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Welcome back everyone. 
I am Caspian Sea and I'm joined 

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as usual by my partner in crime.
Mr. Bennett Tomlin, how are you 

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today, doing pretty good. 
How are you, gasps? 

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I'm tired, but I'm good as 
usual. 

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Kind of a hectic, few days. 
A lot of press releases from 

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tether lately, but we already 
went over tether and their big 

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12 auditing. 
It's funny to me that they're 

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doubling down on that I guess is
the only thing I want to say 

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about that but we're here to 
talk about something else today.

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Today we are talking about newly
found or not newly found. 

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So right word here, perhaps 
finally realized regulatory 

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risk. 
That is there and seems to be 

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permeating the cryptocurrency 
industry in regard to exchanges 

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specifically. 
So I think the first one we 

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should probably talk about Is 
coinbase, because there they 

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have a large. 
We have a big American audience.

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They have a huge American 
usership. 

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So let's, let's start with 
coinbase and talk about what 

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seems to be relevant from them. 
Yeah. 

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So I think there's a couple 
things going on with coinbase 

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right now. 
The first is that the Department

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of Justice Just indicted one of 
their former managers in several

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of their Associates for being 
involved in an insider trading 

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scheme. 
And what was interesting is that

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the SEC came out as part of this
case and ended up saying that 

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nine of the assets that this 
individual had Insider traded 

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were Securities at the time. 
There was a bunch of people 

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upset that the SEC was using 
this is their opportunity to try

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to label these things as 
Securities instead of going 

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after the appropriate Target 
like coinbase. 

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Luckily a few days later. 
Bloomberg reported that coinbase

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was under investigation for 
listing unregistered securities.

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Yeah, so, I'm going to, I'm 
going to go ahead and refer to 

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coin basis blog, which as of 
recording, they released two 

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press releases on the same day, 
and one the day before. 

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So three press releases in a 
two-day period. 

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One is the crypto Securities 
Market is waiting to be unlocked

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but first, we need workable 
rules. 

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The second is institutional 
insights are To crypto financing

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and last coinbase does not list 
Securities and of story. 

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Now, this is obviously the most 
interesting one. 

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It's the shortest also it is by 
their Chief legal officer, Paul 

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Greenwall who was at one point 
sitting on, I believe the 

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California Appellate Court. 
The seventh set was it, Seventh 

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District 9th District, something
like that. 

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Apple in the course tricks as a 
Judge. 

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He was a big. 
It was a judge. 

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He's now their Chief legal 
officer. 

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He's been so for a while this 
two-minute blog post just says 

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that they don't list Securities.
There's no real argument about 

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it. 
You know, there is an argument. 

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The argument is that coinbase 
has a process that decides 

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whether or not things are 
securities in. 

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All of these cases coin basis 
process, these are not 

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Securities and so these are not 
Securities regardless of what 

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the Securities enforcement 
commission, might think Right. 

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And do we know what their 
process consists of? 

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Well, I think it consists of 
calling up coinbase Ventures. 

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Seeing what the biggest 
investment. 

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I'm I'm being somewhat glib but 
I mean, we're talking about an 

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exchange that has listed tether.
Well, Gary Gensler saying, he 

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thinks I'll stable coins are 
securities listed EOS despite 

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them agreeing to a consent order
that their initial sale of the 

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ERC 20 token was a security sale
and like Litecoin write. 

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Like this is a, this is an 
Change with a long history of 

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curious listing practices. 
I previously have talked about 

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Charlie lie, not on this 
podcast. 

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But I remember mentioning that 
day that all of this came out, 

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that they were looking at. 
Do we have the names of the 

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tokens that were mentioned by 
the SEC? 

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Can you, can you give us those 
names? 

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Yes, at least several of them 
tribe, Malcolm X, X, Y 0, 

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whatever, that is. 
Gala ens and power among others.

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I'm sure I can find a listed, 
alchemax know this person 

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Insider traded elk mix. 
Apparently, I don't see, because

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this was a thing. 
There was a nine mention in, at 

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the time, coinbase only had 
seven of them listed. 

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Oh, that's interesting. 
I do think it's funny that 

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alchemax was mentioned because 
that is another thing that we 

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have not talked about on here 
but did not. 

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We're not big fans of otherwise.
Um, so yeah, I wonder, I wonder 

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what, their wonder what their 
process is for taking care of 

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all this stuff. 
I have a feeling it is not very 

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thorough but they should share 
that anyway, if they Some 

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process to determine whether 
these things are securities or 

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not and it's actual, you know, 
they're actually able to 

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determine it better than 
apparently better than the SEC. 

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Then they should probably share 
that with the SEC and with the 

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public at large right? 
Yes. 

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Well and I mean we do know a 
while ago that coinbase 

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published this blog post 
entitled improved Clarity and 

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guard rails for new assets and 
coinbase that talked about some 

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of the additional steps. 
They were taking to help make 

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sure there was no conflict of 
interest and oh my God it was 

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written by the person who got 
into Cited what like coinbase 

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coinbase after a his name, they 
did scrub his name from the 

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article though, to be fair. 
So that's good. 

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So, yeah, a lot of transparency 
from these companies is what we 

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are is what we're noticing, 
they're very open and they want 

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regulatory Clarity, but only at 
the regulatory. 

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Clarity says, my God, you're 
doing great. 

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Look at these tokens. 
How could they ever be 

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Securities? 
It's just a bunch of people 

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investing money in a Team 
control the entire thing. 

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And you hope that by making your
investment, you'll end up 

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earning more money. 
How could that possibly be a 

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security? 
Yeah, end of the story. 

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So, I that that seems like big 
truck that, huh? 

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Yeah, we do not list Securities,
period II love that bit for 

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necks and coinbase and stuff 
like end and blog posts, like.. 

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There, like a fucking 14 year 
old girl. 

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Like blogging and saying, like I
just can't deal with this 

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anymore. 
I'm over it period, end of 

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paragraph. 
Nothing else to say and you're 

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like, hmm, I think there's a lot
more to be said here, Goose 

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until you can't just say that. 
I'm sorry. 

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It's not cast their just dejenne
Builders and this is just how to

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Jen Builders who get out there 
and make things make things 

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period. 
End of story. 

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Maybe if we didn't criticize 
these things, they wouldn't be 

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Securities, you know. 
The other exchange that we 

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wanted to discuss was another 
one that's been, that's been a 

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topic of discussion for us 
previously. 

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So we talked about it in our 
crypto, in our crypto, Capital 

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core, worked directly with 
Kraken. 

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Kraken noticed red flags with 
them and drop them. 

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So we previously had mentioned 
that before. 

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I think we also have seen that 
Jesse Powell is talked openly on

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Twitter and other platforms 
about how they use Pal and other

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kind of third-party payment 
processors as ways to pay out 

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customers, which obviously, I 
think you just it doesn't seem 

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like that's acceptable, but I 
don't know. 

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Anyway, what's, what's the deal 
with them? 

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And why are they getting brought
up Suddenly as well? 

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Well, they're being brought up 
because the New York Times 

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reported that the treasury 
Department is investigating 

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them, and is likely to find them
for serving sanctioned company 

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or countries. 
Excuse me, and in the New York 

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Times reporting, they mention 
how at one point, Jesse Powell 

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shared a spreadsheet that had 
listed where all the customers 

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were that were verified 
customers of Kraken and on it, 

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they just openly list. 
Did a bunch of people and 

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sanction company countries. 
Excuse me and so they, they sent

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that in the company slack. 
And that's what Jesse Powell was

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doing when he wasn't arguing, 
whether or not, he should be 

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able to say the n-word they 
should take slack away from 

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Jesse just as an aside. 
And so it seems the treasury 

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Department is investigating 
crackin for sanctions violation,

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right? 
So we've got sanctions 

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violations and possible kind of 
what appears to be listing 

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listening security is that 
probably shouldn't have been I 

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stood, I posed the question on 
Twitter about a hypothetical and

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so I want to make sure that 
everybody is clear. 

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We aren't not asking this 
question because I think it's a 

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definite or even likely. 
I'm posing this question as a 

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hypothetical because I think 
this is what's ever on 

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everyone's mind, is this idea 
that what's the worst-case 

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scenario for coinbase? 
If if the SEC does indeed find 

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that they've listed perhaps some
unregistered securities At ease 

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and what seemed to be the 
scariest response to that was, I

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believe it was by with this is 
like the third episode in a row.

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I've mentioned, Patrick 
Mackenzie, I think Patti at 

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patio 11 on Twitter who said 
something along the lines of 

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well, anyone who bought these 
tokens that the price, they 

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purchased them at can then 
request that coinbase pay them 

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back at purchase price. 
Give them the money back at 

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purchase price. 
Would probably be pretty 

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devastating for coinbase in a 
number of different ways. 

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First off, that's going to end 
up being quite a bit of money if

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people take advantage of it and 
obviously the market is down so 

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they probably would but 
additionally it's troubling 

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because if that is proven and 
they do have to delist all these

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tokens, I would presume that 
they are going to have to delist

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many more tokens. 
And that that Could pretty much 

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fuck up their entire business 
model. 

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Yes, yes you are absolutely 
right. 

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That if going base is no longer 
allowed to list, whatever shit 

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coins, they want. 
Their business model is fucked. 

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Their entire business model, has
become charging exorbitant fees 

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to retail and trying to attract 
ever more retail investors by 

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listing and increasing list of 
shit. 

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Right? 
So yeah, if they get told, that 

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can't list most of these 
anymore, that fundamentally 

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Alters their business model, but
also that has Acid ramifications

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across the entire industry 
because if all these things are 

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securities than all the places 
listing them are doing our 

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Securities. 
Exchange is now in, are either 

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going to need to register d-list
these and do list a bunch of 

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other preemptively like you're 
talking about any of the lending

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places are now doing like 
lending against Securities and 

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need to make sure they're doing 
that appropriately. 

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And like the fundamental 
structure of everything altars 

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in a way that no one is ready 
for. 

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I guess. 
I guess I'm wondering. 

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What we're seeing with Kraken is
a far different issue. 

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I'm wondering how common you 
think that is as an issue for 

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crypto currency exchanges. 
I also am wondering. 

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I know I've written about this 
and I think you probably have 

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to, but I'm wondering about 
jurisdiction here, right? 

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So, how much will these will 
these Securities issues or 

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whatever? 
Alter, let's say, by Nance from 

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doing business or FTX from doing
business, - but I was going to 

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bring up by Nance next when you 
asked about cracking because and

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I feel like this has gone under 
noticed is that a couple weeks 

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ago, Reuters had the reporting 
that by Nance had served a bunch

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of Iranians right and advise 
lated sanctions. 

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And so this reporting coming 
from Bloomberg, so close on that

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suggests to me that the 
investigation into Kraken to 

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which she responded. 
We're always under 

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investigation. 
It was New York Times, wasn't 

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it? 
Yes. 

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Yes, but not for buying answer. 
Finance. 

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It was a Reuters investigation 
for this one. 

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It was New York Times but in 
both cases that you're going to 

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be remembered just now. 
Oh sorry. 

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You're right. 
No, it's New York Times. 

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I meant yeah, New York Times. 
Okay cool. 

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I'm just Bloomberg, Bloomberg, 
had the scoop on coinbase being 

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under investigation by the SEC. 
You're right. 

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New York Times but I think that 
I think it hints at the 

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possibility that there is a much
larger federal investigation 

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going on And we've seen 
basically a whole bunch of 

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federal agencies have ongoing 
investigations into bitfenix, 

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tether by Nance and apparently 
cracking all the time. 

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If you listen to Jesse. 
Now we know coin basis under SEC

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investigation, I think that it 
is plausible that there is a 

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much broader Federal regulatory,
wake up going on than I 

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previously assumed and that I 
might have previously. 

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00:13:55,300 --> 00:13:57,900
Misjudged it sighs. 
Yeah. 

230
00:13:58,000 --> 00:14:00,200
I mean, it could very well be 
that we have another Liberty 

231
00:14:00,200 --> 00:14:03,200
reserve on our hands, but we're 
Black Friday, you know, I don't,

232
00:14:03,200 --> 00:14:06,800
I also, I think it's our 
responsibility to not wear black

233
00:14:06,800 --> 00:14:10,700
Friday, but I, the look, I want,
I want to sing saying dramatic 

234
00:14:10,700 --> 00:14:14,500
statements like that. 
I want to equalize this and make

235
00:14:14,500 --> 00:14:18,700
sure that we are not from 
menteng Panic or, you know, 

236
00:14:18,700 --> 00:14:22,200
causing people to immediately go
out and sell whatever they hold.

237
00:14:22,200 --> 00:14:23,500
That is not what we're trying to
do. 

238
00:14:23,500 --> 00:14:28,000
We're talking about a real risk 
and the fact that it's a risk. 

239
00:14:28,100 --> 00:14:30,100
It does not mean that it's going
to happen. 

240
00:14:30,400 --> 00:14:36,500
Does not mean that anything. 
Ultimately bad will happen to 

241
00:14:36,500 --> 00:14:38,900
any of these exchanges. 
We have no idea what's going to 

242
00:14:38,900 --> 00:14:43,400
happen and in the past five 
years, nothing has happened. 

243
00:14:43,400 --> 00:14:46,900
So I think it's fair to say 
that, like if you look at the 

244
00:14:46,900 --> 00:14:51,000
past five years of History, it 
hasn't been a big issue, right? 

245
00:14:51,100 --> 00:14:53,100
So then I mean there's been 
little things. 

246
00:14:53,100 --> 00:14:56,400
There's been like the cftc fine 
against bitfenix. 

247
00:14:56,600 --> 00:14:57,900
There's been the New York 
attorney. 

248
00:14:58,000 --> 00:15:00,600
Ernie general office. 
Going after bitfenix and tether,

249
00:15:00,900 --> 00:15:03,300
wonderful things that happened. 
And I'm glad they happen. 

250
00:15:03,900 --> 00:15:08,600
But that is a very small 
numerical set. 

251
00:15:08,900 --> 00:15:12,600
When you can think about how 
many crypto currency exchanges 

252
00:15:12,600 --> 00:15:17,900
have existed and falling apart, 
or still exists to this day. 

253
00:15:18,800 --> 00:15:23,200
So, yeah, those numbers are very
tiny and even the ones we're 

254
00:15:23,200 --> 00:15:27,000
talking about real regulatory 
risk, I mean, I don't have, I 

255
00:15:27,000 --> 00:15:29,700
don't really know. 
I don't know, they obviously, 

256
00:15:29,700 --> 00:15:32,400
they're able to get Liberty 
reserve, that's in Costa Rica. 

257
00:15:32,400 --> 00:15:37,100
So I think that's a pretty 
amiable country to American law.

258
00:15:37,100 --> 00:15:41,300
But I think a lot of these 
individuals have like, 3, AC 

259
00:15:42,100 --> 00:15:46,700
and, and we already saw, I mean 
Arthur didn't Arthur Hays of 

260
00:15:46,700 --> 00:15:49,600
bit, Max Fame. 
Which is, if anyone is 

261
00:15:49,600 --> 00:15:53,300
unfamiliar is a essentially, a 
derivatives. 

262
00:15:53,300 --> 00:15:57,900
It's not, it's not it's not 
physical physically settled. 

263
00:15:58,000 --> 00:16:01,200
In exchange. 
It's like spot, right? 

264
00:16:01,600 --> 00:16:05,900
It's not spot its derivatives 
trading so they just it's not 

265
00:16:05,900 --> 00:16:07,000
spot. 
It's a it's a. 

266
00:16:07,600 --> 00:16:12,700
What's the other one futures? 
Derivatives leverage, its 

267
00:16:12,700 --> 00:16:15,700
Futures contracts. 
Yeah, it's Futures contracts. 

268
00:16:15,900 --> 00:16:18,000
Its Futures contracts. 
Its Futures contracts. 

269
00:16:18,000 --> 00:16:20,300
And they famously. 
I think the even the company is 

270
00:16:20,300 --> 00:16:21,700
something like 100 X, or 
whatever. 

271
00:16:21,700 --> 00:16:22,900
It's called. 
It's a they famously. 

272
00:16:22,900 --> 00:16:27,700
Let you 100x, your leverage and 
immediately get liquidated if 

273
00:16:27,700 --> 00:16:33,000
you wanted to do that but he 
ultimately Arthur Hays. 

274
00:16:33,000 --> 00:16:36,900
Who was the CEO got in trouble 
with with? 

275
00:16:37,000 --> 00:16:39,300
I believe it was the S. 
It was at the SEC or the doj is 

276
00:16:39,300 --> 00:16:41,200
the doj Andrew. 
Sa issues. 

277
00:16:43,000 --> 00:16:45,300
Bank. 
Secrecy Act, Right? 

278
00:16:45,500 --> 00:16:47,700
Banksy could be Bank. 
Secrecy act. 

279
00:16:48,000 --> 00:16:50,200
So yeah, Arthur has got in 
trouble, but he was in 

280
00:16:50,200 --> 00:16:52,700
Singapore. 
Kind of on the Run eventually 

281
00:16:52,700 --> 00:16:54,800
turned himself in. 
It seems like he's going to get 

282
00:16:54,800 --> 00:16:56,400
off with a slap on the wrist and
be fine. 

283
00:16:56,400 --> 00:16:59,000
I don't I don't see much 
happening there. 

284
00:16:59,200 --> 00:17:02,700
If any of these work out that 
way, I would presume it would 

285
00:17:02,700 --> 00:17:08,500
also be similar but like the 
actions of 3ac, for instance, or

286
00:17:08,500 --> 00:17:16,200
do Quan make one wonder if these
individuals Is amiable to US, 

287
00:17:16,200 --> 00:17:23,099
law and coming in and talking to
us regulators and lawyers after 

288
00:17:23,099 --> 00:17:25,800
getting in trouble. 
So I have my doubts. 

289
00:17:25,900 --> 00:17:28,099
Yeah, yeah. 
I mean there's certainly reasons

290
00:17:28,099 --> 00:17:30,300
to have doubts for several of 
the reasons you brought up here.

291
00:17:30,300 --> 00:17:32,400
One, there hasn't been a ton of 
regulator action. 

292
00:17:32,400 --> 00:17:34,700
There hasn't been a ton of law 
enforcement actions of betting 

293
00:17:34,700 --> 00:17:37,000
against. 
It has been a very safe bet and 

294
00:17:37,000 --> 00:17:39,100
then as you mentioned, 
cryptocurrency companies, very 

295
00:17:39,100 --> 00:17:41,900
intentionally play a game where 
they try to position themselves 

296
00:17:41,900 --> 00:17:45,100
out of actions and in places 
where it's going to be expensive

297
00:17:45,100 --> 00:17:47,800
or politically difficult for the
u.s. to enforce its laws. 

298
00:17:47,800 --> 00:17:50,100
Right? 
That's part of the tactic and 

299
00:17:50,100 --> 00:17:54,500
we've talked about it on half a 
dozen of these episodes, but 

300
00:17:54,500 --> 00:17:58,300
like that doesn't apply to 
coinbase, that doesn't apply to 

301
00:17:58,300 --> 00:18:00,600
Kraken. 
That doesn't apply to anyone 

302
00:18:00,600 --> 00:18:04,100
who's in a place with a pretty 
comfortable extradition treaty. 

303
00:18:04,400 --> 00:18:07,200
Like there's still a lot of 
people who are still potentially

304
00:18:07,200 --> 00:18:10,000
in play and a lot of other 
people who can have their life 

305
00:18:10,000 --> 00:18:12,100
made immeasurably more 
difficult. 

306
00:18:12,100 --> 00:18:15,100
If that The tactic that US law 
enforcement and Regulators are 

307
00:18:15,100 --> 00:18:18,400
actually intending to go with 
but like you said, there's 

308
00:18:18,400 --> 00:18:21,300
reason to bet against that and I
think that like part of the 

309
00:18:21,300 --> 00:18:24,500
regulator in action, we've seen 
over the last few years is what 

310
00:18:24,500 --> 00:18:27,400
is kind of really driving the 
manufactured outrage who you see

311
00:18:27,400 --> 00:18:30,200
in the cryptocurrency ecosystem 
in response to this right? 

312
00:18:30,300 --> 00:18:33,100
Is that oh now you're going to 
say these are securities. 

313
00:18:33,100 --> 00:18:36,000
I've been doing this for years 
and now it's a problem. 

314
00:18:36,000 --> 00:18:39,700
Cool SEC. 
I've been even trying to talk to

315
00:18:39,700 --> 00:18:43,300
you about my process where I 
rubber-stamp any that comes into

316
00:18:43,300 --> 00:18:45,800
my office and you wouldn't even 
listen. 

317
00:18:46,000 --> 00:18:49,200
Like and so like the fact that 
there has been nothing means. 

318
00:18:49,200 --> 00:18:51,900
When there is something, it's 
such a jarring contrast that you

319
00:18:51,900 --> 00:18:54,400
get these. 
We don't listen Curiosities 

320
00:18:54,400 --> 00:18:57,200
period and the story could never
happen. 

321
00:18:57,200 --> 00:19:01,500
We're way too careful about 
these tokens including one token

322
00:19:01,500 --> 00:19:04,300
that as soon as it was listed 
published a press release that 

323
00:19:04,300 --> 00:19:08,000
said, power Ledger's, power 
token skyrockets on coinbase 

324
00:19:08,000 --> 00:19:11,200
date, coinbase debut, clearly 
decentralized. 

325
00:19:11,200 --> 00:19:14,600
Clearly not a security The story
period. 

326
00:19:15,900 --> 00:19:18,300
It's it's it's manufactured its 
fake. 

327
00:19:18,300 --> 00:19:24,100
It's a yeah it's up to the point
where I recall a specific lawyer

328
00:19:24,100 --> 00:19:27,500
who I won't name on 
cryptocurrency Twitter doing a 

329
00:19:27,600 --> 00:19:31,900
little mini Thread about how 
this was outrageous. 

330
00:19:32,000 --> 00:19:36,000
That this insider trading guy 
was getting, I was getting 

331
00:19:36,000 --> 00:19:38,500
charged with obvious insider 
trading. 

332
00:19:38,700 --> 00:19:41,500
It's not outrageous. 
I think everybody is looking at 

333
00:19:41,500 --> 00:19:45,300
this and going Mmm. 
Wow yep. 

334
00:19:45,400 --> 00:19:48,300
That looks like insider trading 
and those sure as shit look like

335
00:19:48,300 --> 00:19:51,300
Securities, that's been 
everyone's response, who has a 

336
00:19:51,300 --> 00:19:56,800
working brain and to to see this
lawyer genuinely trying to it's 

337
00:19:56,800 --> 00:19:59,500
but you need somebody to defend 
every criminal and I'm glad 

338
00:19:59,500 --> 00:20:04,200
there are people there to do it,
but the arguments were so silly 

339
00:20:04,200 --> 00:20:07,900
and they amounted to like, I 
basically what I've heard the 

340
00:20:07,900 --> 00:20:12,600
best Arguments for for this, not
being insider trading. 

341
00:20:12,800 --> 00:20:15,100
And people who suggest do you 
remember there? 

342
00:20:15,100 --> 00:20:18,600
Was someone who said to us? 
Like what if what if you gave 

343
00:20:19,000 --> 00:20:21,100
maybe these people wouldn't be 
insider trading if they got more

344
00:20:21,100 --> 00:20:25,600
Equity where they got more, if 
they got better charms on their 

345
00:20:25,600 --> 00:20:30,800
employment and it's like so 
bribe people to not do the worst

346
00:20:30,800 --> 00:20:33,400
possible thing. 
Financially, I don't know, it's 

347
00:20:33,400 --> 00:20:36,300
out, it's insane to me. 
These takes at all. 

348
00:20:37,100 --> 00:20:40,100
If you want to defend the guy 
you know cool. 

349
00:20:40,100 --> 00:20:42,500
I that he needs Defenders. 
That's great. 

350
00:20:42,700 --> 00:20:45,800
And everybody needs a someone to
defend them. 

351
00:20:45,800 --> 00:20:47,900
When this kind of thing is 
happening. 

352
00:20:48,100 --> 00:20:50,700
That's part of the American 
system, thankfully. 

353
00:20:51,400 --> 00:20:55,900
But yeah, weak weak. 
Weak arguments from these people

354
00:20:56,000 --> 00:20:58,500
at least online. 
Hopefully, his lawyer, does a 

355
00:20:58,500 --> 00:21:02,600
better job than these people 
were doing well, anyway, one of 

356
00:21:02,900 --> 00:21:05,200
the last one. 
So one of the interesting things

357
00:21:05,200 --> 00:21:09,500
about that is. 
So this insider trading was not 

358
00:21:09,500 --> 00:21:12,500
detected by Brian Armstrong's 
monitor. 

359
00:21:12,700 --> 00:21:14,200
System. 
He was trying to brag about on 

360
00:21:14,200 --> 00:21:17,700
Twitter. 
It was actually a at Kobe and 

361
00:21:17,700 --> 00:21:20,300
Twitter who originally pointed 
out to these wallets. 

362
00:21:20,800 --> 00:21:24,500
And he also tweeted that he was 
asked, by several people to stop

363
00:21:24,500 --> 00:21:27,900
tweeting about this because it 
was going to be bad for the 

364
00:21:27,900 --> 00:21:30,500
industry to draw attention to 
it. 

365
00:21:30,500 --> 00:21:32,900
Because Regulators would want to
get involved if they thought 

366
00:21:32,900 --> 00:21:37,500
that was happening. 
And like it's CZ responding to 

367
00:21:37,500 --> 00:21:40,500
the block going recommend, no 
more stories like these for the 

368
00:21:40,500 --> 00:21:42,300
good of you and our industry, 
right? 

369
00:21:42,300 --> 00:21:45,100
It's the The same fucking thing.
It's if you talk about the 

370
00:21:45,100 --> 00:21:47,500
project, if you talk about the 
problems then they're real. 

371
00:21:47,600 --> 00:21:50,900
If you don't we can ignore him. 
Yeah this is and this is another

372
00:21:50,900 --> 00:21:55,400
thing we saw there's a this is 
not a regulatory risk but there 

373
00:21:55,400 --> 00:22:02,900
was a big thread about by @l 
ironic100 and he did a thread 

374
00:22:02,900 --> 00:22:06,500
about this essentially this 
thing called helium. 

375
00:22:06,800 --> 00:22:09,200
Honestly, I don't want to get 
deep into the Weeds on this one 

376
00:22:09,200 --> 00:22:12,400
but basically they were offering
like a system for people to get 

377
00:22:12,700 --> 00:22:15,900
Need to offer Wi-Fi hotspots, 
right? 

378
00:22:16,800 --> 00:22:19,500
And that was essentially, that's
the essentially, that's the 

379
00:22:19,508 --> 00:22:24,900
elevator pitch LaRon did the 
math, and it basically amounts 

380
00:22:24,900 --> 00:22:27,600
to a take, like, 200 years or 
people on Reddit, we're doing 

381
00:22:27,600 --> 00:22:30,000
the math. 
But it amounts, like, it would 

382
00:22:30,000 --> 00:22:34,700
take 220 years to recoup, the 
cost of your investment for 

383
00:22:34,700 --> 00:22:36,700
buying the hardware to do this 
thing. 

384
00:22:36,800 --> 00:22:39,700
And I actually had someone reach
out to me a week before that 

385
00:22:39,700 --> 00:22:42,000
thread or something like five 
days before that thread. 

386
00:22:42,200 --> 00:22:44,300
And Say, hey, what do you think 
about helium? 

387
00:22:44,300 --> 00:22:47,700
Like, do you think helium is? 
You must think helium is pretty 

388
00:22:47,700 --> 00:22:50,200
interesting? 
And I was like, no, no, of 

389
00:22:50,200 --> 00:22:53,200
course, like I was like, this is
this is somebody trying to solve

390
00:22:53,200 --> 00:22:56,800
The Last Mile problem but not 
even considering the Last Mile 

391
00:22:56,800 --> 00:22:59,500
and all I had to do was think 
about the people who were going 

392
00:22:59,500 --> 00:23:03,000
to be most heavily invested in 
this dumb idea and it's going to

393
00:23:03,008 --> 00:23:06,500
be people in a city who won 
don't really need hot spots 

394
00:23:06,500 --> 00:23:09,700
already, they have internet. 
But to if you were to do this 

395
00:23:09,700 --> 00:23:13,000
all over a city, you would have 
people competing all The same 

396
00:23:13,000 --> 00:23:17,400
places to be offering hot spots 
in the exact same insect exact 

397
00:23:17,400 --> 00:23:20,000
same place. 
That is unnecessary repetitive 

398
00:23:20,000 --> 00:23:23,300
and bad. 
Meanwhile people in rural areas 

399
00:23:23,500 --> 00:23:25,900
wouldn't it still would not be 
able to get very good internet 

400
00:23:25,900 --> 00:23:30,700
and so they would need to have 
wired or cable door, you know, 

401
00:23:30,700 --> 00:23:33,800
fiber you know whatever. 
We like they need they need 

402
00:23:33,800 --> 00:23:37,500
something to connect to an 
internet and generally people 

403
00:23:37,500 --> 00:23:42,400
who live in a rural area, want a
tech like service, they want 

404
00:23:42,400 --> 00:23:45,100
some Buddy to be able to come 
out and fix it when it goes 

405
00:23:45,100 --> 00:23:46,500
down. 
I don't think. 

406
00:23:46,500 --> 00:23:49,100
I don't even know if helium 
offers that I doubt it. 

407
00:23:49,100 --> 00:23:53,400
But anyway, I guess what I'm 
saying here is that there's been

408
00:23:53,400 --> 00:23:57,700
a lot of promises and conjecture
a lot of nothing. 

409
00:23:57,700 --> 00:24:02,200
Bad can possibly happen. 
And I think we're realizing now 

410
00:24:02,600 --> 00:24:08,000
that it can, it can and it does 
and not all of these things are 

411
00:24:08,500 --> 00:24:10,900
winners. 
And if you're going to list all 

412
00:24:10,900 --> 00:24:13,100
this stuff, if you're going to 
just go For it. 

413
00:24:13,100 --> 00:24:16,400
They're probably going to be 
some level of consequence. 

414
00:24:16,400 --> 00:24:21,900
I suspect eventually. 
Who knows how big or terrifying 

415
00:24:21,900 --> 00:24:25,600
those consequences are? 
Maybe they're maybe it's I think

416
00:24:25,600 --> 00:24:29,900
I asked the question originally.
I'm thinking that the ultimately

417
00:24:29,900 --> 00:24:31,700
the worst thing that could 
happen to coinbase would be a 

418
00:24:31,700 --> 00:24:36,100
fine and it sounds like it could
be much worse but that's still. 

419
00:24:36,300 --> 00:24:39,400
I still think it would 
ultimately probably be like a 

420
00:24:39,408 --> 00:24:42,200
slap on the wrist in it. 
Please don't do this again you 

421
00:24:42,200 --> 00:24:44,000
know. 
Yes. 

422
00:24:44,900 --> 00:24:49,000
So I again, we're not trying to 
stir fucking fear, his, I guess,

423
00:24:49,000 --> 00:24:51,500
is why we're not trying to start
stir fear, but there are real 

424
00:24:51,500 --> 00:24:54,300
risks and they're descending on 
cryptocurrency. 

425
00:24:54,400 --> 00:24:56,200
Well, in, right. 
I thought the most interesting 

426
00:24:56,200 --> 00:24:59,400
thing about livens read was not 
the threat itself, I mean, yeah,

427
00:24:59,400 --> 00:25:02,900
helium has basically no Revenue.
It was all over inflated and 

428
00:25:02,900 --> 00:25:06,300
tokens and stuff during a hike 
phase without any real 

429
00:25:06,300 --> 00:25:08,000
substantial there there, you 
know. 

430
00:25:08,100 --> 00:25:10,000
But I thought the much more 
interesting thing was the 

431
00:25:10,000 --> 00:25:13,200
reaction to the threat, right? 
We had like the For the peace 

432
00:25:13,200 --> 00:25:17,100
and in a 16z partner coming out 
and being like oh this is so 

433
00:25:17,100 --> 00:25:22,400
mean, this criticism isn't fair.
This is so so hard for us. 

434
00:25:22,500 --> 00:25:25,700
It doesn't even talk about all 
the great build out that helium 

435
00:25:25,700 --> 00:25:28,400
has accomplished despite the 
fact that no one seems to want 

436
00:25:28,400 --> 00:25:31,100
it and it doesn't talk about how
Innovative this is. 

437
00:25:31,100 --> 00:25:34,000
And so it's just totally not 
fair to these experimenters who 

438
00:25:34,000 --> 00:25:37,500
just want to innovate man man 
yeah there we go again with 

439
00:25:37,500 --> 00:25:41,900
experimenting an art but 
whatever also also wait I think 

440
00:25:41,900 --> 00:25:45,000
just that One, at least keep a 
key was the one responding, 

441
00:25:45,000 --> 00:25:46,400
right? 
And he was the one when the 

442
00:25:46,400 --> 00:25:49,100
podcast and gave the really bad 
houses on the Block Chain use 

443
00:25:49,100 --> 00:25:51,600
case and then later posted a 
different clip of him out of 

444
00:25:51,600 --> 00:25:53,800
different podcast, right? 
And wasn't his use case at that 

445
00:25:53,800 --> 00:25:56,200
point helium. 
I think his second web three 

446
00:25:56,200 --> 00:25:59,000
years case after he bombed, the 
first time was helium. 

447
00:26:00,300 --> 00:26:01,800
I'd have to look it up to be 
sure. 

448
00:26:01,800 --> 00:26:05,400
But yes and then he did just 
just yeah, he did a seventh. 

449
00:26:05,500 --> 00:26:12,000
The the writer is yeah response 
to know Paki broke that the 

450
00:26:12,000 --> 00:26:16,900
writer was Said that Paki wrote 
a 7,000 word, Novella Novella 

451
00:26:16,900 --> 00:26:20,800
response to that thing. 
And someone noticed that it was 

452
00:26:20,800 --> 00:26:25,400
clearly, angsty towards lorant 
Lear on, but they point they 

453
00:26:25,408 --> 00:26:28,900
were like, yeah, he deserves 
this hate and and, and Packy was

454
00:26:28,900 --> 00:26:31,700
like living in it and enjoying 
it and saying like, yeah, I'm 

455
00:26:31,700 --> 00:26:34,800
glad you noticed this because 
this guy is just a bad actor and

456
00:26:34,800 --> 00:26:39,200
it's like no man you just wrote 
a 7,000 word response about a 

457
00:26:39,700 --> 00:26:45,700
broken thing and And you're not 
even acknowledging your own, 

458
00:26:45,900 --> 00:26:48,400
your own participation. 
There were more people being. 

459
00:26:48,400 --> 00:26:50,800
I honestly wish there was more 
people being held responsible in

460
00:26:50,800 --> 00:26:53,400
some way. 
I don't even mean in a 

461
00:26:53,400 --> 00:26:55,600
regulatory sense, you know what 
I mean? 

462
00:26:55,600 --> 00:26:57,600
Like I don't want everybody to 
go to fucking jail. 

463
00:26:57,600 --> 00:27:00,400
That's not my point but like I 
don't know. 

464
00:27:01,000 --> 00:27:04,300
Time Magazine, she should not be
allowed to even write anything 

465
00:27:04,300 --> 00:27:08,400
critical about web 3 like after 
Schilling X. 

466
00:27:08,400 --> 00:27:11,300
You mean guys shield shield it 
the whole way up. 

467
00:27:12,900 --> 00:27:15,900
From axi Infinity, which they 
shield and talked about how 

468
00:27:15,900 --> 00:27:19,000
great it was for Filipinos. 
And now they're like oh my God, 

469
00:27:19,000 --> 00:27:22,500
it's a Ponzi scam and you're 
like, are you guys just who 

470
00:27:22,500 --> 00:27:26,000
could have ever figured that 
this out to their own and ftes 

471
00:27:26,000 --> 00:27:28,200
that they were showing at at the
top? 

472
00:27:28,700 --> 00:27:32,400
I'm sure that those time fucking
those Time Magazine entities are

473
00:27:32,400 --> 00:27:35,100
doing just great. 
I'm sure the floor isn't falling

474
00:27:35,100 --> 00:27:38,100
out from those things, right? 
I just give me a fucking break. 

475
00:27:38,100 --> 00:27:41,600
Dude, you're not allowed, stop. 
Oh, but you can't say who's 

476
00:27:41,600 --> 00:27:47,400
allowed to say. 
They what kind of what is it? 

477
00:27:48,300 --> 00:27:51,900
Reliable ner narrator I guess is
the word I would want to use 

478
00:27:52,100 --> 00:27:53,800
like they're not reliable 
narrators. 

479
00:27:54,100 --> 00:27:58,900
You know, they clearly had an Mo
they clearly went for it and 

480
00:27:58,900 --> 00:28:02,400
it's the same as that New York 
Times article about the cuckoo 

481
00:28:02,400 --> 00:28:06,300
birds from the latecomers guide 
to crypto, just a bunch of a 

482
00:28:06,300 --> 00:28:11,300
bunch of fucking nonsense. 
And then the same people who go 

483
00:28:11,300 --> 00:28:17,500
out and write these Like highly 
praising a bunch of garbage then

484
00:28:17,500 --> 00:28:18,100
later. 
Right and go. 

485
00:28:18,108 --> 00:28:22,300
Like I can't believe it was a 
scam and you're like maybe you 

486
00:28:22,300 --> 00:28:24,800
can't believe it was a scam 
because you did zero fucking 

487
00:28:24,800 --> 00:28:27,700
research at the beginning you 
know, maybe that's why. 

488
00:28:27,700 --> 00:28:30,600
I don't know. 
That's crazy, I guess crazy that

489
00:28:30,600 --> 00:28:35,700
journalists for respectable. 
Media operations should do their

490
00:28:35,700 --> 00:28:37,200
own research at. 
That's what I mean. 

491
00:28:37,200 --> 00:28:39,700
It's just like someone should 
hold them responsible. 

492
00:28:39,900 --> 00:28:42,000
They are the ones who should be 
held responsible as well. 

493
00:28:42,300 --> 00:28:45,400
They are the ones who help 
people forget, but like Ponzi 

494
00:28:45,400 --> 00:28:50,200
schemes work best when the media
plays right into them and says 

495
00:28:50,400 --> 00:28:52,500
oh my God, how does he do it? 
Man? 

496
00:28:52,500 --> 00:28:53,800
Money. 
That's how the first Ponzi 

497
00:28:53,800 --> 00:28:54,800
scheme. 
Made a bunch of money. 

498
00:28:54,800 --> 00:28:57,300
How does he do it? 
It's incredible. 

499
00:28:57,500 --> 00:29:00,400
Look at how much these people 
are benefiting everyone's 

500
00:29:00,400 --> 00:29:04,900
getting rich and you aren't but 
Unfortunately there's no 

501
00:29:04,900 --> 00:29:08,300
regulatory risk for this. 
There is, you know, for these 

502
00:29:08,300 --> 00:29:13,200
companies and these there should
be but none of them are going to

503
00:29:13,200 --> 00:29:15,700
get sued. 
And I don't necessarily think 

504
00:29:15,700 --> 00:29:19,400
they should but more, I think 
like me either. 

505
00:29:21,000 --> 00:29:24,100
I think that we've talked about 
before, a lot of these 

506
00:29:24,100 --> 00:29:29,700
institutions are gradually 
eroding, the trust that they 

507
00:29:29,700 --> 00:29:33,300
have left and are doing a poor 
job of maintaining. 

508
00:29:33,400 --> 00:29:35,700
Painting and continuing to build
that trust. 

509
00:29:36,200 --> 00:29:38,600
Yeah, I want to thank them for 
doing such a piss-poor job 

510
00:29:38,700 --> 00:29:42,300
because without them doing such 
a piss-poor job, we wouldn't be 

511
00:29:42,300 --> 00:29:45,500
able to talk about this and 
people wouldn't seek us out to 

512
00:29:45,500 --> 00:29:48,100
be like hey what the hell is 
actually going on or for that 

513
00:29:48,100 --> 00:29:51,100
matter? 
Molly white, who's been doing an

514
00:29:51,100 --> 00:29:55,700
excellent job of archiving, all 
these web three scams and Zach 

515
00:29:55,700 --> 00:30:00,700
xbt, who's basically a full-time
journalist exposing scam after 

516
00:30:00,700 --> 00:30:04,100
scam after scam, like he's doing
the This job. 

517
00:30:04,100 --> 00:30:06,400
So I don't know. 
I in some sense I'm like, well, 

518
00:30:06,400 --> 00:30:08,200
there you go. 
Guess we know who's actually 

519
00:30:08,200 --> 00:30:10,400
doing the hard work. 
Now, I think it was worth 

520
00:30:10,400 --> 00:30:13,600
talking about, we're interested 
in seeing how this plays out? 

521
00:30:13,900 --> 00:30:16,800
I thought that was interesting. 
They mentioned that Cuba was one

522
00:30:16,800 --> 00:30:21,400
of the countries and how many 
people 73. 

523
00:30:21,600 --> 00:30:25,800
Although the one with the most 
was Iran, which if you were 

524
00:30:25,800 --> 00:30:28,100
going to pick one of the two to 
have the most, you would want it

525
00:30:28,100 --> 00:30:31,200
to be Cupid right now. 
Yeah, totally. 

526
00:30:31,300 --> 00:30:33,300
Totally. 
I mean what Cuba's not I know 

527
00:30:33,400 --> 00:30:37,900
Are listed on the, you know, 
state state sponsors of 

528
00:30:38,300 --> 00:30:42,200
terrorism. 
But but what a fucking a 

529
00:30:42,200 --> 00:30:45,200
needless for them to be head, 
does not show the same biggest 

530
00:30:45,200 --> 00:30:49,300
the biggest threat to America. 
So I don't know. 

531
00:30:49,400 --> 00:30:52,800
I I'm not suggesting either of 
us are big fans of Cuba but I 

532
00:30:52,800 --> 00:30:54,100
just don't think they're 
something. 

533
00:30:54,200 --> 00:30:56,900
Listen. 
I don't ever worry about Cuba. 

534
00:30:56,900 --> 00:31:01,600
There are tons of problems with 
the US sanctions regime, not the

535
00:31:01,600 --> 00:31:04,800
least of, which is that many of 
the She's on it are not really a

536
00:31:04,800 --> 00:31:07,900
material threat and that many of
the sanctions are implemented in

537
00:31:07,900 --> 00:31:10,400
a way where it's not really 
hurting what you want to hurt. 

538
00:31:10,500 --> 00:31:13,900
Plenty of reasons to criticize. 
It bad idea to send an Excel 

539
00:31:13,900 --> 00:31:16,800
file in your company. 
The slack that says, here's how 

540
00:31:16,800 --> 00:31:19,700
we were violating them like, 
yeah. 

541
00:31:20,500 --> 00:31:22,800
It's been a, it's been an 
interesting week. 

542
00:31:22,900 --> 00:31:27,700
I think a lot of people are kind
of hoping that this is the end 

543
00:31:27,800 --> 00:31:30,800
of the bear Market that we're 
approaching the end of this. 

544
00:31:30,800 --> 00:31:34,800
And that was, that was it? 
I just Have no, I do feel that 

545
00:31:34,800 --> 00:31:37,100
way but my feelings just feels 
like there's more. 

546
00:31:38,500 --> 00:31:41,600
It feels like there's still some
stuff I've done my point being 

547
00:31:41,700 --> 00:31:45,200
maybe maybe number goes up, 
maybe number goes up, but I 

548
00:31:45,200 --> 00:31:49,800
think the regulatory risks are 
so much more clear now than they

549
00:31:49,800 --> 00:31:53,700
ever have been before and good 
luck to tether, by the way, with

550
00:31:53,700 --> 00:31:56,700
their new messaging service, you
know, I think that's such a 

551
00:31:56,800 --> 00:31:59,000
important thing for them to work
on right now. 

552
00:31:59,300 --> 00:32:02,500
I know that the audit is a, it's
been on its way for about five 

553
00:32:02,500 --> 00:32:05,100
years, I know they're there. 
They're working on that and it 

554
00:32:05,100 --> 00:32:07,800
should be here, probably in a 
week, maybe less even. 

555
00:32:08,800 --> 00:32:11,800
So I know they're working hard 
on that and getting this 

556
00:32:11,800 --> 00:32:16,400
messaging app up and running 
that quick proves that they have

557
00:32:16,400 --> 00:32:18,300
their priorities straight. 
So I'm just proud of them. 

558
00:32:18,300 --> 00:32:21,000
When you say, Ted that say, when
you say tethers, new messaging, 

559
00:32:21,000 --> 00:32:23,000
a regulatory risk. 
Right now, you say to others, 

560
00:32:23,000 --> 00:32:24,900
new messaging, you mean the 
video messaging? 

561
00:32:24,900 --> 00:32:28,100
Not like the whole swarm of bots
that have invaded every platform

562
00:32:28,100 --> 00:32:29,500
to talk about tether, right? 
No. 

563
00:32:29,500 --> 00:32:32,200
No, I'm not, I'm not talking 
about their beautiful PR 

564
00:32:32,200 --> 00:32:34,700
campaigns that they run. 
Inconsequent messaging that 

565
00:32:34,700 --> 00:32:36,200
talking. 
I'm not talking about that or 

566
00:32:36,200 --> 00:32:39,000
the idea that they just 
invented, Big 12 Auditors. 

567
00:32:39,400 --> 00:32:43,900
There there they've they've now 
created a new auditing regime. 

568
00:32:44,200 --> 00:32:46,900
I mean, I love it. 
Let's change the system, make it

569
00:32:46,900 --> 00:32:50,300
the Big 12 Auditors. 
Guys will have to keep track of 

570
00:32:50,300 --> 00:32:52,800
them because it'll shift 
constantly, but man, these 

571
00:32:52,800 --> 00:32:54,200
centralized everything, I don't 
know. 

572
00:32:54,200 --> 00:32:57,900
Yeah, tethers on top of it 
anyway, like subscribe, you 

573
00:32:57,900 --> 00:33:00,600
know, I don't know, hit that 
tether button. 

574
00:33:00,600 --> 00:33:02,800
That's a thing. 
I hope night then donate some 

575
00:33:02,800 --> 00:33:04,700
tether. 
To our test. 

576
00:33:04,700 --> 00:33:07,900
Arthur Andersen audit again? 
Yeah. 

577
00:33:07,900 --> 00:33:09,800
Make art make Arthur Andersen 
great again. 

578
00:33:09,900 --> 00:33:13,300
Maga maga make Arthur Andersen 
great again. 

579
00:33:13,800 --> 00:33:15,600
Make bitfenix great. 
Again, let's do this. 

580
00:33:15,600 --> 00:33:16,500
What could go wrong?