Unchained - Congressman Ro Khanna: How to Get More Democrats into Web3 - Ep.321

Starting point is 00:00:00 Hi, all, my book comes out Tuesday. You will definitely want to check out the podcast that day, as I will be dropping big news. And you also want to pick up a copy of my book if you haven't yet to get the full insight scoop on what happened during Ethereum's formative years, including during the Dow attack and the initial coin offering craze. Hachet has deemed the Koptopians a hot book, an internal designation meaning that the book is selling well. Thanks to all of you who have pre-ordered it. And if you haven't yet, definitely get a copy now, which you can do at Bitley slash Cryptopians. I promise you, there are a ton of scoops in this book. So you will want to read it as soon as it comes out

Starting point is 00:00:48 when everybody is talking about it. In recent episodes, I've given instructions on how to get a signed bookplate, how to get a po-op, and also on how to join my new premium. offering, which went live earlier this week. It features a paid Discord, and we've already sent out our first premium content, an interview with Kevin O'Waki of Gitcoin. Later today, at 12 p.m. Eastern, we will also have an AMA on crypto taxes with Sheehan Chandra Sechakra of CoinTracker and John Cardone of RSM. And John, by the way, used to be the crypto person at the IRS.

Starting point is 00:01:28 Check out the show notes for instructions on a lot. how to join all the above and please come to our AMA. Again, check of the show notes for all the instructions on how to get a signed bookplate, how to get a po-up, and how to join the new premium offering. I'm excited to come back with you on Tuesday and to finally see my book out in the world. Until then, please enjoy the show. Hi, everyone. Welcome to Unchained. Your no-hype resource for all things cryptos. I'm your host, Laura Shin, a journalist with over two decades of experience. I started covering crypto six years ago and as a senior editor at Forbes was the first

Starting point is 00:02:10 mainstream meter reporter to cover cryptocurrency falltime. This is the February 18th, 2022 episode of Unshamed. Point change is the easiest way to earn passive income using crypto. You can safely deposit cash or cryptocurrencies to earn up to 20% annual yield. There is no lending or market risk, just so. simple, high-return yield farming. Create an account today at try-defy.c-slash-UNC and receive 40 USDC. That's try-defi.cc slash un-c.

Starting point is 00:02:45 With the crypto.com app, you can buy, earn, and spend crypto in one place. Download and get $25 with the code Laura. Link in the description. Brave wallet is the first secure wallet built natively in a Web3 cryptobrows. with no extension required. You can store, manage, and grow your crypto portfolio all from a safer wallet. Visit brave.com slash unchained to get started. Today's guest is California Congressman Roe Kana from Silicon Valley,

Starting point is 00:03:17 an author of Dignity in a Digital Age, making tech work for all of us. Welcome, Congressman Kana. Thank you so much, Laura, for having me on. You're one of the congressmen who has introduced numerous crypto bills in-house, and you're also a member of the blockchain caucus. How did you become interested in crypto, and why are you a supporter? First of all, a lot of the innovators in the crypto space are in Silicon Valley in my district. So I've seen the impact on job creation.

Starting point is 00:03:52 I've seen the utility that crypto has in terms of expediting, transactions in terms of decentralization. Web 3.0 to me is actually beyond crypto. It's about this philosophy of decentralizing people's participation in the economy. I've seen the prospect of what it can mean for the unbanked. So that's why it's something that I support. And that thesis actually comes out in your recently published book, Dignity in a Digital Age. you talk about spreading out jobs, digital jobs in a way. Can you just talk a little bit more about that theme of decentralization and also how it relates to the thesis of your book?

Starting point is 00:04:38 I'll say, I mean, the thesis of the book is there's $11 trillion a market cap in Silicon Valley in the surrounding areas, 25 million digital jobs in a few big cities, expected to be in a few big cities, and that we have to decentralize it, that we need communities that are left out to participate in modern wealth generation, that we need black and brown communities to participate in modern wealth generation. So decentralization will allow people not to have to leave their hometown, will allow more people to participate, will reduce some of the tensions. And Web 3.0 is all about decentralization. It's saying you don't have to have the concentration of economic power in just a few places, New York or Silicon Valley. And that's why as a progressive, in the argument I make in the book,

Starting point is 00:05:25 we should be forward moves towards Web 3.0 and in crypto. Because of the prospect it has of decentralizing power. And I give a specific example of the book about crypto's use for artists or authors and how this could cut out Middleton and the prospects that actually could get more people access to a market without the barriers of entry. And while you're talking about this trend and also kind of pushing for more of it, at the same time, we are seeing this new breed of crypto mayors who are coming into office. Obviously, there are some really prominent examples like Mayor Francis Suarez of Miami, Mayor Eric Adams in New York, or Mayor Scott Conger of Jackson, Tennessee. How do you see the crypto industry playing a role in bringing tech to more cities beyond just those usual suspects. Well, they are, of course, passionate advocates,

Starting point is 00:06:30 and they see it firsthand in their cities. The job creation, the amount of people who are participating, the fact that there are so many people, black and brown communities, young folks who are active in the crypto space. But what crypto does is it doesn't just require a passionate mayor. You could be a small business person, And now you may have more access to a global market, especially as we get people who are unbanked to have the ability to use crypto.

Starting point is 00:07:04 And so it may increase your ability to thrive. You could use tokens to participate in the governance of a company, and more companies will be set up in that way. you can have much easier transmittance of payments across the world. So I think the technology itself will allow for some degree of decentralization. Now, there's more that needs to be done as I write in the book about policies that can encourage decentralization and technology jobs to move to rural America and black and brown communities. But Web 3.0 should be part of that solution.

Starting point is 00:07:43 And that's, again, why I think that it shouldn't be something that progressive sphere, we need well-regulated space with predictability and certainty, but we shouldn't just be reflexively against a technology that has decentralizing potential. Well, so that's the perfect segue to my next question, because as you probably know, in the crypto community, there is a perception that Democrats are more anti-crypto than Republicans. First of all, do you agree with that perception? And second, you know, regardless of whether you agree, since the crypto community does have that perception, what is your response to them about that? Well, there have been louder critics. I acknowledge on the Democratic side,

Starting point is 00:08:29 but there are champions, people like Senator Wyden and I, Darren Southo and Florida. We're working on a fix to the bipartisan infrastructure bill, which would define software engineers as brokers. It just doesn't make any sense, which would define some of the miners as brokers. In the Howie test is important in terms of what is a security, but just because something may be a security doesn't mean that you should be necessarily filing 10K and 10Q forms if it's decentralized enough. And what we may need is a new regulatory regime for digital assets.

Starting point is 00:09:02 So there are places where regulation is absolutely necessary. Let's consider stable coins. I want to make sure that stable coins have enough dollar backing just like we have reserve requirements and banks. fine, let's have that regulation. But let's understand what stable coins allow. First of all, they've had a higher rate of return than people who just have money in the banks. And they make it easier to transmit money with large sums of money fast and without large fees. This isn't rocket science.

Starting point is 00:09:30 They're just lowering significant transaction costs. So when people say it's just digital gold, no, it actually has transactional values. Or let's have regulatory disclosure on what the blockchain is. But you're not going to have full control over the blockchain, especially in a case like Ethereum, which is basically become a commodity. So you don't have one company controlling it. So I think a lot of the criticism stems from a lack of awareness. I mean, I don't know how many. I don't have much crypto.

Starting point is 00:10:01 I have less than 50 bucks. But I have a wallet on Coinbase. I have a metal wallet. I know that you have to go on what you need to do to buy an NFT. I just think more members of Congress need to just experience the basics. So let's say that later today, you were to have a meeting with some of those very vocal crypto opponents, such as Congressman Brad Sherman or Senator Elizabeth Warren. What would you say to them about this technology?

Starting point is 00:10:30 I tell you, if you're opposed to the power of the banks and if you're opposed to too much power of companies in my district, you should be for decentralization. Now, I understand that they've been scams. Let's be clear, and we need to make sure that we have basic protections against scams. We need to make sure that we have protection against the abuse of crypto-free legal activity. But the irony is that the blockchain is the most traceable source. And so you could actually help law enforcement figure out illicit activity. And there's some concerns of privacy that every transaction, the government may not know what you're doing.

Starting point is 00:11:09 So, but let's understand, though, that this is a technology that could actually decentralize. It could help a lot of people who are unbanked, have access to markets, it could help small businesses, avoid costly middlemen, and then let's have thoughtful, smart regulation about it. But don't just be reflexively against the technology. So a line that I've been hearing more frequently about crypto from either liberals, such as economists Paul Krookman or Democratic politicians, is that non-whites are more likely than whites to own crypto. And then their conclusion is that therefore,

Starting point is 00:11:51 crypto is either preying upon or could harm the most vulnerable. What do you think of that take? Well, first, I think what it shows is that a lot of times non-whites don't have access to the opportunities for wealth generation that many people do have access. I mean, how many people get to, invest in pre-IPO friends and family rounds. How many people get to invest in venture capital? How many people get stock options? Only 50% of Americans are even in the stock market.

Starting point is 00:12:19 So the aspiration that a lot of young folks that a lot of people in the black and brown community have is to build wealth, to build assets, to participate in building their companies. And we ought to recognize that. Now, we ought to make sure that their regulations to protect them. But it should be a wake-up call for us that there's so many people who are viewing this is their way to build wealth and to have a shot at a flourishing, prosperous life. And then I don't think that that's a negative. I think what we ought to do is think about good regulations that protect them, but allow them to participate. So in a moment, we will discuss more about Congressman Kana's book, as well as some of the more specific areas of crypto.

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Starting point is 00:14:17 Brave wallet is the first secure wallet built natively in a Web 3 crypto browser with no extension required. With Brave wallet, you can buy, store, send, and swap assets, manage your portfolio, and NFTs. You can see real-time coin gecko data built right into your dashboard and connect other wallets and other Web3 DAPs, all from the security of one of the most popular privacy browsers on the market. Whether you're new to crypto or a seasoned pro, it's time to ditch those risky extensions and switch to BraveWallet. Get started at brave.com slash unchained. Back to my conversation with Congressman Kana. In your book, you talk about the need to regulate big tech,

Starting point is 00:15:04 and in the book you also talk about an Internet Bill of Rights that you drafted. And the principles actually seem in line with what many crypto entrepreneurs say they're building these decentralized competitors to big tech. Do you think that that vision of these decentralized crypto networks that compete with big tech and give users a piece of ownership does align with your internet bill of rights, and if so, how? Well, in the lines, if we can see alternative platforms emerging for social media conversations, if we can see alternative platforms emerging that facilitate a business, because then that means

Starting point is 00:15:48 we have more competition, more discursive spaces. You don't just have a few actors controlling a lot. But the other thing is, in terms of data, right now you have so much data. data flowing to a few companies. And what I say is you need to have affirmative consent before having your data go to these companies. So that protection, it needs, in my view, needs to be regulatory. Now, if there are alternative companies emerging that have a better protection of privacy and data, that's a positive thing. And so earlier you alluded to some of the, I guess, kind of pending decisions around how tokens will be regulated. And SEC Chair Gary Gensler has made it clear that he views that tokens that are parts of these

Starting point is 00:16:36 networks are basically thinly veiled securities and they need to be regulated under a securities regime. What's your take on that? And in general, your take on how a team that is launching a coin can start centralized but go to decentralized over time? Well, there are two different issues. One is this something is security and then two is how do you regulate it under the Howie test, which has done us a lot of good over time.

Starting point is 00:17:00 Anything that has central control and that appreciates is a security. So you could say, okay, these are digital assets, digital securities. But then they can't be regulated in the same way as something that's completely centralized. I mean, Bitcoin is totally decentralized, but there are places that are hybrids. I mean, Ethereum is now largely decentralized. What do you do if something has 10, 20% centralization and 70, 80%? non-centralization. And I think what the important thing is is for us to come up with clear, predictable rules of how we regulate digital assets. Even if we think there is security,

Starting point is 00:17:35 that means that there may be new ways of regulating it that protect consumers, but acknowledge that you don't have centralized control over the price and that you don't have centralized control over all the disclosure requirements. I am working with the White House, the NSC, the LeapSing, who's very thoughtful about this, to do two things. One, to get input from the crypto community. I'm calling for the White House to have a crypto roundtable on these policies. Two, to have predictability in whatever we do so that we can keep the crypto industry in the United States.

Starting point is 00:18:16 One other point I often hear is on the energy costs and the issue of, you know, coal mines being used to power mining for blockchain. I'd say a few things. First, Bitcoin is about a trillion dollars, as I understand it. Anything that has a trillion dollars of value is going to use energy. That's just obvious. So then the question is, how do we make Bitcoin more green? And there are things we can do.

Starting point is 00:18:43 For example, we could incentivize mining companies to institute demand response, where they use the energy at times that are non-peak and provide tax incentives or credits for doing that. We could incentivize them to use renewable energy. We could incentivize them to use the wind in Texas that isn't being fully used or the hydro that isn't being used. So we've got to get past the boilerplate, oh, it's not green or it is green, and think about innovative solutions to something that's not going away. If you talk to all the young folks, they'll tell you that. So another aspect of crypto that is taking off is decentralized finance or defy, and it's basically a parallel world of finance to Wall Street.

Starting point is 00:19:30 However, it does not have the typical know-your customer or anti-money laundering controls. And there's definitely been hints that not only the U.S. government, but maybe other world governments would like to push that kind of system that has intermediaries that can do those kinds of KYC checks, even though DeFi builders would say the whole point is to remove intermediaries. So what do you think is the best way to handle that issue in defy?

Starting point is 00:20:00 Well, that's a very difficult question, and they're honestly, I support a balanced approach. I know Coinbase, for example, you do when you sign up for a wallet, they have a basic background check on you, and they have to do a know-your customer. You don't want certain platforms to be basically money laundering sites.

Starting point is 00:20:18 That's why know your customer requirements were there. You don't want them to be facilitating terrorism. And some of these requirements came up after 9-11, where we wanted to make sure transactions of a large size were ones that we could follow. So I think there has to be a balance there of making sure that you don't have conduit for large transfers of money for illicit activity or terrorism,

Starting point is 00:20:43 but you aren't being overly burned. But I'm not for sort of a libertarian, let's not have regulation, because that I do think would be too dangerous. So a similar issue is that the way the Internal Revenue Service runs its tax system is through what's considered an account-based system. And what we mean by that is that consumers have their accounts at different financial institutions, and then those financial institutions will report the financial activity to the government. And then when the taxpayer submits their tax return, the government can match that up against what was reported.

Starting point is 00:21:26 But if crypto gains adoption and there's kind of more wallet-based transactions where there isn't that third party that can do that reporting, then the IRS won't have that same visibility into people's financial transactions. So how do you think the IRS should handle those types of transactions in terms of taxing them? Well, if you have capital gains, they ought to be taxed. You know, there's no question that if you have capital gains, whether it's in tech, whether it's in crypto, whether it's in agriculture or manufacturing, you ought to pay tax. If a school teacher has to pay tax under W2, if an Amazon worker has to pay tax, someone who makes money off crypto ought to be paying tax.

Starting point is 00:22:07 Now, how we enforce that, if it's self-reproperse, if it's self-reported, and what the IRS needs to do to enforce that, we need to figure that out and have a rational regulatory regime. But I am, when people say you need regulatory regimes to make sure people pay tax, I say yes. I mean, just because you're doing something online doesn't mean you don't have to pay tax for appreciation. So central bank digital currencies are on the mind of the Fed, and they're already being pushed by other countries. The U.S. at this moment has numerous private stable coins, or at least private stable coins that are pegged to the U.S. dollar. Are you in favor of a central bank digital currency for the U.S.? And also, what is your stance on these private staple coins?

Starting point is 00:22:56 So I think the private stable coins right now are an important place, so where you can have basically the dollar transferred and used for Bitcoin or other cryptocurrencies. And then, They make that process faster and they make that process less painful. And it allows for you to move money around much faster and in a way that is with less feeds. And it also is appreciating more right now than in traditional bank accounts. But I want to make sure that there isn't a run on these stable coins, that they have some capital reserve so that they have the dollars to back it up.

Starting point is 00:23:37 And that seems prudent given what happened in the Wall Street crash. You want to make sure that there's some reserve requirements. I'm for the U.S. government having a digital currency in terms of just the efficiencies it brings, and they should be experimenting with being innovative. I don't think that anything will displace the U.S. dollar or 51% of reserves. I wouldn't want to bet against America. we have a lot going for the country. And so I'm not concerned from that perspective,

Starting point is 00:24:12 but I think we ought to be as innovative as possible and looking at the values of a digital U.S. dollar that would allow people to have some of the benefits that cryptocurrencies bring. I asked crypto Twitter what they wanted me to ask you. And one question by Ryan Selkis, the founder of Masari, was what can they do? to help you bring more Democrats and progressives to the crypto side?

Starting point is 00:24:42 Tell the stories of what crypto actually means. Tell the use cases, how is it benefiting people? Right now, there's still a lot of work to be done. You know, it's going on Coinbase, it still charges your fees. You know, it's so complicated to have to use meta wallet for some things and you can't buy NFTs on some things. It's a whole, it's a lot of gobbly gooks. So you need to simplify it.

Starting point is 00:25:08 You need to show the clear use cases. You need to show clear people, real people who are benefiting from this technology, not just in the hypothetical. Don't just say, well, it helps the young bank. Tell me the story of someone who, a small business owner or a person who's using crypto to remit money or to get paid and make that clear in how it's helping. And then tell the story about young folks who have crypto investments and are doing well or where it has gone down, how they weren't hurt by the recent downturn,

Starting point is 00:25:44 because maybe they already had bought the crypto earlier and the large downturn was for hedge funds. But you have to just be clear about how this is impacting real people. So obviously we're in a midterm election year. And this question was suggested by Twitter user Bricks Bounty Farm, although I'm going to tweak it a little bit. They asked, does crypto legislation, such as what you have done with Congressman Tom Emmer, offer an opportunity for bipartisanship in this Congress, both in this midterm and for 2024? It does. It should. That's such an obvious fix to what was wrong in the infrastructure bill. We should make sure that we're fixing it.

Starting point is 00:26:34 But we have a lot of education to do still with our colleagues about why crypto has use cases, why this is important. One of the interesting things is I've been told there about 40 million people in America who have crypto that that could go up to eventually almost 100 million. But those numbers need to be better broadcast. People should be talking to their representatives about crypto. But I am optimistic that we can have this fix. We need some of these fixes or we'll see the industry go to Britain to Singapore and we don't want to lose an industry that's going to be critical to Web 3.0. And so going forward when you think about everything that you put forward in your book and what's coming ahead for this year in terms of the election and also all these developments in crypto, what do you hope will transpire over the next year? and speak partially to the crypto audience here.

Starting point is 00:27:33 I hope we will have predictability in the regulatory region. That is the first point and a point that I have advocated. I hope we will have clear use cases. Like I demonstrate in the book about what artists and authors can use crypto for to reduce transaction costs and help protect a person's intellectual property while providing access to things like college textbooks in a much lower price. And finally, I hope we will embrace

Starting point is 00:28:06 the fundamental philosophical principle that animates my book and I think animates a lot of people in the crypto space. And that's one word, decentralization. That is what we want ultimately in this country for every individual to feel empowered, to have the freedom to participate and contribute and flourish. And at its best, that's what crypto does. It takes power from a few centers and it says, no, we want to get other people participating in the modern economy. That was the promise of the internet that it would allow for that kind of democratization of participation.

Starting point is 00:28:48 Yeah, I will say reading the book that it definitely feels like even though you're a Democrat, there is so much in there that would appeal to Republicans because a lot of it just seems more common. sense rather than something that's obviously political. So I do recommend it to listeners. All right. Well, it's been so wonderful having you on Unchained. Thank you so much for coming on the show. Laura, I'm a fan of the show. I appreciate it. I'm good luck with your book. And thank you for having you on. I look forward to being back maybe with a Republican at some point. Yes. Yes, we will. We will do that because I think that would be super fun. All right. Don't forget. Next up is a weekly news recap. Stick around for this week in crypto after this short break. Join over 10 million people using crypto.com, the easiest place to buy, earn, and spend over 150 cryptocurrencies.

Starting point is 00:29:40 Spend your crypto anywhere using the crypto.com visa card. Get up to 8% cash back instantly. Plus, 100% rebates for your Netflix, Spotify, and Amazon Prime subscriptions. Download the crypto.com app now and get $25 with the code Laura. link in the description. Thanks for tuning in to this week's news recap. The SEC goes after BlockFi for $100 million. BlockFi, a popular crypto lender,

Starting point is 00:30:17 is paying $50 million to the U.S. Securities and Exchange Commission and $50 million across 32 states to settle investigations into whether BlockFi's interest earning accounts, in which customers lend digital assets to BlockFi in return for yield, are a securities offering. Current customers will remain unaffected by the settlement, though they will not be able to deposit more crypto into their accounts, and BlockFi will discontinue offering it to new US customers.

Starting point is 00:30:44 As part of the settlement, BlockFi will be filing an S-1 for a BlockFi yield product, which would allow the lender to offer interest-learning accounts to U.S. customers as the security registered with the SEC. Said SEC Chair Gary Gensler in a press release, This is the first case of its kind with respect to crypto lending platforms. Today's settlement makes clear that crypto markets must comply with time-tested securities laws. SEC Commissioner Hester Purse had a different take on the settlement, writing, Is the approach we are taking with crypto lending the best way to protect crypto lending customers?

Starting point is 00:31:23 I do not think it is, so I respectfully dissent. She went on to add, it is difficult to understand how the civil penalty will protect investors and called on the SEC to do a better job in accommodating innovation rather than hurting companies who attempt to work under the scope of U.S. regulation. The BlockFi settlement does not come as a surprise as the lender has been under scrutiny since last summer when five states issued either cease and desist or show cause notices against BlockFi. Crypto's Super Super Bowl performance. While the Rams and Bengals battled in Los Angeles,

Starting point is 00:32:02 crypto fought to make it fully mainstream, with multiple crypto exchanges taking out commercials during last weekend's Super Bowl. Coinbase, FtX, and Crypto.com, disclosure, a sponsor, each ran ads, and TurboTax and E-Toro mentioned crypto. Coinbase ran its ad in the first quarter. In an on-brand move,

Starting point is 00:32:23 the company purchased a minute-long ad showing a QR code, bouncing across the screen. Viewers who scanned it were prompted to download the app and participate in a $3 million giveaway. Data from the block shows that the ad was a roaring success, with the exchange jumping from 186 to 2 on the App Store in the day following the Super Bowl.

Starting point is 00:32:47 And speaking of on-brand, Coinbase had to briefly throttle back access to its website due to increased traffic. Where Coinbase stayed simple, FDX swung for the fences. Its ad was headlined by the famous comedian Larry David from Curb Your Enthusiasm in Seinfeld, faux denouncing inventions like democracy, portable music, and of course, crypto. Crypto.com also ran an ad starring NBA superstar LeBron James. J.P. Morgan, the largest bank in the U.S., is now a proud resident of DeCentraland,

Starting point is 00:33:25 the play to earn Metaverse game. This week, the bank opened up a Metaverse branch called The Onyx by J.P. Morgan Lounge, located in the Meta Jukumal in DeCentraland. Metaverse natives who visit The Onyx are greeted with a portrait of CEO Jamie Diamond, framed in the lobby. Also featured is a timeline of J.P. Morgan's blockchain history. Upstairs, visitors can listen to analysts talking about crypto via virtual TV, attached to the virtual wall.

Starting point is 00:33:58 One humorous addition is a pet tiger pacing the foyer, which is a stroke of genius, according to Bloomberg's Matt Levine. I feel like the tiger is a good idea. If you walk into the offices of an investment bank, there should be a roaming tiger to make you nervous, keep you on your toes. Obviously, in a real bank, the tiger would pose liability problems. It might eat the clients, or the bankers for that matter.

Starting point is 00:34:22 But in the metaverse, it is just some nice symbolism. wrote Levine. J.P. Morgan's crypto team, Onyx, also published an 18-page paper outlining its metaverse thesis. In its report, J.P. Morgan revealed a bullish outlook for the metaverse. The asymmetrical risk of being left behind is worth the incremental investment needed to get started and to explore this new digital landscape for yourself, the bank recommended. Our long-standing core competencies in cross-border payments, foreign exchange, financial assets creation, trading, and safekeeping, in addition to our at-scale consumer footholds, can play a major role in the Metaverse, the J.P. Morgan team concluded. Canada blocks Bitcoin and Ethereum transactions

Starting point is 00:35:08 from truckers. Reports indicate that Canada's Royal Canadian Mounted Police, aka Mounties, and Ontario provincial police, are barring all firms, including cryptocurrency exchanges, registered with Canada's anti-money laundering authority, FinTrack, from transacting with 34 cryptocurrency addresses tied to funding the trucker-led protests in the country. The protests began in January over Canada's vaccination requirements for all entrants of the country. The protests were deemed illegal by Canadian Prime Minister Justin Trudeau this week via the Emergencies Act, giving banks the power to immediately freeze or suspend bank accounts tied to the truckers for 30 days. In a leaked document, it appears that Canadian authorities believe this power extends to crypto addresses. Regulators

Starting point is 00:35:58 ordered crypto exchanges to cease facilitating any transactions associated with 34 crypto addresses, where donors had already sent more than 20 BTC in an attempt to continue funding the protests once Canadian authorities froze the $9 million that had been donated to GoFundMe. Notably, Canada's decision had many on crypto Twitter pointing to Bitcoin. For years, it was difficult to explain, to Canadians why Bitcoin is necessary. It was always a conversation of, yes, banks are currently reliable in Canada, but they aren't in other countries. Now their own bank account is at risk. The transition is inevitable, wrote Atomic Wallet co-founder Matt Black. Trust makes the travel rule a reality. 18 companies have banded together to bring anti-money laundering

Starting point is 00:36:47 technologies to digital assets via a coalition called Travel Rule Universal Solution Technology, or Trust. Headed by Coinbase, the group includes other industry leaders like Anchorage, Bicko, BlockFi, Circle, Fidelity Digital Assets, Paxos, Krakken, and Robin Hood. Essentially, the group was formed to implement the Travel Rule, recommended by the Financial Action Task Force, which requires financial institutions to store information about customers with transaction partners. According to Coinbase, trust is built in such a way to protect the security and privacy of

Starting point is 00:37:25 customers' personal information, which is of paramount importance in the privacy-focused blockchain space. The coalition has a three-part plan to make this happen. One, information will be sent directly from exchange to exchange via encrypted channels. Exchanges must provide their identity before receiving customer payments. And finally, coalition members must meet core anti-money laundering, security, and privacy requirements through a partnership with compliance and risk management firm Exeter. The group does not plan to stay at 18 or in the U.S. The next step is adding new members so that trust can provide comprehensive compliance across the crypto industry.

Starting point is 00:38:08 The travel rules reach is expanding internationally, and so must the trust solution. trust is focused on expanding to many other jurisdictions this year, concluded Coinbase in its launch statement. Sequoia Goes Crypto. Sequoia Capital, a prominent venture capital firm based in Silicon Valley, is moving into the crypto space in a big way. Sequoia is looking to raise between $500 million to $600 million in its first sector-specific crypto fund. According to its press release, Sequoia's foray into the Cryptospace will be focused primarily on liquid tokens and digital assets, and Sequoia plans to dabble in staking, providing liquidity, and governance of protocols. Sequoia has previously invested in FTX, block, starkware, and fireblocks.

Starting point is 00:38:59 Time for fun bits. The generational gap is real, and here we are going to talk about two stories. First, this week, Charlie Munger, Berkshire Hathaway's 98-year-old vice-chairman had a few choice words for cryptocurrency. I certainly didn't invest in crypto. I'm proud of the fact that I've avoided it. It's like some venereal disease or something. I just regard it as beneath contempt. I admire the Chinese for banning it. I think they were right. And we, the U.S., have been wrong to allow it, he said. and yes, he did just compare crypto to an STD.

Starting point is 00:39:43 On the other hand, Paradigm, one of the most respected firms in crypto and a recent investor in Citadel Securities, just hired a high schooler as a research engineer. The engineer who goes by Transmissions 11 was a core developer and founding member of Rary Capital and will work at Paradigm on lowering transaction fees. humorously, Transmission 11's bio says, quote, in his spare time, he attends high school in California.

Starting point is 00:40:14 All right, thanks for tuning in. To learn more about Congressman Kana, please check out the show notes for this episode. Unchained is produced by me, Laura Shin, pulled out from Anthony Yun, Mark Murdoch, Daniel Ness, Shashog, and CLK transcription. Thanks for listening.

Unchained - Congressman Ro Khanna: How to Get More Democrats into Web3 - Ep.321

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