Weekly Roundup 05/17/24 (SAB121 repeal, Paul Ryan on stables, Bitcoin ETF 13Fs) (EP.528)

This episode focuses on significant developments in the cryptocurrency and financial regulatory spheres, including the controversial SAB121 repeal and its implications, insights from Paul Ryan on stablecoins, and the trends in Bitcoin ETFs.

1. SAB121's Repeal: The episode highlights the controversial repeal of SAB121 and its potential to significantly alter the crypto regulatory landscape.
2. Influence of Politicians: Insightful commentary on how former and current politicians like Paul Ryan and Chuck Schumer are influencing crypto regulations.
3. Impact of Stablecoins: Discussion on the role of stablecoins in U.S. financial markets, especially in relation to treasury bonds.
4. Institutional Engagement with Crypto: Observations on increasing institutional investments in Bitcoin ETFs, indicating growing mainstream acceptance.
5. Political Dynamics: Analysis of the political dynamics within the Democratic Party regarding crypto legislation.

1: Introduction

Overview of episode topics, including SAB121 repeal and its implications.
Matt Walsh: "This is one of the most momentous days in the history of this podcast."

2: Main Discussion

Detailed discussion on the political and economic implications of SAB121's repeal.
Nic Carter: "SAB 121, which I think the way most people found out about it was probably this show."

3: Guest Insights

Paul Ryan discusses the potential of stablecoins to influence U.S. treasury auctions.
Paul Ryan: "Stablecoins could be a significant buyer of U.S. debt."

4: Market Trends

Analysis of trends in Bitcoin ETF investments and their implications for the market.
Matt Walsh: "We now have much more of a sense of who, from an institutional perspective, is interested in bitcoin."

1. Stay Informed: Keep up with legislative changes in the crypto space to understand potential impacts on investments.
2. Consider Diverse Investments: Explore stablecoins as they may become a significant aspect of the financial market.
3. Engage Politically: Be aware of how political dynamics can influence financial regulations and potentially your investments.
4. Monitor Institutional Trends: Pay attention to institutional movements in crypto, as they often precede broader market shifts.
5. Educate Yourself: Understand the basics of cryptocurrency and blockchain technology to make informed decisions.

Matt and Nic are back with another week of news and deals. In this episode:

The Senate votes to repeal SAB121 Which Democrats defied Biden on SAB121? Chuck Schumer breaks with Warren Paul Ryan’s pro-stablecoin comments on Bloomberg CME is launching a spot crypto exchange The State of Wisconsin owns over $100m of Bitcoin ETFs Pump.fun exploited MEV exploiters arrested by the DoJ What’s up with Roaring Kitty?

Content mentioned in this episode:

Matt Hougan, Who’s Buying Bitcoin ETFs (According to 13F Filings) David Morris, What President Biden’s Crypto Politics Might Really Be About Rep Mike Flood and Wiley Nickel, It’s time to overturn SAB 121 Sponsor notes:

Bitcoin’s Halving Aftermath In Coin Metrics' State of the Network issue 259, we analyze the impact of Runes and miner revenues in Bitcoin's post-halving landscape

People

Paul Ryan, Chuck Schumer, Elizabeth Warren, Joe Biden

Companies

Castle Island Ventures

Books

None

Guest Name(s):

None

Content Warnings:

None

Matt Walsh
Brought down by bad mortgage investments. Lehman, which has 25,000 employees, will be liquidated. The federal government loans American International group AIG $85 billion. This is a different kind of market. And the Fed is asleep.

The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crisis. The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of quantitative easing. You print a couple trillion dollars and all of a sudden people start to worry. So out of this worry we have something called a bitcoin. Bitcoin.

Nic Carter
Bitcoin. Welcome to on the brink. I'm Matt Walsh. And I'm Nick Carter. And this episode is brought to you by Coinmetrics.

Matt Walsh
And here is the metrics minute. For this metrics minute, we're diving into the aftermath of bitcoin's fourth halving. The halving block, which is block 840,000. That generated a record 4.7 million in miner revenue driven by surging transaction fees and the race to secure the epic sat, which is the first Satoshi mined after the having after a three day bidding war. The epic sat.

Nic Carter
I didn't. I wasn't even aware of this. Sold for 33,000,000,033 bitcoins. What? Making.

Yeah, making that block the most valuable batch of transactions in bitcoin's entire history. The runes protocol also launched alongside the having, triggering a surge of opera turn transactions. There are 800,000 of those on April 23. Since the launch of runes, miners have earned 2000 bitcoin via runes. About half of those were within 24 hours of the halving miner.

Revenue per megawatt now sits at $1.3 thousand per megawatt, which is actually the lowest levels since the FTX collapse in 2022. Kind of mixed bag on the halving.

Matt Walsh
That's a lot to pay for a set. Yeah. I mean, I don't understand that. What is. What's the significance of the SAT?

It's just the first sad after the having. I mean, comes around every four years. Right. That's like a very pure NFT. I mean, it's literally just a UtxO with no, nothing else attached.

And how do you showcase it? Would you have that like on a. On a wall? Yeah. You can't even visually represent it.

Nic Carter
That's like you can't put it in a gallery. I don't know. Might be something I'm missing here. Well, this is a big day here, so. SAB 121, I guess we'll talk about this at length in this podcast, but SAB 121 has passed the senate with 60 votes.

I think this is one of the most momentous days in the history of this podcast. Pretty great. No one has talked about Saab 121 more than us. I think that's fair to say. It's.

Matt Walsh
I'm really excited about it. It's. And this is the first piece of dedicated crypto legislation that's ever passed both chambers. Right? It is.

Nic Carter
And it's our pet issue, SAB 121, which I think the way most people found out about it was probably this show not to get too big for our britches here. I mean, if you think I'm tired of talking about it, you would be wrong. I love talking about it. I don't know when it first came up, but when we first brought it up, I never thought it would spiral into this massive issue where now you have Senate Democrats directly defying Biden. Biden threatening a veto on this very niche and esoteric rule from the SEC.

Matt Walsh
I mean, it should be the most bipartisan thing in the world. It just protects consumers. You allow regulated banks to play in this market. What is controversial about that? Yeah.

Nic Carter
And if you think about it from the perspective of a Democrat, that's pro regulation, pro oversight of the crypto markets, pro consumer protection. It doesn't make sense to be against SAP 121 because it allows the largest and most sophisticated and in theory, most sort of government surveillable banks to engage in crypto custody as opposed to the current motley crew of firms that do it. So this rule doesn't actually seem hostile to sort of like your mainline democratic agenda. The reasons for not liking this would be, number one, you just want to kill the industry, which is, I think, Elizabeth Warren. Or number two, you run an offshore unregulated brokerage crypto casino, and maybe you just don't want competition.

So the vote passed. It was 60 passed the Senate. 60 to 38, right? Yes, 60 to 38. So who didn't vote?

I actually don't know who. There were two absentee people. Not there, I guess. So the Democrats that voted to overturn it so openly defy Biden were senators Casey Peters, Gillibrand, Mark Kelly, Hickenlooper, Cory Booker, Tester Rosen, curse in cinema Lujan, Ron Wyden, and Chuck Schumer. The second ranking senator.

Chuck Schumer. That's very interesting. Yeah, that's. I mean, that's huge. He's the majority leader, right?

Yeah. I mean, defying Warren, defying Biden. This is a break in democratic ranks. I think that's fair to say. So this was fascinating because right before the House vote, an hour before the House vote, Biden came out and said that he would veto this.

Matt Walsh
And so he was discouraging House Democrats from voting for. It didn't slow down a number of them. So a number of House Democrats voted for this last week. And then apparently Schumer earlier this week said, vote your conscience to the Democrats. And a lot of them actually have a conscience, it turns out.

Now you can argue around the motivation because some of these Democrats might have said, look, I'm in a tight race. So tester would be a good example there. Testers in Montana, he's super hostile to crypto, super hostile digital assets. People should be really rallying to get tester beat in the next election, I would argue. But he voted for this and probably because, look, he's in a tight race.

He's probably going to lose. It's going to be a lot of money flowing into that campaign because his opponent is a big fan of digital assets and he probably said, look, Biden's just going to veto this anyway, so why do I need the headache? Yeah, it actually makes sense from that perspective. It's a relatively low risk thing to do. You imagine Biden will probably follow through the veto and you can show that you're actually kind of thoughtful on crypto, at least this, this issue.

You know who I really like in all this is Wiley Nickel, who's a Democrat out of, he's in the house in North Carolina. Apparently he's not running again, which is a shame. But he just seems empowered to say what he thinks. So he has come out very publicly. So he's written a letter to the SEC decrying this whole ruling, which was unconstitutionally issued.

He also wrote an op ed with Mike Flood, who's a Republican from Nebraska in black works. It's called it's time to overturn sab 121. So he's really shining here. It's too bad that he's going away from elected office. Yeah, we're going to put that in the show notes.

Nic Carter
We also have a very interesting piece of commentary from another former politician this week, Paul Ryan. His diatribe on Bloomberg that caught a lot of attention on crypto, Twitter. My goodness. So we'll get into that one. Why don't we do some deals of the week to start off.

Matt Walsh
First one up is chainml. This is a research organization building at the intersection of AI and blockchain, which is just a great intersection these days. Days if you're trying to get in the deals of the week. They raised 6.2 million from hackvc, foresight, hypersphere and figment. Next up we have zeta markets.

Nic Carter
They're Solana Dex. They raise 5 million from electric capital, DACM and Cellini Capital. Then we have hilay. I think this has an accent AGU on it. This is a zero knowledge proof company that raised 2.6 million from framework and fabric.

Next up, Archlabs. They are a bitcoin native application platform. They raise 7 million from multicoin Portaventures, OGX, big brain holdings and our friends at CMS. Then it's zest, which is a bitcoin lending protocol that raised 3.5 million from Tim Draper, binance flow traders and trust machines. Then we have a monster deal which is polymarket there of course, the crypto based prediction market.

There is 45 million from founders fund. Big congrats to Shane and the team over there. That's a big fundraise there. Next one up is RCM. This is a confidential computing network that raised 5.5 million from Greenfield, Coinbase, heartcore and longhash.

Then we have humanity protocol, their decentralized identity protocol. There is 30 million from Kingsway, Animoca, Blockchain.com and hashed. Then it's anomaly, an AI blockchain gaming studio that raised 1.5 million from Shima. Then we have Raven, their proprietary trading firm. There is 2.7 million from HakVC and Wintermute.

Matt Walsh
Next one is a company called Cross the Ages, a crypto gaming company that raised 3.5 million from Animoca. What a name. Then we have Gamek, a decentralized social company. They raised 1.8 million from Binance Labs and Polygon Ventures. Here's an insurance one re, which is a blockchain reinsurance company, raised $14 million from tribe and Morgan Creek Digital.

Nic Carter
And lastly we have Shogun, their Defi training protocol. There is 6.9 million from polychain, Arrington and hypersphere. So we talked about SAB 121 at the outset here. But I guess the question is, so this has passed the senate in not a veto proof way, I would add. So you need two thirds, I believe, of the House and the Senate to overturn a veto.

Matt Walsh
Biden has said he's going to veto. Now, does Biden actually know that he's going to veto this? Or is Elizabeth Warren's staff, who now works for Joe Biden in the driver's seat? Is this guy actually going to veto this bill? He's got Chuck Schumer on the other side of this that is telling him that he's in support of it.

So the american people, the representatives of the american people, want the banks to be able to custody digital assets. Yeah. You'd think to overturn the first piece of crypto legislation passed in a bipartisan way in a very contested Congress. You would want a really good reason to do that. And vetoing this doesn't at all seem to be a meaningful agenda item for Biden.

Nic Carter
Biden didn't come out at any point, say, this is one of the objectives of my presidency. It seems really, really weird to use up political capital on this. Of course, he can do it if he wants, but it's just an odd move to veto something like this. I was talking to someone today about Wiley Nickel, who we just talked about, but I've come to have a lot of respect for him. Never met the man, but clearly is speaking out of step with the core progressive wing of the Democratic Party.

Matt Walsh
And this person said, look, Wiley Nickel has the president's ear. And so maybe that's true. What I said back was, it's not like Biden has three ears. I mean, Elizabeth Warren has one of them, and Sherrod Brown has the other one, is kind of how it looks. Yeah.

Nic Carter
I mean, I guess it's clear to us now that a lot of the staffing, especially on the financial regulatory side, in the Biden admin, was informed by, I guess, this compromise to give Elizabeth Warren a lot of discretion there in exchange for the support of the progressive wing of the party. But as crypto becomes an electoral issue, you have to imagine there's some kind of, there's some junior staffers within the Biden admin that are wondering, is it really prudent to die on this specific hill, especially when it's such a straightforward piece of legislation? Yeah, I mean, you have, John Donnenberg is really the key antagonist here. So he's the deputy director of the National Economic Council at the White House. So he's an advisor to Biden, you might say.

Matt Walsh
Well, this guy must have a very storied career. I mean, he must really be experienced if he's directing Joe Biden's whole economic agenda. What did he do before this? Was he a big executive at a financial services company? He must know a lot about the economy.

But it turns out his last two jobs were chief of staff to Senator Elizabeth Warren for about three years, and then policy director and senior advisor to Warren for president campaign for two years before that. So I would argue that this is the guy who's pulling all the strings, and the person who's behind him telling him what to do is actually Senator Elizabeth Warren. I'm really sick of her agenda setting policy at the top levels here. I mean, it is remarkable how much influence she has with very limited pushback from the Biden administration. And it's been very destructive in every single way.

Nic Carter
It's not just crackdowns on crypto, it's misbehavior at the FDIC. And of course, now she's protecting the embattled Groonberg at the FDIC, who I think was testifying today. That's affected not just crypto but fintech as well. So it's all kinds of financial regulation has gone haywire under her stewardship in this country. Well, we were with someone who's running against her last night, Ian Cain, hopefully, Senator from Massachusetts.

Matt Walsh
So he is staunchly in favor of pulling back the Saab 121, passing the market structure bill, passing the stablecoin bill. So hopefully we can get some momentum behind some of these people that are running races against some of the folks that are just blocking innovation in the United States here. So it does seem like a split is emerging within the democratic camp at least. So even if this sabre doesn't go through still, I would say really encouraging development, especially with Chuck Schumer. Do you want to talk about Paul Ryan's comments?

Nic Carter
Yeah. So this was last Friday. I didn't notice it until yesterday, and I think we're gonna actually play them in full. So let's pause here and let Paul Ryan speak. This is on a Bloomberg interview, and the question was about the debt and how the US can tackle it.

He had this to say. I think there's a couple of things Congress could do. They're not, but maybe they'll get something done. I think stablecoin legislation would be a good step in the right direction. That could be helpful.

Matt Walsh
That could be done this year, but I don't see anything other than that on the horizon. Let's talk about stablecoin, because I've heard you say that actually getting legislation on that could help treasury auctions. And when you said it, I said, what's the connection there? Take us through. Take our audience through that connection.

Yes. Stable coins, which are digital, digital, private sector, dollar backed currencies. It's not crypto because it's tethered to the US dollar. They have to have our backed assets. They have to have treasuries or cash to back those stable coins.

There's not a law that governs these right now. So they aren't really deployed. But if you actually have a law which actually McKenry and Sherwood Waters, Maxine Waters and Kenry are putting a deal together, Schumer is in talks with them. I think there's a reasonable chance they could get a deal on stablecoin legislation. That means you have a legal framework to have stablecoins deployed.

You go from a couple hundred billion dollars of stablecoins to maybe trillions. Right now, stablecoins are like the 16th largest buyer of bonds, bills and notes among all sovereigns. If you actually regulate stable coins, have unemployed, that does two things. That gets the US dollar more deeply ingrained in the oncoming digitization of currencies. That's a good thing.

And you create new consumers demand for our bonds because they have to have those to back up the stable coins. More demand for treasuries, more use of a digital dollar throughout the system to help better entrench the dollar. It's a win win situation for America. I think it's a no brainer. I'm hopeful, cautiously optimistic Congress might do that this year.

Still. Now hopefully our editor played that in a way that it's not playing right now as I'm speaking. So yeah, made a slight mistake with the editing last week. I got a few comments about that. I made some really positive comments about Ryan Selkus that never got, that never made it to air for a lot of people.

Nic Carter
I fixed it. You fixed it in post. But I think once it gets into the player and downloaded, people don't get. Yeah, yeah, that's right. So Paul Ryan, former speaker of the House, he's actually only 54, he's very young and he seems to be exceptionally well informed about stable coins.

And there are a few things that are notable. First of all, someone who's so well regarded and occupied a very senior position in Congress, being so clear eyed about stable coins. That alone is striking. That's not necessarily a topic he has to be educated on. So it's interesting that he is also the fact that he just brought up stablecoins spontaneously in response to a question about the debt.

He could have said anything, could have said get our levels of spending down, or cut entitlements, or spend less on foreign military engagements or something like that, or cut interest rates. But he brought up stable coins. And of course the point is that stablecoins are large and growing buyer the debt. So I found that really notable. And he repeated a talking point that we came up with 16th largest holder.

Matt Walsh
Right? Yeah. So that, that traces back to, I guess, presentation. Presentation. I made a mess, or main net, I believe, was the first time.

Nic Carter
And so, yeah, it's still the case. If you run the numbers today, stable coins collectively the 16th largest holder of treasuries, if you count them among the sovereigns, and they'd be considered the 14th largest us money market mutual fund. So it kind of underscores the size of the stable coin market. Yeah. It's great to see Paul Ryan come out and actually say things like this, because a lot of people listen to Paul Ryan.

Matt Walsh
He's very, very smart on policy issues. I believe he has a job now in private equity or venture capital. He's on our side of the table, I suppose, but still very plugged into all of these issues. One interesting thing he said, also positioning wise, was he said stable coins are not crypto, that they're kind of. He really sought to distinguish stable coins from kind of liquid crypto.

Nic Carter
It kind of makes sense positioning wise. I mean, crypto still has bad reputation in DC, and so he's kind of drawing a distinction saying, no, no, no, these things are backed by dollars. They're legit. So I look, I've noticed a tonal shift happening. That's why I wrote that piece on medium recently.

And this really exemplifies it. I mean, hopefully he has the air of some of his former colleagues as well. Yeah, don't call them crypto dollars. They're definitely not crypto dollars. I don't know who would have come up with that.

Yeah, no, they're just. They're just dollars that just so happen to the liability to circulate on chain. So we put out this newsletter every Friday, and I haven't gotten any comments to this effect, but I have felt that there's generally been just a lot of bad news lately, and this week is one that there's a lot of good news. And so Sab 121 goes away. You have the Paul Ryan comments, and then this is just a super interesting development.

Matt Walsh
So the CME Group, according to the Financial Times, they're looking to launch a spot cryptocurrency market in the United States. So right now they have futures, obviously, but they are looking to do this in the spot sense, which that is a huge development. That is a monster. Monster Company has a tremendous market share in derivatives now moving into the spot market, and you'd imagine that this just opens up the product capabilities. So clients who are able to access the derivatives market maybe able to cross margin against spot.

It seems like they have the tech to do this internally from a matching engine perspective, going to be pairing up with some prime brokers to do it. It seems like so big, big development. I don't think people appreciate how big of a deal this is. Yeah, that's really exciting to see. I hadn't even, I wasn't even aware of that before you just said it.

Well, and it's. It's interesting because one of CME's competitors is CBoe, and they pulled the plug on their spot market like two weeks ago. And everyone's like, oh, you know, big institutions throwing in the towel. It looks like it's just a failure to execute on the CBO side, but CME, that's a super, super well run company. So I'm really excited to see where that goes.

And Coinbase stock is down on the news. It's not like an imminent launch. It's kind of interesting to see Coinbase. Stock react like that on the institutional front as well. More of these 13 fs rolled in, and as usual, the Bloomberg Boys, they're always coming up with new records that the bitcoin ETF's are setting that I'd never even thought of before.

Nic Carter
And apparently this is another one that IBIT and FBTC have more institutional holders than they could have ever expected after a few months of existence. According to these 13 fs, the really notable one was the state of Wisconsin. They bought $99 million worth of the ishares bitcoin ETF. Yeah. So is it worth like 167 million now or something like that?

Matt Walsh
So they have a big position. So north of $100 million worth of bitcoin being held by the state of Wisconsin right now. So that was a big one. The other big one, there was a firm up here in Boston called Bracebridge that was big in the argentinian debt crisis trade. They're big into this.

Millennium has over $800 million worth of spot. So millennium is like 7% of the fidelity bitcoin ETF. I think there's something like 2% of the bitwise one. They also hold the grayscale one in the blackrock one. Now you look at state of Wisconsin and you say, that's very likely a long.

They're holding this on a long term basis. With millennium, it's a pod shop. And so frequently I think you'd have offsetting short positions. It's unlikely to me that millennium would just be $800 million long bitcoin as part of their strategy. So people made the initial comment, well, that's sell pressure coming to these products.

At some point, millennium is not going to hold that for a ten x, but I don't really read it that way. I think it's just another tool for them to use in their overall investment strategy. It is refreshing, though, that we now have much more of a sense of who, from an institutional perspective is interested in bitcoin. You remember in 2020, 2021 when people started getting interested again, the only way you'd find out would be because they'd write a shareholder letter, quarterly update or something, and say, we like bitcoin. We think there's debt crisis, and there's a handful of funds that did that.

Nic Carter
Now there's too many to count. There's just dozens and dozens. Tons of them. Tons of them. Well, you know who's not holding it right now is Vanguard.

Matt Walsh
But they have a new CEO came over from Blackrock, where he helped launch the Blackrock bitcoin ETF. So interested to see what Vanguard ends up doing in this space. Probably nothing but interesting that their new leader actually is pro bitcoin. So there's also been a fair amount of turmoil this week. Just as we went to press here.

Nic Carter
It looks like pump fun, which is the engine to create meme coins on Solana, primarily was exploited for $80 million, apparently. And allegedly this is just coming out on Twitter, so it's not necessarily confirmed the disgruntled former employee exploited the protocol. Is that right? Wow. So how much, what's the exploit?

Appears to be 80 million. $80 million. And. Wow, that is a so pump fund a lot. I guess a lot of people won't be familiar with this.

Matt Walsh
This is a, I guess a startup that just helps you launch meme coins. Right. It seems like they've been very successful over the past few months. There's a lot of meme coins being launched. There are a lot of meme coins, thousands a day.

So that's a big exploit. We also had news this week that two brothers, one is in Boston, one is in New York, have been arrested by the US Department of Justice over. I guess I would classify this as a MEV related exploit. So there was a. It's just not your garden variety, maximal extractable value exploit on ethereum.

It seems like there was a kind of a false signature. Seems like it was criminal. I, you know, they stole $25 million from participants in this trading scheme. I don't really know what this means for MeV in general, but it seems like these guys, if this is true, committed a crime. Yeah.

Nic Carter
So this is very, very interesting. So this dates back to. I remember the tweet threads about this exploit were back in April 2023, and this was an exploit of MEV bots of other MEV bots. So this isn't straightforward MEV extraction. They basically tricked other MEV bots and made a fair amount of money doing this.

I'm apparently $25 million plus. I'm very surprised that the DOJ has the level of sophistication to understand this in its entirety. Yeah, because it's super complicated. And I guess the question is, what does this mean for sort of standard MEV searching? Like, is reordering transactions on Ethereum to give DEx traders worse execution?

Is that also a crime? These guys were charged with wire fraud, I think. So the question is, is sort of generic mev bad, or was there something special about this that they were exploiting these other Mev bots? That means that MeV itself is sort of okay. You gotta love the way the US Justice Department describes Ethereum as a decentralized network that nobody controls.

Matt Walsh
Do you think that someone from that office could maybe walk down the street to the SEC's headquarters and say, this is what we think Ethereum is? It is not a security, it's a network that nobody controls. It's run by a decentralized group of actors. Yeah, I had to chuckle at the irony of the DOJ protecting the integrity of the Ethereum network by going after these entities that were exploiting other MEV bots. It's kind of funny because it's like, I'm not very sympathetic to MEV searchers.

Nic Carter
I mean, by definition, you're making money by giving people worse execution. So user hostile behavior at some point. I don't know how to think about the regulation of MEV because this is something that exists in a tradfi context with, like, payment for order flow and things like that. So there is a market structure that has evolved over time in the equity world, and there's going to be MEV on these blockchains. So I don't know how it gets regulated.

Here's my prediction. I don't think MEV searchers will continue to be us based. Of course MeV is going to happen because fundamentally anyone can read and write to the blockchain, but I think it'll be confined to places in the long term. They're not the US. I do think you're gonna strike some fear into the MEV searchers.

Matt Walsh
Yeah. Because what kind of MEV is, is actually illegal? What kind is really extracted? I don't know. The line between what these guys did and just a generic kind of front running is a little tricky.

I mean, they did have the false signature, which is being alleged, which I think is the crux of the case. But maybe we'll do some episodes on how to regulate Defi in the future, because that's a much, much trickier one. So another case, of course, a dutch court has sentenced Alexei Purcev, who's the co founder of Tornado Cache, to 64 months in prison. I don't think that's altogether too surprising, but I saw a lot of dismay on the timeline around that one as well. Yeah, a lot of people upset about that one.

Um, did you see Sam Trabuco wrote a statement to the judge that will be sentencing Ryan Salem, uh, urging leniency. Yeah. So that's the first we've heard from Trabuco, really, since the dissolution of FTX, right? Yeah, I think people generally think he's, uh, you know, living in parts that are known. I guess I probably shouldn't say, but, um.

Yeah, it clearly cut a deal with the DOJ. Yeah, I mean, this implies that he might have been a whistleblower or collaborating or something like that. I still don't understand how he got off scot free. That doesn't make sense to me. There are a lot of loose ends in the FTX situation.

Someone will write investigative journalism pieces around things like toy ventures and some of these affiliated entities. There's a lot of open questions, a lot of open questions around who knew what when on the inside of FTX. What about the parents from hell, you know? Yeah. Barbara Fried and Joe Bankman.

Nic Carter
I mean, what about the campaign finance violations, you know? Campaign. What about the chinese bribe bribes? Yeah, I mean, this stuff is still unresolved. Very.

Matt Walsh
Yeah, very troubling. So, couple pieces that I enjoyed this week. David Morris wrote a piece, what President Biden's crypto politics might really be about. Um, thought that was an interesting one. We'll put the link to it in our newsletter.

Nic Carter
David Morris has also had good coverage of emails from, uh, same bank between Sam Bankman Fried's parents regarding their, uh, apparent, uh, directions to disseminate various, uh, political contributions, which appear quite damning my opinion. Oh, for sure. I mean, especially the mother, right? I mean, she was clearly directing, uh, Alameda and FTX funds via Sam and his cabal of lunatic executives. So there's a lot going on there.

Next up, we have Matt Hogan of bitwise. He put out a piece analyzing the 13 f's, the bitcoin ETF filings. Yeah. This is really just the gift that keeps on giving, I guess. The deadline to file the 13 fs was yesterday.

Matt Walsh
The other dynamic with the 13 fs is that you will have some funds that know that they need to file 13 fs, and they get rid of positions, like, the day before. So this is not conclusive around who has owned these ETF's or who will own them, like, the day after the 13 f filing. But always interesting to see his conclusion. Is that they leave him, quote, incredibly bullish. That's what we like to see.

Nic Carter
That's what we like to see. Well, it seems like so right now, the Dow Jones industrial average is at a new all time high. Is that the roaring kitty effect? Do you see this guy? This guy's back.

Yeah, I don't think it's him. I don't either. This guy's so roaring. Kitty just sent the GameStop to the moon this week. As soon as he tweeted, he came back from, what, three years hiatus on Sunday night.

Matt Walsh
I saw that and I said, that stock is gonna explode in the morning. And of course it did. But it. I don't think it's him, either. I mean, this account has just been tweeting memes for the past, like, three days.

Nic Carter
Yeah. It's like video clips. It's not really even that interesting. It's really not. I don't understand it at all.

Matt Walsh
I don't understand what this guy's doing, but he's way more powerful than just about anyone in financial services. So we have to follow up on our commitment. Last week, we had a contest, which is, who are your three favorite desired commencement speakers to talk about? Bitcoin, I guess. Yeah, we had submissions on warp cast.

Nic Carter
Yeah. So before I kind of jump into it, the. I would recommend everyone. Someone just pointed this out to me this week. You have to turn off priority mode in your warpcast settings if you actually want to see all of the things that are being said on warpcast.

Matt Walsh
And I didn't know. So I was seeing a very small subset of brink nation. So apologies to everyone, but we got it figured out. I see. Do you want me to roll through some of the submissions here?

So, the premise was we are going to be sending merch to whoever submits the best three commencement speakers who could have done the Ohio state commencement instead of the guy who went on about ayahuasca and got booed about bitcoin. Okay, not. Not our best guy. No. There are other better candidates.

All right, so I'm going to give an honor, two honorable mentions, and then we'll do a winner. How's that sound? Yep. All right, Daniel Fernandez, honorable mention number one, commencement speaker. Number one, Eric Voorhees.

Number two, John Woo. And number three, Anita Posh. I would watch all three of those. Very, very good submission. I think John Woo got the top score.

Nic Carter
Remember how we were talking about my quiz from back in the day? I think it was him that got the top score on the quiz at like, an astonishingly good score. So. Huh. Shout out to John.

Matt Walsh
And, of course, Eric Voorhees is the one who I think had a big role in just exposing SPF for the complete phony that he was when he did the. Was it on bankless? He did the debate. One of my, one of my favorite podcasts. Really great podcast hosts over there, bankless strong guys.

Nic Carter
We're withholding all praise of bankless hosts. For the bankless premium subscriber. I think those guys are. Those guys are great. And, you know, again, like David, David.

Hoffman looks like, I think they're real. Real intellectuals. Real. And I don't know if they get out of the office very much. But, yeah, smart guys.

Sure. Smart guys. Strong. To climbing, climbing mountains and things like that. Take on a mountain.

Matt Walsh
All right, honorable mention number two. This is a good one. This is from Captain Jack. Number one, Chris Dixon. Number two, Brian Armstrong.

And number three, Ryan Selkus. Really good commencement. If you can line up any of. Those three, I would say, yeah, good choices. All right, our winner, our winner is cab Calloway.

He says, number one, Howard Lutnick. What a, that what? That's a great one. Number two, Andreas Antonopoulos. And number three, Brian Armstrong with an honorable mention for Abby Johnson.

So he kind of put in four, and he probably knew that we were going to be partial to his honorable mention. But he does win because Howard Lutnick and Antonopoulos in particular, to me, you pay money to go see these guys. I want to hear more from Howard Lutnick. You know, I want to hear what that guy has to say. Yeah, great speaker.

Thoughts on stable coins. Go. Thoughts on. Seriously, you know, the SEC, please start speaking. And Antonopoulos, speaker one, Antonopoulos is just awesome.

I mean, I can't tell you how many times I've watched Antonopoulos, hundreds of hours of content that that guy has put out. What does he do now? I don't know. He kind of quit crypto, I think. I mean, it's just tough to stay on the raging bull that is the crypto Twitter sphere.

Right? Like, the guy went through the block size wars. How many bits of drama has this guy had to deal with but you? This guy has single handedly been responsible for probably more people understanding how bitcoin works than almost anyone on planet Earth, I would argue. I think that's true.

Nic Carter
It is also very draining to be in crypto for any amount of time. So I grant that he may have wanted a reprieve. That guy was. He was kind of Vitalik like, in the sense that he was just always on airplanes, traveling places, evangelizing. Just a really impressive.

Matt Walsh
And his ability to speak eloquently is something that I am envious of. Anyone that can do more than a decade in crypto has my respect. Yeah, I mean, you're. You're kind of coming up on a decade now. I'm coming up on a decade at the end of this year.

Yeah. Yeah. You just got to not blow up. Yeah. You know, you just gotta.

You got to enjoy it, I guess. All right, so I think that is it for the week. It's going to be an exciting next ten days here, because that is how long it takes for Joe Bowden to veto this. Potentially, he can sit on it. I was going to ask you that.

Nic Carter
I was going to ask ten days. So expect something to happen here in ten days. We'll see. If he's smart from a political perspective, he will not veto this. And I'll also say it's time for some of these financial institutions that have built out custody to actually have a backbone and come out and say something like, bank of New York Mellon, what are you doing over there?

Matt Walsh
This is, like, a core issue. You could have a really big business. You've hired a bunch of people to build this out. You sent us the onboarding documents. Get out there publicly and actually argue your case here.

I think it's a real shame that some of these institutions that are doing things behind the scenes aren't more public with it. The number one thing that we need is reputable financial institutions to actually come out and say how they feel and actually work, like, do some of the hard work that fidelity and others have done over the years. So I would encourage anyone who works on the inside of one of these behemoths to actually try to have a little bit of a backbone here and fight for what is objectively good for your customers. Yeah. Stick up for yourselves.

All right, everyone, that is it. Everybody have a safe and healthy weekend, and we will see you on Monday.