Unchained - The Chopping Block: Paul Grewal on Regulation, Tokenization, and Crypto’s Next Legal Frontier – Ep 867

Episode Date: July 11, 2025

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. In this episode, the gang is joined by Paul Grewal, Chief Legal Officer at Coinbase, for a wide-ranging conversation on crypto’s next big frontier: tokenized stocks. From Robinhood’s controversial attempt to tokenize SpaceX and OpenAI shares to the legal and structural hurdles around pre-IPO derivatives, the crew dives deep into what it really takes to bring Wall Street on-chain. They also unpack the regulatory momentum behind the Genius and Clarity Acts, the return of ICO mania with Pump.fun’s $1B token raise, and the absurdly viral drama of Suitgate on Polymarket. Is this a new era of regulated innovation—or are we just recreating old problems on new rails? Tune in for sharp takes, legal insight, and a few laughs along the way. Show highlights 🔹 Tokenized Stocks Take Center Stage – Robinhood, SoFi, and Republic dive into pre-IPO trading; is this a financial revolution or regulatory chaos? 🔹 Coinbase’s Legal Strategy – Paul Grewal reflects on Coinbase’s battles with the SEC and what it took to survive crypto’s darkest legal hour 🔹 Pre-IPO Derivatives vs. Real Ownership – The crew debates whether retail is getting access or getting played 🔹 Robinhood vs. OpenAI – The tokenized equity stunt that triggered a corporate backlash and raised eyebrows across the industry 🔹 24/7 Markets, Finally? – Why crypto-native trading hours could break traditional finance 🔹 Pump.fun’s $1B ICO – The return of ICO mania? The team dissects crypto’s most profitable meme machine 🔹 Are Tokenized Stocks Useful Yet? – Tarun challenges the hype: where’s the real utility? 🔹 The Clarity & Genius Acts – Crypto legislation heats up in Washington—can the industry lock in meaningful reform? 🔹 Suitgate Explained – Zelensky’s outfit spawns a scandal on Polymarket: was it a suit or not? 🔹 Market Manipulation, Oracles & Meme Justice – Prediction markets meet internet chaos in the wildest crypto dispute of the week ⭐️Haseeb Qureshi, Managing Partner at Dragonfly ⭐️Robert Leshner, CEO & Co-founder of Superstate⭐️Tarun Chitra, Managing Partner at Robot Ventures⭐️Tom Schmidt, General Partner at Dragonfly  Special Guest ⭐️Paul Grewal, Chief Legal Officer at Coinbase Timestamps 00:00 Intro feat. Paul Grewal 01:23 How Coinbase Beat the SEC 04:49 Robinhood, OpenAI & the Pre-IPO Stock Craze 19:38 Crypto Regulation in 2025: Clarity & Genius Act 24:39 Why the Clarity Act Could Define Crypto’s Next Decade 27:10 Pump.fun’s ICO: Memecoin Mania or Market Maturity? 32:25 Suitgate on Polymarket: A Wild Crypto Scandal 39:19 The Future of Prediction Markets Disclosures Learn more about your ad choices. Visit megaphone.fm/adchoices

You know, retail can come in and buy this, like, garbage, marked up, you know, private stock slop on, you know, their brokerage. But, like, oh, you can't actually buy this, like, SpaceX derivative. I just feel like it's very, like, you know, paternalistic. Not a dividend. It's a tale of two quond. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. I'm into trading firms who are very involved.

I like that eat is the ultimate. D5 protocols are the antidote to this problem. Hello, everyone. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry inside of perspective on the crypto topics of the day. So quick introos, first you got Tom, the Defy Maven and Master of Memes. Hello, everyone. Thanks you got Robert, the crypto connoisseur, and czar of Superstayed.

Good morning. And you've got Tarun, the Gigabrain and Grand Puba at Gauntlet. You. And joining us once again, we have Paul Growall, chief legalese officer at Coinbase. Hello. And I'm a sieve the head hype man at Dragonfly. We're early-stage investors in crypto. But I want to caveat that nothing we say here is investment advice, legal advice, or even life advice.

please see chopping blocks at XYZ for more disclosures. So we are here at the Coinbase Institutional Summit. I've been told there's 500 people here from the Coinbase Institutional team thereabouts. We were very generously invited, and we've been told that we're not supposed to talk about the coin price. So where do you guys think it's going? So you can't talk about the coin prices. The rest of us absolutely can. It's First Amendment.

But actually, I wanted to reflect on this because the last time we had to do. you on the show was in a very dark hour for Coinbase. And we were just reminiscing about this. Last time you were on the show was when you guys were locked in the lawsuit with the SEC. And Coinbase was really fighting not just for the life of Coinbase, but for the life of the industry. And I'd love to just hear you kind of reflect on what that arc has been like. Now, obviously, we've come out into the sunlight and, you know, this administration has

completely different attitude. Cases have all been dropped. everyone's jubilant, or more or less. How does it feel for you personally over the last year? Well, this is great. This is a lot cheaper than the therapy I would normally pay for it. And, you know, the choice of the word reminisce is also very interesting because, look, a couple of years ago, it was dark. It was dark in terms of the SEC enforcement case.

It was dark in terms of the markets. It was also just dark, I think, in that it was not at all clear. that we were going to make it through that period and, you know, we get to a place like we are today. You know, for the legal team at Coinbase, it's, in many ways, though, been the greatest experience of our professional lives. Because, you know, in our world where, you know, you spend years preparing for fights and very rarely actually get to engage with them, all of the fights came at once. There was the lawsuit by the SEC. There was our own lawsuit against, you know, the SEC. We took on the defense of the tornado cash developers and plaintiffs. We've done a whole host of things that I think have hopefully made a real difference, not just for the company,

but for the industry as a whole. And it's just incredibly rewarding to see it all now start to come together in a way that was unimaginable just a short time ago. Yeah, yeah. Well, I have to imagine, I'm sure as a company, but especially for the legal team, like this was one of the things I remember we talked about at the time that suing your primary regulator is something you just do not do. It's like the number one rule of running a company is like... It's the first thing they teach you in law school. Yeah, I'm sure, I'm sure, I'm sure. But it's of titanic credit to you and your leadership of the team that you've managed to pull it off and again kind of usher the industry going

forward. So I was chatting with somebody else who's at another company and like everybody in this industry looks up to you as like the crypto-leaders. legal dad of the industry. Because you were there. You were there protecting all of us. And people internalize it. But it was a large family. I mean, the fact of the matter is, not only do we have incredible lawyers at this company

who really were the masterminds behind the strategy. But one of the things I think that has been the most gratifying, and maybe the thing I least expected was that there was a real movement of legal leaders across the industry. You know, I give a lot of credit to people like Stu Alderati. at Ripple. I give a lot of credit to the incredible legal minds at Uniswap. I could go down a long laundry list of people like Dan Gallagher at Robin Hood and others who, you know, locked arms with Coinbase and with this company in our darkest hour. And I think we've seen the results. And it's incredibly gratifying. Fair enough. Well, let's talk about what's changed since then.

So, you know, once in a time, most of the show was about crypto. Apparently now we're a show about stocks because tokenizing stocks is now the new big meta that everybody's talking about. So just catching us up on the news. So within the last week, there was a big announcement from Robin Hood that in addition to launching Robin Hood chain, they are tokenizing stocks and allowing those to trade on Robin Hood chain. It's kind of complicated the roadmap there. But specifically, they're going to be tokenizing pre-IPO companies, two of which were

SpaceX and OpenAI. Now, OpenAI, it was a little bit obscure exactly how. this worked and did they actually have the stocks? What was the underlying structure here? They didn't really explain it. And then Open AI came out on Twitter and said, guys, we don't know what they're talking about. This is not

Open AI equity. We did not approve this. You got wronged. Yeah, exactly. And so there's a little bit of a kerfuffle online of them trying to explain of like, well, no, hold on, this is a derivative. It's not quite. Don't worry, we're still going to do this. And in response to that, it seems like actually they've opened

the floodgates. So now, so far, has announced that they're also going to allow access to pre-IPO companies, including OpenAI, SpaceX, Epic Games. Republic is doing the same thing. It looks like a lot of these things are happening through private market funds that have exposure to the underlying.

So maybe these are less derivatives than what Robin Hood's planning to do, but it seems like now this is like a proper movement of tokenizing pre-IPO stocks. Now I've heard this story for a long time that, oh, tokenizing pre-IPO stocks is going to happen.

And it's, I don't know, it's been like five years that people have been telling me this story. I've gotten however many startup pitches and it's never seen to work. But now all of a sudden, you've got these big giants coming into this game. Coinbase soon to enter. Should we have an eye out for that? Look, we haven't been shy. We want to see a world of tokenized equities and we want to see it now. We've been in active discussions with the SEC for some time.

So, yeah, we want to do this. We want to do it in the right way. We want to do it with the full blessing of our regulators. But I don't think the question any longer is whether it's when and how. But what's your thoughts on the pre-IPO tokenization, right? Look, my own view is that, you know, private company equities are different. They have different mechanics. They have different restrictions.

Oftentimes, as I think we saw in the examples you highlighted, management teams and boards are reluctant to give permission. for their stocks to trade because they're worried about valuations, they're worried about cap table management. So there are some differences that need to be worked out. But I think whether it's solving the problem of access to private capital markets, whether it's longstanding frustrations with accredited investor rules, the solution here is a solution to many problems, not just one.

And so I think that's what you're seeing in the response and reaction to the announcements from last week from Robin Hood. and our own interest in advocating for change of the SEC, it's just going to take a bit of time to get all these details sorted out. Yeah. What are your guys' thoughts on the pre-IPO? Well, I feel like Robert has to be the first one in talking about. I'm focused on tokenizing public companies, right?

Because I think, you know, there's very straightforward expectations and rules of the road already there. You know, public companies are already disclosing all the things they have to disclose and making it, you know, safe for anyone on earth to own it. Whereas with private companies, I don't know the first thing about SpaceX or OpenAI besides their name and I know that it's cool and like it sounds big, right? And so, you know, I personally feel that like the tokenization of public equities is incredibly straightforward and is extremely inevitable. Whereas the tokenization of private companies, I actually think is going to run into a lot of brick walls because at the end of the day, you know, private companies can't be publicly traded without registering, right? at least within the U.S. world.

And no company wants to get forced into a situation where there's more than 2,000 holders and they have to register and all of these horrific things. The minute you start like opening up an asset and to the point where it's like on a blockchain and like there's like 90,000 people that own it is like going to run head first into, you know,

what companies have to go through to go public. Yeah, Matt Levine made this point on Money Talks is a Bloomberg column very well, which is that the whole point of like what does it mean to go public as a company which is like well okay you have to do all these disclosures you have all this we do share obligations you can get sued by shareholders

and the reason you know one can look at that and say like wow that's really annoying we should just tokenize these private companies and then allow anyone to trade them at any time with like arbitrary leverage without them making these disclosures it's kind of like well isn't that what going public was supposed to be about like isn't that why we had this process of going public so there is there is this spiritual contradiction

a little bit in like the idea that okay we found this technology that allows us to circumvent what was ultimately like a legal distinction that we created specifically for that reason. But at the end of the day, like, there is this sort of, there's an infinite set of creative ways. If the market wants to do something, one that we learn in crypto is that you kind of can't stop it. You can shove it down, but like it's like a, you know, it's like one of those carpets where like you push down an air pocket and just pops up over here. It feels a little bit like what's going on right now. But if someone tokenized Coinbase's stock before you went public, I'm sure Paul would have sued them.

I think it's a little bit like a release valve, right? It's like companies are staying private for longer because it's such a pain and they has to go public. And hey, retail investors see that. They want in and this is like the best way to do. That's where all this demand has sort of been pent up and looking for something to go into. And I think that's why there's so much excitement around this idea when in reality, even for

the Robin Hood thing, you know, we're talking what a million dollars of like pre-IP stock generated all these headlines, a tweet from OpenAI, like, I think that's a testament to how much interest and demand there is for this thing versus this just being sort of a side show. Yeah, and the pain of life as a public company is absolutely real. I mean, talk to anybody on the finance or legal or several other teams here at Coinbase that managed that process quarter to quarter year over year. It's an incredible, incredible overhead that we have to undertake and work through every single time just to get ready for, the earnings call, the quarterly filings and all of that. So I think if there are technological measures that can provide insights into the operation of a network or of a company or whatever that don't require that kind of process, it's not surprising to me that there would be tremendous market demand for that. The one thing I'll say is, you know, if I look at the success of stable coins, right, like a lot of it came from finding use cases beyond the naive one, right?

And like, I kind of think that's going to be true for tokenized stocks. I need to be able to do something with it on chain that's better than me buying out-of-the-money options on my choose-my-favorance-purchasing platform, right? I need to be able to have some tangible benefit above the existing stuff. And I don't think anyone is kind of, like, I can imagine things. You know, like, I think, you know, if you look to some of the past things in Defi that have been kind of similar, like, these, like, automatic options vaults and stuff like that, like, from 20s. 2021, 2022, that was a very retail-friendly product that is much easier to do on-chain than this to do at a brokerage. But I just don't see, I haven't seen the excess utility jump yet, which is like I think

what you need to actually get people to migrate their demand. Otherwise, they're just going to stay where they are. And I think there's this argument that, hey, international demand will come. But, like, I don't know. In a lot of countries, I can just use interactive brokers. I don't really, like, I don't totally buy the international demand story yet, unless there's some excess, you know, new functionality. I mean, I don't think you can use international brokers in China or India or, you know, the place where, like, a lot of people and money are. But yeah, if you're in Western Europe, yes, you can use international brokers.

It's true. And, of course, as we learned, the Indian options market is Adex, the spot market for... I don't want to trade Indian options. Yeah. I mean, do you don't want to trade them, or do you not? want to, you know, it depends on which side you're. I'm not smart enough to train that. Yeah, yeah. Do you want to add to me? Oh, no, I mean, I think it's also just about all the other nice things that we like about crypto assets, right? So it's like, you know, way lower fees. You're not

paying this like AUM or two, three percent fee from these brokers. You mean, you can get to this programmability, this self-custody. And like, I'm excited to see what people build on top of it. Like, if you ever used IB, it's kind of bad. It's like, it feels like being when USDAC started, right? Like, USDC's initial growth was driven, A, by a usage, on Coinbase and B, by usage and compound and uniswap, right? Like, those were, like, the main kind of initial demand drivers. And the idea was you got something better than just payments, right? Because, like, otherwise, it just looks like I'm sending a Venmo transaction.

There's not that much excess utility. But being able to get yield on chain, being able to swap for tokens, like, that was, like, a real utility beyond your normal FinTech dollar that you leave in a FinTech account. And I just don't see, like, I can imagine a world where that's true. for stocks, I just don't know what that experience is. I haven't seen anyone present, you know, like a compelling vision of like, this is what you can do with tokenized stocks. That's like so mind-blowing that everyone migrates.

Not saying that won't happen. I'm just saying like, I mean, the obvious answer for many people is 24-7. Yeah. So like we're moving toward 24-5 on the NASDAG before too long, but 24-7 is like completely out of reach. And 24-7 for tokenized stocks is relatively straightforward. Obviously, there's a, you know, there's going to be left liquidity on the weekends. But, you know, it's like, Tom made the point in the previous show that people who say this about, you know, ride sharing apps is that, okay, well, what's the point of having 24-7 Uber's, like, who's going to drive at 3 a.m., you know, deep in Long Island or in Brooklyn?

And the answer is somebody. If you build the app, somebody wants that ride, somebody's willing to drive, and, like, the market figures itself out. And so, like, there will be some liquidity. It's not going to be, you know, if you want to buy, you know, $50 million, it's probably not, you probably shouldn't do it on a weekend. You know, it's interesting that, Terran, I think you're actually, whether consciously or otherwise channeling the mindset of a lot of regulators and asking the questions you're asking. It shouldn't be the case that in order to get approved, whether at the SEC or with the New York DFS or any other regulator, that you have to predict or demonstrate that there's a new use case or additional utility. But at the end of the day, you know, human beings want to understand the why or why it matters as much as the what. And so I do think as an industry, we need to be able to at least provide some glimmer of an answer to this question or some version of it.

If we want to see regulators embrace this and run as quickly as we think we should run in order to get these products out to market. Tarun is kind of the regulator of the show. Yeah, that's what we say behind the scenes every time. Can I say? You play their role well. What can I say every regulator colors their hair? Well, this is actually like I think like a double-edged sort of like the killer use case. But like, you know, again, there's not necessarily an institutional use case.

way more retail, but like I definitely think that some people are going to make 20x levered stock type trading on chain because on chain today you have all sorts of opportunities to do 20x long and short everything already. And that draws a huge amount of demand from retail. And I think that answer is very scary for a regulator or scary for institutions, but I do think a big use case is going to be people being able to trade traditional assets with radically more leverage than they're able to in any traditional venue. And that's scary. Well, to be clear, that's true for perps. It's not necessarily true for tokenite stocks. It could be. Why not? Like a lot of even like spot borrow lens stuff, you can get 10x leverage. So like, well,

the other thing too is that with with token, with pre IPO stocks, right, or I guess not stocks, whatever, pre IPO companies. Pre-IPO company derivative. Yeah, pre-IPO company exposure or whatever. Technically. Like the reality is that there's not that many companies that are pre-IPO that people, even know of, right? So obviously we know them because we're VCs, but, you know, I can count on one hand. It's maybe like OpenAI, Stripe, SpaceX, you know, Anthropic. Anthropic, right? It's like probably 10 at the most, period compared to all the stocks that are traded on

the stock market that many, many more people around the world are interested in trading. So it is, I think, relatively marginal, but a lot of brain damage to actually figure out how to do it for the amount that it expands the investable universe. Yeah, fair enough. think this is also just about like consistency and fairness in rulemaking. I mean, there is like, there's like Destiny 100 or whatever, which is like this like private company, uh, IPO view, private TF thing that publicly trades in the US. It's trading at like 10x nav because it's like a close ended fund. So, you know, retail can come in and buy this like garbage, you know, private,

private stock slop on, you know, their, you know, brokers, but like, oh, you can't actually buy this like SpaceX derivative. I just feel like it's very like, you know, paternalistic. One thing I will say is a tangible use case from the perspective of regulators is actually identifying things like this India options thing. Like if that let one of the reasons actually, so sorry, I should give a tiny bit of background. I guess the Indian regulator banned Jane Street from trading there this week because they were sort of doing this Oracle manipulation-looking trade where they would like trade the spot. Basically they would sell one simple version of it. It's a little more complicated, but they'd sell a bunch of options at some strike price, let's say a dollar. And then they would trade the index to never touch a dollar.

And so then they got the premium, but they kind of expired out of the money. And, you know, the main thing that's interesting is, like, why was there so much more demand in the options market in India? It was pretty much because there's no shorting and there's no leverage on Indian stocks. And basically, everyone had to synthetically emulate that. Whereas if you do have an open environment, you could imagine that, like, hey, you don't have this kind of easily manipulable market. And it's, like, much more transparent to even the regulators. The regulators only realized that this was happening because Jane Street tried to sue the team that did it for moving to Millennium on a non-compete. And then that got leaked in court.

And then all of a sudden they settled, but then obviously now they're paying this price. So my point is I actually think that type of transparency and leverage is something that's a little more new. wants, but I actually do think that that is like a real value you could. Okay. Well, so speaking of regulations, this next week is going to be crypto week. So far, it's felt like every week is crypto week in my life. But apparently, starting July 14th, it's crypto week, which means the GOP wants to have three crypto bills fast-tracked before the August recess.

This means the Genius Act, the Clarity Act, which is the market structure bill. And then another one that like banned CVDCs, which like somehow we're still talking about that, but apparently that's on the same platform. So people are very confident in the Genius Act. It passed the Senate 68 to 30, bipartisan margin. That one's a stable coin bill. That's looking good. The Clarity Act is the one that people, I think, have more uncertainty about whether

this is actually going to pass. People have been talking about stapling the two together, but maybe there's some political risk to doing that. And then there's this anti-CBDC surveillance act, which, like, you know, Fed can't issue CBDCs, which again, I don't know why both parties are like, this is really important that we don't let the Fed issue a CBDC. It's like the Fed has never said they want to issue. It's like nobody wants to issue a CBDC. Like, why are you so afraid of this? You know of. True, true. Yeah. Okay. So question for you. You were obviously chief legalese officer. How do you handicap the odds of

genius, clarity, and then this, I guess we can also include this CBDC. Surveillance Act. Look, genius is going to happen. I don't think there's any doubt we're going to see a bill presented for the president to sign in short order, whether that's a week or two or perhaps a bit longer. It's going to happen. And I don't think that can really seriously be questioned. Clarity, market structure bill does have some more work to do, for sure.

I think we're going to see a House vote on that in short order. The fact of the matter is, though, that you do need to see a reconciliation between the House version of that bill and what the Senate would find acceptable. You know, the curious thing about market structure is it implicates not just the financial services committees of each of the houses, but also agriculture, because it does address for the division of responsibility between the SECC on the one hand and the CFTC on the other, and the Agriculture Committee historically had oversight over that. And, you know, there's still work to be done particularly in the Senate Ag Committee to move things along and catch up to where some of the other

committees are, but I'm feeling very good about that happening, if not this month, the next month, or perhaps slipping into the fall. As for the anti-CBDC bill, look, if that's what it takes in order to keep certain members of Congress happy and assure them that the Federal Reserve is not plotting some secret, you know, government-issued digital dollar, I don't think that would be problematic. But I think the fact that we're even talking about, are we going to see one, two, or three bills passed the Congress in the next one, two, or three months is remarkable. Absolutely remarkable. Unimaginable a year ago, even six months ago. And so, you know, that's progress. Okay. But so on the, so I think everybody's roughly in agreement, you know, basically the stable coin bill is baked into the bread. It's going to happen. Clarity Act. I've been hearing from people that they think it's 10% chance that clarity act is going to happen. There's skeptics every, there's skeptics every time. You know, there were people who said there was only a 10% chance on the genius bill not that long ago. True. Okay. Give us your odds. Look, I think it's... If you're betting on Polymarket, what are you putting it?

What are you putting this at? For all kinds of reasons, I am not going to go polymarket, as I see here in the United States. Maybe a cousin, a cousin. Correct legal answer. I think we've got a 75% chance of seeing market. 75. I'm going to go 75.

Let's get it to 100. What can you do, Paul, to get it to 100? What will I do? Look, as soon as we're done talking here, I'm going to be engaged in that very topic. Look, we all have, by the way, we all can help move clarity over the line by reaching out to our elected officials and making clear we want to see the bill passed. There's the will is there. There's no question about it. I think the challenge with clarity is it is more complicated.

Washington, D.C. has a few other complex topics to work through. And so that's also proving to be a challenge just getting mind share and floor time for those types of debates to happen. But yeah, three out of four. I'm going three out of four. There's 500 people here. 500 emails and phone calls to your. House and Senate members actually moves the needle. So go home tonight.

That's your homework. Paul assigned it, I assign it. Go home tonight and get clarity passed. Nice. Turun, as chief regulator of the podcast, what's your take? Honestly, I have no real opinions because I don't know enough about the process by which amendments get added last minute and stuff like that. I feel like there's so much, you know, secretive knowledge that you would only know

if you're writing the bills that, like, I'm not privy to. So, unfortunately, I relinquish my role as chief regulator. Oh, fortunate. Unfortunately, okay. But Clarity Act is the important one. You know, stable coins are important. The Clarity Act really makes Coinbase successful for 100 years. Okay, fair enough.

Wow. Robert is like, is the number one Coinbase booster here. Like, that was a... Okay. Chief Coinbase. 100 years. You're, like, trying to outlast the Bitcoin inflation curve. As long as we can ban a CBDC and pass clarity yet.

But I will say to your point, Robert, like, it's critically important that we get the market structural legislation passed immediately. And I say that not just because I do think it will set Coinbase up for success as well as the industry as a whole. It's because, you know, financial legislative reform only generally takes place once every, I don't know, 20 years. Four century. I mean, look at when the securities act are all past.

The 33 and 34 acts. And so, you know, there are these windows you have to hit. And if you don't hit them, the window closes and if you go another 20 years before you get real reform. So the urgency is real. And that's why you're seeing so much industry effort to get this thing done. Sure.

Okay. So, Paul, I know you don't want to contemplate this, but let's say that clarity doesn't pass. Okay, it just gets stuck in committees, there's too much infighting, too many degrees of freedom. In a post-clarity world, let's say Congress just has no appetite or midterms come and whatever.

Everything's scrambled and there's no ability to get anything passed. What do you think we can get in a, just a purely rulemaking world. What do you think that universe looks like, where CFDC, SEC, SEC, just have to, like, divide up the baby and figure out the rules how we're going to get

some kind of sensible market? There's still a lot that can and should be done by the regulators with or without clarity in place. The problem is absent Congress passing laws saying this belongs to the SEC, this belongs to the CFTC, here's how we're going to define what tokens qualify as subjects of securities transactions or not.

Without that being written, hardwired, if you will, into the framework, a new regulator can come in two or four or six or eight years' time and essentially rewrite the rules entirely. That's what we're trying to avoid. I have a ton of confidence in the task force that is chaired by Commissioner Perce. I think Chair Atkins has done an excellent job of giving them room to run on all these issues. But I don't want to see a world where we're all dependent upon sort of the whims and personal preferences of one commissioner or one chair,

I think we need much more durability than that. Well, I think it's pretty clear the perception from the industry is that right now there are no rules. And so we just saw the announcement today of one of the largest ICOs we have seen in a very long time, which is the pump.combe.combe fund ICU. So pump.combe dot fund, for any of you, have been living under a rock, pump dot fund is the largest meme coin launchpad on chain, lives on Solana. and they are raising $1 billion in their ICO, $1 billion. So they're using a bunch of exchange partners

that are going to be distributing the token, selling it for cash, raising it a $4 billion FDV. The rumor is that 25% of the revenue from Pump.com fund is going to be burned in this token. It's going to be fully unlocked on launch. So it's kind of a crazy moment that's happening right now in terms of the on-chain activity.

I think there's like three days during which you can actually engage in the sale funny enough it was it was leaked by gate gate was one of the partners and they like put up the page when they weren't supposed to and they later got taken down and so a little bit of a snafu but at the same time that it is happening

there's the rise of you know pumpduff fund was predominantly just overwhelmingly the market leader in mean corn launch pads but just within the last couple weeks we've seen the rise of bonk's launch pad which has actually started to really rival the volumes that we're seeing from pump dot fund Let's balk, I think their revenue recently just superseded pumps by a significant margin. That being said, they're offering a lot of incentives, so it's not clear that that's an apples-to-apples comparison quite yet.

But Pump.compt.com, since inception, has had over $700 million in protocol revenue on chain, making them one of the most profitable protocols to ever have been created in crypto. So pump-dart fund ICO, is this the return of ICOs? Are we what's old is new? Like, are we regressing as an industry? How do we interpret this moment? One yard is a lot. That's the first thing.

The first thing, I mean, like, I immediately, in my head went to, like, wow, EOS is back. Yeah, yeah, that's right. At least they actually have a product, though, you know? Yeah, yeah, yeah, for sure. No, no, no. There was sort of an EOO. But I think that's just me dating myself. If the first thought I had was EOS, you know, like, I don't know.

I think it's, like, good to see an. experiment. If they actually burn 25%, I think that's a real serious buyback and burn, right? Like, it's probably going to be 10x larger than the largest ones we've seen on chain. Ignoring the ones where it's like L1s that burn X percent of their supply, that doesn't count. I mean, like, people are actually burning real dollars paid. That'll be interesting to see. I kind of don't get the centralized exchange thing, though. Like, why didn't they just do it on chain or drop?

I think it's distribution, right? You can just get to way more users. And KYC, it's plugged in. Yeah, I guess that's true. That's fair. Here's the question. Has anyone at Coinbase proposed the Coinbase launch pad and has Paul shot it down?

And would Paul say that he shot it down? Yeah, what he said that he shot it down, yeah. I think it's the real question. Look, just on the broader topic of ICA's and the return of 2017, 2018, I think that, you know, for the longest time, the issue hasn't been whether ICOs make sense. It's do they have the right legal structure and framework around them so that they can be offered in a safe, compliant way that addresses what I think are legitimate, fair concerns by regulators about the mechanics of the way in the way in which they're offered. And so my own view is that if this, again, prompts the conversation.

and pushes the dialogue forward on developing rules around these things, there's benefit to that. The market will sort out whether or not what's being offered is a value or not. But I do think that this is a reminder that markets will get what markets want. And the only question is, are we going to put rules in place to allow that to happen in a safe way? Right. Tom, any thoughts, pump token? No, I like that line. Markets get what markets want.

I don't know. I do feel like this is a little bit of like a replay of circle where I know everyone is so bearish and I'm like if anything that makes me very bullish if it's already already priced in. Tom to 100 billion. Yeah, exactly. We'll see. Yeah, it was trading in the, so Abo, which is a on-chain protocol, they have these pre-launch token markets. And so anytime that a token is very hyped up, they have some indicative price at which people are training something that will resolve to the eventual price. And I think it was trading at like $6 billion relative to the $4 billion it's currently being offered.

but it has gotten some things horribly wrong in the past. It's very low liquidity. There's not a lot of trading volume on these things relative to the underlying. Well, this is the private market conversation just replayed. Yeah, absolutely, absolutely. It's the same thing as like you're tokenizing some SpaceX and you're trading it with like a few million dollars for like a, what is it? $300 billion.

$300 billion? Yeah. For SpaceX? Yeah. Well, I think they're trying to raise that four now. $400 billion? Yeah. Okay.

Interesting. Well, yeah. So that ratio does not inspire confidence about price discovery, but so it goes. Okay, so we have time for one more story. This is probably the most important story at all. We want to make sure that we save this for you, Paul. Sure. So there's a scandal going on on chain at a platform that is not available to U.S. investors

called Polymarket. And this scandal is known as Suitgate. Okay. Quick show of hands. How many people know what's going on with Suitgate? Okay, we've got a few. Wow. I respect that.

Okay. So here's the back story. This is the institutional team. Yeah. Exactly. Well, no, these guys, they would resonate with the suit. Oh, the suit part. Yeah, yeah.

The suit argument, I feel like you guys would resonate. Okay, so here's the thing. There was a market that was being offered on whether or not Zelensky would wear a suit. Okay? And now obviously, Zelensky, part of his brand is that he doesn't wear a suit. He was in front of Trump and he was, you know, berated for not wearing a suit. So the question is, will Zelensky relent and wear a suit? And so Zelensky was seen at a NATO summit that was very very, very, you know,

cold and he was wearing like a jacket and a sort of furry jacket and furry pants. It wasn't furry. It was like fuzzy. Haseeb, are you wearing a suit right now? Are you wearing a suit right now? Whatever. It was like a field jacket. Okay, fine. All right. I don't know. Okay, fine. It's like a field jacket kind of thing. And so many, the way the market was resolved is that it said it'll be, you know, whether he wears a suit based on the majority of mainstream reporting. And basically almost every news outlet described what he was. he was wearing as a suit. Now, clearly it was not like a business suit, but it was potentially a suit.

And then who's the guy on Twitter, the suit guy? Derrick guy. Derek guy. He said that actually, technically, this is a suit because a suit is defined by wearing a full outfit that is the same fabric. As long as it's the same fabric, it is technically a suit. And so this market resolved, so the Polymarket uses UMA protocol, which is a decentralized it oracle thing. And UMA protocol resolved that it was not a suit. Now, why do they say it's not

a suit? They said because, well, look at it. It's not a suit. Like, if Trump still is berating him for him not wearing suits, then it's not a suit. But there's been now a scandal because all the people who voted, like, yes, it is a suit, think that the market should be resolved in their favor, versus not. It's been one of the biggest contested markets in polymarket history. And so I was chatting with some people who were telling me that a lot of people, so like part of the strategy for these contentious markets is that when the market is clearly resolving to a no, a lot of people will buy up the yeses at a very, very cheap price and then start like this gigantic tirade online to start to push it. Because you can buy this at one cent and you push it up to like

three cents, you've three extra money, right? So there's a lot of incentive around these things for people to pretend to be more angry than they are or to have lost more money than they really did. So apparently there's like a whole thing. But so anyway, this market is like become absolutely enormous. It's gotten mainstream coverage about whether or not the suit gate should have been correctly resolving whether he wore a suit. There's like $240 million of open interest. It's like a good fraction of like the

presidential betting market. Yeah. So first of all was it a suit? Let's go around. Let's just go around quickly. Yes or no? Was it a suit? As someone who's worn suits professionally for 25 or more years, I would say technically speaking, it was a suit. It was a suit. It was a

suit. Okay. The common material definition is the generally accepted one, whether it's Italian silk, whether it's velvet, whether it's hemp. If it's head to toe, it's suit. Okay. So denim jacket, denim pants, that's a suit. Canadian suit. Yeah, yeah. Okay.

All right. All right. That's a real question. Okay. Okay. Turun? Yeah, that's probably a suit. The suit? Suit.

I'll take the controversial. No, it's not a suit. In the interpretation of those who probably went into the polymarket market for this, you know, everyone was expecting like, oh, what do you wear to the Oval Office? what do you wear it in NATO summit? Like, he looked extremely out of place at the NATO summit where everyone was wearing ties and like beautifully tailored things. So like from what people were expecting,

they weren't expecting that that would be a suit, even though like CNN was like Zelenskyy, like seen wearing like some funny suit at NATO summit. Yeah, I think I agree with that. So I think that it was a suit, but I think the market resolved. Here's what I say. I think the spirit of the question very clearly was that it should not have counted because the whole point of the thing is, like, will Zelensky relent in his campaign of, like, never wearing a suit? And clearly the answer there is no. He didn't wear the suit.

He didn't, like, Trump would not be like, oh, look at Zelensky. He's wearing a suit. But the market, I think, should resolve to yes, because it said, you know, consensus reporting. And because of reporting clearly said the word suit and, like, sorry, sometimes you lose on a technicality. So I think, like, technicality, yes, spirit, like, I didn't, I don't think Zelensky wore a suit. I feel like Polymark should hire a lawyer or someone who has better experienced like wordsmithing things

because this has happened a number of times The crowd's questions. The crowd makes the market in the terms which is the problem. Yeah, so well some of the markets they write the language for right and then obviously there's the you may have reception but this happened recently

where it was like oh is Trump going to say judge or judge and we say judges and they're like oh well that that should count and it's like well you know this doesn't really specify it And so I don't know. I think it's like maybe overall lesson in like how to get rid of ambiguity in writing these markets.

Because I think it was just going to keep coming up. It's human language. Look, I think it's really simple. Any of you remember the movie My Cousin Vinny? Yeah. Remember when Joe Pesci showed up to court? Yeah. He was wearing that ridiculous purple velvety thing.

Tuxedo. It was a tuxedo. And a tuxedo qualifies as a suit. And the judge did not sanction him because he followed the judge's instruction to wear a suit. So I think like that precedent would have played a suit. fly here? I think clearly Zelensky was wearing a suit. You think if Zelensky showed up to court wearing that, he would not get sanctioned by judge? I don't think he would be sanctioned. That's the argument I would make if I were

representing him. Okay. He's very wise. I think Paul should just resolve all the markets going forward. Yeah. I mean, okay. Wait, has Zelensky made any comment? Like, what if he comes out and says, like, it was not a suit? Like, what happened? The tailor of the suit said that it's a suit. That's a pretty good evidence. I think if Trump said it was a suit, then it's game. over. If Trump is like, look, Zelensky's

wearing a suit, I told you, he's all an act, I think that would be like, okay. So you're saying the real Oracle resolution token is Trump, not Uma? True social. I really think so. Because like, what gave the political valence to this market to make it so important, right? I mean, obviously it's not that important, but

like, that's why people care about the care to bet on this in the first place. This idea that's like, oh, Trump will bring him to heal and like, you'll, you know, whatever, you'll give up the whole military fatigue thing. But like, if it's cold, you know, you kind of like, you obviously can't wear military fatigues if it's like super cold outside. I think there's arctic.

I figure out whether the dress was blue on the internet five years ago or whatever. It is a little bit. Yeah, it's a little bit of that. A little bit of that. Okay. So what do you, you gave a proposal? What do you think that polymigots should do in the future to avoid these kinds of snafus?

How do you prevent the next suit gate? I mean, I don't think you can build a scalable solution that requires, you know, subject to determination by a judge or jury. you've got to have some kind of consensus mechanism. And I think slightly more seriously what this illustrates, right, is that common sense or certainly subjective common sense doesn't always square with consensus, especially online.

Right. Taron, any thoughts? You know, I don't think there's a perfect solution. Everyone on the Internet who's making a competing solution is marketing their competing solution solves everything. And yeah, I think it's basically like there's all, always going to be some corners around whatever Oracle choices you make where it's going to be miss on those. And I don't know, like, arguably the marketing that this market got from this

resolution may actually end up being worth more than, like, the lost money in aggregate. That is very true. I think that actually the same thing. Like no meme coin that crashes and people are complaining on Discord in the trenches ever gets this much attention. Come on. Right, right. Now, I think it is true, and it is a little bit also true of the Robin Hood thing, right? Of like the whole, you know, getting open AI to like sub-tweet you of like, oh, we didn't do this. But that was, that was because of the suit that he wore. That suit was a meme. The suit, the suit, yeah, yeah, like, Vlad wore a suit to the Robin Hood presentation. That was definitely a suit. True, true. But I think, I think there's a lesson here, a deeper lesson that I think Polymarket is true for Polymarket

this is for them, is that in a way, these kind of dramas, they do drive the big, gigantic attention spotlight. And those things like, I mean, obviously you don't want them to happen repeatedly, but so much of the difficulty in the space is just getting people to even know and care that you exist and that you're something worth doing. So in that sense, I think at least it was a win for prediction markets. But they do need to become, like there will always be these weird markets that are like, you know, is this guy wearing a suit that people are going to argue about the same way they argue about everything. But I think there are, like, there are like, a lot of really important markets that you see that this, you know, okay, like, is Iran,

like, is the U.S. going to declare war in Iran, right? Like, that was one of the markets that I remember a lot of people around the world were pointing at around that time. And if people learn about polymarket because of Zelensky's suitgate, I think, you know, at least the flow through benefits to humanity can potentially be improved. So anyway. So what Haseeb is telling you is, right now you need to go lobby for a market of, is Haseeb wearing a suit during the podcast? Because, like... We're up on time. Thanks so much for your guys' patience.

I know we're between you guys and lunch. Thank you so much, Paul, for coming back on the show. Thanks for having me. Sharing with us your insights.