Unchained - DEX in the City: How Even TradFi Wants to Pass the Crypto Market Structure Bill - Ep. 989

Episode Date: December 24, 2025

In this Christmas Eve episode of DEX in the City, hosts Jessi Brooks, Katherine Kirkpatrick Bos, and Vy Le break down a pivotal moment for crypto: the industry is no longer operating as a self-contained, oppositional ecosystem. It’s converging with traditional finance. And the cool thing? Washington is responding. The trio unpacks the latest on the crypto market structure bill, what it means that TradFi players are actively supporting legislation, how compliance tools like KYC became unavoidable, and why crypto may be going through an identity crisis.  They also delve into why Democratic engagement is crucial to getting a bill across the finish line, and why January’s confirmed markup could be a turning point. Hosts: Jessi Brooks, General Counsel at Ribbit Capital Katherine Kirkpatrick Bos, General Counsel at StarkWare TuongVy Le, General Counsel at Veda Timestamps: 🎬 0:00 Intro 🎄 2:09 Whether crypto’s convergence with TradFi is finally changing how policymakers treat the industry 🧬 13:54 What “crypto-native hybrids” are and why they’re suddenly everywhere 🔐 15:23 How KYC and compliance tools went from optional to unavoidable in crypto’s tech stack 🪞 18:24 Why Vy says crypto is in the middle of a real identity crisis 📅 21:12 Why a confirmed January markup is a much bigger deal than it sounds ⚔️ 24:00 How the DeFi fight inside the bill is shaping up and why TradFi is now showing up loudly 🏛️ 31:02 What Democrats are zeroing in on to actually get this bill across the finish line 🔄 35:02 Whether the revolving door between government and crypto is healthy or a red flag ✨ 45:49 Good news and end-of-year thoughts Learn more about your ad choices. Visit megaphone.fm/adchoices

For a long time, crypto sort of operated under the assumption that the world would eventually adapt to us, right? That scale and adoption would force regulators to accommodate crypto. What's really interesting about this environment is crypto's at the table, Tradfai's at the table. Tradfai is not trying to kill this bill. In fact, a lot of Tradfai industries are supporting the bill. There is something really amazing about the fact that like Dems have engaged and they continue to engage. Hi, all, and welcome to Dex in the City where the wallets are cold and the takes are hot.

The holiday edition. For those listeners who aren't watching, I'm wearing a tiny Santa hat. A Jesse first, Web 3 prosecutor turned Web 3 protector at Rivet Capital. Hi, everyone. Happy holidays. Is wearing a very festive red bow. As V just said, she looks like she's ready to perform in the neck cracker. And then we have.

V from the SEC to Web 3. Happy holidays, everyone. So blame Amazon, my head piece did not arrive in time, but I put up some little Christmas cheese in the back. This was all these idea. I had to like dig this out of my some drawer. Yeah, and I'm the only one here wearing a dinez Santa hat, which I will happily rock for the duration of this podcast. So before we get going, remember we're lawyers, but we're not your lawyers. Nothing you hear on decks in the city is legal or financial advice, and it doesn't create an attorney-client relationship.

And for the fine print, as always, check unchained crypto.com. I'm also wearing a very festive sweatshirt, by the way. It's a bunch of lights that are all tangled. And then underneath in the text, it says, it's fine. I'm fine. This is fine. Which pretty much sums up. tracks our conversation today about crypto.

Absolutely. It sums up everyone's lives in December and the state of crypto. The lights are tangled, but we are going to be fine. Okay. So that's actually the perfect way to kick off. Yes. So a lot of people saw a viral article that was written, I believe last week, the title was Crypto is Dead.

It was by Doug E. Luca over at Figment Capital. And this article has already been discussed a lot. Unchained did a great episode with Mr. DeLuca on these topics. We're not going to spend a lot of time on the article, but I'll summarize it very quickly. I would say that the way that I understood his messaging is that we're now at a point where kind of the crypto-native technology and ethos as a self-contained world is dying. And we've talked about this a lot on the pod where we're at this kind of critical point where the trad markets and the crypto markets are converging.

And what does that mean? It means that really certain things are disappearing. The industry as a self-contained pocket is disappearing. Crypto-native apps become kind of a tiny fringe. And the label, as he puts in his word, becomes baggage. And the way that I think about this is it's very similar to a lot of people don't recall. I mean, I don't even recall this. But when stocks used to be quote-unquote internet stocks, you know, at the advent of the internet,

there was actually a category of internet stocks. I believe it was internet stocks. Someone might call me out on this. It might have been technology stocks or something like this. Obviously, that label fell away. And ultimately, they were just stocks. You know, there's no subsect of the equity market of tech. So the future prediction is that the same is going to happen to crypto.

There's not going to be kind of crypto stocks or crypto exchanges or crypto-trachshunds. or crypto trading. And we're already seeing that with a lot of companies, Coinbase, Robin Hood, several other good examples, effectively trying to be the place for absolutely everything, you know, for equities, for tokenized equities, for crypto assets, for securities, commodities, all the licensing prediction markets.

And what does that mean? It means the lines of what is crypto become blurred as part of the broader conversation of this convergence. So I really like this article because I think it was thought provoking. I also thought his point about there are certain things that should remain, like what deserves to survive, permissionless access, global liquidity and 24-7 markets. We're already seeing that outside of crypto. There's been a lot of news around NASDAQ's move to 24-7 markets and whether that's actually a good idea, composability and selective user ownership. I would go a little bit farther

and I think what deserves to survive is also the individuals write and control over their data, hot on our heels of the privacy conversation. But look, like, this raises a couple questions that I want Jesse and V to chime in on. First, what is pretty relevant is this actually even a new thought or a new concept? Yes, Jesse. I'll go from there. Okay. Just like with everything, crypto is learning the lessons of prior tech or prior parts of the

financial market. And, you know, shout out to Rivet about a year or two ago. We wrote about how FinTech is dead. And the thesis behind that was essentially that like FinTech has been incorporated into the rest of the financial system. And that's really what happening with crypto. And that was like a real positive as you saw names like New Bank and Revolut and Robin Hood. Obviously, that's now, you know, part of the crypto conversation, like really growing and becoming important places for people to access money. And I think that crypto can also be compared to sort of what happened with the internet. I mean, we might not all remember it really well, but like there was a time of like true techno libertarianism, which was the belief that like the network could root around governments entirely.

I remember like early on reading John Perry Barlow who, you know, started EFF, like thinking about how governments would have no authority in cyberspace. And what does that sound like to everybody here. It sounds a lot like how people thought crypto would be forever. And that belief really powered early internet. It powered how people talked about regulation. And it actually worked, obviously, until the internet became part of economic infrastructure. And that's really what happens when technology stops being just a subculture and becomes part of something real and bigger. And this sort of idea of what should be regulated and how sort of speaks to what we all work on, which is like, what does crypto want to be? Does it want to continue to be a small subculture that, you know, doesn't have to follow rules, doesn't have to interact with the government? I mean, I think what we've been seeing through the conversations, through how people talk about regulators and legislation and wanting this market structure bill that I know we're going to talk about is that we want to be part of the regulatory conversation. So you really can't have it both ways is what a lot of people are realizing. And just to chime in here, because

before we get to be John Perry Barlow. And in case anyone needs some serious nerd alpha to spit at their holiday cocktail parties, he was basically an internet cyber libertarian activist pioneer. And he was a founding member of the Electronic Frontier Foundation, EFF, which is a big nonprofit digital rights group. And it was founded to promote internet civil liberties. And I actually love that you brought him up, Jesse,

because I feel like I'm constantly as an advocate for crypto, particularly in the legal and policy context, looking at the internet, looking back at the internet, the growth of the internet, the policy environment. The one difficulty that I always note, however, is that you forget, and obviously we were, frankly, children. We're not that old. We were children or not alive when a lot of this was happening in the internet context. I mean, we're not that old. We're actually quite young. We're just old in crypto. Okay. I just want to put that out there. But look, like, there was a lot of welcome to the internet. There was a positive environment in Congress where they wanted to make it a growth environment for the internet. And that is

one of the reasons why there was this very important piece of legislation passed that effectively protects internet providers like Facebook and it exempts them from liability tied to wrongdoing on Facebook. We should probably have an episode to talk about that. 213, yep. Yes, yes, section 230. There's a lot of constitutional kerfuffle over section 230. That's my new favorite word, by the way. It's so good.

Anyway, so that environment was different. However, that being said, it's always informative to look back at this kind of evolution vis-a-vis the internet or other, you know, emerging technologies to see if we can take any lessons from that. We jump in here on your thoughts around all of this and the art of and where we are at this point. Yeah, I really love, like, the history that you guys brought up because I think not just, like, the rise of the Internet, but the way that we approached it from a regulatory perspective

has always kind of informed how we think about, like, crypto regulation. It's sort of always been in the background. But there are, like, so many good guests we could have on to talk about that. Like, you know, people that worked on the, like, were in those fights and are in crypto today. I think, like, there's so much we can. learn from that. But so like there have been so many takes on this article. I think it has like 6,000 likes on X by now. What I haven't really seen is like a take from a policy perspective, right? So like if

what he's saying is true and I'll just start out by saying that I do largely agree with a lot of it, if what he is saying is true, like should that change our approach to crypto policy and how, right? So I want to talk about that a little bit. But I, so I'll start by saying I do agree with his, like, argument that something has shifted. I think we've all sort of felt it. And I think that's why it struck such a nerve is because a lot of us have been feeling that this year, but, like, haven't really articulated it. At least I haven't.

But, you know, I was thinking back in, like, you know, when I started to really see signs of this was, I was on the board of one of the crypto trade associations earlier this. this year. And we started seeing a real uptick in the number of member applications from companies that weren't pure crypto, right? They were either like a hybrid or sometimes just straight tradfire or fintech. And it sort of caused us to revisit our founding principles and like what we wanted our membership to look like as a crypto trade association. And looking back, I think this sort of foreshadowed like everything that was going to come this year. And then like just now in my own job, And I'm sure you guys can speak to this too.

In my own job, I feel the shift really concretely, right? So at VEDA, we build vault infrastructure, which is just programmable, smart contracts that let people access Defi while we kind of extract away the complexity and handle all of the risk management and optimize the returns. So like for the first year of our company's life, our conversations were almost entirely with crypto-native teams and protocols. But now we talk daily with institutional and fintech partners who honestly, like, Like even a year ago, I do not think they would have touched Defi with a 10-foot pole. And also, they're not asking for, like, closed permission to lending pools, right? They're asking how to offer their customers access to actual decentralized open permissionless protocols like OffA, like Uniswap. Right.

So from a policy perspective, I think that kind of inverts, like the crypto policy playbook a little bit. Like, I think, you know, for as long as I've been in crypto, And of course, like so many people who have been working really hard on this stuff for like years, even before any of us joined. I think for a long time, crypto sort of operated under the assumption that the world would eventually adapt to us, right? That scale and adoption would force regulators to accommodate crypto, basically the Uber model, right? Grow fast enough, become popular enough, and the rules will kind of be forced to bend to you. But I think what's happening now with crypto is kind of the opposite. which is as this technology integrates more into payments and fintech and financial markets,

crypto itself is starting to adapt to the real world. And I want to stop and say, like, I want to be clear about something, which is, I don't think this shift is driven primarily by regulatory fear. Like, I think there's this myth that safeguards and risk management and compliance only show up because founders are scared of regulators. And I hear that sometimes, right? We all hear it from like other lawyers we work with. But I think in reality, it doesn't, it doesn't match my own experience or the experience of a lot of other defyGCs that I talk to, right?

I think in reality, these things show up because founders actually want to grow. Like they want adoption. And they understand that to scale, users have to feel safe and they have to trust the systems that they're interacting with, right? And sure, like working with regulated institutions does force certain conversations. but I think more broadly as crypto starts touching everyday users, I do sort of think the sense of responsibility changes, and it should, right? We're not in the purely like DGEN era of crypto anymore, where it's like everything's caveat mTOR.

And I mean, I personally think that's a good thing, but I'm sure you guys have thoughts on this too. Kaviat mTOR means buyer beware. Like you come, you deal with it. And that's really just to step in with the legal translation. It's actually a great term. I think you're spot on beat. And the only point I'll make is I feel like we're at this point where there's three

categories of market participants. There's crypto natives, like the Dgen population. There's trad-fi that's experimenting with crypto. Because pretty much every trad-fi entity at this point, I feel safe in saying they're either doing something in crypto, they're doing something in crypto underground, or they're experimenting or researching some facet of crypto. So we're now at that point. If they aren't, then I'm like, what are you doing?

Like on some facet of the technology to create cost efficiency for their customers. And then the middle are these crypto-native hybrids. And the crypto-native hybrids are growing faster than anything else. Like I would never would have called Robin Hood a crypto-native hybrid, you know, years ago. But now I would put them squarely in that camp, meaning sometimes you have crypto entities that have branched out more into trad-fi, but more increasingly we're seeing tradfi that's kind of gone all in on crypto black rock is another example you know they mentioned a week or two ago that their singest most profitable product line is the bitcoin ets i mean just think about this this is black rock okay it's shocking how far we've come and how

profitable this industry is for traditional market players that's why we're seeing this convergence jesse you're going to say something yeah i just want to like add to what you both said and something that V commented on really rang true to me because we all existed in a cryptosphere where everyone really feared regulators and they pretty much were like regulators are going to come in and they're going to force us to use KYC and they're going to impose BSA on us, which just doesn't work. And I don't know what to do with that. And like we just need a fight against it at all cost. But what we're realizing as this like network of incentives has changed. is that like KYC doesn't have to be some top down movement where the state is coming in and like storming the castle,

but rather it's been inching in sideways. And largely through that middle group you identified KK, where when founders realize that they can't scale, they can't partner, they can't touch as much real money, quote unquote, as they want to without it, that's sort of where we're seeing KYC or the like tools surrounding KYC that's just sort of a shorthand like inch in here. And so we don't even need to wait for these laws to come in to have all these projects begin to think about how do I incorporate some sort of checks and risk management, whether it be KYC, whether it be some sort of cybersecurity check. I mean, I have been engaging with the company chain analysis since I was at the DOJ and it first started, right? And at the beginning, it was a tool that the government only used. And then at a certain point, all these projects at the very least were at least incorporating Chainalysis, TRM, something, you know, to say that they had like that check at least for

sanction addresses, et cetera. And that was like the baseline for so long. But that had, that was inched in not because government said you have to, but because that was sort of what was required from either users or investors at the time. And so those kinds of tools, like for better or for worse, like I'm not making a comment. on good or bad. But for better or for worse, they're going to become essential parts of the stack. Now, they're still going to remain a part of the sector just like there's a part of the internet, like the dark web that doesn't have sort of the same rules and standards. And we're going

to have a part of the sector that remains as is. But it's increasingly seeming likely that that's not going to be the majority of it. Yeah. Before we progress at my translation moment, just to refresh, especially with our new listeners. KYC, know your client. These are the procedures that every regulated financial institution, including money service business centralized exchange, MSB, have to adhere to. Like they have to do KYC, know your client processes to determine who their clients are. And these processes are heavily manual, which is the difficulty. And would they have to do this because of the BSA, the Bank Secrecy Act? And I'm sure we'll have an episode on that and elicit findings.

me do. Yeah, yeah. So I, like, yeah, I feel, yeah, I feel, yeah, I feel like we're kind of going through, like, an identity crisis a little bit, right? So, like, I think for me, what that means is, like, we can't keep operating, like, a permanent opposition party. Like, I think that posture made a lot of sense when, like, our very existence was threatened for, you know, like, four years or whatever. But I don't think it makes sense. so much anymore when crypto is just, you know, like Jesse said, starting to touch like real economic activity, starting to touch just like everyday like normie users, right? Because I think the reality is, you know, the moment you start to touch payment rails, you're probably going to have to do KYC somewhere. If you're dealing with institutional counterparties, you're going to need some sort of guardrails. And if you touch things like custody or credit or real world assets or securities, right? Like the whole, everyone stays anonymous forever. Just doesn't, that doesn't work anymore. And so like, that's not to say, you know, like, does the BSA need

reform? Yes, absolutely. Are defy risks genuinely different? And do they need like tailored approaches? Of course. And should parts of the stack remain open and permissionless? In my view, yes. Right. I personally believe that the blockchain layer and decentralized defy protocol should remain neutral and open and permissionless. And then KK, right? Like, are there technologies like ZK that can help reconcile a lot of these conflicts? Yes, absolutely, right? And I'm sure, like, you have a lot to say on that.

But I do think that, like, we sort of need to move on, move beyond the just like crypto-purest position. and start to like consider a lot of these things seriously. And consider them not in the context of like, are we betraying like crypto ideology or our core values or are we like selling out or whatever, right? I think this is actually something that we should celebrate. Like I don't think we should see it as a loss. I think we should see it as look,

this technology is actually proving to be really useful. And the fact that like it's becoming mainstream is actually a marker of, our success. So that's how I would like urge people to think about it, this transition. I love that optimism. And I also love like, look, what's interesting here, I'll just say this. The three of us, I believe, are technically elder millennials. So elder millennials, which I hate that term, are 1980 to 1986 birth years. I'm not going to tell you how old we are. But, you know, we may or may not be in that window. Okay. And what I like to think, and I may have used this in a job interview is that elder millennials, we're at a critical advocacy leadership point in time.

Because elder millennials are the few, like a very narrow point of the universe where we remember life without cell phones and the internet. Like I remember the E.A. or like AI, right? Like, but we also know and understand like the groundbreaking technology that the kids use. Okay. So, being able to branch those two worlds, it's absolutely essential in policy right now because we need to be able to speak to the builders, to the brilliant 25-year-old DGens, but we can also speak 75-year-old legislator. And I am fluent in both, and that is actually unique. We need more people to be able to understand how these two sectors of both the financial markets and the policy world speak. And that's what makes us effective general counsels and advocates.

So on that point, I think it's really important, and this feeds really well into our next topic, is the state of crypto market structure. Because there is definitely a thought that the last remaining barrier to the full embrace of crypto from the Tradfai perspective is legislation, is full clarity, which would theoretically come with the Clarity Act, the Crypto Market Structure Bill. And I want V to give us an update with where we are because we did see some news last week on Thursday. David Sacks said that the markup for the Clarity Act, which this is the landmark crypto market structure bill, is confirmed for January. So before I handed over to Bill, V, I just want to talk about the bill, V to talk about the bill. I just want to refresh that how a bill becomes a law, there's amazing cartoon that we can put in the show notes, but the bill is introduced. It's referred to a committee. The committee has hearings. So this is when

experts testify and information is gathered and the policy. environment and crypto, you know, makes its voice heard. There's a markup session as part of the committee hearings. And this is actually a key point because this is when the bill is revised. And this is when, you know, so kind of this is when crypto has the real chance to be heard. You know, obviously there's a multitude of opportunities to educate legislators as they go through this process. But the markup session is really important. Then the committee votes after the markup session and then the bill goes to the floor, either the House or the Senate. So that's where we are in markup in January.

And it's really important that we progress while we still have kind of the momentum and the support behind getting this bill done. The, tell us more, where are we, what are we going to see in the new year? Yeah. So much moved last week. Like, I think the headline is that Senator Cynthia Lummis, like the real crypto OG in the Senate, she's retiring next year. And I think that matters more than people. people might realize. Like, I think it's creating real urgency, especially from her side, to get a market structure bill done while she's still in office. Like, we need to land this, right? Like, by next

year. So on the Democratic side of Senate banking, I think it's worth emphasizing that the 12 Democrats are not a monolith, like they each have their own priorities and internal dynamics. But I do think many of them defer heavily to Senator Mark Warner, particularly. on defy and illicit finance and intelligence related concerns. And, you know, those issues remain like really big sticking points, right? I think another interesting thing to look out for is Senator Gallego has been, I think, relatively quiet so far, but I think he could end up playing a really important, like mediator or statesman like role, similar to what he did during genius once things start to really move. And then I think I saw an article come out saying that there's

growing tension around Senator Gillibrand, who's been involved in crypto market structure efforts for a long time. So all this is to say, like, even among Democrats who are engaged, there's not, I don't think one unified, like, Dem position that you can even negotiate with. And then substantively, one of the big issues is still defy, right? The committee has been really tight-lipped about the latest draft. I think a lot of us saw that some industry participants were allowed to view it last week, but like only in the room, no copies, no photos. And even Democratic staff reportedly had really little time to review the language before last week's meeting. Only two Democratic senators attended that meeting.

And I think that might just reflect like timing rather than the lack of interest or engagement. And I think one thing that was really interesting about some of the recent meetings was that TradFi was in the room, right? We had not just a number of crypto industry participants, but also SIFMA and the Financial Services Forum and a few tradfai banks, right? So I'm hearing that there will remain a defy exemption in the bill, but it's going to be extremely narrow, right? So like control will be really tightly defined or defined tightly. The BRCA language is included, which is good. But there's just large brackets of the defy exemption part that are still bracketed. I think it'll likely be one of the most contested areas as negotiations continue. And I think both

industry and the SIFMAs of the world are already pushing back. On illicit finance, the language of the latest bill, I believe largely tracks clarity. So no big surprises there. But this, you know, of course, remains like a really big priority for Warner and Democrats that are aligned with him. So I think KKK said, in terms of timing, like, I think, you know, we've been hearing that there will be a markup for, like, months now and it keeps getting pushed. So the latest is that it's going to happen mid-January, but again, that could easily slip, right? Democrats, I think, are signaling that they may not feel ready. I think some of them may have felt, or maybe feeling a little burned after genius, where they felt really rushed to vote it out of committee. And they, they

voted for it expecting that there would be changes from the Republicans in the final bill. And then they saw like totally new text appear once it got to the floor. So I wonder if that experience is making them a little bit more cautious this time around with market structure. And I think if they're not comfortable by mid-January when the markup might happen, this could turn into a more partisan markup than leadership would like. And then I think the final factor is you can't ignore the White House. They are really determined to get this done. So they're applying a lot of pressure behind the scenes to move it forward. I mean, one thing I'm interested to see is whether Democrats are going to kind of be fine waiting. Most of them are not up for re-election

next year. Right. And so there may be less political urgency on their side, which potentially gives them more leverage than people assume to wait and push for the changes that they want to see in the bill, especially if the midterms start to look more favorable for the Democrats, like especially on the house, in the house. So that's kind of what I'm looking for. So, Jesse, before you jump in, I just want to define, SIFMA is the securities industry and financial markets association. So they're really, it's a major U.S. trade group.

It's really the voice of the nation's securities industry. know, they represent broker dealers, asset managers, investment banks. And V's point is absolutely there. What's really interesting about this environment is crypto's at the table, tradfyes at the table. Tradfai is not trying to kill this bill. In fact, a lot of tradfai industries are supporting the bill. Now, there are certain points, like there are rumors that Terry Duffy, who is the CEO of CME,

who the nickname for him is the sixth commissioner, because CME is extremely powerful in the commodities markets. You know, there's rumors that CME and other major stakeholders have had a very big voice on, for example, the DFI provisions that may not be beloved by crypto. Of course, they're going to have differing opinions, which also raises complications when you have Tradfai and crypto at the same trade table. But, you know, having SIFMA there and vocally participating in discussions in this bill, it's good, actually. It means that there's more of an impetus from the street in moving legislation forward. And then the last thing I'll also note is, look, we're now at a point where the House has a version of the bill. The Senate has a version of the

bill. So my biggest hope and all of our hope in seeing progress at this bill is that this markup process in January, hopefully, merges the House-past Clarity Act with elements from the Senate's discussion drafts. And we get to a point where there's a consensus. Because that, is a huge impediment at this point in time. And if we don't get to that point, if the versions remain too far apart, then that is the death now for this bill. Jesse, chime in. I just want to pretend to be Catherine for a second.

BRCA as well, for definition, blockchain regulatory certainty act, it's about like protecting developers and non-pustodial blockchain developers in particular. But I guess one thing I'll say, because, you know, this is our last episode of the year. and I want to be positive going into the new year. But like there is something really amazing about the fact that like Dems have engaged and they continue to engage. And they've been pretty clear from the start about the fact that they have three issues that need to be addressed.

And those continue to be the issues. And I think they're refining them a little bit and like Republicans are helping here and there. But it's illicit finance, which we talk about all the time. And I know no one else wants to hear me talk about that more. pockets and token classification, which essentially like don't be able to classify a token as a non-security, even though it acts as security and a bunch of other stuff related to that. But the ethics part, I just don't think we've touched on enough here because I really think

that is going to get in the way here if we're not careful because essentially what the Democrats have been saying and some Republicans have been agreeing on is that public officials shouldn't be able to abuse their offices to enrich themselves with crypto, right? The same concept that should apply to traditional markets. We've obviously talked before on the show, how the ethics rules associated with, you know, trading in Congress and with other political positions isn't fully defined. It could probably be changed. But like, why add to those? And instead, let's start fresh with crypto and make sure that public officials can't enrich themselves.

And it really speaks to how important it is that the crypto industry and the political movement associated with the crypto industry, understands that a lot of times we are in an echo chamber. And we need to make sure that like the people outside this echo chamber respect our industry as much as we respect it. And also that they don't just see it as corrupt. And I know that we're going to talk more about that with some of the New York Times stuff that's been coming out. But like there is a huge contingency that still thinks that crypto is just about breaking the law. And until you find those people to talk to them, you don't realize how prolific that narrative is. And so that starts from the bottom, but it also starts from the top.

And so how we regulate it and think about it is going to be really important to making sure that this narrative associated with crypto is dead. But we should call it like crypto is becoming part of the larger economic system is going to have to be maintained throughout. 100%. And the other thing that we have to account for is there's still a number of Democratic politicians that like to use the anti-crypto narrative as a persuasive campaigning technical. And to be fair, I want to give them credit for a second because, look, I'm on the board of the Illinois Blockchain Association. And we really advocated very hard to kill an Illinois bit license-esque regime called DACPA. That's the acronym of the law. Because what we saw in the original text was over-regulation. And we were also very alarmed by the language of the text. It would capture like tiny builders and regulate them like centralized exchange. And we're not anti-regulation. We just didn't think this was the right move. So we worked collaboratively with Illinois to get the bill to a more manageable, reasonable state because it was clear that we weren't going to be able to kill it. And then the governor of Illinois, upon signing the bill, tweeted something about how we was like cracking down on crypto fraud and some reference to crypto bros in Washington, which by the way makes me incensed because obviously the three of us do not appreciate the crypto bro narrative. as I say this as a serious general counsel wearing a tiny Santa hat. But, you know, we're serious people and we're women and we're in crypto.

Girls can't pull off this head gear that we're rocking today. Exactly. Okay. But so there is a democratic narrative of kind of like stamp out crypto fraud, bad crypto. And that means that we have more work to do in educating all legislators, regulators, and Republicans and Democrats about how this works and how this technology can frankly improve the lives of everyday Americans and constituents. And there are obviously a multitude of use cases there. So look, like, this is actually a natural next step to our next segment. There were a couple

big, big news items last week that came out of the CFTC. One, Mike Seleague was confirmed as CFTC chair, which is actually fantastic news on a number of fronts. One, we have a CFTC chair. That's just great. There was a lot of drama surrounding Brian Quintenz's nomination. We won't get into it today. But Mike Seleig, I believe all three of us know Mike. I worked with Mike when he was actually one of my outside counsel when he was at Wilkie Far. He's really smart. He worked very closely with Neil, who's now the G.C. of or CLO of Polymarket. Really, really great team. He knows crypto. He spent the past couple of years as general counsel of the SEC task force. I don't, I don't really know anyone who has anything bad to say about Mike, especially as intellectual

horsepower. So fantastic. We have a leader in place, okay? And he was in the private sector. He went to the SEC. He went to the CFTC. Pretty typical. We also saw Caroline Fam, who was first, now kind of a long time, the one remaining CFTC commissioner, who was, as we talked about in a previous episode, on a tear of progress and, you know, advice and rulemaking and work in the CFTC, she announced, or the news broke that she is leaving to become chief legal officer of MoonPay. So big news all around. And we also hope to see more SECC commissioners, CFTC commissioners confirmed, hopefully, as soon as March or at least progress there. But what we are seeing, and a lot of people don't understand this, is a revolving door.

Private sector government, private sector government, private sector government. And I think all three of us are familiar with this. You know, Jesse from the Department of Justice perspective, B from the SEC perspective, me, I was a partner in private practice for many years in white collar defense. And I will say the vast majority of my ex-partners at King and Alding or ex-senior level government officials, their federal prosecutors, SEC enforcement. And there was huge value there because they had the mentality and the view. They had sat at the other side of the table.

And they had the relationships, if I'm being cynical. So I see that's revolving door as kind of a natural value evolution. Government gives value to the private sector. Private sector gives value to the government. But, Jesse, give us your take, especially from your perspective as a long time federal prosecutor. Yeah. I came from government and I incredibly value my time there. And a lot of my closest friends in the industry, shout out we, also came from government.

And I didn't stop because I didn't like leave because I stopped believing in public service. I left because I believed in the tech and I wanted to be building it and building the rules right. And I just don't think you can do that unless you really understand both sides of the table. And to be honest, I say that I've been in crypto for 10 years, which is true. But I didn't truly understand the crypto industry until I went and worked in it. In fact, I think it, I wish it was kind of mandatory to be in both, although I don't know if that would work in our current form of democracy. But I think that there should be like a learning period required because if you don't

have that cross pollination, you don't get good policy. And in crypto, we've had like an incredible amount of great cross pollination. And that's been really wonderful for the industry. I mean, summer at blockchain association is a. great recent example. You mentioned a few other ones. Summer Mercinger, who's CEO of the biggest or one of the biggest crypto trade associations. She is an ex-CFTC commissioner and she left to become CEO of blockchain association. She's fantastic. Go on, Jesse. Thank you, moderator. Thank you.

So in other words, like, I don't see this revolving door as necessarily bad or corrupt. And in fact, it's less of a revolving door and more like an air gap door or something like that. I hadn't quite really worked through the metaphor. but it can only really work, though, if there are rules and laws in place that make sure that there are restrictions associated with going in and out of government. And there are a bunch of these rules, and I don't think anyone wants to hear me lay out the ethical guidelines or the criminal rules, etc. But it's all around the fact that, like, it's not just about stopping bad behaviors by

individuals, but about protecting credibility of the institutions, which is something I believe in immensely because we don't want anyone thinking that a ref is like auditioning for a future job rather than making rules that they think are fair. But the hard thing in all these conversations is like coming down to the distinction between writing general rules that apply to an industry or apply to a technology or apply to like a larger financial system that might impact an industry or deciding specific outcomes on who's the winner and who's the loser. right? And to me, this like ties back in an interesting way to the ethics conversation of market structure and the general narrative of crypto in the midst of the crypto is dead, joining the other

industries because market structure ethics and this revolving door ethics conversation together are really two versions of the same question. So like, are we regulating markets or are we curating winners? I love that. And one other thing I'll note before V jumps in. I heard something super cool the other week. I had this in my kind of crypto development summary on LinkedIn this week, is the U.S. government's actually launched a tech force, which will borrow Saccondis from Big Tech and crypto to work on kind of U.S. government tech. And this goes to our point. I love that so much because I feel like, look, the government is acknowledging that some of the best brains are not working for the government right now. So it's like, let's borrow their brains. And then these

secondees get a new perspective. And this has existed for a while. I mean, this was a huge thing after World War II as well. Like, LBJ was really into this. So this has happened many, many times throughout history, especially around the space race and Kennedy. So it's not the first time. And it won't be the last time, hopefully.

It's just really important that we understand each other well. And you can't really do that unless you really know people in one and the other. Yeah. And you do have, there are rules in place, which are agency-specific. I remember when people would come to King and Spalding, my law from the government,

they would not be able to work on a number of matters. Like they would effectively be axed out of certain matters that they worked on as regulators. But I know that each agency has a different set of rules. Tell us your thoughts on this,

and especially from the SEC perspective. Yeah, so I agree with all of that. And I think it's especially important when you're talking about regulating like a new technology, right? I mean, the reality is, is no one is going to understand a new and like quickly evolving technology better than the people who are actually building it and like working on it day to day.

And that's not it's not the regulators, right? So like having that kind of expertise in the government is I think really, really critical. But I'll say this again, we do need to get rid of that ethics rule that like bans government employees from holding any crypto if they want to work on crypto. matters. So to Jesse's, like, ethics point, I agree that it's really, really important. And I don't, I don't know what it's like at other, like, government entities or agencies, but at the SEC, the rule we had was actually really broad, but, like, pretty, like, easy to understand. So it was basically, once you're starting to have conversations, like, with prospective employers, you have to

tell the ethics office and you have to step away from any work involving that company, right? So the question is, like, how broadly is that defined? At the SEC, it was defined pretty broadly. Like, you can still do your job, but you can't work on any investigations or exams or policy matters that could potentially affect that prospective employer. And then certainly, once you've accepted an offer, you can't work on any of that stuff. So I don't know, like Jesse, if it was that broad at the DOJ. But at the SEC, probably because, like, you know, they touch the capital markets and, like, a lot of potential companies. Like, it was, it was pretty strict and it was pretty broad. Yeah, DOJ had something very similar and where it became particularly relevant is like, as, you know, KK was talking about,

a lot of prosecutors go to work at law firms. And so you need to disclose who you're interviewing with because you can't be on cases sort of opposite to that law firm, which actually is a, it's a big deal for, you know, prosecutors that are working on fraud cases because there are a certain number of, you know, law firms that do many of those. But the regulators in the financial markets, and you can think about banking regulators as well, their rules are even stricter because obviously there's a lot of revolving door, air gap door between banking regulators and banks. And we've just been seeing it for a lot longer than crypto because banks have been a lot around longer. and the rules are pretty strict. It's just the level of enforcing those rules has changed a lot depending on our period of history.

And also like the ethics obligation, it continues even after you're at, like in the private sector, right? So like if you join a company or a law firm, depending on your level of seniority at the SEC, you actually cannot represent your employer before the SEC for some period of time that ranges from like a few months to like one or two years. I think, right? So there are, there are rules like to sort of, you know, address some of the conflicts that arise with the revolving door. Yep. Yep. That's a really good point. So look, this is good news. I think good and bad when you see these departures from the government.

I would love to see more thought leaders in crypto be in high level government positions because it obviously gives the power not necessarily to advocate on behalf of crypto. We expect our regulators to do what they think is best pursuant to their mandate and to the law, but the fact that they would have this institutional understanding or this understanding of how the technology works, obviously that would be fantastic. So again, I'm very happy to see someone like Cher Seelake in the seat fully understanding the technology itself. So that's great news. So that's maybe one piece of crypto good news. I want to wrap with one other piece of crypto good news, particularly important as we round out this year.

to end on a positive note. This week, I read that the Islamic Affairs and Charitable Activities Department has introduced a new service allowing charitable associations in the Emirate to accept donations in Crypto. So this is actually fantastic. This means in Dubai,

charities can now accept charitable donations via crypto. So there's been a little bit of a theme on crypto good news, but what I love to do is I love to cover this because I think it's important to spotlight use cases where crypto is actively trying to help and engage with their community.

And there are so many of those. Crypto is not dead. Crypto is not dead. I mean, and there's a PSA. This year for Christmas, hopefully my brother and sister aren't watching, but I asked them to bring their hardware wallets that I had gifted to them to my parents' house,

and I will be giving my nieces more crypto for Christmas. So everybody, walk the walk. Gift your baby nieces and nephews. Bitcoin. Like, come on, what is going to pay for their college? Is it going to be Ford stock or is it going to be Bitcoin? I mean, as a lover of a Ford truck, don't get me wrong. So no shade on Ford. Anyway, I also want to take a special moment. I'm going to let V and Jesse each say something that they're thankful for or a resolution. But on my front, my hope for 2026 is that the New York Times takes a second look at their crypto coverage. But I also want to say thank you, everyone, for listening.

for being with us on this journey. We are grateful for our listeners and our viewers. We love feedback, keep it coming. It's been a crazy year in crypto and policy and we want to keep rocking with you. So, Jesse, give us some fun to round out the year. I mean, let's just start with New York Times for a second. They published an article about how women are ruining the workplace. So I think they lost the, like, a whole sort of story here.

They really lost the plot. Yeah, what was that headline? Like, what was this? Women are ruining the why women are ruining the workplace. I don't even want to get there. I shouldn't even mentioned it. But like, come on, guys. You're triggering me, Jesse.

You're triggering me. I am really grateful for the two of you guys and how you've kept me positive and deep in the technical side of crypto for so many years. And I've reminded me just like, you know, the listeners, just like many of the people who know who they are listening or supporting. all of us. They've, you know, really kept us positive in the space. There's been a lot of ups and downs over the past 10-ish years or, you know, how many years we've known each other. And without each other, I don't know if we would have continued and gotten through it. And we will continue to do so.

So thanks y'all for being on our team. Love it. The, the kids. Hi, okay. So I hate New Year's resolutions. I don't believe in them. But I did want to just thank all of our listeners and viewers, like, we're so grateful for all of you guys and for all of the feedback we've gotten, both positive and constructive. It's been a really crazy year in crypto and policy, but we really do hope everyone gets to rest and relax these holidays. And we love you guys all. So thanks for tuning in every week.

I am so thankful for all of the boss women in crypto. And the men who are listening and watching, keep building, keep working, great way to round out the year. Happy holidays, happy New Year, and we will see you not next week, the week after, for your next episode of Decks in the City. Thanks for listening.