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🚨IS CRYPTO DEAD?
Recorded: June 11, 2023 Duration: 2:50:34Space Recording
Short Summary
The discussion highlighted significant developments in the crypto space, including the launch of innovative projects like Ozone Metaverse and X-Mana, which integrate DeFi, NFTs, and gaming. The conversation also touched on the shifting focus of venture capital from crypto to AI, reflecting broader industry trends. Despite regulatory challenges, the resilience and adaptability of crypto startups were emphasized, showcasing the sector's growth potential.
Full Transcription
All right, let's get this started.
It's getting the panel organized.
Give us a couple of minutes.
I should start putting music.
Sully, can you play, Joe, can you play some music?
Like, actually good music for like a minute so I can organize the panel?
Just that silence, even though I like it, I think it's really awkward.
Me and John can get right into it.
I'm joking.
Say that again.
I was joking, me and John, I was saying me and John can get into it.
But I don't have the music.
No, John put it out.
I'm going to...
All right, but we'll just put your speaker to some music, man.
You don't have to have a mixing board, but that's fine.
Let me start it off by saying the sponsors of the show.
So this is the show that we do get sponsors for,
and this is not the crypto town hall.
I've just pinned it above, and I probably should send out the invite.
Sully, you're there?
Oh, where's Sully?
I need a new co-host.
Dennis Porter, who's requested, I think.
So we got a new co-host today, by the way, Jonah.
Dennis Porter, do you remember him?
He's been on a couple of crypto shows before.
Do you know Dennis?
No, I don't know.
No, I don't think so.
I typically remember the pictures.
Hey, sir, yeah, bro.
How are you, man?
How was yesterday's show, bro.
Oh, it was really good.
It was really good.
How's Julie?
Sorry?
How's Julie.
Julie.
Who's Julie, man?
Like, I know you're joking, but I don't even get the joke.
You can't keep laughing, bro.
Can you tell me who the fuck is Julie before the rumors begin?
All right.
Don't tell me.
Let me send out the invites.
Me Julie.
Me Julie.
Me Julie.
No idea who you're talking about, man.
I don't think anyone in the audience has any idea what you're talking about.
Can you try to invite, let me co-host Dennis, so at least Dennis will help me invite people.
All right, let me send out more advice.
Dennis, can you see, can you invite AP underscore Abacus?
Because I can't see him.
And my team is listening to this.
Rick or whoever's listening for my team, can you try to find AP Abacus?
I think he's shadow band as usual.
I'm looking right now.
Let me check.
Thanks, bro.
Alright, who else?
Should we send out the invite, sorry, let me get a few more out.
Can you tell me who Julie is in the meantime, Suli?
Yeah, I mean, don't pretend you don't know.
Me Julie is Ali G's girl, isn't it?
And obviously, we've just seen a photo of you.
Oh, shit.
Oh, okay, okay.
And that's a joke.
Oh, yeah, I remember.
Me Julie, yeah, true.
Man, I miss allergy days.
Bro, you're really, I didn't know you're that old.
Jesus.
Ali G and you remember Me Julie.
That's fucking, that's concerning.
Yeah.
My co-host is like 50 years old.
Dave Weisenberger.
So for those you don't know, you can look at Mario's picture
compared to Ali G on his page and mine.
And there is a...
It was hilarious, though.
Yeah, it's Sully, you know,
what Sully messages me an hour ago,
he's like, Mario, my tweets hating on you
seem to be getting the most engagement.
So I'm like, he's probably going to stop
with his philosophical threads.
I just sweet, it's sweet.
Tweet, um, hate it about me.
He becomes a Mario, a Mario troll account.
I've got like two lined up for the next two days already.
How many, I've retweeted you, see how many, how much should it get your boost?
Shit.
Too much exposure.
Let me unretweet.
Fuck, it's too much.
Don't unretweet, bro.
Done, then, done.
I quote retweeted, or, Adanish's one.
Let me see where he's at.
Bro, he's sitting at half a million views, over half a million views.
Yeah.
Man, Dyson should definitely pay me for this shit.
Hey, everyone, so...
Welcome to the Crypto Roundtable, whatever you want to call it.
We don't have a name for this show.
So we do this every fortnight.
They're a bit more heated than the general discussions.
They're also more targeted to people like in Sully's knowledge.
So people outside the crypto space that don't know much about crypto.
Just going to give you an overview.
I put the title as a clickbait title as Crypto dead, which obviously the answer is no, but crypto is definitely not looking.
It's not dead men and I know you want to play devil's advocate, but you've got to do it at least in an intelligent way.
No, I'm reading this. I want to see what your audience is going to say.
My main man, John's here. I think he's going to agree with me, but let's get it on.
Yeah, so let me just mention the sponsors and then I want to kick off with John's thread, because John's thread is an interesting one and it's focused on Binance and the DOJ.
But before doing that.
Just for the audience, I know we just started, so just give more time for people to join.
But for the audience, the sponsors are all pinned above.
They should be.
All right, Suleep, can you fucking remove your, there's people paying to be on the show
and to get a shout out and you're sitting there pinning your stupid tweet.
All right, so if you want to check out the sponsors, they're pinned above.
And as we always do in the shows,
Bro, can you stop?
Can you stop?
All right. So, so there's four sponsors today. I think there's four. No, there's only three today. I don't know why I think there's a fourth one, but they're not there. There's four sponsors. There's four sponsors for three pitches.
All right. So why isn't the fourth one getting a shout out as well?
I will add it.
If you're a sponsor and it's missing, I'll pick the team and add it to the thread.
So if anyone in the audience, I want you to go through them and actually respond to your favorite one.
I want you to go through each of them.
I want to give out $1,000 to the comment that explains why they like one of the sponsors.
So you have to explain why.
So it just means you've done your homework and the sponsor at least gets the exposure.
They're paid for.
So the first one is chirply.
Again, it's pinned above.
They're a P-to-P influencer marketplace that connects businesses with nano-micro-influencers.
So micro-influences like, you know, people like Suli.
How many followers do you have?
You got 60K.
No, you're a nano-macro influencers.
Someone's barely got anything.
So they use AI to automate influencer marketing.
You lie to me then.
They uses, can you stop?
My mind gage is massive.
All right. So Tripoli uses AI to automate influencer marketing campaigns.
And that can help businesses reach a wider audience, increase engagement and drive sales.
So the team loves this project. I think they're working with them.
And my incubators working with them.
And this is a strategy we use in one of my other companies, non-crypto companies, working with micro-influences.
The second one who's going to be joining us on stage as well as our Fox official.
So they're a Metaverse ecosystem, which we're going to talk about the Metaverse
later today.
Thanks to Apple's announcement.
It's a bit of light at the end of the tunnel.
So they're a Metaverse ecosystem that combines Defi, NFTs, and gaming.
So they use VR so you can escape the mundane and dive into a world of limitless adventure
and excitement.
We're going to dig into them later on in the pitches section.
And then the third one is, I know who the fourth one is, X mana.
I'll add the fourth one now.
So the third one is ozone metaverse.
They're a decentralized virtual world combining the best of Web 2, Web 3, and AI.
They allow users to own, create, and monetize their own content in an immersive 3D environment.
So my team says they're one of the more promising metaverses out there.
So obviously my team likes this one as well.
Let me get the fourth one in a bit while waiting for the rest of the speakers to join.
And the fourth one is called X-Mana.
There it is, I forgot to add it.
So X-Mana is a multi-patented blockchain software provider,
focused on building the future of engagement.
The SaaS solutions merge Metaverse and Web3 Tech
with familiar experiences, empowering users, partners,
and investors across gaming, retail, and entertainment.
I've known XMana for a while.
They've launched a couple of years ago.
and I'm going to add them to the thread now,
so anyone that wants to check him out.
And again, if you want to win some money,
you could choose your best one out of those,
and you could win $1,000.
So that's a quick overview about the sponsors.
Otherwise, let's kick off the discussion.
Before we go to John, my question to Sully, I want someone from the outside to give me their thoughts with all the news you've been seeing about Binance and Coinbase.
What's your perception of crypto now after all the media that you've seen?
Just to give her, I have not very good knowledge on crypto, but I have been researching it over the last few days.
Now,
When I look at what's happening with Binance,
and I'd love to hear John's thoughts on this,
because I think he's on the same wavelength,
but when I look at what's happening with Binance and Coinbase
and the fact that they're basically,
the SEC's arguing that their securities are going after them,
I can't understand, based on, again, I read about the Howie test.
I've looked at the case between SEC and Howie and how an asset is a security,
if it involves an investment in a common enterprise,
with the expectation of profit from efforts of others.
So when I look at that,
I can't see how even Bitcoin can't won't fall into that parameter,
but I'd love to hear someone like John's thoughts and those who are Bitcoin Maxis to give me another.
Yeah, John, before responding to Silly,
because I know Sully is a pretty, you know, broad question.
I want to kick off the thread that the team sent me.
And the title of the thread is something, let me open it again,
but essentially hinting at pretty much there's already a,
a filing, where is it?
Why, so it says why the US Department of Justice will file
or has already filed under seal a Binance-related criminal indictment.
And then you have a really long thread, which I'll pin it in a bit.
she's a very very long thread so definitely don't want to read through that
that's all good so good so give us a brief overview of what that means for
finance what that means for crypto what we've seen so far with the SEC action I know
we've discussed it at length in our previous spaces and then and then how that links to
the DOJ and how much more serious is this
Sure. I think there's a lot of misconceptions out there, Mario, about what it means when the SEC seeks an emergency asset freeze. The difference in the types of actions that the SEC files. I mean, they brought...
150 or so enforcement actions relating to crypto.
And remember, the SEC doesn't have criminal prosecutorial authority.
The SEC's subpoenas are not self-enforcing.
So if you serve a subpoena on someone from the SEC, it's an administrative subpoena.
And if they don't answer it, you have to file a subpoena enforcement action.
Not like when I was a criminal prosecutor.
You serve somebody a subpoena and they don't answer.
They can go to jail or you can send the marshals to go pick them up.
So the SEC is just a civil agency.
They can get things like fines and injunctions.
And the most powerful tool they have in all their statutory weaponry with all their litigation tactics is something called a temporary restraining order or a TRO.
And that typically is associated with a request for an asset freeze.
And I've worked on maybe, you know, several dozen TROs when I was at the SEC.
And it's a very, it's used sparingly.
It takes months and months and months to build your case.
The pleadings are extensive, meaning they're exhibits.
There are typically one or two declarations from...
investigators who were working on the case.
When I was chief of the office of internet enforcement,
I was typically the declarant,
and I would say based on conversations with everyone
and everything I've read, here's what I have found.
And then every question that I say.
And I will let you carry on,
but just for the audience, for those who are not.
So when you say it's a temporary restraining order,
how long is that, how long is that for?
Is that until they've done the investigation
or is there a specific time period?
Right.
Yeah.
Right. That's why it's taken me a while to explain. So sorry everyone for that. But it's very different. Like the case against Coinbase, the SEC says, hey, we think Coinbase should register as an exchange, should register as a broker dealer, should register as a clearing firm. And then the litigation starts like every other litigation. Maybe they file a motion to dismiss. Maybe they get some extensions. Then there's discovery. Then they get some more extensions. And years go by and they file a motion for summary judgment. All of those things happen over the course of years.
What happens over the course of years in things like the Coinbase suit happens in the course of days in the Binance suit.
So you live most of the time in every single situation that there's ever, that I ever
filed a TRO, you file it in secret.
You go to the judges' chambers and you say two things that are always true in any TRO
that alleges fraud.
Number one, hey, all, given all the facts that we've found so far, we are going to succeed
on the merits of this case.
And number two, investors' funds are at risk.
And these are typically done ex parte, meaning the other side isn't even there because the SEC staff go into the judge's chambers or maybe into the courtroom, however, the judge wants to do it.
And the SEC says, look, they can't know about this because they would run with the assets.
Well, this action, like everything else in the cryptovirce, is kind of upside down.
For whatever reason, the SEC filed their general complaint.
on one day, which seemed like just the same as the action that the SEC filed against Coinbase accepted much more serious allegations.
But the procedural posture of it was very similar.
But there was a small paragraph at the end that sought this emergency issue.
relief like an asset freeze, repatriation of billions of dollars from Binance to the US, expedited
discovery, all of these things that take months and months and years are going to take days.
And the SEC then filed their motion for a temporary restraining order.
So the judge will have a hearing for that here in the District of Columbia in Washington, D.C., in the U.S.,
And the judge essentially will turn to Coinbase,
pardon me, turn to Binance.
And again, this is nothing to do with the Coinbase case,
turn to Binance and say, hey, why shouldn't these assets be frozen?
The SEC has submitted thousands of pages of documents saying why.
So why is all this relevant to what's going to happen with Binance?
Well, again, typically when I brought, when I worked on TROs,
they were so serious, there was usually a parallel criminal component.
So there was a DOJ case.
investigation going on concurrently.
There may be there was a grand jury.
I didn't know that because grand jury proceedings are secret.
But if there was a search warrant or something like that,
the FBI agents could share that with you.
Maybe there was an FBI agent embedded in my office when I was there
who might be helping and working both the cases.
So you're working very closely with DOJ.
You're giving them all kinds of expertise
with respect to securities laws.
And ultimately, usually there's a parallel criminal case filed at the same time.
But in this instance, there wasn't.
And oftentimes securities lawyers will tell you, well, if there isn't a criminal case filed at the same time as an SEC case,
then a criminal case being filed is unlikely.
Because typically, DOJ will say something to you if you're at the SEC, hey, you've got to stand down.
Our case is more important.
I mean, that makes sense.
So your argument is there's not going to be.
Most likely there won't be a criminal case even though the fact.
Even though, no, my argument is the opposite.
It's the opposite.
In this case, I think they're very likely will be.
Because if you look at the CFTC complaint against finance and you look at the SEC complaint,
they read and you look at all those pleadings.
They read like criminal indictments.
Yeah, I read your, I read you post about that.
I already post about that.
Right.
What you were arguing now.
Sorry, continue.
No, sure.
So that's why, again, I'm saying is that there's a lot of confusion out there because, again, the sequence, the timeline is just a little different.
But it seems to me that the CFTC took on the derivatives parts of the action and mentioned some money laundering violation.
The SEC mentioned no money laundering violations.
And typically when I worked at the SEC,
if there were money laundering violations,
I would allege internal controls violations
along those lines, and I would talk about
those money laundering problems,
but the SEC doesn't really talk about
They focus more on the wash trading and they focus more on this declaration from the forensic accountant from the SEC on the movement of all of these funds from all of these
Zhang CZ controlled different companies from all these different places.
And they essentially say this movie, these monies are moving around so much.
There's no way to know what's going on and everything needs to be repatriated and frozen and there needs to be as I said expedite discovery and then they have a they have a motion for a preliminary injunction usually like 10 or 15 days later and
And it's very hard.
So typically you're deposing witnesses and collecting documents.
I'm sure the SEC is served.
So, John, let me ask, let me ask Haseeb a question.
So Haseeb, just on what you said.
So what's your thoughts on what John said.
Another question I've got.
Before you get, hold on, hold on, before you go to Haseeb,
because I know Haseeb will balance it out, and I wanted to go to Haseeb too.
But just, John, one last question to you is,
Just for people that are like, all this shit that you talk, all this shit that you're talking about, everyone's been talking about we're talking about for the last few days
What is the best case and worst case scenario for Bynas over the next 12 over the next week month and year
Okay, based on what I've seen and what I've read this is just my opinion and this stuff is so unpredictable and
I think there's either an indictment under seal that could suddenly be unsealed or the DOJ could charge a criminal case.
against individuals or against the entities, I think those things seem imminent to me
based on the egregious nature of the allegations and the CFTC and SECC complaints.
So what does that mean?
What happens after they follow?
It depends on the relief that they seek.
It depends on the informants and the whistleblowers that they're working with.
You know, it moves at a lightning page.
John, are you saying this is expedited, like extraordinarily expedited?
Well, in terms of the discovery, yeah.
I think that the civil discovery in the finance case is going to happen over the course
of 10 days.
They're going to notice depositions for all of those finance officials that are mentioned
in the complaint.
So if they set foot in the U.S., they may very well get arrested if there is an indictment
under seal.
And I'm sure the lawyers of their lawyers are advising them of that risk if they step into
the United States.
Because to be clear, we've known that the DOJ, we've
We've known the DOJ was investigating Binance for years.
This is not a new story.
And I think it was in, it was soon after the collapse of FTX.
There was a story, I think, in Reuters that was quoting somebody from within the DOJ
anonymously, basically saying that they were, there was a disagreement internally about whether
to charge Binance at that time or whether they wanted to wait and get more info and kind of keep
building the case.
It seems like we can now understand why, perhaps, because of all the stuff that's come out in the CFTC complaint, which is probably the most jarring and kind of the easiest headshot, because there's stuff in there about sanctions violations of, you know, money laundering to criminal organizations.
A lot of stuff in there that's not, it's not an argument.
There's a lot of stuff in there that's strict liability.
If you are violating sanctions, there's no, oh, I didn't know that, you know, there's no defense, basically.
Correct.
So that kind of stuff we've known for a long time, CZ is eventually going to get it.
The question is going to get it is going to get it.
So going to get it exactly what?
I could, is there a high possibility that we could see and obviously we're speculating, but we could see CZ in jail?
I mean, look, CZ is in, he's in the UAE.
I don't know how willing the UAE is going to be to extradite CZ if they're like, you know, if the U.S. wants him.
Well, there are a lot of places in the world where the U.S. is not friendly with.
But it's certainly, I think it's very likely the U.S. is going to want him.
to come to the US and to stand trial for various things that have happened in the history of Binance.
I don't know whether that's going to happen.
That's a much harder question for me to speculate on.
The interesting thing, though, is that the same day that the SEC lawsuit dropped,
there was also the story that Binance was sort of, it was a little bit of a weird article,
but I think it was in CoinDesk announcing that they were sort of grooming this guy, Richard Tang,
who was previously a regulator in Singapore, to be the new CEO maybe kind of next in line.
And I feel like a lot of what that was doing was signaling to the market, hey, look, if CZ gets too hot, if something happens that we have to completely remove Binance from CZ, Binance can still continue to operate with this guy as being the new leader.
He's clean. He's a former regulator. He can put on a new face and at least give Binance the organization a makeover, even if CZ is no longer viable as a leader.
Well, Binance is going to claim that they've already gotten that makeover and that all this
conduct relates to their pre-makeover because they put Noah Perlman, it's fuck Perlman's son,
in charge of all of compliance.
He's a former attorney, a prosecutor from the Eastern District of New York, very well respected,
very well credentialed, highly credentialed.
And he in turn has hired a, they say they have 750 compliance people and, uh,
Proman claims that there are at least a dozen or so former federal agents now all working for finance.
So the idea, I don't know, maybe during the hearing, they'll bring those people up to testify to say, hey, this is old news.
We've cleaned up everything.
We don't have any U.S. customers.
All of this scheming and everything that's been alleged is no longer of consequence.
Maybe they'll do that.
I don't know what they're going to do in the hearing, but the hearing's going to be this week.
So while all of these other litigations you're sitting and waiting and waiting and waiting,
you're going to find out what happens at the hearing this week.
And then there's, like I said, expedited discovery.
There'll be another hearing intended.
John, I'm kind of connecting the dots here, right?
And look, Sam Beckman-Fried was working with Gary Gensler to figure out the law so he could almost have a monopoly in crypto, right?
Right.
Sam Backman-Fried on interview said, CZ1, he calls this, but he'll get his, right?
Now, this all of a sudden is expedited.
Two, three days after the United States House Financial Service Committee launched a draft of a new bill for digital commodities and digital securities, which would put the screws to SEC, right?
It's just weird that all of a sudden this is super fast.
It feels like retribution.
Why freeze people's accounts unless he wants to create people to create a bank run, test the reserves of Binance, do what CZ did to Sam Bankman-Fried?
That's exactly what I feel like is happening here.
I don't think there's any conspiracy.
If you take a look at the SEC pleadings, you can tell that they've been working on this matter for at least a year or two.
So why were they trying to help FTX get approval?
But read the letters that the SEC was sending to Binance saying we want all the different requests from all the different staff attorneys to all their attorneys.
So this has been a long time going.
I don't think there's anything.
I don't know that that legislation is going to go anywhere that let's.
Congress is constantly putting forth new legislation about this and that relating to crypto.
None of it has gone anywhere.
So I don't think there's this global conspiracy.
The rest of the world has.
The rest of the world has.
So two points to the maker.
Binance U.S., it's important to understand this.
Binance U.S., which is what they issued the injunction against.
They were like, hey, minus U.S.
We want to freeze your account so you can bring all the money back to the U.S.
because CZ's got his hand in the jar for some reason.
All that stuff is only about Binance U.S.,
Okay.
Binance U.S. is tiny.
It is even tinier than we thought because it turned out a bunch of the volume was washrated, right?
Binance U.S. is a failed exchange.
It was like FTX U.S.
FtX U.S. was tiny.
Binance's businesses primarily overseas.
They don't really care about Bidance U.S., which we also learned from the Tai Chi plan or whatever it was,
which is that the reason why they created Binance U.S.
was basically to be this sort of buffer state and absorb all the energy from the U.S.
and deflect them from the main golden goose, which is Binance Global.
So, Binance is going to fight.
Right.
But the pleadings are much clearer about a serious and persistent campaign to get U.S. customers.
Oh, no, no doubt, no doubt.
My point is that the injunction is against Binance, U.S.
are named.
Can't get away from that.
Yes, my point is that the injunction, which is saying, you know, shut down the accounts,
and don't move any money anymore,
that is only against Binance.
That's not against Binance.
That is not true.
Hussieb, they're trying to go after finance.
Hold on, hold on.
Go ahead.
Go ahead, Joe.
No, that's absolutely wrong.
Because the flow of funds by the forensic account
and shows that they went into the international accounts.
So they're actually targeting all of the accounts.
So this is the thing.
Once you co-mingle funds with the International,
you've effectively opened the door for forensic accounting of all of the funds,
including the funds held by the international.
The dot com.
So essentially, could they freeze the funds for Bynast International as well, Joe?
Is that what you mean?
Well, they can issue...
But this is...
But, Joe, Joe, go ahead.
They can issue an order.
They can issue an order.
There's a question then.
Then Biden has to choose.
Are they going to defy a federal court order because they're going to challenge their jurisdictional arguments?
That's a separate question.
But a federal judge can absolutely issue an order with respect to the international.
There's nothing that's going to bar that the question is, is it enforceable and is within the court's jurisdiction.
Do you expect...
This is, Joe...
Well, and likely the answer is that it's probably outside of their jurisdiction, so it's probably going to be up to whatever bank it's with to decide whether to fire eyes.
Yeah, but do you see, do you, can you, looking at historically when the SEC took similar action, financial institutions...
I'm expected to follow the SEC's judgment, are they?
Of course, of course.
And when you issue an order of freezing assets and repatriating assets,
and if that happens at the hearing,
that'll have global ramifications.
Whether you enforce it in other places is a matter of treaty,
memorandum of understanding, informal arrangements.
But the ramifications are very difficult to predict.
I worked on all sorts of cases with international monies,
with domestic.
It's obviously a lot easier to freeze
any kind of any accounts that are in the uf you just do it with a with an email or a fax you send
them the order and remember these freeze orders are not just of accounts that are known but
they're also of accounts that are unknown so when we would do an asset freeze these defendants
couldn't even go out and buy groceries
without some sort of acquiescence from the court.
And so, you know, I don't think you can easily predict the ramifications of the order.
I think it is complicated when you're dealing with international entities,
and it's certainly not as efficient as it would be with U.S. entities,
but you just never know.
And, guys, so John, John, look, and by the way, Ben, I think it's your first time on stage.
So if you want to speak, feel free to jump in any time or put your hand up.
But, guys...
Haseeb, let me go to you as a more optimistic person here.
If we do see that, if we do buy,
if we see Binance International's assets frozen,
you know,
that freezes a lot of liquidity in this space
and destroys trust even further.
What could that mean for the ecosystem?
What could that mean for all these projects listed on Binance?
What could that mean for other exchanges?
Like, I've spoken to a large exchange
and I don't want to be fee-mongering here,
but man, like I was saying things a lot milder a year ago
and that was considered fee-mongering,
which sound like nothing today.
So my question to you is...
I've spoken other exchanges, and I'm talking top-tier exchanges,
and they said, like, if Binance gets hit this way,
that's game over for a lot of them,
because you could see a lot of outflows from all these exchanges.
I just don't see how we can get out of this in the next couple of years.
That could lead us to an ice age, has you.
Am I being too dramatic?
I think you're being dramatic.
I don't know if you're being too dramatic.
The reality is that, look, Binance is the biggest exchange in the world.
It's more than 50% of global trading volumes.
It's a big deal if Binance gets her.
It's pretty clear at this point that there is going to be a DOJ indictment of some kind to Binance.
Now, is that going to include TV personally?
Is it going to mean that it's the end of the...
Most of the Bitcoin in the world is traded on binus.
Traded on minus.
Yeah, exactly.
It affects the whole industry, my man.
I'm sorry to tell you.
It affects the whole industry.
There's zero fees now on my name.
So, one, okay.
So let me, to answer the original question.
Hold on, Sula.
Go ahead.
Yeah.
So it's happened many times before that the dominant exchange gets displaced.
The industry can recover, and it will.
And there are a lot of other high-quality exchanges that are out there that can go up and take on the mantle that Binance was serving.
But it's going to be painful.
They're going to be dislocations if that happens.
And so right now, all the stuff that Binance is facing is civil.
And that just means that everything is going to be a lot more calm and orderly than if we see a DOJ in diamond, especially one that's particularly egregious.
Because that's where, you know, one day the site goes offline, the domain is seized.
We don't want to see that kind of stuff happen to finance.
That's going to be extremely disruptive.
And to be clear, you know, as much as people want to go after...
There's a lot of willingness to go after Binance, but there's also some sensitivity to the fact that these are very large financial markets.
There are a lot of players involved here, including governments.
Like when governments go to sell their crypto, which they do, they do it on Binance.
They do it on Coinbase.
They do it on these exchanges.
And so I think there's some sensitivity to the fact that these things are really important and have large impacts.
But...
If what the DOJ finds is bad enough, they might just say, screw it.
This is a criminal enterprise when you take the whole thing down.
The crypto will eventually...
The US sells Bitcoin through auction.
It doesn't sell it on Coinbase.
It sells it through auctions, forfeiture auctions.
It has sold it on Coinbase before.
Let me...
Let me...
Hold on.
Go ahead, Dennis.
Hold on me.
Go ahead, Dennis.
Yes.
Yeah, someone would try to say just a moment ago that it wouldn't be impactful on Bitcoin if we were to limit the, you know, the exchanges of like Binance, Coinbase in the U.S.
And like there's always this like kind of like theory like, oh, Bitcoin will be fine, will always survive.
And I do agree with that as someone who's just like very, very Bitcoin focused.
But for the Bitcoin companies, the ones that are Bitcoin only, Bitcoin specific, including particularly the Bitcoin miners, like access to liquidity, these liquidity markets is extremely important for their business.
I mean, we all like to live, you know, those of us who are very, very pro Bitcoin, love to believe and think about the world in the future where everything will be Bitcoin only and we don't have to worry about access to dollar liquidity.
But that's just not where we are right now.
And I would love to get just like.
like, would it be Brad, because I know Brad is very Bitcoin focused or Joe, very Bitcoin
focused. Talk a little bit about, you know, that component of like how, how do we make
sure that these Bitcoin-only companies who don't care about the crypto component have access to
dollar liquidity and, and we see the Bitcoin only companies like whether it be Marathon, whether
it be, you know, riot, these huge Bitcoin mining companies still have access to dollar liquidity.
Go ahead, Joe.
And what percentage does anyone know, what percentage of Bitcoin does anyone know is traded on Binance?
A lot.
If you believe the wash trading numbers, then you'd say a lot.
But if you think it's wash trading because there's zero fees and incentivize people to trade large volumes,
then you wouldn't think it's a lot.
Let me just ask you a question on that.
Let me, let me.
Yeah, go ahead.
Then we'll go to Ben.
Yeah.
Did you say 50% of crypto is exchanged on Binance?
50% of all crypto trading volume roughly.
And what percentage, and is that in the US or worldwide?
That's worldwide.
And what percentage is traded on Coinbase, if you know?
A very small amount.
I mean, most of the crypto in the world is traded through derivatives, not through spot.
Binance is by far the largest spot exchange.
Coinbase, of course, doesn't trade any derivatives.
Derivatives are probably 70% of the total volume traded in crypto, if not more.
Ben, I want to go to you, get your thoughts on what's been discussed so far.
Then I want to go through just latest developments for the audience.
Just to get an idea and I'll go through the SEC allegations against Binance.
I'll go through that in a bit.
But go ahead, Ben.
Yeah, thanks. I think obviously the Binance thing is significant in the sense that a lot of people's crypto journeys probably have begun since Binance has been in existence as well. And as we know, these markets are largely driven by confidence.
And it's about the consumers also saying, where is that place that we can sort of, that can displace finance?
But you've seen when it was just announced that certain tokens were going to be delisted from Binance US and Coinbase, or at least the suggestion to do so, caused a bit of panic and ripple in the market.
So I think it's more about the impact that...
as I said, people, people's journeys haven't been longer than five or six years for the most part.
I mean, us that have been around for a decade or so, that's...
they're small in numbers.
So it's this consumer confidence causes people to panic.
Other people try and get ahead of that.
So I think it's more the ripple effect of making sure that there is some sort of clear move
and some sort of want to get this legislation in place to just restore the confidence in the market.
That's probably the thing that's really important.
Yeah, so on that point, Joe, I know you've got a story you want to share.
I keep that story, the one you've shared in our group.
So I'll get to that in a bit.
And the confidence stories, one I want to talk about as well, Ben, in a bit.
First, let me let me hit back at Brad.
Brad, there's a story here.
There's a piece by Coin Desk that came out in January, 2023, so six months ago.
And the title, the heading is Binance controlled 92% of Bitcoin spot trading volume at the end of 2022.
That's by arcane research.
So I don't understand how you can still make your point that Bitcoin is fine if we see Binan shut down.
And thanks for action for sending this story out.
Brad?
Well, I don't think that Bitcoin is in jeopardy here.
I think that the crypto exchanges that are engaging in very highly risky, grayer stuff are...
All the liquidity, the liquidity is all on Bynast, right?
I don't know how it's not jeopardy.
It's not all on Binance.
I mean, if there is a shutdown of finance,
there may be some volatility in the short term.
But the ethical companies that just choose not to go off on the risk cliff and invest in the pre-mines of securities, tokens, and whatever and list them on their exchange, they choose to focus just on Bitcoin to provide that service for the massive demand by hundreds of millions of people that just want to buy Bitcoin and large companies like mining companies that just want to buy and sell Bitcoin.
that's a huge opportunity so companies like river oTC desks like cumberland mining and and folks like that
i'm sure they're still going to be able to do a significant volume for people that want to get in and out of
bitcoin in large chunks and cash app and swan bitcoin and places like that that are bitcoin only exchanges
they don't have to worry about any of this stuff because it doesn't apply to them because they're not dealing in securities
So let's go through just a bit of an update.
I'll read out some news, Joe.
Yeah, go ahead, Joe.
And then we'll go through news.
There's never been a number one exchange every bull cycle.
So the prior bull cycle, it wasn't by Nance.
But I don't know, but whenever someone looks at the history of crypto,
I tend to ignore it respectfully.
I just say crypto barely has a history.
So it's just not much data to look at when you look historically.
You look at, okay, how many big exchanges have we had?
in the last in the last eight years how many exchanges have been number one what four three or my
am i the idiot here joe four or five four that's what i mean it's just not four it's just not
that many exactly let me go through the news but before doing that crypto jack good to have you
can you give us a quick overview on the markets uh jack and it's been a while i haven't had you on
stage so it's going to be good to hear your voice just tell us how has what do you think about the market's
response
over the last week with all this news coming in
what happened a couple of days ago we did an urgent space on it I think 24 48
hours ago on that dump we saw I think we saw Robin Hood dump a lot of alcoins
and give us an update on that one and what do you expect to see once the DOJ
indictment comes out is unsealed and we start seeing what's what's in that
Sure.
Yeah.
Good to be here.
Thanks, Mario.
Been a while.
I think the last space we were on together was when Elon showed up during the FDX stuff.
So, it's been a while.
I never thought I'd say these were the good days.
Right.
Imagine those being the good time.
So then here we are now.
But anyway, you know, the one thing that, hold on real quick.
All right, sorry. The one thing that caught my eye about all this price action, you look across the world of crypto, and I put air quotes around crypto, and all these coins over the last day or two, they're down 15, 20, 25, 30%, just diving, swan diving off a cliff. But Bitcoin fell 3%.
So it's a very interesting phenomenon.
It's actually one that a lot of people expected where when you're in the really scary times of a bear market, you know, if you think of things in terms of cycles, this is the part of the cycle where things are bad, things are tough.
It's always scary.
You know, there's another monster around every corner, it seems like.
But what's interesting is when people flee their alt coins, they typically move those funds into Bitcoin.
Let's say they don't want to go to dollars or money.
or roubles or whatever.
The only other option, really, as far as hard assets go, is Bitcoin.
So all that being said, across the board, and I've been saying this for a while,
this is not the time to have alt-coin exposure, in my opinion.
This is the time to be stacking Bitcoin and dollar cost averaging,
waiting for the next sunny day, you know, years from now.
But, yeah, I just don't see...
But, Jackson, why...
Why...
Why? Why? Because another argument would be like, you know, it cannot get any worse.
And when there's blood in the waters, and I know when saying this back when FTCs collapsed,
when there's blood in the waters, that's exactly when you should be accumulating.
Isn't there blood in the waters now like alt coins that have been fucked by the SEC?
They've been screwed with all the exchanges, all the stamps, the liquidity pulling out,
all the VCs collapsing, Elameda, etc.
So what else could happen to her alco?
The SEC labeling all these different coins as securities...
What's left an attack on the tether?
Right.
Well, yeah, okay, sure.
Maybe because the tether truthers like to come out around these times.
It'd be like, aha, I told you, tether's a scam.
And it's like the same kind of message we've been hearing for the last several years.
But regardless, I try to be very measured about this stuff.
So I tend to ignore headlines and look at charts.
And the chart that has had my attention for probably three months now is the Bitcoin dominance chart.
And it's something that just shows basically the trend of the market.
Is the market buying into Bitcoin or everything else?
It's very binary.
It's like one or the other.
And in the last several months, you know, there's been this thing happening on the chart.
I'll kind of keep it very 20 IQ that suggests that.
all the momentum is moving into bitcoin and out of alts now to your point that we could be at the
pico bottom of all these all coins you know if we look back five years from now this was the bottom
whatever it could be but whenever you look at making a smart move into even if it's an all
coin trade like you're just saying hey this is a trade i'm taking forget whether i think it's the
next best thing whatever
but it's a trade I like.
You know, what you want to see is a period of sideways and stability.
And, you know, on the charts is what I'm talking about.
You want to see signs of strength in retests and accumulation and all these things.
And when you swan dive off a cliff 30%, that is none of those things.
So I really just, I can't stress enough.
This just does not feel like the right time to be moving into alts at all.
Is anyone on stage?
Dennis, go ahead.
Personally, I just kind of feel like the Bitcoin dominance chart is a little bit bullshit because you're measuring Bitcoin against what is essentially just like an infinite amount of different projects, tokens, various other things that have really sort of no comparison to Bitcoin whatsoever.
So it is kind of a bunk chart in my opinion.
I just thought I would, I think it's important for people to realize that when they're looking at that chart.
Yeah, Brad.
The only pushback I give on that, Dennis, and it's a completely fair take.
A lot of people believe that.
But the only pushback I'd have is if you treat it like a momentum, like not necessarily,
what is the number that I want to make of trade?
Like, forget that.
But the momentum against what, though?
I mean, you can add, like, we could say like tomorrow, let's say I create a new token
and somehow pumped the liquidity to like $1 billion.
Like that's happened before.
We've seen these little just terrible side projects get pumped to a billion dollars.
And that...
That takes away dominance from Bitcoin, but really there's no value there at all whatsoever.
But Dennis, maybe for a day, maybe for a week, but what you're looking at months of information.
Well, there are literal trash projects out there that just have no value whatsoever,
and you're comparing them to Bitcoin.
It's like a dominance component.
It's just like you're comparing, you're comparing tether essentially to Bitcoin and the Bitcoin dominance chart.
It doesn't make sense.
Well, and let me take guys.
Let me, let me move on.
John, hold on, hold on.
I want to make the most out of having John, Joe and John,
so John Deaton and John Reed Stark, both of them on stage.
as well as Joe.
Usually we get one or two of them if I'm lucky,
but to have all three them on stage is,
I'm gonna make the most out of it.
So I wanna go back to the SEC lawsuit,
and then I wanna go back into the argument.
I wanna see someone who supports else,
support me with an argument here.
I wanna feel a bit of hope here,
because obviously we're incubating a bunch of projects,
and we're gonna continue doing so.
We've got a pretty big portfolio.
And, you know, I'm sick of Brad Mills shitting on me about it.
Let me read out the news just to give an update for the audience.
And then I'll read out the SEC lawsuit against Bynas
and then the labeling of various tokens and securities
and what that could mean, what we could see next.
How much worse could things get?
And we'll probably go to John right after, John Deaton.
So I'll read out the news.
We have, number one, CZ, according to our data, last,
so when did he tweet this?
I think in last, yesterday or the day before.
Let me see when he tweeted this.
He tweeted it on June 10th, two days ago.
According to our data, the last 24 hours,
Binance net outflow was about $400 million.
And then it compares it to when FTCS collapsed,
and the fear then was another level.
Back then, $7 billion worth of net outflowers happened in one day,
which kind of says like,
You know, an argument that I want to ask the panel is hasn't Binance been stress tested enough.
But before we get an answer to that one and Sully, keep that question in mind because I want to go to it right after I read the news, is that Binaz has gone through all the stress testing that it needs to go through.
Number two is Binance US has informed its users that US dollar deposits have been suspended and UST withdrawals will no longer be processed.
And that's referring to Binance US, not Binance International.
True UST paused minting of the TUST stable coin through prime trust.
We've covered that story already.
I won't go into it.
Now, an argument that was made in previous spaces,
and silly, if you do me the favor and keep that as a second question,
is that we're seeing Bruce Fenton has been on stage multiple times this week.
And he's made the argument constantly.
He's like, you know, the world doesn't revolve around the US.
But then we've had others, but other people push back, say, hey, if you look at Australia,
there's Operation Choke Point in Australia.
But then if you look at other countries like Hong Kong, John N. G., I don't know how to pronounce it, said that global exchanges, so he's a legislator in Hong Kong.
He said global, and sorry, before I continue, Hong Kong is a playground for China, this is a testing ground for China.
So whatever happens in Hong Kong, we should watch very carefully because China could then implement it in the mainland.
Okay.
said that global crypto exchanges, including Coinbase, are welcome to come to Hong Kong to apply for compliance exchanges and discuss stock listing plans.
And he is willing to provide assistance.
Both OKX and Huobi compliance entities were previously listed on the Hong Kong stock exchange.
So we're seeing, again, light at the end of the tunnel.
It's like not everything revolves around the US and the US could end up losing out if they continue this crackdown.
Another one here we saw millions worth of Madik
appeared to be sent to key market makers.
That's part of the Alkoin dump.
We already saw that.
We talked about it.
Two more stories.
We've got Binance Nigeria Limited
is hereby directed to immediately stop
soliciting Nigerian investors
to any form whatsoever.
That was by the, I'm guessing,
So, yeah, it says Nigerian regulators, exactly.
Nigerian regulators cracking down on local binass operations.
We've talked about this and we had panelists,
I think it was Haseeb who said that,
that it's relatively common.
In Nigeria hasn't been too friendly towards crypto
since the early days.
And then the last one is we've got online brokerage,
Robin Hood markets said it will remove trading for some tokens
that the SEC alleged to be securities
in this lawsuit against Coinbase.
In a post Friday, Robin Hood said it will end support for the native tokens of the blockchain network Cardino, Cardino, Polygon and Solana, effective June 27th, so in about 15 days.
After the deadline, the company will sell these tokens and market value and credit the funds to customers.
It's probably why we saw that massive dump.
The SEC sued Coinbase earlier this week,
and they've included a whole bunch of tokens as securities,
a bunch of crypto assets and securities,
and that included Solana, Cardano, and Polygon,
as well as tokens like Sandbox and Axi Infinity.
So these are the stories for the week before digging into...
Binance a bit deeper again.
We got both John and Joe here.
The first question I had is about Binance being stress tested.
And maybe we'll go to, I'm going to go to the,
I'm going to go to the mad scientist about this point and then Joe afterwards.
And then just to get your thoughts on...
Look, other than regulators cracking down, if Bynas has done the right thing and if customer funds are sitting there, they haven't spent them and misallocated them, which is criminal, of course, doesn't that mean like Bynas could be weakened, could be slowed down, but it will always be there, scientist, and then we'll go to Joe and John.
I mean, Planis has been stressed tested a lot.
I mean, that's just kind of a general fact.
But, like, when we're talking about these outflows and everything else, like,
if we dive further back in, like, history, right?
Like, there was the China fight, right?
And that went from 2017 all the way forward, right?
And as the China Bandit, Unbanded, Bandit, Bandit, Unbandit, right?
Every time that news came out, the market reacted less and less and less, right?
For the last, what, since FTCX dropped...
right we've been hearing exchanges are going down
doj right every time it drops just a little bit
drops just a little bit drops just a little bit right
I think that this is literally kind of market apathy
to these headlines right like while all of us
in the industry understand this is a very big deal
and this is huge right
those that wanted to get out
Look, it's been eight months of pretty much turmoil in the market, right?
One thing after another, between banks going down, between FTC's collapsing, one thing
after another, right?
If you were going to get out of the market, you probably already got out.
Like that's just kind of where we're at with like where are these gone.
And the market's just apathetic to it now.
Right. Like they're just sitting there like, oh look, another government doing another piece of enforcement.
Okay. And they just don't care anymore.
and I mean I don't know if Binance has done the right thing not done the right thing
I have heard on inside channels that no you've been you're the scientists you've you've been
you've been critical of Binaz since FTX days and not many people have like I would
label I have people I can count on one hand that were they were loud about biners
back during FTCS collapse and you were one of them.
So is that what you're seeing now?
Is it worse than what you expected what you feared back then?
Or is pretty much what you expected?
I mean, this is all kind of what we expected, I think, across all of us that had like,
had were any remotely critical of Binance.
And look, like I was a Binance customer way back when,
um like got the bnb airdrop a long time ago right like that that long and you know i mean is one
of the guys pointed on here like that's where i started but like they is an awful lot of rumors
of them doing sketchy stuff you follow their wallets on chain and right there's no context of
why they're moving it but there's some questionable things that happen right and so
right wrong or indifferent why those things happen is going to have to come out and then you know
like someone else's law on here said finance us and ftx us both of those in my opinion were just uh hey look
we're trying to do the right thing us and they just kind of existed for that purpose but i don't know like
at the end of the day finance has been stressed us pretty hard joe what what are your thoughts on that same
question
Okay, the answer is nobody knows, including the SEC.
And if you look at what has been put forward, not just in the allegations,
but in the supporting emails, documentations, and the declaration of the forensic auditor,
we know the following.
We know that the finance executives, the finance auditors,
and attorneys purportedly representing both finance and binance.
US have given contradictory information about the assets controlled by Binance US and the international entity.
Okay.
And I've posted documents which have sites to source materials attached to the SEC TRO petition.
These are not just allegations.
These are direct documents where the SEC is saying, look, we've been reaching out for months up to an including May and early June just a few days ago.
And we're getting contradictory reports of how much assets are currently held within the Binance.U.S. entity.
entity. Okay. That's the basis because we cannot the little I'm reading from the
actual petition the SEC does not have confidence in the numbers that are being reported
by Binance on behalf of their counsel. Right. That's that's the core of what's going on
here and that's the basis for the TRO petition.
You can read the allegations and the citations of the source materials, look at the emails and look at the statements themselves.
They were all over the place. They were at $2.6 billion, then they're at $1.9.
But we do know that there are accounts that were beneficiary accounts for Z in the United States.
And if you read the last screenshot, I just posted in the nest here, okay?
And again, these are, you know, the SEC's position.
Maybe there's a different side of the story, well, we'll see.
But it says that, you know, since...
At the end of March, 2023, accounts are down to a balance of 180,000.
They're at $840 million as of January 1st of this year.
So there's significant amounts of money that were U.S.-based domiciled,
and they're getting drawn down and withdrawn from the United States.
And if those are tied to the Binance.
U.S. entity and they're pulling Binance U.S. funds out of the country,
that's a real problem, guys.
And I think people are underestiming how significant this is going to be at this TRO petition.
John, are you in a similar boat as John and Joe, John Deaton?
Because we haven't spoken about this for a while.
I know you jumped into our stage a few days ago, but briefly.
Okay.
What are your thoughts on the imminent on ceiling by the DOJ and the SEC action on Bynas?
Where do you see Bynes over the next few months?
And then what could that mean for the market?
You know, I read earlier that over 90% of Bitcoins trading volume is on Bynas, let alone
the rest of the Alcoins.
I think people have to assume it's going to get worse before it gets better related to the
market.
I agree with Joe.
And I agreed with John a long time ago.
I rarely agree with John Reed Stark on many things with the SEC.
But I agreed when I read the CFTC complaint, I think Joe and I may have predicted that finance was looking at a criminal indictment.
There was a report three, four months ago that the DOJ was split on indicting Binance back then.
And when you do look at the source documents, Joe was talking about it.
This TRO is going to be very interesting.
And I think everyone has to assume that there is some meat on the potatoes as it relates to finance.
I mean, meat on the bone as it relates to finance.
And so I would predict that there is going to be a criminal indictment.
And I don't disagree with any of that.
The thing I want to remind, one thing I would remind people, though, is when the SEC makes a claim that something's a security does not make it a security.
Period. A court makes it a security.
And we're going to see very soon this week with the Hedman emails how the interworking of the SEC, how they debate it, whether or not Ethereum was a security, whether or not XRP was a security.
Okay. But remember, an investment contract is about the circumstances surrounding the cell.
So just because the SEC says these tokens are all securities don't make them.
This ripple case is going to decide how a judge interprets.
And the SEC agreed in a response to something I filed a long time ago, they stated,
it is up to the court to test the validity of the SEC's theory.
And I think the SEC's theory as it relates to the underlying token is deeply flawed.
Why do you think it's flawed though?
Because when I'm reading it, it seems quite strong.
I mean, if you look at the SECV Howie the Howie test and you look at the interpretation of it,
I mean, the fact that the SEC have interpreted these coins as securities is actually a very strong argument.
And they've been pretty, and John, they've been they've been pretty vocal about it since the ICO days.
I've read a bunch of quotes about it.
Yeah, yeah.
I mean, if you look at the definition, it's very sound.
No, first of all, an ICO clearly means the definition.
The Ethereum ICO clearly met the definition and satisfied the Howie test.
I don't think anyone could argue that otherwise.
Okay, but here's the thing.
When you're talking about secondary market sales, there's not a single case in history.
that found a secondary cell of an investment contract to also be an investment contract.
You must determine the circumstances of the cell at the time of the cell.
So if the SEC can prove that when I buy Ethereum or XRP off a Coinbase,
that I did it as a common enterprise with Coinbase,
Then maybe.
Okay, but the best case the SEC has, in my opinion, of Coinbase is the staking argument.
That's the closest they're going to get to Howie.
But the point I'm saying is that everyone just falls for this narrative of Gary Ginsler's,
that the underlying token itself is a security per se in perpetuity.
And that's just not the law.
And there's not an attorney that can disagree with that.
And John, can you also speak to the fact that there was the Hillman, Hellman, or whatever his name is with the emails?
He came out and said Ethereum is not a security.
And so what's the difference between that and something like?
What's the basis of that, Joe?
he came out and said it was the security what's the basis of why he's saying it's not a security the problem is if that's not a security based on the rationale that he had
the definition though i need to the rationale you can't just appeal to authority and say he said it like what is the definition that it doesn't
um me by him saying hold on but you can't appeal authority but these are this you're talking about the SEC they're the ones that determine the shit right he's from the SEC
Right.
EFERCELFITUCCA
sufficiently decentralized term came from that speech.
Understand something.
Right, right, which had no basis in case law, right?
We can agree there's no case law that supports the idea that something can become sufficiently decentralized.
There's no support either way.
That's the point.
He made this statement in a speech, right, which the SEC now claims he was not speaking for the SEC when he gave that statement.
Yes, there's no doubt sufficient decentralization is not a factor in the Howie test.
And there's this theory.
And Chairman Clayton stated that he agreed with it.
Hester Perce agrees with it.
Hennman agrees with it where something that is initially an investment contract,
a.k.a. security can transform.
And so there's not a lot of case law.
Joe's talking about is absolutely true.
There's no case law.
That's why people were referring it as the new almost the Hinman test,
the sufficiently decentralized test.
But in that speech, he didn't define what sufficiently decentralized means.
That's why I said these emails that we're going to see on Tuesday
that are all going to be limited redactions,
we're going to see there's 63 of them.
There's 52 versions of that speech,
52 drafts of that single little speech,
at the SEC, we're going to see how the SEC struggled with it.
Okay, and I remind people, and on June 13th, 2018, the SEC wrote an XRP Howie memo,
analyzing XRP under the Howie test.
That's been protected under deliberative process privileged.
However, the judge noted that there was no recommendation made.
In other words, it's clear the SEC enforcement officers didn't say,
boy, it's very clear that XRP is a security security.
But we're not going to say anything to ripple.
There was no cease and desist letter.
There was no recommendation enforcement action.
So even the SEC enforcement lawyers were struggling in 2018 whether XRP met the how he tests.
And Gensler, there's video of Gensler during his course saying XRP isn't a security.
It's a currency.
So it's like so much confusion that these people have been spilling for years.
So what?
He said that during his course.
I've been teaching law school for 20 years, both at Georgetown and Duke.
And, God, I'm sure most of my classes were recorded.
And who knows what the heck I said?
So, I, that's just, I think, consistency is what we've been asking for, John.
But how is that consistency?
That has not a good point.
The issue is, when it comes to these coins and whether they are securities,
it's something that is from the grand scheme of things, quite a new issue.
And you can see why there will be this kind of discussions about whether it is
or whether it isn't.
But when you look at it on the face of it in terms of how we test,
not only the 46 cryptocurrencies that they wanted to classify recently as securities.
I mean, I wouldn't, and I want to hear some arguments later.
A lottery ticket could be a security under the Howie test, Solomon.
A lottery ticket could be a security.
Sorry.
Let me just say.
Yes, you can, John.
I want to hear how even Bitcoin, I mean, I wouldn't be surprised if later the argument is made.
And I want to know what the counter argument of this is why even Bitcoin isn't.
I think.
I mean, those are great questions.
Let me talk about it.
If we go to Bitcoin, right, and you talk about the Howie Test, if Satoshi Nakamoto, when he was mining Bitcoin or she or they or whoever the hell they are, was mining Bitcoin and reached out to someone and said, hey, I'll give you 100,000 Bitcoin for, you know, some value.
That would meet the definition of the Howie Tests.
Okay, period. Now, it could be an accredited investor and it could be exception and all that, but that would constitute meet the three factors of Howie and the third factor is a two-part factor, so some people caught four. But the point about Gensler, I agree with John Reed-Smith, where he says, yeah, who cares what Gensler said? This is why I care because...
Not what he said about currency or not.
He stated that Ethereum and Ripple needed clarity in 2018.
April 23rd, 2018, he said the market needs clarity, ripple and Ethereum need clarity.
And then today acts like it's been crystal clear since 1946.
And so we can't, we can't forget the narrative.
A couple quick things.
Well, I get it.
Can I address some of John's stuff?
Because I think John makes some great points.
I think...
Yeah, Guy, we'll get Bitcoin point.
That was hilarious and terrible.
John, John, what I'll do is I'll get Corey to respond quickly just to balance it out and then we'll go to you, John.
Thanks.
Corey, you're there?
Corey, can you hear us?
I'm waiting for the person that was going to speak, but...
If you want to just go for one sec...
Yeah, go ahead.
Just on the Bitcoin argument.
Go ahead, Corey.
And it's so funny, the narrative, the cherry picking of the alt-coin fans from that speech itself is just beyond logic.
You can actually see a screenshot of some of the transcript there.
And...
Everything that Hinman said in that 2018 speech points directly to Ethereum being a security
into having been marketed and sold as a security and to the ongoing activities of the Ethereum Foundation
and consensus as being the marketing and the selling of securities on an ongoing basis.
So I invite you to go ahead and take a look at that and actually read the damn speech that always gets quoted.
Okay.
Yeah.
That's a great point.
I mean, first, let me say some things about John Deaton being right because I appreciate that he's making some excellent points.
He's right that the SEC is just a civil litigator.
And when they say something's a security, that doesn't make it so.
You know, again, I was chief of internet enforcement for 11 years, filed lots of cases.
And it doesn't make it so until a judge says it so.
So I agree with that. I also agree that John's kind of tapped into this odd things that happens at the SEC where somebody comes to work at the SEC for however many years, gets up and makes speeches about things, puts the usual disclaimer on there saying these views are their own and don't represent those of the commission.
But he's exactly right that when you write a speech like that, it's not surprising that there are 30, 40 or 50 iterations and
and edits of a speech like that because the SEC still considers it important.
And if you're making a speech like I often did in lots and lots of different situations,
you want to make sure that it's consistent with what the commission wants and what your boss wants.
So that's just human nature.
So I think he's tapped into an area that creates a lot of confusion.
And my view is, you know, again, having worked at the SEC for almost 20 years, people,
they come and go.
I worked under, I think, eight or nine different administrations, priorities change.
And that's just the reality, whether it's right or wrong.
If I look at all the cases, though, and Suli, you asked about the Howie tests.
You know, I've litigated Howie on numerous occasions in the cases that we brought.
during the time that I was chief,
because there were a lot of very esoteric
and eclectic offerings over the internet.
You know, eel farms and ostrich farms.
And of course, this is a very broad rule.
And these aren't, like Gensler said,
Chair Gensler said, these are not laundromat tokens.
Promoters are marketing,
and the investing public is buying most of these tokens,
touting or anticipating profits based on the efforts of others.
They're not buying them for their utility.
And if you look at the best example I can give,
You know, of course, as I said, the SEC has brought 150 cases, some they've settled, some they've litigated, like telegram, like KIC, like LBRY.
You can read all the pleadings in all those cases.
I know John Deaton has read them all.
I've read them all.
I'm sure Joe Carl, Joe has read them all also.
And, you know, but I think that if you take some of the cases, there's a case called SEC versus Lauer, which involved these bogus instruments called prime bank instruments. These were bogus instruments purporting to represent a secondary market for standby letters of credit.
Big mouthful, big nothing, totally fictional.
The Chicago Housing Authority bought $4 million worth of these things.
The SEC sued.
The defendant said, well, the SEC says these are securities,
but the SEC also says they're a fiction.
How can they be as securities if they're a fiction?
And they took it to the Seventh Circuit,
and the Seventh Circuit still said these are securities,
because if they were what they purported to be, then they actually would be.
So I look at Howie as a very broad test,
whether you're talking about, initial coin offering...
Simple agreement for future tokens, staking, lending products, whatever the iteration, whatever the concoction.
That's how I think Joe is going to rule.
John, before I go to you and Ben, I want to get your thoughts on this as well.
There's one thing I want to read out from the SEC lawsuit against finance.
They kind of get me a bit worried as well.
I'll read it out and then Joe, I'd like you to respond first to it.
But Ben, first, I'll give you the mic just to respond what's been discussed so far and then I'll read out that particular section.
Go ahead, Ben.
Yeah, you were pleading before for someone to make a ballcase for ALTS because you said...
Alt, yeah.
Look, if we're talking about, if now we're discussing whether Bitcoin's a security,
which obviously I don't think it is, but if now we're having that discussion and we're kind of...
I don't want to have that discussion because I'm not a lawyer, but...
Okay, bro.
All right.
Well, we'll see what the courts,
whether the law streets,
you know,
you know,
let's look at what happens with XRP
and what happens with the rest of the tokens
and what happens with CoinBenz and Binance
before we look at Bitcoin.
But then, Ben,
how can we make it,
how can we make an argument for Alcoins then?
Yeah,
so I think that basically you,
this,
what a great number of points
have been made by the panel and,
Very, very, very good points.
But the thing is that if you go back to that China fud and all the rest of it,
people were sweating.
If you remember, Binance delisted all the Chinese tokens,
a few brave souls, myself being one stupid or brave, whatever you want to call it,
took that opportunity.
But ultimately,
what will happen is people will look
for some sort of market indicator, right?
Because people come in
and that's why they,
in the old days,
they bought tokens that were worth one,
Satoshi.
People want to,
as you said,
act in the way of a security.
They're in for games,
not for utility.
And the thing is that
soon as there's some sort
of clear direction in the market
or soon as there's some sort of,
okay, these are allowed to exist,
these are not allowed to exist.
There's a lot of conjecture
about this trying to push people towards
more anonymity based as opposed to out in the open projects.
But the fact is, as soon as that steer comes through,
people will say, now's a good time for us to buy.
It's a safer time for us to buy.
These alts are trading at a great discount or a marked...
discount from what they were before.
So I think that this legislation or whatever happens,
and it looks like they're going to move pretty quickly
on the Binance side of things,
will give a wave of people,
especially those that are already in,
confidence in the fact that is an okay time to buy,
whether or not it takes...
X years to recover, that remains to be seen.
But the fact is that that will be the indicator for people to say,
all right, let's get in and buy the results
because there's been clear, decisive action taken.
So let me read out a specific section from the lawsuit,
and I'm going to get your thoughts on it, Joe.
Okay.
The defendants and talking about Binance,
Binance defrauded equity, retail, and institutional investors about purported surveillance.
I wasn't, shit, I knew I'm going to mispronounce that name.
Surveillance and controls over manipulative trading on the Binance US platform,
which were virtually nonexistent.
Can you explain what that means, Joe, I'm sure you've read it before because I know you've gone through the lawsuit?
What do they mean by manipulative trading on the Binance US platform?
which were in fact virtually nonexistent.
Yeah, they have damning emails all the way up until March and April of this year, guys,
where the folks, employees at Finance at US are chatting back and forth to one another saying,
We don't know whether there's wash trading on our own platform.
We can't prove it.
And even the surveillance, they style it as surveillance company A,
reportedly some contractor they tried to hire to monitor watch trading on the platform.
This is U.S. base, right?
They're saying, we can't verify this.
We just tried to do some attempted wash trading.
It went through.
There was no safeguards in place.
So this is that what you, the allegation you're referring to is related to the context.
the fact that they had very little controls, not enough compliance.
And this is ongoing and continuing through just a couple months ago.
So it's kind of stunning.
And it's not just, again, it's not just an allegation in the complaint.
There are emails and supporting documents and chat logs they obtained attached as evidence in support of the TRO.
I've got another one here.
The defendants made representations, let me go through it now.
Bynes made representations to investors about controls they claim to have implemented on Bynes U.S. platform while raising approximately $200 million from private investors.
Do you know what they mean by, so what does that mean exactly?
I'm trying to break it down and I took the main sections.
I can break that down for you because there are different ways that the SEC will sue for fraud.
You might be defrauding your customers or you may be defrauding your investors.
And if you look at the first FTX complaint, it was about FTX investors and SBF defrauding them, as opposed to the customers.
I think later on it's been amended and moved around to consider the customers.
So the SEC often sprinkles different types of constituencies in there.
And in that sense, they're saying, look, you told your investors that you had all these internal controls, that you have all this wonderful compliance, that you're not doing anything unlawful.
but you were all along.
And that's a different kind of fraud.
And the remedy for that isn't necessarily an asset freeze,
though it could be, the remedy for that is rescission
and your investors get their money back.
So that's sort of a different line of relief
that the SEC can seek because of those allegations.
And then the last one I want to dig into is the commingling of funds.
And that's something that obviously rings alarm bells reminding us to FTX days.
But then when you look at the numbers that I mentioned in the lawsuit,
I know Reuters broke down a story who said billions were commingled.
But then we look at here, they talk about the Binase's U.S. affiliate transferred at least $145 million
to an account of a CC-controlled entity, which then bought a yacht.
Can you elaborate on that one, Joe, and whether the billions in commingled funds that
Royder's reported is...
is, you know, accurate? Could it still be a possibility?
I don't think, here's the thing. I don't think they have a good, good, clear idea.
I mean, that's the problem. I mean, as the SEC alleges in the TRO position, they don't have
confidences from the assurances in the documents they have so far. They've seen hundreds of
millions of dollars move offshore in the last several months. And that's stated in the, in the
nest, I pin that allegation that they put forward in the TRO petition.
So I think there's not a clear understanding as to how much this is.
I think at one point, the finance that U.S.'s attorneys said there's 2.6 billion in the finance
U.S. entities accounts in the United States approximately 140, I think,
440 was cash in U.S. banking institutions.
Some of those institutions are now zeroed out in the last several months.
So who knows if the finance international entity is bleeding and they need to draw on U.S.-based accounts to support it?
I mean, I don't think anyone has a clear idea, and that's part of the basis for the emergency relief.
all right so i want to go to john i'll let you respond and then i want a panel to prepare for the next
question moving away completely from the from the binance lawsuit the the the the imminent doj action
we've got the coin based lawsuit and the other news that i mentioned is that what what happens next
for crypto like this one i want to really really focused on i probably go to del john and jack afterwards
because the fear and greed index is sitting at 47 george you sent it to me so it's recovered from
the laws that we saw a few days ago
I know a lot of you don't give a shit about that index, but I still think it's an interesting indicator.
Instead of being way in the red, why are we neutral?
Why aren't we dark, dark, dark red considering Operation Chalk Point, whatever is in full action?
But John, I'll let you add on to what George has said.
Sure.
I would just add that what's interesting about the declaration, and Joe's absolutely right.
These supporting documents of the TRO create just this.
endless supply of inculpatory evidence that's direct, you know, like real account statement.
So if you look at the signature and silver bank accounts and the number of accounts that CZ had
beneficial control over, that to me is compelling evidence that you put in front of a judge,
even though you might not know where the money is going or how it's moving, you sit down
and say, why does one person have so much control over so many accounts?
Right.
related to a business, that's going to create at least some questions from the judge, and the judge is going to need to hear something definitive and from those witnesses as to why these accounts are structured that way.
Because, again, and there's a declaration, Joe, you probably notice this also, that's missing.
The last I checked in the pleadings, there's a declaration also from an attorney, not an accountant.
that is cited in the memorandum of support.
And that declaration I don't think has been made public as...
It's going to be filed under seal, John.
That will be filed under seal.
And why do you think that is?
Why is that going to be filed under seal?
You know.
Yeah, exactly.
It's probably because it relates to a criminal proceeding
or maybe there's evidence in it relates,
not to a criminal proceeding,
relates to...
a potential criminal indictment and contains information that the criminal authorities don't want
release or that there could be something in there that would lead to even more assets being
depleted or even more evidence being destroyed. I've never done that. I've filed lots of
declarations that I've never filed one under seal because again, the DOJ action is usually concurrent
so you don't have to hide anything.
But that's where all the meat and the guts of the complaint of all the allegations are in those declarations.
So there's more to come, and it's going to come quickly.
Mario.
yeah go ahead i i think people need to appreciate what john just said about coming quickly
unlike the ripple case where they didn't seek a preliminary injunction or a t r o you know the government
is very confident uh if they weren't confident they wouldn't brought a t r o which they have to meet
this substantial likelihood to succeed standards so um
I think what people need to appreciate is this week, we're going to hear much more information and we're going to just see how bad it gets.
I mean, and you just said, John, that it's going to come quickly.
And this is just to anyone in the audience or even someone who's a Bitcoin maxi.
It's going to come quickly.
I mean, Mario mentioned that 92% of the Bitcoin volume is in Binance.
Someone else mentioned that 50% of all crypto is in Binance.
You also have...
Trade and Binance.
Yeah, yeah, trade and Binance, sorry.
You have...
basically the SEC going after various cryptos, you know, XRP, DASH, Tron, Cardona,
Binance coin.
And then, I mean, according to me and a few others on this panel, Bitcoin does seem to be also
meet the how we test.
I mean, this sounds like, and then we're going to talk about other things on this,
but this sounds like Bitcoin may be.
This is crazy.
Okay, 92% of the volume of Bitcoin trading is not happening on Binance.
That's just insane.
And, yeah.
Just saying that Bitcoin is a security.
So do you have any...
Brad, Brad, do you have any sources?
Just go on...
Go on Massari. Go on Coin Gecko.
Go on CoinGecko. Go on Coin Market Cap.
Go anywhere and just look at the normalized volume.
Maybe the fake, like, wash trading with zero percent fees volume is 90%.
Or it's hard.
It's hard to know.
Wait, don't you guys remember in 2017 when the Chinese exchanges had zero fees
and they were like 90% of the Bitcoin volume?
And all the bitcoins were saying that's no pay attention to that
because they literally incentivize you with tokens and yield and all the stuff to go and do fake wash trading.
They actually incentivize market makers to go on their exchanges with zero fees.
And they do you farming.
Let me, before moving, before we're doing towards, I think it's, I think Binance is active.
I agree that, but I've always been saying for the last few years before FTX blew up and
everybody was excited about Coinbase.
And I was saying like, hey, listen, like, look at the new signups to Binance.
Can we look at, Brad, can we look at Coinbase lives in terms of users and bar.
Okay, so can we can we, can we look at coin market gap as the source for, for the trading volume on Binaz?
I'm looking across Masari,
Coin Gecko, Coin Market Cap,
and just go to the normalize.
Let me just put in a word here that Brad is absolutely right.
Binance no longer allows zero fee trading.
So that 90% number that you quoted from an article in December or whatever, it's a very
stale number.
It turned off, they turned on fees again.
Yeah, so it looks, it looks, it looks a lot.
So coin market cap puts it as much lower numbers.
It puts that at a 17, 18, just under 20%.
I think Corey can't hear me.
There's supposed to be 57% of-
Yeah, there's a lot of fake exchanges on core market cap, but, you know,
You're probably a good estimate is 40-50 people.
Sully, just, just tell, tell Corey, tell Corey that he can't get him back up.
Corey, can't he moderate.
Yeah, there's some, I'm going to come back up.
Yeah, there's somebody I can't hear.
Yeah, yeah, go.
Yeah.
So, so the question, yeah, the question, the, the,
Yeah, so based on coin market cap, guys, the number.
Even if it's 50% account about Hasib said, that is a lot.
Not 50, bro, Bynas is sitting at,
the coin market cap says it's at 17, 18%, if that number is actually.
Hasib said that he believed it was 40 to 50%.
So I'm just going on what he said.
Of all crypto or of Bitcoin?
Hasib.
There's a lot of fake exchanges on corn market cap.
I would not take coin market cap at face value.
Look, crypto has a significant majority of...
Let me ask, hold on, let me ask.
Bitcoin, that's all of crypto.
Hold on, Brad, you know, hold on, guys, guys.
All right, so I understand Bitcoin is different to crypto.
But the question I want to move, I want to move on from this,
and I want to talk about the future...
I'm John, Steve said 50% on Bitcoin.
That's what I want to clarify, 40 to 50%.
See, do you think is...
Mario, we've also not gotten a good debate on...
Is this an important point?
Do we really need to debate this?
No, no, I don't know why Sully is just sticking to it.
No, I mean, it is an important point because obviously...
A big trading volume.
We don't know the exact number, but it's a big trading volume.
Even if it's a large number, it is an important point to consider.
Yes, yes, we all agree it's a big number.
No one's disagreeing with you.
And we all agree it's going to hurt liquidity.
Brad is living in a different world that thinks Bitcoin won't be affected.
But everyone else agrees it will be affected.
I said short term it will be affected,
but long term it's an opportunity for Bitcoin-only companies to take all that volume.
Fair point.
Look at the fear and greed, Mario.
It's like, it's not even, like, during FTX, it was at eight.
Now it's a 47.
Yeah, which is really, that's my next question that I want to debate.
People don't care.
Yeah, yeah, I don't think they don't care, but look at the market dumping.
So let's look at the price.
That's parking makers, but let me know.
It's not retail.
Yeah.
I want to ask you a question quickly to the to the to John John and Joe.
last question.
Does anyone on stage think that Bitcoin is a security before moving on to what's,
what's next for crypto?
This is John.
Nobody does.
Absolutely not.
And John Reed Stark, do you agree with Joe and John?
You know,
I'm not going to take a position on that.
I need to write something on that before I really just say something out loud.
So let me think about that.
John, I didn't expect that.
I think there's an argument you can make that it is, but I've never made it.
So I'll, but maybe I'll write something on that.
But would you say, would you say?
John Deaton, did you not say that you believed that Bitcoin didn't meet the Howie Test?
No, absolutely does not meet Howie Test.
What I was saying is that...
If you, every alt coin starts off as a security in the initial sales, whether it's an ICO or whether it's not.
So even, you know, people think that I defend ripple all the time when I don't.
I said that the SEC could have absolutely proven a case against ripple.
They just went with this insane, the token itself and every cell from the beginning of time to the end of the world is a security theory.
Right.
And I said they may have snatched defeat from the jaws of victory.
My point was that when you take this old Howie test from 1946, when Satoshi was only the miner and then he offered tokens for value, you could say that Bitcoin when it first started out was a security.
I'm not saying it is.
I said the argument.
But that didn't happen, John.
What you're saying, that didn't happen.
Stoshi mined his Bitcoin and anyone else could go on and mine their own.
I know it didn't have it.
He didn't sell those tokens.
He froze those tokens.
I know it didn't happen.
I was given a hypothetical that if it did, someone could make that argument.
Right.
Yeah, yeah, but it's all, this is why it's important, like one of the prongs is right, the reasonable expectation, right?
So it's context specific.
This is why it's really hard for the folks that are, we want a bright, line, clear rule on this, because you have to look at the specific representations that the token issuers are putting into the marketplace.
That's the critical thing.
The SEC seems to be focusing.
I agree with you.
I know there are a few lowers on stage.
I'm not a lower myself, but the fact that there are CFTC approved futures for both Bitcoin Ether,
is that not basically dispositive that the SEC is handed over jurisdiction of those two assets to the CFTC?
No, the SEC could claim that Ethereum, not itself, but the staking with Ethereum on Coinbase. They can still make that argument. Any asset can be a...
But that's not the asset itself.
It can be sold as a security. Any commodity can be marketed, packaged, and offered as a security.
Right.
No one wants to, real quick, Marr, I just want to ask you. Go ahead.
Yeah, since no one wants to make the ultimate case or make a, you know, John Reed, you are not trying to make the case that Bitcoin and security said you need to still do some more homework on it. That's fine. But would Corey or Brad or Joe? No, I said I've never studied it.
I've never studied it.
So no definitive, no definitive.
But Corey, Brad, or Joe, I mean, I know all three of you are very pro Bitcoin and do not
believe Bitcoin is a security.
Could you give us the definitive proof evidence that Bitcoin is not a security?
I can give you a quick rundown of some of the things that make sure that a coin is definitely
not a security.
And there are actually some alt coins that fit the definition as well.
If you announce it well in advance, if you have a fair launch, if you have anyone in the world able to join the network and mine in the coin, if you have no pre-mine.
So basically like Bitcoin, Bitcoin Forks, Lightcoin, Grin, Raven, any shitty little proof of war coins, I would say are, you know, obviously don't pass Howie.
Everything else, and I think every single thing with a pre-mine...
Every single thing with proof of stake, I think, meets the definition of a security in the United States.
Why is the pre-mind so important?
It just like automatically makes you pass howie.
You can literally just go through it.
Let me, let me, I don't want to get in too deep in the weeds, guys.
I want to, silly, I'd say I don't want to get into too deep in the weeds.
So I actually want to move on to what's next for crypto.
Like a lot of people here are either investors or people that are probably out of the market and looking at a time to get back in.
Obviously we're not going to predict price.
You know, we cannot know nobody here can know what's going to happen next.
Literally nobody.
But let's see what different panelists are doing right now, what their strategy is.
So Jack, hearing everything you've heard, we know next week it's going to be pivotal
and they get a bit more clarity with the DOJ and the SEC's TRO on Binance.
How do you think the market will respond?
And then what will happen to all these different startups and VC funding in the ecosystem,
considering the uncertainty on what's the security and what's not?
Yeah, sure. Let me kind of give you broad picture first, and then we can talk like price expectations or whatever, I guess.
And so I'm kind of viewed us like the charts guy. But I think this is more important at this first point.
So about six months ago, I do these weekly live streams and I had Marcappellus from Mount Gox come on just to talk about what's been going on and what's happening and stuff.
And it was actually really interesting. One of the things he told me that I did not know was because of what happened with the blow up with Mount Cox –
that the Japan, the nation of Japan, has from that point forward, made it where like fractional reserve exchanges cannot be a thing.
Like they really, really hone in on proof of reserves there.
And so one of the things he talked about was how he thought the Japanese residents would get out from some of this, the FTX debacle.
better than some of the other, you know, miscellaneous foreign nationalities and stuff.
And based on some of the headlines I saw early on, it actually looked like it was tracking that way.
I didn't follow it super closely.
But take, okay, that was one moment in time.
Now recently, I think this was today or yesterday, Pierre Rochard helped with this announcement that Fractional Reserve
banking with Bitcoin is now illegal in Texas.
And so this was something that lawmakers wanted to help avoid
block buy FTX, Celsius, etc.
So what I see coming in the future is more of this focus on the reserve side,
Bitcoin focused,
and,
and kind of everything else, if it's still around, like all coins,
like you go to a coin market cap, there's 25,000 different coins, right?
So obviously there's not really a true use for everything.
But if they're around, everyone agrees, hey, this is the casino.
We all kind of look around and nod.
This is the casino.
Like, that's it.
But on the Bitcoin side of things, I think where things get really interesting, like Balagis, the...
The tech entrepreneur who puts out a lot of good content who is betting on Bitcoin going to a million dollars.
What's going to be interesting is if there comes a point in the future where you can either have Bitcoin or U.S. dollars, but not both because of a lot of this regulation and stuff, what are people, not just in the U.S., but globally, what are people going to choose?
I think that's going to be really interesting to watch.
Haseeb, what's your position on the markets right now and what's your strategy moving forward?
And just for the audience as well, our strategy is pretty clear, like we're still going to be incubating projects, working with projects, building our ecosystem, as we've been doing throughout the bull market.
And a reminder for anyone in the audience to check out the sponsors of this show, which we're likely working with.
There's four of them. They're all pinned in the thread above.
and to be incentivized to go and check them out.
You can go through them.
It's a thread that's four of them there.
Choose your best one, comment, and you get $1,000.
It will choose the best comment explaining why you've chosen a certain project.
So you have to be detailed.
You have to check out their profile, their website, and tell us a good reason why.
Haseeb, I want to go to you.
What's your strategy moving forward?
What are your thoughts on the market?
Yeah, so look, we're long-term investors and we're venture capitalists, first and foremost.
So for us, not a lot of changes.
I mean, we're a pretty global firm at Dragonfly.
We have a big presence in Asia as well as in the U.S.,
If it is the case, the U.S. is basically going to shut the door on crypto, it may mean that the industry is going to consolidate more and more in these other hubs that are friendlier.
There was just news, I think it dropped just 20 minutes ago about A16Z, one of the largest venture funds in the industry, moving or establishing a new mini headquarters in London.
And, you know, Rishi Sunak, the PM in the UK, has positioned himself as being very crypto-friendly in opposition to the U.S. stance.
Same thing happening in Hong Kong, same thing happening in Singapore.
And that's where a lot of our roots are.
So for us, it's business as usual.
If the U.S., I mean, it's clear the U.S. has a lot of great talent.
A lot of amazing entrepreneurs, a lot of amazing talent.
But if they can't set up shop here,
they're still going to do crypto.
Like there's just no question.
Crypto startups, I like to say, they're not like, you know, traditional companies.
They're more like laptops, where if you're hanging out at a cafe and it looks like the cafe is going to close, you close a laptop and you go down the street to a place that's open.
And I think that's what's going to happen to a lot of crypto activity if the U.S. retains this attitude.
I hope so. I hope so because then that doesn't impact us much. We can still allocate capital to these projects. We can still be bullish. We can still see those tokens that Brad Mills loves become utility tokens that work in an ecosystem and the SEC action will just delay the U.S. participation in those ecosystems. Is that a fair summation of what you said?
Yeah, I'm sure Brad is very excited about it.
Yeah, someone else that won't be as excited. Del John, Del Johnson, good to have you, and it'd been pretty quiet today, surprisingly. What are your thoughts on? What are your thoughts on crypto? What would be your strategy in the Web 3 ecosystem? Is it just sit back and hold and watch what happens next? Or it's a good time to get in considering that everything's just been screwed and screwed and screwed for the last 16 months.
Yeah, well, thanks for having me.
And yeah, you know, all of this is new.
And like I said in previous discussions, you know, my relationship with crypto has been kind of...
you know, middle, middle of the road, so I haven't done any crypto investment.
So I'm just watching from the outside.
So maybe I'll give that perspective.
I think it's pretty optimistic to say that the U.S. potentially kind of curtailing activity is going to have, you know, a very de minimis effect.
Of course, you know, like the person who just spoke.
said one of the first responses is going to be moving overseas and moving to more friendly regimes. But, you know, that's kind of trying to outrace, you know, like a tsunami because the U.S. is such a kind of central tempole of where...
crypto has been and where all of the money comes to fund crypto investment. So when you talk about,
right, where is, especially with venture funds and these, you know, crypto, not just the projects,
but the companies that are built on crypto, right? Like, where does that capital come from? Well,
it comes a lot from U.S. investors, uh,
large venture capital funds themselves, LP organizations that are based in the U.S.
And if you've seen the recent reporting numbers on how much money has been going to those
companies and those funds recently, you're going to have this kind of backwards waterfall
effect where, you know, less LP money from the U.S. means that less money is going to venture
capital funds, which means that
less companies that are built in the crypto space are going to be able to operate.
And so you're going to see this freezing effect.
So we're talking about two different things.
I think sometimes with the exchange and the coins that already exist.
And then like the future of coins that will be minted later.
And then also companies that are built on crypto that are coming later.
And I think the future looks a lot more bleak, potentially, depending on what happens next week, a lot more bleak than the present.
Thanks, Del.
That's exactly what I wanted to hear.
Ben, Ben, I think you're going to be more optimistic moving forward.
You have a startup yourself and your project is a sponsor of the show as well.
So shout out to our Fox.
Actually, you know, that makes you interesting, Ben.
As a project in the ecosystem, what's the team morale?
What's your strategy?
And just be as, but I hear myself echoey, Ben.
So I'm sure if you can fix your mic.
But genuinely be honest.
Yeah.
How are VCs? What are VCs like? Did you guys raise your money already?
Our VCs pulling out a term sheet sitting there, not Terms Heaths sitting there and tap it on up being said.
What's it like?
Because what happens when FTC collapse, like everyone froze.
Like I remember the biggest, I don't want to sit here naming them, but the biggest most respected VCs, like even respected to this day, literally.
Literally.
All the staffs that were pending and the money hasn't been sent,
the stables have been sent, have just been frozen,
everything just went into limbo.
Are you seeing something similar today?
That's a good question.
We actually, believe it or not, been around for five years
and we've largely bootstrapped.
So, but we are talking to investors now, and we've been talking to investors fielding calls over the course.
Obviously, during the bull run, it was a very different situation.
What we're getting now is more interest from Asia-based VCs reaching out now.
I don't know whether they sort of think to themselves, this is a good time to invest,
or this is a good time to sort of reassess the situation.
But a lot of projects that are around us are saying that they're not getting their
money come through in their tronches.
They're not getting those fulfilled.
VCs had basically told them all to cut back on staff
and to cut costs where possible.
But we've been, I guess in the last week,
we've had probably six or seven reachouts
and two of them have said,
do you really need tokens?
They're obviously do a fair bit of business in the US as well.
But the Asian ones are sort of very keen to talk about
what the future looks like and because we double-
Oh, no, so Ben, Ben, are you saying that Hong Kong's moves?
Because we were talking about this while, I'm hearing myself echo, bro.
Let me mute you.
Okay, so Ben, I muted you because I'm hearing myself echo.
I'm not sure if you can fix that.
But you're saying the moves are all the Hong Kong opening up to create?
I can remember exactly what happened?
First, does anyone, can anyone update me what happened exactly in Hong Kong?
Can I forgot about it with everything with Binance and Coinbase.
We were talking about it as good news just before the SEC went crazy.
Anyone on the home on the bride go ahead Hong Kong released a framework a regulatory framework where they had previously banned crypto trading and bitcoin
I don't know if they banned bitcoin but it was like crypto they looked at it like gambling and stuff and they banned it
and then they came out with some regulations that were kind of trying to tame the market and reopen
crypto trading but under this really strict framework of what you're allowed to do and how you had to register
And then so when that news came out, all the crypto-shill people turned that into like the most bullish news ever.
Like, look, Hong Kong is so progressive.
But when you actually look at it, it's the same as the Dubai regulations.
It's not that progressive.
It's like it's taming the markets and it's preventing a lot of pump and dump activity and wash trading.
Hold on. Dubai.
So Dubai regulations is not that progressive.
All crypto projects are coming here.
Yeah.
our project, one of our business was base here.
I'm in Dubai.
I mean, I just saw people in chat rooms that I'm in that are, that we're discussing it,
talking about how it was very restrictive and they're going to lose business to Abu Dhabi
because they're too restrictive.
Joe, you agree?
Yeah, because they make it really hard to do banking in Dubai, and that's the problem.
Although they are moving in the left direction.
We struggled hard for that.
But the bank is impossible.
But, yeah.
I think it's surprising that Hong Kong's news was so positive for crypto,
considering that Hong Kong is still behind the US.
Anyone correct me if I'm wrong?
But if they took some steps in the right direction,
the US is still more friendly towards crypto than Hong Kong.
I don't think it's positive.
I think it's just propaganda or cope or whatever from the...
It is. It is.
No, no, right, right.
We can...
We can say it's positive, but it's not as positive as people making it out to be.
So, oh, man, it's moving, but it's like a hint.
It's like they're moving in the right direction.
That's what I would say.
Could it be lead to more opening up?
I meant a thumbs up there, not a thumbs down.
I'll take your thumbs down and up me.
Brad,
nothing.
I'm joking.
So Ben, just want to go back to you.
You're saying you've had more interest from Asian investors.
That's interesting.
Why do you think that is?
And when you say Asian, where from Asia?
I'm in Hong Kong, Japan, China.
Where?
Hopefully the microphone will be okay.
Yeah, we've always been, had a strong presence in Vietnam.
We're incorporated in Dubai, but we've always had strong presence in Southeast Asia.
So the Southeast Asian, not Hong Kong based.
I don't think Hong Kong's moved the needle much at all.
I think it's more so the fact that some of these Asian funds are
looking for projects that are a little bit more established.
You've seen that a lot of the series C and beyond have dried up in this region,
particularly in the Asian region,
but the early stage and people that have not the product
So they're looking for people that have got a product that have actually been able to build their idea,
not so much on the rest of the,
the rest of the,
because they're sort of saying we can help with the growth of audiences and bringing people in,
but we want to see people that are capable of building quality products.
And I think it's just more of a mindset or mentality of moving and striking while the opportunity is there,
but also these guys say to us, and you don't ever know the truth,
they say that they still have pretty...
a bit of money in their funds still and they're looking to deploy it and they're looking for projects that can actually build something because that's their biggest uh
is he has sieb and dell i've got a question for you could we see the AI so we're seeing the crackdown by the SEC
hurt crypto. FtX obviously screwed us and all the scams and shit, but the regulatory crackdown in the US
will hurt crypto further. But something else that we haven't talked about is, and we'll touch on in a
bit, maybe I want to kind of wrap up the discussion later with the Apple news and what that could
mean for the Metaverse meta.
that kind of went up and collapsed last year,
whether that could change things?
But before that, could we see a lot of liquidity leave crypto for AI?
As Jason Kana-Kanis tweeted and Haseeb were laughing when I mentioned it last time.
But genuinely speaking, couldn't we see that every fucking crypto project is mentioning now AI
and somehow they're linked to AI.
In some cases, it's valid.
Other times it's not.
But generally speaking, could people kind of...
VCs move their allocation.
We're seeing that actually, moving the allocation from Web 3 to AI Dell and Haseeb.
Do you want to go first, Dell?
All right, yeah.
There was actually a chart.
I forget who put it out.
It's one of the data aggregators for venture capital that was showing the actual investments by segment, market segment.
And it showed like this precipitous drop-off of crypto.
It was cart-up.
Okay, okay, okay, yes, Carda, yes.
This precipitous drop-off for crypto investment,
and then this, like, subsequent rise in investment for AI.
So, I mean, absolutely, you know, I write a lot.
I had a piece in Wired, and the information about VCs being herd animals, right?
Which they're not supposed to be.
They're supposed to be, like, counter cyclical,
and that's the problem with VC is that they're not operating the way that theory actually defines.
Right.
But the point is that regardless of that, they are operating third animals.
And if AI is the new hot market, that's where everyone is going to huddle into.
Now, the defensive maneuvers that different founders are doing from different spaces are kind of all identical in that, you know, everyone, regardless of if it's, you know, traditional fintech, crypto, SaaS,
you know,
B to C,
I mean,
everyone is saying
that they are integrating AI,
and some of that is actually legitimate,
but they're doing that as a means to chase
venture capital investment,
which is also water falling down from the LPs.
And so the fact that,
you know,
crypto founders are doing the same kind of moves is going to have like neal effect I believe as far as like what happens in the market overall so you would expect especially if the actions you know in the next couple of weeks are overly punitive that you would expect this trend to continue I think
Del, the next question I have for you is, and you can see us rotating the panel, just preparing for the pitches that will start.
We've got four pitchers, three pitches today.
They'll start in 15 minutes.
So you'll see a new panelist join us in the next 10 minutes, 15 minutes.
Oh, John, John, and Joe.
Okay.
Yeah, John John, we're done talking about Bitcoin.
We're done, we're done.
Stop.
Stop with all Bitcoin to security, bro.
You're really obsessed over one thing.
You're doing every show.
You're obsessed over one thing.
You don't let it go.
Let it go.
We're moving on, man.
No one cares about what you think.
The SEC will decide.
The SEC will decide.
There's existing lawsuits.
This is a problem.
The courts will decide.
The courts will decide.
The courts will decide.
And Bitcoin is not going to be insecurity.
Bitcoin is not going to be, I said already.
I said, let's see what the side.
Mario, can I make a quick point on the last topic?
Brad, Brad, just smash.
Then hold on.
Brad, if you don't smash him here, I'm going to be very disappointed.
Before you go, Brad.
Shilly, in two, hold on, hold on.
Hold on, hold on.
Not.
Hold on the security topic.
I don't think we should discuss that as stupid,
but on the previous thing that was being discussed.
I was a stupid.
I just, I just, I just, hold on.
Brad, right, before, but, but let me ask a question.
And then Brad, you could, I would you to comment your point and answer that question.
But first, Del, I want to ask you that question before Brad and has you jump in.
Is that with, with, um,
With the Apple's announcement, and as an investor, what does that mean for the meta, meta, for metaverse projects?
Because we saw the hype after Facebook changed their name to meta, and all of them pumped.
And obviously we all knew that there was going to be a short-term pump.
But then again, the concept of a metaverse, of a digital world that has digital ownership as well, a virtual world, is one that's, you know, the world is still moving in that direction.
And then Apple's announcement in the Apple, Apple Vision Pro, many said that this is going to kick off the meta, the Metaverse movement again.
Are we seeing any of that?
Are we seeing any Metaverse project kind of pop up and capital start to flow into that space already or not?
I mean, you know, I think that.
I think the best...
No, no, no, I'm going Dell first.
I don't know if you want to ask for that one, Brian.
Let me go to Del first.
Yeah, I do have thoughts on that.
Surprise, surprise.
Oh, cool.
Oh, very surprised.
All right, go ahead, Del.
Yeah, I think what you're seeing is, I mean, it's kind of a reprieve for those companies that were working in the space before, right?
Because they now have...
a platform that they could kind of hang their hats on and say,
okay, well, this thing is going to be, you know,
transmutable across these different metaverses or whether it's the same
metaverse.
I'm not sure what Apple's plans are.
But they can say that, but, you know, now that you're dealing with Apple and a lot of
its kind of like closed-like ecosystem, although I have heard that they are opening
things up more than you would expect with this being the first version of the product,
I think it's going to be hard for those companies to kind of get a foothold.
But, I mean, it's definitely possible.
So you can see, like, you know, as where that door was pretty much completely shut before,
there's like a little creak of openness.
But also when you look at Zuckerberg's comments on Apple and kind of what Apple is trying to do,
it seems like a platform that's going to be a lot less social than what, what,
Facebook, sorry, meta, had had in mind when they came up with their idea of the metaverse.
And honestly, you know, like, you got to build things people want, right?
And so, like, if people want to sit on their couch and just kind of browse things, you know, semi-mindlessly,
then that's what they're going to buy.
And maybe they don't want, like, this really kind of sprawling social metaverse.
But we'll see.
I don't like to predict, like, the future of technologies.
But, you know, it's hard to bet against Apple.
Brian?
Yeah, so I just wanted to highlight, like I'm a investor and I transitioned from being
a crypto investor in the previous bubble, learned my lesson in 2018 and 19, got wrecked
and rugged and held SAF to zero to no liquidity.
And I think that's exactly what we're going to see here as well.
You know, that's my thoughts.
But for people listening, that didn't go through the last bear market cycle where you were a year and a half into it and then you're buying theft for 80% discount thinking you're getting such a good deal.
And then a year later, there's like just zero liquidity for that theft.
That's what I think's going to happen here.
I think it was the same bubble logic that caused people to buy into the same narratives,
but just with a new fresh coat of paint on them.
And now it's just all blowing back up again,
and people are going back to trying to make real businesses and think about things.
in logical terms.
So just the idea that you can just make a video game
and call it a Metaverse and then put a token in it
and then that makes it worth something like that I think is on the decline.
And I pinned a couple of links at the top here.
Over the last couple years,
I've been spending most of my time investing in Bitcoin companies,
so people building Bitcoin-only startups
or even peer-to-peer web startups
or things in the Bitcoin ecosystem.
And you can, they just got removed.
Yeah, I removed it, man, because I have to, I have the sponsor tweet there.
I'll let you put it in L-P-Wine afterwards.
Maybe that's better.
Let me just put it up.
Yeah, put it in.
Everyone, check it out.
Everyone, check it out.
If you actually care.
So make sure you do it now.
And this is from Adam back.
Mario, you know who Adam back is?
I like, of course.
Yeah, yeah.
All right.
We'll leave it.
Okay.
So, Adam, like, so listen, Bitcoin is at least 40, 50, probably more than that percent of the market cap of everything in crypto.
and including the stable coins.
And yet only about one and a half percent of venture capital money goes to Bitcoin startups.
So it's a huge misallocation of capital that's been happening because of this crypto bubble.
And as somebody that's been very active in the Bitcoin-only venture seen, I can confirm that this data from TVP is accurate.
Right.
that Bitcoin companies are seeing a surge of investment.
And there's like a lot of big rounds happening.
And there's many big...
You might be happy.
We're invested in a bunch of Bitcoin projects,
but the projects building on Bitcoin.
And I've been bullish on Bitcoin.
I don't mean ordinal stuff.
I'm talking about like...
No, no.
Prior to ordinals,
I'm talking about two, three years ago,
in the Bull run as well.
I've been bullish on Bitcoin for a long time.
And the whole...
Are you putting a thumbs down?
Bro, okay, I want to move, I want to kind of crush.
Suleiman is just sitting there pissed off, I promise you, Brad.
And Simon, I need you guys to do this because he does this all the time.
So let me explain what Suleiman does and I'm going to give him the mic.
He makes a point, okay, and then he obsesses over that point.
So his point right now is that Mario has changed now.
There's a good argument to be made for Bitcoin being a security.
And that's pissing me off because that's not an argument anyone's even discussing anymore.
That ship has sailed a long time ago.
So Sully, I let you make your point and then Brad and Simon and anyone else would crush you.
And then I can move on to the pitches.
Go ahead, Suli.
Sure, I will.
And you'll have to understand, guys, the bias on this stage.
These guys are Bitcoin, basically heavily invested in Bitcoin and hence why they're doing this kind of drama.
I hold zero Bitcoin, but go ahead.
Yeah, yeah, whatever.
So these guys, these...
Can I also say a comment on?
Can I also a comment?
Yeah.
There's a difference between investing in something and trying to get everyone to believe that or investing in what you believe in.
And so in crypto, you have a lot of, I bought this, therefore I want to push this and I would get as many people to try and do it.
There's a saying in another language, I've got what it is, you know, hit the water, still water, nothing happens to it.
This is Suleim, man.
So don't, don't bother you.
What I'm saying is we don't put Bitcoin.
Yeah, we just need to.
Yeah, I, yeah.
Just because you're.
True, true.
Someone's investing in Bitcoin.
Exactly.
Because you ain't it.
You need to pump it.
All right, Sully, let's just let me get this over with.
Trust me, Simon, because he'll never stop.
Sully, go ahead.
Make your point, please, man.
Sure.
Thank you.
Thank you.
So when I look at the how we test, I do believe that there's at least two aspects of it that meet with Bitcoin.
And then there's two other aspects of it that I can see the argument.
Okay, which ones?
Let's do it.
Which ones?
Okay.
So the first one is investment of money.
So you exchange Bitcoin for an exchange of money, correct?
But you're not buying Bitcoin from a company, though.
You're buying Bitcoin.
It has to be an exchange of money for like...
No, no. So you are...
I buy hamburgers with money. It's not a security.
Yeah, it's in context.
It's in common, you just...
How it works is it's meant to meet all four.
You have to put it in context of an investment contract.
Yeah, but you're asking, silly, you're asking about the first one.
They're responding about the first one.
That's a dumb argument because the whole point is it has to meet all four things.
According to your standard, that means nothing leads nothing.
Who are you buying Bitcoin from?
Are you buying Bitcoin from a company issuing Bitcoin?
So you...
Are you buying Bitcoin from Satoshi?
no you're not buying bitcoin when you buy bitcoin how do you buy how do you get bitcoin you exchange it for
money don't you you exchange it for somebody else that has it no but also but how do you just like
you do that with potato you also also what suleman also what when you get bitcoin you exchange it for
money is that correct yes or no yeah it's it yes you when you get burgers you can you can
you can exchange it for your labor you can exchange it for energy
Even for pizza.
Guys, not at all.
So you basically...
Next one, next one.
No, no.
Go to the next one.
No, no.
Your argument's so dumb.
Next one.
No, no, next.
Silly, silly, silly, silly.
I'm doing you.
Silly, silly, silly.
That's like saying money isn't currency because guess what?
You can exchange it for work.
So that means money is not going to...
I'm just dying to hear the money.
Hold on a hell.
Because literally, yes, you can exchange it.
I really want to hear the other ones, silly.
Yeah, okay.
But please tell me the other ones.
I will do, I will do.
But you're asking very weak.
I just want everyone to understand it.
Okay, okay, okay, okay, okay, yeah, yeah.
Every, by the way, every SEC attorney would...
Go ahead, go ahead.
Next one.
If you buy it, hold on, if you buy something where money is the security,
that's everything in the world is a...
Now, let's go out in second.
No, no, let's go to the second one.
Let's wait and get the next one.
So you're sticking, hold on,
you're sticking to one point,
and they're saying, why are you guys talking about that point?
Because that's the only one you've mentioned.
We're on the second one.
But what I'm trying to say,
the fallacy of their argument where they sit...
But Simon keeps mentioning.
He keeps saying, as soon as you do that one thing.
We get it.
You're right.
Money is a security next one.
To be clear, you have to.
You have to meet every prong of the Howie test.
So go to the next prong.
Exactly.
It's a very point before we could go.
These two nerds don't understand it.
Right.
So the second prong of the Howie test is what, Brad?
You have to pull it out of your butt first.
Then you can read it to me.
No, no.
You tell me because you're acting like an asshole.
So let's see if you know.
Uh...
Expectation of profit.
Investment on money, expectation of profit, on the efforts of others.
And I forget the fourth one.
I was sorry, and it's a common enterprise.
Is it giving us money?
I like the expectation of profit.
Hey, got you.
Okay, silly, silly.
Silly, can you just get to the second one, bro?
I'm not going to spend half an hour on this.
I'm giving you like 10 minutes.
Just get to the point.
Please, bro.
Yeah.
So let's hear it.
Let's hear it.
Right, okay.
So the argument made, and this one is that I actually understand that our argument both ways.
So I can see how it won't meet the test and I can see how it can meet the test.
So like I said, there's two that I thought,
did me and the two that I can see the arguments on both ways.
So this one is a common enterprise.
And the reason why it's a common enterprise is because, you know,
when it comes to investors, their fortunes are interlinked.
So even though I know that Bitcoin is decentralized, right?
You, the overall market value, the market and the value is impacted by the participants.
So is the U.S. military a security?
Participants are, for example, the miners, the developers are market forces.
Right.
right so what i'll do what i do is the better is military a security sully so i i didn't expect to stick
on that long silly i'm going to move on for this one we could do because all the brad bad bad bad bad
silly silly silly silly this is just not going the right way i didn't expect the debate to go that way
so what we'll do is next time we do a crypto space in two weeks i'll because i've removed all the
attorneys 10 minutes ago we only got half a half on here who jumped on last minute jesse it's
been a while man but i'm not gonna wait i'm not gonna
Can I just give the case law where Bitcoin isn't as curious?
So it's trending.
No, no, no, no.
Trust me, I know what will happen.
I've been courting with silly for a while.
He really obsesses.
He goes down those rabbit holes and doesn't care about anything else around him.
And, yeah, so I'm not going to go down that rabbit hole.
Instead, I will do, let's do the, let's do the pitchers.
We've got three pitches today.
And despite all the fear mongering that's been happening over the last week, a lot of it is valid.
and I've been behind a lot of it covering all these stories.
We're still doing business as usual.
We're still working with projects.
And as Haseep said, this could slow things.
This could slow liquidity.
But that's pretty much where it kind of ends.
So let's go with the first one.
I think we're ozone metaverse.
So these, this project, I think we're working with them.
And so they enable the internet to morph into interoperable 3D worlds by bringing the best of Web 2, Web 3 and AI together.
So guys, good to have you.
Sully, I let you kick off the timer.
Hey guys, good to be here.
Are you okay, Ozone?
Is your mic working okay?
Yeah, yeah, yeah.
Can you guys hear me okay?
Can you hear me?
We can, man.
We can.
Just for the audience, for the audience as well,
you can hear the three pitches.
Choose your best one, write it in the thread pinned above at the top.
Put your favorite project in that.
Tag them, there's four of them there.
Three of them will be pitching today.
Tag them above and we'll choose a winner for $1,000.
But go ahead, Ozon.
Ozone, are you ready?
No, good to hear, Mario.
I'm going to start the timer.
No, thanks.
Go for it, bro.
It's fine.
Good to be here, guys.
Good to be here.
So Ozone is a web-based, immersive experience builder and marketplace.
So what we put together is the AWS to build the immersive web
with our own proprietary 3D engine at the core.
As older 3D graphics technologies were built on an old paradigm to build games,
there was a need to build an instant on in the browser 3D experience builder.
and that's what ozone has done with our great engineering over the last couple of years.
Now what's cool about the platform is besides the 3D technology at the core,
we have our cloud infrastructure. So everything runs in the browser,
the builder is on the web, and you deploy instantly. So enterprises that we're working with,
with some of the world's best IP holders, are loving it because
You go from taking months and millions of dollars to build one immersive experience.
Now you can build and iterate thanks to our SaaS platform.
Now the Web 3 layer is a very important part of what we believe is going to be the Internet-scale Metaverse.
And to echo some of the discussions that I heard earlier on,
the truth of the matter is a lot of the discussions happening,
although legitimate from a regulatory standpoint,
from a technological requirement.
You got to be quick, man.
There's a timer. Go ahead.
Yeah.
Yeah.
Our...
are not are really pointless because we need the web 3 technology to enable the
the digital world yeah no it's good so I mean it's all we have to say yeah we have a cloud
silly silly you gotta put a put a proper ringing at the end it's not like teed-de-d-d-d-d-d-d-t you
gotta make it louder all right make it loud I thought the people can hear but yeah for the
for the panelists make sure you put your hand up and just jump in with questions good did you want to go first
Yeah, I mean, one of the first questions I had when I looked at you guys was like, what's the actual business model?
Like, what's the revenue stream that you're generating and like how are you guys actually, you know, running a business with what you're doing?
Yeah, I have no idea what you do after that pitch.
Yeah, I think I was going to say as well, like the pitch, I think your project is good, really cool, because I've looked at you before the pitch, and I know what you guys do.
But the pitch was not the best.
I'm not in the best.
I'm not much love there, but we need a pitch to be stronger and to the point.
But go ahead, answer the question.
So we are a SaaS platform enabling immersive world building and monetization out of the box.
So especially your SaaS platform that allows metaversus to be built and monetized.
Is that a fair way of putting it?
Right, right.
Yes, yes.
Yes, exactly.
So the AWS meets Unreal Engine in the browser.
Okay.
And when you say it helps monetize, how do you help monetize Metaversus?
Can you give us an example?
So our e-commerce infrastructure, yeah, our immersive e-commerce engine.
It enables immersive stores and 3D interactive shopping experiences.
And I'm looking at your website.
Is that Jay is speaking?
Yes, Jay speaking.
Oh, cool, cool.
And you worked at Disney, did you?
Yeah.
What was your position at Disney?
So I was in hospitality management.
Okay, interesting.
Go ahead, Goody, Joa.
Half on.
Yeah, what's it?
I don't understand.
I write you a check.
I mean, AWS hosts my data, right?
I don't understand.
Do you, if I want, if I, if I have like a, like, is it more like Shopify?
You're building some sort of immersive experience where people want to buy stuff for us.
But for you, you build it in like a Metaverse 3D-ish.
We have the tools to build your immersive experience, whether it's a conference or an e-commerce enabled world.
The ozone engine and platform enables to build, deploy, scale, and monetize in the browser.
Yeah.
I'm looking at your pricing model, go ahead, Joe.
Is it basically Shopify for Web3?
You're basically a platform so people could build their stores or whatever they want to build in Web3.
I mean, I think you say it that way, people get it right away.
If I'm correct.
Yes, that's a great way to put it.
Yeah, it is not only Web 3 exclusive.
Web 3 is an augmentation layer.
So when we do a festival, like we did the Burning Man last year,
There was no need for Web 3, right?
It was just a festival experience.
When we work with the brand like Universal or Warner Bros.
To build their immersive movie experience,
there is...
the interactive world, but there's also the chopping.
Are you working with the universal?
Look at this.
Ja-Jai, look at this.
Ja-J-J-J-I, look, let me do your favor.
Look at this.
They're doing themselves such a disservice
because they sent me doc and I'm going through it now.
Explain what they look what a disservice they did with this pitch.
And Jay, I'm jabbing at you, but I'm really benefiting you.
Look at this.
Ozone is building the Shopify for Web 3 Metaversus.
We've already raised a million dollars in funding despite market conditions.
We've generated over a quarter million dollars already in revenue with pilot customers.
And we're working with various IT, IP enterprise customers, including Burning Man, Ferrari, Voldaf or Mercedes, Universal DC, legendary Disney, and more.
And I've worked in Disney previously.
How's that for a pitch, Joe?
Yeah, that was a lot better.
A thousand times better.
You get it that way.
Yeah.
So them a question changes basically to who have you signed up?
Are they making money?
Are there plans to continue with them?
I'm sure they've made, yeah.
So you've made, you've raised, you've raised.
No, that's a great question.
Yeah, you've done a quarter of a million dollars revenue.
Yeah, go ahead.
Let me address this, Mario, yeah.
So this is a great question.
So as you can imagine, building your own 3D engine and cloud platform,
and I invite everybody to go to Ozone Metaverse. I.O.,
get it, an account for account.
It's a pretty big undertaking, right?
We are going after Unreal Engine in a big way,
and we're the brand new 3D technology.
So a lot of our revenue so far were service-based, right?
Now we just rolled out the SaaS platform, which you will see,
and our positioning is spatial computing cloud platform.
All 3D content to date, you need to run downloads,
you need to have a supercomputer to build it.
So we're doing what Canva did for Photoshop,
for 3D content, right?
Before Photoshop, you need to be a designer,
have a supercomputer, now, KANVAI,
you can do it in the browser real quick.
It's an $80 billion company.
We do that for 3D immersive experiences,
all in the browser with e-commerce out of the box
for Web 2 and Web 3 alike.
Are you Metaverse as a service?
Basically?
Yes, that's a great way to put it.
You need a marketer on your team.
Sorry, you need someone who works a marketing on your team.
It's very complicated the way you explain it.
And I'm trying to simplify it as much as possible.
Metaverse as a service makes sense.
Thank you.
That's exactly what we're raising funds right now.
So we look forward to, yeah, that's why we are raising funds right now,
to go to market and onboard a business development team.
And, yeah.
Yeah.
Ozone, can you just mention...
Oh, sorry, go ahead, Tilly.
No, go ahead, so let's see where you have.
Okay, so thanks.
So Ozone, you just mentioned about the browser.
So my question is, just to expand on that.
What devices and platforms are supported by the Ozone all in one platform?
And the reason I'm asking that is can you use as access and interact with virtual worlds
using your various applications such as desktop, mobile or VI devices?
Okay.
100% all of them, including the Vision Pro as we come through the browser, and it's 100% JavaScript, and our entire infrastructure runs just like a website, right?
But our engine, our proprietary 3D engine, handles all the 3D graphics, while all our APIs support the Web 3D, the AI services, databases, and the standard web infrastructure.
Yeah, that's a little better. I mean, I just want to push back. I'll be the opposing voice. Anybody who tells me they're selling Metaverse as a service, I'm running so far in the opposite direction. I'm throwing my body in front of Dell so he doesn't write a check. I just think it's just too generic.
If you're talking to me about 3D immersive experiences, and then you can do that in the browser.
And, you know, with obviously we have all these Apple and all these VR goggles coming
and that you can do that, you know, things like conferences and things like that,
that have a little more 3D as opposed to 2D, and you can do that, provide that as an alone-on service.
I get that a little more.
I think that...
Thank you so much.
No, you are very right.
What's happened is a lot of companies have thrown themselves as a metaverse industry,
but they're using Unreal and Unity Engine.
which are old technologies, which are game technologies.
So the NetNet is a bunch of Web 3 games,
which are totally segregated with no interoperability.
Our platform provides interoperability at scale.
So there's never a download so we can host billions of 3D assets in the cloud
And each user just use what they need on call at the time on any device to Suli's question.
Thanks for that, Suli.
Yeah, our system runs on 2 billion devices today, including mobile's desktop.
And it's a future-proof approach because it's browser-based and cloud infrastructure.
Thank you for that.
Can I ask how you're raising?
Are you doing a couple more questions?
Do you equity raise?
Yeah, so thank you.
Great question.
Yeah, so we have some SAFT options and OTC opportunities still available for approved territories.
So if interested, there are some tokens, but there's also equity available before our Series A.
So this is the last round before Series A via SAF.
So if anybody interested for a ticket, please reach out.
Yeah, hit us up. It's in the thread.
John, last question, because I know you've been on a lot of these pitches, John,
last question, we'll go to the next pitch.
Jonah, destroy him.
Yeah.
Well, I have many questions, but I mean, his comments saying Unreal Engine is old technology is pretty hilarious.
That's just not true. And they have 3D technology, in fact, they own architecture, software, among other many assets.
I know I've...
Yeah, yeah, yeah. So let me clarify. Old technology means it's C-sharp C++.
It's an old paradigm of building 3D experiences, which relies on a download.
Our system is all JavaScript, WebGL, WebGPU, which is runtime in the browser.
That's what I mean by all the technology.
Yeah, and I'm just going to say, like, I guess that's true, but also doesn't make sense.
But, John, what do you think?
John, what do you think of the fact that they've already generated quarter of a million dollars in revenue,
considering that the whole Web3 Metaverse industries just barely get excited?
Not many have generated revenue.
Well, the question I would have.
The question I have is when did they generate that revenue?
This was this year or was that last year?
Was that in the bull market or recently?
Last year.
During the boom market?
Yeah, mostly last year.
Okay.
Yes.
Most of last year.
Yeah.
How many potential leads have you found the last quarter?
over a dozen, all the ones mentioned by Mario earlier,
we're all from this year.
Okay, that's good.
And also just one more question, John.
Because we move on to the next one,
John, you could warm yourself up for that one.
Oh, on just one last question.
Have you seen, and that's a selfish question up for you guys.
Have you seen a spike in interest after Apple's announcements
a few days ago or too early to tell?
Well, this fundamentally further reinforce our value
proposition, which is future proofing enterprise solutions
for the Web 3 and Metaverse strategy.
So the whole internet spectrum comes to life in immersive 3D UI.
That's what the metaverse is and will be.
It's a new user interface, right?
Just like we went from PCs to mobile, we're going to move to spatial computing, immersive computing.
Our system is in a really good position to deliver this at the scale that no other platform can today.
And yeah, of course, the fact that we work out of the box, Mario, right?
We have metaverses and virtual worlds that have been on for the last four or five years.
99% of the time.
And guess what?
You go on the Apple headset now, you open Safari, you type in the URL, and it's there.
So, yeah, it's definitely strengthened our position.
Cool.
I appreciate the pitch.
Anyone that wants to talk to Osomedaverus, whether you listen to the recording or listen to this live, hit us up, or we can connect you to the team.
I think your name was Jay from Ozormevers.
Hey.
Good time, man.
And I want to thank you guys for the feedback.
Indeed, we are looking for the greatest talent on the business side.
Also on design, these are true roles we're really looking for.
I'm more on the engineering business side of...
I appreciate.
I've helped you with the pitch, man.
I've helped you with the pitch, don't worry.
And with the panel, what we're going to do is we're going to go in order and have you all choose your favorite project.
That's ozone matter of us.
We've got two left.
Cherpley.
What's up, guys?
Hey, everyone.
How are you, man?
I'm too good.
What's...
Pleasure to be here.
I'm excited to tell you about your team as well.
Where are your base, man?
Netherlands.
Oh shit.
Cool.
Where?
Amsterdam or Rotterdam or where?
Maastricht is in the south.
Yeah, yeah, I know Netherlands well.
All right, man.
Let's kick it off, Sully's timer.
Awesome.
Sully?
Hold on, bro.
Sully, what the fuck, man?
Guys, are you ready?
Yeah, sorry.
Yeah, we're ready, man.
We're waiting for you.
Oh, right.
Let's go for it.
Go for it, bro.
Go ahead.
Awesome.
Awesome.
All right. So Cherpley is an automated marketplace that connects brands with 9-1 micro-influencers.
So influencer marketplaces have been around for some time, but they do come with limitations that hinder brands from scaling up on influencer campaigns.
You know, as brands still have to like manually find, manage, validate influencers.
So it makes it just really hard to scale up, especially if you work with 911 micro-influencers.
So managing like a large group of influencers at the same time is just not workable.
You know, you can do 10, but you can do 1,000.
So Tripoli is a marketplace at Phoenix brands with the smallest influencers automatically
unless brands, you know, execute and manage their campaigns and influencers with just a few clicks.
And we actually do this through our unique set of features, which is automated matchmaking and execution,
data-driven influencer valuation, which gives like instant market prices based on the real engagement of the influencer.
And we also use like AI plugins for content, video, image creation and overall automation as well.
So Tripoli allows brands to set up and execute influencer campaigns with like thousands of small influencers in a matter of minutes.
But we're just not just here for the big brand.
So we believe in opening up like the influencer market at scale for small to medium-sized businesses too.
So for example, like you're a bakery shop owner and you want to start promote your cakes.
You know, what if everyday people like your housewives, you know,
that live around that bakery shop, start posting about your cakes?
You know, they live in this neighborhood.
Their following is interconnected.
And, you know, probably also more.
I'm happy.
Sure, for you there?
Yeah.
Yes.
Hey, bro.
Man, we need to work on that pitch.
All right, so I don't understand.
Why do you need a token, though?
You did?
Yeah, yeah, the token.
I mean, obviously, you know, the company could work without a token, but because we are
an influencer marketplace, our token holds its value, you know, against influencer marketing.
So we can use our own token to actually, you know, make the marketplace a self-sustaining
marketplace in the future.
So, you know, it just really helps with the like user acquisition and overall like
for healthy.
Yeah, I, I, I, go ahead.
So I work in the content creator and media industry.
It's like what I do is my day job.
There are hundreds of the things you've just explained.
So one, you absolutely don't need a token.
In fact, it would actually make it bad, not good.
But my question is, do you have a background in influencer management or ad attribution or any of those verticals?
Yeah, sure. I mean, I've been working with influencers for the past 10 years for various companies and also in the crypto for like over five years.
Is there a influencer campaign that you can highlight here that shows your expertise?
Yeah.
Yeah, it's like overall the people that we work with, for example.
So also someone is going to be joining our team.
It's like a TikTok expert.
Also has done like campaigns with Rinaldo in the past.
You know, like bigger enterprise companies and some celebrities as well.
Yeah.
But I think, John, what concerns me more, John is like what I'm trying to understand the utility of the token itself.
There's no utility. It's not needed. Waste of time.
Let's see if they can push back. We're not seeing the utility for the token.
Is it just to be able to raise the capital?
So the token allows you an easy way to raise the capital to then build out the ecosystem, chirply?
I mean, it does help, but we do give like intrinsic value to the token.
So we do have on each transaction, we do have like a 20% buy back and burn.
So that's got like not solely based on speculation.
Obviously we don't need the token, but we can, in our eyes, we can make the company grow faster with the token economy attached.
And also in light of like the future, we want to be completely, fully automated, fee list, decentralized.
So you've already got to deal with Maxi enlisting on Maxi?
So for the audience, Mexie is one of the centralized exchange.
So has Mexie agreed to list you guys, have they invested, or what's the deal you have with them?
Yeah, Maxi just listed us.
We were also with Buy-a-Bit and also in contact with...
Oh, you've already listed on Mexico, correct?
Yeah, on day one, yeah.
Okay.
Question I have for you is, how much capital have you raised privately?
We raised over 800K, perfect.
Okay, and was that in the Bull Run or recently?
Okay.
We'll run us.
No, that was actually in the bear market, yeah.
Oh, you've raised it in the bare market?
Okay.
Yeah.
Interesting.
I see your token is already listed.
Go ahead, guys.
I'll go to go to, you know, we'll go with Dr. Dibon.
Hi, hi, Mario.
Hi, Cherpy.
How are you, man?
Thank you for having me out.
I'm good, man.
I'm good, man.
Yeah, absolutely. So Cherpie, look, it's very easy for people to come up here and, you know, destroy your project that you've been working on for some time.
So I think I'll just give you so my name's Devin. So I want to VC. Actually, we predominantly invest in metaverse technology.
So ARVI, immersive tech related to sports related to fashion. Okay.
And I think the thing that you should consider and worth considering is one of the major issues in the last ball run is a lot of influences, for example, would get involved in projects with tokens.
Okay, especially crypto influences.
Right.
And the problem we had was project related to tokens,
especially when there's lots of influencer backing,
those tokens become overvalued very, very quickly.
Okay, this was the problem, and they became overvalued
because retail was...
you know, retail were basically purchasing that token on the way up,
and then VC would exit,
and, you know, and then the people would lose out would be,
would be the retail.
Okay, basically they'd get dumped on, you know, for use of a better word.
So when, you know, you intrinsically have a,
token associated to a project, which is purely based on influence and marketing, that's the issue that you potentially face.
Okay, so it's really worth considering your, your token utility beyond, you know, just because to be honest, I understand where you're coming from, because actually having a token associated with a project, especially the last ball run, it attracts interest.
They attracted interest from Web 3 because people wanted tokens.
VCs even wanted tokens.
So I see where you're coming from, but you just need to be careful of this.
I just wanted to make that point.
But well done, getting to where you are.
Well, and to his point too, like, how are you vetting these projects or like, do you have any kind of vetting procedure that you're doing for people that are using your influencers or using influencers that are on your platform to market these projects?
Because what's to stop somebody from just, you know, launching a series of rugs using a thousand of the micro influencers?
And you have, you know, no liability except to be able to say like, oh, well, we didn't know that that was going to be a rug.
Like, do you, so do you have a vetting procedure?
This is one of the big questions there.
Yeah, it's a good question. It's something that we're working on.
So we're working like AOC for like brands, but also the influencers.
So we were working with Azure Defi, you know, for the brands, for the projects.
But also just like we're not just a crypto project, right?
So we started out in the crypto vertical, but we will open up to any market.
And we have like a new way of doing marketing, which I explained earlier.
It's like the localized, you know, influence marketing.
So we will procure a lot of volume also from the web to markets, you know, crypto
critical is only like a small segment of that. So in terms of like token sustainability, also
because we have like the auto burn by, you know, buyback and burn mechanism built in, it will
actually the token will hold its value, you know, based on the platform performance and not just
speculation. So and also it's like
Web 2 people will not have to deal with the token.
They can just pay in Euro or like fiat or like any currency basically.
And influencers can also be paid out in any currency that they want.
But we will incentivize people to use, Cherpy.
So Cherpy, one question is what do you offer the small influences that other platforms don't?
And in addition to that, by going with you, how will they maximize both their growth and their earnings?
Yeah, it's a good question. So we really provide like small influencers the handle to actually become like an influencer.
So we provide them with a lot of deal flow, really easy to use interface.
So they can just wake up, get their campaign notifications, do a few minutes of work and then, you know, already just instantly make money, basically.
It's just a very friendly platform for these influencers to work.
Then, Cherpy, you should make it, you should make an access token.
Okay, if your value add is you're giving influencers access to potential projects to support,
it should be an access token, in my opinion, access to your platform,
and you should move away from the purpose of the token to hold value, okay, to retain value.
This is my comments.
Access.
Okay, thank you.
I had a question.
You guys are basically an alternative media platform, right?
So how many people, how many nano-influencers do you already have signed up?
like how big is the media we have basically we have 30 000 influencers signed up uh we've done
over 150k in platform volume and really haven't been focusing on sales just finding like pro
market fit etc so we're going to be integrating with with tictock like instagram facebook
how how we yeah but how are you going to get more like 30 000 of nano influencers is very small
right so how are you how are you going to acquire these new people
to sign up as nano influencers because there's going to be cost there's going to be customer
there's going to be basically almost customer acquisition costs although you're not you're paying
them they're not paying you so it's a bit of a chicken in an egg race and i'm just trying to
yeah yeah exactly but that's all you know always the case when you want to grow a marketplace so
you always have like a two set up marketplace you always have to you know uh
you can get both sides filled up.
So the beginning is the hardest.
When network effects will actually start kicking,
that's the organic and that's also like the,
you know, the real beauty of a marketplace model.
But yeah, I mean, influencers are not easy.
But are you going to do like a tweet to earn or something like that?
Like where you share this tweet and you get paid
or are people actually going to be able to pick like specific filters
to choose the nano influencers they want?
Yeah, so we do most of the vetting for the impencers, so it's all data driven.
So, like, yeah, it's just really based on what kind of brand, you know, is in front.
All right, so Trapia, I'm going to go to Axmane's our last pitch,
so we're going to prepare for the last pitch now.
Just for the audience, make sure you go to the Pintwit, choose your favorite pitch so far.
and sully you'll choose the comment that wins the thousand dollars yes sully you'll do that at the end
so let's focus on the pitches now jonah you've heard a pitch from chirply you've heard a pitch from ozone
what are your thoughts on both in 30 seconds jona
Well, I don't think...
Silly, come on, bro.
That's silly.
I'm no unkism.
Come on.
Jonah, go ahead.
No, no.
I think...
That was a joke to the audience because everybody knows Jonah destroys pitches.
That was the...
No, he doesn't always destroy it.
Hold on, for the record.
Jonah doesn't destroy pitches either.
He's praised a lot of projects.
It's a lot of projects.
It's a really good one.
It's all my personal opinion, right?
So take it with my personal opinion.
So, one, what Ozone said...
I respect the work they're doing and the initial revenue, but it's not totally true.
Unreal actually bought and integrated a new programming language, as well as the fact that Unity already does WebGL.
In fact, it's one of their most popular plug-ins.
So they're not doing anything new that I've heard of.
and the graphics need to be significantly improved.
They should probably work on edge computing, which is different than what he's doing.
Chirpley, the fundamental problem I have is that influencer agencies should already start.
It's not that they're not backed or investor backable.
It's that they should already be generating revenue before they even raise money.
The reason being is that it's a low lift and mainly requires network and prior experience.
So I don't know, one, there's no reason for the token.
In my opinion, I just read the site.
It's very convoluted.
And two, you really don't need to totally raise for this, at least initially, until you show that Cherply as a
entity has done a number of agency deals for a number of micro-influencers to prove campaign
value and then maybe even just get regular financing, not investing.
Because influencer marketing is a very crowded space and it's all about network and deal flow.
And I haven't seen that you've provided that here.
Right, let's go to the...
Can we get to correct if there is something wrong, Mario?
Yeah, go ahead.
Yeah, go ahead.
Yeah, go ahead.
Yeah, yeah.
So, Jon, I really appreciate the Unreal body new programming language and all that.
Be direct, bro.
Don't be nice.
But the WebGL thing, you know, when the core is in C-sharp C++, no matter how you compile
or your M-Script them out, it's not native, and the platform cannot do what we do.
And happy to book another card and have our team.
We'll connect you guys.
Anyone that wants to connect with Ozone or Tripoli hit us up.
X mana, last pitch for the day, you guys are a SaaS platform to monetize engagement.
Really keen to learn more about it guys.
And I think you guys, is the token already listed guys?
XMana, are you there?
Yes, right here.
Can you hear me?
Yeah, I can hear you, but I'm going to give your favor and tell you to fix the mic because you're very low and we hear echo.
Can you hear me now?
Is that better?
Nope, it's the same.
And still like him.
I apologize.
You are forgiven, man.
It's you for your own sake.
I have a feeling, I don't know if you are the same ex-mana
we invested in a year and a half ago,
but I have a feeling you're not based on whatever.
Oh shit, long time.
You're still alive.
Respect.
Indeed.
Indeed.
Pushing forward.
Yeah, man, have you pivoted from what you did back then or still the same?
Still the same.
In fact, we've enhanced it quite significantly.
Cool.
I'll let you do pitch, but first fix your mic, man.
Trust me, it's much better.
I don't know if you could take off the headset or whatever.
Mario, I think it's your mind.
I'm stuck on on Bluetooth.
Let me just try one more time.
Hold on. Let me see Dr. Deban.
Sully, is it my end or X-Mal-A-Zant?
Steve, X-Munous one sounds good to me, but yours is echoing to me.
Sully?
Dr. Sully.
Take off your mic and then we'll see.
X-Mara speak.
I'm meeting myself.
Can you hear me?
It's better now, yeah, you fixed it.
No, it's not, okay, I don't know.
Why am I asking?
X-Mata, go ahead, man.
Silly, you don't put the timer?
X-Man, are you ready?
And I do, Silly, you go three, two, one, go.
Hold on, no, no.
You've never done one pitch properly.
Sully, you go three, two, one, go.
Do you go ahead, Sully.
You ready, X-Man, go ahead.
Three, two, one, go.
Okay.
Sounds good. All right. So XMana is a SaaS solution designed to connect ad spend to add return.
And we leverage sports club's abilities to reach millions of sports fans and white label technology for them that allows them to be able to do that.
Connect, add, spend, to add return. Users log in and access the Cryptoverse, whether they understand it or not.
It encompasses things like the NFTs. It encompasses our metaverse and a variety of ecosystems around it.
truly a macroverse that's going to be owned by everyone.
We have hundreds of companies already registered to be a part of it.
And with that, we also deliver white-labeled loyalty applications that allow them to drive engagement, GPS-based, air drops in a variety of different kinds of ways.
an incredible backend ecosystem that allows these clubs to monitor and monetize that ecosystem
to be able to create real-time engagement in the middle of a stadium to attach a tournament to a
jumbo-tron, a jumbotron to the announcer, the announcer to the prizes, prizes, you know, to all
the people on the field, and to be able to do it seamlessly, instantly in a matter of seconds,
right, on their phone, mind you.
And with that, they're able to connect a variety of different kind of application services.
We've already launched with David Beckham's New Soccer Club in Miami.
And as it stands, we are completely focused in on revenue.
We ask a pretty simple, straightforward question, what if?
If you take global gaming numbers, which currently exceed the revenue from it, exceeds music and TV combined and plug it into sports.
So, you know, those numbers are quite high when you plug those two together.
And, you know, we deliver the technology solutions that allow them to do that.
That's time.
Go ahead, guys.
Yeah, go ahead.
Who wants to go first of the question, would you?
I've got a question for you, Ozone.
I was reading your white paper yesterday, and in that you talked about...
Well, you were reading a white, hold on, you were reading a white paper?
Come on.
Yeah, you've got...
Yeah, bro, you've got a plan, isn't it?
I'm not like you, I just turned up and then hope someone else is going to do the job.
You're so full of shit.
Go ahead.
The Toulamon is so D-Gen that he's reading white paper.
Yeah, let's see, silly.
He doesn't know what white paper means, but go ahead, silly.
Bro, they're easy to read.
I mean, it's a couple of nerds putting some words together, and they think it's a white paper.
But anyway, um...
Right.
He just, he's, that's how he talks.
Go ahead, Sudi.
Right, okay.
So, X-Man.
X-Man.
X-Mana, bro.
Go ahead.
X-Man, whatever, bro.
Chill.
Right.
So, anyway, you mentioned about collectible NFTs in your Ethereum world's Metaverse.
So my question is, what's their role?
And how can a person obtain those NFTs?
And what are your plans to enhance their utility in the future?
Yeah.
That's for a question for me. I apologize?
Yeah, it is. Yeah, it was. Yeah.
Okay, excellent. So the idea of NFTs and one of the things that we patented as well was, you know, tokenized proof of ownership.
How do you attach and create NFTs, first of all, allow them to be used within a metaverse environment across a variety of different kind of applications and services and allow it to be seamless, something that will plug in through utility, not just, you know, people's idea of, you know, collectibles.
access to a sports stadium and access to concerts and a variety of different things that,
you know,
we'll give you real utility within these environments.
For example,
the clubs are going to start selling digital memberships to their fans because we're
superimposing a digital stadium on a physical sports property.
Now, this allows the club to go out,
not XMANA.
The club is going out and selling to their fans,
digital memberships that give the fans access,
even though it's an NFT,
It will give these fans access to the digital environment permanently,
but most importantly, is the physical stadium as well.
Now, it's not a ticket to the game.
It is, however, access to a VIP area when you do have those NFTs, right?
Kind of like a lounge at the airport.
Goody, Joe, and Jonah.
I had a company that actually sold that did something similar that did not involve the blockchain at all.
Basically, you could go and I did this for Anheuser-Busch.
You could walk into a bar, interact with the TV, other people in the place.
So what is the benefit of the blockchain on your platform?
Great question.
Except for the NFT.
Except for the NFT stuff.
Because that are you.
Yeah, of course.
Well, there's a lot of reasons for it, but I could just point out one of the most obvious.
And that is our atomic gaming, right?
The core of our model, we're completely driven by revenue.
So if you take a look at it, there's a publicly traded company called Skills.
You know, they do skilled-based gaming.
Their top game, a game called Solitaire, generating $20 to $40 million a month in cash-based gaming.
And we basically took that and put it on steroids.
Allowing people to game against each other, Bitcoin, against Ethereum, against dollars, against NFTs, it doesn't really matter.
So users can enter into any kind of gaming environment.
and they're able to engage in a variety of different ways and not have to worry about the fluctuating markets and so on and so forth.
But most importantly, the game developers that develop games with a few lines of code and in under 30 minutes, we can take any game and wrap that game with our code,
introducing blockchain, smart contracts, digital currencies, and immediately allow their game to be plugged into a live sports ecosystem to be able to create that engagement.
Now, what that does is it allows the users to game against each other in that way,
and blockchain is a critical part of it.
Now, there's one other aspect of that, and that's when it comes to data.
The whole idea of connecting ad spend to add return requires a digital chain.
Now, everywhere I go, I hear people talking about how they're going to get everyone onto their chain, and I'm sorry, I just don't think that's going to happen.
I think the way it's going to happen, or at least what we try to do, was something a little different.
We're not trying to get all the users onto our chain.
We're trying to encourage them to interact with us along five of the most important parts of the value chain.
all right that's sports gaming retail entertainment and spending and within those environments when
users interact with us we know enough about those users to give back real value and that's where
the blockchain side comes in not everything's on the blockchain mind you just the best parts of it
are they playing games against each other at a sports game that's what i'm not understanding
sorry come again
Because you're talking about doing it at a stadium.
It says one stadium at a time, right?
Are these people gaming each other while they're at the stadium?
That's what I'm not understanding.
Before, during, and after.
So instead of having companies like Samsung,
who spends $56 million a year sponsoring sports,
putting up signs saying, hey, here's my phone, you should buy it.
We've tested another model with Maccabi Tel Aviv over the course of two seasons
and said, what happens if you just put up prizes and say,
hey, you could win it?
Would the users interact with you?
The very first time we tried this at Minora Mitachim, a stadium of 11,000 people,
we got 20% of the fans to take out their phone and start gaming with us.
It got so good that we got to a point where 50% of the fans in that stadium
never watched one second of the basketball game.
They spent the entire time trying to win the prizes.
The more prizes we gave, the more they interacted.
McCabe is like, guys, we really need them to watch the game.
We've got to make some changes.
And, you know, we go through that learning curve with them.
But again, yes, the fans will engage.
They will interact with you, especially for prizes and rewards.
And you can leverage that out as well.
The important part is to help the fans understand that the game time is where we create that engagement.
But when they go home, it continues.
And it continues from there, in between the games, during the offseason,
and as well, during the games where we have boots on the ground that every time people come into the stadium,
they're going to get a $5 gift card brought to you by,
and this company allows them to go in and game against each other in a variety of different games,
where they can win back the rewards from their actual gaming brought to you by the sports club.
Let's go to Jonah from next question, Jonah.
Yeah, you're entering what's called e-sports, and I know a lot about that.
So I know about skills and skills has very few third party games that are using it at all.
They realize they had to build all their own first party, you know, license-free games in order to create that.
And it's for a lot of, we call them doctor office games, right?
Games where you play for like five minutes while waiting to get your tooth pulled or something.
Can you explain in two sentences from me?
Okay.
what it is you actually do?
Because I'm not going to lie, I was pretty confused in the pitch.
Like I'm trying to understand what you guys do.
Sure.
We build technology stacks for companies that want to monetize their ecosystem better
and connect ad spend to add return through gamification.
Very simple.
And let's go to the last, I mean.
John, I'm going to ask, for the panel, what we're going to do right after Dennis asked the final question is we're going to get the panel's thoughts on all three pitches.
And we've got one more project that's not going to be pitching, but I was going to give them a shout out at the end.
And I want the panel's thoughts on their favorite pitch out of these three.
Dennis, last question for the gentleman from X minor?
Okay.
Yeah, you know, I have a few questions, but I'll try to just keep it short since we're at the end here.
But, you know, there's a lot going on.
I love ambitious projects.
But like, what would you say is the thing that if you had to nail it down is the one item that you're going after that you're going to be able to generate revenue from?
And where is the, are you generating any revenue now that is outside of just the token?
Personally, I'm not a big fan of tokens being added on to kind of what I see as just like what are standalone business projects that can operate totally independently without tokens.
Like adding the token on is, in my opinion, somewhat of a cash grab.
So is there any revenue that you see that you're grabbing right now without a token involved?
And if not, you know, where do you see yourself generating revenue from in the first place?
So that's a great question.
So first of all, the revenue coming in is not from tokens.
That's from our private presale that we're doing right now in a Reg D, Reg.
S and converting to a full prospectus for our preferred equity round.
Outside of that, you know, our primary focus is skilled-based gaming revenue.
They're very well-known numbers.
Users being able to challenge each other in a game and any kind of a game, right, where they can bet...
PVP, they can enter into brackets, they can enter into tournaments,
a variety of- Are you taking a split then off of what people bet?
Correct. So here it is. The way it works is very simple. You and I enter into a Candy Crush game, for example. I bet you I can beat you. You put in 60 cents. I put in 60 cents. Right? Winner takes a dollar. That leaves 20 cents left over in the pot. From that 20 cents, 40% of that goes back to the users. 10% of it goes into the game, goes to the game developer whose game created that gamification. The rest is split between channel operators, the club and us.
And we have all the revenue models and everything else.
Just to move quickly.
So then you're,
so you're taking this model where you're saying essentially what's what skills does.
And you're doing the gamification component.
You're letting people bet against each other.
You're taking a split of that.
You're giving a part of it to the club.
But on top of all that, you're white labeling all of that within the act.
And then geo fencing it around some sort of a, you know,
whether it be a football club or a football stadium or anything like that.
Is that basically the premise?
Yeah.
That's correct. Connected into other things like a Pokemon Gofer, adults, Metaverse applications, and a variety of other services around it.
Because the same gaming mechanics that occur on mobile game occurs in the Metaverse as well.
Are you have any concern about gambling too?
You're talking about people betting against each other. Do you have any concern about gambling?
Goody and then Andy.
Great question. The answer is no.
All right, cool. Great answer.
Andy.
Yeah, sir. Do it real quickly.
Andy, now no need to respond to. Andy just quickly and then you respond to both X mana. Andy?
Andy.
Yeah, my question was more on the game developer side than the end user side. So on the game developer side, I'm curious what they're actually doing on the blockchain side and how you're focusing on Web 2 developers and on the Web 2 users. I'm assuming you're going to target them as well, not just because you talked about mobile. So are users signing for transactions in this flow? How does that work?
Yeah, so users log in with Google, Facebook, Apple, get a non-custodial wallet access, whether
they know it or not.
We've got about 11,000 people testing the platform, registered, and gas users combined
across the ecosystem right now.
And, you know, it is very much focus on the mass market.
We don't believe in adoption and education.
Let's be realistic.
There's not, there may be a handful of people on this call right now that actually knows
what happens when they swipe their visa, but we use it.
every day. Why? Because it's simple. It's seamless. It's something we understand.
And that's really the concept behind launching this kind of technology to users as well.
I'm curious, last little follow-up is what defines it for you that it's a non-custodial
when these Web 2 users show up on mass?
I apologize. I couldn't hear you. Would you mind repeating it?
I'm saying for you, you called it a non-custodial wallet.
I'm curious when you have users showing up on mass and you want frictionless flow.
What defines it non-custodial wallet for you there?
And if it's a service, what are you using as well?
Well, the users automatically get a wallet set up for them.
Right now, it's native on Polygon.
But the idea is that, you know, I think we can handle about 30,000 wallets per minute right now in terms of creation and so on.
I think it's as well, we can definitely enhance that and scale that as well.
But the idea for the users is that they shouldn't have to understand how these little assets work or these other parts of it.
They shouldn't have to understand how they're, you know, PK's work or anything else.
They should, it's something that should just be easy and familiar for them.
And then there could be education processes throughout that, which, you know, help them to become, you know, aware of those things.
So there'll be, I think, some processes that occur with that as well.
All right, guys, so we'll just, we'll wrap it up.
I want to ask a question for the panelists as we wrap up all the pitches.
John, you go first.
What's your favorite pitch of the day, man?
We've heard, actually, before you do that, Ben, you said you don't want to pitch.
I don't know why, but you guys have a pretty cool project with R-Fox Games as well.
So the website is our Foxgames.com.
It's in the thread pinned above.
For the audience, make sure you choose your best project in the thread above.
Surely at the end, we'll choose a thousand dollar winner.
In the meantime, our Fox games was looking at your website and maybe give a quick overview of what the project is, Ben, I appreciate you being on the panel today.
But tell us a bit about your project.
Yeah, thanks very much.
The reason we weren't going to pitch us so is because we're not actually raising at the moment.
Hey, shit.
Nice flex, bro, nice flex.
All right, cool.
But anyway, what do you do?
So we're a Metaverse builder.
We've been around since 2018.
We came from, you know, turnarounds, big turnaround companies and decided that the space was too fragmented,
decided to put the four fastest growing sectors of the internet economy into one platform.
Took a big punt that that would be a Metaverse and that that'd be a thing.
Built VR first and did lots of AI integrations.
So now we have even voice AI customization.
So you've got a wristwatch on your avatar in the Metaverse,
and you can actually just talk what you want to change,
like your walls, your floors, your ceilings,
expanding that out to creating products through,
through the actual, so creating the assets, you can mint them, you can put them on as NFTs, you can keep them as web too.
But the long-term objective and goal has always been for us to create these spaces for people to build.
So you can click in a VR chat or a normal game into a...
into a space and you maintain it.
You're not relying on us to upgrade or the next iteration to come out.
But our long-term goal's always been to have an API with full SDKs and tools
so that all these creators and builders and content creators in the Web3 space can come along
and say this is one space, one spot, it's too fragmented.
You have to go to one place for NFTs, one place for Defi, one place for games.
It's far, far, far too fragmented.
So it's taken us five years to put that together, just going into Open Beta now and building the, finishing off the user portals.
And we've got a ton of games and VR chat people coming across to deploy their applications in the spaces.
Cool.
All right, guys.
So, John, as we wrap up the space, your favorite pitch of the day?
So we had three.
We had ozone.
We had chirply, and then we had X mana.
Of the three...
I would probably say ozone.
Ozone, yeah.
I expected you say that one.
Doctor.
Only,
only because they can do well with that.
Only,
only,
well,
you know,
don't think things personally.
Just,
you know,
you never know what I'm going to think.
But the reason being is,
I think that,
it being mobile could be attractive.
I think you need to improve the graphical quality here,
but it being mobile is actually good.
And I think if you had really good salespeople,
you could probably convince a few virtual conventions
and virtual business conferences to use the product.
Cool.
We'll go to just briefly Dr. DeBan, your favorite project.
I have a conflict of interest here, so I can't really...
Ha, ha, ha.
Who are you invested in, bro?
Who are you invested in?
I'm not going to...
I'm not going to...
I'm not going to...
I was on...
Is Dr. Devon...
Ozone? Is Dr. Devine...
Is Dr. Devine invested in you?
So, look, we...
Not yet.
Not yet, actually.
I'll just say this point, which is actually...
people think about the metaverse
but there's so many issues with the
metaverse actually coming to fruition
and what they don't realize is it's ARVR
immersive technologies and it's about adding those
technologies into market segments that are growing
gaming is obviously growing but there are other market segments
that are growing sports for sure
because sports
sports stadium struggle to hold fans attention.
A lot of these sports stadium fans are from low socioeconomic status
countries. They don't have access to these experiences.
And so if you can create a way of engaging these fans
that don't actually have access to these stadiums,
there's huge potential revenue there.
And I know one of these projects has the potential generate huge amounts of revenue
by tapping into this ecosystem.
But I really believe in AR related to sports and fashion.
So I'll just leave it that.
But I'm not going to show the project because we have invested in one of them.
cool man joa and then we'll go andy favorite pitch joa
yeah i like x-manna but believe it or not it's not because of the business model i just
if you have the connections with the stadiums and the fans and then you're getting the brands
to sponsor you there's a lot there i just i still don't believe in why the the the
blockchain involvement there's a lot to do without it and i like the old concept andy
Eventually the same. I kind of only got to hear the very tail end of ozone.
So, you know, between turpling and the mana, I would go with the mana, but I think all of them probably don't need the token as much.
We'll go goody.
I mean, I think X-Mana had the best pitch, and for anybody that's coming up in pitching,
if you have 90 seconds to explain your project, you should prep for 90 seconds to explain your project
and practice it before you come on stage, because that time frame is a short time to explain a lot of stuff.
And I think X-Manna did the best job when it came to that.
And Sully and Dennis.
Yes.
Yeah, for me, I'm with Joy. I was going to say the exact same thing. I like X-Manor because of the...
There's a number of reasons, but what I really liked was, like, the interactive experience that sports fans can experience.
I think when you look at sports, it's a major aspect of society, and that's one of the things all fans are looking for.
How can I immerse more with, you know, the thing that I'm most passionate about?
Cool.
And Dennis, by the way, I would like to support.
Go ahead.
Mario, if it's okay, I would like to support X-Man as well because we're, and we should talk later on, mate, because the direct-to-consumerouser activations, right, in immersive world with Web3 layers is really the future of user engagement and fandom.
So, yeah.
Very aligned there.
Cool.
Dennis,
last person to speak up
on the favorite project.
And by the way,
that doesn't include
RFX,
which didn't pitch today.
So it's just X-Mata,
Cherpley,
and ozone.
Yeah, I just, you know, as someone who's very Bitcoin only, oftentimes, I find that people label these projects with their new tokens and use it as a way to drive investment.
I personally feel like X-Man, I had the best pitch and, you know, it'd be even better if they got away from tokenizing the project because it's somewhat unnecessary.
But the idea of giving people white-labeled opportunities to...
you know, better engage with their audience at sports arenas is a really great idea.
Sounds like they've had some success there, and I think that they should lean into that component.
Cool.
Sully.
It's so funny because I'm the only, I'm the one who liked X-Manna the least.
Yeah, I'm not surprised, man.
I kind of guess you're going to choose Ozone from what I know.
X-Mana's up on stage.
What do you guys?
Is it because you're a digital gamer, not a physical gamer?
You're not in.
No, it's because I've worked in this field.
I also helped write a bill into the United States for e-sports betting, and I know the challenges
he's going to face.
Sully, did you choose the comments?
Skills-based gaming is not the same as traditional gambling.
Otherwise, I wouldn't.
Yes, but as somebody who studied, that's true and not true, because there is even laws on skill-based
gaming on a state-by-state basis.
How?
Hold on, hold on, hold on.
Hold on, guys, guys, hold on.
XMata, did you guys, did you guys, did you,
XMata, did you say, I don't know, XMata,
did you say you sent me a message,
we aren't a utility token where SEC registered.
We never touched on that point.
What are you talking about, Chris?
XMata.
I don't know what message you're referring to.
Chris might have been sending a message.
Maybe it was from the past.
I don't know.
He sent it to my team just now.
The team forwarded to me.
He said, can you mention X-Man token?
We are in a utility where SEC registered.
We never touched on that point.
That's your man, Chris.
Not sure, but...
I can check with him afterwards.
But in the point of skilled-based gaming rules, we spent quite a bit of time researching skilled gaming rules and regulations globally and have uploaded them into the platform.
So that way we cover all the different states, all the different countries, understanding what the rules and regulations are.
In fact, we filed a few patents on the processes of how that works and everything else.
So we were very careful to make sure that all those rules and regulations were uploaded into the applications.
And I had built something similar.
It's really not that difficult in terms of getting past the legality.
Plus, once you do it in stadiums, you can do it in bars, you can do it at hairdressers.
You can do it in a lot of different places.
Cool.
All right, well, let's go.
I'm curious.
I do want to wrap up, guys.
So what I'm going to do is I'm going to choose the comment that Sully liked the most.
Sully, what's that?
You sent me a good one.
Can you tell me who commented and what they said and why you chose it?
Yeah, it's a long comment, but it was from Edward South and he said, I pick pitch three to back up and invest.
Which pitch three?
As the guys, I assume it's X manner.
Yeah, it is.
But as the guy's pitch was not so good with Mario's support, I could clearly see the meat on the bone for the ability of this to solution.
The ability of this, I think he means solution to work today and in future.
As I am still unsure, the Apple A-R-M-V-I headset will take off and the price reduced to mass adoption.
But if it does, then this type of solution will be needed for sure.
As they have working solutions today, I am bullish.
All right, well, Edward, hit us up.
Edward South.
Congratulations on the $1,000.
All right, these pitches went much longer than they usually do.
But again, everyone listening to the recording or everyone getting the clips or the VCs getting the clips.
Hit us up if you want to be connected to any of the three projects that pitch.
or if you want to be connected to our Fox games,
which is not pitching and doesn't want your money,
so it's kind of giving you the finger there,
which is surprising in the bear market,
hit us up and disclaimer,
we're likely working with most,
if not all the projects that pitched today,
and also heads up that we are continuing to work with projects,
whether through the media side or the incubation side and heads up we do have the daily show
monday to friday me you ran and scott the crypto town hall we do this every day at whatever p m est
i think it's like 10 a m esth or something do you know what time it is sully yeah it's 10 15 a m estes
yes t or whatever um every day oh not every day monday to friday uh six space and we do these
big spaces that the one we did today and we do that every once every every couple of weeks i
don't do them that often anymore um because we've got the crypto town hall
But a, yeah, it's a pretty interesting space today.
Like I think we went pretty deep in the Binance story,
starting with the DOJ, the imminent action from the DOJ.
We dug into the SEC lawsuit.
We looked into the, I think we focused heavily more,
like what concerns me more is less than the Binance lawsuit,
but more the tokens being considered as security.
Yeah.
So yeah.
And for those who were interested in the, sorry, Mario,
and for those who are interested in the AI space,
that is going to be the AI show starting on Tuesday at 1230 Eastern,
and that is on Tuesdays.
By the way, did you know, yeah, we're going to do that AI show.
And also we're working on a biohacking and anti-aging.
I'm very deep in the biohacking and anti-aging world, very, very deep.
So we'll be going into, we're doing a space.
regular spaces, regular shows with most likely
David Sinclair, Ben Greenfield and others.
So we're gonna kick those off in about a month.
Big, big fan.
So we'll be covering the three sexiest industries in the world.
And we've obviously got the daily finance show
with Danish, which everyone knows about every morning
at whatever a.m. EST.
I think it's 8 a.m.
But we have also, we're gonna be covering,
we do, crypto, we've been doing this for a long time.
We do AI, I've been doing it for a while,
and we're gonna do it more regular now.
And now we've got anti-aging and biohacking
So we cover all the cool stuff from a financial perspective, but also from a, just because they're interesting.
And also the best show that there is, which is the politics show.
Yeah, that one doesn't need chilling, bro.
That one doesn't need chilling.
All right, well, Sully, last week's thoughts on the space today.
What do you think?
Man, I thought the space was really good.
We had very good difference.
