Unchained - Grayscale v. SEC: Who Won This Week’s Hearing? - Ep. 465

Starting point is 00:00:00 Hi, everyone. Welcome to Unchained, your no-hype resource for all things Crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as a senior editor, Forbes, was the first Main Tree Meteorporter to cover cryptocurrency full-time. This is the March 10th, 2023 episode of Unchained. Branching out from just being a podcast, Unchained has launched a new website, complete with more breaking crypto news, educational articles for those just getting started, how's you guys and videos? Check it out at Unchained Crypto.com to find answers to all your crypto questions. With the Crypto.com app, you can buy, earn, and spend crypto in one place.

Starting point is 00:00:43 Download and get $25 with the code, Laura, link in the description. Ever wanted to use defy without being tracked? Railgun is a leading defy privacy solution on Ethereum, BSC, Arbitrum, and Polygon. Shield your funds and use them privately in your favorite DFE. apps, while Railgun's cutting-edge zero-knowledge system encrypts your data from public view. Yes, that includes dextrating. Visitrail.org or use the Railway app at Railway.xYZ. Today's guest is Elliot Stein, senior litigation analyst for the financial sector at Bloomberg Intelligence. Welcome, Elliot.

Starting point is 00:01:20 Hey, Lauren. How you doing? Good. Glad to have you here. Yeah, thanks for having me. I listen to your podcast fairly frequently, so it's nice to be on the other side. Great. On Tuesday, a panel of judges in the District of Columbia Court of Appeals in Washington heard oral arguments in Grayscale's lawsuit against the SEC over its rejection of Grayscale's Bitcoin ETF application. Give us the background of how this day in court came to be. Sure. So, you know, there's a lot of really interesting legal cases in crypto these days. And one of them involves this case. gray scale petition challenging the SEC's rejection of its spot Bitcoin ETF. You know, this goes back a few years. I think the crypto community has been clamoring for some sort of Bitcoin ETF for a few years now.

Starting point is 00:02:13 The SEC rejected those applications for a long time. And then finally, in late 2021 and then again in 2022, they started approving applications for Bitcoin futures ETFs. But to date, they have not approved an application for a spot Bitcoin ETF. And that discrepancy was the impetus for this lawsuit or this challenge by Grayscale. And so on Tuesday during the hearing, what were some of the arguments that you heard from both sides? Sure. So, you know, Grayscale's main argument is that there's an inconsistency in the standard that the SEC is applying because they approved Bitcoin futures ETF, but they have rejected spot Bitcoin ETF. And the argument is that, you know, because the underlying assets

Starting point is 00:03:11 essentially are the same and derived from Bitcoin prices, they should be treating these two products the same, but they're not. And as a result, they're treating similar products differently and that to use the legal phrase is arbitrary and capricious and violates federal law. And then what about the SEC's argument? What were they saying? Sure. Well, the SEC's argument is, you know, that they actually have been applying the same standard, but the products are different that the, that the futures, Bitcoin futures market is regulated by the CFTC and so that they have some comfort that they can detect fraud and manipulation in the underlying market and be satisfied that the ETF won't be affected. But in contrast, the spot Bitcoin market is not regulated,

Starting point is 00:04:08 and so they don't have that same level of surveillance agreements with exchanges to make sure that there's no fraud or manipulation in the underlying market. So one other thing that I wanted to raise here was just an interesting tidbit about Grayscale's counsel. His name is Don Verrilli. Who is he? What's his background? Oh, sure.

Starting point is 00:04:31 Don Verrilli is a highly esteemed lawyer. He was the Solicitor General in the Obama administration and was probably most famous for arguing the Obamacare case in the Supreme Court, which wound up going. in the Obama administration's favor. You know, he's a terrific lawyer. He's got a very understated manner, I would say, in court, but very respected, very credible. And I thought it did a really fine job yesterday on Tuesday when the case was argued. So when that happened, what kind of questions were you hearing from the judges?

Starting point is 00:05:06 So the judges were really digging into one particular issue. And this goes to previous orders where the SEC approved these Bitcoin futures ETS. And in those cases, they said that if there was fraud or manipulation in the underlying spot market, it would show up in the futures market. And as a result, you know, the SEC was able to approve those orders. And they were wondering why that isn't the case now, because in the Grayscale's application and in the SEC's rejection order, the SEC said, actually, if there is fraud or manipulation in the spot Bitcoin market, it's not going to show up in the futures market.

Starting point is 00:05:52 And just because you have a surveillance agreement with the CME where Bitcoin futures are traded, you're not necessarily going to see that there's fraud or manipulation in the spot market. And it's that discrepancy that the judge is really focused on. And they wanted the SEC to give them a satisfactory. answer. The SEC tried. I'm not sure they convinced the judges, though. What was the SEC's argument? Well, the SEC's argument is that even though there's this 99.9% correlation between the prices in the spot market and the futures market, they're not convinced that broad in the spot market

Starting point is 00:06:32 would show up the same way in the futures market. They never really clarified what that meant, but they, you know, they said that gray scale needed to provide more empirical evidence. of how fraud in the spot market might manifest in the futures market. And the judges pushed back on that quite a bit and said, you know, why do they have to show that? Why is it not enough that the prices are correlated so extensively? And in addition to that, what type of, you know, empirical evidence do they need to show? And the SEC, you know, didn't really give a satisfactory answer for that, in my opinion.

Starting point is 00:07:07 And so going into the hearing before you heard the arguments, what were your thoughts about how you thought the case would go? Yeah, so going in, you know, I thought it was a close case. I gave the SEC a slight edge. I thought Grayscale had a 40% chance of winning prior to the argument. You know, and that in my mind I reflected that it was a close case. I gave the edge to the SEC. I thought courts generally defer to agencies on issues like this

Starting point is 00:07:33 because the agencies are the experts and courts are, you know, not quite as versed in in securities laws and and things like that. But coming out of the argument, you know, I think Grayscale is favored now and I give them a 70% chance to win a ruling from the court that vacates the SEC's order rejecting their application. And was that primarily based on that one inconsistency that the judges were really honing in on? Is that why you changed your mind? Yeah, that's that's a lot of it. I mean, it was sort of the tenor, of the questions and the extent to which I thought or in this case didn't think the SEC convinced the judges that there was a satisfactory explanation for that inconsistency.

Starting point is 00:08:20 Yeah, and it definitely looks like the markets agreed with you because afterward the GBT price rose and for quite a long time now it's been trading at below the nav, which reflected kind of the fact that people felt like it wasn't. isn't actually as valuable an instrument to have as the underlying. So that now reflects more confidence that eventually holders of GPTC could be made whole. And if they're buying a discount now, then that means that they'll sort of get free money if this becomes an ETF. So in a moment, we're going to talk about what the different outcomes could be. But first, a quick word from the sponsors who make this show possible.

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Starting point is 00:10:13 So if the court rules and gray scales favor, that doesn't necessarily mean that suddenly GPTC would become a Bitcoin ETF. So why don't you just outline like all the different possibilities of what could happen? Yeah. And they actually talked about this at the argument on March 7th. It's not like the court is just going to issue a rule in saying, bam, you know, bought Bitcoin an ETF is approved, ready to go, they'll most likely send it back to the SEC. They'll let you an order sending it back to the SEC for further review.

Starting point is 00:10:48 And language in that ruling is going to be really critical because they can go a few ways. They can send it back to the SEC and say, you know, you didn't give us a satisfactory reason for treating these two products differently. Go back to the drawing board. Give us a better answer. and, you know, reviewed the application again with that in mind. That's one possibility. Another possibility is that they actually constrain the SEC a lot more and sending it back and say,

Starting point is 00:11:18 look, you know, based on, you know, the arguments made, the facts that we've seen, you know, we don't see any way for the SEC to reject this application again. And so we're sending it back to you, but essentially with the direction to approve the application the next go around. But obviously, there's still a chance that they rule for the SEC, right? I mean, you know, I think Grayscale is 70% likely to win this round, but that obviously leaves an opening for the court to give, to rule for the SEC. Right. But so let's explore this, like if Grayscale were to win a little bit further. So potentially it could be either that the Bitcoin ETF is denied on another basis.

Starting point is 00:12:04 Could anything happen to the Bitcoin futures ETFs as a result of this, you know, whatever happens? Yeah, that also came up in the argument. And, you know, a couple of judges asked about that. You know, if they do, if they do vacate the order, the SEC's order, and they say the SEC got it wrong, theoretically, there is the possibility that the SEC says, okay, well, you know, if spot Bitcoin ETFs are not going to be able to, you know, if we can't reject those, And in order to be consistent, I mean, in order to be consistent, we'll also have to reject futures, Bitcoin futures ETS, which we've already approved. I find it hard to believe that the SEC is going to go back on its previous approvals of Bitcoin

Starting point is 00:12:52 futures ETS. I think that chip has already sailed. But it is a theoretical possibility. It came up an argument both sides. The SEC was unwilling to say exactly what it was going to do. But the judges asked about it and Donva really mentioned it as a possibility as well. And so earlier when I said that, you know, the price of GBT rose because potentially people are like, oh, like if I own this and I'm sort of getting these shares cheaper. But it looked like you reacted and maybe didn't agree with me.

Starting point is 00:13:21 So yeah, did you want to respond to that? No, no, I don't read too much into my facial expense. But, you know, but we did see, you know, very very. that the discount did drop, right? The discount went from like 40% or something like that when the argument started to, you know, low 30s by the time the argument ended. So, you know, I think that does reflect the market thinking

Starting point is 00:13:49 that, you know, Grayscale had a good day in court. You know, there's, you know, probably $5 to $6 billion at stake here in terms of value for GPC investors, you know, reflecting that discount between the value of the trust, which is, you know, about $8.5 billion as of March 7th versus the value of the underlying Bitcoin, which was roughly $14 billion in the trust. So what, so if this ends up resulting in GBT being turned into a spot Bitcoin ETF, what do you think that could mean for other, you know, firms that have been applying to create their own

Starting point is 00:14:37 spot Bitcoin ETFs, like, meaning would the ruling be limited just to this one situation or would there be kind of a wider implication? No, I think there's definitely a wider implication because if eventually Grayscale's application gets approved, then it opens up the, you know, the floodgates for other firms to offer similar products. And so earlier, you know, you started to go into if the court were to rule against grace scale for the SEC. And obviously we talked about why, you know, right now your confidence is more in the other direction. But if the court does rule for the SEC, what do you think the reason will be? That's a great question. You know, I think the reason would be that these are different products.

Starting point is 00:15:25 and that, you know, the SEC, if that happens, convinced the court that just because the price is correlated doesn't necessarily mean that the way fraud or manipulation manifests in the spot market is the same as it is in the futures market and that as a result, the SEC was, you know, in the right in tune in the two products differently. Another argument that the SEC made is that in Bitcoin futures, ETSA, one of which was approved last year in the two creum order, there was a one-to-one relationship between the underlying assets, which were Bitcoin futures,

Starting point is 00:16:05 and the products on the CME that are subject to surveillance agreement. And we don't have that here in the spot Bitcoin ETS, because the underlying asset is spot Bitcoin, and the surveillance agreement, again, is with the CME and Bitcoin futures. And so there is a flight discrepancy there. And, you know, the SEC pointed to that difference many times, but again, I don't think the judges were convinced. I think that's one thing that the judges will actually ask the SEC to go back to the drawing board and explain better, why that matters, why that one-to-one relationship matters for purposes of approving the or rejecting the spot Bitcoin ETS. You know, the backdrop to this lawsuit is that there's been kind of a turf war between the SEC and the CFTC over crypto now for a few years.

Starting point is 00:16:51 and I wondered if you thought the ruling in this case would have any impact on that fight sort of between the agencies. Yeah, no, we definitely see that. I mean, you know, I think sometimes people describe it as a turf war. I think it might be overstated because I think the agencies actually do work together most of the time. Chairman Gensler certainly has tried to stake out a lot of territory in terms of overseeing the crypto market. I don't think this case actually will have much effect on, you know, whether the SEC or cases as the FTC has jurisdiction. You know, the FCC has jurisdiction over, you know,

Starting point is 00:17:26 ETFs and exchange traded products, right? There are other cases where I think it will really matter for whether the SEC or the CFC has jurisdiction, things like the SEC versus Ripple case, you know, other cases where the SEC is saying that digital assets that are being listed on platforms are unregistered securities, right? And if the SEC loses those

Starting point is 00:17:48 and they're not treated as securities, and the CFDC would have jurisdiction over them. So when do you expect a ruling in this particular case? So, you know, based on other cases coming out of the D.C. circuit, you know, I think a ruling's likely within three to six months, probably closer, you know, to the six months timeframe. So, you know, I'd expect something at the earliest late 2Q, but probably more likely in, you know, mid to late 3Q. And so just a moment ago, you said that there are other cases that you feel are also very impactful in crypto.

Starting point is 00:18:24 What are some of those that you're keeping an eye on? Yeah, there's a lot. Yeah, I mean, the SEC ripple case is obviously one that's on a lot of people's minds. And, you know, we're waiting for a critical ruling on summary judgment motions in that case, which will essentially determine whether the judge rules on her own as to whether XRP is a security or not. or not, or whether she sends it to trial. But there's, you know, there's, there's the SEC versus Wahy case, which is the case involving a coin-based employee accused of insider trading.

Starting point is 00:19:00 Again, the SEC has alleged that, you know, almost 10 digital, I think there's like nine digital assets at stake in that, at issue in that case, and the SEC has said their securities. That'll be an interesting case to follow. You know, we, the case against Terra form involving stable coins is going to be interesting for purposes of how the SEC approaches stable coins in terms of alleging whether they are securities or not. We have the NFT case, the TopTots case that came out not too long ago, which has to do with whether NFTs are securities. You know, the judge there said that based on the allegations, the case could proceed. But we still have to wait for, you know, a merits decision later in that case.

Starting point is 00:19:49 There's a few others. But, you know, the point is there's a lot of really interesting cases. And a lot of them are cases of first and present because this is obviously a novel area. And of those cases, which ones right now do you think are going to go in a direction either that the crypto community wants or like really doesn't want? Well, I think the ripple cases, I think, you know, one of the more interesting ones. Because you're dealing with a digital asset that, you know, has utility, right? Which weighs in favor of those assets being commodities. On the other hand, you know, the SEC has alleged that they were marketed as investments in many ways that purchasers who bought the tokens from Ripple, you know, treated them as investments and are hoping that the, you know,

Starting point is 00:20:44 the price of the assets rise, right? So it's a really interesting case for the whole crypto sector. And, you know, I think we may get a ruling on the summary judgment motions, you know, in 1H this year. All right. Well, it has been such a pleasure chatting with you. Thank you so much for coming on Unchained. My pleasure. Thanks for having me, Laura. Don't forget. Next up is the weekly news recap. Stick around for this week in crypto after this short break. Amazon presents Jamal versus the Shih Tzu. Descending from the gray wolf, shih Tzu's live by their own untamed primal code of not giving a single shih Tzu. But Jamal shopped on Amazon and bought dog treats, chew toys, and 32 ounces of carpet cleaner.

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Starting point is 00:22:06 Link in the description. Thanks for tuning in to this week's news recap. Silvergate Bank shuts down. Silvergate Capital Corporation, the holding company for Silvergate Bank, one of the crypto industry's most important banking partners, announced that it intends to wind down operations and voluntarily liquidate the bank. The decision was made a week after it failed to file its annual 10K report with a securities and exchange commission and said it was being investigated by the U.S. Department of Justice.

Starting point is 00:22:35 The announcement tanked the stock by more than 60%. The bank's wind down and liquidation plan includes fully repaying all deposits. Silvergate Capital has yet to decide how best to resolve claims and preserve the residual value of its assets, which include proprietary technology and tax assets. The news comes despite Bloomberg reporting earlier in the week that Silvergate was working with regulators to prevent a complete shutdown of its operations, with examiners from the Federal Deposit Insurance Corporation sent to Silvergate's headquarters last week to review the bank's books and records and a move authorized by the Federal Reserve. Last week, Silvergate Bank shut down the Silvergate Exchange Network, or S-E-N, its instant

Starting point is 00:23:16 settlement network developed for its many crypto-industry customers. However, all other deposit-related services will remain operational as the company works through the wind-down process. The bank's choice to close down operations and liquidate is expected to have significant implications for the crypto industry as a whole, and will likely be closely watched by regulators and other financial institutions in the space. In fact, on Monday, White House press secretary Karene Jean-Pierre had said it was, quote, aware of the situation with a troubled crypto bank and would continue to monitor reports. In a video for Unchained, Caitlin Long, founder and CEO of Custodio Bank, says that this failure isn't a reflection on crypto.

Starting point is 00:23:57 This is actually a canary in the coal mine for bank regulators, and I do hope they see it as that. This has nothing to do with crypto. It has to do with how fast the payments can settle, which means bank runs are. are going to happen a lot faster. New York AG claims Ether is a security. New York Attorney General Letitia James sued Seychelles-based crypto exchange Ku-coin for violating securities laws. James claims Ku-coin has been offering tokens, including Ether, without registering with her office.

Starting point is 00:24:28 This marks the first time a regulator has claimed in court that Ether is a security. James asserts that Ether's value is dependent on the efforts of others, including Vitalik Booder, and that it meets the definition of a security under the Martin Act, New York's anti-fraud law. Ku-coin is also being accused of selling unregistered securities via its product Ku-coin-Earn, similar to the recent case with Krakken, which settled with the SEC for not properly registering its staking services. Finance U.S. gets approval to buy Voyager's assets. Bankrupt Crypto Lender Voyager Digital received approval from a U.S. bankruptcy judge to sell as assets and transfer its customers to Binance U.S. in a deal valued at $1.3 billion.

Starting point is 00:25:12 Binance U.S. will pay $20 million in cash to Voyager and take on crypto assets deposited by Voyager's customers, with the customer's crypto assets accounting for the bulk of the deal's valuation. The deal's approval comes despite objections from the SEC and other state regulators. The SEC initially cited concerns over how Binance U.S. could afford a transaction of such magnitude. However, the regulator was later overruled by the bankruptcy judge who found the objection to be, quote, vague and lacking concrete evidence. The deal's approval marks a significant win for Binance U.S. and Voyager creditors who could potentially recover 73% of the value of their deposits at the time of Voyager's bankruptcy filing. The ruling could set in motion the process of transferring customer accounts from Voyager to Binance, and when it is closed, Voyager customers will be able to make withdrawals for the first time since I'm. last summer. In related news, a judge approved the company's agreement to set aside $445 million

Starting point is 00:26:10 after an FDX entity sued it for loan repayments. The parties agreed to participate in non-binding mediation and establish a framework for the litigation of remaining disputes. White House proposes new crypto tax treatment. In its fiscal year 2024 budget proposal, the Biden administration included a provision that would subject digital assets to wash sale rules, which means that tax deductions on selling assets at a loss and quickly repurchasing this same or a similar crypto investment would be eliminated, similar to the treatment of stocks and bonds. The administration estimates that this change could result in roughly $31.6 billion in revenue over 10 years. 3A.C founders launch new exchange. The founders of collapsed crypto hedge fund

Starting point is 00:26:58 3 A.C., Kyle Davies and Suju, raised 25 million. for a new venture called OPNX. The platform will specialize in bankruptcy claims trading, allowing creditors to sell their claims quickly without waiting for a long bankruptcy process. The platform lists bankrupt crypto firms such as FTX, Genesis, Celsius, BlocFi, Mount Cox, and yes, 3AC itself, among the claims it will service. The firm estimates a market size of $20 billion and will cater to investors too small to qualify for OTC deals. Thankfully, Zhu and Davies did not cost. it GTX, because, quote, G comes after F as was initially pitched.

Starting point is 00:27:40 Separately, Rook, a liquidity profile on Ethereum backed by 3AC, experienced a surge in activity, with its token rising 23% on speculation of the fundraising. Alameda sues Grayscale. Alameda Research, the bankrupt crypto trading firm related to FDX, has taken legal action against Grayscale investments, the creator of the largest Bitcoin fund. Alameda alleges that Grayskills, quote, self-imposed redemption plan is obstructing shareholders from receiving $9 billion in value related to the Bitcoin and Ethereum trusts. The lawsuit was filed in the state of Delaware's Court of Chancery and seeks injunctive relief to allow FTX's investors to obtain over $250 million in net asset value. Elamita holds 22 million shares in the Grayscale Bitcoin Trust and 6 million shares in the Grayscale Ethereum Trust.

Starting point is 00:28:30 Additionally, the suit claims that gray skills management of $1.3 billion charged over the last two years violates the trust's agreements, and the firm used fabricated excuses to prevent redemptions. Alameda sells stake in Sequoia. This week, Alameda has also agreed to sell its interest in Sequoia Capital to the Abu Dhabi's sovereign wealth fund for $45 million, according to court documents filed on March 9th. The deal is part of FTX's bankruptcy proceedings in which the company is selling its. investments in early-stage crypto and tech ventures to repay creditors. The potential buyer is owned by the Abu Dhabi government and already invest in Sequoia. Still, the deal is subject to approval by a Delaware bankruptcy court, but could be closed

Starting point is 00:29:13 as soon as March 31st. Meanwhile, Sam Bankman-Feed's lawyers informed a federal judge that he may ask to delay his criminal trials scheduled for October 2023. They say he needs more time to review large amounts of evidence that prosecutors have collected, including cell phones, laptops, and Google accounts of former employees. Companies tied to Tether used false documents. According to the Wall Street Journal, firms backing Tether, the company behind the most widely traded stablecoin, USDT,

Starting point is 00:29:45 allegedly used falsified documents and shell companies to circumvent the banking system. These entities apparently used, quote, shadowy intermediaries to maintain their access to the global banking system. As per an email reviewed by the Wall Street Journal, Tether owner Stephen Moore detailed how one of Tether's major traders in China provided fake sales invoices and contracts for each deposit and withdrawal. Tether associated companies also allegedly hid their identities behind other businesses and individuals. Moreover, Tether and its sister company Bipfinex

Starting point is 00:30:18 reportedly attempted to expand their bank access through the once crypto-friendly signature bank. Tether called the report, quote, wholly inaccurate and misleading, and stated that they routinely and voluntarily assist lot enforcement organizations in preventing money laundering, terrorism, and other crimes by bad actors. Finance wanted to hire Gary Gensler. According to text messages and documents reviewed by the Wall Street Journal,

Starting point is 00:30:44 finance tried to hire Crypto Public Enemy No. 1 as an advisor in 2018. Yes, we're talking about Gary Gensler before he became the chair of the SEC. At the time, Gensler was teaching a course on blockchain and money at MIT's Sloan School of Management. after a meeting with Ella Zhang, Binance's former head of Ventures, and Harry Zhou, co-founder of Binance-backed OTC Trading Desk, Coy Trading, Gensler reportedly declined a role as an advisor to the

Starting point is 00:31:10 crypto exchange. The documents indicate that Binance had a legitimate concern regarding potential repercussions from U.S. regulatory bodies. A presentation shared in 2018 called for the establishment of a separate U.S.-based entity to insulate Binance from U.S. enforcement, which eventually led to the creation of Binance U.S. A Binance spokesperson told the WS.J that the presentation was rejected and had never been implemented. In related news, Binance-branded stablecoin BUSD's market cap has been declining since the SEC issued a Wells notice to its issuer Paxos.

Starting point is 00:31:45 Investors have redeemed over $8 billion from BUSD, which has resulted in its market cap falling below $8.5 billion. Is the Celsius buyout coming? Celsius Network has been granted exclusivity by bankruptcy court judge Martin Glenn to repair a plan for exiting bankruptcy until the end of March, despite the West Government and creditors asserting that liquidation is an option. Celsius currently has a potential deal with Noval Wolf that could lead to the crypto lender exiting bankruptcy protection by the end of June. Nova Wolf, a financial technology company, had originally entered into an agreement with Celsius to explore the possibility of an acquisition. However, Celsius is still open to, quote, better offers from potential buyers, according to the firm's attorney. The bankrupt company and its creditor committee have already met with another buyer on an alternative proposal to Novalov's.

Starting point is 00:32:39 If Celsius chooses a different bidder, it intends to offer Novalv of to $20 million in breakup fees. In a separate move, Celsius allocated $25 million to address the high demand for withdrawals from its platform. The embattled crypto lender has also burned $500 million worth of raft Bitcoin in an effort to manage its exposure to volatile crypto assets. Time for FunBits. Paul Krugman gets rugged. Paul Krugman, the famous economist and longtime cryptosceptic, has fallen victim to the very thing he criticized. He recently took to Twitter to complain about being blacklisted by Venmo, a centralized payments app. Naraj Agrawal of Coin Center tweeted back at him, quote, were you trying to buy drugs or assassination, and posted a screenshot of a tweet of Krugmans in which he said that it wasn't a big deal to use a third party for payments, quote, unless you're buying drugs, assassinations, etc.

Starting point is 00:33:36 Samson Moe replied, chatting by facts must be tedious, a dick at Krugman's famous 1998 proclamation that by 2005 the Internet's effect on the economy would be no greater than the fax machines. And of course, Michael Saylor wrote, Bitcoin fixes this. Vatolic Boutteran sells $700,000 in shit coins. When the creator of Ethereum makes market moves, people pay attention. Ginny Hogan from Unchained has the update. So Vitolic Boutteran recently sold about $700,000 worth of shit coins, which are these joke coins that are often a huge waste of money.

Starting point is 00:34:15 Not to be confused with regular cryptocurrency, which are non-joke coins that are often a huge waste of money. But like a hot girl in a bar, Vatolik actually got these coins for free. It turns out that sometimes people will send free coins to a celebrity in the hopes that their followers will copy them and then buy the coin. It's not a bad strategy. I mean, people do copy Vatolic. That's why unicorn T-shirt sales have gone through the roof in recent years. Anna can have positive repercussion.

Starting point is 00:34:37 One time, Shiba Inu sent about half their total coins to Vatolic, and he donated them to a COVID relief fund. I have to imagine is the sole reason why the pandemic is wrapping up after a mere three years. Is it rude to sell something that somebody gave you for free? My mother would say yes, but in my defense, I think that a gift card for egg freezing was kind of a weird birthday present. Thanks so much for joining us today. To learn more about Elliott and the ongoing fight between Grayscale and the SEC, check at the show notes for this episode. If you've been enjoying Unchained, please share with family, friends, or others who have an interest in crypto. Unchained is produced by me, Laura Shin, without from Anthony Yun, Mark Murdoch, Matt Pilchard, Zach Seward, Juan Aranovich, Sam Shree Rum, Ginny Hogan, Ben Munster, Jeff Benston, Leon,

Starting point is 00:35:21 Camino, Pamma Jimdar, Shashonk, and CLK transcription. Thanks for listening.

Unchained - Grayscale v. SEC: Who Won This Week’s Hearing? - Ep. 465

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