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LIVE: Rep W Davidson: FIRING GENSLER? |HINMAN DOCS|CPI #CryptoTownHall
Recorded: June 13, 2023 Duration: 1:10:19Space Recording
Short Summary
The discussion covers the SEC's regulatory actions, including the proposed SEC Stabilization Act, which aims to address structural issues within the agency. The release of the Hinman documents sheds light on internal SEC deliberations about Ethereum's status, impacting regulatory clarity. The conversation highlights trends of regulatory scrutiny affecting crypto prices and the movement of crypto companies to regions with more favorable regulations. Despite a bull market and increased liquidity, there is concern about the U.S. becoming less favorable for crypto businesses due to regulatory challenges.
Full Transcription
You, Scott, can he hear me?
Yeah, I can hear you.
You hear me?
Now it's working.
Not working.
It wasn't really.
But hopefully it's not too loud.
Shouldn't last too long.
No, you're good.
I'm sending out the invites now.
Are you in the cryotherapy?
Or what exactly is that most?
Just so we know we're dealing with here.
Look, let me send the advice.
Let's not get into a heated debate now.
Let me send the advice.
Let me be at peace.
Let me do my thing.
Each one has his own thing.
He's wearing an ice block right now from the neck down.
Capsule that they did nice.
It's crazy.
Good for inflammation.
Mario, Mario, Mario is spending his whole, his whole, this life trying to be, to live longer.
But he's spending more time trying to live longer than he's longer than he'll actually live.
That's what I'm worried about.
Yeah, that's the problem.
And I end up regret it.
I know I'm about to get hit by a bus in the next decade or two and I'm going to regret all this shit.
But for now, let me just do my name.
I think he's spending, I think that's spending.
I think he's spending.
I think you're spending four hours or five hours a day,
and I think you're only gaining three hours a day, net, net.
To be fair, though, he is on spaces generally the whole time, so it's, you know.
Yeah, it's working well.
Like, these are still productive hours.
So, give us a bit of a...
Yeah, I don't know, man, after this discussion, I'm reconsidering maybe this is getting a bit of a revenge.
I've just sent out all the advice by the way, guys.
Alex, I've just sent you through an invite you should see it on your screen now, and then everyone else should see it in their DMs.
And guys, you've got the co-host advice, so you feel free to bring up the guests as well.
Yeah, I've just invited Meltem.
It should be in your DMs as well, Alex.
We should be able to get people up here slowly but surely.
Yeah, yeah, yeah.
I see Alex Kapskone.
Someone invited Alex?
Yeah, we try to invite him every time and somehow it doesn't work.
Make sure you use your phone, Alex, make sure you use your phone, not a laptop is very important.
I mean, once, I mean, while we're inviting people up, probably with talking about the inflation number.
Yeah, exactly. What was the result? I know our space crashed.
Literally two minutes before the numbers or something.
It's horrible, I know, I know.
But what was the result?
The year and year inflation is 4%.
The expectations were 4.1%.
The last reading was 4.9%,
which means that inflation is now coming down
at a very, very, very fast rate.
The interesting part around the inflation numbers
is that if you look at
how long it took, it took 11 months for inflation to go up from 5.3 to the peak of 9.1%.
It took that 11 months. And to come down from 9.1 to 4.1, which is 1.2% lower than the 5.3,
it took it 12 months. So what we're realizing is that inflation is actually coming down way faster than inflation went up.
which is a very positive sign.
And we are heading very quickly
towards the Fed's target of 2%.
I say very quickly,
relative to how quickly we're heading there before.
We've also had 12 months in a row
of inflation declines,
which means that
You know, if the Fed's role, if the Fed's job was to decrease inflation,
and I don't think we should start commenting about how they got there in the first place,
but if their job was to increase inflation, they've certainly done a good job.
They've reduced inflation in the span of 12 months from 9.1 to 4% year on year.
There is still inflation, but it is coming down.
And the Cleveland Fed forecasts that next month it's going to come down as well to about 3%, or 3.2%.
So, I mean, very, very, very encouraging inflation numbers.
The result of the inflation numbers is that there's now 98.8% probability, sorry, it's just changed.
95.3% probability that the Fed's not increasing interest rates tomorrow.
And of course, we're going to be live here tomorrow.
The three amigos are going to be live here tomorrow doing spaces.
It's a very long space is tomorrow, right?
Scott, what did we find out?
What did we finalize for tomorrow?
I think we're going to be.
spacing for like 19 hours.
I think we're just going to do a 47-hour marathon so that we can get a single number on FOMC.
Exactly.
Yeah, it's got to keep up the hype on the front and back end, obviously, for these very important numbers.
We do have good speakers.
We have Nereal Rubini's coming on.
I know Noreal's coming on.
He's always good value.
We've got some good speakers coming tomorrow.
He loves Bitcoin, so I'm definitely going to ask him about that.
Yeah, yeah, yeah, yeah.
No, I don't.
Yeah, so I mean, inflation numbers.
And how did the markets, how did the markets react, Ryan and Scott?
Well, the markets, the, the traditional markets were really expecting this.
So, I mean, you are getting them like up half a percent.
But you know what?
Something that I covered on my show when we covered this inflation, which is probably worth with talking about is, if you look at the NASDAQ, the NASDAQ, the NASDAQ is up 40% this year.
So if you look at the NASDAQ since the first of Jan, the NASDAQ is up 40% this year, which is, it's a serious number.
You've got the Nikai up about 30% this year.
So there is a massive, massive, massive bull market in equity markets.
I know people are talking about, you know, it's a bare market or whatever.
Equity markets are in a massive, massive bull market again.
Also, today there was news that China is considering stimulus.
which may put more liquidity into global markets.
So, I mean, you know, you can sit back and you can ride this narrative of how bad things are and how bad the economy is.
Or you can say, look, the markets are actually looking right through this.
And if again, you take the NASDAQ, NASDAX up 39.09% year to date, which is a big number.
So it's a massive number for the NASDAQ.
It's almost like the Fed should be using leading data instead of lagging data to make their decisions.
I mean, we'd still be here if the Fed had stopped tightening six months ago.
But I guess that's topic for another day as we approach having Warren David's a few minutes.
I mean, look, I think the, like, listen, the Fed got itself into a pickle when the money had to be printed and the stimulus checks had to be done and whatever else.
But I think, net net, I think that, like, they did do, they did, they did manage to reduce inflation in the span of 12 months.
with aggressive rate tax, but whilst keeping people employed.
So like, I mean, I don't know how much more,
how much better job you could have done than what Jerome Powell actually did.
And I'm not-
I think you're allowing them to spike the ball
and celebrate this touchdown a little too early.
Yeah.
I don't think that you can claim that they've done the job yet if we know what could still be coming for commercial real estate and other places.
I'm not a doomer, but just because inflation has come down now does not mean that six months from now the cuts that they did in the last few meetings are not going to wreck the market.
I think by then they will have a tool at their disposal, which is the ability to reduce interest rates from 5% or 5.25% back down.
At least now, at least now...
They're not pivoting unless the stock market crashes.
It's not going to happen.
Maybe.
I mean, listen, if tomorrow don't increase interest rates, is that a pivot?
No, that's a pause.
Isn't the pause a pivot?
I mean, if you're increasing and then you pause...
No, it's a pause.
Okay, and going back to easing and easy money would be a pivot,
and I don't see that happening immediately.
Scott, you've become very skeptical.
Why is that, Scott?
Hold on, but why?
Why?
Because it's a pause. A pivot implies going the other way.
And by the way, if you look historically at pivots, if you look at the way that this happens for all those who are massively bullish on the stock market here, you get the yield curve inversion, then eventually because something breaks, the Fed pivots, then the stock market bottoms.
every single cycle. So if you do think this is a pivot or a pivot is coming, then based on history, almost every time you should be expecting for stocks to put in a new low.
Let's get look, hopefully other guests are more optimistic. Alex, William, Eleanor David, Melton, anyone else have, you know, more optimistic expectations from the Fed?
No one has more optimistic expectations.
Nobody else.
Everyone's on Scott's boat of pessimism.
I'm not even that pessimistic to be clear.
I'm just telling you what's happened in history.
And a pause is not a pivot.
Go ahead, Melton.
Okay, no, you didn't want to get into this round, but I think if we look at what caused the decline in the inflation number, it wasn't driven by food and housing, right?
And I think there's a difference between the CPI print and whatever the inflation number is that's published.
I think it's very unfortunate that we live in a time where there is just very low trust, generally speaking, about the official published numbers.
But if we look at what caused the decline, the decline was primarily driven by energy price declines.
And so I do think it's interesting to observe that inflation is not coming down equally in all sectors,
and it's certainly not coming down in the sectors that matter most to people's perceived wealth and their spending habits.
Consumer credit card debt is still at an all-time high.
We look at households.
sort of a credit very high.
And so I think, you know, if you're in the position of the Fed, the Fed has repeatedly said,
if you listen to what at end treasury, right, Janet Yellen has said,
they're perfectly happy to destroy the economy.
And they're perfectly happy to harm American workers,
if that means getting CPI in line.
And if you look at, you know, the jobs numbers prints, unemployment is incredibly low, labor
market still incredibly tight. So I think we're sort of in this uncanny valley. And, you know,
a big OPEC meeting last week as well. There's sort of...
A lot of gaming going on within OPEC, within oil prices.
So I'm not as optimistic.
I think prices, if you look at the way people are experiencing inflation,
you know, people are going to the store, $100 that you would spend on groceries,
doesn't buy you the same amount.
Rents are rising.
So the cost of living generally is rising dramatically.
I don't see that coming down.
And again, with so much...
money in the system, it's just hard to see a world where like that core, when you strip out
energy is actually going to decline. So I don't know if I'm as pessimistic as Scott perhaps,
but I just think that this reduction in inflation is not felt equally across all categories.
And I do think that some of these categories, particularly energy prices, can be manipulated
if we look at the utilization of the strategic...
petroleum reserve or SPR and just some of the gaming going on within OPEC in particular,
you know, the Saudis cutting production and there's a lot of, you know, interesting sentiment
looking at oil going into peak demand season this summer. So I'm just, I'm approaching
with skepticism.
I don't see why the hikes would stop just looking at the overall landscape because inflation
is still 2x over target.
Job market is still very tight.
And I just don't think we're at the achieved end state.
Yeah, to be clear, guys, I'm not so pessimistic.
I'm literally pointing at the data from the past.
Yeah.
Pause that I do not believe is a pivot.
I think that that's generally consensus.
It's literally pausing.
Pivot implies going the other way.
But if you look at history, that pivot precedes the market crash.
That's what happens.
I'm not saying that will happen this time.
I'm not even pessimistic.
I just can only look at the data that exists.
And just quickly, Senator Davidson, you're in the audience.
We've sent you through an invite via DM, and I've sent you.
You should see it on your screen as well.
Just make sure you use your phone, not your laptop, and you should be able to come up on stage.
So if you go to your messages and check my message, or click on my profile, check my message.
You'll see an invite, click on that with your phone, and you'll be able to come up on stage.
It'd be good to have you.
And while waiting for Senator Davidson to come up, Scott, maybe give us a bit of an overview of what's going to be discussed today and what the Hinman docks are.
Sure, I can do that.
As he comes up, obviously, we're going to be respectful of his time and dig right in.
There's people on stage who are much more qualified to discuss the Hinman docks than myself.
Obviously, this is what people in the Ripple case have been waiting for, as Brad Garlinghouse said, for 18 months,
which will be effectively when Hinman, the SEC, deemed Ethereum...
a not a security, which should be precedent to many that will be the same for Ripple.
I find it interesting, though, that the narrative around the Hymondocks release now is more
around people's belief about Ethereum than it is about Ripple at this point.
People are very excited that it could effectively give us some clarity on what is happening
with Ethereum.
Of course, I mean, there is just an insane amount of...
of news and things happening at this point, we just want to obviously focus on the SEC Stabilization Act and Congressman Davidson as he comes up here.
Ran, I mean, you reported on all of this stuff earlier today.
I mean, what's really impacting the market here for you?
What thing are you looking at the closest?
Everyone, I guess.
I just obviously want to wait for Congressman Davidson.
Okay.
I mean, look, as I said, I think we'd be, I think if it wasn't for the SEC's attack,
on crypto, then I think that we would be, I think we would, I think Bitcoin would definitely be over $30,000 here.
Because, you know, the markets are running. We're in a bull market. There's more liquidity coming in.
I mean, it's, it would be, it would be, it would be a clear road ahead.
I think I think I agree, Rand. I just, I do want to interrupt because, because Congressman Davidson is here.
I'd like to welcome Warren Davidson, the United States Congressman from the great state.
of Ohio. First, I have to thank you very much for giving us your time and for your pragmatic
approach to our industry. I have to tell you that personally, I've probably used your, quote,
Hotel California rule for crypto that you used in that congressional hearing about a thousand times
is probably my favorite quote ever, and I reference it almost daily. So thank you for that.
But obviously you're here today because you propose the SEC Stabilization Act,
which would see Gary Gensler fired and the agency reconfigured
I would love if you would tell us more about the act, why you proposed it, and your desired income.
Yeah, hey, thanks for having me on.
And it's really, really nice to see a pretty good crowd of people in this Twitter spaces.
So some folks haven't seen for a while, so great to connect over the space.
And some folks that probably I haven't ever met yet.
But thanks for promoting this and allowing me a forum to join you all today.
Look, I think we all know we have a Gary Gensler problem.
But, you know, Gary Gensler's...
abuses have highlighted that we also have a structural problem with the SEC. And essentially, it was
originally created as a commission. And with the way Ginsler is doing everything, you know, we really
have commissioners that it's nice to read a good Huster purse.
dissent every now and then, but she has no power in the organization.
We have an overly strong chairman, and he's a super activist.
So if you look at the abuses, he's proposed on average two new rules per month.
It's the biggest rulemaking process.
at the SEC since Dodd-Frank passed,
and Dodd-Frank was a major overhaul
post-08-09 financial crisis.
So it makes sense that they would be writing rules after that.
The only thing that happened...
recently as Gensler became chairman, and then he started this whole period of activism.
And not only did he do the rules, but he put inappropriately short public comment periods
because, yes, he doesn't care what anyone thinks.
He doesn't even care what the impact on the market is.
He's got an agenda, and he's very anxious to implement it.
A lot of these things are unworkable, and they're unlawful.
They're outside of scope, the ESG disclosure mandate.
is an example. And wherever you stand on ESG and all the things that it does, if you're going to make a
major overhaul to reporting requirements in capital markets, it should be a law. It should go through
Congress. It shouldn't just be, you know, an overly zealous chairman kind of imposes his will on the
entire capital markets of the United States.
And frankly, 50 plus percent of the world's capital invested is in our market.
So it's really bigger than that than just U.S. investors.
The Hotel California rule that I cited, you know, that's, you can check in anytime you like, which is a little change to the quote, but check in any time you like, but you can never leave. You're never going to get approval. And kind of the other part of that is you've essentially committed to an endless discovery period where there's not going to be resolution. And, you know, you're just a captive to the SEC at that point.
he's got unworkable proposals for overhauling the equity market structure.
He wants to change things like payment for water flow that have improved retail investing.
And if that's one of the themes for sure, it kind of goes with his claim that somehow he's
protecting retail investors. You can't just ban people and say that's investor protection. It's
actually harming the retail investors. It's harming our capital markets. And, you know, we have to rein that in.
His proposed custody rule is essentially all bought a ban for crypto. You know, certainly anything that
self-custody. I mean, and people that want to ban self-custody are essentially saying they don't trust you with your own money.
They want to have you have your money in the hands of someone else that they can control.
And so if they can't kill crypto outright, they're at least trying to make it account-based so that it's not
able to achieve its real potential, which is very disruptive to get rid of all the intermediaries.
If you have peer-to-peer permissionless transactions,
which is the vision,
then, you know,
look at all the intermediaries
who are disrupted.
And frankly,
they're pretty happy
with some of Gensler's work
to kill this innovation.
And then lastly,
he's front running,
you know,
I said Congress,
but really just about everybody.
He's front running Treasury.
He's front running,
he's front running,
you know,
others to try to get out ahead of,
of efforts to provide the clarity.
And we've got legislation in Congress finally,
that is bipartisan.
And he's trying to make sure that he gets out ahead and kills as much as he can
ahead of that legislation taking effect.
you know,
we know we need to get rid of him.
So what does the bill do?
It's,
He's a commissioner, but he's elevated as chairman.
So I suppose he could stay on board as a commissioner,
but he would be one of six commissioners,
three Republicans, three Democrats.
And essentially, if there's not consensus,
then they can't really change things.
They could hire an executive director
that would handle day-to-day administrative functions.
But that position would be powerless.
Right.
except from the power given by the commission.
I think the last thing there is, just to be sure,
no former chairman can be the executive director,
so that would preclude Gary Gensler from being the chairman.
So that's what we're trying to do,
and frankly, depoliticize it,
and that's where I hope is,
I hope we can get some Democrats to be on board with the bill.
Some of them like it, but they're reluctant to kind of buck the administration and kind of the cartel that Elizabeth Warren and crew have imposed on the financial services space.
So you talked about front running Congress.
You talked about front running the Treasury and to all the other speakers, please remain muted.
You talked about that, but many pundits have pushed back in defense of the SEC saying it's the job of Congress to legislate on the status of crypto, whether or not these assets or securities or commodities.
So this lends the idea that the SEC only has one tool and when the only tool you have is a hammer, everything looks like a nail.
Is it actually Gensler's job to offer clarity on which assets are in fact securities or does some of that actually fall on Congress?
Yeah, I mean, it's fair. I thought, look, I started.
working on financial services committee in 2017.
And I tried to get hearings about the ICO market back in 2017
so that we could propose some sort of bright line clarity
as to, you know, what is the security and what isn't?
What's the process for registering?
All this, I thought we would be able to do that in 17.
18 was going on.
I still couldn't even get a real hearing, but I was, you know, pretty junior guy.
So I was like, okay, well, we will hold.
have a meeting anyway, and that's when we had in September of 18, the meeting that produced
the token taxonomy act.
So that bill was done at the end of 2018.
We tried working all through 2019 to get it.
If you look at how much damage is done in the market, all the bankruptcies, frankly, all
the harm that's been done to retail investors through failures, a lot of that could have
been prevented if we simply passed the Token Taxonomy Act in 2019, which is longer than
I thought it would take.
We still haven't passed anything like that.
So you look, part of this failure for the market is Congress's.
But when you look at what Gary Gensler is doing, he's doing selective enforcement on the one hand.
So, you know, he reaches a settlement with Kim Kardashian for promoting an unregistered security, which was Ethereum Max.
Right.
But then he didn't engage in any kind of enforcement action to shut down Ethereum Max because they've got an unregistered security.
So it isn't even a coherent enforcement strategy on the one hand.
And on the other, he's hyper aggressive in rulemaking proposals.
And...
where's the rule that makes it clear?
I love the CEO of Cracken.
It was like, oh, yeah, I should have clicked that register here button that's so easy to do on the website.
We had a hearing.
He still will not answer whether Ether is a security.
Look how long Ether's been in the market.
So he's willfully withholding clarity.
So there is a burden for Congress to correct that.
And I think we will get around to that.
But I think.
His abuses have highlighted the other thing Congress needs to correct is we need to get Gensler out of the chairmanship, and we need to get a structure that doesn't leave that organization vulnerable to a similar set of abuses.
So what's the path for seeing the SEC Stabilization Act become law and how long would that theoretically take?
I mean, I think it would obviously have to get through the Senate and the president, which seems challenging.
Yeah, I mean, I'm not going to say it's a layup, but my hope is we'll get the bill noticed for a hearing.
That's the way the process works in Congress.
You notice it.
So then there's people, some of the questions will then be based on that bill.
And then hopefully as a result of noticing it for some hearing in the future, we'll move it to a markup through the Financial Services Committee.
From that point, we try to get a vote on the floor of the House.
So in general, members of the committee try to make amendments
in the markup during the committee process,
and then members of the rest of Congress offer amendments on the floor of the House.
And then, you know, okay, let's say there's a couple of amendments that make it palatable.
Then the hope is, Sherr Brown, as the chair of Senate banking, would take it up.
I wouldn't get my hopes up, though.
Sherr Brown hasn't moved a single bill on any subject the whole time he's been chairman of Senate banking.
So he's basically just provided cover for Elizabeth Warren.
over there. But the hope is that you look at the market, just look at, and we were like
almost 4 million views on this, you know, tweet yesterday just announcing it. So there's a lot
of appetite for something along this line. So I think everybody spent years being frustrated
by inaction, you know, frankly by Jay Clayton as well, but also kind of very much so by Gary Gensler.
So the public, look at the Republic, if you can keep it, we the people can keep it, not just Congress.
So hopefully my colleagues in the House and my folks over on the Senate will take note and start moving this legislation.
Senator Hey, it's, it's Ron speaking.
I have a question for you.
So Gary Gensler was an MIT professor.
He lectured a series of courses on blockchain.
He developed those courses himself,
which means that he obviously had like a passion for the technology.
And if you listen to his, his attitude around blockchain technology from those courses,
and I've listened to about nine or ten hours of stuff on the web,
He seems to have changed his tune since he got into the SEC.
What do you think this?
I mean, it feels like we're not really hearing from Gary Gaines.
I'm keen to hear what your views are there.
Well, motives are always hard to ascribe, but I will say when he was named chair of the SEC,
I also took note of his...
passed in his course that he taught at MIT.
And I was hopeful that he would provide, you know, the clarity that was possible through
rulemaking at the SEC and that he would be collaborative and coming to Congress and saying,
look, I can only go so far.
We need you to support a law that does XYZ.
Like, I think that would be an effective chairmanship.
And I was hopeful that he would be the kind of person who,
that would do that.
So, you know, it's not that he's,
it's not that he, you know,
there are some people that don't get the implications
of certain policy positions,
Gensler is not one of those people. He gets the implications. There are some people who, when they think through the implications, they say, well, there's some unfortunate tradeoffs here, but on balance, it does good. That's not Gensler either. Gensler is for these policy positions because of the implications of the policy positions. Now, why? That's the harder part. But you have to say, given what he's doing, driving him, he's...
He is designing these things, is designed his own actions.
He's for them because of the implications.
I know that we're wrapping up momentarily and we respect your time.
I just want to know what we as citizens can do to help support this act.
And I also want to just make a quick point.
I think quite a few people in the crypto community have become single issue voters.
And I'm curious as to your thoughts as to whether we're a large enough part of the constituency to actually impact the upcoming elections.
Yeah.
Yeah, you know, one, I think what can you do for sure? Get engaged. I think a lot of people in this space haven't been incredibly political. Definitely the saying that's relevant there, you may not take an interest in politics, but politics will take an interest in you.
Yeah.
people in this space that just want to run their businesses or launch their innovation or even
participated in it as retail investors are finding that politics is wrecking what they care about.
And so, you know, the solution is to get engaged.
And you can get engaged at every level.
Part of it's just like, you know, following.
We've.
grown our followers at Warren Davidson on Twitter,
you know, quite a lot over this issue and other issues in this space.
I probably ought to launch a different Twitter handle just so I can get my regular constituents.
I won't say this is like the biggest issue in any one congressional district,
but, you know, that's the way single issue topics go.
And, you know, I started working on this because it was one of the topics that wasn't already taken.
when you come in as a new guy, you find that, oh, well, somebody else is working on this bill, that bill, the other bill.
You're like, well, what's still open?
Well, new stuff.
And so this is just one of a range of issues I picked up.
but a lot of our following has picked up there on it.
I just say make sure that you try to reach out to people that represent you
and get on their calendar, call their offices, write them letters,
but especially get on their calendar.
Because when you get on someone's calendar,
some staff member will do research.
They will prep the member of Congress or legislature, Senate, whatever.
Even, you know, any way you can participate in regulatory feedback,
just stay engaged on it.
And then I think, you know, the other thing, and the nature of politics, a lot of it takes
money.
And I've been encouraged by people who've built some of these fundraising programs out there,
and they're starting to put money behind races.
There were people that were talking to me about running for Senate to try to take out Sherr Brown.
I'll admit it was tempting or is still tempting, but I'm really passionate about what I'm doing in the House right now.
One of the things I learned when Paul Ryan was speaker is the minute you say you're not running for reelection in the House,
all your juice is kind of gone.
I mean, he was speaker, and he still kind of lost input on all kinds of things.
And I just really feel like I need to run through the tape on some of these issues.
You know, this is just one of the ones that we're working on while we have the majority right now.
So it'll have to be somebody else that takes out Sherr Brown.
And I think that would send a big message for one, because he is the chairman of Senate
banking, but two, there are three states where the Senate hangs in the balance.
West Virginia, Ohio, and Montana all have Democrats in the Senate right now.
And if we flip two of those three, control of the Senate goes to Republicans.
And I think that's hard because a lot of people in the space might think of themselves
as Democrats more than not.
But Elizabeth Warren is...
is kind of atypical of your average Democrat, particularly with respect to this space.
And so she's incredibly hostile to it.
I think it sends a strong message if we can somehow pull that off.
And the big things in campaigns, there's money, message, and work ethic.
You've got to find the people that will have the work ethic and the message.
And a lot of people in the space maybe can help with the money part.
I think it's fair to say that we've got your back and everybody here is excited to see this push forward and willing to do whatever it takes to make that happen.
So thank you very much for your efforts and for your time and we will be tracking it very, very closely.
All right. Yeah. Hey, thanks for having me and God bless all of you. Great success to everyone. Take care.
Thank you. Alex Tapscott, I saw that you tried to lift your mic during the talk there, so obviously you had some thoughts. Go ahead.
Yeah, well, Congressman Davidson, if you're still on, thanks for all the work that you're doing to push the agenda forward and to help our industry.
I think that there was a couple of things that he said that I thought were kind of interesting, that perhaps, even though I think we can all agree that the SEC is overstepped in this area, that there could be a silver lining.
And that silver lining.
is that there are now people in like lawmakers in the US on both sides of the aisle who see the overstep for what it is.
And I think are trying to sort of wrestle back some control of how we govern and regulate this new industry in asset class.
And making that something that's, you know, based on some kind of new law or legislation.
You know,
I think there's a, there is a mischaracterization that the, the, that DC is kind of divided along party lines.
And to be sure, like, I think Republicans in general are more favorable to the industry than than Democrats.
But we know of, you know, people, there's the, there's the blockchain caucus in the Senate.
There are.
Congress people like Richie Torres in the House who, you know, are Democrats and are very supportive.
And I thought that was actually really refreshing what, what Congressman Davidson said, that
Elizabeth Warren is atypical of, you know, your average Democrat. I'm not sure that's entirely
true, but I do think that she is an outlier. And I think that there's an opportunity here to build a
bipartisan consensus.
to try and create a lasting, durable, you know,
regulatory and policy framework for this industry.
And, you know, I'm a Canadian,
so I've kind of got an outsider's perspective on this,
but I really hope that the U.S. gets it right
because most of the world is not waiting, right?
There are 33 countries that have either enacted
or developing new laws for crypto.
You know, Europe passed its Michael laws.
Hong Kong is opening up recently.
The UAE is spending billions to attract entrepreneurs.
And even we saw last week,
you know, the government of Beijing talking about Web 3, though, as we discussed on last week's show,
maybe overstating how keen they are on Web 3, and that Web 3 might be Web 3 with Chinese characteristics, right?
But even still, we're seeing a lot of, you know, nobody's waiting for the U.S. to sort this out.
And I think my concern is that unless, you know, there's some kind of change in how the government approaches this,
that the next era of the web, Web 3 is going to be built anywhere but the United States.
And I think that would be a shame because I think that the, you know, the U.S. has lots to offer.
There's been a lot reported recently about the offshoring of talent and capital.
And, you know, it's a decentralized industry and technology.
And the world today is more flat than ever.
And there's no reason for people to necessarily be based in any one place.
So, yeah.
governments are competing in a marketplace for regulation and for capital and so forth.
And I think that there's an opportunity here to maybe turn the tide.
But I don't want to sound too too polyanish because I think that it's going to be kind of a difficult slog here in the next little while.
David, I saw you had your hand up before as well, Bailey. Go ahead.
Yeah, I just wanted to ask the congressman about the GBT situation and getting some relief there for GBT shareholders.
David, but from what you've looked at, how much could this act actually impact something like that?
Not really at all because it doesn't require any sort of action.
It just requires clarification from the SEC that GBT can do file for Reg and Relief today if they wanted to.
And I was just wondering if he had made any kind of decisions around his view on that.
Got it. Meltem, I know when Congressman Davidson came up, he said, some of you are familiar
phrases and friends. I think he was referring to you, right?
Look, I think Congressman Davidson and I have certainly, you know, shared our views.
And obviously, gosh, it feels like a lifetime ago, five years ago now.
When I testified, you know, in the Libra hearings, we had some banter and, you know, he's
said shit coin in Congress and that I think was a very funny moment, very hard not to laugh. But look,
I think Congressman Davidson is sort of,
been on the mark with many of his criticisms. And I'm happy, you know, we, we have incredibly engaged,
you know, political leaders like him. Luckily, chairman of House Financial Services as well.
We have Tom Emmer. We have Cynthia Lemma. So we have a lot of people on the Hill who have taken the time to really
try to understand what's going on in the industry.
I think what doesn't help us is there are a lot of sensationalist headlines.
You know, there is a lot of very scammy activity in crypto.
And unfortunately, you know, it's, you know, when you have a digital asset that settles with finality, it's just a hotbed for...
fraud because it's very easy to defraud people, unfortunately.
But I do think there are a lot of people on the Hill who've taken the time to really engage,
to speak to industry, who understand how aligned the ethos and sort of the underlying principles
of Bitcoin and more broadly the cryptocurrency Web3 space are with like foundational American values.
So very grateful that, you know, we have folks like him putting their reputation and their social capital and their political capital on the lines. It's great to see. It is an election year coming up. So we'll see what impact that has and how this issue plays into politics.
conversations going into election season.
But it certainly has been great to see.
And I hope everyone here will do what they can to contribute,
whether it's going out and voting,
contributing to campaigns, just going out
and speaking to people on the Hill.
Staffers are a good place to get started.
I know there are a lot of people in here
who have been doing that work.
But it takes a lot of effort.
But I'm happy to see that people are taking up the cause.
You made it really important.
Go ahead.
Let me ask a quick question.
Sorry about the background noise,
but he did talk about a movement.
I think Alex,
you mentioned it,
that it's leading to a movement in Congress
in support of crypto and freedom.
Are we really seeing that?
Could that change the course of regulation
for crypto over the next few years?
Well, you know,
a lot of people talked about
like a bipartisan consensus
around this industry last year
and even the year prior.
You know, there was a,
a few different points at which people from both sides of aisle came together.
I think that the,
frankly,
I think the collapse of FDX kind of obliterated that,
that bipartisan consensus in the short term.
I think a lot of Democrats were caught with mud on their face,
having taken,
you know, campaign donations and kind of changed,
not changed their tune, but in general,
I think the pendulum has swung far more to like a shoot,
first, ask questions later approach.
But what I'm suggesting is that, you know,
maybe if there's a silver lining to this whole SEC thing,
that it's kind of reset the conversation
and that the fact that the SEC is taking the approach that it is,
has raised eyebrows for,
from lawmakers on both sides who view the, you know, the prerogative of setting new rules for an
emerging industry as something that should be Congress's responsibility rather than the regulator,
and that maybe this will cause a renewal of the bipartisan consensus. Because ultimately,
you know, unless it's an election issue, and unless, you know, it's something that constituents
care on both sides of the political spectrum, I'm not sure that,
whatever laws are working their way through Congress,
we'll see the light of day.
Like I said, Canadian, not a U.S. constitutional scholar or anything like that.
But my hope is that this event will cause a renewal of the consensus
that I think a lot of people were really hopeful about,
or the bipartisan sort of viewpoint on this industry that did exist,
you know, in the last couple of years.
William, go ahead.
Yeah, I think we have to be realistic in that
The only thing that's going to make a difference at this point is if there is going to be an actual ruling at the end of these lawsuits.
That's going to make a difference.
In the meantime, we're just discussing things, and we know that the Congress is going to be slow to enact these bills.
As we all know, there's been 84 of these bills that have been discussed.
There are lots of hearings. There's another one today.
But moving from a hearing to an actual bill that gets voted is not going to be an easy thing right now.
Unfortunately, I think the SEC has a bit of an advantage right now because they are more nimble
and they can fire on these lawsuits one after the other and we are now on the defensive.
I think the best thing we can do as an industry is to talk more about use cases.
I've said this before, there's a lot of too much finance currently in the blockchain.
And that invites a lot of attacks.
We need to talk more about what are people doing with the blockchain that is not just about trading.
And I would say one last thing.
It could be a bit controversial is that
There's going to be a new wave of entrepreneurs that's going to emerge in the U.S.
Despite, in spite of the regulatory headwinds, you can do Web 3 with tokens and be compliant
in a way that you bring utility to the token before you make it tradable.
And that is going to be the new wave of entrepreneurs that we have to expect.
Hey, I actually, John Deaton, I see we've got you here, so it's a good opportunity to give a quick summary of what's happening with the Hinden Docks.
Long awaited.
We've seen some of it, but I think a lot more is supposed to be dropping today.
You've been tracking this and on top of it more than anyone.
So can you give us a bit of context and what you're expecting?
Sure.
Basically, so far we have...
The summary judgment motions had lots of redactions,
and one of the redacted sealed documents was the infamous Hinman speech.
So everyone knows the June 14th, 2018 speech by Hinman,
which said Bitcoin also, but really highlighted that ETH wasn't a security.
There were 63 emails, 52 drafts to the speech, and there was give and take.
But those were all sealed.
Ripple fought for two and a half years.
seven court orders.
The SEC fought tooth in now.
Even there was a third party
Rosalind Leighton, who's a Forbes
contributors sought to intervene to get these published and the judge ruled that what could be sealed and what couldn't be sealed.
And this relates to all of the evidence.
Evidence that Rippled won it sealed, that she said, no, that's fair game.
Evidence that the SEC wanted sealed, such as these Hennman documents.
No, that's fair game.
That's all being released today.
So there's going to be tens of thousands of documents.
that are being filed that are unsealed.
Right now what we know is that the Hinman emails
have been published and released,
and they're still being...
processed. And, you know, Ripple, Stuart Alderode put out a tweet and a thread summarizing. This is the
evidence that Brad Garlinghouse said was going to shock people about the behavior of the SEC.
And as far as the hymn, I made a prediction. And the prediction was that
the emails would go to the fair notice issue that Ripples brought,
not the substantive underlying whether or not XRP was sold as a security under Howie,
but I said that the conflict...
And him in violating 18 U.S.C. Section 208, which he did unequivocally, would be further highlighted.
And that for sure was.
You have the Office of General Counsel saying, you know, I don't think you should put East in there.
I don't think you should do that.
He interestingly said, you shouldn't do it because it's going to limit our ability to say otherwise in the future, which is what we see.
So that's good news for Heath.
You've got the General Counsel of the SEC...
saying, hey, if you say it's not a security, it limits us in our optionality in the future.
And that's where we are today and why you see, even though Gensler may think he's the security,
he's never come out and said it.
So there's that.
And basically what I said about highlighting the trading markets director basically warned,
this speech is going to cause greater...
confusion in a market that's already confused.
And so Hinman ignored those things, and he included East.
And when you look at the conflicts, and if you want me to spend two, three minutes on that,
so I can prove to people that this isn't a fucking conspiracy theory, this is a monkey
could prove that he violated 18 USC 208.
I can do that.
Have at it.
Two, three minutes ago.
All right.
So basically,
Hinman,
Jay Clayton's,
Pharma Sullivan,
and Cromwell,
Joe Lubman did a fantastic job when in hiring Sullivan and Cromwell attorneys as soon as Clayton was appointed, made one the Deputy General Counsel.
And basically, that guaranteed a meeting.
December 13th, 2017, Joe Lubin and consensus meet with Hinman and they discuss.
an alliance, the general counsel of consensus the next day, December 14.
I got all this proof on my site, says, we're building an alliance with the SEC.
Between that moment and June 8th, when they met with Vitalik, 6 to 8 meetings were made with Hinman and the East folks, including Chris Dixon at A16Z.
Jay Clayton went to Chris Dixon, A16C said, put a memo together.
Lowell Ness, their attorney in crypto, wrote a memo, gave it to...
Hennman on March 26th, 2018,
met Hennman two days later on March 28, 2018,
and they offered a safe harbor for ETH,
and only ETH, the only token,
that was listed as someone who should be given safe harbor.
And then there's this meeting that continue to happen.
Then, on June 11th,
that's when the general officer general counsel says,
you shouldn't put Eth in,
and Hennman ignores it.
He says...
Well, we believe ETH is sufficiently decentralized, but I'm going to talk to Vitalik and see if he confirms that.
Now, imagine going to Brad Garlinghouse or Joel of David Schwartz, the CEO of Ripple and saying, hey, we think it's sufficiently decentralized.
Is the XRP ledger sufficiently decentralized?
Of course they're going to confirm that.
And then the speech was given.
Now, what we learned is that when he gave the speech, Hinman was...
Being paid, not retirement income people.
He was an ongoing profit-sharing partner.
The better the firm did, the better he did.
In addition to his retirement, that year, he made $1.8 million in profits.
Their firm, Simpson-Thatchew, was a member of the Enterprise and Theorem Alliance.
That per se should prevent him from giving the speech.
Okay, but those East investors, A16 Z, and all of them, Joe Lumen Consensus, all of them,
helped write the speech.
Their attorney said his speech tracked it.
This sufficient decentralization, that's not in Howie.
And these intra-emails have the trading markets director, the Office of General Counsel saying,
you're making up law, Bill.
That's got nothing to do with Howie.
You.
You should not include that, but he ignored all that and gave the speech.
And where is Henman today?
He's with the guy who can help him write this.
Can I ask you, John, can I ask you a question very, very quickly?
Because I want to go to the other panelists.
How will that impact?
What will this drop, these Hinman docks?
How will they impact the market?
How will they impact the case?
What does it mean for the average crypto investor, the average crypto project?
Well, I think it helps East and East holders, like me, I'm an Heathholder, that, okay, this is going to help.
It helps dragon chain because they were a ERC 20 token, and they're being prosecuted right now, governed by the Ethereum blockchain.
And so it helps that.
It's going to help Coinbase because it shows...
that there's this issue that there are conceding at the SEC that's already a confused market and the speech is going to even make it more confusing.
So it's going to just sorry, I'm the dumb one here, John.
So it's actually going to help the argument of all these tokens being securities.
Yes.
That's no longer an easy argument to make based on this job.
Is that correct on my way or from that?
You can still make the argument, but let's say where it helps ripple, right, for example,
is that if the judge says, you know, I find that when you sold XRP to this person
or this institution in 2017 or 2018, that that constitutes an investment contract.
And I'm good, but now I'm going to allow you to argue to a jury.
that you didn't have adequate notice because the market was in such a disarray and the SEC
was giving such conflicting evidence. For example, the Office of General Counsel said that if a
promoter owns tokens like aka pre-mines, that that's not really relevant. Yet in Bill Hinman's speech,
he said it is relevant. And also the judge in library found that the
pre-mind owned by library was relevant.
But you got the Office of General Counsel saying that it's not relevant.
So it marks everything up and it allows stronger arguments.
But you got to understand the speech is irrelevant to the judge's analysis, right?
That goes to fair notice.
It goes to bad conduct.
It goes to the SEC couldn't even make up their mind.
They could trade XRP up until March of 2019.
How could it be a security if you're allowed to own it as an SEC enforcement lawyer?
So it goes to all those issues.
And that's how it's going to help.
So, Bruce, I want to go to you.
Just kind of summarize for us all.
Like we've gone through the discussion with Congressman Davidson.
We've seen the, you know, Tapscott mentioned about the movement in Congress and support
a crypto and putting the pressure on Gensler and the SEC.
We're talking now about the Hinman docks.
We've seen the cases against Coinbase against Binance as well.
We've seen Binance hit back yesterday.
I'm not sure if we're going to cover that briefly, Scott.
And obviously, Brian Armstrong became public about his concerns and a bit more critical of the SEC relative to his criticism previously, or lack of criticism previously.
He's a bit more vocal now.
Putting all this together, Bruce, obviously we're seeing a fight.
We're seeing also the movement in the East and what Hong Kong is doing.
Yeah.
And we've had one of the, I think it was one of the members of Congress, whatever, I can't remember his name, speak positively about crypto and encourage crypto companies to go to Hong Kong.
Putting all this together, Bruce, how do you look at everything? How should the market respond or how should the long-term investor respond? How should the VC, the average VC respond to all this?
Well, you know, the world has makers and takers. You know, there's a bunch of people on this stage who make stuff and build things. And then there's people like Elizabeth Warren who take things from other people. And that's how they get power by perpetuating a system that is run by force and violence, extracting wealth from the people, taking worker wages, taking...
money from people and then using it to prop up a big authoritarian machine.
And that's what we've seen throughout human history.
It's a story as old as time from the first time that the first caveman had a bat
and could crack somebody else in the head and take their stuff.
And that's exactly what we have now.
It's just a more sophisticated version of it,
where instead of the bats, they have court orders that are backed by people with bats and guns.
Because if you don't follow these things,
They're not suggestions. They are backed by force and violence and it's really what should be but what should what should we do like I'm in this space
I'm an investor. I hold a bunch of a bunch of a bunch of Eath. I don't hold Bitcoin anymore. I probably should hold it again. I'm investing all these different startups
How should I respond to all this news? How should the startups listening to us for us respond to all this has happening in the last week trying to make sense of everything?
You've got to go where, what people have done for thousands of years.
You've got to march with your feet and go where there's freedom, where they have economic freedom.
That used to be America.
It was a great story.
You know, give us your poor, you're sick, you're tired, you're hungry.
Come here, it's the land of the free, the land of opportunity.
This is where you go and pursue your dreams.
That was a great thing.
It's just a fantasy now.
It's long, long gone in the rearview mirror.
So you've got to look.
You can either hope, I'm kind of an optimist.
I hope that America will once again be a free country someday.
But right now you've got to look at the places where they do have economic freedom.
Places like the UAE where they view businesses as an asset rather than a competition or something to be squashed, where they have dialogue.
You know, what John said, Gary Gensler doesn't care about dialogue.
Doesn't anybody find it odd that this guy, he's never been on a spaces?
What is he so busy for that all of us have the time to talk about this?
But the guy who's at the center of the whole thing is,
just somehow is too important.
You have a member of the U.S. Congress who just joined us.
But Gensler so far has done zero interaction.
He's never been to a crypto conference.
He's never been to a Bitcoin conference.
He's never been on one of these spaces.
And the reason is because he doesn't care.
We are not his constituency.
He doesn't care about, he's not sitting there saying,
gee, maybe I'll hurt this industry, maybe I won't.
He's sitting there.
He has marching orders to crush our industry,
and that includes Bitcoin.
And any Bitcoiner who thinks this is good
or who's cheering for Gensler needs to go back to the basics
and read Road to Serve them and understand the basics.
So let me ask one more question.
And John, David, I want to go to you right after Bruce and Eugene.
And the question I have for you guys is,
Bynes' response yesterday.
I know Bynas hit back.
I'm not sure if you've read through the response and whether they've got a pretty strong case.
I haven't gone through it at all, so I'm pretty ignorant there.
But before that, Eugene, we're in a similar boat, me and you, we invest in a lot of these
startups.
I want to ask you the question is, what does that mean for us as investors in the ecosystem?
And Bruce, before we go to Eugene, last question for you is Gensler, if he's gone, does that
change everything or it's not that simple?
It changes it a little bit, but this is being driven.
He has his marching orders from the administration, and I would say from Biden,
but Biden is an absentee president who doesn't know anything.
I would quite bet you that Biden, if he was unprompted,
if you asked him on the street, back in the old days when we were a free country,
you could go right up to the president, and the press would ask questions.
We don't have that anymore.
But like you look at younger people can look at videos of Ronald Reagan and stuff.
You had this amazing thing where the press would like shout questions to the president and he'd actually answer if you did have that and somebody said
Hey, mr. president who's the chairman of the SEC? I don't think he even knows I don't think he knows he's his mind isn't there so he's not pulling the strings
other people like Elizabeth Warren are.
So unfortunately, even if you replace Gensler, it would probably help.
It would probably help.
But it wouldn't be the solution because you've got to solve the bigger issue of the administration itself
and, you know, Warren and the Biden administration, whoever there is pulling the strengths.
Eugene, question for you, and since Ryan is with us as well, what does that mean for people like us that are investing all these startups?
Well, I think it's kind of a bifurcation.
So I think the game for U.S. startups in crypto, I want to say it's over, but I would probably highly recommend new companies.
start domiciling elsewhere, right? You know, places like the places that Bruce mentioned.
I think the, you know, the SDH, the SEC has shown his hand. The administration has shown its hand.
I think it's going to be a dark time for regulation for the foreseeable future. But on the flip side,
you know, I'm currently in San Francisco. I mean, you know, to push back a bit on what Bruce said,
Bruce, I'll agree with a lot of your points. But the AI boom is really like centered here in the Bay Area.
I'd say in the world, right?
Maybe places in China, you know, might be a competitor.
But, you know, I think for different kinds of industries, it kind of depends, right?
America's still actually a bright spot for at least AI.
But for crypto, I'm not so sure.
I think, you know, I mean, even coin-based is, you know, bought that Bermuda-based exchange, you know, just a few weeks ago.
So I think we're seeing clear moves.
You know, U.S.-based companies like D-YDX can't service American customers, right?
It's just...
really, really unfortunate. So, you know, I mean, and talking about kind of land of opportunity,
you know, kind of similar to the fact that, you know, basically the Senate golden age, the golden age
of the Senate in the 1800s is, you know, kind of what we kind of all strive for, right? It's why we're
on these Twitter spaces having open discourse, you know, the Senate of Daniel Webster. That kind of
government, you know, 100 plus years later doesn't seem to exist anymore. There isn't active dialogue.
There's simply
enforcement by regulation. I think we should all, you know, mourn that, you know, as folks
who like innovation. So before going to John and David, just for their quick thoughts on
Bynas' banish hitting back on the SEC yesterday, finding a response, Ran, your thoughts
on what we've heard today with the discussion with Congressman Davidson and the expert,
the anticipation of the drop of the Hinman docks. Does that change? Anything at all for you?
No, I mean, I read whatever of the Hinman docks have already dropped.
I've read what it is.
And I mean, what they...
What's your two cents?
Well, how would you summarize it for the audience?
If the SEC said that Hinman was acting on his own accord, they're 50% right, based on what I've seen.
Why?
Because there was a lot of pushback from people in the agency about how he shouldn't, shouldn't frame things.
And it seems like when he was in the speech, he framed it his own way.
regardless of that, you know, he came out speaking, I guess, on behalf of the SEC, and, you know, he was quite clear in, he was quite clear in his messaging.
So, yeah, I mean, I think it's a nothing burger, to be honest.
And I think that's why the price of XRP went up and went straight back down again.
I think it's a nothing bigger.
It's like, you know, I think Ripple scored a whole lot of points that were.
unnecessary point, so to speak, I don't know, just kind of like, it was a big fight for a small
prize, maybe, so far from what, from what we've seen so far. Yeah, then my thought about,
Congressman Davidson's... Congressman's bills. Yeah, I mean, I'm glad that there are people
like him that are fighting for us.
But I am I hopeful that this is going to be the beginning of the end for Gary Gensler?
No, I mean, is it getting much support at all?
Is it getting much traction at all?
It's too early to say, but it's way too early to say.
You know what I think this is?
I think this is a great opportunity to score some political points.
But Warren Davidson's always been on the side of-
He's always been on the side of crypto.
You know, Tom M has always been on the side of crypto.
You know, two Republicans, two Republicans who are on the side of crypto drafted a bill.
I think, to be honest, can't see the build really going anywhere or getting any traction.
No bill goes anywhere.
No bill goes anywhere with the current environment.
So this one has even less of a chance.
Let's be honest.
I mean, this is we've seen.
I believe I read that there's 20 pending...
acts of legislation regarding crypto that are sitting in some house right now collecting dust,
right? And Lummis Gillibrand, which was bipartisan last year, a senator from Wyoming and a
Republican senator from Wyoming, Democrat senator from New York of all places coming together
to try to even pass some sensible laws about stable coins has effectively gone silent.
You don't hear about it, even though they do say that that's going to come back around
in the coming months.
I think to your guys point, this is largely a political move, political posturing.
But that said, if people don't propose things, nothing even has a chance of getting it.
So let's let me, so just for the audience, as we prepare to wrap up, just let us know in the comments.
How bullish are you?
And what are your thoughts about the recent developments?
I haven't, we should have asked you earlier to give us questions for congressmen.
Completely forgot.
I do want to go quickly to John and David.
Guys, you know, kind of final topic, at least from my end.
is Binass's counter of the SEC's motion.
Anything interesting there at all?
I know it's going to be a long battle.
No, the battle itself in general is going to be long,
but in this case, in terms of the motion to freeze there at funds for Binance US,
that's going to be really quick.
So any thoughts on Binus' response?
They're counter?
David, John?
talking about John Deaton, right?
Yeah, John Deaton and David.
Okay, I'll be quick.
Listen, Binance came out with a response
and said that their offer was to secure all assets
of finance U.S. customers,
placed the private keys in the hands of U.S. personnel,
and provide for accounting of finance assets.
And so that seems reasonable on its face,
The SEC, of course, objects because they have an agenda, even though that does sound reasonable on its face.
We're going to find out what the judge thinks because the hearing is today.
And so we're going to know a lot more at the end of the day.
Yeah, I think I agree with John.
The Bidance came in.
I want to say they capitulated, but this isn't a brief or this wasn't a response that was fiery in nature.
This was almost total capitulation.
They just almost complained about how.
They took a shot at Gensler for what Gensler previously said.
But then they basically rolled over and said, look, we'll give the U.S. government, the private keys.
But more importantly, they said the TRO was already effective.
They lost their biggest banking partner in the United States.
And that whether or not the motions granted or not, they've already lost.
And I think that was an amazing thing to see them concede up front because it's the truth.
Without the U.S. banking partners, the TRO and the lawsuit worked for how and what's going to happen to finance U.S. moving forward.
And where does that leave if finance was a legitimate company and doing everything right, which obviously I don't necessarily agree with?
they've already been screwed.
They've already taken, the poison pill has already gone down
and there's nothing they can really do moving forward.
The SEC got what they wanted,
and now it's just a discovery battle moving forward.
All right. So to Matt scientists, I brought you up because I know you were at the offices of Congressman Davidson and spoke to a bunch of members of Congress.
What's a sentiment like? Any interesting insight before we wrap up the space?
Yeah. So I actually had already been planning on coming out here before all this shenanigans like blew up last week. So I...
But I guess kind of fortunate to be up here this week.
It was really interesting.
I met with Bud, Ted Bud's office, Richardo's office, Elisa Slotkin's, Willett-Sinicenton,
some of the House Financial Services Committee, and Senator Loomis' office, and then why not.
Oddly receptive, to be really, really honest.
They do.
They actually, when you say receptive, like, what do you mean by receptive?
Like, do they give a shit or they're just being nice?
They gave a shit.
Right. There was a lot of engagement. There was a lot of questions. Right now, for those that know me, I'm a big defy guy. I trade almost exclusively on decentralized exchanges. And so that's my realm, right? I was out of the centralized space. So that was my initial purpose of coming out here was to have that conversation with them and see where their heads were at with that. Obviously, that changed after last week.
Aaron, though, aren't those all of the Congress people and senators that are already receptive to crypto?
So those ones are already receptive, right?
And it was kind of why we went to them first, but one of the big questions that I continuously asked,
I was like, what do you need from the industry?
What do you need from us?
What are your roadblocks?
Like, how can we get there?
What are you guys pursuing as roadblocks?
Continuously, one of them is the generational gap, especially in the Senate, which is senators are old.
Okay?
They don't understand this stuff.
Sorry.
That was a full.
Yeah, we'll wrap it up.
Yeah, go ahead, Aaron.
Just maybe no 30 seconds.
The generational gap's a big issue.
They need some more education on Defi.
They want you all to come out there.
They want you to get on their staffers' calendars.
They want you to get on their calendars,
and they want to have these conversations.
That was a consistent...
thing so do that um overall the sentiment was good scott you're the only scott you're the only one in the
u.s so so pack your bags man i i i've talked about this before but occasionally i'll just wake up
one morning and get on chat gpt and uh write some random letter to a bunch of senators and
congress people and then send it like a hundred of them a day i do it all i literally do it all the time do it
100%
You're one of the coolest
Scott,
you're one of the coolest
and weirdest people
I know in crypto
Yeah, well when you can't sleep
It's easy to be strange
Aaron, final quick word
Who cares about Warren?
Who cares about Warren?
Um, she is an, Aaron, bullish, last thing, bullish, bullish quickly, because I know you've been with us in the FDX days.
Actually, this is what we're seeing.
Um, 2 p.m. today, there's a committee meeting for the market structure bill.
So pay attention to that.
I think, you know, Scott, I'm actually bullish as well.
I just think the U.S. will respond positively seeing the movement in the east.
If they see China become more receptive to crypto, and I think Russia, I've seen some news that they're becoming more receptive.
Some bank, SBR, something's brickers.
It's the biggest.
Spare bank is the biggest bank in the world.
Yeah, yeah.
Hold on, the biggest bank in the world.
But the story is...
Do you know the news, though, was they allowed trading of crypto?
It's some random Russian bank.
I don't think it was the big one.
I mean, the central bank of Russia is going to be stacking Bitcoin effectively.
There was news a couple months ago that kind of quietly passed or will be mining it directly
from the central bank and the government.
But the story there is you're saying that we will push back.
That's not what's happening.
What's happening is they are pushing back against our aggressive stance.
So we're the one that's opening the opportunity for the rushes and the Chinas of the world.
So I disagree that under, I think we have a very clear direction for this administration and this regime as to what we can expect.
The only way I see any change here is if we get either regime change.
Yeah.
or something major, but to be quite frank, I think that by that time,
I just, I just confirmed, it is, you're right, it is Spurbank that's offering crypto trading services.
Isn't that big news or is it, am I overreacting?
No, it should be massive news, but we all sit around and have a circle jerk about how important the United States is
and that nothing else matters anywhere else in the world.
Yeah, well, Bruce, Bruce is probably smiling right now, listening to you.
But hold on, if we've seen the movement in Hong Kong being more receptive to crypto,
I know we've got to wrap up, but just to say this final thing for the audience,
Spurbanck offering crypto asset trading,
and they're one of the biggest banks in the world,
and they're definitely Russia's biggest bank.
Considering those two facts, I would be surprised if the U.S. allows itself to be left behind.
And I know we like to be critical of the U.S. I generally don't think that will be the case.
I don't think it's allowing itself to be left behind per se.
I think that the structure and manner in which Americans will be able to access the asset class will just be wildly different.
Guys, I mean, you can buy and sell Bitcoin on Fidelity.
Right. If you want to talk about the path is going, it's going to largely be killing the crypto-native companies in favor of the Wall Street incumbents. And that is what's happening here. Bitcoin's not going anywhere. Bitcoin is going to Wall Street. Maybe that's it. Great way to end it on this on this on this on this on this point. For everyone else. Um,
I've got to tell you if you want to work with us for incubation or you want to come on the show,
hit any of us up, Rand, Scott, or myself via DM.
Otherwise, we'll see you again tomorrow.
And I don't think we'll do an urgent space when the Hinman Docks drop, Scott.
I know you're geeking out over it, but your friend Rand says it's a nothing burger.
So I don't know, man, I'm split.
I think so far what we've seen is a nothing burger.
Let's put it that way.
Cool.
All right, guys.
Appreciate it.
See all tomorrow.
I can comment there, but I'll wait to the next time.
Alright, Scott, we'll see you, John, see you tomorrow, man.
Bye, Ron.
