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A
And here we are not just. Just over halfway through 2023, Quan is in jail in Montenegro, waiting to be extradited to the United States. Sam Bankman Fried is under house arrest. Can only assume he's going to jail. Mashinsky's going to jail. Suzu and Kyle Davies are still on the run, but they're completely ostracized from the west. They can't step anywhere outside of Dubai or else otherwise they would be arrested. So that box is not yet checked. However, with all the other boxes checked and the complete fall from grace, that is 300 capital. And probably the very likely cases and efforts going into actually grabbing those guys is probably going on behind the scenes that we don't know about. I say that we have permission to be bullish.
B
Bankless nation. It is the third Friday of July, and it is time for what, David?
A
It's the bankless Friday weekly roll up, Ryan, where we cover the entire weekly news and crypto, which is always an ambitious endeavor, yet we persevere nonetheless into the frontier, no matter where we are in the world. As you can tell, I'm in a kind of a cramped little. This is the most cramped podcast recording setup I've ever had.
B
It looks good, actually. So David's in Paris, and by the way, bankless nation, this is the first time we are actually doing an episode in three weeks. All right.
A
This is my Ryan's first podcast in three weeks, which is the longest time that we've gone since starting this podcast.
B
Yeah, so we've had. David's been off climbing mountains, and you've got some more mountains to climb, by the way.
A
I've got one.
B
So we queued up some podcasts. We put those out for you for the last. And I've been doing some solo episodes. David's got one more mountain. How has it been so far?
A
It's been pretty good. Let me tell you. The whiplash between being on a mountain and then the next day flying to Paris to go to Ecc. So, like, from mountain to crypto conference in under 24 hours was a lot. I was sitting on the plane, there was a few moments I had halfway up the mountain. I was like climbing, climbing rainier, and we were like 12,000ft with 2000ft more to go. And I was pretty exhausted. And I'm like, this is my first vacation. And then I'm like, and that's what.
B
You choose to do?
A
That's what I choose to climb out. Yeah. And then. And then just a day and a half later, I'm on a flight to go to Paris, and I'm, like, ten days behind on anything crypto related. Like, crypto is a new industry. Ten days later, I was, like, sitting around like, mandy, I need to catch up on crypto. What do people do? How do people consume crypto news? What do they do when they need to catch up on the week? Oh, I can listen to the roll up. Listening to the weekly roll up with you and Anthony, and I was like, oh, this is so useful.
B
Yeah, you know, it is really useful. I mean, bankless, I think for me and for you, David has just been about kind of a journey of creating content, exploring subjects that we would have wanted to explore otherwise. So it's just kind of a chronicling of that journey. I'm glad you found the roll up so useful, David. That's great. That's great customer.
A
I am. I was very satisfied.
B
Okay. Very remind people what Anthony did.
A
A great job. A huge shout out to Anthony Cesano for tapping in three times over the last, like, five weeks or so.
B
Yeah, I mean, he really is the third podcast co host, even if he doesn't know it.
A
Yeah, he's better than us.
B
Okay, so what are you doing in Paris? You said a crypto conference. What conference is that?
A
Eth, CC. So I'm at the Ethereum community conference. So I actually, ECC is interesting because it was the super spreader event right before COVID So it was the last Ethereum conference before we shut down conferences. And then it was also the first conference in 2021 that started things up again. So this is the third ECC since the conference season really got started. Conference season started after, like, in 2021, where crypto, like, was dead between 2018 to 2020, from the perception of the outside world to very, very much alive. And so this July, it's always in July. It's always in the same place. It's always the same running and programming, programming this thing. And so it always feels like one trip around the sun. It's like an arbitrary birthday for all the conference goers out there. It's like, oh, it's a nice landmark every single year. So this is ECC number six. This is my third. It was great. It's been great.
B
I always like to ask, because, as you know, I don't go to these things. I only go to, like, one conference a year. And that is permissionless, which is coming up, by the way. When is that coming? That's the next one you're doing. That's in September.
A
That is next. Permissionless is next. Yeah.
B
All right, so bankless nation. Make sure you grab a ticket if you already haven't. But ethcc is different. Uh, my impression, it's very, it's kind of a technical type, type of track. Very technical. My favorite question to ask people, and we'll get into some of the events, some of the um, announcements that were made at ETH CC. But the question right now is, because we're still in a bear market, is like, what's the vibe among the builders? So how's everyone feeling? Like, what's your assessment? Because you've been to so many eth ccs, how does it compare to previous ones?
A
Yeah, since it's at the same venue every single year. I walked up to the venue this year and there's always people like kind of hanging out outside. If you don't, people come without tickets and so they come and just hang out outside and then people take a break outside. So there's always people hanging out outside the venue. And I was walking up and I see like the massive people that's always there and I could just tell like, oh thank God it's a calm one this year because last year's was insane. And also it was 100 degrees last year. This year was only 80 in Paris. So I would say it's calm and relentless. Like the building. The rate of building in Ethereum has always been like redlining in a good way, like at the highest rpms possible, whether you're in a bull market or in a bear market, that hasn't changed. And specifically the building now it really feels like people have always been building hard, but rubber is really meeting the pavement here and I think we'll see that as we go through this weekly roll up agenda. You can just kind of look around this space. Like layer twos are shipping. Like the infrastructure around. Layer twos are shipping hard. Entire ecosystems are transitioning. Everything is. All the hard problems, if they are not being currently solved, they are on the cusp of being solved. And thats how I would share the sentiment of builders. Its real inside of it has been real in the last six months and the next six months, a lot of very real stuff. Hard problems are getting solved.
B
I like those words. Calm but relentless is a really interesting way to describe it. And there was a bankless party event as well that we had for bankless citizens. This is a photo from one of these. So what was the vibe there?
A
Yeah, this is the bankless team. So this is at the end of the party. We took a team photo. Party was great for all the bankless citizens. Shout out to all the bank citizens that were out there. I talked to John ice cool from the Dow quite a lot there. And just a number of other people, you know, while talking to all the bankless citizens, there's, like, certain archetypes across crypto. Of course we know this, the different, different tribes. I would call the bankless citizens, like the Athenians of Crypto.
B
Oh, really?
A
They're like, yeah. They're like, there's a lot of dads. We have a lot of dads. So shout out to all the dads that listen to bankless. But, like, there are a lot of people who really care and really care deeply about crypto, and they're living like, they're like, it's a lawyer with two kids. Or, like. And why I call this the Athenians is in the 300 movie. You have the Spartans and the Athenians talking to each other. And the Spartan, the spartan guy who's. I can't remember the name, the guy, the.
B
It's just like a warrior society, right?
A
Yeah. And he's asking the Athenians who want to join the fight, and it's like, what's your profession? And one guy says, like, oh, I'm a blacksmith. And like, oh, what's your profession? It's like, oh, I'm a cobbler. And like, oh, what's your profession? I'm a farmer. We're the Athenians. Like, it's just this very diverse group of very, like, humble, focused people who live in a society, live in a collective. And so I just, it's like, everyone's just really appreciative, of course, of, like, the, the podcast. But, like, the diversity, I think diversity is really, the word I'm going for here is, is pretty, pretty cool to see.
B
I really love that description of bankless as the Athenians. I feel like an Athenian myself, so that's, that's really cool to hear, David. I see a lot of plants at this venue. Intentional, David.
A
Yeah. So I wish I could say I picked this place, but Rachel, who is in the middle, she picked, she picked this place. Curator of vibes. The drinks were fantastic. I had a number of head chaining cocktails, so I got a little loose. And because we had this beautiful event sponsored by Sega, all the drinks for the bankless citizens were free. These are the rules. If you're a bankless citizen, you come to the bankless meetup, you get free.
B
Drinks, and the next time the band gets back together, of course, is that permissionless? And hope, the Athenians, the bankless citizens show up for that one. Anyone who's listening, of course, you can catch that in Austin, Texas, September 11 through 13th. There's a link in the show notes to tap into this. David, you still have some conference energy in you for the back half of this year.
A
Yeah, I actually signed up for one more here at ECC, but we'll talk about that later. So you called ECC a very technical conference, and you're totally right. Like, for people that, like, hear me and Ryan talking about conferences and hear the crypto industry talking about conferences, ECC is like. It's like, you know, 301, 401 kind of hard. Like, it's like professionals and teams and people coming to, like, get shit done. And definitely that's also true for permissionless. But I think if you're looking for a stepping stone into being a conference or. And I can't remember, recommend being a conference or. Enough, Ryan. Uh, permissionless is a great place to get started. It's like the. The vibes last year, just like. Yeah, the. The Athenians, like, so many different people. A hodgepodge group of people coming to all coalesce under. Under permissionless and blockworks just a. Does a killer job, just like facilitating and organizing and operationalizing a conference. And so we will have our next bank meet up for citizens at permissionless. That is September 13, 11th through 13th in Austin, Texas. A ton of people.
B
If you only go to one. If you only go to one.
A
If you only go to one, it's permissionless.
B
This is me. I only go to one. This is one. I go.
A
From your personal experience, we got a.
B
Lot to cover this week. David, man, we're talking about conferences. It's good to catch up with you, but there's so much going on in crypto. I'm glad you stayed up to date on the roll up, but topics of the week, Alex Mashinsky, remember that guy scammer from Celsius? He was just charged by the SEC, the CFTC, and the FTC. Finally, they are busting the scammers. We'll talk about that. What else we got going on the Ripple case?
A
I know the ripple case happened right after you stopped recording with Anthony last week, and then you added that little bit. But we're gonna get the reactions from the ripple case. I actually have a take. I think Ripple actually lost, but crypto still won. So that's my. That's my hot take about that.
B
Talk about that.
A
Yeah. And then also I interviewed Hayden Adams about this next announcement. Uniswap X. I interviewed him right before eth ccdhdemdev. So we're going to go into what is Uniswap X. It's a brand new protocol to pair with the Uniswap amms. We also got an l one that wants to become an l two, and we'll talk about all the ECC relevant things along the way as well.
B
Before we get into it, guys, want to give a shout out to our friends and sponsors over at stator protocol. This is a new ETH staking protocol. It is decentralized. One of my favorite things about this is that it is permissionless. So similar to some of the decentralized protocols out there like rocket pool. And second, this is if you're ever looking to run an Ethereum node yourself, okay, this is the lowest cost way to do that. Lowest capital requirements, I should say, way to do that. Only for ETH to spin up a stator node, which is really cool. And they also have a pledge to keep staking decentralized on Ethereum, including a self cap on the amount of eth that they'll accept in their protocol. So David, I got to tell you, I am now in the season where I'm thinking about staking my eth. Okay, I've staked some in the past, but now I'm kind of ratcheting that up. It feels like a lot of the risk has been boiled out of it. And it is so fantastic to see all of these new staking options right now. As far as launch incentives, Stater has a 1.5 x staking boost this month that you can be eligible for. And they've got some lp rewards too, so go check them out and in general look for options to stake your eth.
A
That is the, the bankless way that 1.5 x boost. What that means is you are getting a little bit extra from the SD cardinal token paid as incentives. So token incentives is where that boost come from. If you want that boost, there's a link in the show notes so you can go and get started with Stater.
B
David, let's talk markets, man, it's been too long. Where are we at this week on bitcoin?
A
I'm not going to get out the words out of my head about the bank. Let's meet up where everyone is that they just chuckle when we do the prices, but we're doing them anyway. We're doing them anyway. Bitcoin last week, seven days ago, 30,900. It's currently down Thursday afternoon 4% to 29,700. So down 4%. Bitcoin down 4% on the week.
B
I think pricing in the crab market is difficult because it just doesn't change from week to week. It's kind of, I mean, this is.
A
Basically in single digits a lot.
B
Yeah. How about ether? Me as well. What's ether on the week?
A
Down 3%. So 1930 to 1890. So down 3%. And then, of course, that means the ratio. It's up. It's up a little bit more than a percent.
B
Hanging out, you would call it.
A
I would call it a negligible week.
B
This feels like our crab market numbers, right? 30k.
A
These are big crab markets.
B
Yeah. This is where we are crab, by the way. It just is a market that goes back and forth, back and forth, and thats sort of where we are before this influx of new money, which, wheres it going to come from? I think thats a major theme for us this year in 2023. 2024. But whats the ratio look like? Any change there?
A
Okay. Up a percent. A little percent and a half .063 market cap.
B
I think we're above a trillion.
A
I'm not even 1.1.3 trillion. We at 1.3. You saw, you said 1.3 trillion last week with Sazzle. That was the first time we hit 1.3.
B
I mean, that feels big, right? To be above a trillion. That's another big number for me. Let's talk about trad five. David, you remember stocks, those things that you could, they're like tokens. They're like ERC 20s.
A
But honestly, like, I forgot about stocks. I only look at the charts that you have pulled up, the Nasdaq and the spinous. Well, look at them.
B
It's a nice looking chart.
A
I shouldn't have forgotten about stocks. Let me tell you that. They're almost at all time highs both in the Nasdaq and the spy are almost at all time highs, which is around where crypto set its all time highs. Crypto set its all time highs at the end of 2021 and going into 2022, the spy and Nasdaq did the same. And they are almost back there. You know, what gives?
B
Yeah, what gives? Where's our bull market?
A
Where's our all time highs?
B
You know, and I, it's funny because people in crypto are bragging about, like, how, you know, bitcoin and ether are decoupled from stocks now. Great. That is, I'm, like, basically coupled in the wrong direction. That's not fun. That's bad.
A
Yeah. This is a take from Anthony Cesano where he said Max Payne for crypto investors is watching stocks hit all time highs while Ethan BTC, BTC are range bound, aka Crab market ultra pain is selling crypto for stocks just before crypto starts a new bull market. And like I comment below this, and I say the year is 2019. If you I, this is exactly what 2019 was. The equities, markets were ripping and crypto was just lagging so hard and it gave us all so much fomo. We were so bummed about that. And then, and then, you know, all know it happens in 2020. But man, this, the 2019 to 2023 discrepancies, not, you know what, different for me.
B
I'm feeling zero fomo. Like I just go ahead, rally stocks. Like, I don't care. Like we are so well positioned right now in crypto. I'm just like, okay, that's great. Go do your thing.
A
In fact, it's like now that the discrepancy is there between spy and nasdaq all time highs and crypto is still flat like that, it would be dumb to chase that because you, the discrepancy is bullish for us, for crypto assets and it makes permission to be bullish.
B
Well, do you permission to be bullish? Is that the theme for the episode? Do we have permission for the episode?
A
Yes. Yes. There's, I've put this in the agenda a number of times. There's, this is the first of many reasons in this roll up why bankless listeners, I think you have permission to be bullish now. If you are a bullish person on crypto and your friends are saying, haha, you're dumb for being in crypto, you're like, no, you should be buying crypto. You have permission to be bullish about that. Yeah, like, there's enough evidence there.
B
I totally agree. I think I am. I've never, should I say I've never been more confident about crypto, but, like, I just feel like we are so well set up. It feels good. The spring is coiling right now and.
A
Like, it resonates with what I'm seeing here at ECC and all the hard problems about like, sequencers and layer twos and zk stuff, all of that, all the hard problems coming into fruition, being solved, man. Okay, again, theme of the episode, it'll be, it's a reoccurring theme. We'll keep going.
B
Okay, well, be patient. You have permission to be bullish now. As David Hoffman, my co host, says, good to have you back, man. I like that bull energy. Okay, how about go the protocol? That's gho. This is Ave this is a stablecoin that launched on top of Aave. They've hit 4 million in market cap in two days and are probably larger by the time we're recording this. So a pretty good, pretty good entry, I would say, into this. Yeah, it's 4.56 right now. Remind us what go is, David?
A
Yeah, just it's pretty similar to Dai from Makerdao, except this is go from Aave. Pretty, pretty similar. If your mental model starts there, you're off to a great start. So Ave, you know, it's an. Has assets in its vaults and it has extra margin because people deposit more than they withdraw. And so you can mint go from your deposits into Aave, just like how you can borrow anything else. And so now Aave is a hybrid compound, maker protocol, which is bullish, I would say.
B
Yeah, that's cool.
A
And then also similarly, this is, I would say, another theme of what I've noticing is a lot of parallel development. Makerdao, this is aside from the news of this week, but Makerdao is doing its spark protocol, which is aave for Makerdao. So Aaves got a stable coin, and Makerdao has got a lending facility. So all these verticals.
B
Well, Bakerdao has always had a lending facility. What do you mean by this?
A
It is. It's different. It's being compartmentalized now. So the stablecoin and the lending. Yeah, so it's got an aave. So aave is different than Makerdao. And now Makerdao, the system, as a vertical, has the credit facility, which is dai, and then the money market facility, which is aave.
B
There's definitely. This is a meta pattern. There's definitely a lot of convergence here. Like, one thing, I'm sorry, so much convergence is like, there's a ton of convergence on layer twos as another big.
A
Theme that's going on.
B
This was completely unsettled two years ago. Anyway, let's keep going on. Do you do any whale watching, David, I'm talking about crypto whales. All right, well, I don't either, but.
A
This one, I don't. I feel too jealous of people who I see moving their funds after icos, after eight years. I'm like, man, you got to remember.
B
There'S one address out there. There's still some massive whales out there. This address awakened after eight years and just moved $116 million to Kraken. Oh, our friends and sponsors Kraken. What other exchange would you use? Of course, it's got to be kraken.
A
To sell your ethic. ICO. Imagine investing in the ethereum. ICO. And not making a single transaction. And the next thing you do is you send it to Kraken to sell it. Like, I don't. I wonder if they, like, lost their private keys and magically found it somehow, which is best day ever for them. Or they just have the biggest diamond hands of all time. Just patience. Don't even care about Defi.
B
Maybe it's just patience. So you wrote that thing from. I mean, how much was this when they.
A
Twenty five cents. Twenty five. Thirty three cents.
B
Okay, well, that. That was the price of ether, right? So it's 100 at the Ico price.
A
Yeah.
B
Oh, no, it's 61k worth of ether times, you know, $0.25, whatever that is. I don't know, 15,000. $15,000, something like this. So $15,000. Okay. Buy this thing, wait eight years, and then you send it to cash out, presumably at 116 million. Wow. That is a patient investor right there.
A
I can't. They must have had another address. They never. Because, like, they never got themselves, like, I don't know, a house, a car. Yeah. Like, they never glowed up their life in eight years when they had access to hundreds of millions of dollars multiple times.
B
Patience. Who knows? Wow. What are the chances that way?
A
That's insanity to me.
B
Listening to this right now and us talk about this individual, and they're like, yep, that was me. They're bankless. Listener, maybe. David, we got a lot more to talk about. What else we got coming up next?
A
Coming up next, we got miss key arrested on fraud. But I have a conversation starter that actually starts with a Nick Carter take, which leads into our second reason of the week as to why we're allowed to be bullish. Ripple put the SEC on its heels, and I also have a take as to why Ripple actually lost, but crypto still won. ECC has brought plenty of announcements, and base is open soon to builders. We're going to talk about that. I interviewed Jesse Pollock here at Ecc. Ryan. We're going to talk all about that and more as soon as we talk to some of these fantastic sponsors that make this show possible, especially Kraken. If you have a dormant ICO that you haven't touched in over eight years, consider using Kraken to get your liquidity. We're going to go hear from them right now. Alex Machinsky, one of the big great scammers of 2022, has been arrested on fraud and a bunch of other charges, wire fraud. We're going to talk about all the details of what he's getting charged. But first, before we get into that conversation, I want to pull out this take from Nick Carter. I want to start this conversation here. Nick Carter, in November of 2022, right after FTX collapsed, he tweeted out, and I remember him talking about this on his podcast. He says, if we can't purge the three arrows, capital boys, SBF and all of his cronies, Mashinsky and Quan, we don't deserve to move on as an industry. Good people will continue to leave because they can't morally justify participating. I remember reading this take and I was like, oh, that's bearish. That's going to take so long. There's so many of them. They're all over the world. And today, Alex Mashinsky is arrested on fraud and all these other charges that we're about to go into. And so the details here, and we're going to come back to Nick Carter's take at the end. The details. CEO of Celsius, of course, charged by the Department of Justice lawsuits from the SEC, CFTC and FTC. The Department of Justice accused Mashinsky and his cronies of orchestrating a years long scheme to mislead customers on the market value of the company and interest in the sell token. The SEC has accused him of securities fraud and misleading investors. The CFTC has accused Mashinsky and engaging in a scheme to defraud customers by misrepresenting the safety and profitability of the platform. And the FTC has accused Mashinsky of violating the Federal Trade Commission act in connection with the marketing and sale of cryptocurrency lending in custody services. The companies have agreed to a judgment of $4.7 billion, which will be suspended to permit Celsius to return its remaining assets to consumers in bankruptcy proceedings. Basically, that is the comprehensive takedown of Alex Wiczinski et al. That book is closed. And while we can go into the details of Alex Wysczewski, I think we can really just summarize it there. I want to go back to the Nic Carter, take three errors, capital, Alex Macinski do Kwon and Spf. And he goes, if you want to pick a bottom, it is when all of Quan, Bankman, Macinski, Livingstone and Suzu have reached their reckoning, only then can we recover. And I remember being intimidated by this take. Like, I didn't want to admit that that's true, but because I do thought that was such a crazy hill to climb. And here we are. Not just, just over halfway through 2023 Quan is in jail in Montenegro waiting to be extradited to the United States. Sam Bankman Fried is under house arrest. I can only assume he's going to jail. Mashinsky is going to jail. Suzu and Kyle Davies are still on the run, but they are completely ostracized from the west. They can't step anywhere outside of Dubai or otherwise they would be arrested. So that box is not yet checked. However, with all the other boxes checked and the complete fall from grace, that is 30 capital and probably the very likely cases and efforts going into actually grabbing those guys is probably going on behind the scenes that we don't know about. I say that we have permission to be bullish. I say those boxes are checked.
B
Look, I think it showcases the value of the bear market as well. If prices didn't go down and we didn't see the collapse that we saw, if we just continued to go straight up, then all of these frauds would still be here in this industry, and we'd have that toxic cancer inside of the body and not even know it. I mean, some of. Some people would know it, but, like, it wouldn't be obvious. This is the value.
A
They'd be the minority.
B
They'd be the minority. We saw the same thing in 2019, too. All of the good, all of the ideas were tested. We had a whole bunch of icos that were just, like, raising ungodly amounts of money. For what? Like slides, white papers. Remember, it was the white paper season. Create a white paper, raise, $50 million in a token, and then just exit scan. Basically all of that was lifted during the bear market of 2018. 2019. So we need these purges. This is the reason for bear markets and why I'm glad that and thankful that we have them. David Ripple case, we talked about this at the outset of last week's roll up. So, of course, XRP, a judge ruled in the US that XRP itself isn't a security, according to court. We talked about this, including we had Mike Selig on the episode. Maybe we should just recap this for folks because you weren't here. And then I'd love to get your takes on this in terms of catching up and what you think about it. So what happened last week that was so momentous?
A
Trey? Yeah. So last week, that course case came out finally. We knew it was coming, but we didn't know this specific dates. And then it finally comes out. And the TLDR of the case is that it's both a win and a loss for both the SEC and ripple. Both sides won and lost, depending on which part of the case that we're talking about. So Mike Selig says it's a massive win by the ripple team against the SEC, where Judge Torres clearly affirms that the view that the same crypto asset may be sold in an investment contract as a standalone. Good. So what he's saying is there's a line being drawn here, and it's a line that is so elegant to me and actually, really, it restores my faith in the court system to actually methodically and clearly and thoughtfully come to the correct conclusion. So we have sold as an investment contract and then later sold as a standalone. Good. And those are two different things. And this is why I think this is so elegant. The SEC is charging ripple, and ripples loss here is that they are being charged with selling an investment contract of SRP to certain large institutions under the premise that later, later, because of the efforts of Ripple, they will be able to sell those tokens to retail for after price appreciation. That was a security. That was a legal securities offering. That was an investment contract. The actual XRP that is sold later to retail is not a security. So retail did not buy a security. A security was not sold. It was a standalone good. So Ripple, who I think you and I would say is like, I do not agree with the strategy and ethics perhaps of Ripple as a product, and they got charged for what I think you and I would agree on is what they ought to have gotten charged for, which is, quote, unquote, dumping on retail. They just did it with these institutional security sales, primarily the primary sales of XRP, which was an investment contract. But then it's a huge win for crypto because XRP is not a security. When retail, the interested retail parties permissionlessly bought that XRP token of their own volition, of their own accord. So the bad guys got got for the right reasons and crypto got protected also for the right reasons. And the XR and Ripple has to pay fines for all of their legal securities offerings. And Gary Gensler has to put his tail between his legs. And we as an industry get to say that all of our crypto assets on secondary sales of programmatic Defi exchanges and also crypto exchanges are not securities. I think it's a three for three. Ripple goes down and has to pay fees for the things that they did are bad and the sins that they've had. And Gary Gensler has to put his tail between his legs and be like, oh, I got beat by ripple. And crypto gets to go free, saying none of our things are securities anymore. It's like three for three, dude. It's perfect.
B
Yeah, I think that some would argue that. Well, let's say, let's assume that Ripple and XRP is actually selling, selling vapor, of course. Right. So they could continue selling those tokens to the public as long as its not in an investment contract. In fact, they did do that. And that act in itself was not a security. And some people would look at that and say, well, thats a net bad, David. Right. Because theres not much of a product here. Its overvalued. These assets arent worth what people think that theyre worth and so theyre selling it. I dont really have a strong comment on that. What I'm most excited about is the refutation that of Gary Gensler and the SEC regimes. Their claim that all crypto assets, all tokens are securities, that's what they said. That quite plainly is not true and cannot hold. That's what was most strongly refuted in this particular case, that that very strong posture of all tokens are securities and therefore must be regulated by the SEC. This was a massive pushback against that. I'm, it's, it's super, it's, I'm very pleased with the outcome of this particular case. Um, there's some takes back and forth about this, but one of the takes was from Gary Gensler. He responded to the ripple decision. Uh, his take was he's disappointed over the treatment of retail investors. Hey, look, guys, I was just trying to protect retail this whole time. Um, I don't see that, I see most of retail being very excited, like the actual crypto investors being very excited about this particular ruling. So im not sure who Gary Gensler claims to represent on the retail crypto investing side, but hes just sad for retail. The true losers over this outcome.
A
Imagine Gary Gensler knows a single retail investor. I think hes saying, oh yeah, the retail investor whispered in my ear that theyre disappointed. Im like, well, Gary, the retail investors whispered in my ear that theyre super happy. So actually, I think retail investors are celebrating.
B
Yeah. By the way, it's not my opinion that we need no protection for retail investors in this whole, like, to the extent there are centralized parties, then of course we need protection. We're just celebrating Alex Machinsky and SBF. It was a centralized service that regulators and enforcers of the law are actually prosecuting. And we want that, that like go, go after the scammers. It's just that when the SEC is taking a posture to completely kill innovation in the space and basically take the posture that all tokens are securities. That's just like unworkable. Of course they're not all securities, right? And so that's what I'm celebrating mostly here. Here's a comment from Jake Chervinsky that I thought was pretty good. Some financial journalists, I don't know if you've caught up on this, but Matt Levine, for instance, of Bloomberg, read a post about this, you know, saying that there's still a lot of confusion. This is what Jake Kravinsky is replying to some folks read. Financial journalists are still confused about the ripple decision. The key holding is that investment contract analysis must focus on transactions, not assets. Tokens are not securities. Transactions in tokens can be, depending on the facts and circumstances, he goes on. This is a critical distinction that the industry has made and the SEC has ignored for years the fact that a federal district court has explicitly acknowledged its validity as a monumental shift in us crypto regulation and a forceful rejection of the SEC's theory of law. It's particularly important for the SEC's ongoing cases against exchanges that list tokens for trading like Coinbase. Although the court didn't directly say trades on exchange order books aren't security transactions, it's extremely hard to read the decision any other way. Of course, we saw many of the exchanges, including Coinbase, re enable trading for XRP on the back of this.
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