Unchained - Ari Redbord Sits Down With the Hosts of DEX in the City

Episode Date: July 7, 2026

Ari Redbord sits down with Katherine, Jessi, and Vy to talk about SEC clarity, the onshore perps boom, and DeFi's opsec problem — plus why the U.S. should hack North Korea back. Thank you to our sponsor! Cape: Your biggest crypto vulnerability isn't your wallet, it's your phone number. Cape is America's privacy-first mobile carrier that rotates your SIM identity daily and blocks SIM swaps before they happen. Get 33% off your first six months at https://cape.co/unchained (use code: UNCHAINED). The hosts of DEX in the City spend every week breaking down crypto's legal fights. This time, they're the ones answering the questions. Ari Redbord, Global Head of Policy at TRM Labs, sits down with Katherine Kirkpatrick Bos, Jessi Brooks, and Vy Le for a wide-ranging conversation on where crypto's regulatory and security battles are actually headed. Vy traces her path from SEC enforcement to her case for "tech-neutral" rules: regulators should regulate outcomes, not technology. Katherine explains why DCMs have become crypto's hottest acronym, as true perps and prediction markets move onshore. And Jessi makes her push to stop calling North Korea's hacks "illicit finance" and start naming them a national security threat: Pyongyang, she notes, is funding a weapons program with stolen crypto. Ari goes further — if North Korea can steal hundreds of millions from DeFi, the U.S. should steal it back. Vy pushes back on the panic over the recent hacks: most, she argues, weren't broken smart contracts at all, just sloppy operational security. The conversation covers SEC clarity, the CFTC's moment, DeFi security, on-chain privacy, and what it really takes to keep the ecosystem safe. Host: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ari Redbord - Global Head of Policy at TRM Labs and Host of TRM Talks Hosts: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Katherine Kirkpatrick Bos⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, General Counsel. Previously held senior legal roles across DeFi and centralized exchanges. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Jessi Brooks⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, General Counsel at Ribbit Capital⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Vy Le⁠⁠⁠ - Co-host of DEX in the City and General Counsel of Veda Timestamps 🛡️ 02:29 OFAC's first IRGC-linked exchange sanctions on Zedcex and Zedxion 🧭 05:20 How Vy, Katherine, and Jessi went from the SEC, BigLaw, and DOJ into crypto 🎙️ 14:10 The origin story behind the DEX in the City name and its all-women cast 🏛️ 18:25 Vy on the SEC trading ambiguity for rules, and "tech-neutral" regulation 📈 22:36 Katherine on why DCMs are suddenly crypto's hottest acronym 💙 25:38 Cape: Get 33% off your first six months with code unchained at https://cape.co/unchained 🩹 26:12 Jessi on reframing illicit finance around victims, not just enforcement 🔐 30:03 Jessi and Vy on Drift, Kelp, and why the recent hacks were ops failures 🕵️ 34:52 Katherine on why privacy is necessary for on-chain markets 🔮 40:04 Lightning round: Jessi on agentic finance, Katherine on perps, Vy on vaults Learn more about your ad choices. Visit megaphone.fm/adchoices

The reason I think we are still optimistic about the future of Defi, despite all of the stuff that's been happening, is that like smart contract security has actually gotten really, really good over the years to the point where if you look at a lot of the recent hacks, they weren't actually exploits of smart contracts. When we were at the Eve wealth summit, I was talking to another wonderful GC in crypto. And she was saying, that's the good news, is that this was actually just a stupid people problem. It was about like people not taking governance and operational security seriously, right? Just very simple basic things. Like, you know, if you're a signer on a multi-sig, have a dedicated device for that. Don't use the computer that you do work and personal stuff on and that you

download random files on. Don't use that to sign your keys, right? Like just basic operational security stuff. Hi, everyone. KK here. This week is a different episode of Decks in the City. I relinquished my moderating duties, and Jesse and V. And I were recently on TRM Talks with Ari Redboard. We covered everything from why the CFTC is so hot right now, to why hacks and crypto are a national security issue, to the origin story of Dex in the city. It was a fabulous conversation,

and I hope you enjoy learning more about our backgrounds, what drives our passion for all things crypto-lawyering, and why we wanted to do our own podcast. Enjoy! I'm Ari Redboard, and this is TRM Talks. I am Global Head of Policy at TRM Labs. At TRM, we provide blockchain intelligence software to support law enforcement investigations and to help financial institutions and cryptocurrency businesses mitigate financial crime risk

within the emerging digital asset economy. Prior to joining TRM, I spent 15 years in the U.S. federal government, first as a prosecutor at the Department of Justice, and then as a Treasury Department official, where I worked to safeguard the financial system against terrorist financiers, weapons of mass destruction. construction proliferators, drug kingpins, and other rogue actors. On TRM talks, I sit down with business leaders, policymakers, investigators, and friends from across the crypto ecosystem who are working to build a safer financial system. On today's TRM talks, I sit down with the Dex and the city team,

Catherine Kirkpatrick Boss, V. Lee, and Jesse Brooks. But first, inside the lab, where I share data-driven insights from our blockchain intelligence team. On today's Inside the Lab, we're focusing on a structural shift in sanctions enforcement. OFAC sanction Z-Sex and Z6Ccion, marking the first designation of a digital asset exchange linked to Iran's IRGC. This matters because in 2025, sanctions-related cryptoactivity was not diffuse. It was concentrated in structured networks leveraging digital infrastructure to maintain cross-border liquidity. Sanctioning exchange is different from sanctioning a wallet. exchanges are liquidity gateways, their infrastructure.

They connect users to counterparties, fiat rails, and broader financial systems. When an exchange is designated, it affects counterparties, correspondent relationships, and compliance exposure across jurisdictions. According to TRM, in 2024, IRGC activity accounted for 87% of all ZDSEX and ZSexcion transaction volume. That is not the use of an exchange. That is the creation of a shell. company. Infrastructure-based sanctions raised costs across the network. They reduce accessible

liquidity, increase friction, enforce rerouting, and rerouting creates new patterns that can be analyzed. The data tells us that state-aligned digital asset usage is no longer experimental. When tens of billions move through structured corridors, enforcement adapts accordingly. And in this case, it did. And now, Jesse, V, and Catherine. Today, I have the most special guests, The cast of Dex in the City and three of my very favorite people in our space, V. Lee, Jesse Brooks, and Catherine, Kirkpatrick, Boss. Thank you so much for being on TRM Talks. Yay. Thanks for having us.

You're having us. I'm so excited that I don't have to host this podcast. Well, I am excited to host this podcast, and your journeys are all super interesting, and I want to start there. This episode is brought to you by Cape, America's Privacy First Mobile Carrier. Same premium service you'd expect from any other carrier, but designed so your number, your location, and your data actually stay yours.

Get 33% off six months at cape.co slash unchanged. But V, I have a really, really important question to kind of kick things off with you. You are a lifelong Nix fan and are so excited about what's going on right now in New York. Just give me a feel for the excitement. that's shaping your life at the moment. Okay. So first of all, I don't normally sound like this. So that should tell you something. It's been total mayhem. I mean, it's the Knicks being in the finals for the first time since like the 90s. It's also that I went to a bad bunny concert this weekend. Oh, amazing. That is a real combination. Between all of that, I sound like I just smoked like 10 packs of

cigarettes. So just there with me. No, it's been like complete mayhem here, like in a good way. Unfortunately, they lost game three last night, but they're going to come back. I think they'll sweep the next two and we'll see what happens. But no, it's been so much fun. And, like, I haven't felt this energy, this kind of energy in the city in so long. So, V, with all of that, would love to kind of hear about your journey. How did you get into the space, you know, financial regulation sort of more broadly? This sounds like so cheesy, but the honest answer is like, I got into the space and I've stayed in this space.

for all these years because crypto is the most intellectually alive thing I've ever done. You know, I came to it first as a government lawyer, so I wasn't like a cypherpunk or a true believer or anything like that, right? I was at the SEC in the enforcement division looking at like all of the things that could go wrong and a lot did go wrong. Like during my time there, we went after like just a lot of straight up scams that were happening during the crypto ICO boom, right? Like the first case I ever charged, these guys raised $4 billion in an ICU. Like, I can't even say that number without laughing. And to this day, no one knows what they did with all of that money. So, but, you know, the deeper I got, the more I realized, like,

the hard questions weren't just, you know, is this legal or is this a security or is this an unregistered offering, right? The questions were actually a lot more fundamental. Like, what is an intermediary? What is custody? What is trust? What does investor protection look like when the market structure is something totally different than we've ever seen? Right. So, you know, I've been working as a securities lawyer for over a decade before I joined crypto. And I don't think I ever asked myself once, why are the laws the way they are. I've sort of just accepted the world for what it was. And crypto really changed that, right? And that's what's kept me here. Like, I love that crypto forces you to really go back to first principles. And it's like law and tech. and markets and incentives, like all of this stuff tangled together. And then, of course, like, I think all of you guys can agree, it's never boring, right? So, like, I'm sure all of us have moments where we're like, you know, do we miss that sort of calmer, more stable legal career

that we had before this? But, you know, this is the life we chose. And I think, like, you know, we're never looking back. Catherine, I think that actually, a lot of that really probably speaks to you as well. And that is like, when I look at this space, I'm like, oh, my God, like, if you're a young lawyer, you're going to be involved in writing the law books in a way that we, you know, first it was blockchain and now, you know, who's liable in the age of AI, right? Like, talk me through sort of your career journey as really a chief legal officer at so many important places in our space. Yeah, you know, V just said a lot of things that resonated with me in a far more eloquent way. But I had a similar journey where I was a homegrown law firm lawyer. I was with King and Spalding

for 12 years, homegrown partner. You know, my blood, sweat and tears. I made it to partner. the age of 34. And then I realized, look, this is, this is great work. This is interesting work. But wow, this space is like that, you know, hyped up. The intellectual horsepower, the ever-changing nature of it. People think lawyers are risk-averse. I don't think that's true in crypto. It's impossible to be risk-averse and be a crypto-lawyer. You're constantly balancing a lot of aspects of regulatory strategy that don't exist in other industries. And, you know, I also say, I think that the people here, there's a reputation of the people being scammy. I have had the complete opposite experience with respect to particularly the crypto bar.

One of the things that has kept me in the space is even during the worst periods, even during 2022 when I was GC of a DeFi protocol that, you know, facilitated under-collateralized lending to crypto market makers, you know, Maple Finance. They've done an incredible job pivoting. That's such an incredible project. I had this team here. All the other GCs in the space were like, how can we help?

How can we collaborate? We're all here to do good, interesting work. And I'll also add as an aside, Ari, you're one of the first people I ever talked to when I went full-time crypto. So you were like maybe my second or third ever conversation with like a crypto lawyer after I was in it. And you were so positive and you were so wonderful.

You're like, how can I help? How can I connect you to people? and it was sincere, which that's just not really a thing in tradfired fire, manufacturing, or health care. So that's incredible. That is amazing. And thank you so much. Jesse, for my own journey, I mean, you've been such a huge part of that personally and professionally. I've known you for, you know, well over a decade now. Yeah. And remember when you were a baby prosecutor playing your guitar and singing at our Christmas holiday parties, I mean, it's just incredible to see your growth in the space as like a leader. And in the TRM talks journey, too. You were, our second ever guest in our second ever episode on the show when you were a prosecutor at the U.S. Attorney's Office. That was about 150 episodes ago, which totally blows my mind. Tell me about your journey. I feel like, you know, from a prosecutor in the domestic violence section at the

U.S. Attorney's Office, which is a really neat place through national security and really all the stuff that you've been doing for years now at Ribbet. So, yeah, crypto found me in a slightly different way, but I'm going to take you back about 12 years when baby Jesse, prosecutor, no wrinkle, shows up at the DOJ and was so excited to be a domestic violence and sex offense prosecutor. Like, all I really ever wanted to do in my life was protect victims in the vulnerable space. And who do I meet in my first week? But someone named Airy Redboard, who I was a bit intimidated by because he had been there maybe like a year or two more than I was, which was like a lifetime at the DOJ at that point. And, you know, I spent a number of years prosecuting just,

domestic violence, sexual assault cases, child pornography cases, sex trafficking cases, and saw that a lot of victims were affected immensely by cybercrime. And so I really wanted to lean in to the cyber side of protecting victims. And it was through that that crypto sort of stumbled into my life through a colleague of our Zia Faruqi and many others that we know, who helped, you know, sort of immerse me in the crypto space. and make me understand that it was a tool being used by criminals. And so the first case I really worked on involved Hamas and ISIS and other terrorist groups using crypto. And through that, I moved into the national security space. And I got really excited about the technology,

not just because I was learning about it and I thought it was really, really special. But as I reflected back on my many years of working with domestic violence and sex event victims, you know, I really, really felt like in many ways I could help keep them safe physically by going through the process. But there was one gap always. And that was sort of the financial security, which was a big part for a lot of the victims that we interacted with on our time on the 10th floor working on domestic violence and sex offense cases. And the financial safety side was something that the DOJ could not really touch or help in that many ways, except for like filling in little gaps here and there. And part of that was because many of them didn't have

their own bank account or didn't have financial freedom or if the account was controlled by the person hurting them or the person hurting their child. And to me, I really felt like there was a way to think about crypto as financial freedom for those that were experiencing violence and maybe was the difference between leaving and staying. And from there, I just felt like I had to be a part of building this technology because I wasn't sure if the DOJ at the time, really understood the potential of technology because it was very easy to only be focused on the bad actors. But I just saw it as another tool. Bad actors are always going to buy new technologies and rely on, you know, whatever they can do to make

money and profit, just, you know, like anyone trying to make profit. And there was something in this tech that I wanted to be a part of. And I just feel so lucky to have seen that and been able to, you know, talk to ARI, talk to many others in the space about how to do that. I love that framing about sort of, you know, helping victims. I think that when you're a superior court prosecutor at the end of the day, like people don't realize we're prosecuting this demeanors and violent crime and all this crazy stuff. But it is really about victims and about supporting people. And there was always a financial aspect to every case, whether a victim wouldn't come testify against her abuser because he supported her, kept a roof over her. I mean, there's so many interesting aspects to this. I have to ask one question before we get a little bit more substantive. And that is, I need the origin for decks in the city. Like I just starting. with the name and the vibes and you guys and Laura. Like, Catherine, I'm going to go with you here. So I think that we all shared the opinion that, A, there's too many crypto podcasts.

And a lot of them are terrible. Not through M talks, no. Fair enough, fair. Not here I'm talks, obviously. But there's too many. A lot of them are terrible. And 99% of them are old dudes. And a lot of time, their dudes talk about things that they shouldn't be talking about.

Like, they're saying things that are just incorrect. Like, they're regurgitating crypto Twitter. This has always been a source of frustration for me. And luckily, Jesse and I had been friends through the kind of CryptoGC bar, same with me and V, and we became real friends when she happily moved to Chicago. And a year or two ago, we went to a Cubs game, and it poured rain the entire time.

So I don't think we actually have to see any of the Cubs game. So we're standing there, and I was like, we should have a podcast. Like, we should have a podcast of women. And, you know, we tossed out a couple more names, and we went home and I formed a telegram group. And, Walt, you know, the four original podcasters were in this group. That changed a little bit over time.

And I was tossing out ridiculous names. I think my first name idea was the duchesses of D.Fi, which everyone immediately said that's a terrible idea. And, you know, it kind of grew from there. And we found a home with the unchained team. And one of the things we really appreciated is that Laura, she wanted to support us because she agreed with our thesis of, amplifying women's voices in crypto.

Like, all three of us feel very strongly that we're constantly advocating in policy circles that crypto's not just filled with crypto bros. And we're a great example of that. Like, you know, I'm a Midwestern bomb, okay? Like, I don't look like your average crypto bro. You know, neither do any of us. And we appreciate the diversity of voices and experiences in this space. And we're happy to feature those voices and be, you know, some of those voices.

We also were just seeing like so many bad legal takes on X, right? And so we were like, we need like we need something where like people can get legal analysis, but in a way that is like easy to understand. Well, and it was perfect because V is X SEC, Jesse's X DOJ. I'm X white collar defense. And then I was also chief legal officer of multiple CFTC registered entities. So the three of us can cover a wide spectrum of crypto developments with a degree of understanding that a lot of people just can't. And it kind of just worked out that way too.

Like we sort of, I mean, I think we all, you know, as crypto GCs, right? And this applies to you too, area like in the policy space. We all sort of can, you know, understand and talk about a whole like breadth of issues. But we really, each of us really does have like a specific area that we can go really deep in and have that background and expertise. And it's funny because it really did just kind of work out. that way. Yeah, I mean, I'm really passionate about putting diverse voices out there, particularly in tech. You know, I work in a space where we invest in all types of tech. And it's just sort of inspiring when you see different perspectives at all times. And to me, it's like a lot of work to put

this podcast together because we take very seriously our ability to educate and do it in a thoughtful, interesting way, but not just like say stuff off the cuff, but rather be really knowledgeable about what we're talking about. But at the same time, like, not to get too cheesy here, but it has become one of my favorite hours of the week. And just like a really great time for me to make the two women here hang out with me. For folks who are listening and aren't fully tracking all of this, Dex in the City with V, Catherine, Jessie is the best new podcast out there. And really what they're doing is something very different than what we do on TRM talks. And that is you're like getting together and talking about the issue of the moment. So whether it's a defy hack that,

happened the day before, whether it's new CFTC regulations, you're on it right away and kind of having these conversations and having some significant hot takes there, which I think is really cool, too. So definitely give it a listen. Unchained media. They're all over X. The three of you are incredibly diverse in terms of your background is sort of that regulatory expertise. What would you say are sort of the most significant developments right now as you're thinking about them from an SEC perspective? So I don't, you know, I don't think it's any single like enforcement action or rule or proposal or guidance. I think it's just this 180 that we've seen, right, with the SEC finally trying to move from enforcement and like ambiguity to actually providing like clear lines.

You know, for years, I think, you know, we all lived through this from different, different roles that we've had. But so much of like the crypto conversation was about enforcement and risk and all the things that could go wrong and a lot of things, you know, there were things that went wrong. But I think, you know, the current SEC has really started to think about this technology as something new and different. And how do we think about important regulatory goals like investor protection and market integrity? How do we think about how you can achieve those same goals? But, you know, with a different tech and with a different market structure and with different kinds of assets. So I think that's the big shift that we've seen and the most important thing that's happened.

That said, all of this is going to be really, really hard to implement. And I think that is that's something that the industry probably does not fully appreciate. Like, you know, if I worked at the SEC for six years. And before that, I was a lawyer in the private sector doing securities work. So I think, you know, one thing people don't appreciate is like, we have a lot of laws in like the traditional securities markets, a lot of laws and regulations for a reason. It's going to be like a monumental undertaking to think about how do we craft laws, how do we tailor them for the onshing version of a lot of that stuff. It's going to be a lot of work. We're all like involved in it in various ways. And I think we can we can do it. But it's I think that is one thing that

the industry does not appreciate just how big of a task that's going to be. It's extraordinary. I mean, to me when I think about sort of this, this issue, it's that these regulators, particularly SEC and CFTC are trying to get ahead of, you know, where Congress is. You know, hey, who knows where Congress is going? Who knows where clarity is going? But we're going to need to provide rules of the road prior to that. And that's kind of seems like what's coming, been coming from the White House since that 163 page report. It's like, hey, guys, you need to get ahead of this. It seems like that's what we're seeing. But V, what does that look like to you? Like when you talk about like, hey, it's going to have to be different. It's not rip and replaced, but it's also not like,

hey, these same rules are going to have to be applicable. Yeah. So the way that I like to think about it and the way that I approach, like, you know, all the conversations and engagement that we do with Congress, what the regulators is regulators don't regulate technology, right? They regulate outcomes. So things, like I said, investor protection, market integrity, fairness, accountability, transparency.

Those are the objectives. That's what they're trying to achieve. So the question for them should be, look, if you have something new, a new asset, a new technology, a new market structure, is there a way that we can think about the rules that will still achieve those same very important objectives just with a different structure? Right. And so I think that the task for us and the challenge for us, but also like the opportunity for us, is to show them, look, this is something that we're building. We think actually it can achieve the same regulatory goals. In some cases, like better.

than the traditional forms, right? And so I think that sort of education and kind of looking at it through that lens is really helpful for them to understand it and also for them to sort of understand what their role should be as a regulator, right? And I think, you know, people throw around the term tech neutral a lot. That is what tech neutral means to me. It means you think about the objectives, right, and not like the specific forms that you're used to. You think about the objectives and you can think about, is there new technology or like a new market structure or something that can also help us to achieve those same objectives in like maybe a more efficient, more effective way?

Catherine, similarly with CFTC, you know, it's interesting. This is a regulator that has been relatively niche for like decades. And all of a sudden with sort of crypto and Bitcoin in particular in those early days, it became really arguably the most important regulator in this space. you've represented CFTC registered entities for ages. Talk me through sort of how you see the CFTC and really developments there over the last couple of years. Yeah, I did some CFTC enforcement defense.

Look like it is true. A lot of people didn't pay much attention to the CFTC. Although I do recall years ago, the CFTC had one year where its collection of fines was higher than the SECs because, you know, they go after different kinds of entities and market participants. And see, you should never ignore

of the CFDC, especially these days. I keep joking, I'm like, DCMs are so hot right now. DCMs are designated contract markets, which are derivatives exchanges, which is where, of course, prediction markets live in the United States, and now perps, true perps, perpetual futures, live in the United States. So everybody's now, everybody in crypto is now completely obsessed with DCMs.

And I feel like there's a lot of lawyers and a lot of market participants that are all of a sudden, like, oh, we need to learn about this. We need to pay attention to this. What's this all about? Obviously, a lot of the focus has been dominated by those two things, particularly as of late. Prediction markets, which, as everyone on this pod knows, it's not just a crypto thing. There's a lot of prediction markets that have nothing to do with crypto, but obviously, like, those two things get conflated a lot. And perpetual futures, which that is a multi-trillion dollar market offshore. We saw some major news, you know, lately that is we're bringing true perpetual futures onshore. So there's a lot of unknowns linked to that

news. I think that I like where the CFTC is right now because it is supposed to be a pro-innovation regulator. And that's what it is right now. It's pro-innovation. It's also a principles-based regulator, not a rules-based regulator. This is something V and I are constantly explaining. So there is theoretically more flexibility with the Commodity Exchange Act vis-a-vis credit. and new technologies than there is with the securities laws. There was also a sense that when people were uncomfortable under the Gensler administration, that everyone was like, oh, we want the CFTC to have all the power, you know, with respect to crypto. That's actually, it's not like they're going to be easier on crypto.

A lot of it depends on the chair and his or her interpretation of the laws at this point. It depends on the commissioners. We're missing some commissioners these days. I would love to see the full suite of commissioners for both the S&S. and the CFTC. So there's a lot of unknowns. But I like what the CFTC is doing right now. I like that they're thinking outside the box. I would like to see a lot of these products come back onshore into regulated markets with centralized parties. And that's what they're trying to do. Fantastic.

If you hold crypto on your phone, your biggest vulnerability isn't your wallet. It's your carrier. AT&T, Verizon, and T-Mobile have been breached again and again. And Simpsons. swaps are still one of the easiest ways for attackers to drain accounts. That's where Cape comes in, America's Privacy First Mobile Carrier. Same premium service, but Cape rotates the identifier on your SIM every 24 hours, deletes your call-and-text metadata after a day, and protects against SIM swaps with a 24-word recovery phrase that only you control. You also get two middle-to-end encrypted secondary numbers for banking and signups. So you stop handing your real number to every app that asks. Go to cape.co slash unchained and use code unchained for 33% off your first six months. Jesse, you and I have had conversations, I think,

over the years where we love this space, right? And we want this ecosystem to grow. But in order to have that happen, you've got to keep it safe. And I think that's been so much of the focus of your career is how do we craft rules? How do we stop bad actors from engaging with this financial I think you and I both ultimately lean into the technology there. What are the things that we can do? Talk me through your perspective on keeping this ecosystem safe. It starts with reframing the conversation in my mind. Something that really grinds my gears and I talk about a lot just comes back to what got me into the space, which is the victimhood of it all. And the fact that whenever there's a hack, whenever someone is hurt by illicit finance, like that is affecting an actual human being or an actual family or an actual entity.

And so when we think about but you're saying the safety of this ecosystem, we need to take that all into account. And our conversations cannot be. Yes, we want to make sure that there's no elicit finance. But that but of a conversation is the thing that continuously gets, I think, our industry in trouble because it should be and. We want to stop illicit finance and these are ways that blockchain can enable it. Now, I talk about it a lot and both V, KK and I have debated this and also written a number of papers on it. But one of the reasons that I have remained in crypto other than the amazing colleagues and people is that I truly believe that the way the technology is built will allow us to meet the incentives of regulators and victims and make the space safer.

And we just need to prioritize it as a space. And now there is a gift for us in the fact that there is a complete coalescence of industry. Like we all talk about crypto, but the truth is we all work in crypto and financial regulation and tech and fintech and AI at this point. And so we need to use all the tools out there to make the space safer and not just say, well, everything is great, but there's a hack that we need to deal with, or but there's one entity in the ecosystem that's not a good actor. Instead, we need to take on the responsibility as an industry to say we are trying to make something better here. That is what we are also excited about, is about a better financial system where the domestic violence victims that you and I, you know, worked with,

they can now get access to something similar to a bank account. And the people in another country that are dealing with currency that is not as stable as we are lucky to have access to, they now have access to a stable currency in a way. And what comes with that is not a potential risk of illicit finance or a hack, but rather also a very secure and maybe an even more secure ecosystem. I know you talked to on your show on Dex in the City in the week or 10 days where the drift hack and Kel happens sort of back to back. But talk to me a little bit about how you think about sort of overall protecting the ecosystem from this type of activity. Talk me through how you think about that.

Because what I always argue is, look, first of all, no developer wants their protocol to be hacked. And they want to build every defense they possibly can in order to stop that. Talk me through like what you see as sort of like the way forward. First, it goes back to how I started this conversation, which is the reframing, because the phrases elicit finance, which I just use. So I'm part of the problem. and DPRK, which is the official name, are not tangible enough to people. So what I've learned from Nick Carlson, who is the foremost expert on this stuff, is they want to be called DPRK. So I call them North Korea under all circumstances.

Yeah. I think you're right. And like, let's break down North Korea for a second. I know you do it on this podcast all the time. But like they are building a nuclear weapon system with the money that they hack from crypto. That is not just like a threat far away. way that will never touch crypto users in the United States or a financial system. Like, that is a real threat we need to be thinking about. So to me, it's just making it all more tangible. Like,

what is illicit finance? That is a terrorist that could bomb a town that is vulnerable people. So, like, let's just put that into a framework. And I'm not sure exactly how to make that more tangible because of things you need to explain concepts. But it's really like, what is elicit finance? So that's number one. Number two is the, taking responsibility. And we talk about this a lot on Dex, right? So when there is a big hack, there is a lot of finger pointing. And it really should come down to like a true understanding of who is responsible for what and who is not responsible for what and who is built something and not controlling it anymore. It gets back to what B was talking about about defining control and who is actually controlling

it. Because one of the most beautiful things about crypto is that it's interoperable and that entities rely on each other in some way and protocols might be layered on top of each other. But what also comes with that is one week link can affect links 10 down, whether it be tops, whether it be protocols, 10 hops down or whatever. Like that is all interconnected. And so we need to work more collectively on this problem for security. Obviously, all the hacks that we've seen like in the past few months have been really just devastating. from the perspective of like people being hurt and losing money, protocols having to shut down, and it's just being like really hard for the industry to come back from something like this.

The reason I'm actually optimistic, right? I work at a defy company. So when this stuff happens, like I'm literally just on the phone with like our security folks and our engineers for like 72 hours straight. It's just, it's intense. The reason I think we are still optimistic about the future of defy. despite all of the stuff that's been happening, is that smart contract security has actually gotten really, really good over the years to the point where if you look at a lot of the recent hacks,

they weren't actually exploits of smart contracts. They were, it's so funny, I was like, when we were at the Eve wealth summit, I was talking to another wonderful GC in crypto, and she was saying that's the good news, is that this was actually just a stupid people. problem. It was about like people not taking governments and operational security seriously, right? Just very simple basic things. Like, you know, if you're a signer on a multi-sig, have a dedicated device for that. Don't use the computer that you do work and personal stuff on and that you

download random files on. Don't use that to sign your keys, right? Like just basic operational security stuff. But the good news is that that is very solvable. And I, and I, and I, I, think we actually have reached the point in the industry where it's finally been like a real wake-up call. And I think as an industry, we really are starting to take a lot of this stuff seriously. So I feel really optimistic. I'm optimistic too. I mean, I think there's two pieces to this. When I think about it, there's the, look, we have to harden our cyber controls. And I think that's really what you're getting at. There will be eventually standards, if not sort of best practices. And I think we see that playing out today. But I take this other tech, it's like, let's stop talking about

the defy protocols and start talking about North Korea. Like, we need to be on the offensive. If North Korea can steal 600 million from defy, we should be stealing it back. And that is a lot of what I think we need to be leveraging every sort of national security tool to do. Catherine, I've heard you talk about sort of like the visibility, the traceability of on-chain markets. You mentioned even the prediction market space. It's interesting. You have, you know, polymarket on chain. You have others that are not. And I almost feel like, hey, if we're in a world where everyone is on chain, you're regulator, CFTC in this case, would have more visibility than ever before. How do you think about sort of this new financial system? Well, it's actually a perfect segue because people think privacy bad,

privacy bad guys. And, you know, this is something that I personally have advocated against. There was actually, I was on the SEC roundtable for, you know, financial surveillance and privacy back in December, which was, you know, that philosophically has really been led by Commissioner Perce in starting the conversation about how, you know, financial surveillance and privacy, which was, you know, that philosophically has really been led by a commissioner, perse in in starting the conversation about how privacy is not a bad thing. And, you know, I take that a step further where privacy is a necessary thing if markets are going to move on chain. And I think a lot of people in this space, myself included, I've never been a true crypto evangelist in that I don't believe crypto is going to replace fiat. Okay. I think it's going to scale into a fully complimentary

asset class, which is what we're seeing. And then I also think the underlying technology is going to make markets more efficient and faster, which is, again, what we're seeing real time. But, you know, if you look at your average kind of investor or hedge fund or, you know, we can go on and on and on, they're not going to trade at scale on chain. So what do we need commercially? I'm a big advocate of privacy technology as a need commercially as on-chain activity scales. And there's also a multitude of mechanisms where you can have privacy, without sacrificing risk management or compliance, a lot of the more sophisticated technology

using Xeroen groups have things like a viewer key, audibility, a slew of different technology mechanisms, which makes kind of Jesse and I's favorite term, programmable risk management or risk management that can plug into privacy under the hood in a way where you're not, you know, intermediating privacy technology. One other point is we talk a lot about security and privacy, But I think we should take it a step further and talk about how national security and privacy should be going hand in hand as well. You know, we all, I think, believe in the Constitution. Ari and I, you and I fought for it and stood by it for so long. There is a reason why we stand behind it.

And a big part of it is the alignment and balance of national security and privacy. And there is a real ability using new technologies, not just crypto, but also AI and other sort of financial tooling to ensure that we can protect national security while ensuring the privacy of our financial transactions, but also our entire lives, because that should not be accessible to the government, to any party we do not have it, you know, in our pocket to be able to be accessible to. Vian any thoughts overall on privacy? And, you know, honestly, while we're at it, what I did want to, from your last

answer, I actually wanted to build. Just talk to us a little bit about your work at Vita today. Yeah. I think, you know, Veda is such an interesting company because it's like we're trying to sort of be the translation layer between Defi, which is, you know, very powerful and complex and the real world requirements of like institutions and everyday users. So for me, that's, that's actually a very, like personal mission, right? Because I feel like I've spent so much of my career being that translator, right? I mean, I think that applies to all of us, like translating between,

regulators and builders and lawyers and engineers and policy and and the technology and you know between crypto degen's and and tradfai institutions so you know the problem we're trying to solve now and i and i really do think it's such a marker of like how far the industry has come and how much it has mature right like institutions really want access to crypto and they want access to defy and i think The misconception is that institutions want defy to become tradfai. But I don't think that's actually true. I think they just want defy to be safe. The power of defy is that it can be, you know, all the things that we were talking about, like programmable and transparent and interoperable and composable, right? And so I think like institutions see the power of that. But they need to understand things like, you know, where does

control sit? What is the strategy? What the risks are? How do the assets move? What happens in a stress event? what diligence should they be doing and how do they explain this to all of their internal stakeholders? And so like the lesson for us at VEDA has been, Defi's powerful, people want it, everyday users want it, but the market needs to build products

that are more usable, have better risk controls. Obviously we need just more legal clarity around a lot of this stuff. We need better operational infrastructure and we need just better interfaces and like user experiences between on-chain systems and the real world. Amazing.

I'm going to ask one sort of quick question. Jesse, what are you most excited about right now? Agentic finance and how it can operate on chain. And it doesn't have to solely be on-chain, but that can be one avenue to enable an endless array of financial transactions and varieties that we cannot possibly imagine. To me, there is a true opportunity to find a path forward. for the security abilities of AI, the transparency and immutability of crypto to work together to really recreate the financial space at a speed that we have sort of been hoping for for a while.

Amazing answer. KK. I would say I'm really excited about Perps, obviously. Very on brand for the Princess of Perks. I love it. I'm the board of Brad Harrison's company architect, which recently required at D.C. and has been trading non-crypto perps offshore out of Bermita for a while. So I think non-crypto perpetual futures are really interesting. I'm also just really, I continue to be incredibly passionate about infrastructure, you know, interoperability, bridges, oracles, all of the things that are going to help facilitate the convergence between TradFi and Defi.

We are finally seeing that at scale. It's very exciting. I love the products that are helping do that under the hood and are helping make it safer in the process. V, other than the NICS, what are you most excited about right now? Oh my gosh. Okay, so my entire personality these days, and I'm sure it's so annoying to all of my friends and family,

but I'm just so excited about what we're building, like vaults. I think vaults are going to be really critical infrastructure for crypto to succeed and to go mainstream. And it's funny because we talk about like institutional adoption, like it's kind of like a bad word. But the way that I think about institutions getting more involved, like to me, that just means more everyday users are going to get to access this technology

and to benefit from it. So to me, institutional adoption is not a bad thing. It means more crypto for the world. So that's what I'm excited about. Amazing. All right, Catherine, I'll start with you with this one. What makes you happy? What do you do outside of work?

What gives you energy? Spending time with my family, of course. You know, I unlike some people in crypto, actually have a lot of civilian friends. My husband's in Tradfai, so I love, you know, obviously hang out with him and our kids and intellectually talking about his perspective on the space, reading books about crypto, books not about crypto, history, biography, getting out of the bubble, lifting weights and walking, which is, you know, every 40-somethings women's, like, MO right now, like, lifting heavy weights, walking, traveling, skiing. One day I'll get back to scuba diving when my kids are older.

Amazing. Jesse, what do you love to do? What are you passionate about outside of, outside of the space? Yeah, I am a total hobbies, girly. And so my current biggest hobby is definitely Claude but that does not count. I love Legos. I build a lot of Lego sets. I still play guitar and sing very poorly. I don't do it in public at, you know, professional settings anymore. And I go to a dog shelter and volunteer there a lot. Anytime I can surround myself with animals, particularly dogs and see the world through their eyes, it just gives me such joy, especially like seeing them on the beach, as you know, I do love a beach. All right, V, what do you got for me? Oh, gosh. Okay, so I have three young kids. So a lot of my

real life is just people. Yeah, shuttling them. Us too. Very wonderfully, like, ordinary, right? school, travel, each just on the weekends, trying to create little traditions for them. But personally, I love reading, I love horror movies,

I love skiing, live music. I love Nashville. At any chance I can get to go to like a crypto event there will always say yes. I love being near the water. And I love,

like, listening to the same Bad Bunny song like 10 times. This is a thing about me that I think people will find crazy. If I like a song, I will listen to it 10 times in a row. Famously, we talk about country music a fair amount on this show, too, because it's a passion

of mine. Are you a country person or just sort of love the overall Nashville vibes? I just, I love that there's a city out there that has such a sheer, like, amazing concentration of like, Schner talent. Like, to me, that is such an incredible thing. And it's just fun. We were just there, actually. Amazing.

And it was incredible. I mean, to see all of crypto at Ruby's was like one of the true thrills of my career. I was like, I can't believe this is happening right now. Some of the most important regulators in the world were listening to music with us, which was pretty cool. That is awesome. Thank you so much for the conversation. I feel like there's so much more we could have talked about today. And maybe this is like, I don't know, Dex and the city TRM talks mashup one or something like that.

Yeah. But we'll have you on. I would love to come on. Oh, my goodness. Absolutely. We need to have you on ASAP. As long as you call me Mr. Big or something, some version of that. Aiden, right, Aiden. You guys are the Carrie Bradshaw's of Crypto. I don't know. Thank you so much for joining TRM talks, and I cannot wait till next time.

That was a really special episode. I thought of TRM talks. And honestly, for me personally, as I mentioned, you know, V and Catherine and Jesse have been, you know, people I've looked to in our space for advice and guidance and career stuff and just to have them on the show together. But what's so fun is that they really do bring these really unique perspectives. And whether it was intentional or not with Dex in the city, you know, V has this really. really deep background as a former regulator at the SEC, Catherine representing CFTC registered entities for years, and then Jesse and I haven't been colleagues at DOJ for so many years, you'll have that really different perspective and different expertise. And I love what they're doing, is really tackling the sort of really key issues of the day as they're happening in real time. Really cool conversation today. I love the going deep on perps with Catherine, really hearing Jesse's perspective on keeping the ecosystem safe, particularly around hacks. And then V. really talking about the importance of tech neutral regulations, right? If we're going to, if we're

going to regulate, it's not regulating technology. It's regulating outcomes. I thought that was one of my favorite pieces of the conversation today. So looking forward to doing more, looking forward to going on decks in the city, you know, look, I think you all know that the reason I have the energy that I have and the reason I love this space is the people. And these are three of those people for me. On the next TRM talks, I sit down with the CEO of Comply Advantage, VATSA, Narasimha. If you love the show, leave a review wherever you're listening to it. And follow us on LinkedIn to get the latest news on crypto regulation, compliance, and investigations.

TRM Talks is brought to you by TRM Labs, the leading provider of blockchain intelligence and anti-money laundering software. This episode was produced in partnership with voltage productions. The music for this show was provided by EcoLeod. Now, let's get back to build it.