Silicon Valley Bank Collapse, Is Ethereum a Security, Digital Assets & The Administration’s Attack

What’s happening ladies and gentlemen my name is Austin with black bites and welcome to Across the chains and holy crap we have blood in the streets ladies and gentlemen we have an actual bank not that silvergate wasn’t an actual bank but Silicon Valley Bank literally just a

Couple of minutes ago was shut down by California Regulators we have kucoin getting sued by our old friend Leticia from the the New York AG we have ether being mentioned in documents as a security and coming close guys I want to tell you a little secret it’s not

Whether you win or lose it’s about the friends you make along the way I gotta be honest with you and the honesty is that’s complete [ __ ] we’re here to win and make some money let’s get into the show Thank you boy oh boy you know days like today I’m telling you so y’all ever listen to Buck Cherry I’m probably the only one that knows who that is I have no idea what you’re talking about oh they’re a rock band man they got this song lit up it’s

All it’s about drug use and [ __ ] but I put it on in the background cranking it up I put on the one minute chart man I just let it ride and I feel alive man on days like today I’m crazy to be perfectly honest all right clay Mark what’s up buddy good

Morning Nick is uh joining in right now I think he had to go get a whiskey or something because uh uh he’ll be here in a second he’s on the way yeah that’s right so so we have big big news actual banks are starting to fail now and you

Know I don’t know about you guys I feel mild I don’t I don’t think Vindicated to the word because I’m not really involved but I watched a bunch of regulators yesterday [ __ ] all over silvergate bank and say that it was crypto’s fault that they went down and now their own FDIC

You know Federal Reserve whatever banks are crashing doing the exact same thing and they had nothing really to do with crypto whatsoever and it just kind of you know but but be that as it is this is getting us closer to whatever the end game is Right remember inflation going

Down takes a long time but turning the money money printer on doesn’t take as much time Nick good afternoon sir Dexter what’s up good morning gentlemen good morning good morning that’s right the real gains of the friends we make along the way hey real quick before we get into this I

Want to I want to give a shout out to a couple of people so we have some regulars that have been just die hard on our daily show that we’ve been doing every day uh Chewie John Doe crypto Bean Fallout Zone disco Chuck Wally Rich maybe Michael Wooten Mr got plenty are

We I don’t know that’s it man if you’re here drop it in the comments we love hearing from you and we do have a giveaway oh yeah uh uh kindness of the bite Masons we’re gonna be giving away 150 in oath and Clay how can they get

Those you are going to type in ATC like across the chains uh into the YouTube chat my friends so hashtag ATC enters to win and I can see when the tallies going up we’ll give it away at the end that’s right actually let’s give it away with about 10-15 minutes left in

The show so that way we give people time to reply with their their Twitter handle or whatever because you know we give something away and then somebody goes and creates their Twitter and then we get DMS from fake people this [ __ ] happens all the time so all right all

Right let’s get into the show so uh major Banks are not only closing but the big boys are losing billions of dollars in value so the four biggest U.S banks uh lost 52 billion dollars in market value on Thursdays so this isn’t just like a an isolated incident this is

Really affecting the banking industry and JP Morgan lost about 22 billion Bank of America 16 billion Wells Fargo 10 billion Citigroup was down 4 billion and uh we just heard that Silicon Valley Bank I mean their shares were down huge but that’s changed since we wrote these notes uh they have officially been

Closed uh by California Regulators so this is Major and and I think the the question here to you guys is this the first sign that there may be some sort of crack in the in the financial system like have they broken it clay let’s kick

It to you so I I think so obviously yes this is the first sign that this is the crack in in the actual traditional Trad five Financial system and and and you brought up a good point that it was it was a lot of the like we’re going to

Talk about the uh the hearing that went on yesterday but a lot of the pot calling the kettle black now going on in terms of the silver yay collapse and you look at what’s actually happening uh with you know major banks in the United States but before we get into like

Is this the crack in the system I think that’d be good and Nick if you don’t mind my friend why is this happening like like if you could break it down so everyone understands you know obviously you know it’s about treasury yields and taking you know long-term positions and

Treasuries and then and being worthless but can you explain to the people what’s going on here sure so we need to start from the beginning um and it leads back to Austin’s question around is this the beginning um of something else so leading up to the GFC um and

This can get somewhat complex so I’m going to simplify it but Banks needed to have a certain percentage of equity on their books compared to how much assets they were managing so basically when you start a bank um let’s say I’m going to start a bank

And I put in a hundred dollars of my own money okay or we put a hundred dollars in where the investors of the bank um so that is an asset uh sorry that’s that’s equity in on the balance sheet then we open up the bank to depositors who give us their money their

Liabilities the combination of the equity and the liabilities equals the assets of the company so if we put in a hundred we can take in another 10 sorry another thousand or another 900 from depositors we owe them that money so the the ratio between the equity that we

Have and the assets that we have on our books needed to be X leading up to the GFC that number was really small right and as we saw things got out of control and Banks went under so in the aftermath of that the regulators and the fed and

The banking system went to the banks and said look guys the party’s over you can’t do that [ __ ] anymore you need to be a lot safer you need to keep a lot more capital on the books to operate the way that you operate plus a lot of other

Uh uh strict regulations but effectively what it said is you need to keep more cash more equity and do nothing with it and the bank said whoa whoa whoa hold on that doesn’t work we need to be able to do something with it so they made a deal

And they said okay you can take that money and you can put it into the safest of safe Investments and that is bonds um so treasury bonds are issued by the government then you’ve got Moonies which are issued by municipalities and States um you’ve got corporate bonds you’ve got

Mortgage-backed Securities some of them are crap some of them are not so crap so all of these fall under the safest of the safe and they said to the banks you need to hold more Capital but you can invest it in these things and then the bank said well hold on a

Minute if we’re going to invest in these bonds um those bonds fluctuate in price whenever the Market’s open they they literally trade like a stock would so that doesn’t really work for us because we’ve got shareholders and we’re listed companies and we can’t have our p l

Going up and down 10 on a weekly basis because there’s activity in the bond markets so they made another deal and they said to them okay if you buy these bonds you can have two classifications on your balance sheet you can classify some of these bonds as available available for sale which means

Um you can sell these at any given point right and and we’re going to mark them to Market which means as they fluctuate in price and I’ll I’ll Circle back and explain why bonds fluctuating price in a minute so you’ve got available for sale classification of bonds and then you’ve

Got held to maturity and if you put the bonds in the hill to maturity bucket you’re not allowed to sell them okay if you sell them we’re going to as an industry look down upon you and and you will be viewed as a unsafe bank so there are serious consequences to [ __ ]

Around and putting things in the HTM bucket but then trading them so um and the reason that that was significant is if you put the bonds in the HTM bucket you can have them on the balance sheet at cost so if you bought the bonds for a hundred

You put them in the balance sheet for a hundred if the bond in a year’s time is worth 50 cents on the dollar it doesn’t matter it doesn’t show up anywhere in the financial statements of the bank because you’ve told the industry you’ve told investors you’ve

Told the market I don’t intend to sell these bonds I’m going to hold them to maturity and as a result I don’t care what the price of the bond is because when they fall uh when they fall due I’m going to take that Bond I’m going to

Give it back to the issuer which is either a municipality or a government or apple and I’m going to get my principal back so as a result all these Banks started playing money into the HTM bucket right um because as these things traded up and down they didn’t have to uh it doesn’t

Show up in their financial statements so that is why you end up with this situation called duration mismatch which is you know something that we’ve heard a lot of over the last couple of weeks what happens is that in the case of these two banks that have

Just you know had to shut down both silvergate and Silicon Valley Bank for slightly different reasons but the mechanism is the same is um they took all these customer deposits which are liabilities and then they went and bought long-dated treasuries and the reason they bought long data treasuries

Is because they wanted a yield I think the Silicon Valley Bank quote was they bought something like 80 80 billion dollars worth of of bonds 10-year bonds 10-year duration for an average of 1.63 coupon right so they’ve been buying these things for years when they weren’t yielding very much now

When interest rates started going up um about 18 months ago the the the price of the bonds goes down why does the price of the bond goes down because if you’ve got a bomb that’s paying you two percent and you paid 100 for it and all

Of a sudden the the the two-year bond is trading at four percent no one wants your two percent Bond so they sell it and they go and buy the four percent one so these things start trading down and under normal circumstances this would not be a problem right but

But both of these banks for different reasons had different catalysts that led to customers saying hey you know what we want all our money back and these two Banks because they’ve only got around about 10 equity to assets if everyone wants their money back straight away

They don’t have it in cash they have it in these long dated mature long-dated uh bonds so they have to sell them they sell them for a loss and they sell them for a loss to give the money back to the depositors so in the case of um

I keep confusing the names but in the case of Silicon Valley Bank they had they had a problem for three reasons um because of the name and where they’re based uh that they are known as the bank for vce-funded startups so all of their inflows came from the VC

Startup World okay so and over the last 10 years billions and billions of dollars has flown into that industry so the tap was on and when they’re trying to work out what percentage they should you know how they should allocate their bond portfolio they just look at you

Know the last 30 days the last 60 days the last year and they try and predict what inflows are going to be in the next 12 months as interest rates shoot up their inflows dry up why do the inflows dry up because now VC funds are less likely to invest

In startups so that gets hit their existing customers who they rely on and they’ve lent money to now they’re in a cash crunch they can’t raise more money they can’t raise any more funding so now they have to work out how they’re going to pay these loans back to the bank so

Collections on those loans slows down you also have some defaults because some of these companies are going to go bankrupt so their loan book gets slightly impaired that’s the second thing the third thing is once one person starts asking for their money back and some people start getting

Worried I think there’s an article going around that Peter Thiel caught up on these portfolio companies and said run for your lives as soon as that happens everyone does the same thing so you’ve got a business that’s got inflows drying up its existing customer base is under extreme duress because they don’t have

Diversified Holdings or Diversified customer base it’s very concentrated on the VC startup world and then number three you get a run on the back and you have to sell the bonds at a huge loss and um and either you can cover the loss or you can’t cover the loss the reason

The shares got hit 60 overnight is they announced yeah we lost 1.8 billion dollars because of these activities um and we need to raise 2.25 billion to bridge the gap when you do that and you own shares of that company you’re going to get diluted all over the place so the

Value of that bank goes down drastically so that was kind of a long-winded way of explaining what happened and silvergate had the same kind of issue in terms of the duration mismatch um but the reason they had a run on the bank was different in October and

November marker Otis who’s a very good short seller um in the last three years he said uh uh he he went after a company called my Medics and he said the CEO of my Medics um Parker petite is going to jail this guy’s a crook he’s in jail today his

Next Target was SPF he said and no one believed him when he was saying this right SPF sir cook is going to jail he’s in jail the third guy that he picked on is Alan Lane the CEO of silvergate Bank and in October or November he started saying that silvergate bank is a

Criminal Enterprise because of the scn network that they set up it was very easy for Bad actors to funnel money into that system and pass it around through the sen Network outside of the eyes of regulators and as a result they were that they were laundering billions and

Billions of dollars so their lack of control LED to this criminal Enterprise kind of you know being perpetrated when he said that right if you happen to be one of these criminals that’s cleaning money through that bank what do you do you pull your money out

If you happen to be a good actor that’s doing business with that bank what do you do you pull your money out so money started flowing out and we’ve spoken about this stat twice on this on this show where in in the Great Depression the average uh um

Capital outflows for these banks that all went bankrupt was 33 69 of capital left silver game Bank in Q4 because of the accusations around the criminality on top of that the FTX thing happened you know um people wanted their money off exchanges because they didn’t trust exchanges so when you want your money

Off one of these exchanges The Exchange goes to silvergate back to get the cash so all these things happen at once and there was a run on the bank for silvergate so the mechanism and they had the duration mismatch and that’s why that they’ve gone under so to Circle

Back Austin’s question was is this the beginning the question we need to ask ourselves is how many of these banks have been buying long a long-dated bonds over the last decade and have them on their balance sheet to take advantage of this accounting treatment with the HTM bucket where they

Don’t need to um they don’t need to report any of these unrealized loss the answer is almost all of them almost all of them do that um because that’s the way the business is done so you know I put a tweet out a few hours ago just a guy

Frantically going through his desk Traders hedge funds everyone’s going through every balance sheet of every listed bank right now to try and work out who has a high enough level of unrealized loss on the HTM book compared to what kind of capital they have and they want to cause chaos in the market

Not because they’re evil but because you can profit from it we’ve now got two instances of banks going out of business markets are getting body bagged and it’s not going to take a lot to say this bank’s in trouble this bank’s in trouble this bank’s in trouble so last week I

Said you know that I’m net short for a lot of reasons I didn’t know this was going to happen this week but all of these things happen when interest rates go up something’s going to break but I said that if you’re long you’re committing Financial suicide right if

You’re long today I might as well shoot you myself just out of principle right there are so many factors at play here that the powers that be are going to shake things up and and you’re going to see charts going like this and like this is going to be

You know some banks are going to be accused of being in trouble and they’re not going to be in trouble doesn’t matter right the markets are going to get shook so right now is the time to take down gross exposure and and grab some popcorn and and because things are

Going to get kind of dicey anyway sorry that took me like 20 minutes so things are getting irrational and and obviously like so amazing explanation Nick thank you thank you to simplify you know for my very small brain uh a consequence of the federal reserve’s aggressive campaign to control inflation I.E rate

Hikes has caused Banks to have to you know liquidate treasuries that they generally probably wouldn’t have otherwise uh do you do you see I mean I guess for the panel do you see a world that you know this being the consequence of of the of the fed’s raid hikes that

The banks start to fail and then they’ve got to walk back this quantitative tightening because we’re going to have a collapse in the financial system in general like like basically something along the lines of this run uh run on One Bank credit equivalent contagion imminent Financial collapse QE

Infinity like is like because in some ways you know that scenario seems to be feasible yeah I mean I think I mean this is obviously uh absolutely insane but it might my reading of all of this is you know it’s you know I understood most of what Nick said because I’ve been reading

Up on this over the last few days trying to understand it myself not naturally a bank guy right so a lot of this is new information didn’t really know the structure of the treasuries but if that is a common practice and if all these banks are effectively insolvent right

Just by the nature of their existence and how they’re constructed kind of all the time so so basically if there’s a bank run on any bank that bank will go under uh then they are all at risk and it’s because of the structure that was set up in 2008 right combined with our

Current situation and um reading up on on what happened with silvergate I saw that Caitlyn long uh who’s working on the custodia bank in Wyoming which got denied a federal Master license and they were very specifically a hundred percent backed at all times so they did not have this same structure in

Their proposed Bank specifically to avoid uh getting killed in this situation they were denied a federal uh master account right so and they were less risky than all these other things she said that silvergate uh the way she sort of expressed it was they were they they had leverage on a 10-year treasury

Bond now I don’t know if that was sort of like a YOLO thing you know you only live once they went crazy or whether that was just that’s the normal structures okay so that is extended practice okay so standard practice is insanely risky right and the other thing that

I’ve been seeing this is this is kind of a funny but also not funny thing on Twitter there are a lot of uh sort of conservative Venture Capital people that I know personally uh who were on Twitter last night telling everyone do not panic over Silicon Valley Bank they supported

Us in lean times we should support them by not withdrawing and they’re all these sort of oh God testimonials and like you know don’t withdraw your money guys kind of thing it was very three three sounds like Luna yeah it was very Luna right and I’m watching this going oh my God

I’ve seen this movie before right we all have we’ve all lived it recently right and we all know where it goes and somehow like their brains were not yet processing where they were on the timeline and that it was they were basically already dead and they didn’t

Even know it so uh so that was that was a very interesting phenomenon to me you know what scares me about this um oh before I I even say that I do want to mention so there was just a a press release uh sent out in regards to Silicon Valley Bank he

Said it was closed today by the California Department of Financial uh protection however it also sets all insured depositors I assume they mean FDIC insured will have full access to their insured deposits no later than Monday morning March 13th the FDI will pay uninsured depositors and Advance dividend within the next week

Um good news except there’s limits on you know FDIC insurance it’s a it’s a quarter million dollars on an account unless it’s a joint account right so like I you know like I have accounts with my kids on them and [ __ ] like that to get the extra FDIC insurance but but

Nevertheless this is good news uh unless you have you know big big accounts under your own name but either way uh it’s just some positive news so here’s what concerns me the most about this and and both Nick and mark thank you guys for your explanations

Um you know back in 2008 when we had the subprime mortgage crisis and all that [ __ ] that was going on and and it was just so systemic because like you know so many people were doing it right and what you just described Nick is something that everyone is doing uh it’s

Like that that little vein that’s running through the industry that’s now getting exposed I had no clue about that the drug yeah I had no clue about that but if this is something that everyone is doing uh and these and these treasury bonds are effectively losing money right

On the market just a just a point of order there right um it is standard practice but um the the the Quantum of the practice within the bank varies greatly what I mean by that is um the percentage of a long long dated Securities versus at-call funds or

Available you know uh uh for sale bonds and other deposits it just it’s a case-by-case basis right in the case of silvergate you had this specific scenario um around it only being a crypto Bank okay all of their customers were crypto related um the FTX thing happened the

Accusations of the money laundering and the fear around you know The Regulators clamping down on it all the money disappeared okay this the the the Silicon Valley Bank similar but different in that high concentration in VC funded startups and lending to these Enterprises which have no cash flow no

Profitability they’re just running on the fumes of the VC bubble and when that bubble pop when interest rates started moving up now they don’t have anywhere to turn right JP Morgan has something like it’s got billions of dollars of unrealized losses in the held to maturity Bond portfolio

Doesn’t matter to them because they’ve got hundreds of billions of dollars right access to Capital very easily um so that they can cover any run on the bank you can’t have a run on the back of JP Morgan you know they they run too deep and in and in the in the unlikely

Event that they get stuck the government jumps in and helps them in the case of silvergate and I know that you know Mark’s not going to like this if he hasn’t heard it already is that when everything started unwinding with the bank run supergate had a loan an

Advanced loan almost like a bridge loan there’s a there’s a federal um there’s a government entity I forget the acronym something around Federal home loan Association or something like that it gives liquidity to Banks when they need short-term cash and they gave it to silvergate and they

Called it they called the money back when they were about to blow up effectively blowing them up right so if you’re JP Morgan not only does that call not calm you probably get another call that says hey you need me to step in and help you

Out so super gate you know it’s not the government’s fault that silvergate got done but they certainly didn’t help so um you know there’s an ETF called the kre which tracks Regional Banks it’s big ETF it had a three standard deviation move down yesterday right because the big banks that are too

Big to fail and they are too big to fail are going to be fine because they are run you know they just have so much scrutiny on them that you know they’re ready for this but these smaller Regional Banks um that you know have concentrated uh deposit deposit deposit base don’t have

Deep Pockets um and and aren’t too big to fail some of these things are going to go under and that’s why you saw the big move in the kre yesterday um I don’t know uh any other banks that might be in trouble but what I can tell

You uh is that the banks in Europe are run like a lemonade stand run by eight-year-olds compared to the way that the U.S banks are run the U.S banks are run very very well the Best in Class globally so you know um scary times if you’re uh you know if

If you’re looking for things to go up over the next few months I mean I don’t know what’s going to happen but but but the the the the idea that this is systemic it’s not systemic but the idea that there’s only two banks that had these very specific scenarios calls

These Bank runs and that’s it that’s not it there is a hundred percent more of them we don’t know who they are I mean you can probably you can probably look at this the the the the the how the equities being trading or how some of these options have been priced

Over the last three or four days to work out who knows what I’ve I don’t have the time to do that work um but yeah tough time I I so I would like to do the exercise maybe for next week’s show on where where does where does signature sit in all of this

Because Marco hones is now after signature the same way that he was after silvergate and I listened yeah the reason he’s off to silvergate Mark’s a weird guy he’s just weird signature like he sounds like a conspiracy theorist because he’s so out there and he swears a lot and he goes

After people but you know the last two guys this guy went after are in jail um and they were powerful like Parker petite at my Medics he was a powerful powerful guy um he’s in a jumpsuit right now and and we all know about SBA so the reason he’s

Going after signature is for the same reason he went after after silvergate signature also has this closed system right that allows for these internal Network transactions so correct I think it’s being shot down now is that correct it’s not operating in U.S dollars so like that right they actually they were talking about

Expanding it as soon as the signature went down that’s the Articles crashed because the reason I bring this up for the context for listeners uh there’s a there’s a tweet by Dylan LeClaire that’s and I actually meant to have it pulled up but everyone who left silvergate has

Gone to Signature everyone in the crypto space and so if there was something to go wrong with signature we’ve got a whole another bucket of issues on our hands and I don’t know where people go after that so well go ahead sorry I don’t mean to catch up there one one

Thing I want to mention is you know Nick had mentioned earlier that the run on on silvergate you know nothing was ever proven that they had done anything wrong however it was a enough to cause enough of a run to bring them under from from my understanding and now whether or not he

Has that enough power to do that with signature or not but it sounds like what he’s implying is this closed system makes it easy for folks to launder money and as a result you must be doing something wrong if you have it I was heeding the warning where there’s where

There’s smoke there could be fire so we need I think we need to wrap the segment because we got a lot of other stuff to cover we do uh this like this tweet I I you know look I’m not a macroeconomics master and I certainly can’t break it down the way that Nick

Did but I have to Envision that if things start to go south uh and we start to see slightly better inflation numbers in the United States that the FED is going to have to back off there cannot be a banking collapse amongst major Banks across this nation uh without the

FED pivoting in some way shape or form and maybe you disagree yeah a disagree for one fundamental reason is that the capital controls that these banks operate under are very very strict are some banks going to get in trouble yes um is it going to cause a collapse of

The banking system I don’t believe so right there are so many eyes on these things and you can just see yeah they shut down silvergate in a matter of whatever 48 Hours yeah so they’re on it you know they don’t want to look like idiots the way they did a

Little over a decade ago um so I don’t think it gets to that point for that reason alone now that assumes that all these regulations and all this oversight functions correctly I don’t know right I don’t know um but if you look at the numbers in terms of the capital they’ve got on

Their balance sheet and and and the the stress tests that they undergo ongoing it is nothing like it was 12 14 15 years ago different board game um is it possible anything’s possible man you know I really have nothing at this point if these guys have been

Skating the regulations you know kind of trying to find roundabout ways to earn extra yield um and they they get caught out things could get wacky but I don’t think it’s it is a you know like the scenario you outline clay I don’t think it’s more than like a two or three percent

Scenario I don’t think it’s likely adult I think rates keep going higher inflation is the the priority and they’re not going to take their foot off the pedal until inflation gets under control regardless of what breaks as long as everything doesn’t break right they’re going to let some things break

Demand destruction he said it in the very beginning and it’s certainly here all right let’s let’s move us on I’ll tell you what I would like to do clay if if you’re up for it I’d like to skip the next topic and go on to the Congressional hearing topic sure uh to

Give that top billing because I think that one’s really really important and I’ll let you take it away man and double sharp don’t forget to jump in now we’re not really doing the call on people thing today because it’s just it’s clean world so yeah yeah so we’re gonna skip

The uh the ethereum security situation we’ll put it at the end we can get back to it all right I was gonna say I think we could do that in five minutes but fair enough uh yeah let me uh let me get some things screwed up so uh as I’m

Doing that awesome please set the stage of what happened yesterday I will so there was a hearing yesterday on Capitol Hill uh and it was entitled coincidence or coordinated this administration’s attack on the digital asset ecosystem and it was very very interesting to hear there was people from bitco there were

People from coinbase they were there there was a dude from duke who’s now crypto’s uh Public Enemy Number One um and they’re largely for the most it was very interesting how partisan it was but for the most part there were there was a lot of support for the crypto

Industry uh the word you know the word stifling Innovation were used many times which I like it when I hear that because that you know that’s kind of the caveat that we’re all hoping for and it was very very interesting and and we really got an inside look at companies like

Coinbase who have tried with all of their might to be SEC registered and compliant and have been getting crickets for years and it was really really interesting to hear so clay hopefully that set the stage for you buddy that that did that did a very good job so uh

You know if you’re watching the show obviously you care about the industry you care about where crypto is headed you care about regulation and obviously a lot of the talk that we’ve had over the last six months has purely been regulations been collapse in regulations those are the main themes

Um why this is so important is that nothing like this has actually happened on the hill there hasn’t been a senate hearing titled you know uh the administration’s attack on digital asset ecosystems uh I’ve been told by my informants that a lot of people didn’t like that title that a lot of people

That uh you know in Washington thought that that was kind of a ridiculous way to phrase this because you know obviously the the support from a bipartisan infrastructure on both sides is not always the same fine so they had a pretty diverse panel of folks there uh

There was uh Mike belsia co-founder of uh of uh bitco Tanya Evans a professional a professor of school of law from somewhere I don’t know uh Jonathan Gold a lawyer who’s a bank regulator a legal officer from coinbase and Paul gruel and and this guy named

Lee Raynor who’s a Duke law professor uh who thought you were going to call him a douche yeah yeah who who they brought in and I’m not sure what his purpose was but it was clearly to hate crypto and we’ll show you exactly what I mean by

That uh but you know so is it what so what what did I like about it they brought in a diverse panel of people that that kind of you know had perspective on all sides we’re going to show you that how are we going to do

This right now I’m going to show you uh two different Senators that kind of sit on on different sides of the perspective you know different uh spectrums of perspective uh that you know basically different perspectives on crypto’s value versus risk and so this is the first one

That I’ll play I’m gonna play them both back to back and then I think we can discuss kind of how they’re viewing these the space innovation has the potential to increase the accessibility and lower cost of financial service products but I I am also uh likely to exercise some caution

About the risk to consumer financial data some of the Hidden fees the lack of transparency the misleading marketing practices that were here for exercised in this industry I plan to continue to voice those concerns in this Congress I do remain optimistic in the potential for great innovation in financial

Services and the Myriad possibilities of blockchain Technology given the collapse of much of the crypto industry this year including the recent news involving silvergate bank and the scrutiny over binance’s practices I have some lingering concerns about the volatility and risks that crypto assets pose to Consumers particularly low income and underrepresented communities the

Collapse of Terra USD Celsius block fi and FTX speak to the larger regulatory gaps in this space including lack of corporate controls inadequate liquidity or reserves co-mingling of assets and irresponsible practices I do worry that these practices exist across the industries and the result of insufficient oversight and lack of

Regulatory guidance I commend the actions of our Administration the Biden Administration through its reports guidance and executive orders to thoughtfully examine the benefits and risks of crypto products I also have concerns we’re going to stop there so obviously you can see you know kind of kind of the the skepticism what’s going

On and where that may align so that’s that’s the first one and then I have to stop sharing and pull up the second one and so bear with me and let’s be clear the name of this is the administration’s attack on crypto and that that doesn’t mean congresses or

The judicial branch that’s the executive Branch’s attack on crypto so while we think it’s just Gary Gensler out there where the wild hair up his ass this is coming from somewhere uh just to be clear right uh all right and now sort of the uh the optimistic Camp I believe uh all right

Are you good to go here um Austin if you can just pull this stuff on screen I’m trying to click 15 buttons I got you buddy thanks thank you chairman the regulatory environment for the did just come to a critical inflection point because there are no clear rules

Of the road for centralized digital asset trading platforms that list non-security digital assets American users our constituents and consumers are not adequately protected while participating in these markets it is our job in Congress to craft appropriate fit for purpose legal framework for these assets and this space it is our job it

Is our duty it is long overdue we must establish clear rules for trading platforms that provide Americans with the necessary protections and ensure Market Integrity however these rules must provide the clear framework that is flexible enough to accommodate Innovation these rules must also preserve America’s ability to self-custody their digital assets

Congress must do everything in his power to ensure that American citizens can access this transformation transformational technology and have the right to possess their stake and ownership right private property in the technology preserving self-custody is a critical step in this effort because of this I am working on reintroduction of

The keep your coins act to protect Americans ability to manage their own digital assets and to make permissionless peer-to-peer transactions thank you for your attention and I look forward cool so that is kind of the the two different perspectives that I think that this you know this thing was kicked off

With and like those were the themes that you might uh that you might sort of pick up throughout if you were going to sit and watch the hour and 45 minutes like I did um so I will stop it there and guys reactions like like are you surprised

That there’s you know divides in in the way that this is being viewed uh in the house committee uh and just I’m gonna shut up so I put the link uh in the chat for anyone that would like to go watch it and I’ll kick it over to you guys I

Don’t I don’t want to take up the whole time I love double strap out of the floor go ahead all right double sharp I’m throwing you the ball buddy you’re up oh no I mean I haven’t been saying much because most of the stuff isn’t really my area of expertise necessarily I mean

I just have opinions I think you know going back to like you know all the stuff we’ve been talking about with banks with um you know just the you know where things are going in general it’s you know there’s all of this stuff is like highly complex I do I have some

Amount of um you know knowledge or opinions of some of it but you know just going back to the the banks for example like the flip side of it is that higher interest rates also or how Banks make money through lending more people save so they

Put more money into Banks so like that stuff can’t like there’s um you know certainly banks that have gotten themselves into trouble obviously and and then you see um like I mean what Nick was saying with the larger Banks I don’t think I don’t actually see them having issues just because um

They’re so big and they have their their fingers in like so many different pies um you know and then just where regulation is going I think my main takeaway generally from listening to to like testimony and whatnot is that I think we’re still kind of far from politicians and people who are setting

Regulations under like fully understanding what their um you know what they’re trying to regulate and so you do see people right-wing left wing in the middle whatever some people have opinions and some of them are very much based on things that aren’t necessarily true some people are knowledgeable but they’re

Talking to lots of people who aren’t necessarily knowledgeable so that’s kind of a long way of saying I I still don’t put a lot of weight into what you know any individual is saying because it’s it’s there’s you know you need such a large group of people to

Agree to actually move forward on some of this stuff that I don’t see enough agreement um or understanding in general for for there to be much action like relatively soon but I also follow technology a lot more than I do uh next you know the regulations in politics and stuff like that so

Um I can talk about solidity 0.8.19 [Laughter] awesome okay awesome all right Mark you’re up buddy yeah so I mean I I just the the title of this hearing coincidence or coordinated as clay points out it cannot be emphasized enough how important just that alone is

We have never had uh a hearing with a uh with that kind of viewpoint right so the suggestion is is that uh this coordinated multi-agency action uh that we’ve seen over the last couple weeks or a month or so uh uh destructive to the crypto industry has been intentional

There is a force somewhere coordinating all these different agencies potentially right and the suggestion is that you know sort of like the phantom menace right you have like Senator Palpatine you know pulling all these strings somewhere uh he looks like a friendly senator from Naboo but really there’s

Nefarious things going on it shouldn’t be done this way right even if you hate crypto um it should you should debate it in the open we should pass laws there should be considered public debate about whether we should have crypto and to what extent we should have it right so it shouldn’t

Be done in the shadows regardless of where you stand on that issue now Sherman Brad Sherman are you know who hates crypto uh when his time came to talk he said um you know he he didn’t like the title and he said you know uh there is no

Cabal to get rid of crypto because if there were I would they would have invited me into it and I would happily have joined in with them to get rid of this scourge of crypto right he called it a Scourge that’s his exact words so that was probably the most negative

Thing that I saw however uh by and large I did watch the entire hour and 15 minutes or whatever it was it was very positive and uh there were a lot of criticisms of Gensler uh you know basically saying he is he is trying to grab power he is not actually

Trying to be helpful in any way and like you said earlier Austin uh the the gentleman from coinbase was basically saying look we’ve really tried to be good actors and engage and they just won’t engage with us and that frustration that um was very palpable and very convincing

Right so uh that I was really happy I was overall very happy with what I saw there was also some deep understanding of crypto from a lot of different um Congress people like surprisingly so and there were a lot of new faces that I personally had never seen before who

Clearly had deep understanding of crypto and were positive on it so overall I think this was a win for us um and he even even Sherman being there was a win for us because he provided a you know he looked like a hater he did not come off well he just looked like

Someone who hated it right for not really a good reason so I I want to reference this comment uh Stephen vono Pro and anti-crypto we’re just jerking each other off I disagree my friend uh this is so vitally important this is the this is the most critical step to the

Future of this ecosystem this industry for this stuff to actually be discussed uh and and regulation passed in a bipartisan way and hopefully a way where there’s actually informed people like the clip I’m about to play from the guy from coinbase who says this is where you

Know this is what needs to happen and we are on the ground and we are good for the industry like I I think it’s actually one of the most crucial steps we’ve seen in this space since the collapse of all of the [ __ ] we’ve seen

Over the last six months so so I think I think it’s hugely important so Austin I’ve got you were going to say something in them queue it up Sir cue it up all right so um so so basically uh basically I just want to play One Clip so Austin ran out

Of order as Austin now he’s does uh and we were supposed to really talk about experience as a security and they kind of led into the fact that the cftc has a very different stance on crypto than the SEC does uh and it’s clear and we can

Well I’m sure we’ll Circle back but the lead-in was supposed to be uh you can see where coinbase Allegiance lies because of the the way that the cfcc approaches the crypto space and so this is basically coinbase is legal uh advisor or legal analyst or whatever he

Is head of legal uh saying who he thinks should regulate the space the legislative proposals to provide Clarity in this space Grant the cftc spot Market authority over crypto since the cftc was first established through the commodity Futures Trading commission Act of 1974. the agency’s been a principal’s based regulator this

Flexibility principles-based approach is fundamental to the cftc’s regulatory framework which enables it to be an Innovative and proactive regulator now with that said jurisdiction over the spot Market Authority deserves a robust conversation around what is best for investors consumers and even the agencies Mr Great Wall could you share your

Thoughts on where spot Market Authority for crypto assets should belong thank you very much Congressman you are correct in identifying that spot Market Authority for uh crypto assets currently represents a gap in the current in the overall legislative landscape we would certainly support any legislation which made clear that the cftc had such

Authority in order to uh enforce and establish those principles which are appropriate for the spot Market boom so I guess the the point of showing you that in my opinion is if we are going to be rooting for something we probably should be rooting on the side of coinbase they’ve made themselves very

Clear that they you know they’re building based like they’ve got vested interest to succeed in this space and they think that the cftc is a is a much better regulatory body uh for a for a bright future for what we have going on currently and so I thought that was an

Interesting point uh and it’s interesting to see where coinbase’s Allegiance lies uh any feedback guys I’ll I digress how about you Nick you want to take over I didn’t watch the hearing um so I’ve just been listening carefully um I I I’m I’m on double Sharp’s kind of

Pathway of thinking here in that I don’t put too much stock in what any one person says um they’ve all got their own mini agenda for whatever’s going on in their own little world um the the overall conversation in Aggregate and direction of it is very important as clay says

Um I I I think the name is kind of cool it shows that there are some allies and there is there is a desire to fight back um you know at the end of the day coinbase has gotten some flack around you know some douchebag inside of

Trading nfts or whatever the hell he was doing um but ultimately if we get good outcomes it’s because of companies like coinbase um who who who at least get a seat at the table right binance doesn’t have a seat at the table they’re an outlaw so anything good that comes out of

Regulation coinbase is going to have a hand in it so you know um we should be supporting them a little more than we have been over the last four or five years I want to point something out here too that’s kind of interesting um and we’ve mentioned it before and it

Is it really does seem true that this is a partisan thing and like for politicians at the end of the day they care about one thing and they care about votes right and and you better believe they are planning they are planning for the next election cycle

One demographic where I am quite certain the GOP has lost people has been in the younger generation coming up there’s just no question about that and they may have found what they believe is their talking point to re-adopt that younger generation into voting their Direction and if that’s so whatever their reason

Is for it they may push this to the limit to get those votes and which is just going to be to our benefit regardless of what their motivations are If This truly is their talking point to to get that demographic back in which I don’t know that it is

But that would really be the only explanation I could see that it seems so divided uh then I would say go ahead the um the I’ve been done the work on this so this is just a gut feeling me just talking you know intuitively um that demographic is not

Um the kind of group that is going to go out and vote right they want out of the system they don’t want to try and help shape the system which is a mistake by the way right um and I also question the quantity the Quantum of that group

Um that is Young and is is has allegiances to the crypto industry because a lot of these young people um have gotten body bagged in the last 13 months in the markets and they think it’s a scam too interesting um so I don’t know I mean I’m sure I

Don’t disagree with you all data on that so I I could play I could play like two more if you want or we can stop and we can move on but there’s there’s one there’s one that like one dude was just a complete hater uh and and you play it all right

Yeah everyone’s gonna get depression I need a drink after this do you believe in this industry to encourage Innovation here in America while also protecting consumers will Congressman first I appreciate the update on the uh the Duke game because it has been on my my mind and I’ll just

Note that we are peaking at the right time of year here um yeah my written testimony what I think is uh the right approach here um and you know and I would just push back slightly on you know the concept that there’s you know any Innovation here worth embracing frankly I mean you

Know crypto’s been around for 14 years um you know that’s a pretty long track record to take a step back and look at the harms that has caused um and the benefits and on the harm standpoint you know The Ledger is pretty long it facilitates ransomware attacks which have absolutely crippled America’s

Small businesses municipalities and Health Care Systems it undermines our national security by sanctions evasion um terrorist financing I would just note that you know North Korea stole 1.7 billion dollars worth of crypto last year uh to fund their ballistic missile program uh and then of course you know there’s the environmental impact

Associated with proof of work uh Mining and then the numerous you know just investor losses as well as frauds hacks and and scams and so when you look at that institality what are the benefits that we’re receiving in return um wow uh so I think as lawmakers you need to

Be clear-eyed about what’s happening here um and so I you know because of that investor protection I think should be front and center while also minimizing risk to financial stability and so I think letting the SEC fulfill its mandate to protect investors um and giving them exclusive oversight

Over crypto is the right approach now giving them exclusive overnight over crypto is the right approach like so I obviously this guy’s a Disney villain I mean he’s not even realized like I want to know who he is I’m about to show you so I was told by again I can’t

Quote who told me deep throat deep throat yeah I was told that he actually wasn’t on the panel list so he was not on the approved panelist but that people were so upset about the title of this hearing that they brought him in as sort of this like party to completely flip to

The other side that there hasn’t been any attack by the administration on crypto and that he was the last minute addition uh to to basically you know kind of counterbalance uh what probably would have been pointing out a lot of facts that there’s been um you know complete sort of uh like

Regulation through authoritative regulation instead of actually trying to do like pass laws and regulate that way so who is he um I’m trying to find the uh the Tweet here we go he’s a plan that that guy’s a plan he’s definitely a player yeah he’s a plan and that’s true so so the

Question you need to ask then is okay so so who who would be so rolled riled up that they would they would orchestrate a plant like that because right sure that he’s just it’s so one-sided yeah so I mean that’s kind of how you kind of work

Out who the real enemy is is so what’s this guy’s name man so I put out this tree yesterday because I was so I was so [ __ ] fired up watching this thing I I so I then I started going deeper I started looking at donations what has he

Been doing where does he live I wasn’t actually going to find him but you know whatever uh and turns out that he’s a he’s a professor at Duke uh and he’s speaking and so he’s written six scholarly papers two of them are cryptocurrency in the state the Unholy

Alliance Bitcoin future from self uh uh from self-certification systemic risks clearly I said basically wolf in sheep’s clothing I then went a couple steps further two weeks ago he puts out a video on CNBC uh argues harm associated with crypto outweighs benefits uh Bitcoin is too volatile every legal

Tender and then basically I called him out and said seems impossible you could have brought more anti-crypto bias than you did today we uh we could have gotten you a shirt not shirt and tie that reads crypto and forced regulate and destroy the SEC had every opportunity to

Regulate FTX and they failed did you miss that and I was hoping that he would actually respond to me and I also hoping that thing would get retweeted uh so people kind of know that this suit is a wolf in sheep’s clothing so um yeah absolutely that like that that

Floored me but I’m not surprised and uh well you missed one place where he spent a considerable amount of time which is he spent five years uh working with the Federal Reserve Bank ah I forget which one I don’t think it was St Louis But but so he’s directly from that industry

He’s also uh he’s also on a podcast called coffee and crypto crypto February 330 was on this podcast and he was on it again on on on uh Uh tomorrow so he’s on this thing once a month with one of his colleagues from Duke so you don’t have good sir I mean if you want to attack something yeah one of the ways to do it is to get your narrative out there but but in a

Very big way so you go and start a podcast to talk about it right yeah this guy’s a [ __ ] plan I can’t believe this yeah so if you guys for the for the 90 of you watching uh like the video we’re having a lot of fun hit us with

Some comments tell us what you think about this stuff and if you really want to troll it go go get that tweet that I put out and 91 of you retweet that thing uh and then and get it get it floored uh all right so the last thing hold on to

The left the last thing I want to show you all right all right one sec one sick yeah can I just give you a link there’s a photo here I just put it in chat look at that photo he’s posing right with four colleagues and in front

Of him is a is just can you put it up yeah thank you to our sponsors Circle Galaxy and trm is that usdc Circle and Galaxy oh yeah digital so what the [ __ ] going on there well I mean like if anything was going to become the uh the uh cbdc of the

United States maybe it’s sort of like who knows what the like who knows what the underlying agenda is but you know you could definitely uh draw some conclusions on our own I think what is going on I don’t know very interesting all right last last one I promise uh and uh so basically

The Silver Lining I think for all of us and and you know if you’re gonna if you’re gonna be watching the show you’re gonna get behind anybody Tom emmer uh is an absolute G when it comes to this space he’s he’s uh forget what political party you support I don’t care this

Isn’t this isn’t a political issue uh this is a decentralization issue it’s a Financial Freedom issue this is the reason that we’re all here issue and so my man went on and just laid it to him straight and uh I’ll play it for you now love this guy crypto technology is

Shifting economic power from centralized institutions back into the hands of the people it’s transformational and it can be threatening to unelected bureaucrats and quite frankly some elected people here in Washington DC this threat is most saliently observed through several recent administrative actions on January 3rd 2023 the FED FDIC and the OCC issued

A statement discouraging Banks from holding crypto or servicing crypto clients on a quote safety and found this basis on February 7 2023 the Federal Reserve published a statement in the Federal Register seemingly turning this perspective into a final rule without following the public comment process outlined in the administrative procedure

Act in the midst of this on January 27 2023 the White House National Economic Council published quote the administration’s roadmap to medicate mitigate cryptocurrencies risks this report summarizes President Biden’s political plan to lawlessly abuse the administrative state to push American crypto firms and their United States customers into offshore unregulated

Opaque and unsafe markets these recent actions are an explicit display of what Congress and the American people already noticed this Administration is weaponizing the banking sector to de-bank Legal crypto activity here in the U.S using Scare Tactics to run an entire industry out of the country and

The collapse of FTX should warn us of the vulnerable position we are putting American consumers in when we don’t compete to keep crypto firms on Shore clearly the admiration’s policies are motivated by a thirst for increased control over the American people boom dude you know how that makes me feel

How I feel that’s how I feel when I listen Beavis with a sword yeah so yeah so I mean I think like you know the question is you know what what’s the saying like first they first they laugh at you and then they what’s what’s that one do you guys know the the

Yeah we’re important enough to be fought against that’s what’s happening yeah we’re there so uh I know that was I know there’s a lot and it was a long segment but I think it’s super important guys um and I hope that you feel the same way and we’re gonna we’re gonna be keeping

Close tabs on what happens next because I guarantee you that’s not the last year and we’re gonna have this type uh and there’s certain folks that I think from a house perspective or from a uh a political perspective that we can rally behind uh because we’re going to quickly

Find out who are our allies and who are not let’s go let’s go all right so why don’t we kick back to kucoin real quick because it is relevant and maybe maybe we can wrap up with this one since we are we’re pushing yeah we could talk about that too

There’s some cool stuff all right so let’s get back to it so uh there was a lawsuit right we all know is her name’s Leticia I believe uh she’s the the AG for the southern district of New York she’s essentially the enforcement arm of

The SEC as it seems uh so there was a lawsuit taken against kucoin uh Leticia James and the suit argues that ether is considered a security under the Martin action because they offered ether and they also likened it to Luna as well as uh UST I believe they were offering the

Sale of unregistered Securities and she also went on to mention that she was able with a New York IP address to create an account on kucoin to fund it and to purchase these what she called unregistered Securities and I want to pull up a quick tweet from from Dylan

Leclair uh here and I’ll try and and control plus this so you guys can read it and part of their argument for if you Miriam being a security and and I have to tell you this is not a bad argument if we’re using the Howie test as our

Yardstick but they’re not using the Howie test as the yardstick for the record well they kind of are though and that’s what that’s what this argues here he said he said she says buterin and the ethereum foundation retain significant influence over ethereum and are often a driving force behind major initiatives

On the ethereum blockchain most relevant here buterin and the ethereum foundation played key roles in facilitating the recent fundamental shift of transaction verification method to proof of stake indeed one developer who worked on creating the software necessary for the transition stated that his team was granted permission by the ethereum

Foundation and what they’re going for here is that in the Howie test uh part of it is uh expectation of profits through the actions of others through the work of others right and that somebody else is driving the ship and you’re going to get an appreciation in your asset that’s what they’re saying

Here yeah but they’re opening the door with the Martin act so that like basically they they’re they’re they’re they are back during the Howie test into this thing through something called The Martin act which is which is uh a 102 year old New York anti-fraud law uh that basically gives the attorney general

Power to investigate Securities fraud uh on the basis that you know values of ethers dependent on the efforts of others I.E vitalik buterin and so they’re actually using a 102 year old uh law to then you know circum like to to bring into how we test to this case and

So like that’s insane that’s pure Insanity wait till she finds out the real value of ether is dependent on the length of vitalik schlong in the next picture then then the lawsuits will flow my friend there’s some there’s some important points here first of all um coin is not an American company

Um so the prosecutors are prepared to argue this case they’re not bluffing by any means it’s not what I’m suggesting but they know full well that kukuan is not going to engage they’re just going to ignore the suit and they will lose by default or whatever mechanism when you don’t show

Up so the prosecutors will not have the opportunity to lay out their case as a result whatever the judgment is even if they don’t show up it can’t be used for precedent so this is not that big a deal other than the prosecutors have a case that they’re prepared to argue they’re

Just not going to get a chance to do it this time but they’re probably going to find another vehicle by which to get that information on the record and and their hope would be to set a precedent to cause more Carnage but this is not it because kucoin’s just not going to play

Ball yeah very good point there so we we did with at no point in the show and we’re not going to have we talked about the Voyager deal being pushed through from a binance U.S perspective it’s now being um you know tried to get basically being uh challenged thank you appealed uh but

Nevertheless in that case the you know the judge was his judge Willis basically characterized the agency’s claims which is the SEC as vague including the SEC failed to present substantial evidence he also criticized the SC for expressing its concerns at the 11th hour I cannot put the entire case into uh interminate

Deep freeze while Regulators figure out whether they believe there are problems with the transaction in the plan my point of saying all that is that this is the same thing like there’s actually no there’s no guidance as to what is or is not a security so I don’t know how they

Could possibly come after like like these backdoor attempts at coming after ethereum when there’s actually no guidance how can a judge like how will that hold up in court how would a judge like how would that be any different than what’s going on in the boys your

Case where there’s no precedent so the judge is like I’m not going to make decisions based on this I mean again I mean it depends on the judge right I mean there is it depends on how you know if you have a judge it’s sort of like Sherman and he just hates

The space for whatever reason or he’s part of a coordinated action uh you know he’s not going to be as favorable as this judge was right so and it feels like it feels like what’s really happening to us is not really getting a getting trials and things argued on

Their merits you know is crypto good is crypto bad is the has the law been broken are things really Securities or not but it’s more of a sort of frivolous lawsuit DDOS attack on crypto it’s a new legal Theory every week from a different department at the state level at the federal level

Etc and the the idea is to exhaust us to exhaust industry participants to drive us away right so and I see a rolling your eyes there double that’s what’s going on maybe though but like when we’re standing up right now are the Republicans the Democrats are not the

Democrats are attacking it is a issue but going going back to what clay said like there just isn’t precedence sometimes in the way that you set precedent is through through uh legal cases you start them at lower levels they get appealed if you know this you

Don’t agree it goes to you know higher Court higher Court eventually it goes to the Supreme Court then they make a decision and then you have precedent that’s just how how it works I I think I think tomorrow’s point and and so I I mean I agree with what you said double shark

Because that’s that’s how I feel about this situation currently but what like there’s they’re trying to back door anything that they can if you can get something that actually you know creates some legislation that gets passed by any backdoor means like that seems to be what’s happening and I think

The SEC has gone after 140 different cases and I don’t think they’ve lost a single one and xrp is still pending um and so they certainly have you know they’ve they’ve set themselves into places they think that they can win and it’s usually low-hanging fruit xrp is

Not low hanging fruit ethereum is not low hanging fruit like they’ve got the money to fight whatever they need so you know I I I actually think that we said it Photon miles this probably does eventually become a Supreme Court thing that’s that’s my guess the SEC also had

A setback in the grayscale case this week they didn’t have a good week um except except in that case it was grayscale that sued the SEC I believe yeah um around around the spot ETF um uh issue with with the grayscale trust now it’s good that the SEC had a

Sit back but all that happens there is that case doesn’t mean that they can get the spot ETF they can just get a judgment that the SEC didn’t do the right thing or whatever so then they can reapply for the for for the spot ETF but

The SEC is just going to knock it back for a different reason so it’s not that significant other than it would appear that if things go to you know go to the level where there is a judge adjudicating these things we seem to be getting a fair Shake in that scenario

Right but you’re not always getting you’re not always going to get a fair shake you know judge is a human and some of them have biases and it’s a it’s a slippery slope um but a couple of wins are uh uh uh are better than none but if the SEC sues you

Yeah yeah I mean the federal I think the federal government has a success rate of around 99 so like if if you are if the federal government brings your case to trial you’re pretty much going to lose is kind of what that means so they don’t usually try things unless they already

Have a pretty good idea of the outcome and not to mention I doubt most people have the funds to defend themselves when you can be in litigation for three years plus uh and so that’s a big problem so but the little winds matter and and things like that that amount over time

Is momentum I believe uh to push us in the right direction for this faith and that’s really that’s what we need right now is little wins because God we’ve had a lot of losses as of late I want to I want to add like a positive

Spin on this which is that you know I’m not I I don’t want to say that like a lot of lawsuits aren’t frivolous you know some are valid many probably aren’t but going back to the whole precedent issue if somebody does make you know some outrageous claim it goes to court

Gets appealed all the way up to the Supreme Court and then they’re like no that’s actually that’s that doesn’t make sense now there’s precedent for that situation so even though it seems annoying in the moment and the process is really long you know you could be

Pessimistic about it but if you want to be optimistic that’s also how a lot of this stuff does eventually get set and then you do have precedent and then you do have something to fall back on you know to set regulations and all that sort of stuff so

It’s not just the you know not all of them are going to be valid and then the rulings end up setting the precedent for future cases after five after five years in the space double sharp and and many monetary losses in being a crap Trader and learning a lot and seeing number on

Screen go up and down and all these different things like I’ve actually become in some ways numb to to a lot of it and for people that are new to the space it’s hard to become that way it takes years it’s taken me a long time

And and Nick I should have met you five years ago I probably would have made a lot more money along the way but uh and but my point is that you know this is a death by a thousand cut strategy and I think that we all have to realize that

Like that is what’s going on here like they’re they’re always going to be chasing some way to find some back door to take you know as long as the current ahead of the SEC is the current head of the SEC it’s going to be dead by a

Thousand Cuts and it’s just going to take patience to get through this scenario so that’s my two cents uh I am numb to it uh and I love to see us get little wins so with that if you’re if you’re liking the video Austin I think

It’s time to give away the thing you got it yeah yeah so if you if you haven’t in in the chat box you haven’t typed in hashtag ATC as in across the chains then go ahead and do that because you got about 15 seconds to get that done so

Type in hashtag ATC I will pull up the giveaway and we’re going to give away 150 worth of oath oats uh generously donated by the bite May tones uh and there’s 90 of you watching and there’s only 67 submissions oh 70 so that doesn’t quite add up so uh I would go

Ahead and say if you can um you know get yourself in there we lost double sharp 73 we did lose double driver I have no idea why um and he was going to explain the Phantom stuff but that’s all right I got some cool stuff picked out all right

Cool all right uh we’re gonna get 10 seconds 10 9 8 7 6 5 4 3 2 1. all right cool yeah damn bro I wrote I rugged the countdown uh 82. we’re gonna click draw yeah yeah Steven vinyl hey congrats buddy you’re easy to find my friend yep

Uh congratulations Stephen vinyl we will uh we will figure out a way to get that over to your wallet thank you for being a loyal dedicated and participating across the chains fan we appreciate you my friend and we appreciate all 93 of you who are tuned in right now hit that

Like button and uh Austin if you want to take us the last topic actually Nick you had something to say yeah so I’m just curious what you guys think um so the last big financial crisis Bitcoin was invented um and we all know the you know the the

The the message that was put on the first transaction then in 2013 the banking industry in Cyprus of all places collapsed the banks went bust and if you had money in the banks you took a haircut so you lost some of your money and if you look at the price of Bitcoin

When that happened it just went parabolic for obvious reasons um we could be on the cusp here of some shaky times in the U.S banking sector and maybe even in Europe and elsewhere but Bitcoins down eight or nine percent on the day so um you know

I don’t I mean I kind of think I know what that means but how do you how do you guys reconcile that I you know I I’ve always thought that the way Bitcoin would would you know go through the roof and kind of go into a

Kind of a super cycle would be that there would be a financial crisis like a very big one um you know with the dollar with major Banks and you’d basically see this Dynamic where it’s sort of like the Titanic where everything gets sucked down at once and then over you know then

It’s at a certain point people would realize that Bitcoin was being sucked down less than everything else and in a world where cash and you know equities and everything nothing was a good place to put money and Bitcoin was the least shitty place to put money everyone would

Pile into that and that would be the one remaining uh Lifeboat and then every then Bitcoin would go up to 250k 500k something crazy like that and it would happen overnight I’ve always sort of just felt that in my gut and uh and I predicted it for years and I’ve been

Wrong kind of every time I predicted it um we may finally be there is what I’m saying I I think you’re right but what you’re describing is the collapse of global Fiat currencies in Africa right yeah you’re describing um you know not a crisis you’re describing an apocalyptic collapse now

That’s going to happen I don’t know if it happens in our lifetime because they keep kicking the can down the road but in that scenario I yeah I I think that’s what happens it’s like um I don’t know if you guys have been watching the show this year the

Last of us it’s kind of Apocalyptica yeah and so in that world yeah bitcoin’s the thing um I just don’t think we see that you know very very uh you know in our lifetimes I don’t think we’re there yet and and I’ll tell you the reason I don’t think we’re

There my mom’s visiting I love bringing up my mom she’s such a good like for example for these types of things right but so you know a lot of that generation uses uh money managers uh right their money is with somebody who’s you know we assume smarter than me and is making

Moves on my behalf bitcoin’s not the move they’re making right now and and I would I would submit that a large part of that boomer generation would probably operate in that same way now spot ETF in the United States opens things up right and there’s

A reason that a spot ETF has not been opened up yet you can short Bitcoin through an ETF through pro shares uh there are ETFs in other countries I think Canada has one and you know a bunch of other places double sharp welcome back sir

I think I think this event has been a tremendous learning opportunity I know it has for me uh and it probably has for a lot of other people that never really care to learn how all this worked because it just worked until it didn’t until it stopped working and it put

Pressure right and and for me that was a huge motivator to go okay what’s actually going on behind the scenes and every time I hear Nick talk I realize I don’t I don’t know I don’t know what’s going on but I know more than I did yesterday and so I think we’re probably

Moving in that direction who knows if we’re there yet if Asia collapsed though like if something really [ __ ] up happened in Asia I’ll bet it happens overnight yeah I I think I think uh do you think the Drone will be forced to pause redox in order to access State Banks find out

Um I mean Nick you kind of reference that like there’s you know they’re not stopping they’re not stopping it’s it’s a pipe dream yeah they’ve been very very clear about what their game plan is um and unless the world implodes they’re not going to stop so so basically I just

Shot down a bank let me just sit there there’s like in in one minute if JPMorgan actually has you know legitimate liquidity problems insolvency type issues do they step in and just bail them out and and that’s that and it’s like like they don’t turn the money

Printer on for everyone else but they they just bail them out is that is that the scenario I think so and it’s not just them right there are still deep pools of capital around the place and if you’ve got you know a bank um like JP Morgan

Um you know Buffett’s going to throw in some money you know like a few Sovereign wealth runs are going to throw in money if they let them it’ll be fine if it’s one you know something like that um they’re not going to turn on the money printer for that stuff you can’t

Fight they know that they can’t fight two battles at once right you pick a monster and you go after it and right now they’ve told us without any kind of um ambiguity that inflation is that monster rates are going to keep going up we all want them to stop going up

Because we want the market to go up it’s just not going to happen so I’m going to give my quick uh my quick answer to the the question that Nick pose in terms of when does Bitcoin I think it was effectively go parabolic or or get some type of crazy explosion

Where you know it’s a million dollars a coin or something insane uh Bitcoin ETF so accessibility through you know um retirement funds you know getting other people into the space that wouldn’t normally ease of use to get into the space uh from institutional players uh where billions of dollars can

Flow in uh I think is huge I still think the space is too difficult to to get into we’ve got massive barriers to entry and until we start to break that down and make a web 3 entry as easy it is to get on Fidelity and buy a stock like web

2 which I guess centralized exchanges do in a way but but not really well and not globally I’d say uh that’s a big problem and also having all of our Fiat or all of our our stable coins based in Fiat is is a problem like like then we didn’t

Talk about it today but uh the knock a dollar which was proposed by Arthur Hayes where it’s a Bitcoin based uh stable coin things like that you know that changes the game if you were to pull something like that off uh and that mechanic was actually worked where

Currency is then based almost like gold backed like what would be equivalent of a gold-backed sable coin on bitcoin and so I think if we saw those two three things happen then you could perpetuate some type of insane bull run as of right now I still think we move in the same

Bitcoin having Market cycles and I don’t think it changes anything for what 2024 could be will be agreed with you clay agreed all right so I want to kick us over because double sharp thank you for coming back because this next topic is you man uh so real quick and this is

Super cool I put out a tweet this morning if you have not looked at the hackathon uh submissions for the Phantom hackathon you absolutely absolutely should so uh the hackathon submissions are in and why don’t we kick through like the first round uh to see which ones qualify and move forward I picked

Out a couple of my favorites as I was going through it but double stripe I want to kick it over to you because I know that you have uh a little bit more information on here hang on I think you froze and then you try to rejoin from

Your other computer all right let’s wait a sec why don’t I show the ones that I picked out uh real quick while we’re waiting on him there’s fifty thousand dollars in prizes you can see there’s a bunch of different levels of of the prizes but effectively you know what are people doing Austin

They’re building applications as a building building working software applications that integrated into Phantom blockchain and they’re giving away money so just exciting stage that’s that’s pretty much what they’re doing so let’s let’s go ahead and share this post here real quick uh and it was not a

Small amount either uh if you come down here you scroll down to the bottom there’s like I don’t even know how many pages there’s a ton of pages but I picked out a couple that I thought were really really interesting uh the first one being this one which is wallet

Inspector and so essentially what wallet inspector will do is it will read your wallet it’ll read all of your approvals it’ll read your RPC it’ll see all the wallets that you’ve interacted with all low reputation tokens Etc and it will not only give you an idea of any

Potential security concerns but it gives you the ability to fix it right within it I thought that was really really cool the other one is hazed and hazed uses stealth addresses to allow you to send and receive Phantom private privately on the Phantom Network so I didn’t really

Get too much further into it than that but those were two of the things that came out of the Phantom hackathon that I thought were very very valuable tons of games tons of nft things I would just totally recommend everyone go check it out I love that they’re doing this sort

Of uh initiative now and I think there he is double Sharp’s back can you hear us buddy double Sharp testing we don’t have sound yet I guess while he while he’s doing that I have a quick question for Mark oh gotcha double Sharpie there I think I’m here

There’s a blizzard and the internet doesn’t like it let’s talk about this Phantom hackathon I just showed a couple of the ones that that you know I thought were were pretty cool but I know you’ve got like a lot more information on this so take it away buddy

Um yeah I mean I have more information I I don’t have I you know when I agreed to talk about this I thought I was going to be looking at like 20 submissions to the Phantom hackathon and then when I went and looked at the page there were like

200 and something of them so I ran through um as many as I could but unfortunately I couldn’t look at the details or videos of all of them there was a lot more than I was expecting there is um you know overall I thought some of them were were cooler than I was

Expecting also um I’m not sure the ones that you mentioned um earlier but they were you know one that I thought was interesting for personal reasons is somebody built a nft smart Wallet app so you can take any nft and turn it into a smart wallet which is

The the thing that I presented on at um consensus last year is using that token ID to create a unique contract and then that contract can own other things so I thought that was pretty cool that some people implemented that um what’s that Shimmer’s doing that by the

Way just so nice yeah yeah it’s in built yeah um and then I know that um buns and sold swap uh submitted some stuff also I don’t know the details of um specifically what they were developing but I know they added on some some features to their site for it

Um you know lots of lots of games um one that I worked on summer helped with not not a ton but contributed a little bit to his um the paint swap uh team is building a game called S4 Kingdom which is an idol RuneScape kind of

Um play to earn game my understanding is that there you know I’ve looked at the code so I know this but the um it’s going to be freedom and the characters and then you sort of you know interact play the game level up um everything in the game is is uh ERC

1155 nft so the characters the um all the different assets you can gather and stuff and then it’s kind of cool the way they built it to work with their brush token so it’s um you know all the the in-game stuff works with their token and then it it’s

Tradable through the marketplace and the royalties are all sort of built into it too so the Art’s cool the gameplay is pretty cool it’s pretty complex but um I am a little biased because I helped with it and oh as I mentioned earlier it does use cool solidity 0.8.19 features

It’s got uh you know user defined types and overloaded operators and some cool stuff that they’ve built into the latest versions of solidity to make it a little bit nicer to use um I know rabbitai who built uh phantomime and some of the the Bots that

Are in a lot of the Phantom Discord servers he also worked on a game um that’s uh you know based on it’s an nft based game for you know taking nfts combining them leveling up things like that so overall I thought you know quality of a lot of the the stuff looks

A little bit more polished than I was expecting so I saw a cool ZK ticketing app uh all sorts of cool stuff in there two quick questions so one uh I had no idea there was over 200 submissions like one of my things was like is this good

For Community engagement and the answer is clearly yeah huge uh so I’m very encouraged by what you know I’ve been encouraged by what the fandom Foundation has done the last six months and we’ve talked through all that so we don’t need to go back through it uh but

Um do you think that this brings like new like like does this bring new Builder Talent or is this existing people that are in the ecosystem that are that are submitting to this type of stuff like I’m trying to figure out is this a conduit to like to actually bring

In new folks well so you know buns and and soul Swap and paint swap they’ve obviously been building on phantom for a long time um I did notice or you know I actually like I was saying I when I agreed to to talk about some of this and I was like

Yeah take check out the projects then I went and loaded it and there were like 250 and I was like oh no that’s I can’t get through all those in the amount of time but um I did look through a bunch of them and in the description of several of

Them were people who were saying you know they had developed on other chains before and then there were plenty of people who said that they had never developed in web3 at all so this was like their first foray into making a smart contract I think the ZK ticketing

Thing was like that was the first zero knowledge right he might have even said it was like the first programming he did thing he did or one of them it was like they’d never even programmed before and and you know developing sort of contracts and adapt was like their first

Um jump into it which is you know I’m sure that they still have stuff to learn you know hard to do that in a month but um I I did see plenty of people who were interested in participating um and then there were you know I clicked on some of the profiles of

People and some of them had submitted um hackathon stuff on to contests on other chains but it didn’t seem like they were necessarily linked to like big projects or anything so so it did seem to be attracting people from um you know outside of web 3 and other chains and stuff

Can’t speak to the percentages or anything like that but if I’m being honest there was a lot more interest and a lot more submissions and a lot broader range of um of projects than I was expecting fantastic dude I just I just looked at one called Zuma key which I just wanted

To mention this because it’s so freaking cool I don’t know if you saw this double sharp but uh it’s essentially where you choose people called Guardians you’ve got multiple Guardians right and you have your your uh private key or your mnemonic phrase that’s loaded up into a smart contract apparently uh and somehow

It has your identification in there I don’t know if you’re you I don’t know what you’re doing but you’re Guardians the people that you choose are the only ones that can release it back to you if for some reason you’ve lost it I just thought that was cool as [ __ ] for web

Yeah that’s that’s some of the stuff that um I think I mentioned this before like that’s one of the reasons people are excited excited about account abstraction on ethereum on Phantom on on the other chains is that you can um easily do stuff like that which is

Not to say that you can’t do some like some of the stuff is going to be brand new and like you have to wait for them to release these features a lot of it like the one you’re talking about now are things that you can totally do today

It’s just more work so it just yeah so like that is super cool to see I saw a couple different like multi-sig kind of apps some smart wallet stuff so like while it’s focused on nfts while it’s focused on defy um yeah like I said I was just overall I

Was impressed with the the quantity of of submissions that’s that’s awesome so so guys uh just so you know on the 20th which is a Monday I’m doing a Twitter spaces with Juan we can dig into all of this stuff he told me they are they’re actively going through all the

Submissions going to whittle them down into sort of final this group so we can certainly get an update there uh also told me that they’re working on the ecosystem Vault governance uh because it’s broken in terms of uh I guess you know how like designing delegates to

Vote on behalf of the ecosystem uh that should help with voter turnouts and validators don’t have a lot of incentive to participate which is big and if you know about the Phantom ecosystem that’s been a problem for a long time so there’s a lot of things that are going

On uh I’m stoked to hear about them definitely check out the Twitter spaces on the 20th I’m excited to lead it Juan’s the man he’s going to do a workout Live on YouTube while we actually do I’m kidding um but uh what I’m looking forward to it Monday the

20th at noon check it out and uh and that’s it be there be square all right let’s go ahead and wrap this up ladies and gentlemen hey if you’ve watched this entire thing and you have not liked this video or subscribe to the channel I don’t know what the hell you’re doing

With your life my name is Austin with blockbites with me as always Mr crypto clay Mark Jeffrey the wonderful double sharp and we’re gonna get the hell out of here take us home Mikey have a great weekend Thank you

CRYPTO NEWS THIS WEEK! The federal banking system is starting to break, along with Silvergate bank in crypto. The New York Attorney General claims that Ethereum is a SECURITY in Kucoin lawsuit. Will that hold water? Arthur Hayes proposes a new Stablecoin termed the NakaDollar.

Across The Chains highlights crypto news from all the major blockchains like Ethereum, Binance, Fantom, Optimism, Polygon, Shimmer, Avalanche, Arbitrum & more…

Blockbytes | @blockbytescom
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Nick Drakon | @ReveloIntel
Clay Kilgo | @crypto_klay
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