Unchained - Can the New Solana Phone Go Mainstream? And What the Roman Storm Verdict Means - Ep. 883

Episode Date: August 8, 2025

Solana Mobile’s Emmett Hollyer joins to talk about the Seeker phone, and former prosecutor Sam Enzer breaks down the partial Roman Storm conviction. This week’s episode features two big stories. 📱 First, Solana Mobile has begun shipping the Seeker, its second-generation crypto smartphone. Emmett Hollyer, GM of Solana Mobile, joins to explain: What’s new in the Seeker and how it compares to the Saga Why he says it’s the most secure phone for crypto How Seed Vault, Seeker ID, and the SKR token could reshape crypto identity, incentives, and adoption ⚖️ Then, we unpack the Roman Storm verdict. The Tornado Cash co-founder was found guilty on just one of three charges. Former prosecutor Sam Enzer explains: Why the outcome is seen as a partial win for crypto Why Storm has strong grounds to fight the verdict What this means for developers building privacy tools and open-source software And whether the remaining conviction might be overturned Visit our website for breaking news, analysis, op-eds, articles to learn about crypto, and much more: unchainedcrypto.com Thank you to our sponsors! Walrus Xapo Bank Focal by FalconX Guests: Emmett Hollyer, General Manager of Solana Mobile Sam Enzer, partner at Cahill Gordon & Reindel Links: Solana Begins Shipping Seeker Phone Tornado Cash Co-founder Roman Storm Found Guilty on One Count Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's episode covers two stories shaping the future of crypto from innovation to regulation. First, I sit on with Emmett Hollier, GM of Salana Mobile, to go deeper on the seeker, Salana's new crypto smartphone. Is this finally the device that brings self-custody to the mainstream? Then we unpack the verdict in the Roman Storm Trail with former prosecutor Sam Enzer. Storm, the tornado cash co-founder, was found guilty, but not on the most serious charges. What does it mean for open source developers and the future of crypto privacy? We'll start my conversation with Emmett. Enjoy the show.

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Trusted by 80 plus institutions, now open to serious traders like you. Visit askfocal.com. Heads up, everyone. We've got exciting news. Bits and Bips, our Macro Meets Crypto Show, is officially spinning off into its own podcast feed, YouTube channel, and X account. If you've been enjoying the deep dives into interest rates, monetary policy, and how they intersect with the crypto markets, make sure to follow Bits and Bips wherever you get your podcasts on YouTube and on X. You'll find the links to YouTube,

X, and other podcast platforms in the show notes. If you're watching this, there's a QR code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer clips from the show on those accounts. Remember, go to the show notes now and subscribe to Bits and Bips. That's Bips, plus sign Bips spelled BIPS on YouTube X and wherever you get your podcasts. Welcome, Emmett. Hey, Laura. Thanks for having me. So congrats on The Seeker, finally shipping this week. How are you feeling right now? A little tired, but mostly excited. It's been a busy couple of days, weeks, months, years. So this is like a very, very fun milestone for us

getting to see actual customers receiving their actual devices. Yeah, before we dive into the details on the seeker, I'm just so curious. Right before we started, I asked you to put your devices and do not disturb. And you said, I have three. So please tell me your current phone set up. So yeah, I just want to know. So I currently have three devices on my desk. One is a production seeker. So the the brand new ones that started shipping out this week. This is what I've been onboarding my whole life to the last few days. But next to it, I have a pre-release prototype of Seeker that I had been using as a test device for a couple of weeks.

And then I do have an iPhone on my desk, which I'm in the process of moving my whole digital life away from and back into Seeker. Wow. I also just want to talk about, like, you know, when you started working at Salonamobile, which I believe was, I think, like three-ish years ago? Little over three years ago, yeah. What was your overall goal? Like, how were you thinking about how to approach this, you know, kind of task or mission?

And what problems were you trying to solve? When we set out to do this, it was a pretty obvious problem that existed. Things have progressed a lot since then. We've made a lot of progress, but the problem still exists, which is developers who are building crypto-enabled products and users who care about crypto-enabled products have a very hard time finding one another. If you're a builder trying to distribute your app through one of the using app stores and get around their arbitrary policies and be able to afford their extractive fees made a lot of crypto products a non-starter in most app stores. Now, like I said, there's some

openings that have been kind of appearing in the last couple of months. So some products are getting through, but historically it's been a major challenge. And from a user perspective, if you wanted to do anything crypto-related, you were kind of relegated to being stuck to your computer. The best you could hope for on mobile was maybe your favorite product had an okay mobile website and then you would open it up in the browser tab of the wallet that you downloaded. But it's not, that wasn't a great experience. It wasn't a secure experience. And so we set out to solve those problems. We wanted to bring builders and users together on mobile. And so, you know, one thing that's very noticeable, you know, so I received my seeker late last

tonight, you guys, I would have wanted to have content ready for the morning. But unfortunately, I literally happened to be in a tunnel underground, not getting a signal when they arrived on Monday to deliver it. And so I was like, oh my God, I can't believe that was like the one window when they try to drop it by. But anyway, so, so yeah, I haven't, I haven't been able to use it as much as I would have liked. But, you know, it's very slick and it feels very much like just any phone that you would, you know, buy on the market. So I was just curious, like, you know, because this phone, it just feels and seems quite different from the saga. What were the issues with the saga that you wanted to improve upon with the Seeker?

First and foremost, we wanted to make sure that it felt more portable. That sounds like kind of silly in the context of mobile phones. We think of them by default as being portable. But it's amazing how much of the difference, just a little bit of size and a little bit of weight can make. And so one of the pieces of feedback we heard from many, many, many of our saga customers was this thing almost feels like too much to bring around with me. Whether it's my primary device or whether I treat it as kind of my secondary crypto slash financial device, it's just a lot to bring along.

And so we wanted to make it smaller and lighter and easier to carry. But, you know, somewhat paradoxically, as you make phones smaller, it gets a lot harder and a little bit more expensive. You're basically constraining yourself. You've got less battery space, less chip space. You have to be more thoughtful about things like building the antenna. and all the parts. And so we set out to make something that was smaller, but didn't sacrifice on things like screen brightness

or camera performance or all day battery life. So it was fun to start from the drawing board, but we knew we had to if we wanted to be able to meet most of our customers' needs who really were craving something that felt still premium, but a little bit more easy to take on the go. And did you have experience building mobile phones before you started working at Slotam Mobile? Me personally, no.

Fortunately, the first hire, when SalonMobil started, three and a half years ago, Anatolia was like, we're going to do this. First person he hired Steve Laver is the, has perhaps the most impressive hardware-backed CV of anybody I've ever met. He's built headphones and phones and smart watches and you name it. So we had him around, which was extremely helpful. I came in to help build out the rest of the business and grow us

and tackle everything from operations to support to product. But the two of us together have built this thing out, lending on his hardware expertise. Anatoly's systems engineering and background around chip sets, and then frankly, just a bunch of really talented hardware partners that we've been lucky enough to work with across both Saga and for Seeker. And what was your background and how you came to crypto, let alone Solana? I before, so telling it chronologically, many years ago, I was working as a product

management consulting, doing all things mobile. So like in the late teens, when every Fortune 500 company was saying, we need better mobile apps, basically. They all had super terrible mobile apps. They were just small versions of their websites. I worked at a company that helped basically start them from scratch and say, hey, look, mobile is a totally different landscape. You can't just take your desktop app and make it small.

You have to start from scratch. What do your users care about? What do they want to do on the go? And so I really fell in love with mobile. And I could say it was a totally, it was still new-ish, but it felt like a really fertile ground to build some super interesting products. And so I built that experience and then went to work at Google for a few years, actually implementing AI for telcos. So it kind of continued on the mobile-ish journey, a little bit more AI-oriented.

But that experience was really interesting because it gave me access to cutting edge, emerging technology that frankly wasn't ready yet. Like it was pre-product market fit. It was before OpenAI had launched ChatGPT. It was before Google had launched Gemini. So we were trying to bring products to real cost. customers around the world, maybe with technology that was like still trying to find its way. And so I was fortunate enough to know somebody who was at Salana Labs at the time. And he reached out and said, we're starting this totally crazy moonshot.

We're going to build a phone. And you've got mobile experience. You've got emerging tech experience. Would you want to jump on? And at that time, I wasn't, you know, super like head over heels all days, you know, spending my time thinking about crypto. But I had found a love for the technology and was super interesting. And so I said, yes, and it's been a crazy journey.

Oh, wow. This is super interesting. So you, so you weren't even like super into crypto. It was like you had some work experience with mobile phones and then they reached out to you. And then you kind of got into crypto. Yeah, kind of. I wasn't actively, you know, there's a lot of people that we work with who have super strong crypto backgrounds.

It's something they've cared about their whole lives or for as, I guess, as long as it's been available. And for me, I definitely knew about and cared about it. You know, I had a portfolio. I was trading. I had started my self-custody journey, but it wasn't the thing that I was like. I needed to find a way in. Rather, I had a love for emerging technology, cutting edge tech, wanted to be doing something a little bit more nimble than what I was getting at Google.

And the stars kind of aligned where it was a great company with some really intelligent people, some of whom I knew, and they needed some help. And I came on board. And since then, obviously, I've become much more people fluent. I've a real love for the products that are being built in our space. And so it's been fun. It's been like a good opportunity for me to, it had been a great opportunity for me to kind to get to know everybody a little bit better and get to know products a little bit better.

Yeah, it sounds like you probably went pretty quickly from casual user to like power user. It was like overnight. Yeah, I was like when I joined, I had, you know, I definitely transacted. I had a phantom wallet. I was kind of doing the bare bones swapping. This was still in the heyday of NFT trading. So I owned a few NFTs, but it definitely, I flipped a switch overnight.

Yeah. All right. So now let's talk about the Seeker more in depth. What would be the biggest features that you would want listeners to know about? Yeah, two things. First and foremost, Seeker is the most secure place for crypto, period. We've built what we call Seed Vault. Seed Vault was available on Saga.

To put it simply, Seed Vault keeps your crypto keys separate from the rest of the phone. It keeps it away from the operating system and from the apps. It's really designed to give you a fully secure self-custy experience on the go. And so with Seeker, we've improved it. We've kept the same technology. We've kept the same security, but we've made it even more usable. And on top of that, we've actually built a wallet, seed vault wallet, with our friends at SoulFlare.

And the purpose of tying those two things together is to really build what feels like an OS-wide transaction signing and connection experience. I think a lot of us are very used to the Google and Apple sort of payment models, where no matter what website you're on or what app you're in, There's usually just an easy button to hit. And then before you know it, you've spent some money and it was very seamless, but also very trustworthy. The purpose of Seed Vault and Seed Vault wallet is to bring that type of experience to crypto, but make it feel phone-wide. So I think that that's kind of the first thing.

And the second is the Salon Adap Store. I mentioned at the top, we want to create distribution. We want to be able to bring builders and users who care about crypto together. And so we've built an alternative app store that does not take fees from developers. It does not impose arbitrary anti-crypto policies and has really become like a fertile ground of innovation of teams who are either building totally new products that we haven't seen before or extending the capabilities of their desktop apps into mobile. And so we're very excited about the discovery opportunities that are there as well. Yeah, you know, the first thing that you mentioned about the security of the phone, I'm not going to lie. When I was setting it up and so, okay, so for people who don't have one or maybe haven't heard.

So basically, there's a little, so sorry, this is awkward because I'm trying to show it well. We'll do this and we're going together. So you, there's a little button on the side and then you like have a biometric reader there. So it like logs your fingerprint the way that, you know, like an iPhone will log your face or your eyes or whatever it's doing, your iris. I'm not sure exactly what it's looking at. And then basically, I think it's something like, yeah, tapping the. that your finger there is what allows you to do different transactions. When I was setting this up, I thought, ooh, that makes me scared.

Like, what if I'm like holding the phone in a certain way and I accidentally hit the, you know, but I don't mean to or, and maybe it's just that I've interviewed so many people who have very, who are smart and like know about fishing, you know, scams and whatever and still have fallen victim. So how do you think about that? because, well, okay, so we'll talk about that, you know, but then one other additional question is just when you talked about the seed vault, you know, the one of the selling points is like if somebody steals your phone, they can't, you know, open the vault because they wouldn't have your fingerprint.

But then I wondered in that case, then when you set up a new phone, will your fingerprint open the vault or do you have? have to enter in the seed phrase or yeah, I was curious for that. So I did a multi-pronged question. No, it's all good. All good questions. So first in terms of making sure that you're not accidentally signing malicious transactions, the gesture to sign and connect on Seeker is actually a double tap and then you place your fingerprint. And so that actually serves two really important purposes. And you'll notice that same pattern. Now that I'll kind of walk through it, you'll notice it more and things like Apple Pay and Google Pay as a very common practice, which is the first is a

double tap. The double tap confirms that you're alive and that somebody, a real human is using the phone and that they are intending to do the thing that is being prompted in front of them. So rather than just sort of passively scanning your face or passively scanning your fingerprint as it sits there, nothing is confirmed without that double tap. So that's part one. And then part two is the fingerprint or in the case of other phones, a face ID, and that is to confirm you are who you say you are and that you have access. So it's about checking for liveliness

and then authenticating a user. And so in the instance that you talked about, if somebody snuck a transaction in front of you, just having your finger resting on the power button wouldn't sign anything. You'd get a bottom sheet. You'd have to double tap the power button and then it would have to read your fingerprint.

So you'll be safe from those types of attacks. As for losing your phone, having your phone stolen, it's not dissimilar from having another hardware wallet. So we wouldn't have it be so that if you bought a new phone, we would just instantly recognize your fingerprints. You know, fingerprints are stored locally. We're not backing any of that information up. We're very conscious about customer privacy.

But rather, when you go through the phone onboarding, in the box, we've got some seed card phrases, or seed phrase cards, just like if you got a new hardware wallet and you were setting that up for the first time, you'd want to write those down and keep them somewhere. safe so that if, God forbid, you lose your phone or something happens to it, you can easily restore those wallets, hopefully, into a new seeker. Okay.

And just generally, so I love how you explain that about how there's intentionality behind the double tap and then obviously the biometric piece. Are there any other, you know, aspects to building the security? Because I do think there's probably attention, right, to having something that's accessible to the Internet at all times and yet you want to keep it secure. So are there any other features that have been added or other ways that you think about that tension? We that that tension you just outlined is at the heart of designing secure systems, especially something that is intended to kind of meet users in a place that's historically really easy, right?

Like smartphone apps have become so seamless to use. Like I spend money on Amazon constantly, mostly because it's just easy. Like it's like one tap and all of a sudden something's headed to my house. Trying to find that line between something that's extremely secure, but also easy enough to use is really challenging. And so for us, we have made it so that Seed Vault is built in a very custom way down to this specific hardware. So, you know, we couldn't just hand out a Seed Vault app and installed on any phone. It's very tightly integrated into this hardware.

And the reason for that is that it can sit totally separate from the rest of what the phone does. You can't download it because it doesn't even know where apps get downloaded. Everything that happens in Seed Vault is totally separate. And so that takes a lot of time. It takes a lot of development effort. It takes a lot of expertise. But we're confident that by taking that approach, we give users a much more secure version of self-custody than just relying on importing a seed phrase into an app that's running in user space or connecting to some existing wallet. We want to make sure that it is truly separate from the rest of what you're doing on your phone because phones are great. They're very connected. They're very online. But, you know, You don't want to open doors for bad actors to potentially take your seed phrase or take your funds. And is the technical language for that something like trusted execution environment or I forget, there's another piece of lingo lurking in my brain somewhere that I can't remember. The trusted execution environment is sort of the place that it all runs.

It's within the secure element is the physical hardware. It's the piece of the chip set that houses all this stuff. The trusted execution environment is where those trusted assets, apps run and then those communicate via API back up into the operating system. And so that secure element that runs the trusted execution environment, that's actually the same setup that is used on all sorts of devices for things like storing your biometrics. You know, if you've ever wondered on my iPhone, they scan my face and then they hash it, but like, how can I be sure that that's safe?

Like what if that just leaks out? The way that happens is through these totally separate elements that run what, yes, the trusted execution environment. And so we've really taken advantage of that. existing technology. It's, you know, we didn't build something new. We didn't create a new type of hardware, but we're using existing hardware in a way that other smartphone manufacturers just won't. So as we discussed, the wallet has this seed vault, but then it also has a native wallet, the seed vault wallet. And I was curious how that particular wallet differs from any other

wallet, you know, that comes with the phone, for instance, like the phantom wallet. So seed vault, maybe just to start, seed vault is an open technology. So it's very secure, it's very hardware driven, but we want to make sure that users have a choice that's obviously super important in crypto. You don't want to insist upon you only ever using one wallet provider or one software provider. So we've made Seed Vault open. There are a bunch of great wallets who have chosen to implement it so that if you have a seeker, you have your choice and your seeds are safe regardless of which wallet you choose. Now, what that said, when we launched Saga, we did that same model. We kept the API open and we said, hey, wallet builders, we'd love to have you.

We think this is a really interesting path forward. Please come work with us. But what we found was that this wasn't their baby like it was our baby. And so the attention to detail trying to build this totally new type of wallet experience, really simplified signing, really simplified connections, it just never became the priority we hoped it would. And so it was frankly just kind of frustrating. We were constantly in a world where we wanted to see more and we wanted to see innovation and it was just hard to get there.

And so when we set out to build Seeker, we said, okay, we're going to take matters into our own hands. Just like three years ago, we decided to take matters into our own hands by building a phone in the first place and build a mobile first wallet that is supercharges the seed vault experience. And so from a differentiation perspective, you know, at its core, it does a lot of the stuff that you would expect a wallet to do. But what really sets it apart is how native it feels to the phone.

When you're in Chrome or in a native app, if you hit the connect button, you'll be able to just connect directly to the wallet without any sort of back and forth. You don't need to go into a special browser tab within the wallet. It's all built on this connective tissue that makes it feel very seamless. So I can head to Jupiter in my browser, connect. I'll get a little bottom sheet and then it'll disappear and all of a sudden I'm in session rather than you need to do a million back and forth. So seed vault wallet is really a usability-focused product for us. Okay. And so just so I understand, so when I'm using a third-party wallet, I have the choice of whether or not I want it to connect to the seed vault and use that as my security for that wallet.

Is that what you were saying? Exactly. Yeah. It's not dissimilar from having a hardware wallet, right? Like if I have a ledger and I plug it into my computer, I can connect to that wallet via Phantom or SoulFlare and their browser extensions. I can also connect to Ledger Live. It's standalone software product. Seed Vault is built very much in the same way, where it derives wallets for you based on your seed,

and then wallet providers can connect to them so that you can use whatever software you want. It's just that we've also built our own wallet that we think takes special advantage. Okay. Yeah, I mean, I was using it yesterday for the brief time that I had. Unfortunately, there were just, you know, It's one of those things where, what do they call it, Murphy's Law, that, of course, I had, like, a weird paperwork tie up with, like, my account where I, like, normally have the Saul. So it just took me forever to even get Saul in the wall and was like, I just spent an hour.

But anyway, all I'm trying to say here is that despite my personal issues, which are not phone-related, it did feel, you know, pretty seamless. And there was even, like, a Robin Hood option as well. Yeah. Yeah. Yeah. Yeah, I'm sorry to hear about the journey to get the phone as well as your onboarding. We, you know, there's still a lot for us to improve on.

I think we feel really solid about the experience that we can provide. But the truth is, you know, it's still kind of hard sometimes to onboard crypto into a wallet. You know, I countless times I'm trying to bring new money on chain and sometimes the on-ramping works and sometimes it doesn't. So we want to make sure that everybody has a great experience. We work with some great on-ramping partners. So hopefully we can get more and more customers bringing new funds into their new wallets. Again, sorry, you had to deal with some bugs yesterday. That's not related to the phone.

It was just my personal situation. So I wanted to talk more about the Salana Dap Store that's on the phone. So you guys are, you know, I can tell you're, you know, admitting different apps into that app store. But then also certain ones were featured. And I wondered, you know, are there certain criteria that you use for determining whether or not you'll admit an app into the App Store and then also other criteria for determining what will get featured? In terms of submitting to the App Store, everyone is welcome to do it. We do have policies that are available online.

The long and short of it is we want to keep our users safe and secure. So any content or features that put them in harm's way, we're going to take a long, hard thing. look at and make sure that we're not accidentally, you know, publishing an app that's a flashlight and you turn the flashlight on and all of your funds get drained, for example. So first and foremost, it's about user safety and security. Beyond that, we're not super opinionated. We want to see all types of apps flourish, all types of innovation. And so we're very excited to be very crypto-friendly and let all sorts of crypto-based apps in. But exactly what apps succeed and what takes off. We're still excited.

We don't exactly know what's going to be a hit with the community. But with that said, you mentioned we have kind of featured space at the top of the store. That is gearing us up for what we call Seeker season, which is coming in September. And so the criteria that we've been using to identify teams to fill those slots for us are once a week, starting in December. There will be something new and exciting and exclusive to Salon Mobil. I think that last part is particularly important. It has to be exclusive. And so whether it's an app that you can literally only download from our store or an app who has some subset of features that are exclusively available to Seeker or an app that's running an incentive campaign or awards campaign or an AirDrop campaign, finding those types of partners who see the opportunity for our users and want to take advantage by giving them something exclusive.

Those are the folks that we're trying to line up. And we've had more demand than we've had slots. So it's been good. It's a good problem to try and solve for trying to figure out. exactly how to get all of our partners lined up to that program. I have to ask, because just listening to that, I thought, did the idea for this come from that Bonk phenomenon that happened with the Saga? The Bonk phenomenon was a leading insight that got us here, not the sole one.

You know, we, Bonk is kind of the one that everybody remembers from Saga, and we are very, very excited that that whole time and place happened because it gave us the opportunity to continue to learn and grow and sell more phones. phones and ultimately led us to Seeker. So we're eternally grateful to the Bonk team and the incentive program that they offered our saga customers. But there were others. There were other teams who were shipping to the store who were doing something exclusive,

offering boosts, offering rewards. And time and time again in our research with users, they said that was like the easiest way for them to decide what to try. Because at the end of the day for us, this is about products and about experiences. It's not just about free money. It's, you know, what are really interesting compelling crypto products being built. But the best way to get a user's attention, the best way to bring them on board is to incentivize them. And when you look across crypto, that can be kind of hard.

There's a lot of bots. It's pretty easy to spin up a wallet. But if you know somebody has a real phone that they received it at a real address and they're doing actual transactions, it can be a lot easier for builders to offer up those exclusive programs. And I'd love to take a tangent here and just actually hear what that period was like for you. you because I remember the funny thing is I had Anatoly on the show literally like I forgot like just I don't even know just less than a month before and I had asked him about how the phone had not sold out and you know what were their plans I you know I was kind of like you tried this thing what's where's it going next and then after we published it I don't remember like a week or two

later and suddenly it's like flying out the shelves like people are you know selling it at a huge premium on eBay like so tell me from your perspective what your life was like during that time? Well, it would have been nuts no matter what. The fact that we just were selling thousands of phones, seemingly every hour, was a lot. It was super exciting. We knew we were going to keep the mobile bet alive. It was just a matter of what it looked like.

And this gave us a lot more confidence to keep going. But for me personally, it was particularly nuts because I was also expecting, my wife was expecting our first kid. So his due date was December 11th. The whole kind of calamity started in the lead-up to that. I think maybe on the 9th or 10th, we ended up selling out phones on the 12th or the 13th. So every night, middle of the night, I'm waking up, leaning over and saying, do we need to go to the hospital?

Is everything okay? Are we good? We're past your due date. And as soon as she would say, no, I turned the other way, open my phone, check Shopify, check Slack. So it was like a totally insane couple days. And then as we were heading out and we knew that he was kind of, I said, okay, so are we doing this again?

Everyone said yes. And I said, all right, I'll be back in a little bit. Let's do it. And here we are. Well, congratulations for surviving. Thanks. Actually, aside from secrecy's, and are there other kind of plans to kind of grow demand for the phone?

Because I can see right now, obviously, you're very much targeting crypto users, Salana in particular, the Salana community. And, you know, Apple last year sold. 232 million phones. And, you know, the fact that you have just sold 150,000 is, is great, obviously, for such a new product. But, you know, how do you think about kind of the big task ahead of trying to make this more mainstream product? Yeah. Right now, our focus is 100% on Seeker. We've got more phones to sell. I think one of the misconceptions is we only ordered as

many phones as there were pre-orders. That's not the case. We still have plenty to sell. So if anybody listening to this or online hasn't ordered, you can still head to store.slaunaMobile.com and get yours. So, you know, we want to continue to bring as many of these to market as possible. The more users we have who are transacting regulated on these phones, the more developers will take advantage of the opportunity. And that will just start spinning the flywheel of builders bringing exclusive, interesting use cases to our platform and users spending money, trying products, and hopefully building this self-sustaining ecosystem. So we're going to work closely with teams around the world, whether they're product teams, whether they're Salonic Community teams to help make sure that we're bringing products to their customers in a way that is meaningful and impactful.

But as we look beyond Seeker, which we, you know, it feels crazy to have started shipping phones two days ago and already be thinking beyond Seeker, but it's part of the job. We want our software to grow in as many places as possible. You know, like when we set out to do this whole thing, we chose to build hardware because we never could have just walked into a phone manufacturer and said, hey, crypto is going to take over. It's going to be really important. And you need to be first. You need to build great software.

You need to build great experiences. You need to build security. They wouldn't have taken it seriously for years ago. We didn't have any proof. There was nothing there yet. We've now reached a point where we've continued to grow our audience. We're shipping more devices. We're going to have all sorts of interesting usage information.

And we're just going to see these communities of users and builders grow. And so the next step for us is taking the software that we've built for Saga and improved for Seeker and find a way to bring it to other devices, whether that's devices people already own, new devices that haven't come out yet. All that's TBD. But our growth is really through new hardware partners and not always in forever, only the Salon Mobil team and the hardware that we ship. All right. So let's talk a little bit more about some of the other new features of this phone. So there's this, Seeker ID. Explain what that is and why you decided to add that to this phone. Yeah. Thinking back to what we've learned from Saga, when I talk about those incentive programs, whether it was Bunk or one of the other teams who wanted to specifically provide something exclusive or something unique to our users, as I mentioned, bots are a real challenge. And so what we built with Saga was what we called the Genesis token, the Saga genesis token.

And so as you went through the phones onboarding, you were able to claim this non-transferable NFT and then it became sole bound to your wallet. And so anytime you were transacting on chain, a builder could say, hey, we can see because of what's in this person's wallet that they are indeed transacting from Saga, we can give them this type of program. We heard not only from users that that was great because it kind of felt like they were part of a club, there was this membership component, there was this community component, but also from builders who were excited to be able to build programs on chain to recognize device holders. And so we carry that forward a Seeker, but grew it even further. And so in addition to having the Seeker Genesis token,

we built that out to also include the Seeker ID. And the purpose of those two things coming together is this is a real person, transacting on a real Salon mobile device. And with an ID and a tag, you can start to build out some of those social constructs. So whether it's social features within apps, social features between friends, peer to peer and wallets, we wanted to give kind of a new vector. In addition to just making sending money easier than just the traditional pub key address, we're pretty confident that some of those social dynamics in our community will continue to flourish through the secret ID program. Yeah. You know what's interesting. It kind of combines like a world coin type

aspect with, you know, just like an ENS or just, sorry, any any blockchain name service or crypto name service into one. So do you do you also? to see it having that sort of feature or being used in that way in the future? I think potentially, yes. Obviously with world ID, there's a slight difference in that you go to an orb, it scans your iris. And so the ID there is really proof of identity. It's proof of uniqueness. For every one eyeball, there can be exactly one ID generated. For us, it's different because it's for everyone phone, there can be one ID generated. And so it's not exactly a one to one, but it's a pretty good approximation.

You know, it's a lot easier for us to ship phones around the world than it is. But I'm so confused because when I created mine, it said that, you know, I'd have to put in my secret ID and that it could not be changed. So if I get a new phone, do I change my seeker ID or? So for each phone, you can generate exactly one secret ID. If you bought a new phone and you wanted to transfer it, we could do that with you. But what we wanted to avoid was a world where someone bought. a phone and then they claimed the Genesis token and they spun up an ID and then they reset it and

they did it again and then they reset it again and they reset it and they reset it and did it again. So we've got some safeguards in place to prevent that type of abuse. And similarly, we didn't want to see a world where somebody buys a phone. They set it up, they get the Genesis IT ID with the Genesis token and their ID and then they package it back up and sell it to somebody else. And that person doesn't realize, oh no, all the value has been claimed already. So our program is built against one ID per phone, one token per phone, not necessarily one per person. If you own multiple phones and you want to transfer it, we can do that with you. But it's more so about trying to prevent abuse.

We want to protect our builders from having their programs taken advantage of. Okay. Okay. This then maybe is why I was wondering this other question. So the saga was named the saga and this is named the seeker. But if I can't transfer my seeker ID, so then is the next. next phone going to be named something else and it'll have a different token and a different like domain name type or you know ID in it? We you know we don't have another device to announce yet

that gives me like part palpitations considering all the work we're doing right now to get Seeker out but eventually there will be more devices that have our software. I think Saga as a brand was an interesting starting point. We're very committed to Seeker on a go forward basis. So all of this connective tissue we're building Seeker ID. Some of the of, you know, we've announced SKR, the native asset of the Sonomobile economy is coming. Seeker is here to stay as a brand. And so you could imagine in the future, if you owned additional devices, we would make it easier to bring that ID to multiple places.

It's just that from Saga to Seeker, we've introduced new things, new ideas, that it was a little harder to port backwards. And so in many ways, Seeker is a fresh start. Okay. I see. So, yeah, so let's talk about more about the SKR token. It's described as the native asset. of the Solano Mobile economy.

So what does that mean to you? Like, how are, what are all the ways you're imagining this will be used? Yeah, I mentioned the growth of our ecosystem, this idea that our platform could exist on all sorts of future devices in the future. You know, existing Android devices, smart watches, you name it.

Trying to build a system that is open so that all types of hardware manufacturers can bring their products to us is really challenging. And one of the main reasons is challenging is all of those builders, have to historically have to trust one central authority. They have to say, okay, Google, we'll run your version of Android with your Google services, hope we're allowed in, and we know you're going to monetize all of the users and keep all the money. That is very

antithetical to crypto. And so we would hate to see ourselves basically fulfilling that prophecy of building a platform where we're at the center of it and we want everybody else to play by our rules. So if we're going to grow it, we also have to decentralize it. But you can't decentralize it without having some type of incentive mechanism in place. And so really what SKR is about is how do you keep users and builders and hardware manufacturers incentives aligned so the platform continues to grow and flourish and usage continues to go up? And so we announced SCARA's coming. It's not yet launched. We don't yet have a timeline for it. But when it launches, the purpose will be, how do you secure the network and how do you give everybody an open opportunity to join?

Okay. Interesting. So I've heard you, I listened to one other episode you did and was released this morning. Excuse me. And I heard you talking about just how, you know, for you, one of the big focuses, developers. So how are you thinking about, you know, how you're going to incentivize developers and like, why is it that that's so important for the secret now? It's important because we can't build every app.

The whole reason we got into this business was to give distribution to those builders. If you look at the Salon ecosystem, there's all sorts of interesting products that are not only interesting, but people are actually using. They're generating revenue. They're generating usage. But most of that revenue and most of that usage is on desktop. And so we're in the business of trying to help bring that usage into mobile. And so we have a great relationship with lots of ecosystem teams.

We can't build every app that will ever exist. So we really need to work closely with them to help them bring their ideas to life. But also, there's a bunch of teams that haven't started yet. Like there's builders who are out there who are curious, who have ideas. And historically, their way into the Slana ecosystem was, okay, like, I'll maybe join a hackathon or some type of accelerator and I'll ship a desktop app and we'll see how it goes. We want to give an alternative path that lets you come in. directly through mobile. And so that's why we just today are wrapping up the first lot of mobile hackathon, which is really focused on trying to find that next wave of builders,

teams who don't already have an app, who don't already have funding, who can kind of swing for the fences and start with like a totally new mobile idea that's not just a port of an existing desktop idea. And those types of investments, whether it's the prize pool for our hackathon or ongoing grants programs, we're hopeful that it provides just a little bit of an extra kick to get teams to take the opportunity seriously so that they can build sustainable businesses that just continue to run without us. So here we are at this moment in time in crypto where I'm sure you're highly well aware that all of a sudden it seems like we're in this phase of mainstream adoption.

You know, we have seen just announcement after announcement after announcement. You know, some of the big ones were like Robin Hood, you know, they're going to be launching their own chain and, you know, doing tokenized stocks and, you know, all the things. Perps and Coinbase is doing its everything app and, you know, JPM, you know, is going to be doing its own like deposit token and Shopify and whatever. There's just so many. We're hearing like Walmart and Amazon are thinking about, you know, doing stable coins. So, you know, we're in this place of kind of heightened competition and there's heightened competition amongst the different chains and ecosystems. So in that world,

What role do you want the Salana mobile or the seeker to play in helping Salana fight that fight? I would be hard pressed to imagine that all of those exciting announcements that you mentioned happen without succeeding in some way on mobile, whether it's everything apps, whether it's payments, solutions, all of these things. Like, we rely on our phones to do now, right? I don't even bring my wallet with me. I pay places with my phone, right? So I think the baseline assumption we have as a team is, yes, there's all of this exciting momentum.

Clearly, there's mainstream adoption right in front of us. Mainstream adoption has to, in some way, be fueled by mobile. And so we think we're uniquely situated to help support those efforts. Now, Seeker, as it stands right now, is a very, you know, crypto user-focused device. It takes all the great things that you need a phone to do, whether that's make phone calls or access banking apps or go on. social media. It does those well, but then it augments it with great crypto-centric security and usability. So as this device stands, like, do I think every point of sale terminal in the country is just going to switch over to a seeker? Probably not. I mean, that'd be great. It'd be awesome,

but it's pretty unlikely. I think what's more likely for us is that as more people come into crypto and see the opportunities, see the apps that are being built, and see how their existing phones maybe can't help them use all of these great things, Seekers are a really great entry point for them to increase their usage and continue to learn more and continue to try things. And then as time wears on, the software that we build, the software that all the ecosystem teams build, hopefully can swim upstream and start finding themselves on other types of products that people who maybe aren't crypto first, but are still crypto-curious, can get access

to whatever is next without needing to go and buy a crypto-specific phone. All right. Emmett. Well, it's been so great chatting with you and learning more about the Seeker. And again, congratulations. I'm sure you just must feel so, I don't know, relieved and proud and excited. So thank you. Yeah, a little bit of those things. I keep joking with the team. It's simultaneously a finish line and a starting line. But it's a big milestone for us. And thanks again for having me. Yeah. Thanks so much for joining us today, everyone, to learn more about Emmett and The Seeker. Check out the show notes for this episode. From the cutting edge of crypto hardware, we now turn to a very

different story, when that could shape the future of crypto development itself. This week, Roman Storm, co-founder of Tornado Cash, was found guilty on one count related to money transmission, but the jury couldn't agree on the more serious charges tied to North Korea. To unpack what this verdict really means and why it's being seen as a partial win for crypto, I spoke with former federal prosecutor, Sam Enzer, who if you were a longtime listener of Unchained, you'll remember him from his great commentary and analysis on the SBF trial. Here's our conversation. Enjoy. At Unchained, we care about the future of decentralization. So it only made sense for our media content to be decentralized.

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Want to track every move in your portfolio, news, unlocks, price action, and open interest in one place? Meet Focal, your personalized AI assistant for crypto. Built for institutions now open to serious traders like you. Focal surfaces high signal insights, automates your workflows, and helps you move faster in 24-7 markets. Find out why the smartest desks use Focal to stay ahead. Sign up at askfocal.com. Welcome, Sam. Thanks, Laura. Great to see you again. Thanks for having me on. Yeah, nice to see you. So a verdict was delivered in the trial for Roman Storm, the tornado cash developer yesterday. Obviously, it seems that it was somewhat of a win for crypto, though in my opinion it was also kind of confusing, because in my opinion, it may contradict existing regulatory guidance. But before we get into all that, Sam, why don't you give us the background on who Roman Storm is and what he was being tried for?

Sure. And it is a fascinating case with huge implications for the industry. Roman Storm was one of the three co-founders of a company called PeppercSec, which was the entity that developed the tornado cache software, was a or is an Ethereum-based protocol that is supposed to be a privacy tool. It allows users to send their crypto assets to a pool where the funds are commingled with others, which obscures the source of the funds. So if somebody is tracing the chain, it would obscure your identity or that you were the one who sent it in when the funds leave. And that has legitimate purposes, but it also can be abused by criminals. to obscure the source of criminal proceeds. And so this case was about whether Mr. Storm had violated money laundering, money transmission, and sanctions laws in a criminal way, in a willful and

intentional way through his role in operating this business. And so what were the charges? That's a very interesting question because the charges that were initially brought the government didn't proceed on all of them. So originally, during the Biden administration, which had a very different approach to the crypto industry than the Trump administration that we're in right now, during the Biden administration, my former office, the Southern District of New York, where I used to be a prosecutor, obtain an indictment accusing Roman Storm of three counts.

Count one, conspiracy to launder money, to launder proceeds of certain specific crimes. And those crimes included a conspiracy to use tornado cash to launder the proceeds of hacks and frauds in the crypto sector. Count two, which is the most important count, and the count that Mr. Storm was ultimately convicted of in part. Count two originally during the Biden administration charged a storm with conspiring to violate the laws against operating an unlicensed money transmission business in two ways. One, conspiring to operate tornado cash as an unlicensed money transmission business, full stop, which is a technical registration crime. And separately, conspiring with others to operate. Tornado Cash as an unliced, as a money transmission business with knowledge that some of the money being transmitted with this business was criminal proceeds derived from crimes. and then count three conspiracy to violate OFAC sanctions and specifically the sanctions on North Korea

because there was evidence at trial that the Lazarus Group used tornado cash to launder proceeds of the infamous Ronan hack arising from Axi Infinity. So those were the original charges. During the Trump administration, the new deputy attorney general Todd Blanche, who is himself an alum of the Southern District and used to be President Trump's personal lawyer in certain matters. Deputy A.G. Blanche issued a memorandum in April changing the guidance on how the Justice Department would approach prosecutions in the crypto sector. And in particular, he explained in the memo that he did not want prosecutors in the Justice Department to prosecute crimes against market intermediaries, like centralized exchanges, decentralized exchanges, software developers arising from registration crimes, technical crimes, failure to register as a money license,

money licensing or money transmission or money service business, for example. So after that guidance, there was a back and forth, and we don't have visibility into that. all public. But we know there was a back and forth between the defense lawyers representing Mr. Storm and the government. And ultimately, the government wrote a letter to the court, Judge Fela, in the Southern District, explaining they were not going to proceed to trial on the conspiracy to operate tornado cash as an unlicensed money transmission business. They dropped it. They're not proceeding on it. They didn't bring it to the jury. But the other counts, they did proceed on. And in the end, the jury returned a partial verdict after a long trial and extensive deliberations

with lots of ups and downs. They convicted Mr. Storm of conspiring to operate tornado cash as a money transmission business with knowledge that it was used to transmit or transfer funds that were derived from crimes. And they could not reach a unanimous verdict on the other counts, the money laundering conspiracy count, and this sanctions did the Asian conspiracy count. They didn't acquit. They didn't convict. They hung on those counts. So I was not able to follow the trial closely.

But from what I had glean, at least, it seemed it didn't go well for the prosecution. And, you know, I have an awareness. Of course, I'm getting most of my info from, you know, through this crypto lens. So maybe that's like a slanted view. But I was wondering if you could talk a little bit about those very. various ups and downs at trial. Yeah, I think that those accounts are correct in the sense that, and the verdict bears that out, the outcome.

This is a very weak verdict for the government. And I say that because there are very significant legal problems with the count that the jury did convict on. Most notably, and I think you alluded to this earlier, Laura, in 2019, so before tornado cash was launched, there was guys. from the Treasury Department's Financial Crimes Enforcement Network, FinCEN, guidance that laid out sort of how the Bank Secrecy Act and money transmission laws and regulations apply to crypto and how they do not apply to certain activities that we would typically

call defy or decentralized activity, right? And one of the things that's critical in that guidance is the notion that if you're a developer of software and you develop non-custodial software that allows peer-to-peer transfers of digital assets, which is what Ternado Cash did. That is not money transmission activity. In other words, the regulator who is charged with overseeing how this statute is applied at the federal level and who does and doesn't have to register with FinCEN as a money service business said, this type of activity, or at least what the defense said was the type of activity that Roman Storm was engaged in through his business and through Tornado Cash, are excluded.

And yet the jury found that they conspired to violate it. And I think there's going to be significant motion practice after the verdict to ask the judge for a new trial, to overturn the verdict or direct a verdict of acquittal. And if the judge doesn't grant that relief, a significant litigation at the appellate level on this question because, one, Storm and the software and PEPRSEC did not have custody of the digital assets that were being mixed through the service, okay? And that is critical for whether or not someone is acting as a money transmitter. And another issue with the government's theory, PEPRSEC and Tornado Cash, the software or the user interface did not get transaction fees. So a typical

money transmitter like Western Union, they'll receive money from someone, they send it to somebody else and they charge a fee, they get a commission base. That's not what happened with Tornado Cash. There was no fee. So how can you have a money transmission business when there is no business? They had an indirect monetization model. So in fairness to the government, their argument was that Peppercsec or Roman and others launched a token. the torn token, and that the sale of the tokens in the government's view was an indirect way of monetizing whatever was happening on the Tornado Cash protocol. But I think, you know, is that correct under the wall? There's significant room for debate about that. And there's significant room for debate about,

even if this is activity that you would say violates the statute, is it fair and appropriate to put somebody in prison when there may have been a lack of fair notice as to whether what they were doing was legal. That is a problem under the due process clause of our Constitution. Yeah, and one other piece of this is just I don't even really quite understand how they were even able to bring the charge if the guidance from the regulator is that if you don't have custody, then you know, then you're not a money transmitting business.

So can you even explain how that was able to go through? Yeah, the FinCEN is an arm of the Treasury Department and they interpret laws, but their interpretation is not binding on the Justice Department. And I think what the Justice Department would say, or at least what the prosecutors would say, is, look, that guidance is what it is. We don't think that it applies to what Roman was doing. He was doing more or doing something different than what is excluded within the text of the FinCEN guidance. So that would be their argument. That's their position.

It has to be. But, you know, the jury wasn't told about some of this back and forth. And I think those of us who have been following this case publicly know that the Treasury Department's Office of Foreign Asset Controls, OFAC, which is the body that issues sanctions. They sanctioned certain wallets or, or I should say, smart contract pools. that were used by the Tornado Cash protocol as the vehicle for mixing funds. So they were sanctioned, and then there were several litigations challenging those sanctions. Ultimately, the Fifth Circuit, one of the intermediate appellate courts in our country that sits between trial courts and the Supreme Court, decided that OFAC and the Treasury Department

had exceeded their statutory authority, that they did not have the power to sanction a smart contract protocol, software. They can sanction a person. They can sanction property. But the protocol, the smart contract addresses, are not a person and are not property, and so they cannot be sanctioned. And then OFAC ultimately lifted the sanctions. Now, I think all of that uncertainty, the defense wanted to admit that to the jury,

and the judge said no, it would confuse the jury. But I think there will be a debate about whether or not it was proper to exclude some of that evidence, which goes to the question of, did Roman have clear notice of what the government says the rules were? Did he knowingly violate them? And is it fair as a matter of fair notice and due process to put him behind bars in a situation like this? Yeah. I mean, so I wasn't there for the arguments around this, but just knowing what I know, it feels like they should have been informed of that. So during the trial, I think, like one of the very first things that happened that was, you know, a sign that maybe things

weren't going to go well for the government was the fact that I guess one of their very first witnesses may not have even had a transaction that even connected to tornado cash at all. Can you talk about what happened there? So the government called several types of witnesses to prove their case. Some of the witnesses were victims, folks who were victimized by a fraud or victimized by by a hack, and then their argument would be that that, those, the proceeds of the fraud or hack were laundered by criminals through tornado cash and that the victims complained to tornado cash or, you know, to, they emailed the founders, including Roman Storm.

And so the government wanted to say that that put the government, put Storm on notice of the criminal laundering, use of criminal proceeds, sanctions evasion. But there were all kinds of snafews during the trial. One of the victims, it turned out, had not connected up the way that the government said. Others, you know, another sort of snafu in the trial, I think the government called criminals who had used the protocol to launder funds. And in many instances, those criminals were, you know, I think in the jury's eyes, worse. worse human beings than the guy they're trying. And that's a thing that prosecutors talk about is that is referred to as cooperating down,

taking somebody who's a bad actor and letting them work off their sentence, get a reduced sentence by testifying against somebody who is a smaller fish than them. As a legal matter, it's allowed. There's nothing wrong as a legal matter with that. That is a tactical matter. I think experienced trial lawyers know juries find that distasteful. They don't like it. They don't think the prosecution should do it.

And very often they will express their discontent with that strategy, the cooperating down thing, in the way that they approach the verdict. Okay. That's really interesting. So as we mentioned, this verdict is, you know, a sort of mixed, but I think, you know, more on the positive side. So what would you say is the significance for crypto developers like Roman Storm, but also for the wider industry? So the case isn't over and we need to see how the challenges to the verdict play out and what an appellate court says before we kind of land on the conclusions. But I think one sort of piece of, there's a few lessons, right? One lesson is for developers, it is critical.

that if they are going to develop software and let it go into the world, you know, if that, and if they're going to defend themselves by saying, I develop the software and I don't have control over whether other people abuse it, then they need to be clearly, very clear that that is in fact their role, right? Roman, I think that was a big piece of his defense. His defense was, I developed this. The software. does what it does. If people were abusing it to launder money, I can't stop that. The problem is he had continuing engagement with the software. He was running a user interface. They were launching the torn token, and he's getting communications about, you know, victims having issues. And so the government argued to the jury and was allowed to argue to the jury that he could have done things, introduced compliance features, and didn't. And they said that was evidence of his intent, that he wanted this to be used as essentially a money laundering service, a way to wash dirty money.

The point there being, you know, if you're going to be a developer, then you need to keep to that role and not also run a business that continues. That could be done by some separate entity, right, to keep the lines clear. It's important. that people think about the compliance aspect of it. You know, the things the government argued, like, you know, using geo-blocking to block folks in sanctioned jurisdictions, none of it's perfect. But if they had been done from the beginning,

I think that is evidence of good faith that can be used and failure to do it can be a problem. And then another thing was just there were a lot of unfortunate communications. Some of the most damning evidence against Roman were chats, signal, telegram emails where he's talking to his co-founders and he's being very candid and probably speaking at a time when he's emotional, right? And in a trial that can be taken out of context very easily by the government. So it's really important to be thoughtful about what you're saying in writing. Like I always think of, I love Game of Thrones. And in the Game of Thrones series, there's this trial of Lannister, I'm forgetting,

Tyrion Lannister is tried for a crime he didn't commit, the murder of his nephew, who was the king. And they call a parade of witnesses who relay a nugget of truth, a comment he made here, a thing that happened there. And it's true that they happened. But the context in which they happen is completely different from the way it's presented in this quote-unquote trial. And when the government is shooting 100 bullets at you,

100 out-of-context statements, you can't sit there and tell the jury, well, that's not what I meant, that's not what I meant, that's not what I meant. Eventually, it's going to fall on deaf ears. I mean, ultimately, you have to do that, and I think the defense did a very good job of doing that, but it's very difficult,

and the best way to avoid that is to not say dumb stuff in writing. right be careful you have to when you put something in writing it's like putting it in stone you need to think about how this could be viewed under a microscope later yeah i mean the one part that you said about how like it's one thing to write code it's another thing to make a business out of it i mean you know most companies that are developing and it's not even just encrypted like most you know if you look even at like the mag seven or something like developers write code and then that's used in the business and you know even something like uniswap, like, yeah, they have developed the technology, but then they also run a front end.

So this is something, yeah, that is a pretty common model in the industry. And frankly, makes sense just from like, you know, just from how anybody was to a business sort of perspective. So I did also want to talk about how there's a number of related proceedings that have been happening in parallel. You know, like OFAC sanctions. There's the Samurai case, which that was a little bit of a surprise. event right before the jury went to deliberations. But explain what's been happening with those and how that could impact the case going forward. Absolutely. But before I do, let me just comment on what you said a moment ago, Laura. I want to make sure that what I was saying is clear. I think if you want

to get the protection of the FinCEN guidance for being a software developer, you put that in danger when you do more and you continue to run a front end. There's nothing wrong with running up. front end. But now you have to deal with other areas, which are also excluded under that guidance. And what I would say there is, I think what we're seeing from the government, there is a push and pull, right? If you run an ongoing business that profits from activity that is happening on a decentralized protocol, on an automated protocol, the government is going to complain that you need to have some type of compliance. What does that compliance look like? That's evolving. I think it is understood right now that know your customer requirements are not required, or at least the government hasn't said

that it's required in a situation where it's non-custodial and fits within the 2019 guidance. But that is the debate happening right now. Unfortunately, the Clarity Act in Congress doesn't address that particular issue. So anyway, how that gets regulated, how that gets sorted out, we'll see over the next few years. Now, to your question about the other. proceedings. It's a tortured history, but basically, OFAC imposed sanctions. Several litigations were brought, one by Coin Center, some by users of Tornado Cash, saying, look, these sanctions are illegal. The Treasury Department doesn't have the power under the statutes that allow them to set forth sanctions to sanction software. They can sanction a person. They can sanction property. They cannot

sanction software. The Fifth Circuit agreed and then OFAC delisted, they took away the sanctions that were imposed on the smart contract protocols. I think that's the quickest summary of what happened in the other proceedings. And it just shows, I think this case is at the center of some very difficult questions about, you know, okay, the government and society have a legitimate interest in making sure that criminals cannot easily move criminal proceeds. On the other hand, we can't have makers of software, manufacturers of goods be held criminally liable when other people abuse what they made. Where's the line in between? And that is now front and center. As this case continues to move through the district court and maybe the Second Circuit and potentially the Supreme

court and it will be front and center in Congress. Okay. So what are the next steps exactly? Like I think that so they're going to appeal for Roman's team. So can you, yeah, what are? Before we even get to an appeal. The Roman gets to move for a new trial or a judgment of acquittal. I think that's the next thing that will happen.

And there will be briefing on that. The court, the judge, Judge Fala, will rule. If she rules that the conviction was proper on the one count, we could proceed to sentencing. The government could retry Roman on the counts where the jury hung. So it is possible that they could be retried. Or the judge could say, I think the conviction was inappropriate and could say that on the counts that the jury hung on, those should have been acquittals. and if either of those extreme outcomes after the case has made its way through the district court, it could go up on appeal.

And who appeals will depend on what the outcome is. If the government's upset with the outcome, it'll be them appealing. If Roman's upset with the outcome, he'll be appealing. Okay. Yeah, I mean, one question, actually, just how frequent is it that the jury will, or there will be a hung jury, I guess, on certain charges? Like, is that common or uncommon? It's not, I wouldn't say it's, it happens.

It's not the norm in the Southern District of New York. In the Southern District of New York, the government chooses its case, right? They decide. They investigate, they're alerted to many things, they investigate, they decide whether they're going to proceed to trial. So if they're going to trial on a case, they think it's strong. So it is rare, but it happens. And this is one of the most extreme world, one of the most rare situations, which is a partial verdict.

We've got a verdict on one count and an unknown, a hung on the others. Okay. And last thing I just wanted to throw in there about some of the ups and downs. That whole thing with Dragonfly Capital is so interesting where the prosecutors kind of let it be known that they were considering bringing charges against Dragonfly Capital for investing in pepper sack? Was that just a blunder? Or do you think it was meant to be like, was that purposeful?

Or how do you interpret what happened there? I think sometimes it all depends on what you mean by considering charges. Very often the government will interact with people that ultimately it's not going to charge. But that they're involved enough in activity that they're considered what's called a subject. In other words, they're not a target. They're not somebody the government is focused on charging. They're not a mere witness like a bystander to a shooting. There's somebody who has knowledge of activity but might have some exposure.

And whether they have exposure will depend on what the evidence shows in their investigation, in the government's investigation. So it is possible, and I don't know all the circumstances, but it is possible that, you know, the government conveyed that Dragon Fly was a subject. which may not have meant that they were going to prosecute that they actually intended to prosecute. Huh. Okay. Okay.

So, yeah, I guess, you know, as you look forward at what might happen, like, what do you think the crypto industry should be on the lookout for? And, you know, depending on how things go. Like, like, what do you think would be ideal for the industry? I think what would be ideal is a verdict, a ruling from the court that this software was not conducting money transmission activity because the software or the developers of the software or the folks running the front end

never had control of the funds. The users had control to send the funds into the pools and only the recipient of this secret code could then move the funds out and that was never Roman. It was never the co-founders. it was never pepper some. So that's non-custodial,

and that money transmission rules should not apply to non-custodial activity. Also, I think it would be very nice to see a ruling that you can't be guilty of running an illegal money transmission business when there's no business, when there's no profit, no fee from the activity. To say that you could be running

in a money transmission business by having indirect monetization through a token, I think is a bridge too far. It's just not sound under the law. So I think those are what I'd like to see. And frankly, I think whether it's Judge Fela, Judge Fela, after the verdict, the government moved to have Roman Storm detained pending the outcome of sentencing. And she rejected that motion. She said he's not a flight risk. And part of her reasoning was that Roman has no incentive to flee because there are significant and strong grounds to challenge the conviction. Does that mean she's actually going to throw out the conviction? I'm not saying that. I can't read the tea leaves to predict that. But she recognizes that there's a significant legal issue. And thus, it's not so clear that this conviction is going to stick. I mean, I think this is a very, very close case.

probably 50-50 as to whether that count of conviction sticks. Okay. All right. Well, I guess we'll be glued to our seats seeing what happens. And actually just for these next steps, like what is the timeline for them? So the judge is going to set a schedule. She may have already, but she's going to set a briefing schedule for a motion to challenge the verdict and for a new trial. So the defense will make their motion.

The government will oppose it. The defense will probably get an opportunity to submit a reply. And then the judge will decide that. If the case still has a conviction, it will proceed to sentencing, which could be at a time set by the court. If she tosses the conviction and orders a judgment of acquittal or in a trial, you know, if she orders a judgment of acquittal, then I think you're going to go directly to appeal. If she orders a new trial, then we're going to have a new trial. Okay. Wow. All right. Well, Sam, it's always great to catch up with you. Thanks so much for sharing your insights with us on Unchained.

Likewise. Thank you for having it. Hands up, everyone. We've got exciting news. Bits and Bips, our Macro Meets Crypto Show, is officially spinning off into its own podcast feed, YouTube channel, and X account. If you've been enjoying the deep dives into interest rates, monetary policy, and how they intersect with the crypto markets, make sure to follow Bits and Bips wherever you get your podcasts on YouTube and on X. You'll find the links to YouTube, X, and other podcast platforms in the show notes. If you're watching this, there's a QR code on screen. We'll be posting here for a few more weeks, but starting in September, Bits and Bips will launch on its own feed. For now, we will publish longer clips from the show on newest accounts.

Remember, go to the show notes now and subscribe to Bits and Bips, that's Bits and Pips, Spel B-I-PS on YouTube X and wherever you get your podcasts. We begin this week with a major shift in retirement policy. President Donald Trump has signed an executive order directing the Department of Labor to expand the scope of assets allowed in 401k retirement plans, clearing the path for private equity, real estate, and cryptocurrencies to be included. The directive instructs Labor Secretary Lori Chavez-Deremer to re-evaluate fiduciary guidelines under the Employee Retirement Income Security Act of 1974

and coordinate with the Treasury and SEC to assess rule changes. A senior White House official said the order aims to offer retirement savers broader investment choices. Crypto researcher Matt Mena wrote on X, letting crypto into 401ks and IRAs could be the biggest unlock yet. And it looks like another executive order is already in the pipeline. The White House is preparing an executive order aimed at penalizing banks that denies services based on political affiliation, with a focus on protecting conservative groups and cryptocurrency companies.

A draft reviewed by the Wall Street Journal instructs federal regulators to investigate whether financial institutions have violated anti-discrimination or consumer protection laws, and directs them to remove policies that may contribute to such actions. The order follows long-standing complaints from conservative. and crypto communities about being denied access to banking services. Crypto lawyer Austin Campbell described these actions as part of what's been labeled Operation Choke Point 2.0, stating it was, a concerted disguised effort by federal banking regulators to eliminate access to regular banking services for the entire crypto industry. Meanwhile, in regulatory news, the SEC is taking steps to clarify its stance on staking. The U.S. Securities and Exchange Commission has clarified that certain liquid-staking activities

fall outside the scope of federal securities laws. In a staff statement issued Tuesday, the agency said that platforms issuing liquid-staking receipt tokens do not need to register those tokens as securities. The guidance comes as part of the SEC's broader Project Crypto Initiative under Chair Paul Atkins, aimed at modernizing regulations for digital assets. Atkins said in a statement, Today's staff statement on liquid staking is a significant step forward in clarifying the staff's view about crypto asset activities that do not fall within the SEC's jurisdiction. The SEC emphasized that these tokens, which represent ownership of staked crypto assets and their rewards, do not constitute securities when providers act solely as intermediaries.

The move could ease approval for Ethereum ETFs with staking features, addressing past concerns about liquidity management. Over on the infrastructure side, Coinbase's base network ran into trouble this week. Coinbase's layer 2 blockchain base suffered a 33-minute network outage on Tuesday, following a malfunction in its transaction sequencing system. According to the team, the issue began when the primary sequencer started lagging at 607 AM UTC. Base's conductor system attempted to shift responsibilities to a backup sequencer, which was not yet fully configured, causing block production to stop. The team restored operations by 6.40 a.m. UTC after activating a properly functioning mainnet sequencer.

We quickly switched to a healthy mainnet sequencer, and base chain resumed normal operation. Base build posted on X. Base's head of engineering acknowledged the disruption and stated the team is, proud of the quick response, and committed to strengthening infrastructure to prevent future failures. This marks Bace's second major outage since launch, underscoring concerns about the reliance on centralized sequencers. Speaking of major developments, a surprising leak this week suggests a new stable coin might be in the works.

A now-deleted governance proposal has revealed that MetaMask may be developing a new stablecoin called MMUSD in partnership with payments giant stripe. The disclosure, which surfaced on Avey's governance forum, described MMUSD as a dollar-pegged token designed to serve as the foundational asset across Metamask's suite of services, including wallet functions, swaps, buying and selling, and earning features. MemusD is intended to be the cornerstone asset of the Metamask ecosystem, the post read, before it was swiftly removed. Avey-Chon initiative founder Mark Zeller confirmed the post's authenticity, but said the release

was too soon. Neither Metamask nor Stripe has officially commented on the proposal or the potential launch. In legal news, the ongoing fallout from the FTX collapse has brought Binance's founder back into court. Former Binance CEO Chang Peng Zhao is seeking to dismiss a $1.8 billion lawsuit filed by the FTX bankruptcy estate, arguing the case lacks U.S. jurisdiction and misrepresentes Binance's role in FTX's downfall, the lawsuit centers on a 2021 share repurchase agreement, which FTX claims was funded with misappropriated customer assets. Filed in Delaware, the motion asserts that the deal occurred entirely offshore, involving entities based in the British Virgin Islands, Ireland, and the Cayman Islands.

Zhao's legal team stated, the statute set issue, which lack extraterritorial application, do not even apply. FTX alleges that the repurchase was executed despite the company's insolvency. Zhao's defense counters that he was not a recipient of the funds and merely served as a nominal counterparty. Addressing claims that his social media posts contributed to FTX's collapse, Zhao argued the exchange was already a fraudulent enterprise and compared the accusation to blaming a whistleblower for revealing a Ponzi scheme. Turning to regulatory momentum, the CFTC is now looking to bring spot crypto trading onto federally registered exchanges. The U.S. Commodity Futures Trading is advancing efforts to authorize spot crypto asset trading on federally registered exchanges.

As part of its Crypto Sprint Initiative, the agency is seeking public input on listing and regulating spot crypto contracts through designated contract markets. Acting CFTC Chair. Caroline Fiam stated, the CFTC is full speed ahead on enabling immediate trading of digital assets at the federal level in coordination with the SEC's Project Crypto. Spot crypto asset contracts would be designed to reflect live market prices and trade under futures-style structures on CFTC-supervised platforms. The initiative follows recommendations from the Trump administration's working group on digital asset markets, which outlined 18 regulatory priorities.

Meanwhile, Bitcoin is showing signs of unusual calm, at the same time that a major buy has hit the headlines. Bitcoin's volatility has dropped to historic lows, just as strategy, led by Michael Saylor, completed its third-largest BTC acquisition. According to Bloomberg ETF analyst Eric Balshunas, Bitcoin's 90-day rolling volatility recently fell below 40 for the first time, down from over 60 when spot ETFs launched. Since BlackRock filing Bitcoin is up like 250% with much less volatility, Balsunas posted on X. Fueling the price stability are consistent ETF inflows from institutional investors, which have created steady demand and helped dampen dramatic price swings.

By-bit data shows implied volatility dropped as low as 28% in June, while realized volatility hovered between 22% and 25%. Amid this environment, strategy purchased $21,021 Bitcoin worth $2.46 billion between July 28th and August 3rd. The firm funded the buy using common stock, a novel, stretch preferred stock, STRC, which mimics stablecoin mechanics. Strategy now holds over $70 billion in BTC. And while that story grabbed headlines, another quietly revealed one of the largest crypto thefts in history. Blockchain analytics firm, Arkham Intelligence, has revealed a massive Bitcoin heist dating back to December's 2020, involving the theft of 127,000, 400,000. 426 BTC, now valued at nearly $15 billion, from Chinese mining pool, Lubian.

At the time, the stolen funds were worth approximately $3.5 billion, making it one of the largest crypto thefts ever recorded by dollar value. According to Arkham, Lubian was first compromised on December 28, 2020, with over 90% of its Bitcoin reserves drained. A second breach occurred the following day, targeting an address on the Bitcoin Omni layer. Arkham believes the attacker may have exploited a flaw in the algorithm, Lubin, used to generate private keys, making them vulnerable to brute force attacks. Messages sent from Lubian via Bitcoin's OP return field pleaded for the return of assets, referring to the recipient as a white hat.

The attacker has not moved the stolen BTC since July 24. Meanwhile, inside the defy world, Curvedow is reconsidering its multi-chain strategy. A new governance proposal within Curvedau is calling for an end to future deployments of the decentralized exchange on additional Ethereum layer 2 networks. Submitted by Member Phil Zer0 Lama, the proposal argues that current Layer 2 expansions generate minimal revenue while demanding significant developer resources. Curve is currently live on about 25 chains, yet its Ethereum main net pools generate approximately 450 times more revenue than all Layer 2 deployments combined. combined. On a slow day, L2s bring in only about $1,500 across the board, Phil Zero-Z Lama noted, recommending a shift in focus toward expanding SCARVUSD, Curves-Etherium-based stable coin. While the suggestion has yet to see broad community engagement, it reflects

growing scrutiny over the cost-benefit balance of multi-chain strategies. Looking internationally, China appears to be moving forward with its stablecoin ambitions via Hong Kong. China is preparing to launch its first stable coins through Hong Kong, signaling a strategic move to internationalize the Renminbi and counter the dominance of U.S. dollar-backed tokens. According to the Financial Times, the effort will proceed under Hong Kong's new stablecoins ordinance, which took effect on August 1st and requires issuers to secure licenses from the Hong Kong Monetary Authority. While crypto trading remains banned on the mainland, Hong Kong serves as China's experimental

hub. The HKMA plans to issue a limited number of licenses, focusing initially on business to business applications. Officials remain cautious, citing risks of capital outflows and money laundering. However, interest is growing among Chinese state-owned enterprises, several of which are expected to apply for stable coin licenses. The HKMA has not ruled out approving tokens backed by offshore Rnman B. And finally, time for fun bits. Coinbase dropped a satirical musical, ad in the UK titled Everything is Fine, and it was so fine that British TV networks banned it. The cheery jingle praises spotless streets and affordable groceries while showing rats, flooded ceilings, and 100-pound fish fingers. Naturally, viewers were not amused. CEO Brian Armstrong called the

censorship proof that, the truth hurts, adding, if you can't say it, then there must be a kernel of truth in it. Critics called it political. Coinbase called it poetic. Either way, the UK may have banned the song, but Crypto Twitters got it on repeat. Unchained is produced by me, Laura Shin, with help from Matt Peltred, Juan Uranovich, Pamma Jumdar, and Marka Curia. Thanks for listening.