This Week in Startups - British pound crashes, Do Kwon's red notice, NASA's DART mission, TikTok nears US deal | E1570

Episode Date: September 26, 2022

J+M break down the British pound dropping below $1.04 (5:15), Interpol issuing a red notice for Do Kwon (27:07), NASA's DART mission (53:52), and TikTok discussing an agreement with the Biden administration! (59:44) (0:00) J+M tee up today's topics! (2:48) Importance of focus, avoiding the news cycle in the grand scheme of things (5:15) British pound crashes to lowest level ever against the USD (13:15) Indochino - Get $50 off any purchase of $399 or more by using code TWIST at checkout https://www.indochino.com (14:38) Breaking housing and energy in the economy, income inequality's impact globally (25:34) Grammarly - Sign up for a free and get 20% Grammarly Premium at https://grammarly.com/TWIST (27:07) Interpol issues red notice for Do Kwon on behalf of South Korea (35:39) LinkedIn Jobs - Post your first job for free at https://linkedin.com/twist  (36:54) Do Kwon tweeting on the lamb, more theories around where he might head to (47:15) New decentralized crypto derivatives platform Nibiru raises a $7.5M seed at a $100M valuation (53:52) WLITF: NASA's DART mission and planetary defense (59:44) The Biden administration drafted a preliminary agreement with TikTok to try and resolve national security concerns FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

Hey, everybody. Welcome. It's Monday, Monday, Monday. We have a huge news show already. And we're not even, we didn't even stockpile any news over the weekend. This is all just like breaking today. Maybe a little bit over the weekend, I guess. For our first story. First up, we're going to talk about the British pound crashing and possibility that could hit parity with the US dollar, what that means for startups and what it means just in terms of this macro monetary policy in relation to capital allocation. just the economy writ large. Yeah, we're just going to dig into a little fiscal and monetary policy and trickle down economics and the long, long history of what does and does not cause inflation first thing on a Monday, no big. And then we're going into spy territory with Interpol issuing a red notice for Doe Kwan. I'm sure he did nothing wrong. These are all allegedly, but the South Korean government would like a work with Do Kwan,

who is taunting them on Twitter. Doesn't seem like a great strategy. And then we've got a crazy we live in the future story. I mean, this is like the most bananas show. Just for We Live the Future, we're going to talk about this NASA asteroid defense mission where they're going to crash a golf cart into an asteroid and trying to knock it off of its trajectory to make sure that should one be headed toward us and threatening an extinction level event, we can just derail it.

And I've been yelling at the moon for a year about TikTok. just throwing my fist in the air and nobody's listening and the Biden administration is asleep at the wheel regarding TikTok and Chinese spyware. And sure enough, it turns out that our government has been in deep negotiations trying to settle with Bytance and TikTok to make their app maybe compliant and less spywareish or maybe ban it. Anyway, it's going to be a great show. It's going to be a great show. Stick with us. This weekend startups is brought to you by Indochino makes custom fitted suit,

shirts, and casual wear at affordable prices. Shop for your next best look or book a virtual style consultation at Indochino.com. Right now you can get $50 off any purchase of $39 or more by using code Twist at checkout. Gramerly is an all-in-one writing tool that helps you churn out clear and concise communication fast. Go to Grammarly.com slash twist.

to sign up for a free account and get 20% off when you sign up for premium. That's GRA, M-M-A-R-L-Y.com slash twist and LinkedIn jobs. A business is only as strong as its people, and every hire matters. Post your first job for free at LinkedIn.com slash twist. I thought this was going to be a slow week, and like last night I just sent the Doeplan story, the pound story, so many stories. Yeah, it is not going to be a slow. We are not going to have a slow week again for like a while, I think.

It's going to be like Christmas, I think. Well, usually during Christmas we get like a two-week reprieve from chaos because journalists decide to stop filing stories and government officials decide to stop creating chaos. I do. I was actually thinking about this at 5 o'clock this morning when I was like, I have this to do and this to do and the little anxiety freak out about the coming week. And then I was like, this is super normal. This is very standard.

September and October are always bananas. because everybody who, you know, everybody sort of took the summer off, come back, and you have all the speaking events and the this and that and that thing happening and the blah, blah, blah. And then November, like, you hit sort of Thanksgiving and then you shut it back down again for a little while. So I'm like, and then it doesn't really resume again until February. So. And keep in mind. I just used my long, many, many years of life experience to remind myself that this is all a cycle.

Yeah. It will be okay. Well, and on top of that, you know, when you think about it as a. founder of a company or a capital allocator, there's always chaos going on in the world. We are just so attuned to it. I mean, you and I, because we do a daily show and talk about the news, but social media, globalization, and, you know, the race for clicks and something to talk about, you know, this combination of the media model, the amount of media, social media, all of this is leading to a layer of discourse and news coverage that didn't exist, I'll say 30 years ago,

velocity of it was much different. Very true. And so it's just really critical to understand what your day job is, put your head down, block everything out for eight hours and do that, you know, or six hours, whatever it is. So if you're a founder listening to this, all this news is important in some ways and totally irrelevant to your business in all likelihood. So whatever happens with Doquan or the pound or Ukraine. It's all noise.

All this important stuff in the world. Until it's not. Yep. It probably has no impact on your startup. Now, if your startup is operating in the Ukraine, it does. Well, yeah. But that's why I'm sort of giving a little caveat. Or if you were thinking about expanding to the UK.

Yeah, it's going to be cheaper. Go. It's a great time to go to the UK. Now's in time. Now's the time to open an office. Speaking of the holidays, holidays in London sounds great. Let's do a made up. 20% discount. Very affordable.

So yeah, we're actually going to start the news today by talking about the pound crashing and what this means for startups. And, you know, like we said, potential business or travel opportunities or start of a global contagion. Hard to say. But as we are speaking, the pound has hit a record low against the US dollar. Investors are selling out of that currency effectively because they don't have faith in the plans that were announced last week, Friday, I think, by the UK government, obviously

as a refresher, Britain just got a new prime minister in Liz Truss and her cabinet came in after succeeding Boris Johnson. and effectively the first thing they did was announce massive tax cuts, primarily on the wealthy. And that caused even some fiscal conservatives and trickle-down hawks to basically just freak the hell out because they were like, oh, you announced basically $100 billion, $100 billion in tax cuts and spending. Same thing.

At this point, same thing. Same thing. Right. Tusha. We're going to 26% chance of hitting parody, they said. Good point. Take a look at the chart. I think throw up the chart is pretty.

The chart is, yeah, this is the pound dollar to sterling rate from 1971 to 2022. And if you're not watching us on video, it goes down. I mean, our whole life, it was a buck 50. I mean, that's what I always remember going to England. And, you know, a pound was a buck 50. You need to pay a dollar 50 to get one of those pounds. You pay a dollar and three cents, you get a pound. So what does that mean?

It's pretty simple. I mean, importing stuff into the UK is going to be very expensive. So if you were in the UK and an Apple cost a dollar that you were importing from somewhere, you know, for two pounds, you would get three of them. Now, you know, if it's just a dollar, you know, it's, you're, you're going to get, you know, far less. So it's, you know, two of them. Remember, you and I are of the age when, to remember when Jazele Bunchen started taking

her salary in pounds. Remember that? Oh, really? I do kind of, I have, how strong. I mean, the pound, and it was just like, earth shaking. Like, she was like, I take my supermodel money in pounds now because the dollar is BS and the pound is where it's at. And remember, this is happening in the, you know, so much obviously has changed here that,

and so much has happened over the past few years. that it's easy to remember this is also coming in the context of post-Brexit. So Britain has been attempting to create new innovation and financial incentives. Like actually London had really tried to establish itself as a tech hub and lure a lot of startup activity. And this is sort of part of that. But it's also 100 billion pounds worth of spending into an economy that is effectively an island, literally an island and literally an economic island without the backstop of the rest of the EU economically speaking. And so it's, you know, people are calling it casino economics. There are reports of a no confidence vote in Liz Trust and in this

economic plan. And certainly investors are having that response. You know, macroeconomics is hard, it seems. You know, every time I have these macroeconomic talks, I talk to experts, it seems like they have theories and concepts, heuristics, but this is very complicated stuff when you turn these dials. For me, I'm trying to find a primer to read about just interest rates and what they should be set at because if you were to look at interest rates in the U.S., like it's been incredibly low, zero, close to zero over such a long time. One has to wonder if maybe instead of going, you know, from zero to six, we should just maybe keep it at two? and have like a little bit of dry powder available if we did have a situation like we have now.

We didn't, you know. So it feels like the monetary policy has been just too loosey-goosey. And maybe we're spending too much money and making it the free money too available and just moderating would be good. But what this also does is as people are voting no confidence, then there's another group of people who might be looking and saying, well, there's an opportunity, you know, to use this currency arbitrage to build things in the UK, right? It's cheaper to build in the UK. So hiring a developer might be cheaper now. Or having your satellite office, people would say, oh, you know,

I'm going to open my satellite office in Berlin or maybe Spain or Ireland, maybe now, or Ukraine. Maybe I'll open my satellite office in the UK because it's a 20, 30 percent discount to what I was expecting. But yeah, that's a tough way to get business. But I think that is partly what they're betting, right, is that there will be this increase in in economic activity. I mean, I think yes. That was the goal of the tax cuts.

It's all very complicated and it's also deliberately obfuscated all the time. Right. And there's, we're basing like even our current monetary policy in the U.S. in terms of raising interest rates to curb inflation, right?

That simple activity action that we're taking is based on activities that happened in the 70s. when Paul Volker did that and threw the economy into recession to kill inflation. It was the only way to do it. And it happened at a time. Maybe not the 70s. That was the 80s, right? Inflation from the 70s, late 70s.

Yeah. Paul Volker doubled interest rates in the late 70s to kill the inflation that was going on then. So then in the 80s, you had people buying houses with like 19% interest rates. I remember that, yeah. Because interest rates were so crazy. Like that's, you know. So that is, if that's the playbook that Durham Powell is following now, but it's a 50 year old playbook that happened at a time when everything about the US economy was completely different.

Exactly. We're always applying like the last playbook to the current crisis. We don't know if that works. We do know in the case of like Liz Truss in the UK that I have been obsessed with this story, this thing that came out in 2020, this 50 year, 18 countries. longitudinal study that the London School of Economics did, where they said over 50 years of data across 18 countries trickle down economics, this very specific thing that the trust government is doing, which is cutting taxes on the wealthy, trying to inject money into the economy through

corporate and wealthy people, never works. Like, never, has never worked. Only ever increases inequality. The money doesn't trickle down. Like, so, So, you know, assuming you believe the most rigorous possible economic research, this is a strategy that's designed to fail. And there are some clearly investors and economists who are looking this and being like, oh, okay, we're screwed. Yeah, I think in and of itself trickle down. If you just think from an affluent person's perspective, if you save a little bit on your taxes, do you go invest it, you know, in starting a small business? Probably not. You probably just sit on it and.

Well, and what happens? And conversely, if you raise people's taxes too much, they do start to think, yeah, maybe starting a business is not worth that kind of situation. So I think there's probably two extremes to it. You know, if you do raise taxes too much, people will move to lower tax locations. We see that in the United States happening right now as people bail New York and California for, you know, places with lower taxes. So there's like a breaking point on either side of this for sure.

Yeah. It's going to be a crazy year. I think it's going to be a crazy. I mean, I think, fundamentally, it's going to be crazy. Weddings are back. Black tie events are back. In-person business meetings. It's all coming back, folks. And you want to look great and you want to do it for a great price, right?

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raising interest rates is going to have an impact. Now mortgages are 6%. Oh, my God, people with variable mortgages right now are freaking out. Like, their payments are going up 500 bucks a month, 600 bucks a month, thousand bucks a month, who knows. But I don't think they can break housing all that much because it is a supply demand issue in addition to being low interest rates. Right. And there's not a lot of supply. And wages are not going up still, right? Like, we keep talking about inflation. Not compared to inflation.

Yeah. But not compared to inflation and not compared to the 40 prior years in which they did not go up. And they did not keep pace with inflation. They've been surging the last couple of years. You weirdly have surging wages in some ways. And you have all this out, you know, freak out about inflation related to wages. But people are still making so little that like all the mental health professionals at Kaiser are on strike. There's talk about some other big strike that might happen.

Like there was the Amtrak near miss. I mean, that was a massive near miss. And it's because these companies like didn't want to give people pay for being sick. Yeah. It's a, um, people are getting paid a lot more. We see that. Um, but you're right that we didn't have, um, wage gains for so long that it's kind of playing catch up now.

Right. It'll be and, and you have a little bit of inflation. So if the money goes to gas. And economists are literally saying, we don't want to see wages. increases because wage increases reflect inflation. So, you know, you have this real question of like, if wages didn't go up since the 70s when Paul Volcker did this and the Fed is trying to use that same playbook and that playbook includes, oh, we can't have wages going up because that contributes to inflation, but wages haven't gone up in 40 years, which is why you have populist revolt in America

and Italy, which just, you know, I mean, I'm like way down the marketplace rabbit hole right now, but there's a lot to, but it's a really complicated time. Well, people are, I think are now going to learn. I sent you this great story. I think it was in The Economist or FT with GDP and carbon. And it turns out like some people are having surging GDP while carbon is going down. And I think if you invest in nuclear, that seemed to be a major part of this. And you can have GDP growth with, you know, carbon going down if you make investments.

And I think a lot of people just haven't made those investments. And, you know, I think this is going to make people. wake up and say, yeah, cheap energy is a great way to spur your economy. And you have to wonder this turmoil that's happening in the UK and in Europe, how much of this is related to their energy costs and their lack of thoughtfulness about, you know, supplying energy to their populace. If you look at all of the issues they're having, if they had more nuclear and were less dependent on dictators for oil, this could be very different. So, yeah. I mean, it's a I think those are the issues having, they're having now.

I think you also have to look at recent history and say there have been protests across, you know, that's what the yellow vests movement is all about it. Like income inequality is at the heart of so much of this. And then, you know, costs going up because, frankly, like GDP is measured in economic growth full stop and nothing else. So the incentive, if you're a corporation who gets a big tax cut is not to pay your people more. You will actually be punished in the stock market for that. Well, and people are opting out. I mean, the great resignation, quiet quitting all this stuff.

It's real. You know, getting people to come to work in certain locations is becoming harder and harder. And it seems to be young men who are opting out. Yeah. And I know, by the way, like I'm just preempting Nauties and also Twitter that I sound like a radical lefty here. This is all in Ray Dalio's book, right? Like nothing about this is radical.

Income inequality is a threat to national security and global stability. And every time you've had it be at the extremes that it's at now, you've had a revolution, a world war, some kind of collapse, a populist revolt, a right-wing election in Italy, like, this is just what happens. If people don't feel like this, if people feel the system is rigged and they can't, you know, move up in the system or it's an unfair deal, they will opt out. We're seeing some people opt out. And when people did opt out, what did we see? Amazon raising prices, $22 bucks an hour, get your degree, have health care. All of a sudden, everybody, when they couldn't hire people, raise their prices. So it's part of being.

being a functional market is, you know, doing that price discovery and now people have realized, geez, people just don't want to come to work. And they have rich parents. So that's actually, bolsters your argument. If the boomers, if the boomers made all this money, and they got all this wealth, and they're sitting on it. And then their kids are Gen X millennials. And they're like, oh, well, mom and dad have a million dollar house or a two million dollar house. It's paid for and it keeps going up 10% every year or two. And I'm getting that. And my parents can give me a little bit of extra money

because their 401ks are doing good. Well, screw it. I'll just work, you know, seasonally, I'll work, you know, half time. Well, I'll work when I feel like. I got to start a little business, consulting business. And I don't have to go to work because my parents are going to subsidize me. And so you have that in Europe as well. Italy has it.

The UK has it. A lot of young people have rich parents who will subsidize them and pay for their apartments or buy a second apartment and give it to their kids. So this is part of that. trickle-down has made that next generation not feel they need to go to work because they have inheritance is coming. Right. So maybe there is a version of trickle-down that's working, but it's not working for like labor and the economy. People don't have to work. It's working in a very strange way. That's amazing. That needs to be a think piece in the

Atlantic immediately. Like trickle-down is working for the people who don't have to work. It's working with like a balloon payment if you think about it. It's like all this wealth, my parents have it. They're holding it over my head with this giant balloon of money. And then like they can let a little bit of money out of the balloon for me. And eventually when they die, boom, you know, when, you know, you're 50 years old, your parents croak at 80 or 90, you get their house. And that I'm saying is massive wealth transfer will occur. But it would be a little bit better if people went to work and yeah, I mean, this is terrible.

Exactly. We're talking about this like, yeah, it's great for, but it's not. This is terrible for innovation economic growth. Like if there's just a whole bunch of people who are like, I don't have to work and I'm not going to. and we don't let any immigrants in, like, it's a problem. Immigration would be the great solution to a lot of this, you know, because then you could have these, you know, if these trust fund kids or, you know, inheritance kids, they're not kind of trust fund kids because I would put that as like,

you know, they're getting millions of dollars. But these kids who are going to inherit, let's call it hundreds of thousands of dollars, which would be the equivalent of, you know, decades of salary, or they're going to be subsidized for 5K a month or 3K a month, whatever their parents are willing to do. If they're not going to work, you know, if we can bring in 5 million people a year, to come work here, give them a path to productivity. And we looked at people coming from south of the border the way we looked at people coming

from Europe, you know, the Irish, the Greeks, you know, the Italians all came here, English, of course. And they took the jobs, you know, maybe folks who were already here didn't want. My parents, my four fathers were street sweepers, cops, firemen, you know, worked on ships kind of thing on the docks. And like, you need people to do that. Like, does it matter if they're coming from Europe or South? of the border, like, let them in. Like, let's get them to work. It would really stimulate the economy.

I certainly do not think immigrants, by the way, are just for the jobs we don't want. See, you can never head off. You try to head off the notice, but you just can't. No, I mean, there is, we could recruit people for PhDs to start companies, you know, that's great too. Yeah. But most of the folks who are, a lot of the immigration income, I mean, are people who. We have a teacher shortage. We have a teacher shortage. We have a nursing shortage. Like, there are a lot of jobs that can be filled in this country that are really great jobs. Nursing actually has been a lot of immigration has gone to nursing. But a lot of people don't have the degrees.

Pilot shortage? Like, name and industry, we have a shortage. That's true. They would also need to be credentialed, have the education qualification, and speak English. So a lot of the people coming in don't have those prerequisites, and it would take them a decade or two to get it, or maybe their kids would get it. So that's, I think, part of the problem there. But we have seen people recruiting nurses and paying for nursing school specifically.

So if you, I remember when my mom was a nurse, Jamaican nurses became a very big thing because they were recruiting specifically from some island countries to get more people here to be nurses. Yeah. I also think Indians too. Yeah, we were, we had a specific push to have more Indian doctors. Mm-hmm. And the education, you have to have the education system match the U.S. That's the other challenges. Can people assimilate and do the education systems match the credentialing system?

Sometimes they do, sometimes they don't. So the devil's in the details. It's a very complicated, right, like, and then do the education systems need to be overhauled because they're actually just, like, excessive or exclusionary or unnecessary. I don't know. Anyway, should we go back to tech? This is why a point system is really, when you look at immigration, the point system that Canada, Australia, and some other countries use.

Right. It's really a great lens, which people refuse to talk about here. They rather just send immigrants to Martha's Vineyard or have no border, you know, like these two extremes make no sense. A point system makes complete sense. you have a college degree, you speak English, you can assimilate faster. Great, we'll have a certain number of those folks. Oh, you, you know, don't speak English, you don't have a high school diploma, you know, okay, we can accept a certain amount of those folks to these regions. Let's have a

plan. You never hear people talk about a plan. You only hear them talk about these two extremes. Yes. Problem porn, I like to call it. That's why I hate both parties. Like, they're both parties view on immigration is just, has no nuance, no plan to it. It's just, have a plan. Explain to us your plan. And neither side can explain an actual plan. How many people, what categories, what point system, what degrees, where will they go? How will they assimilate?

There's other countries that really think about this in a very detailed way. The Nordics have had to. When you look at the Nordic systems, they're literally, we can accept this many people from this group, this many people from this group, you know, and they bucket everybody into what the cost of assimilation is going to be, what the cost of absorbing each person. group is going to be. And Ken, what's the reasonable number you can absorb? That is just so much a better way to do. Okay. Speaking of immigration. Or immigration or on the land. Roundabout way. I tried. I tried to make a transition. I love it. All right, listen,

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Hey, oh, according to Bloomberg, thank you, much better. According to Bloomberg, South Korean prosecutors say that Interpol, the international police organization known to us who are big fans of spy movies, has issued a red notice for Terraform Labs founder Doe Kwan. Red notice, of course,

meaning the whole world is after this guy? It is a country can do a red notice if they're searching for somebody and then there's a group of countries that participate in red notices under like sort of good faith that the person who is originating the red notice it's actually a criminal

and then they will put an APB after the person. It is like an international APB. Hold on, I found the definition. Red notices are issued for fugitives wanted either for prosecution or to serve a sentence. A red notice is a request to law enforcement worldwide to locate

and provisionally arrest a person pending extradition, surrender, or similar legal action. So every nation on earth has been deputized to find this guy. Which is a pretty big deal. It is, yeah. And they can be, you know, this is done by Interpol.

And these can be abused, as is the case with, you know, Putin has done red notices on people that are bogus. So there's a, this can be abused. But in this case, South Korea is pretty good actor, I think. And they want to talk to Do Kwan. Yeah, they are not stoked about this. He, of course, is facing charges. related to that $60 billion wipeout of cryptocurrencies that he created.

There has been this overall $2 trillion route in digital assets, according to Bloomberg, that has exposed some hugely risky practices. Neither Interpol Kwan, who has been tweeting throughout this whole thing, nor Terraform Labs immediately replied to emails seeking comment. And this is, I mean, we've sort of talked about this on the crypto roundtable also, which is this kind of question of how South Korea is treating these financial activities. compared to how it might have been treated in the U.S. Like, there is some debate, it seems like,

about how bad his actions were, but South Korea is effectively saying, like, we are not having it. Like, this Terra Luna collapse is in our eyes a huge crime and we're going to treat it accordingly. Yeah, so, and they, early this month, prosecutors in Seoul asked to revoke his passport so this wouldn't happen.

and they had claim they had some circumstantial evidence. But certainly when you go on the lamb, that doesn't look good for your chances of being innocent. Of course, he could be innocent. But when you have this big of a whole, this much pain and suffering on the citizens of South Korea who bought into this, that's a problem.

And if he won't face the music and do a thorough investigation, that really looks bad for him. And he is clearly on the lamb. Yeah. And the other thing that looks bad for him is it isn't just the, you know, again, it's sort of, there's always this question of like, yes, he started a business that ended up bankrupting people.

It was a risky. It was always a risky thing to get into. It was algorithmic stable coins. Like there was always a risk of collapse and ruin. But it is exacerbated by the fact that he allegedly also was sending off 80 million. million dollars a month to secret wallets. Oh, really? For himself, evidently.

I just looked up like, what did Doquan do? And that was a big part of it. Like in the months leading up to the collapse, there were SEC statements or statements from Terraform employees sent to the SEC that said these funds flowed into dozens of cryptocurrency wallets and it raised suspicions of money laundering. So where does he wind up? If he was going to go somewhere, would you go to Russia? Where would that money buy you freedom?

Like, where do you go on the land with a bunch of crypto money? You got to go to a place that will not extradite you and that you can pay off. So it's got to be like an authoritarian place that wants that money. And that's what I wonder about the red notice too. It seems, does it supersede extradition treaties? No, I can't. That would be crazy. If there was like a global security force, they could be like extradition doesn't matter.

So he's just got to like end up in Cuba or something. everybody's like given their suggestions. There's definitely a processor. Bill Broder, you know, had a red notice pulled on him when he was in Spain as an example by Putin and it wasn't legitimate. And so like I think Spain did not extradited him, but they did arrest him. So that the Interpol system is not perfect. There can be bad actors on either side of it, you know, obviously it's meant to catch

criminal. So almost always they're bad actors. But the governments can also put out bogus ones or my understanding of it is it's like a, there is a process even if you catch the person. They could be thoughtful about it before extraditing them. But I wonder where he is. I know he moved to Singapore because that's where a lot of crypto people were basing because of taxes and stuff like that.

But when I had him on the program, you know, I tried to get him to explain it to me. And I'm no derivatives trade or whatever. But I couldn't understand. I kept asking, where is the yield coming from? Like, who's paying that interest? And, you know, that was the thing I could never understand about these services. And listen, I'm no financial wizard. I don't work in derivatives.

But it did seem to me that. that these things did not make sense, that people were loaning out their crypto and then some other, they were getting some other tokens because they did that and some interest. I'm like, who is the person staking these coins? And if you start thinking about just first principles with crypto,

like, what is the point of this token? What is the point of it? Like, what is the value it provides in the world? And it's like, none. Store of value, money transfer. It's like, okay, well, we could all just sit here. I could make a Google, I can make a Google sheet,

with a hundred coins numbered one to a hundred, then put somebody's name next to each one, I could say they're each worth $100. Everybody give me $100. I put the $10,000 in a bank account. We could all sit there and trade them back and forth, and then we could move the money around. But that's not like really a lot of value, is it?

Right? Just creating this sort of shadow token system. And then you think about, well, if it actually has very little core value to it, and then you start trading on top of it, and you start doing very funky trading on top of something that has no core value, when it blows up, you got a problem.

This is why like, well, if people are doing mortgages, at least there's a asset underneath it. And then when they started doing mortgage-backed securities, they're like, okay, let's put a bunch of these together and we'll bundle them and then we'll create a derivative on top of it. The more you abstract the actual value. Exactly. The mortgage and the house behind it is no longer the product. The product now is this basket of securities and the risk or lack of risk that they

represent and that's exactly what happened just snowball too much distance between distance between core value in the world and you know people trading on it in some way and and that's where man maybe I'm just a simple fella but when I look at this stuff I'm always like well what does that do for you you know if you own it what does it do for you it's like well if you own a home you can live in it or you can rent it you know and maybe it goes up in value other people you know there's a scarcity of them. With gold, it's kind of like, well, what do I, I always had a problem with owning gold. I'm like, well, what's the value of it? It's like, well, you can make a necklace. I'm like, okay, that doesn't provide me any value. I'm not interested in gold necklaces, but I guess some people are interested

in jewelry. So I never understood gold or silver. If you told me rare earth metals, hey, listen, you could buy a bunch of these rare earth metals and you need them to make batteries. I'd be like, okay, yeah, I can understand owning that commodity. Could understand only wheat. But even as a commodity may be right, but like having a pile of it in your backyard. I don't know. And it seems like gold was historically valuable for some reason. And so gold to me feels like these cryptocurrencies, like, okay, people believed it had value for a long time because it was scarce, but does it actually have value? I have the same problem with diamonds.

Like, are diamonds actually valuable in the world? Why? Because engagement rings are made out of diamonds. And like now you're making these fake diamonds that are kind of better than the real ones. What's the actual value here? This is why crypto, I think, collapsed first. You know, stocks collapse next and then homes collapsing next. If you look at those three asset classes, which one provides the most value?

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Post your job for free at LinkedIn.com slash twist. That's LinkedIn.com slash T-W-I-S-T to post your first job for free terms and conditions apply. I do want to go through. Doquan has been tweeting, not since this news about the red notice, but as of September 17th, he tweeted, Dear CT, I will tell you what I'm doing in where I am. If, one, we're friends, two, we have plans to meet. Three, we are involved in a GPS based web three game. Otherwise, you have no business knowing my GPS coordinates.

I really think he might be. And then one of his tweets said, who's CT in this? Who's Dear CT? I don't know, like the South Korean authorities maybe. Do you hear everyone? No one really knows what CT means. I think this gets high. And then he goes, I am not on the run or anything similar.

For any government agency that has shown interest to communicate, we are in full cooperation and we don't have anything to hide. We are on the process of defending ourselves in multiple jurisdictions. We have held ourselves to an extremely high bar of integrity and look forward to clarifying the truth over the next few months. Cheers! With some drinks. Champagne emojis.

and then amazingly follows that up the same day with like quote tweets his own tweet about how he's not on the run and then says to be honest haven't gone running in a while need to cut some calories. I was going to bring it up when he was on the pod. He was looking like old J-Cal, you know, like a little bit of that round face going. I was going to tell him I was going to give him some advice. No, here's my advice. On the run jokes are not funny. Yeah, this is the kind of taunting emoji use. Like, man, this feels like, what's that,

was that bipolar, a borderline personality disorder? I hate to diagnose people, but when people say you have like these really high swings, like manic episodes, it feels like a manic episode to me. And, you know, I hope he's okay because this kind of manic episode in a very serious situation, not good, not a good situation, right? Yeah, it could also be, as Nick points out, and he just cashed out $500 million and thinks he's invincible. Although those are probably related.

Now, you know, I remember Doquan was like making some statements that he didn't deal with poor people or didn't, you know, he was like one of these crypto, he was like one of those crypto kids who was being a little toxic online and he was like, why should I listen to this person because they're poor? You know, and it's like, I've seen that before. I remember in the doccom era, like, I had somebody on stage at one point who was like,

that's just like an excuse for having like a sub one billion dollar market cap. Like he was like dismissing another CEO of a public company. I was like, well, there's a little bit of hubris there. Like, yeah. When you get into these measuring contests of net worth and the net worth is not based upon any kind of reality or value in the world, like, not good. Well, and I think it's very possible that people who are building, I mean, there's, you know, there's this sort of like unstable genius thing that could. be happening. And then there's also this idea of like, if you are building something that is

fundamentally contrary to the idea of institutions, right? Like your whole worldview is I am going to tear everything down. I'm going to decentralize. Banks are not, have no validity. Our current economic system needs to be totally disrupted. If that's your worldview, you could see that very easily tipping toward this kind of generalized nihilism. Like, nothing matters. No institution has value. Borders are meaningless or police are meaningless. Interpol is meaningless. Like, I'm operating at a plane. Now, this is granted when you become slightly untethered, but you could see that being easy to do if this is the world you live in, the people that you talk to all the time, and you have $500 million on top of that, you're basically like, I don't have to care about this.

It's a fair point. You know, a lot of these folks were radicals who believed in breaking the monetary system and, you know, giving an alternative to state-sponsored fiat? And I said this all the time. Like, do you think people who are running the state-sponsored fiat are just going to give their currency and their sovereignty over to a bunch of crypto-radicals? The answer, of course, is no. And then the question becomes, well, if you're going to do these things, what state are you part of?

And there is very few options in the world today to say, I opt out of being part of. of a state. I have no home. You can't really do that. That's why Peter Thiel was like exploring sea-steading. Now, it seems crazy, but the idea would be, hey, we could opt out of being part of the United States, New Zealand, South Korea, whatever. We could become citizens of this oil rig. I'm not kidding. Like, literally they were looking at oil rigs and maybe converting them. And we could all live there. Or we could live in a battle, like literally they were looking at like used battleships and cruise ships. We could be a hundred miles off Sanford. We could live there.

We could come in. But then these countries would be like, well, why would we let you in if this is just some way of opting out of society? So, yeah, I think this is when some crazy radical ideology, as you're pointing out, like, I want to build my own world, faces the reality of you kind of got to pick a country. You got to be part of something to live on planet Earth currently. I could be wrong, but is there some place for people who want to opt out of all society conventions with tax and finance and they could live there? What's the most permissive, you know, is it one of the islands in the Caribbean? You then want to participate, you know, that exists out in this labs, like out by Palm Springs. You can just live for free on federal land and like be off the grid and have a crazy terrifying life, but you're still within the rules.

Yeah, you're within laws and taxes. everything. Yeah. What I'm saying it's like a tax rule. What I'm saying is I don't think he cares what country he's in. He just is like whatever country I'm in these rules don't aren't are real. They don't apply. And he you know he might very well be innocent and just a bunch of people bought into a crazy system. Like who knows if he did anything wrong? Who knows if he knows if he stole money? He may have just, you know, made some crypto trades that are totally legitimate, possibly. Possibly. It's always possible. We have to keep one part of our mind open to the possibilities. Could be innocent and he could be, let's say he is innocent. He took no money or if he

did make money. It was just like anybody else did. And he made a clean trade. If there is such a thing in this world, he made some clean trade. He paid his taxes on it, whatever. But they want a scapegoat because crypto is a new follow to. Because they want to protect the fiat. Exactly. So, you know, maybe that's in his mind. I did nothing wrong. I built a system. People participated in it. They lost their money. I lost a bunch of money. I lost more than any. I think he did lose more than anybody. He probably had a big chunk of this, of his net worth in it. Hey, I lost more than anybody. Everybody knew the rules. And hey, there's some winners. There's some losers. Some people made the right bet. Some people made the wrong bet. The end. And by the way, Korea has a lot of to answer for too, because they were originally one of the countries that was going to ban crypto. They were very skeptical of this. They did not like it. And they flip-flop. They vacillated because Korean citizens were so enamored with crypto. And, knowing a little bit about Korean culture, like it's a very risk-taking culture, and they embrace new technology in a big way. They embraced this in a big way, and they demanded the government

allow them to. So if you look at the history of it, Korea, South Korea banning and South Korea allowing crypto, they went back and forth and vacillated, not based on principle, I believe. I think they vacillated, and somebody can correct me if I'm wrong here, but I think they vacillated based on public sentiment. The public wanted to do this very, very big. badly. So maybe the government has something to answer for because if things were going well, Doquan was a hero of the Korean culture because he was creating amazing new crypto leading technologies and creating opportunities. So if this went well, they might have a different view. That's such a good point and it's so easy then to just drift right into like this is just

the government trying to preserve the status quo. They are, you know, they're accusing him of a crime when in fact his crime was taking a big risk and having a big loss associated with that risk. You could say the same thing about Masayoshi-son, right? Like, it's easy to end up in that side of the narrative also. We don't really know. With Masayoshi-san, he used the traditional structures. So if anybody wants to complain, he'd say, well, here's the legal documents. It's legal. You had this top-tier law firm, negotiate with my top-tier law firm, you sign these documents, here's the history of the court cases. We can resolve this in the courts if you feel you were wronged. Whereas with crypto, there is no court system. You make the bet, the trade happens.

There's no law here. Your money just gets evaporated, nuked because some smart contract or trade just got executed. So this is where, like, if you choose to participate in a global crypto casino with no regulation and you lose your money, well, you knew that was going to happen, didn't you? I really have little, I increasingly have little tolerance for people who invested in crypto or SPACs at very high valuations of things, you know, companies that had had. delivered no cars. Like, if you really made those bets, I kind of feel like you knew what you were doing.

You were trying to make a, you were trying to make 10x in a year. Yeah, of course. You're not 10%. You were trying to make 10x in a year. Absolutely. I don't have any, I have increasingly have little tolerance for those. That's why we do this job. Yeah, we are trying to make 10x. I mean, we're trying to make 50x in 10 years. Let's be honest. But we're trying to do it. But it's not a, there is no such thing as get rich quick. We're trying to do it over 10 years with a lot of rigor and a lot diligence. Jason's like, well, there's poker. I would rather, I would like it to happen quickly if I'm being honest. I mean, same. I'm willing to have 80% of the companies fail, right? Like, we, we kind of have a system here in this high vol space, which is 80% of the experiments,

aka startups maybe don't work out, 20% do the 20% make up power law, yada, yada, baby turtles. Hashtag baby turtles. Just you have to, baby turtles make it to the sea, yes. You have to go in eyes right open. Well, okay, speaking of crypto, Yeah, speaking of that. Speaking of crypto raising out of... Still plenty of appetite out here. Is there? Oh, man.

Okay. Apparently. I know Arjan. Arjun's very smart, by the way. We'll start that story out here. Arjun Sethi is... He worked with Chimatha, that's social capital. So he's a smart cat.

I know him. Super smart cat. Okay, so super smart cat, Arjun Sethi of Tribe Capital. Just evidently raised a seven and a half million dollar seed round for a crypto startup that he co-founded called Nibiro, N-I-B-R-U. Nibiru at a $100 million valuation and it's pre-launch. That's absurd as a valuation, but congratulations.

Congratulations. Not absurd for crypto, I will say, you know, like crypto evaluations make no logical sense. So somebody bought 7.5% of a company with no product in market, am I correct? Yeah, you're correct. That's absurd. Right now. Right now. Right now.

In September 2020, two, two, two, after the the whatever $2 trillion route that we just talked about. Yeah. Still going strong, evidently. I mean, that's amazing to me. I mean, listen, I will say Arjun is a really smart cat who has had moderate success. Previously, he did message me and some other companies. So he knows what he's doing.

He's smart. And so I could see people making a bet on him. I don't understand how the valuation is $100 million, not $2030. So as serial founder, maybe $30 million would be like a very high valuation. But yeah, 100 million is insane. Let's attempt to understand what the company is, too. According to TechCrunch, Nibiro is a decentralized crypto derivatives protocol. Oh, boy, here we go.

Sounds familiar. Yep. Yep. Well, the difference we think is that this is similar to Binance or FTX in that it will, we think, be in exchange. but those firms are centralized. Like ultimately, it all flows into this one exchange. And then in theory, Nibiru is a decentralized solution that would serve users on over 40 blockchains

with these advanced trading features, but not on a centralized platform. Now, if this is the part where you ask me how that works, my answer to you is going to be, I don't understand a GD word of this. I read Arjun's blog post about it on LinkedIn, but I still don't understand. other than it's just more financialization, it seems, of crypto.

Okay. So people like to make bets on crypto. It just went through this, actually, in the last story. You know, people are making bets on crypto that has no core value in the world, and then creating derivatives on top of it. That seems incredibly high risk, you know, to me. But we don't know exactly what's going on here. But a lot of this feels like people gambling.

And a lot of the people I've talked to, like from the poker world who got into it, this staking and derivatives and all this stuff. They were doing, these are the people with the most gamble in them. And so this stuff to me seems like really dangerous. But I don't know exactly what the company is. We'll have Arjan on the pod. I'm sure he'll come on when he's ready to talk about it. I would love that because, yeah, I really read about this and was like, I don't understand.

Well, again, back to financializing. But it is financializing fundamentally. This is like, it's about trading. Yeah. Like, it's fully about trading. they're going to do like arbitrage trading between FTX and Nibiru and they're going to, they've got a liquidation engine so that you can cash out. And at the end of the day, it sounds like what this is is an attempt to create a more trustworthy

exchange for continuing, right? It's for bundling up the mortgages and selling them as security. So like it's not, it maybe the world needs that because what crypto is is a is an asset class and that's all it will ever be. but in terms of creating some other kind of value, I don't see it. Remember there was a whole cult of Nibiru or whatever and there was going to be this planet that was going to come into our solar system and crash into planet Earth and a bunch of people. Yeah.

Yeah. So there was a Nibiru Earth collision that people were talking about. I don't know if you remember this, but it was decades ago, but there was, you know, people thought it was going to be the end of the world. It didn't happen. this is part of this Nibiro, the company is part of this

Cosmos ecosystem which is an existing ecosystem of blockchain. So people are like congratulating Arjun on this clever name because it's related to the Cosmos thing. But yeah, also it's like it's a huge collision of celestial

bodies that causes like complete apocalypse. So the whole thing is just kind of like naming your airplane company boom. Right. I just, I, anybody who wants to name their company, please come to me first. Just, just run it by me. Anything, like, I had named one of my first companies, Tsunami Studios. And then somebody was like, oh, kills a lot of people.

And I was like, yeah, but it's before the big tsunami had hit. And I was just like, yeah, but it's like a wave. And I just love the idea of a giant wave, right? And they're like, giant wave hits the shores everybody dies. Not good. And I was like, oh, yeah, I guess so. But I just love tsunami as a. powerful wave, but, you know, I hadn't really done the diligence two steps, you know,

further of like, cool name, but. It's a cool name, though. But yes, the Nibirro cataclysm, reading from Wikipedia, is a supposed disastrous encounter between Earth and a large planetary object, either a collision or near miss, that certain groups believed would take place in the early 21st century. It was considered a doomsday event and created a doomsday cult. just run this through the New York Post filter. This is kind of how crypto feels some days.

I'm just saying. I always run these things through the New York Post editorial room test, which is we need a cover. Okay, an aeroplane blew up from a company. What's the name of the company? Boom. Yeah. Great. Okay.

Here we go. Boom goes boom. You know, like it just like the headlines write themselves. And here, like if this thing had like a trade collapse, It would be like Nibiru, Nibiru's, you know, like. I mean, I would read the crap out of the book that was based on this Nibiru death cult and idea because it's freaking fascinating. As a company name, I do have questions.

Speaking of galactic collisions, what? Hey-oh. Sometimes it all comes together because now we're actually talking about legitimate galactic collisions. tonight we live in the future. Wait. Tonight, NASA is going to ram a robotic spacecraft into an asteroid, 7 million miles from Earth, to prove, hopefully, that we can actually defend Earth from hazardous space rocks in the future. This sounds like the start of every movie that goes wrong.

Like, if they hit this thing... Don't want to miss the thing. It does feel like that. Like, what if they hit? hit it on the wrong angle and it goes straight for Earth or the moon. Like, be careful, folks. But I think they're doing this pretty far away. Seven million miles, which, who, okay, I feel great about that, I hope.

So they have this little golf cart size thing, the dart, which is the robotic spacecraft. It's going to target this asteroid called dimorphis, which is the size of a football stadium. Got it. And it's actually just side note. It's actually a moonlit of a larger. asteroid, but they're not going to mess with the big one. They're just going to see if they can push the moonlit, just ever so slightly off of its existing path to make sure that should an asteroid be headed toward us, which by the way, is actually an extremely terrifying threat. I interviewed

this guy last summer who is an astrophysics. He's actually related with a startup. I'll come back to that. But he was like, yeah, just fun fact, if an asteroid is approaching Earth from the direction of the sun, we can't see it. So like that's how we die, basically. Is a big asteroid comes from the direction of the sun and crashes into Earth, and then we all die. So like, I'm all in favor of this working today, but also, wow. This happens all the time. The Earth gets hit by things.

And, you know, we've had significant ones because these impact events, as they're called, that's what off the dinosaurs. And it's what creates these giant craters on planet Earth. So we know this. And if we were going to have an extinction level event, on Earth, I've always been of the belief that it's going to be this. Like, I don't think it's going to be aliens. I don't think it's going to be nuclear war.

I don't think it's going to be, all due respect, global warming. I think we'll solve that. I think, actually, if we're going to get off and the reason to be multi-planetary is because one of these things is going to come flying at us, we're not going to be able to get it off course. It's going to be too big. It's going to land and it's, yeah, we're going to have to, like, put people underground and it's going to kill off life for a couple hundred years.

Like, I think these things kill off life for a long time. Oh, yeah. And then something survived. An extremely terrible potential event. And then something's right. Like the Earth survives, right? And all the little organisms and stuff. But like big things can hit the Earth.

Like, this is a real, it's obviously a real enough threat that NASA has spent a lot of money on this. And then side note, just for us for fun, evidently, the dart is festooned with cameras. cameras and they're going to capture video of it. And if the video survives and is being back to Earth, then they're going to put it on NASA TV in a couple days. So hopefully we'll get to see the footage, which is amazing. I mean, this totally is we live in the future. The fact is, we live in the future. It's incredible. For most of human existence, we didn't even know that this could happen to us. Not only do we know this is going to happen. Like, we figured out this is what happened. I don't know when we figured out, you know, that the dinosaurs were, I would like to know what

year we found out that these craters existed and that it created the ice age, et cetera. Because the time between when we discovered this as a threat and the time by which we are running drills to avoid the threat. Like, is it, is it 100 years, 150 years? It must be something in that range of when we discovered the threat to countermeasures. It's pretty dope that we got countermeasures now for things that could off us. Yeah.

Countermeasures are great. It's so awesome. And it's also awesome. that like we've got this little golf cart thing and we're going to crash it into an asteroid the size of a football stadium at 14,000 miles an hour and then just like, boop. How stupid do the dinosaurs feel right now that they never created golf carts? They could have been around if they had just invested a little bit more in golf cart technology. They could have just saved themselves.

But great. I love the fact that we have, the fact that we have the resources to take something that is like a one in a I don't know event. You know, it must be one in a million year event or something. Yeah, this is great that we have the resources

to go do these kind of stuff. We live in the future and that we have the resources to then film it and beam it back to Earth so that we can all watch it on TV. Hopefully. I hope the video works.

I hate to be a capitalist right now, but they should have sold a sponsorship for this. I mean, this is musty TV. This is kind of like the Super Bowl. I would have invested, can you imagine, like, to put somebody's logo on the side of this thing,

like Monster Energy drinks, like this collision is brought to you by Red Bull or something. Like this is a Red Bull level event. They should have gotten like a $100 million sponsorship. For this video could be awesome. I mean, you know NASA is like a taxpayer-funded organization and they actually are required as part of their charter to just give us this information.

Just put some logos on it. If I was running NASA, I would have sold sponsorships for this. This is awesome. Liquid, death. I could turn NASA into a money. I can turn it into a profit center. For sure, it could be a profit center. This would have been great.

Can you imagine the pay-per-view of this? Well, I mean, long-term, it is a profit center. Like, that's how we get all that good research and golf balls and stuff. Yeah, I mean, if we can find some of those minerals and stuff like that on those planets, that could be unlimited energy. It would be pretty great. Hey, okay, so apparently while I'm ranting like a lunatic about banning TikTok, and I'm like, why is nobody doing anything?

Everybody always thinks that, yes. I'm like, why are we letting this happen? How stupid are we that we're not doing anything? And I'm sitting there and people are like, see, Trump did something. Biden's asleep. This is the problem with you, commentators. Just because nobody's telling you doesn't mean it's not happening. Well, it turns out the Biden administration has been on it.

Apparently, they have been had secret clandestine discussions with TikTok about if they want to stay here in the U.S. they got to play by the rules or putting some safeguards. And they have actually even drafted a preliminary agreement with TikTok to try to resolve some of these national security concerns. The details are still being ironed out. It seems like TikTok may keep operating in the U.S. without making massive changes to its ownership structure, meaning that Bight Dance won't be forced to sell the platform, which had, of course, been on the table during the Trump

administration. The negotiations call for TikTok to change three major components. One, these are all according to the New York Times, by the way. First, TikTok would store American data solely on servers in the United States, probably run by Oracle. So Oracle will get that sweetheart deal instead of on its own servers in Singapore and Virginia. Second, Oracle is expected to monitor TikTok's powerful algorithms that determine the content that the app recommends in response to concerns that the Chinese government could, of course, use its feed as a way to influence the American public. And then lastly, TikTok would create a board of security experts reporting to the government to oversee its U.S. operations. Sounds like Oracle gets a sweetheart deal and a ton of data on American citizens, which is super, way better.

Yeah. Not good enough. Yeah, you're not buying it at all. Nope. Nope. What's happening here is there are very powerful people in the United States who have invested in TikTok. and they make big donations to the government. And this is the biggest win in venture in a long time.

This could wind up being one of the biggest venture capital wins in history. This company is worth hundreds of billions of dollars. And it'll be worth more than Facebook. Who's invested? Tell me more. Who's invested in TikTok? This is a new wrinkle you're tossing on to the laundry pile here. Listen, I don't want to start. aren't firing off here, but there are firms, lots of them that have put lots of money into

TikTok at very low valuations. It is one of the great wins in venture capital history. But isn't it already? Like, isn't ByDance already public? No. This TikTok has not gone public. It's going to go public in Hong Kong next year. It'll be public $500 billion. It'll be one of the largest IPO ever. It'll be one of, this will send tens of billions, perhaps hundreds of billions into American investors and endowments by extension. And so there's a group of people who have placed this bet who want to get liquid. There's an administration that those same people help put in office. And then there's the reality. China has the ultimate secret weapon that they can use to spy on Americans and to shift American culture and to shift sentiment.

It is way too dangerous. Everybody knows that. So what we have right now is how do we let all of these investment firms with all of these LPs, how do we let them get liquid before banning this thing? That's the negotiation that's really going on here. Nobody will talk about it, but I'll talk about it. You got a bunch of people with vested interests here, and here's what has to happen. It has to become an American company. It has to have an American board. It has to be on American servers. The algorithm has to be transparent, and it has to be totally disconnected from Chinese ownership and the Chinese government. And that is possible.

What it means is it has to go public on the U.S. stock market and be subject to U.S. regulation. It has to have all of the Chinese investors bought out and it can't have any connection to the CCP. Right now, that is going to be very hard to unwind. So this negotiation is a bunch of window dressing to try to allow this thing to go public, get it public, let people liquidate, and then ban it, or something like that. If I own shares in this,

I would sell them for half the current value because this is way, way, way too much of a security risk. If we're banning things like Huawei and their routers, this is much more pernicious than that. This is on everybody's phone already. This is already swinging people opinions about things.

I mean, they can basically change the top 100 charts for music based on their algorithm. So let's just let that sink in. They can pick the winners in music. Okay? So if you can pick the winners in music, do you think you might be able to pick the winners in a couple of elections? I mean, listen, I know. I've heard this from you and many others.

I want to go back to this idea of the big fight behind the scenes because the other, of course, moneyed interest here is everybody else in social media, Google and Facebook, lobbying hard to get TikTok thrown out of the country. But this is a new, this is new. This idea that there's an equal amount of money on the other side saying, no, no, no, we have to let TikTok and buy dance go public and make a lot of money. Correct. Yeah. That's it. That's what this is about. And so the government knows what it needs to do. It needs to ban this thing. It's just way, way too powerful of a tool. The risk is not worth the reward.

And so it has to be spun out. It has to be an American company. It has to have no Chinese ownership or a passive Chinese ownership. So if all the Chinese ownership was blind, they didn't have access to the board. They didn't have access to the data. They had no access to algorithm. But what that BuzzFeed story, if you remember we covered, showed was that Oracle and all the American folks were like, we don't write the algorithm. Algorithms written in China. We don't write

the back end. We don't, the Americans running this thing don't have, they don't know what's going on. So all the Americans who are running this, who I consider traitors. Is that what that story showed? I thought that story showed that some data was flowing to Chinese servers as they tried to test how much data was flowing to Chinese servers. I don't know who's. So they were like, the algorithm for TikTok is not made in the U.S. It's made in China. All the back end, all the infrastructure was built there. Now they're slowly saying, okay, let's store the information here, but how would we even know what information, what metadata was even making it to China? They don't know. The Americans don't even know the American traders working at this company. And I consider them traders.

I'm dead honest. Because to work for a Chinese company to get paid off with these massive stock options and know that the Chinese government has the ability to spy an American citizens and influence stuff, man, that is just gnarly. And I hope it's worth the options that all those people are getting there. And I know people are going to make fun of me and say, like, oh, it's just cat videos and dancing videos and you use it and, you know, All in Talk has 100 million views and you retweeted that. Listen, I could love the format.

I could love the product. While still in my consciousness know that this thing needs to be disconnected from the Chinese Communist Party. It's a group of people who have put their own citizens under the, surveillance and then finds dissent and sends them to concentration camps. This is not hyperbolic statement. This is a statement of reality. They spy on their own citizens to the most granular level, and now they have a tool to spy on our citizens at the most granular level. And anybody who works at TikTok is enabling that. If you work there, you're enabling the Chinese Communist Party

to spy on Americans. Now, if they've turned the switch and started using it, who knows? None of us will know. But it's far too dangerous. That's why India kicked them out and any logical person would say this is too powerful for a communist country to have access to. If you, let's run it through another lens. If North Korea had access to this or MBS and the Saudi government had the same tool, would we feel differently about it? If Putin had this, would we feel differently about it? If Putin owned it, how would you feel? You'd be like, I mean, I get it. I totally get it. Yeah. I completely understand. I'm slowly creeping towards your point of view, but I'm a little like, now I'm focused on this question of the competing monetary interests and the idea that there may be those in the US government who hold exactly the same position, but are like someone who invested, and we will not name names if we don't have to, but 50 or $75 million at $100 million round, that could be a $50 billion position when Bight Dance goes public and that that is like enough of a lobbying technique that all of what you have done. just said would be thrown out the window, then there's a part of me that's just like,

what even matters? Yeah. What even matters? U.S. trading firm Susquehanna reportedly owns 15%. That's the big secret. Susquehanna, they are this little known venture firm that nobody knows of. And they own 15% of it. Can you imagine the return?

Nobody's even heard of this firm. And that's where people need to start double clicking. Hmm. Heard it here first. On that note, who is that firm? Mike drop. Who is that firm? Who is Susquehan?

And who are their LPs? I would start double clicking on that. Who owns TikTok, really? Now, do we want to have our societies doing commerce together to avoid conflict in the future? perhaps, but maybe not this type of company. So it's kind of great that we make iPhones over there. It'd be great if they watched our movies and we had some, or they watched the NBA and we could build some fabric together,

but not spyware. Sorry. Full stop. That's see. And that's where I don't want to reopen this debate. That's where it all falls apart for me. Who's like, I don't think we get to have a group? Who are the executives there?

Who do they donate money to? Who's on their board? Who are their LPs? Who's on their team? There's your story, friends. There's your story, journal friends. I don't see any journalists run with it.

Double-clicking on this one. Yeah. Have you seen anybody talk about the... If this winds up being a, you know, trillion-dollar company, maybe $500 million dollar company, owning 15% is a lot of money. Yeah.

How much did they pay for it? It's a privately held. Susquehanna International Group, LLP, has a privately held trading a technology firm. Does it feel weird that we're not mentioning Sequoia China?

Because they're not the only ones with this money. It's always owns everything. Sequoia China owns a bunch of this. Like, yes, this firm is secretive, but there are plenty of, this is, I mean, this, I guess, just gets at this fundamental question

is everybody's in deep here. Yeah, I mean, a lot of people made late bets on this, right? This deal with Oracle is creepy too, right? Like, it's just like, I don't know. So who, you know, there.

There was a notable early investor. Like, plenty of people that no one like in addition to Susquehanna. Sure. I'm just talking about this one secret of firm. This one secret of firm owns like a large percentage of this. I don't know that there's any thing nefarious of it, but I do think like that is super peculiar that this firm nobody's heard of is the largest owner, I think.

So I would like to know more. Let's take this out of the realm of the super sketch and just say there's a lot of money on both sides of this question. There's a lot of money in it for Oracle. There's a lot of money in it for investors, including Sequoia China and Yuri Milner and the Susquehanna. Like, yeah, for sure. I mean, I don't know that Oracle makes much money. This is all the question of money.

And every single one of us consumers and our democracy is apparently just up for grabs. So like, I don't know, I'm not in a mood to even pick a side here. It's got to be spun out for the, you know, this is the thing. Like when you have this much money at stake, things get very complicated, right? So you have what's in the best interest of America? the country. Yeah. And then you have this economic questions. And I, you know, listen, if I had hit this giant win with this, I would also be like, oh, my lord. And that's where you just have to insist. The board needs to insist that there be no Chinese connection because

this data is too great of a risk. It's nothing to do with Facebook, Twitter. That's all, you know, unimportant. What's important here is national security, the amount of data who has access to that data. And TikTok has not done a good job of separating these things. They've done a terrible job, in fact. And so I think this is great that our, I'm just glad our government is actually involved in this. And based on what I've read, Biden doesn't know where he sits on it. He's kind of flip-flopping between the hawks who want to ban it. And then other people, you know, I think Janet Yellen just kind of maybe a little more permissive and like, yeah, let's just put some safeguards in place. There's no safeguard in place here if the code is written

in China and written by Chinese citizens because Chinese citizens work for the CCP or you die. So the end. Full stop. That's the difference between a communist country and a democracy. The rule of law. If you work for TikTok in China, you work for the CCP. You work for Facebook here in America. You are subject to American law.

Could there be shenanigans, yes. But American law prevails, as we've seen. All right, everybody. We're going out on that note. Thanks for listening. There's going to be much more coming this week.

More news. I believe we have a crypto roundtable on Wednesday. Do we not? Yeah, I think we do. Are we doing crypto roundtable? That'd be great.

Lawn is back on Thursday and, you know, haven't helped us. Whatever other asteroids had our way. Did you watch House of the Dragon? He'll be here. I haven't watched yet, but I haven't on my agenda.

And if you miss the, by the way, two great interviews. So, you know, we're produced so much content here. Sometimes they go a little faster, but I haven't listened to your

interview yet because I had the kids yesterday and I didn't want to waste it listening on, but I'm going to get on the treadmill after this and listen to your interview from yesterday. Maybe you could just give a little plug for it. I'm going to do the same thing with your interview from Friday. Yeah, so Friday, no big deal. Toby Lucky from Shopify on the show. And then Sunday, legendary investor and co-founder of Union Square Ventures, Albert Winger, talking about the world after capital, the transition to the knowledge age.

and, of course, climate investing. We just like, you know, we're just getting it done over here. I wish we had a blogger on staff. If somebody wants to blog those two. That would be so great. Yes, to write-ups. We need write-ups. I'll tell you what.

Somebody do a write-up of those. And if you do like really good show notes or write something insightful and put it on your LinkedIn or whatever, Molly and I will retweet it. Okay? Yeah. I will retweet it so you get traffic. So if anybody wants to do either of those episodes, then maybe I'll send you a, I'll Venmo you a hundred bucks or something

if you write a good one. So the best one I'll send a hundred bucks to. If you want to work for free for us, that would be like, well no, I mean, some people might want to write it to get the retweets between the two of us. I mean, I have, you have like 150, 200,000 followers. I have 500,000 or something. So between the two of it's a lot of retweeting.

I think you would retweet it, right, if they wrote a. Oh, I would 100% retweet it. But, you know, I'm holding out the retweet. I'm a long history of being asked to write for exposure and like, well, this is it for exposure, but if you want to do it for a retweet, you know, whatever. and then I'll give $100 to each of the best ones. Boom.

It's more like 105 pounds. Yeah. If you're in the UK, we'll make it 105 pounds. We'll round it up. Exactly. So you can buy some. Amazing. Amazing.

All right. Give us a thumbs up and we'll see you all. Manana. Bye bye. Bye.