Unchained - The Chopping Block: Why Vivek Ramaswamy Wants Less Crypto Regulation - Ep. 569

Episode Date: November 13, 2023

Welcome to The Chopping Block – where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest news. This week, the gang welcomes Republican presidential candidate Vivek Ramaswamy, who discusses his mission to end the U.S. government’s regulatory overreach of the crypto industry, the parallels between crypto and the biotech industry where he came from, whether “code is law” is an appropriate framework for crypto regulation, how Bitcoin could be a check on the Fed, and how less regulation would actually lead to fewer, not more, instances of fraud like FTX.   Ramaswamy is promising to release a comprehensive crypto policy plan this week.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, TuneIn, Amazon Music, or on your favorite podcast platform. Show highlights:  what Vivek thinks about crypto and why he is interested in this topic as a presidential candidate why he believes the SEC is engaging in “unconstitutional overreach” when it comes to crypto what the similarities are between early-stage biotech and early-stage crypto investing whether current regulatory requirements create a "false blanket of security" how Vivek would act to make sure the SEC doesn't overreach how the system should respond to less regulation in terms of fraud and innovation how stablecoins can reinforce the value of the dollar and Bitcoin can help discipline the Fed, according to Vivek whether Bitcoin is an asset that the Fed should buy for its balance sheet why Vivek believes it was a mistake to abandon the gold standard in the 1970s the gang's debrief of the conversation: what stood out, where they agree or disagree with Vivek their reaction to the conviction of Sam Bankman-Fried Hosts Haseeb Qureshi, managing partner at Dragonfly  Robert Leshner, founder of Compound Tom Schmidt, general partner at Dragonfly  Tarun Chitra, managing partner at Robot Ventures Disclosures Guest Vivek Ramaswamy, American entrepreneur and U.S. presidential candidate Links Fox Business: Ramaswamy woos pro-crypto voters, says he’ll build new policy framework for digital assets Axios: Ramaswamy goes after regulators at crypto event CoinDesk: Vivek Ramaswamy Is Drafting a 'Crypto Policy Framework' WSJ: Stablecoins Can Keep the Dollar the World’s Reserve Currency Decrypt: What Stops the Fed From Buying Up Bitcoin? Forbes: What Happened In 1971? Unchained: SBF Trial, Day 18: Sam Bankman-Fried Found Guilty on All 7 Counts in Swift Verdict Learn more about your ad choices. Visit megaphone.fm/adchoices

What's happening today is the assault on crypto is not coming from Congress. It's coming from an unconstitutional regulatory state, particularly the SEC, that never had the legal authority to take the positions that they're taking. And so I can get into far more detail. But that's what animates me on this. It's a constitutional question first of which crypto and the crypto sector has, I think, have been left holding the bag. Rather than a coming at this as a pro-crypto crusade and how do I understand government, it's the other. the way around. I understand the Constitution and I understand the government. Now, how do we look at the sectors that have been harmed? Let me understand those that I don't. And that's been my journey

of education and understanding how it's been a wet blanket on innovation in crypto, the unconstitutional overreach of the administrative state. Not a dividend. It's a tale of two quons. Now, your losses are on someone else's balance. Generally speaking, air drops are kind of pointless anyways. I'm in the trading firms who are very involved. I like to eat the ultimate pomp. D-Fi Protocol is part of the antidote to this problem. Hello, everybody. Welcome to the chopping block. Every couple weeks, the four of us get together and give the industry insider perspective on the crypto topics of the day. First of that, we've got Tom, the Defy Maven, and Master of Memes. Oh, hello. I'm going to use to this still.

We're going to get this down. We're going to get this down. Robert, the Cryptoconisor and Tsar of Super State. GM. And we've got Turun, the Gigabrain, and Grand Puba at Gondlet. Aloha from Central America. And finally, I'm perceived the head. at Hype Man at Dragonfly. We are 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 Chopin Block. That XYZ for more disclosures. So today we've got a special guest, Vake Ramoswami, the Republican hopeful, who's currently running for office, one of the remaining, I think, top four candidates who's in the running for the Republican nomination.

And we're going to chat with him today about his crypto policy. The Vake, great to have you on the show. It's good to be on, guys. Yeah. So my understanding is that right now, now, you're about to unveil your crypto policy. Yep.

And crypto has been a big, one part of your platform. I know you've got a bunch of different angles. I know that you're also on the campaign trail. Things are, I'm sure, are crazy. We heard you were just off camera chowing down on some Indian food. We have to ask, what was your food of choice? Also, Indian food on the campaign trail seems aggressively messy. It is.

What's your strategy there? My strategy is don't wear white shirts because white shirts are magnets for that. ties or magnets for like the Indian food grease. Actually, my top food of choice isn't much better on this either. It's Mexican food. So I am famous for scarfing down enchiladas before and after big events. Like that's usually my pump up and it's also my decompress. It's like a heavy plate of cheese enchiladas.

But, you know, as you notice, like literally, I was not wearing white. So you guys, yeah. Unless if you hadn't asked about it, your audience wouldn't have even known. But if I was wearing a white shirt and tie, your audience would have absolutely known what I was eating. Yeah, I respect. I mean, it's a messy cuisine, so I respect the carefulness that you're taking here. That's impressive.

Prudence is something you need in a president, I think. So somebody who's able to think these things through, I think, is part of the equation. So, okay, Vivek, why don't we start with you giving us just a very high level of how you think about crypto? And then we're going to jump in and kind of dive into different questions and delve into your perspectives. And, you know, I'm not, yeah, it was not. native to your world, right? I mean, I was an entrepreneur, but I came from the world of biotech

and otherwise. My interest in this issue as a presidential candidate actually comes from a totally different angle, which is my, I would say, assault on the administrative state as an institution. I mean, that's probably the most important part of my presidential objective is to shut down the unconstitutional, and I do believe it's unconstitutional, administrative state. and the unconstitutional regulations coming from the administrative state. So my first interface with this, just so people have a background of where I'm coming from, right, is my passion for this actually comes from having seen the front lines

of regulatory overreach at the FDA. And also in other parts, I got my career, my start in the world of hedge funds, the SEC. These are regulated industries and regulators that are absolutely, I believe, unconstitutional, bordering on corrupt in their overreach, going far beyond what Congress ordained them the power to do. But then it turns out that when you take a step back, it's not just the FDA and the SEC. Those are just the ones that I had exposure to. Basically, the entire span of the administrative state itself, EPA, I mean, you go through

FTC, go down the list, the three-letter alphabet soup. It's a violation of the Constitution. And the people who we elect to run the government, it turns out, are not the ones who actually run the government. Gary Gensler was never elected. Staying the obvious, but people should remember that. The legions of people reporting into him absolutely were never elected. That is a bastardization of a three-branch constitutional republic. And so for me, my mission is to get in there and restore what our founding fathers envisioned, which is three branches of government with checks and balances and to shut down unconstitutional overreach. Now, that has negative practical effects. For the energy sector, which is suffering, for health care, for crypto. And so I come at this as part of a

broader project, but looking at sectors of American innovation, driving economic growth and prosperity that have been hampered by a philosophical failure of the Constitution and the form of the administrative state itself. So that's where I'm coming at this from. And so I'll back into this then by saying, if everyone in the United States showed up at the ballot box and wanted elect congressmen and senators with a policy agenda and objective of saying cryptocurrencies and the trading thereof shall be banned in the United States. I'd vote against that, but I'm a citizen of this country. And so if that's the way the constitutional republic works and that's what comes out of the front door democratically ordained constitutional republic is, you know, we live

by those set of rules. I'm opposed to it, but I'm still a citizen of that nation. That would never happen, of course, because most people in this country are users of cryptocurrency or otherwise. But what's happening today is the assault on crypto is not coming from Congress. It's coming from an unconstitutional regulatory state, particularly the SEC, that never had the legal authority to take the positions that they're taking. And so I can get into far more detail, but that's what animates me on this. It's a constitutional question first, of which crypto and the crypto sector has, I think, have been left holding the bag, rather than a coming at this as a pro-crypto crusade and how do I

understand government. It's the other way around. I understand the constitution and I understand the government. Now, how do we look at the sectors that have been harmed? Let me understand those that I don't. And that's been my journey of education and understanding how it's been a wet blanket on innovation in crypto, the unconstitutional overreach of the administrative state. So hopefully that at least gives you a sense for where I'm coming from. For sure. I think one natural extension of that, given kind of your background at Royvent. You know, there are actually a lot of people who are in crypto now who actually came from early stage biotech investing.

I think Royvin actually bought one of my old co-workers companies, Silicon Therapeutics. Oh, nice. Okay. Cross paths I didn't know about. Nice. Yeah. And but the interesting thing is, you know, I think crypto investing and early stage biotech investing share a lot of commonalities, right?

There's a lot of speculation far before something reaches mass usage or reaches like, like adoption. And there's also this this kind of overreach or slash, you know, interventionalism that happens. So, you know, I would love to hear how you compare and contrast the two, given that you have a ton of experience in the biotech investing space, early biotech investing. And like, where you see similarities, where you see differences, how that influences your policies. Yeah, it's interesting. I hadn't thought about it that way. You know, I'm probably going to merit it on that and give it some more thought. But off the bat, I think we could see some parallels between biotech, the movie industry.

crypto, you're playing for a high skew outcome where one success makes up for countless other failures, right? And so these sectors or spaces more than some others demonstrate the principle that the path to success truly runs through failure. And that means that that level of innovation there requires a lot of latitude for experimentation. I think the latitude for experimentation is an ingredient of success in biotech. You have to have the space for that. And though you will know your space better than I know your space, what I know about it suggests the same is true about yours too. And so I think that latitude to have the freedom to explore and to make sure that at the earliest stages of inception, even regulatory overreach doesn't quash what the basic table stakes are for the existence of that industry itself, I think is really, really, really,

important. And so that's one principle. The other principle that I would bring to bear, you know, it's just off the cuff here. You're, you know, getting me riffing here a little bit is when I was developing drugs, I came to, so Royvin was the company I founded. You well know, we oversaw the development of multiple medicines. Five of them are FDA approved today. Many of the ones we worked on failed. That's standard in biotech. Royven actually had a much higher success rate than most other biotech companies I've ever known. But understanding that failure is part of the I still believe that the time and cost was too high of bringing a new drug to market. And there's an irony in who benefits from that.

The irony is actually it's the bigger pharmaceutical companies that benefit when the time and cost of bringing a new drug to market is higher because then the barriers to entry are higher, which then contributes to higher drug pricing, guess who's left holding the bag? It's not the pharma companies. Many of them are able to sell their preexisting products at Monopoly Profit. it's the people who would have benefited from medicines in a marketplace of competition that were available at lower cost. And so I think that that's a little bit of a paradigm parallel here where you think that the people who are, you know, to be the beneficiaries of deregulating

or lightning the regulation of new cryptocurrencies or the advent of new ways to store value are going to be the people who are the pioneers of that who are going to be the contrarionaires or zillionaires. Who's actually left holding the bag? at the end are individuals who are left with less choice as a consequence and costs are higher intangibly or tangibly of the way they actually are left to transact. And so that's, I think, one parallel. And then one final parallel is that, at least off the cuff here, is I'm an absolutist when it comes to right to try. So my view is that even if the FDA has not approved a new medicine, let's say it's been through phase two, right? I think many people would be,

reasonable, thoughtful people who say that, okay, I'm going through a condition of struggling. This has been through preclinical testing. It's been through phase one for safety testing. It's been through phase two for efficacy testing. But it just hasn't been through confirmatory phase three for efficacy. But it's been through safety for phase one and phase two as well as efficacy in phase two. That I want to take that risk for myself and make that medical judgment for myself. I have a right to try it. The FDA, so this is one of the classic examples of technically there's a right to try law. on the books in Congress. The FDA has basically ensured that it never gets used. And it's well known in the industry. Actually, there's an old adage in the farm industry. They say the FDA

never forgets. It's an old adage in the industry that the FDA will punish the heck out of you. They will punish the heck out of you on something else if you dare as a company to take advantage of the right to try of somebody who's actually a patient who wants to try it. Every company knows the FDA will screw you over if you dare do it, even though it's legal. So, I'm a right to try absolutist. And I think that that, and by the way, it also means that just because the FDA has approved it, you have the right not to try it as well.

Take a COVID vaccine as an example. You have a right not to try it just as a way you have a right to try it. So I'm a right to try absolutist. To me, that principle applies in the crypto arena too. You have a right to try. Don't stop somebody from being able to access an alternative in this parallel ecosystem,

code is law, right? I think we should have a right to opt out and try it. So that's what I would say to payrolls off. Let me bring you back a little bit to crypto. So I hear you about, you know, kind of an overreach of consumer protection. Yeah. The SEC is often the object of what we talk about, this regulatory overreach in crypto, where they're focused on investor protection. And obviously, you've had, you've had many experiences of the SEC running a fund yourself. Okay, so we can say that we think the SEC is maybe being too aggressive. They're going after the good actors rather than the bad actors.

There are many charges you could levy at the SEC. But the core mission of the SEC is around investor protection. What is your belief about investor protection as a concept in capital markets? So I'm going to wear two different hats here. One is philosophical purist where my actual instincts are. The other is as somebody who is the next U.S. president that swears an oath to the Constitution to uphold the laws as they exist today. My own view is that if we're drawing up the slate from scratch, investor protection is best off when investors are left to ask questions for themselves. Actually, we've seen a crowding out effect. They use that term in economics in other contexts, but it's a crowding out effect here.

The government is crowding out and individuals need to be vigilant for himself. And so I think more fraudsters are able to get away with actual fraud in an environment where the government gives you a protective blanket, but that doesn't. doesn't actually solve for protecting against people who are being defrauded. Even in the context of, you know, public companies or otherwise, they print these 10Ks and 10 Q's. I mean, millions of, I mean, think about across the economy, hundreds of billions of dollars in value each year wasted on this production process, or at least over time, you could call it hundreds of billions in deadweight waste.

But if somebody really wants to defraud the public, the reams of paper that you're printing in those so-called 10Ks and 10-Qs aren't going to be what stops it, because it's going to always be somebody who's one step ahead. I mean, there's an SBF analogy here to the crypto space, but we can talk about that in parallel. It creates a false blanket of security that relieves individual investors of the responsibility that they should assume for themselves to understand that here are the risks I'm taking. And part of that is making sure that I'm not dealing with somebody who is fleecing me on the other side. So I personally believe that, we would be better off as a society.

This is just a normative view, better off as a society. If we didn't have that security's regulatory paradigm in the first place, I think more people would be likely to be protected because you don't have the government crowding out your own native instincts of having to do your own due diligence. All that being said, where we are right now is we do have certain laws. We have the 33 Act. We can go on about the different acts that have been passed,

the Exchange Act. those are statutes, those aren't going to change anytime soon. But what I want to restore is at least making sure that the SEC's scope of the regulations that it writes and its enforcement actions respect at least the strictures of those laws that were democratically passed rather than really making up the rules as they go along with what you could call the regulation by enforcement paradigm. It's not limited to the SEC. It's across the administrative state. Find somebody now you know what the regulations are after they go after you. but what about the person who they went after that's left holding the bag? It's like a game of musical chairs. And so we need clarity in those rules. Those rules have to directly tie to laws that have been passed by Congress.

And that much, that's my job as U.S. President. So I can't just go say we're going to nullify a bunch of laws that have been passed. But what I can say is we better at least darn well make sure the government's actually sticking to those laws rather than the executive branch of the government, these three-letter agencies, making up far more expansive interpretations of those laws. through the regulations they write. That much I can do as the president. So that gives you both hats of where my intuitions are versus how I'd actually carry out my responsibility as U.S. president. So I totally agree with you there. One thing that before I hand it off to Robert,

because I know he's dying to ask this next question, I heard, listen to a couple of your podcasts, you get an idea of how you think about crypto. And I listened to one very interesting discussion where you talked about this trope in crypto where we say code is law. Yeah. This idea, of course, that a blockchain is a,

system of enforcing property rights. And so, okay, you've got your own little system. You want to live in the wild west, but then you want to come crying to us when you've got these property disputes that you want us to adjudicate. How do you view, you know, especially as you're stepping into a potential presidential role, how do you view the relationship between, on the one hand, this sort of law of the jungle crypto thing versus this, of course, a system of property rights and a rule of law that the U.S. is otherwise known for. We have, SBF was just convicted of every count of of fraud basically under the sun. How do you think about the interplay between what happens in crypto

with respect to decentralized property rights and how we think about normal property rights in the U.S. legislative system? So my view is the best case scenario from a crypto landscape and from an American landscape is code is law paradigm. There's a parallel system that you opt out of. You opt out?

I mean, you could just have a total. opt out from the existing system, the existing monetary system, and this isn't just a regulatory question anymore. This is out of an existing monetary system that is badly broken and corrupted by the U.S. Federal Reserve and central banks around the world to say that we are opting out of that in entirety and have an entirely bottom-up decentralized mechanism for transacting and really even building economic relationships with one another. I think it's a beautiful, alluring idea. And I do believe that would be the cleanest vision of allowing for people to have systems that opt out of the current regime, but to say that in that regime, you're not entitled to then

opt back in selectively when it's to your own advantage. I don't believe that's realistic right now in terms of where we are. So again, I'm separating for you where my native intuitions are as people maybe get to know me versus wearing the hat that I have as the next U.S. president. That ship has already long sailed. Okay. So where we need to go right now is at least making sure that in ordinary transactions as they exist today, we're not caught in this no man's land, that we have to have the ability to at least apply the basic principles of anti-theft principles, for example, to say that if you steal something that literally belongs to somebody else, right, like I'll give you an example of this, right? Let's say if your passwords on a USB stick, somebody comes in and

steals that USB stick. Just because those were passwords that related to crypto doesn't change the rules of engagement. That person stole a thing that belongs to you. And I think that that's different from, well, somebody actually wrote code in a different way that left you with less value in your account than you wanted, which I don't think should be adjudicated by the current court system. that should be adjudicated by the rules of the people who write the protocols that underlie what a new cryptocurrency or blockchain actually is. So that's where I draw the distinction is theft, basic enforcement of the same rules of the road you apply for non-digital assets.

Yes, apply those to digital assets. Make sure the rules of the road are applied the same way. But I still think that preserving some element of the code is law vision, keeping that spirit alive to say that different blockchains can operate according to different rules without coming to daddy on this side to selectively enforce that against somebody who disagrees with me in the space I'm operating in, I think preserving some element of that will be a good thing. But realistically, we have to make sure that you can secure a property rights if it's the equivalent of somebody stealing your USB stick with your passwords. That would

be covered by the law just as somebody stealing your USB stick if it contained your Microsoft Word documents the same way. So how does FTX fit into this? If, you know, when you you're president, you know, and you have the, you know, executive branch behind you, and an FTC occurs. You know, do you view that as theft that goes through the normal DOJ channels? Or do you view that as, you know, partially existing in an alternate, less regulated space where they publish their own rules of the road and they're treated differently in some way? I mean, the question is, did they violate contracts and commitments they made to their customers? I think the jury found that they did. So what you tell you?

someone you're going to do one thing, you have a contractual agreement with them to do that thing and you do a different thing instead, then you break the law. So it doesn't matter if it's a normal asset, a digital asset. Either way, that's the same set of the rules of the road. And that's what I think that that's the way I think that the legal enforcement paradigm and the regulatory paradigm should go is protect against theft. Old-fashioned theft, whether it's, you could say, you know, we have these cell phones, the advent of modern technology. Does that change the way we treat this phone as being robbed as opposed to if it was, you know, this bottle of water? No. The same rules of the road apply, even though the underlying technology is different,

that doesn't change the way our property right vests in the thing that's powered by that technology. And that's different from a regulatory paradigm that says we need to think about the rules of securities or the rules of investor protection or theft differently because of the nature of the underlying technology. That's where I think actually the regulatory state messes up. If we take a more hands-off approach from a regulatory perspective, and it's more of a caveat emptor situation, you know, you said previously that you think that investors will ask more questions. Do you think that there will be less FTC style frauds, or do you think that, you know, there'll be more, but it's alongside the societal benefit that's going to be created by more

innovation. Like, how do you think about this? Yeah. So in the short run, I think it is possible it would be, you know, comparable levels. It would be different, right? So, right now the levels of fraud or regulatory arbitrage, but they would look different. You might have old garden variety vanilla fraudsters. I would say maybe equal in magnitude, but different kind, but drastically more innovation through experimentation. And then in the medium to long run, I think you would actually have less lasting fraud with still the benefits of that innovation. That's what I think that trajectory would look like. And one of the problems in the United States with our current political system today is we don't have the latitude or courage,

or politicians most don't, at least, to think on the timescales of history rather than on the timescales of a two-year election cycle. And so that's part of my responsibility here. I mean, I'm not making a, I have not made a career out of politics or public service. I don't think public service should be a money-making mechanism or a mechanism of building a career. It should be temporary, finite period of your life that you do public service. And so I'd rather, you know, lose this election than play some game of political snakes and ladders, but it does take somebody from the outside to think on the timescales of history rather than on the timescales of what they view as two-year employment cycles in Congress, but what we call two-year

election cycles, that's a big part of the problem that gets in the way. I wanted to go back to your comment on the Fed and sort of the Fed being part of this administrative state. And I was listening to some other podcasts you were talking about with Bitcoin basically being sort of a check on the balance of the Fed's power and being sort of this escape hatch and sort of this release valve. how do you sort of think about Bitcoin versus stablecoins, which we've seen are now responsible for most of the value transfer. They sort of promote dollarization globally. It's what most users are

using. How do you sort of think about these two balances and how do you sort of think about regulating stablecoins going forward? I would just say all of the above is the best approach, right? Stable coins in some ways can reinforce the value of the dollar. They have an interest in the disciplining of the dollar. Bitcoin can be among the kinds of alternatives. that play a role in disciplining the actual value of the dollar. So in a certain sense, stable coins, like anybody who holds a dollar, if you hold a stable coin, you benefit from dollar stability. Well, that's more people who have invested, and in this case, educated interest in dollar stability. If the dollar's wildly fluctuating, I don't think that's good

inherently over the long run for stable coins tethered to the dollar. But the role of actual alternatives to the dollar like Bitcoin is to, among other things, hold that those who manage if you will, at the Federal Reserve, the value of a dollar, to prioritize dollar's stability in a way they haven't if there's an opt-out to the system. So my view is, yeah, 90% headcount reduction at the U.S. Federal Reserve restore a single mandate of stabilizing the U.S. dollar as a unit of measurement. I would actually peg it to hard commodities. We could talk about what's contained in that basket. But that's my job as U.S. president, but it makes my job that much easier if you have somebody holding the government's feet, in this case the Fed's feet to the fire to say that

if you screw that up and you mess up on that mandate, there's an opt out from the system. So that's how I see that interacting. Tiny question, related question. If you were, say, the Fed chair, would you buy Bitcoin as a reserve asset and keep it on the balance sheet? I think there will likely be a point in the future where that becomes a prudent policy, a part of a broad basket of commodities, gold and otherwise. If you just look at the sheer volatility of Bitcoins historically, that's a part of,

just wouldn't, that's not a decision that could be supported today. But is that a future that we're headed to? I think that's completely reasonable as a future we're headed to when Bitcoin becomes like gold in its volatility profile. I personally believe the dollar should be pegged to a basket of hard commodities. We could talk about gold, silver, nickel, et cetera. Eventually, will there be a day where Bitcoin's on the list? I think there will. So Vive, you have a complex view about how the dollar should be tempered, how the Federal Reserve should be tempered alongside it. I'd say, And of course, you are very welcoming of stable coins, as it sounds like you are. One big question, I think that we hear a lot from folks who are against a lot of what's happening in crypto

is that it is weakening the power of the dollar hegemony that we have in that a lot of U.S. foreign policy takes place through our control over the dollar banking system. So I'm playing a little bit devil's advocate. Yeah, of course, fair enough. Not my side. But how do you answer the charge of someone who says, look, this is why America is so strong, globally is because we control the banking rails. And if you give this all to the crypto bros,

then all hell breaks loose and Hamas and North Korea and all these guys can't just run amok. What do you say to that? Yeah, well, first of all, I'll say I share your view that you don't understand what you actually believe unless you can articulate the other side's point of view, at least as compellingly as they do. So, yeah, I'm all for devil's advocate exchanges.

I think there's truth to the fact that the U.S. and its control over levers of power outside of the financial system come in part from the dollar serving as a reserve currency of the world and a dollarized global financial system. And so from a U.S. perspective, is that a desirable thing? I think it is, all else equal. And I'm not running for president of the world. I'm running for president of the United States. I'm very clear about the hat that I wear. From a U.S. perspective, that's preferable. And I think you can make an argument that it is also better for the world when the United States is strongest at home because what hope does the rest of the free world have if the U.S.

itself becomes weak? All that said, though, why pin the tail on the donkey of crypto? In some sense, if you're worried about a competitor in life, I mean, this is just a general principle in life. I think it's a principle for institutions. I think it's a principle here as well. If you're really that afraid of a competitor, that reflects your own insecurity about your own value proposition. So instead of pointing at the other and trying to stifle the other, how about taking a long, hard look in the mirror and asking yourself what the source is of that insecurity? Well, I think part of the source of that insecurity is we have a $33 trillion national debt problem, growing to $34 trillion soon by the day. Where did that come from?

Well, it's a longer story for another day, probably. Seven trillion of it attributable to wars in Afghanistan and Iraq that didn't advance the American interest government spending that was untethered from our constitutionally ordained principles for how we spend money as a government. I could go, I could be careful not to get myself going on that. But that's actually the insecurity of the value proposition of the dollar, which is also why you now see, we went off the gold standard, which I think was a mistake in the early 1970s. Now you see the rise of the Bricks nations talking about a common currency pegging it, you would have guessed, to gold, which purposefully ties the hands of the government that otherwise would print the money to tie their hands. You do tie your hands in a certain way, but that's part of what gives people trust, is that your hands actually are. tied if you're pegged to a basket of commodities or even pegged to gold. So against that backdrop,

I think that I kind of view it in reverse is that, yes, I think it is a good thing for the U.S. to have backstop control over the financial system as it applies globally. But the way to actually protect ourselves is we clearly need a disciplining force to hold ourselves accountable as the U.S. government and actually bringing competition to the table, offering an alternative value proposition, ensures that we, you know, to borrow a sort of a mythological analogy from Odysseus, tie ourselves to the mast. And I think that there's a virtue to tie ourselves to the mast. That's what gives people trust in the very boat on whose mast were tied. So that's what we're missing today. And I think playing whack-a-mole with respect to competitors

is just a projection of our own insecurity in the value proposition of the dollar itself. solve that problem instead of otherizing it to the next competitor. And mark my words, you squash that this time. There's going to be something else that comes up. Human nature is what it is. We're going to come up with alternatives if we have the need for that alternative. And so quashing that isn't the way forward. And in some ways, in a deep sense, it reflects even my commitments to free speech. I'm a free speech absolutist. We see this right now. I see this, you know, we see this for all American history. We're seeing it in different forms coming up as we're having this conversation. The idea that if somebody else is making an argument that I have to respond to, if I don't

have a readied response, the right answer is to censor it. No, it's never the right answer to censor it, actually. And so the same impulses for me that want to keep the channels of free speech flowing are also the impulses that want to keep the alternative currencies flowing, frankly, because that's what holds us accountable to be the best version of ourselves when we have competition, be it in the marketplace of ideas or the marketplace of currencies, that's when the U.S. is strongest. Well, Vivek, I know that you're running up on time and you've got a tight schedule. I want to thank you for coming on, answering our questions and giving us some of your perspective. I will say for the people in crypto, I wouldn't say we're all single issue voters,

but we're, you know, crypto is a big issue for most of us because we've been pretty beaten up, as you mentioned by the administrative state over the last, you know, three to four years. So it's something that we care very deeply about. So your message, I think, is going to resonate with a lot of folks in this community. One thing is on, I think around November 16th or thereabouts at the blockchain, there's this blockchain summit in Texas, just the most convenient one by way of timing. I'm going to be unveiling comprehensive crypto policy there. Some basic tenets.

It's going to be principles driven, freedom to code, freedom to have financial self-reliance, freedom from obtrusive regulation to foster innovation, the freedom to innovate. Those are going to be some of the basic principles, but we will get. into some level of detail about my crypto policy. So we're putting the final touches on that between now and then. And I'm looking forward to hopefully really opening up a conversation that doesn't exist in either major political party today. But I'm not just doing this to open up a conversation. I'm doing this to lead this country accordingly. And I think we can drive that kind of generational change if we're successful. And so, you know, frankly, I think the crypto

community is not part of the traditional Republican donor establishment. And I am not loved by the traditional Republican donor establishment, but I'm competing against candidates who are. And so we're going to hopefully create a movement that creates, as we said, an alternative to that existing Republican establishment. And I think we have a clear shot at success here. But one of the things that people have to level with is we have a government that does have a say in whether your industry,

let's call it out for what it is, continues to exist or not. And the government could be an existential threat to the future existence of crypto, at least in the United States. And so, I mean, maybe it's self-interested to say this, but, you know, I'm living a good life. I'd be just as happy not to, I mean, to go back and living the life that I had, that's, that's a, that sounds like a pleasure to me. But I'm doing this for a reason, but we're going to need the support of non-traditional Republican mega donor types. That's what's going to be required to succeed here. And so I hope people pay close attention on the 16th when we unveil that policy.

And we're taking feedback between now and then in the meantime. Well, we, I think we, I can speak. for all of us and say we really appreciate your seriousness and your engagement with these tough questions. We wish you the best of luck in the primary. I know you've got a hell of a race ahead of you. Thank you. But thanks for coming out and vague. Thank you. All right, guys. So thoughts. Robert, why don't you start? What was your sense of evake? Yeah, my sense is that he cares deeply about this issue. I'm excited to see the policy platform that he unveils. It's clear that, you know, in general, his thought is to let things exist and grow organically so it's not

to trample innovation. And, you know, getting into the nuance of how innovation is protected, while at the same time, you know, as he mentioned, you know, coming to grips with the reality that there's going to be an FTX out there and preventing the next one, I think it's important. So I'm looking forward to the policy proposals in their detail and digging in. What do you think? Yeah, I'm also curious to see. the specifics of the policy. I feel like it's very easy just to say, yeah, yes, everything is good. I'm also not quite sure about the whole Code is Law forever kind of thing. But it feels like,

I mean, the general philosophy feels very of the time right now. There's a lot of sort of questioning of Chevron deference. It's being retested in the Supreme Court. And, you know, this entire sort of concept is what's given all these three-letter agencies, you know, all of their power. And so it seems like the timing is right for this kind of idea. But I think there's probably to only be some balances. There probably need to be some sort of, you know, bounds on, you know, a lot of these different sort of gatekeepers. So we'll see. But, I mean, it's a refreshing take, nonetheless, and glad to have them on. Do you know, what do you think? You know, it's always interesting, this might be the first time my lifetime. There's ever been a presidential candidate who has

very somewhat similar background to me. So it's kind of funny, despite the fact that I might not agree with their policies otherwise to talk to them. Similar background, very different looks. Yeah, yeah. Yeah, he's not more buttoned up and polished. Yeah, different vibe, different vibe, but similar backgrounds. You know, it's a vibe session, as they say. So we got a, we got it. Someone has to lift them up.

I, yeah, I think the thing that was most interesting to me, and like, I think if we had slightly more time, I would have dived a little more into is his view on code is free speech, you know, especially given all the OFAC stuff within crypto, that was sort of a big deal. But there's also this free speech and code issue coming up in AI in the recent Biden executive order, which makes a bunch of nonsensical things like you can only models that have more than use more than 10 to 26 floating point operations have to report to the security committee dog shit thing. I don't know what else to call it, which is just ridiculous because like there's so many ways to get around that. Also, they didn't define floating point operations. So great, I can go define a I can do everything in fixed point and tell you to fuck off. So it's sort of like kind of one of the most, like, it just reminds me of like government overreach, like how absolutely idiotic that executive order is and how transparently written it was to enshrine, you know, open AI and a few other people, which is why there's, you know, the war on the internet over it. And I think the interesting thing is crypto is in the same conversation about this freedom of code and speech and whether governments can put arbitrary restrictions. So I think that aspect, I would love to actually see if his policy really reflects that or if it's sort of a lip service. That would be pretty amazing if like the regulatory arbitrage for like all large language models going forward is that they're all in fixed point.

But they are all in fixed point. They are all in fixed point. That's the fucking crazy thing about it. Like most are trained in fixed point. Yeah, because it's a lot faster. And people observed about eight years ago, nine years ago, that you got almost no difference in model. quality by lowering precision and doing a fixed point versus doing it float. So like a lot of the hardware stuff, a lot of the acceleration comes from really optimizing

like the 8-bit six-point unit. So like everything written in that just shows you how incompetent everyone of the White House is in like knowing basic stuff about something like I just like that level of incompetence is like the same level of competence that's writing crypto regulation. So I just from from a pure like technological standpoint. I'm happy to see, hopefully see someone who maybe has an alternative to that. But, you know, I'm not sure I agree with the rest of the campaign policies, certainly not enough to vote for it.

Okay, fascinating. I will also say it just occurred to me as you were talking about this, that if I can really imagine like Vivek being the super ego and Turun being the id in one guy like sitting on each shoulder. Anyway, sorry, I just said it. I just, it illustrated perfectly in my mind. And so I had to bring that out. he was surprisingly thoughtful.

And I like the fact, actually, that Tarun, your question made him really think about parallels between biotech world and the kind of the moonshot type investing that we more or less do when we're looking at early stage founders in crypto. And I think it made it click for him a little bit, like why it is that there's so many things in crypto that are valued so highly, even though they don't have a lot of adoption. In biotech, it's kind of the same thing, is that there are a bunch of companies that are worth lots and lots of money that are never going to end up shipping a product because it's all probabilistic because there's a small chance that you will win a really, really big pie.

And if you multiply the big pie by a small probability, you get still a large number. It's not, you know, it's not 20 billion, but it's still worth something. So that was, it was great to see him, like, thinking in front of us. And it's one of those things that you rarely see from, from politicians. And that, to me, was impressive. That definitely made me, that definitely made me like him. And for me, certainly, I think, you know, so Royvent, some background, I guess,

is like they did a lot of actual computational drug discovery, and I used to work at a place that did computational drug discovery, and actually, I think, invested in Roivin along like 10 years ago. So I've kind of followed their story for a long time. And one interesting thing I've always seen in biotech is that it has the same sort of like things go public really early. Like there's like liquidity very quickly for a lot of things. And then there's sort of this idea that like,

you have this thinly traded market that slowly grows into liquidity, and then maybe you have a coronavirus, and then you have something like biotech, which grows to some gigantic size or Moderna, right? Like, Moderna was basically like Ethereum pre-Defi. It had no drugs. It had a bunch of patents, maybe, and it had a bunch of like MRNA synthesis stuff. Until the pandemic, it really didn't have any business model. Yet the company was still able to survive because, like, they have liquidity and they're trading and they're able to issue shares. And there's a sense in which somehow this idea of like waiting until the right event happens is extremely similar between biotech and crypto.

And I feel like he did, you know, even though maybe he had a fine figure that out on the spot, I thought he did actually kind of get close to that view, which is sort of at least what I see in that. Yeah. Yeah. Yeah. My sense of a vague is that he is very much a first principles thinker, which is cool to see, but obviously doesn't work for a lot of stuff.

That turns out like, okay, you don't need. to be thinking for first principles. You need to be thinking about how do I get from where I am to where I need to go. And, you know, obviously a lot of the stuff about dismantling the administrative state. I kind of take it as campaign talk, you know, when you actually get in, if you actually end up in the chair, you're like, oh, well, this would cause a lot of chaos. And I'm sure that a lot of his proposals actually would. That's okay, though.

I feel like that's true of every candidate ever, is that there's a lot of stuff they say that is no practical way of getting implemented and people forget immediately as soon as they get into office. So on the whole, I think I like the direction that he's articulating, especially when it comes to business policy. Some of the social policy stuff, which obviously we didn't talk about, I take more issue with. But I think on the business side, I'm actually pretty impressed with his platform.

So I thought he just handled the conversation really well and fluidly, which impressed me. He's clearly probably the most intelligent candidate, I think, right now. I really would love to also have a candidate from the other side on the show at some point because I think it would be interesting to just compare and contrast similar style expositions. Agreed. If you're a presidential candidate listening to this episode from the Democratic Party, please reach out to us, and we will schedule you to appear on the chopping walk.

The problem is that the Democratic candidates have all gotten sidelined because, like, nobody wants to, like, they're not doing debates because of, you know, because Biden is just going to take. So it's kind of like a cakewalk for Biden unless he, like, heals over or something or gets sick. Well, he's welcome to come on the chopping block. And present his ears. Biden, if you're listening to this, which I know you are, you're welcome to come on anytime. I might, I might have, I did just rail against his horrible executive order. So I'm not sure he's going to be that thrilled.

But he has a very short. You should know, he should know. We have one out of four co-hosts who's from Delaware. So, you know. Wait, which? Me. Are you from Delaware? Turinus, yeah.

You're from Delaware? Yeah. famously so. All the mayor. As we all, as we all know. Yeah. That's the one thing everyone remembers about to ruin. from Delaware.

All right. Of course, the famous Delaware goat behind you. Is that a goat or what is that? That's it. I don't know. That's a flower coming out of a horse's head. That is true.

This is a hotel. Very on brand. I did not realize what that was until just right now. All right, beautiful. Okay. Well, gentlemen, I will also say happy SPF conviction.

Good way to close out the episode. Any just quick, heartfelt reactions to seeing the man of the of the year go down under? Well, I'll start by saying I am very glad that such a massive fraud and theft was brought to justice. There was fears from, I think, everybody in the industry, myself included that somehow he would escape the punishment that he was due for whatever reason.

And it's just a relief to know that $10 billion of theft and, you know, fraud and abuse was put to rest. Hopefully, this is the turning point where people say, why did it happen? How could it have happened? And what are the potential uses of blockchain and transparent on-chain systems to reduce the probability of the next FTX? That's one of the reasons why I'm here in the first place is, you know, how do we use this stuff so it doesn't happen again? And, you know, I hope that this is just an inflection point for the whole industry to start thinking more forward-looking than backwards. Yeah, I think, you know, it's somewhat cathartic.

It feels like, you know, a step towards kind of getting this whole thing behind us. Obviously, you know, sort of the next step of sentencing in a few months, but there's a couple, I think Polymarket has a prediction market and puts it in that like currently 50 years estimated. And something about that actually felt very wrong to me. You know, it seems very unsettling to send this man to federal prison for the rest of his life, effectively for, you know, some fraud, which I mean, even now with claims they're trading at like 60 cents. So something about that feels kind of wrong to me. And there's a lot of sadness, I think, around also just the case, like a couple reporters, including Laura, we're talking about, you know,

his parents, you know, crying, you know, openly in the, in the courtroom. So, you know, I don't, you don't want to see anyone go to prison, but it is maybe nice to just have this whole thing kind of, kind of getting closer to being behind us. Yeah, I mean, I think I definitely agree. happy that justice was served unanimously. I will say personally, I find a lot of the internet discourse post it happening a little bit disingenuous. I feel like a lot of people who benefited from SBF were like sitting and pouncing on his grave. And I just feel like a little distasteful. So, you know, kind of to Tom's point about the like, hey, you know, like, you know, society really has to send people to prison when it's really a really bad crime. But there's also, I just feel like a lot of

people were kind of like using this opportunity to try to absolve themselves. And I found that quite distasteful personally. Yeah, I would I would echo that. I'm glad that this is behind us or at least beginning to be behind us. It's also insane that it looks like actually maybe a lot of these claims will be fully paid out, which is a very strange ending to this whole saga just because of how much anthropic has run up. And of course, the balance sheet of FTX itself has run up just because their, you know, crypto has gone up.

So we may end up in a situation where everyone gets all their money back, which is an absurd outcome. to this whole saga. But I would agree and underscore what Turun said in that I think it's probably a good time for us as we sees to shut up because I think that in many ways we were at the center of this whole saga, although we were not the ones ourselves on the stand. Yeah, unfortunately, I don't think many of our colleagues, ironically the ones more involved in investing did that. Yeah, yeah, unfortunately not. So anyway, that's it for this week. Thank you, everybody. And we'll be back next week with, obviously, with President Biden. I think he's our next guest, so we'll look forward to that.

Actually, not. Please don't tune to Expecting President. Tweet it. Tweet it.