Unchained - Why Crypto Market Structure May Not Pass Until 2027: DEX in the City - Ep. 946

Episode Date: November 13, 2025

In this first episode of DEX in the City, hosts Jessi Brooks of Ribbit Capital, Katherine Kirkpatrick Bos of StarkWare, and Vy Le of Veda dig into the questions that DeFi keeps forcing the industry to confront. They debate how projects should respond after exploits like the recent Balancer hack, what “programmable risk management” could look like in practice, and why the idea of “pure DeFi” might be more myth than model. They also cover the MIT Brothers trial (and what its mistrial revealed about the law’s limits in crypto) and end with why the long-awaited crypto market structure bill still isn’t close to the finish line. Hosts: Jessi Brooks, Ribbit Capital Katherine Kirkpatrick Bos, General Counsel at StarkWare Vy Le, General Counsel at Veda Links: Paper: Trust Without Intermediaries: A Programmable Risk Management Framework for the Future by Jessi Brooks and Katherine Kirkpatrick Bos Paper: Blockchain May Offer The Investor Protection SEC Seeks By Tuongvy Le Timestamps: 👏 0:00 Introduction 🌆 0:43 Welcome to DEX in the City — meet the hosts and the mission ⚙️ 6:16 What “programmable risk management” could mean for DeFi’s future 💥 10:38 How the Balancer hack exposed huge differences in how projects respond to exploits 🧩 17:48 Can “pure DeFi” really exist, or is it just a myth? ⚖️ 22:23 The MIT Brothers trial: why no one paid attention and why it matters 🏛️ 28:26 Inside the Senate’s new crypto market structure bill draft 🕒 33:13 Vy’s prediction on when (or if) the bill finally passes Learn more about your ad choices. Visit megaphone.fm/adchoices

The balancer exploit recently happened, right? This incident, just like others that have come before it, right, reveal this really interesting tension. I think it's this idea that like decentralization is not binary. Because ultimately after a hack or an exploit, like I, and I know institutions and users don't want to have to wait around and be like, well, is the project going to do anything to work for me? Is the community going to do anything to work for me? Is the government going to say that this is a crime even though it's unsure if this is a crime? For all those betting on polymarket as to crypto market structure passage, this is not investment advice, but I am, I agree with V.

I am very bearish that this is going to happen soon, despite the president making this a mandate, like, get this done. Hi, all, welcome to Dex in the city where the wallets are cold and the tapes are hot. There are a lot of boss women in crypto, and we want to make sure you hear from some of them. We're going to get to intros in a second, but we first want to frame why we're doing this. There are a lot of crypto podcasts out there and you could be listening to any of those. So why should you be listening to us? Well, between the three of us, we've worked in senior roles in defy, C-Fi, crypto banking, venture capital, infrastructure, and more. We have insights on tradfying crypto.

We're on the front lines of crypto policy and we're pros at regulatory engagement. We are also very good at breaking down the more complicated concepts into English. Before we dive in, this is our very first. addition, very exciting, and we're thrilled to bring Dex in the City to you as part of Unchained on air, the new slate of shows expanding the incredible Unchained network. Before we get going, remember, very important, we're lawyers, but we're not your lawyers. So nothing you hear on Dex in the City is legal or financial advice and it doesn't create an attorney-client relationship. For the fine print, as always, check Unchained Crypto.com.

So let's dive in. First, we have Jesse, Web3 prosecutor, turned Web 3 Protector at Ribbit Capital. Hi, everyone. I am so glad we are finally doing this. I want to do a quick shout out to Laura and the entire Unchained team. As you can probably tell, the technical infrastructure that goes into this is very, very complex, and they have been working on it for a long time, and we just get to join for the ride. So thank you guys so much. So I'm excited to do this pod because the three of us spend so much time talking about this space

and really debating off mic and sometimes over drinks, which will maybe do sometimes on this pot as well. And now I can force the two of y'all to hang out with me every week. So KK said, I'm Jesse Brooks. Hello. I've spent about a decade in crypto. It started in the national security world at the Department of Justice, where I was taking on North Korea, terrorist networks that were engaging with crypto and hackers like the BitFinex hackers.

And everyone else was trying to make the same space less safe for us. for all of us, especially at the beginning when it was building. Now I'm at Ribbit Capital, which is an investment firm committed to backing rebels that are reinventing finance across crypto, AI, and fintech. Awesome, Jesse. And everyone needs to listen because hopefully one day you'll get to hear the famous Jesse Brooks rant, which is my personal favorite in terms of engagement. You will hear it.

Let's next move on to V from the SEC to Web3. Lee. Hi, everyone. I'm Vee Lee, the general counsel at Veda, where we're building infrastructure defy scale safely, something we'll be talking about today. So I've been in crypto for over four years, first at a digital identity protocol, then at a crypto VC, and most recently was the GEC of the only federally regulated crypto bank, which is actually still the only federally regulated crypto company in the U.S. period, which I think tells you a lot about how far we, we, still have to go on the policy front. One of the things that we'll be talking. Before crypto, I was your classic Tradfai lawyer, practiced securities law at a big law firm, spent almost six

years at the SEC. So suits, memos, windowless office, the whole thing. But the SEC is also where I first fell down the crypto rabbit hole working on crypto investigations. So I have government to take for that. But I'm so excited to be doing this with two of my favorite people in crypto, Jesse and KK. So if you've ever wondered what it would be like to be a fly on the wall and three female CryptoGCs get together, you'll get a taste of some of that on this show. Not everything. Just have. So I think we all have drinks. We should cheers to that. Very important. Cheers to coffee in case my tea is watch. This is Cam-Mil tea, but I like it. Fantastic V and very important disclaimer with V. was not with SEC enforcement during the Gary Gensler administration. So I needed to, you know, provide that disclaimer. And I'm your host, Catherine, or KK or KKB, any of the above. And I'm fluent in

Tradfy and Converseent in Deep Tech over at Starkware. So I was a Whitechew big law partner doing basically all Tradfai investigations, defending big entities, asset managers in U.S. government investigations. And then I too fell down the crypto rabbit hole. Loved it. Saw the inherent inefficiencies in triad by market structure and understand how crypto can solve those. So I completely went off the deep end and went to be GC of a defy protocol. Then I moved to be chief legal officer of a centralized exchange, both spot and derivatives

and derivatives clearinghouse. So lots to say about the CFTC these days. And I will just say day to day, we're going to tackle a lot of the crypto happening. but with some new takes. We're going to dive a little bit deeper and get into perspectives that you do not hear on crypto Twitter. We're also going to correct crypto Twitter. And we're going to have fun while we're doing it because we're also real friends, not just crypto friends. So that's an important distinction. So let's get into the meat of today. So I have to say in the theme of self-promotion here, Jesse and I released an academic paper a couple weeks ago on programmable risk management. We were

very excited about this. But it did create a little bit of spice amongst certain nerds in the population. And I think our take on it is that a lot of people didn't read the 20 plus paper, which I completely understand. But the thesis that we set forth in this paper was basically, there are theoretically ways to improve upon defy. We love defy. I mean, my heart is with defy. It was my first GC role. Now, one of the things that we were saying in the paper, is we outlined a whole laundry list of tech-based solutions that theoretically would not disrupt the U-X, that would not re-intermediate D-Fi. And we said these should be optional solutions for discussion within D-Fi and maybe certain protocols in, you know, conversing with their community in achieving

their goals might want to consider these. And many already exist and are being considered, too. Exactly. Many of them are already being used today. Exactly. I mean, blockchain analytics is one extreme side of things because most defy protocols are using blockchain analytics as the bare minimum, but there were a multitude of other solutions. To be very clear, we are not, and we're not arguing that defy should be regulated or reintermediated in any way. So I want to kick us off here because I know the three of us have a lot of thoughts about the safety of defy, what solutions exist. Why don't we go right into it? You know, V, let's get us started.

Kick us off. What are your thoughts on all things programmable risk compliance, programmable risk management? I read it before it was published. I read a manuscript of it. So I was so honored to be able to do that. So if you guys haven't read this paper, it's groundbreaking. And I really think you should. We'll link it in the show notes.

I also wrote a paper last week or an article for Law 360. For those of you who don't know Law 360 is a legal publication that at least was my daily reading when I was a law firm associate and clerking and in government. But in the paper, I talk specifically about chain capital markets and how issuers and users aren't going to participate unless they feel like they can trust these markets to be fair and greedy. And I look at some of the solutions that, you know, like McKin and Jesse just said, some of the solutions that the industry is already. you know, developing and using to build safeguards directly into things like tokens and smart contracts with respect to order execution quality, UV mitigation tools, that sort of thing. So along the same lines as KK and Jesse's paper of, you know, instead of regulatory mandates, what are some ways that the industry can leverage the technology itself to keep users safe

and combat things like illicit finance? So I think, like you guys said, I think the feedback on both of these pieces has been really interesting. First, I'll say, and I think you guys agree with this, right? We welcome and encourage debate and disagreement. These are really hard issues that we're all trying to figure out together. And I think all of us are committed to crypto's core values of decentralization and inclusion and transparency and censorship resistance, right? So, you know, but I do think the debates raise some really, like, hard questions. about defy that are worth discussing in a nuanced way, which social media doesn't always lend itself to.

So I'll kick things off for us, right? So for me, I think a lot of the defy debate comes down to two fundamental questions, right? One is, what responsibility do we have to keep users safe? And relatedly, what responsibility do we have to offer users recourse when things go wrong? So I think it's really easy to say, yes, we're in favor of, you know, pure defy or true defy, but then how do you answer those questions? And how do we see defy protocols actually answering those questions in real life, right? So I think, you know, there were two recent events that, to me, really illustrated this tension.

First was the balancer exploit that recently happened, right? So balancer is a defy exchange. It recently suffered an exploit where the attacker drained and drained $28 million. for liquidity pools, manipulating the pricing function and the pool balances to basically trick the protocol into miscalculating the value of the tokens. And then they repeatedly performed swaps to deflate the price and then either minted or bought the undervalued tokens, immediately redeemed them in a way that allowed them to drain the pools. So how did Balancer respond to this? I think most of their pools do not have an admin key or like a kill switch. But there were some

pools that were able to be paused. And they did that. They paused them. They alerted users, and then they worked with White House and recovered the funds. And what was also really interesting about this incident is that the different chains that were affected responded in really different ways, right? So Ethereum largely stuck to the code as law ethos. So they didn't do any rollbacks, no forks. The losses remained on chain. But there were a bunch of smaller side chains. But there were a bunch of smaller side chains and L2s that did intervene. Unvalidators or sequencers, rarely halted block production, or they coordinated soft forks to freeze the hackers and others actually did perform a hard for it. Reverse or isolate the impact of the attack,

right? So for me, this incident, just like others that have come before it, right, reveal this really interesting tension. I think it's this idea that like decentralization is not binary, meaning even chains that, claim to be or aspire to be immutable or permissionless, sometimes do need, feel the need to intervene when users are or lose funds. So I think this really puts the idea of peer defy to the test, right? So I think we need to ask ourselves, like, when a network can be forked to recover used funds, does that create some sort of like de facto fiduciary duty or something like that among validators off that?

100%. Before we move to Jesse, I just want to clarify one thing. A white hat hacker, a lot of people I realized didn't understand what that was, if they're not in crypto. A white hat hacker is kind of a good guy. And what you often see with exploits in crypto, or not often, but occasionally, is there's a hacker who facilitates an exploit, and whatever entity is in charge or a community member will then go to them and say, we'll pay you if you turn into a white hat, like if you give

the money back. So this was not the case here, but white hats help the ecosystem. But Jesse, please jump it. Yeah, let me just give you a little insider knowledge on white hat hackers as well. These predated crypto for many people who have been in the cybersecurity, national security world for quite some time. And actually, the government relies on them for a lot of sort of early cybersecurity, national security issues. So it's just sort of something to think about how it's also been incorporated in crypto and variety of ways. But I actually think that these two questions sort of level setting are very, very thoughtful. And I'll just add a third one, which is who should give the recourse? Should it be the protocol? Should be a community? Should it be the government, the courts,

which we're going to talk about some of the stuff that's happening there, particularly with the MIT Brothers case that we'll cover in a little bit. But also, I just want to put forward like what kind of world do we want to live in where users have to think about how do I get recourse for something bad happening instead of having the choice from the start of being much, much more comfortable of where they put their finances before something bad happens. And I think that's sort of the debate here is how much can we embed in the native aspect of crypto and defy and all the projects that are built in it to make users less worry. read about any sort of hack and who they'll need to go to for recourse later on.

Because to me, like, decentralization is not about having no rules or standards, but it's rather about a bottom up choice of how to embed rules and standards if you want or not. And a choice by the users, a choice by the projects, a choice by the protocols, the choice to opt into more security and safety when they want it or more risk and maybe more upside if they don't want Because isn't that like really what we're building here in my mind? Like the crypto ecosystem is about giving people, in my mind at least, more power over their finances, whether it be self-custody, whether it be how they want to engage with Defi. And it should also be the opportunity to engage in a more risk forward or risk conservative manner. Because ultimately, after a hack or an exploit like I, and I know institutions and users don't want to have to wait a

around and be like, well, is the project going to do anything to work for me? Is the community going to do anything to work for me? Is the government going to say that this is a crime, even though it's unsure if this is a crime? Instead, why don't we allow users to say, okay, here are all the options out there and let's go from there. And on that point, like, isn't it better that we work from the ground up than have sort of this regulatory oversight coming afterwards or trying to figure out how to fit things within crimes in order to give recourses to users. Power to the people, Jesse, I love it. And it's, no, but it's true.

Like, you make a great point in that I think the fear in with respect to some of the radical pure defy advocacy that we've seen lately is that there's a fear that if we even open up the discussion as to so-called protections to put in place, that regulators or legislators are going to seize on that as a way of regulating. defy or mandating such checks. And I completely understand and acknowledge that fear because there should be a scenario where pure defy exists without checks, eyes wide open. You know, there's a beauty of transparency with defy that we all understand and acknowledge.

Like I would always explain that to people that didn't understand crypto vis-a-vis maple, my first defy project, that it's midnight. The payment for the loan is due at midnight. 12.01, everyone can see it's not paid. which is, you know, a beautiful thing about on-chain activity, you know, defy lending doesn't exist in TradFi, right? But I think your point is really important. Like, shouldn't we also empower builders that maybe they want to go more conservative? Maybe they want to serve a population, regulated entities, institutional participants, one-day pension funds.

And they want to, you know, ensure that they're taking a more conservative route without being penalized. in the defy community by not being pure defy. Because I don't view a lot of this as re-intermediating defy. A lot of it can be inserted without disrupting the peer-to-peer U.S. Can I ask you guys as like Defy Project GCs? Don't you think about this kind of thing on day-to-day? Like what comes up when you sort of make the considerations of how you were going to build? Is it all or nothing?

Like how do you guys think about pure defy and building in the space? My gosh, so many things I want to follow up on. So, Jesse, I wanted to follow up on one point that you made that I think is really important, which is like one of the benefits of Defi and these Defi protocols is that you know ahead of time what's going to happen, right? Like everyone can see the code. Everyone knows how the protocol is going to behave. But when when these hacks and these exploits and attacks happen, the response is always so ad hoc. Like you said, right, like no one knows what is.

going to happen? Like, is anyone going to intervene to, like, help return the funds? Like, what is going to happen? No one knows. So I think for that reason alone, we should probably, you know, at least be able to talk about it should there be some standards in place? Like, are there tools that people can use? Like, what are best practices here? And that is something that is missing, I think, right now. And obviously, these events are going to keep happening, right? I think it's only fair to users to be able to know ahead of time what they're getting themselves into. And that's very, part to people, though, is those standards. You know, I think that's the scary part because they don't want to, we don't want to mandate

standards that would basically harm defy holistically. However, it's really interesting. I think everyone's occasionally forgets that, you know, what defy protocol exists without a smart contract audit? Like, that's a self-imposed industry standard for safety, right? Because it's common sense. You want your smart, you know, you don't want to engage with a protocol that hasn't had, you know, an audited smart contract.

So I would love to see the industry growing in a way where, and again, I said this before, but blockchain analytics, a lot of general counsels of devcos, et cetera, we always think through risk. Like, I like to sleep at night. You know, we don't want a facility wrongdoing in any form, even inadvertently or, you know, not knowingly, of course. Now there's a criminal threshold. You need to have intent to be convicted of a crime. however, that gets very sticky with things like civil liability for sanctions, which we'll get into it another time because it's kind of complicated.

But I think that's the role of a GC, and especially in crypto, it's not to eliminate risk. Like, absolutely not. It's to educate the company about the risk. It's the issue spot. So then they're armed with that information and can make informed decisions. You know, to your question about, like, are we thinking about it, like, Perchabit GSC working at a, defy company or defy portable. I guarantee you every single

defy project out there is constantly like on a daily basis to balance decentralization and the principles of decentralization against user safety, like keeping their user safe. This is something we think about constantly and it's a struggle.

It like, I like it's, I mean, it's something that I have to deal with with respect to like new features that the team wants to act. or a new design mechanism, right? Every defy project out there thinking about this. So I think the other reason I hope we can sort of move beyond the, you know, like pure defy or like the all or nothing debate is that I just don't think that that which is the reality of what most defy projects and companies are dealing with.

As defy goes more mainstream, I think the other dynamic we're starting to see, and we certainly think about it in these terms do. The other dynamic you're going to start seeing is, you know, if you're able to create protocols or markets where users feel safe, that is going to be like a competitive business advantage for you. So that's the other thing, right? I think this isn't just like it's not a philosophical or academic debate anymore. Like defy is gaining adoption. It is going mainstream. Now we have to think about what are the market opportunities. But that's the other way we think. That's absolutely right. And I think that's something a lot of us like we've discussed before.

If the trad and crypto markets are converging pure defy without even discussion of this, I mean, I am skeptical that it will ever scale. I'm also sympathetic, however, because there's also the balance between kind of paternalistic measures. So that's, this is not an easy conversation by any stretch. So I want to move to Jesse to talk about the MIT Bros case. This is a fascinating case because I feel. feel like it got no attention from anyone. And, you know, it's, it's so random to me what gets a lot of attention and discussion and what does it. This was an important one. So, Jesse, please educate everyone. I think people must have just been excited of like tracking day-to-day crypto trials that

they needed a break. But I am similarly surprised that this didn't get a lot of attention because it presents a really interesting aspect of the law that hasn't fully been touched on point in prior criminal cases. But, you know, just back to level setting, like, to me, the big question of this pod today is, like, who's going to enforce the rules when code alone isn't enough? And this is a case when the courts tried to enforce it, and it didn't really go so great, and we maybe have less clarity than we did before. But just to give, like, a two-sentence overview on what this case was about, essentially, these very technically savvy brothers exploited of vulnerability in Ethereum's MEV boost relay code. And in so exploiting this, they extracted $25 million from bots that

were engaged in sandwich attacks. And the argument that they made is that they simply found a bug in code and they targeted bots that were already manipulating the markets, like not the most sympathetic victims, right? They say they didn't lie to anybody, so there's no fraud. They didn't directly interact with the victims, no contractual relationship. And they didn't violate any of the rules or standards, the two words we've been using a lot today, of the decentralized Ethereum network. And I slowly say decentralized Ethereum network because obviously it might work differently on other networks and might have been charged differently. But the government said like pish posh, no, we disagree. This is wire fraud and conspiracy and money laundering. But focusing on the wire fraud,

because that was the real issue at trial. And the question was, what was the fraud? So the government argued that it was the bait transactions and the false signatures. And, you know, the technical aspects of that were really interesting in the trial. And the specific details of this are really important. But I think what's even more interesting is that after a few weeks of a very technical trial, and for anyone here that has been in trial or, you know, had any sort of component of a trial, you know how hard it is to explain these complicated concepts to people off the street. But after

days of deliberation, the jury could not come to an agreement. So they say that the jury was hung. Let me just take a quick sidebar to explain what that means. So essentially in a criminal trial, the jury has to unanimously decide the defendant is guilty of this charge or unanimously decide they are not guilty. Those are really the options and it happens for each charge. And if If they can't come to an agreement, they come and tell the judge, hey, we can't come to an agreement. Usually the judge says, go back and keep arguing. The prosecutor says, go back and keep arguing. The defense usually says they're not going to come to an agreement.

And if it gets to a point where it's pretty clear they won't, which happened in this case, after some very emotional jury notes, which are somewhat odd in these circumstances, the judge decided that they weren't ever going to agree. And so they declare a mistrial. What happens with the mistrial is that the prosecution gets to decide whether it wants to bring the case again. What happens behind the scenes is that the prosecution decides, do we want to drop the case? Do we want to offer a plea or do we just want to go to trial again? So we don't know what's going to happen and they have a few weeks to come back and decide. But I think like the bigger question that sort of fits in here is we have an exploit. Maybe it hurt not so sympathetic victims this time, but thinking about the bigger picture, for users that might have been hurt in some sort of vulnerability attack, why are we leaving it to 12 random people off the street to decide after a few weeks of trying to learn about these technical issues that this is or isn't a crime?

Like, is that the best way for us to move forward in this space? And it rhymes a lot with what happened in the Mango Markets case where a guy named Avi Eisenberg didn't exploit a vulnerability or a bug, but he rather manipulated the platform's own Oracle according to the government's allegation. And then a jury found him guilty and then an appellate judge overturned the convictions. So in both of them, the court system tried, but I don't want to say failed, but sort of seemingly failed to come to a decision that gives the space any clarity. And this is why it comes back to my argument before of like, we should give choice in protocols for users and institutions to build what they want, what kind of risk they want because in the world that we live in right now, you don't know where to go for recourse. So that's sort of the framework we're living in right now. And fun fact, I was once on a jury for a check fraud case. And it's highly unusual for a lawyer, like, especially with what we've done historically.

No, you never get picked because there's. There's this process called voir dire where they vet the jury members. And so there's peremptory challenges where the lawyers can strike juries for cause, like, oh, you're biased. So usually I would have been struck through a peremptory challenge because I knew too much about criminal law because I was a white collar defense attorney. But I somehow ended up on the jury. And afterward, the judge was like, the defense blew through all the peremptory challenges.

So he was stuck with you. And of course, I do want to tell you, see, you have to keep lawyers on. there are so many lawyers. So you can go by what kind of. And so statistically, you have no choice, but it was a fascinating experience. So there we go. I'm just going to put that out there. So we only have 12 minutes left.

So I want to shift topics really quick to market structure because it's important to know, like we weren't originally going to touch this. But hot news, the House Agriculture Committee had advanced and then passed. the Clarity Act back in July. This is the crypto market structure bill that we're all really excited about. And to explain to people, I'm constantly explaining to people that aren't lawyers why we're excited. There is a fear that all of the good work that the regulators are doing right now in the United States vis-a-vis crypto, the SEC is a great example, their transparency, their engagement,

etc. Could be completely reversed if we have a different administration with a different mandate in a few years. The only thing that will determinatively prevent that is legislation. So that's why you see a lot of crypto people, like desperate for crypto market structure legislation, even if it's not perfect. So a draft dropped yesterday from the Senate Agriculture Committee because we need the House, we need the Senate, and then we need the President. Okay. So we got the House. The Senate's version is different.

And this is why there's a big uphill battle here because there is basically efforts from the Senate Banking Committee, efforts from the Senate Agriculture Committee, those need to be reconciled and cleared by both committees and then get passed in the Senate. So we have a lot of work to do. But this draft dropped yesterday from the Senate Ag Committee, and it was very different than the banking committee.

And in keeping with our theme today, like first, a lot of emphasis on the CFTC's mandate versus the SECs, a good protection of self-custody, a direction for joint rolemaking with SEC and the CFTC. AML anti-money laundering specifics are very vague, and the scope of CFTC exemption powers are unclear. I call that out because it's really important that regulators have the power to grant exemptions. But we've been talking about this a lot on this pod.

There is a section on defy with nothing in it. Like, defy oversight is left completely open. which is a little scary to people because we were all desperate and really hoping for explicit developer protections in legislation. So, Jesse, it looks like you want to say something. Before we jump it over to V, I want to play moderator for a second and just do one extra level of explanation because, you know, unless you're on the hill all the time, it's hard to understand all these different committees, what the heck's going on up there. And so in Congress, committee jurisdiction drives everything. So CFT,

is under AG and then banking and financial, banking takes over SEC and all financial regulation. So the AG is committee in the Senate. They have a bipartisan draft that came out yesterday. The Senate banking committee, the Republicans have only really come out with an agreement. So there's this interesting strategic game playing right now where the Dems in the AG committee are trying to figure out how do we, put forward a bipartisan proposal that doesn't go against what all the Dems on the banking committee are going saying and that also competes with the fact that the ag committee can't really regulate the kind of stuff that the banking committee should do which sometimes might be the ML stuff or the defy stuff and you're going to see lots of brackets throughout this new

draft so it's congress's version of like a sticky note saying hey we got to come back to that because we haven't agreed yet. And so that's sort of where, like, who knows with Defy? Who knows what the definition? So I guess, like, I'll just turn it back to you guys. Like, what the heck should people get from this? And brackets are scary to people because it's hard to make progress if you don't have the fundamentals accrete upon.

So I'm also scared of the Defy brackets. But the other thing I'll also explain to people is people are often like, to me, especially non-U.S. persons are like, why is the agriculture committee involved in this. That's because you have to think of the definition of the OG commodity in the United States. It's often things like cows and corn and wheat. So like that's why the Ag Committee is such a big part of the crypto debate because crypto is a commodity.

But the classic commodity, like as a Chicagoan, like it was all of the farm animals. Like there's a futures market for a reason. Like we'll get into that another time. So V, jump in because I know you are all. also very sophisticated on the policy. Yeah. So, I mean, I just wanted to touch on, like, you know, I'm sure everyone's wondering, like, what is the process from here? Like, you, you know, you mentioned that the two committee's bills, like, eventually, hopefully will be merged into some, like, Senate edge that

will reconcile EC and CFTC jurisdiction. So if both committees vote their versions out, Senate leadership has to agree to bring it to the floor, which is like always a hurdle, right? Just given limited floor time and competing priorities, the fact that you need 60 votes to overcome a filibuster, which means they're going to need some Democrat support, the Republicans. And then if it passes, the Senate bill would then be reconciled with the version that passed out of the House a while back. It seems like ages ago. But, so, you know, negotiations or conference committee, like, that would have to happen before being sent to the president. So, I mean, I think in terms of timing, like, realistically, I don't think the process is going to wrap until 2026, probably not until late, 26, maybe even early 2027.

And then we also have, you know, the elections next fall. So that could also grow a wrench in things. But, you know, I remain optimistic that something will eventually pass. Like both Republicans and Dems have an interest in this passing. I think both sides are working really hard towards that. The momentum from the industry is as strong as it's ever been. Stablecoin legislation, of course, passed earlier this year, which I think, you know, only improves market structures,

chances of passing, even though it's a much more complicated undertaking. And then also the SEC, the CFTC Treasury, I think they're also really pressuring Congress to act and are working closely with them on the bills, right? So that really matters too. So yeah, my prediction is late 2026, early 2027. You know what? That is like, you know, that sounds so far off. But like, I will say in the meantime, Defi will keep shipping. And I would also remind people that neither the SEC nor the C. FTC is waiting around for Congress, right? There's plenty they can do and are doing under their existing authority as we speak. So don't worry that will give us plenty to talk about on this podcast, even if things don't move along in Congress. A hundred percent. Like, I have been so heartened by the SEC. I mean, the transparency. I mean, I'm obsessed with Hester Purse in a purely academic way. She's been making so much great

progress as head of the crypto asset task force. the transparency that we're seeing and the engagement. It's what we all dreamed up for so long. The scary part is a lot of this work can be undone. And Chair Atkins of the SEC has said that they are working to try to avoid a scenario where the progress they're making can be undone. But the thing that will really let me sleep at night is crypto market structure legislation. And of course, once the legislation is passed, it's going to take years to actually create rules. And, you know, it's, that's really a basis for what's to come. But for all those betting on polymarket as to crypto market structure passage,

this is not investment advice, but I agree with V. I am very bearish that this is going to happen soon. Despite the president making this a mandate, like get this done, there are just significant headwinds. And let's get out of our crypto bubble for a second. We all need to remember that for many legislators, there's still a real education gap.

They don't feel comfortable with this. industry. And this is just not a priority for them, especially with the, you know, nonsense that we've been dealing with lately, like the other parts of dysfunction of our government on day, what is it, like 32 of the shutdown, by the way. We're in the 40s, baby. Oh, my God. It's just all a blur to me, all a sad blur. But Jesse, do you want to wrap us up with any final thoughts? I think what you should just say, it was so lovely to do this our first time together. And I am really, excited to keep debating with you guys throughout the next few months. Any final thoughts from UV?

No, this was so fun. Thanks, guys. And cheers. So I think what's to come from us? So the beauty of this is you'll hear our insights on the CFTC and the SEC and legislation. Oh, this is sounding so sexy. I can't even know. I think you'll get to hear our thoughts on the legal policy, a strategy.

oriented environment for crypto. You know, hopefully we'll be able to give everyone insight on all of the good, bad, and ugly within this ecosystem. And we'll be able to correct a lot of things that you read on crypto, Twitter. I'm just going to reiterate that because that is the theme of my life. Like, that's wrong. That's wrong. That's wrong. Well, we love to debate.

Yeah, I'll add it to me. That's it for this episode, the very first episode of Dux in the City. If you like the show, make sure to follow us on your favorite podcast. podcast app and on X slash Twitter will always be Twitter in my heart, even though I understand and recognize that it has a new name for live streams, updates, and clips. Thank you so much for listening and we will see you next week.