey, what's up, you know that some agencies are going to come back with something negative. And at the very best, you have a bunch of busy body nanny state Karen sitting around bureaucracy offices paid for by our tax dollars in fancy marble buildings paid for by our tax dollars, sitting around figuring out how to screw the entrepreneur and screw the American public. So at the best, you have a waste of resources,

but at worst, you're going to have a couple of those agencies who take that as a cue. They're like, okay, the handlers of the old man, because it's not Biden who decides anything. It's whoever his handlers are. But the handlers, they're saying like, oh, the handlers are sending this message. They want something done about it.

It doesn't take much to think, oh, I'm the ATF. Let me figure out how I can kind of screw this industry, which apparently the boss man, Mr. 10 percent or whatever he's called, you know, doesn't like, you know, so that's that's, you know, IF's crew. And I think their plan was to push this bad set of regs. And there's a bunch of people in the crypto space, a lot of these, you know, DC think tanks, you know, the same kind of people who donated to my opponent when I ran for Senate and called themselves crypto people. You know, there's a bunch of these folks who were active in pushing Sam's legislation. You know, Sam spent, SBF spent a lot of money that he stole from customers on pushing this bad legislation. And there's people in this space who are like, oh, pro-crypto. It wasn't pro-crypto. It was an attack by the administration.

And then once that failed because Sam's House of Cards came crashing down, then they pivot. All right, well, we wanted to screw this industry anyway. Let's just outright screw it. So we have Operation Chokepoint 2.0 going on right now, and this sort of all-out attack. So I don't see it so much as a shift in policy. It's just a shift in messaging. They thought they could do it one way. Now they're doing it with the hammer. I think that's fair, Seth. I'm going to give you one second. I just want to make a point. But I do think that to some degree, there was just egg on the face of all these people,

and they literally just politically don't feel like they can support this industry period even if quietly they wanted to right if you met with sam and you said how great crypto was now you're just not going to do that period yeah actually i think you know i think you guys are both right um you know on the executive order, that was a masterful example of marketing. And much of the crypto industry sort of gobbled that up. And I think it's because they heard what they wanted to hear and not what the executive order actually said and certainly not what it signaled, which I think Bruce is much more attuned to that. If you actually look at the number of reports required to be prepared by the executive order, I forget the exact number, but it was in their mid-upper teens, all but one

of them was sort of designed to deliver a negative result, an anti-crypto result one of them in the that was directed to the department of commerce uh you know potentially was set up to be pro-crypto so it was you know it was always negative uh you know i think that the headline um you know was delivered as this is pro-crypto but it never was was. And I don't think that the attitude or approach of the administration to the industry changed as a result of or in response to FTX. I think FTX merely provided the cover for them to sort of transition from sort you know, sort of a wait and see to an inadvertently hostile posture. But, you know, it was never positive. And the executive order was never positive. It was never meant to be.

They just sort of simply hadn't turned on the full court press yet. And that's what FTX enabled. Well, I believe in strong opinions loosely held you guys convinced me that it was never positive so I I take back everything I said about the White House executive order if you and Bruce certainly agree in that direction and I think yeah I mean certainly at this point looking back uh it's hard to argue with that right so then the question is and we hinted at this before is this simply just wait for regime change and then we get what we want you know the the the crazy thing

to me is that even if we get horrid legislation or crap down or any of it we've seen that these parties just reverse the decision the minute they get into office if it changes. So, I mean, even if we get bad legislation or poor regulation here, could it just be changed by another administration coming in? I mean, it could. We see that all the time. But what we see changing typically is not legislation. The legislation, by design, it's very hard to pass laws in the U.S., and therefore it's very hard to change them once they get through. What we see going back and forth are things like executive orders and agency guidance. Sometimes agency rules, but even those are more permanent and more difficult to change. It's the, it's sort of the soft things that, that, you know, change with the administrations. And those things are temporary anyway, like, like we said earlier. So, you know, I think the answer is not, you know, we're not, we're not

going to, we're not going to win and we're not going to ultimately lose through policy, I don't believe. My view is we have to engage in that. We have to play that game and sort of be part of the process. But we win by building. And a number of speakers spoke to this earlier in the day. I think a great example is prohibition. In the last century, the United States outlawed alcohol for 11 years or something like that. And consumption of alcohol in be something like Uber. There were a lot of entrenched interests in preserving the monopoly of the taxi companies and the city medallion system, and it lost because Uber was a superior product that the people wanted. That's how we win. We just got to keep building, keep improving experience. And maybe that building, in the meantime, needs to take place somewhere else.

But eventually, we will win if we're providing a product that people want. Well, I can't wait to get my hands on Allegra Stacks. I love to hear it. I love mine. They're super slick speaking of projects and products that people want guys i think we've uh beaten this dead horse for today and i know that we will inevitably come back to it i want to remind you guys once again that starting next monday it'll be 10 30 a.m probably instead of 11 we're going to be doing these every

single day all of you who are have been guests, you're welcome to speak, show up anytime. We'll be hosting it alongside Mario Nafal, as I said, and Rand Nooner from Crypto Banter. We'll be rotating probably the channels, but we are committed to at least two hours every single weekday. So, yeah, I can only talk about regulation so much, knowing that I'm going to have to do it every single day. So thank you, everybody, the amazing guests for joining. Please follow them all on Twitter. Incredible insight. And until next time, see you guys later. Thank you.