Latest / The Paul Barron Crypto Show / Banks Accidentally Triggered The Bull Run🚀Chris Giancarlo INTERVIEW

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Banks Accidentally Triggered The Bull Run🚀Chris Giancarlo INTERVIEW · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Did banks just begin a bull run by accident?
• 0:03
  Speaker 2: Well, today we're going to be breaking that down. You're
• 0:05
  Speaker 2: going to love it.
• 0:05
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• 1:05
  Speaker 2: Let them know we sent you.
• 1:07
  Speaker 1: I have someone special joining us that has been in
• 1:09
  Speaker 1: the crypto industry for quite some time.
• 1:11
  Speaker 2: In fact, it is a two-time author.
• 1:14
  Speaker 1: You guys know him out there as Chris Giancarlo, and
• 1:17
  Speaker 1: he is now announcing a new book coming up very soon.
• 1:20
  Speaker 2: Chris, how are you?
• 1:22
  Speaker 3: Great, Paul. Really good to be with you and really
• 1:24
  Speaker 3: good to have this opportunity to tell your audience about
• 1:27
  Speaker 3: my new book. So I'm really looking forward to our conversation.
• 1:29
  Speaker 1: I'm looking at it right here on Amazon right today.
• 1:32
  Speaker 1: It's going to be available October 27th. You guys will
• 1:35
  Speaker 1: be able to get it right there called The New
• 1:37
  Speaker 1: Adventures of Crypto Dad.
• 1:39
  Speaker 2: What is it that.
• 1:40
  Speaker 1: You're talking about this one in this book that may
• 1:43
  Speaker 1: be elevated from the previous book?
• 1:47
  Speaker 3: Well, it picks up where my last book left off,
• 1:49
  Speaker 3: which was the end of my term as CFTC chairman.
• 1:52
  Speaker 3: and the beginning of four years of the Biden administration's
• 1:55
  Speaker 3: hostility to digital assets, and then the beginning of the
• 1:59
  Speaker 3: turnaround with the Trump administration, at least when it comes
• 2:01
  Speaker 3: to digital asset acceptance and innovation. And we're seeing an
• 2:08
  Speaker 3: explosion of innovation, as you know, across space now. And
• 2:11
  Speaker 3: I talk about that, and I've got some inside views
• 2:14
  Speaker 3: of how some of the things that we're now looking
• 2:16
  Speaker 3: about came to be, including some of the development of
• 2:19
  Speaker 3: the Genius Act and perhaps the failure of the Clarity
• 2:23
  Speaker 3: Act and what may have gone into some of that.
• 2:27
  Speaker 1: Well, listen, we're going to talk about that. I want
• 2:28
  Speaker 1: to kind of lead off with this article right here.
• 2:30
  Speaker 1: This was a Wall Street Journal piece, and it came
• 2:34
  Speaker 1: out over the weekend, obviously targeting Brian Armstrong in a
• 2:37
  Speaker 1: very aggressive way in the sense of painting Coinbase as
• 2:42
  Speaker 1: the scapegoat on.
• 2:43
  Speaker 2: All of this.
• 2:44
  Speaker 1: Do you think it was in line with blaming Coinbase
• 2:48
  Speaker 1: for what happened with Clarity?
• 2:50
  Speaker 3: Well, let's put this in perspective. Whenever a piece of legislation,
• 2:55
  Speaker 3: the degree to which this was championed and the degree
• 3:00
  Speaker 3: to which this was attacked fails, there's always a reckoning.
• 3:05
  Speaker 3: There's always a game of name-calling and blame assignment that
• 3:10
  Speaker 3: goes on, and I view this article as part of that.
• 3:13
  Speaker 3: If I'm part of the bank coalition that fought this
• 3:17
  Speaker 3: then this article is very helpful to shift the blame.
• 3:19
  Speaker 3: If I'm part of the political class that voted against it,
• 3:23
  Speaker 3: then this article is very helpful to shift the blame.
• 3:27
  Speaker 3: And I think it's a game of blame shifting. But
• 3:29
  Speaker 3: there's a lot more than what Brian Armstrong may have
• 3:32
  Speaker 3: done or not done that went into the failure of
• 3:36
  Speaker 3: the Clarity Act. Some of it has to do with
• 3:40
  Speaker 3: just the political cycle. We're late in an election season
• 3:43
  Speaker 3: when things rarely pass and both sides counted the numbers,
• 3:47
  Speaker 3: and they looked to their base, and they decided what
• 3:49
  Speaker 3: was in their best interest, and it didn't get done.
• 3:52
  Speaker 3: I think it's a terrible disappointment. Here's how I view
• 3:56
  Speaker 3: the failure of clarity. What it means is not that
• 4:00
  Speaker 3: innovation is going to stop. In fact, innovation, if anything,
• 4:03
  Speaker 3: is going to continue. But it does mean that the
• 4:06
  Speaker 3: United States is not going to be able to exert
• 4:09
  Speaker 3: the global leadership in industry standard-setting organizations like like IOSCO
• 4:16
  Speaker 3: and the Financial Stability Board and others, where global players
• 4:21
  Speaker 3: come to set global standards. It also means that those
• 4:28
  Speaker 3: investment advisors and others that have fiduciary duties, whether they
• 4:33
  Speaker 3: are pension fund managers for state employee pension funds or others,
• 4:38
  Speaker 3: are going to be a little bit more careful about
• 4:41
  Speaker 3: in investing in this innovation because of the lack of
• 4:44
  Speaker 3: federal certainty. Nevertheless, I do think we are going to
• 4:48
  Speaker 3: get regulatory certainty because Paul Atkins and Mike Selig have
• 4:52
  Speaker 3: made it very clear that they intend to move forward
• 4:55
  Speaker 3: with rule writing in this area. So it's not going
• 4:58
  Speaker 3: to stop the innovation. It is a disappointment for the
• 5:02
  Speaker 3: United States not to show leadership in this area. But
• 5:05
  Speaker 3: I think the march of innovation goes on.
• 5:09
  Speaker 2: Okay, so what's your position?
• 5:11
  Speaker 1: Do you think that banks accidentally, under letting this kind
• 5:15
  Speaker 1: of get bounced out of Congress, started a bull run here?
• 5:19
  Speaker 1: Because we have seen nothing but up cycles on almost
• 5:22
  Speaker 1: every crypto project out there, mostly coming in from the
• 5:26
  Speaker 1: announcements out of the CFTC and the SEC, pointing to
• 5:30
  Speaker 1: your point exactly, and that's innovation.
• 5:32
  Speaker 3: Yeah. Well, you know, it's funny, but in my new book,
• 5:35
  Speaker 3: I actually recall... American banking industry's history of fighting virtually
• 5:44
  Speaker 3: every innovation to come across, whether it was ATM machines,
• 5:48
  Speaker 3: whether it was chip readers in credit cards, whether it
• 5:52
  Speaker 3: was branch banking. American banks have used their clout in
• 5:56
  Speaker 3: Washington to fight every one of those innovations. often successfully,
• 6:01
  Speaker 3: only to have that innovation happen anyway. And three or
• 6:04
  Speaker 3: four years later, the banks have had to adapt simply
• 6:07
  Speaker 3: because their competitors were adopting the innovation. They got Congress
• 6:10
  Speaker 3: to stop it, not make it mandatory, and then they
• 6:13
  Speaker 3: found themselves having to do it anyway. I think the
• 6:16
  Speaker 3: same thing is going to play out here. I think
• 6:18
  Speaker 3: it was a short-termism by the American bank industry to
• 6:21
  Speaker 3: try to fight this innovation. It's not going to be stopped.
• 6:24
  Speaker 3: It's going to happen anyway. And the American banks are
• 6:27
  Speaker 3: just going to be late to the game, as they
• 6:29
  Speaker 3: have been in many, many other innovations. And whether it's
• 6:32
  Speaker 3: triggered a bull run or not, certainly Bitcoin is up.
• 6:35
  Speaker 3: At least it was early this morning. I haven't looked
• 6:37
  Speaker 3: in the last hour or so. And we're seeing the
• 6:40
  Speaker 3: same spillover effect into a lot of digital asset adjacent businesses.
• 6:46
  Speaker 3: And that's not surprising. Many people actually thought that the
• 6:50
  Speaker 3: Clarity Act was not a good bill. It was flawed
• 6:53
  Speaker 3: in many ways. My predecessor, Tim Bassett, the CFTC, has
• 6:58
  Speaker 3: been out there saying that it's a flawed bill. And
• 7:02
  Speaker 3: I think for many, no bill may be better than
• 7:05
  Speaker 3: any bill at all.
• 7:07
  Speaker 1: Well, and I think to your point, a lot of
• 7:10
  Speaker 1: people were probably looking at it that way. And I
• 7:12
  Speaker 1: think the issue that you mentioned earlier in the sense
• 7:15
  Speaker 1: of the U.S. not necessarily becoming the global leader on this,
• 7:19
  Speaker 1: it's gonna be a forced mechanism. It also puts a
• 7:22
  Speaker 1: little bit of risk at play, and we'll talk about
• 7:24
  Speaker 1: that in a second, where you're gonna have administrations shift,
• 7:29
  Speaker 1: which could also put pressure on what's.
• 7:31
  Speaker 2: Coming out of the SEC and the CFTC, as.
• 7:33
  Speaker 1: You well know, heading and chairing the CFTC for quite
• 7:37
  Speaker 1: some time.
• 7:39
  Speaker 3: When you look at- You know, if my chairmanship stands
• 7:41
  Speaker 3: for anything, Paul, it stands for the fact that Congress
• 7:44
  Speaker 3: didn't give me permission to put a regulatory framework around
• 7:48
  Speaker 3: crypto futures. I did it because it was my duty
• 7:51
  Speaker 3: as a chairman of an agency not to ignore a
• 7:53
  Speaker 3: new innovation, but to create a regulatory framework. I know
• 7:57
  Speaker 3: that Paul Atkins and Mike Selig feel the same way.
• 8:00
  Speaker 3: They gave Congress every bit of assistance they could to
• 8:02
  Speaker 3: write a good bill. But Congress now shook that responsibility.
• 8:08
  Speaker 3: So Mike Selig and Paul Atkins are going to uptake
• 8:11
  Speaker 3: that responsibility and write the rules. All right.
• 8:15
  Speaker 1: So some other things that are going on, and I'll
• 8:17
  Speaker 1: show something from Paul Atkins coming in on in general
• 8:22
  Speaker 1: around the SEC's, you know, innovation side of thing. And
• 8:26
  Speaker 1: this kind of centers around Reagan MS, which, of course,
• 8:28
  Speaker 1: this is something that has centered around a certain level
• 8:33
  Speaker 1: of equalization of how trading occurs.
• 8:36
  Speaker 2: And one of the things that was put out.
• 8:37
  Speaker 1: In this post that I thought was interesting is is
• 8:40
  Speaker 1: that this statement right here, TSVs must run smart contracts
• 8:43
  Speaker 1: that are public and auditable on a permissionless ledger and
• 8:47
  Speaker 1: be able to and must halt trading in a token
• 8:50
  Speaker 1: whenever underlying stock is halted. Now, we saw this happen
• 8:54
  Speaker 1: quite some time ago when it came to the GameStop scenario.
• 8:57
  Speaker 1: So there was halting. It was like a ridiculous amount
• 9:00
  Speaker 1: of times. I think I've got it right here. Yeah,
• 9:02
  Speaker 1: January of that year, there were 40 such halts in
• 9:06
  Speaker 1: the GameStop scenario, and this of course was an exact
• 9:10
  Speaker 1: situation that occurred in traditional finance. Now you have tokenized
• 9:15
  Speaker 1: stocks that are also going to play into this. And
• 9:19
  Speaker 1: this gets kind of intriguing to me because that's a
• 9:22
  Speaker 1: completely different ecosystem. It's ran in a completely different way.
• 9:28
  Speaker 1: If you think about halting on something like Ethereum or
• 9:32
  Speaker 1: Bitcoin or something, it just doesn't happen. Do you think
• 9:36
  Speaker 1: that's going to cause any issues down the road as
• 9:38
  Speaker 1: we see tokenized stocks starting to play outside the traditional markets?
• 9:43
  Speaker 3: Yeah, so there's a number of things playing out here, Paul.
• 9:45
  Speaker 3: You're absolutely right to identify this. And something that hasn't
• 9:49
  Speaker 3: been commented on, but I will recall for your audience,
• 9:53
  Speaker 3: that Paul Atkins voted against Reg NMS when he was
• 9:57
  Speaker 3: a commissioner at the SEC. His view then and his
• 10:00
  Speaker 3: view remains today that that was the SEC and that
• 10:04
  Speaker 3: was the government putting their heavy hand on market practice
• 10:08
  Speaker 3: in a way that really was an answer to a
• 10:11
  Speaker 3: problem that didn't exist. There was really not a question
• 10:16
  Speaker 3: of market participants not getting good fills. And he felt
• 10:19
  Speaker 3: the government came in with that rule and skewed the
• 10:24
  Speaker 3: market to greater complexity. Now, at the same time, so
• 10:28
  Speaker 3: when Paul sits there today as chairman, he looks at
• 10:31
  Speaker 3: what has been wrought by Reg NMS and he says, OK,
• 10:34
  Speaker 3: how can we simplify this? What can we do to
• 10:37
  Speaker 3: perhaps remove some of these rules? At the same time,
• 10:41
  Speaker 3: you've got President Trump saying, I want to see these
• 10:44
  Speaker 3: overseas decentralized markets like hyperliquid moved onshore. And so I
• 10:50
  Speaker 3: read this innovation exemption as sort of a compromise. How
• 10:53
  Speaker 3: do we move some of this liquidity onshore at the
• 10:58
  Speaker 3: same time knowing that we've got a much more complex U.S.
• 11:01
  Speaker 3: structure than a lot of these new emerging markets? market spaces.
• 11:06
  Speaker 3: So how do we make the onshore structure more simple,
• 11:09
  Speaker 3: but at the same time, don't create unlevel playing fields
• 11:12
  Speaker 3: between our securities markets and these? And I think that
• 11:15
  Speaker 3: the rule that came out last week was a good
• 11:17
  Speaker 3: first step. It showed directionally where the SEC would like
• 11:21
  Speaker 3: to go. I think that rule, before it becomes finalized,
• 11:24
  Speaker 3: it's going to be subject to a lot of a revision,
• 11:27
  Speaker 3: a lot of good input. I think the industry is
• 11:30
  Speaker 3: going to provide a lot of commentary. And I think
• 11:34
  Speaker 3: it's a first step. I consider it kind of a prototype.
• 11:37
  Speaker 3: It's a step forward. It shows some intention by Paul
• 11:41
  Speaker 3: Atkins' run SEC, but I don't think we're at the
• 11:43
  Speaker 3: final stage of what this rule looks like yet. Yeah.
• 11:46
  Speaker 2: Okay. Well, that was kind of leading into my next question.
• 11:48
  Speaker 1: Do you think people will be satisfied with this compromise
• 11:51
  Speaker 1: right now that we're dealing with today that obviously the
• 11:54
  Speaker 1: SEC is prepping for? Or do you think this is
• 11:57
  Speaker 1: something at some point Congress is going to have to
• 12:00
  Speaker 1: get involved and we do get clarity?
• 12:03
  Speaker 3: Well, let's hope ultimately we do get some positive reaction
• 12:08
  Speaker 3: from Congress, either under this Congress or a future Congress. Incidentally,
• 12:12
  Speaker 3: I think clarity is dead in this Congress. In fact,
• 12:16
  Speaker 3: I think it's been dead for some time. I've been
• 12:18
  Speaker 3: warning the industry for months that I didn't think it
• 12:21
  Speaker 3: was going to happen. And I think the industry almost
• 12:24
  Speaker 3: became caught up in its own cycle of wanting it
• 12:28
  Speaker 3: to happen, that lost sight of some of the detail
• 12:31
  Speaker 3: of it. I think we're now in the stage where
• 12:33
  Speaker 3: you're going to see Atkins and Selig writing rules, and
• 12:37
  Speaker 3: they will get good public input into those rules, and
• 12:40
  Speaker 3: hopefully those rules will be durable until Congress is ready
• 12:44
  Speaker 3: to weigh in. But here's the thing I think your
• 12:46
  Speaker 3: audience needs to know. Whatever Congress does, in some ways,
• 12:50
  Speaker 3: whatever Selig and Atkins does, this innovation is not stopping.
• 12:55
  Speaker 3: If Gary Gensler and his crew couldn't kill it, the
• 13:01
  Speaker 3: lack of federal legislation is not going to kill it.
• 13:03
  Speaker 3: This is the internet doing to banking and finance and
• 13:07
  Speaker 3: money what it's done to information gathering and social networking.
• 13:12
  Speaker 3: And there's no turning back. I think the industry has
• 13:15
  Speaker 3: an important role to play. And I think Brian Armstrong
• 13:20
  Speaker 3: would very much agree this. He's got an interest in
• 13:23
  Speaker 3: getting those rules right. And actually, I think Brian Armstrong
• 13:26
  Speaker 3: wasn't far off with his engagement on the Clarity Act.
• 13:31
  Speaker 3: It's a shame it didn't result in a good piece
• 13:34
  Speaker 3: of legislation. But the industry needs to engage in this
• 13:38
  Speaker 3: setting standards. And hopefully, a few years from now, when
• 13:41
  Speaker 3: Congress is ready to take this up again, they'll look
• 13:44
  Speaker 3: to the standards that the industry developed that Atkins and
• 13:48
  Speaker 3: Seelig will do in the next two years and we'll
• 13:51
  Speaker 3: get good legislation out of that.
• 13:53
  Speaker 1: You know, it's interesting because a lot of, I had
• 13:56
  Speaker 1: conversations this weekend about this very topic is doesn't this
• 13:59
  Speaker 1: hurt traditional investors in a bigger way? And, you know,
• 14:03
  Speaker 1: some of the conversations we had were saying, well, wait
• 14:05
  Speaker 1: a minute, you know, look at the transition right now
• 14:07
  Speaker 1: that's happening in the market. You are seeing a next
• 14:10
  Speaker 1: generation investor coming to the market right now.
• 14:14
  Speaker 2: They're already very familiar with this.
• 14:17
  Speaker 1: This doesn't even hold them back one iota compared to
• 14:21
  Speaker 1: what a TradFi investor might do looking back into this
• 14:25
  Speaker 1: market a few years from now.
• 14:27
  Speaker 2: So big difference.
• 14:29
  Speaker 3: Paul, you nailed it. In fact, I talk about this
• 14:30
  Speaker 3: in my new book. One needs to think about investment generationally.
• 14:36
  Speaker 3: Our parents' generation that saw the stock market in a
• 14:41
  Speaker 3: very traditional way is eventually yielding. We're talking about a
• 14:44
  Speaker 3: huge money transfer between one generation to another. To a
• 14:48
  Speaker 3: younger generation that had been playing video games and trading
• 14:51
  Speaker 3: game tokens since they were 16 years old in their
• 14:54
  Speaker 3: parents' basement, they are not going to trade the way
• 14:58
  Speaker 3: their parents do. They expect the type of instantaneous transactional
• 15:03
  Speaker 3: capability that only blockchain-based finance can give them. Not only
• 15:07
  Speaker 3: are they entering into their investment years, they're also entering
• 15:11
  Speaker 3: into their government service years. They are going to replace
• 15:15
  Speaker 3: the Jay Powell's at the Fed. They're going to replace, ultimately,
• 15:19
  Speaker 3: Elizabeth Warren in the Senate. They're going to replace both
• 15:22
  Speaker 3: Paul Atkins and Mike Selig eventually at the CFTC and
• 15:24
  Speaker 3: the SEC. And they're going to bring with them an
• 15:27
  Speaker 3: expectation of digital finance, of digital network finance. And so
• 15:33
  Speaker 3: time is very much on the side of these innovators
• 15:37
  Speaker 3: because the user experience they're developing for their users are
• 15:42
  Speaker 3: tomorrow's future major investors. And not just on the retail side.
• 15:47
  Speaker 3: They're going to the Fidelity's, they're going to the BlackRock's,
• 15:50
  Speaker 3: they're going to the JP Morgan's, and they're bringing those
• 15:52
  Speaker 3: same experiences and expectations with them.
• 15:56
  Speaker 1: Yeah, I think you're right in the sense that many
• 15:59
  Speaker 1: of the forward thinking financial institutions that institutional capital guys
• 16:04
  Speaker 1: that are out there playing in this market right now
• 16:07
  Speaker 1: have been.
• 16:08
  Speaker 2: For maybe the last two years.
• 16:10
  Speaker 1: They clearly are getting a lot of the indicators from
• 16:13
  Speaker 1: many of the next generation finance whiz kids that are
• 16:17
  Speaker 1: essentially kind of starting to play in this market on
• 16:19
  Speaker 1: an everyday basis.
• 16:20
  Speaker 2: So That is a big deal.
• 16:22
  Speaker 1: I want to jump over to how tokenized stocks may work,
• 16:26
  Speaker 1: because this is going to be something that I think
• 16:28
  Speaker 1: may come out in the public very quickly. It's not
• 16:31
  Speaker 1: been out there on CNBC and everybody talking about it,
• 16:34
  Speaker 1: but I want to know which moronic companies would be
• 16:40
  Speaker 1: not willing to make their stocks available in the tokenized market.
• 16:46
  Speaker 1: I'm thinking, not that I'm saying anything about AMC or anything,
• 16:49
  Speaker 1: you know, I understand, you know, That's just the beginning
• 16:52
  Speaker 1: of the morons that are out there.
• 16:53
  Speaker 2: But are there others out there that are waiting to
• 16:56
  Speaker 2: come in on this?
• 16:59
  Speaker 3: That's a great question. I imagine there are because, you know,
• 17:04
  Speaker 3: we all grew up reading, you know, Crossing the Chasm.
• 17:07
  Speaker 3: And we understand in any tech cycle, there's early adopters,
• 17:11
  Speaker 3: there's late adopters, and there's the broad bell curve in
• 17:14
  Speaker 3: the middle. Well, there's some late adopters, I'm sure, out
• 17:17
  Speaker 3: there that will be laggards to this. But I ran
• 17:22
  Speaker 3: a public company, GFI Group, 20 years ago, back in
• 17:25
  Speaker 3: the analog era. We were a financial service company. We
• 17:28
  Speaker 3: were publicly traded. And we were lucky if we knew
• 17:32
  Speaker 3: who 20%, 30% of our shareholders were, because most of
• 17:36
  Speaker 3: our shareholders held their shares in street name and other name.
• 17:40
  Speaker 3: And we had no privity of contract. We were totally
• 17:43
  Speaker 3: reliant on on proxy service companies and others to communicate
• 17:49
  Speaker 3: with the middlemen, to communicate with their own shareholders. People
• 17:53
  Speaker 3: talk about tokenization from an investor point of view, but actually,
• 17:58
  Speaker 3: it's the other side of the coin. It's the investment.
• 18:02
  Speaker 3: It's the issuer point of view. that tokenization is really
• 18:06
  Speaker 3: attractive to. Imagine if back in my days running GFI,
• 18:09
  Speaker 3: I could have known who every one of my investors
• 18:11
  Speaker 3: are because they held a tokenized instrument, and I could
• 18:14
  Speaker 3: have offered them registration rights. I could have offered them
• 18:18
  Speaker 3: all kinds of issues because of a shareholding. In every case,
• 18:23
  Speaker 3: I think issuers, once they get used to the direct
• 18:27
  Speaker 3: access to their investors they're going to have with tokenized securities,
• 18:30
  Speaker 3: There's going to be no turning back on this. By
• 18:34
  Speaker 3: the way, I know some people still send letters in
• 18:38
  Speaker 3: the mail, but it's been a long time since I've
• 18:41
  Speaker 3: sent one because instantaneous mail and email is so quick.
• 18:45
  Speaker 3: It's been a long time since I took a film
• 18:47
  Speaker 3: photograph because digital photography not only allows me to take
• 18:51
  Speaker 3: an instant photograph, it allows me to post it and
• 18:54
  Speaker 3: send it and do all kinds of network things. The
• 18:56
  Speaker 3: same thing is going to be true about shares once
• 18:59
  Speaker 3: they're in tokenized form.
• 19:01
  Speaker 1: Well, listen, times are changing at Ando right here. Starting today,
• 19:04
  Speaker 1: approved institutions can use shares they already hold to mint
• 19:07
  Speaker 1: Ando stocks through Alpaca's instant tokenization network.
• 19:10
  Speaker 2: This is just an example of those that would be
• 19:12
  Speaker 2: able to execute on that.
• 19:14
  Speaker 1: Then you have some other things happening out there. I
• 19:16
  Speaker 1: thought this was intriguing in general. And if you look
• 19:19
  Speaker 1: at this statement here, You can continue to enjoy an
• 19:23
  Speaker 1: additional 10% yield on every.
• 19:24
  Speaker 2: Dollar you invest.
• 19:25
  Speaker 1: This is in reference to the Glider Mag7. Remember the
• 19:28
  Speaker 1: Mag7X portfolio was designed by Bitwise out there. So it
• 19:32
  Speaker 1: continues to, and I think we're going to see these
• 19:35
  Speaker 1: kinds of things starting to really break loose. And I
• 19:38
  Speaker 1: just wonder when you look at equity airdrops that are incoming,
• 19:42
  Speaker 1: we've seen a handful that are starting to play into this.
• 19:45
  Speaker 1: This seems like this could work for almost any company
• 19:49
  Speaker 1: out there that wants to create loyalty around their brand
• 19:53
  Speaker 1: or around a token, whatever.
• 19:55
  Speaker 2: It might be.
• 19:56
  Speaker 1: I know the guys out there with Klanosaurs just did
• 19:59
  Speaker 1: this announcement where they're actually going to get 15% brand equity. Remember, guys,
• 20:04
  Speaker 1: this was a meme token that was an NFT that
• 20:08
  Speaker 1: And now they're getting essentially allocation to glanosaurs in general
• 20:14
  Speaker 1: on an equity basis.
• 20:15
  Speaker 2: So I'm just curious.
• 20:17
  Speaker 3: This is why this technology is so innovative. In the
• 20:24
  Speaker 3: traditional analog world of stocks and bonds, on bonds, you'd
• 20:28
  Speaker 3: get your yield. On equity, you might get a dividend
• 20:31
  Speaker 3: now and then or be a beneficiary of a stock buyback.
• 20:33
  Speaker 3: But other than that, it's very hard for issuers to
• 20:38
  Speaker 3: reward their shareholders for through the instrument of their equity interests.
• 20:42
  Speaker 3: With tokenization, we're going to find all kinds of novel
• 20:45
  Speaker 3: ways of issuers in a very efficient way, because you
• 20:49
  Speaker 3: won't have as many middlemen, being able to reward loyalty
• 20:52
  Speaker 3: to the company and investment in the company. And I
• 20:56
  Speaker 3: think we're just on the tip of the iceberg of
• 20:58
  Speaker 3: what's coming down the pike.
• 21:00
  Speaker 1: You look at companies that are out there like, you know,
• 21:04
  Speaker 1: almost any retail company that could use this in a
• 21:07
  Speaker 1: loyalty platform.
• 21:08
  Speaker 2: You know, if you were holding loyalty points or some sort.
• 21:11
  Speaker 1: Of, whether you're a Starbucks or a McDonald's user or,
• 21:14
  Speaker 1: you know, you name the company or the interest, I mean,
• 21:16
  Speaker 1: even Tesla could probably go this direction. They have reward
• 21:19
  Speaker 1: points for their loyal members that have purchased multiple Teslas.
• 21:22
  Speaker 1: And being able to maybe allocate a sliver of a
• 21:26
  Speaker 1: publicly traded position into those members, would that start to...
• 21:32
  Speaker 1: get in the way of the SEC maybe coming in
• 21:35
  Speaker 1: and looking at this differently than what? Because a lot
• 21:38
  Speaker 1: of times those loyalty programs are meant just to create loyalty,
• 21:42
  Speaker 1: not really to reward something like this. Do you think
• 21:45
  Speaker 1: there's a possibility that the SEC could ever kind of
• 21:47
  Speaker 1: clamp down on that kind of strategy?
• 21:49
  Speaker 3: Well, you know, an Elizabeth Warren run SEC probably would.
• 21:54
  Speaker 3: I'm not sure that's the direction of the current SEC.
• 21:56
  Speaker 3: I think the current SEC says, We're not going to
• 22:00
  Speaker 3: direct the technology. We're going to let the technology blossom,
• 22:03
  Speaker 3: and then we'll find out what regulatory guardrails we put
• 22:07
  Speaker 3: around it. Because this technology enables new benefits for investors,
• 22:12
  Speaker 3: my guess is a Paul Atkins-run SEC is going to say,
• 22:15
  Speaker 3: that's a good thing. That's not a bad thing. That's
• 22:18
  Speaker 3: a good thing. So now how do we add the
• 22:20
  Speaker 3: right regulation around it? I was fully expecting the passage
• 22:24
  Speaker 3: of the Genius Act to result in stablecoin's issuance by
• 22:29
  Speaker 3: the likes of Walmart and Target and other big box retailers,
• 22:37
  Speaker 3: as well as Macy's, where they would be able to
• 22:39
  Speaker 3: provide stable coins to their users. And with those stable
• 22:43
  Speaker 3: coins would come sale items, early purchase items, reward systems.
• 22:50
  Speaker 3: I think that still may be out in the future.
• 22:53
  Speaker 3: It certainly empowers it. You know, if you were Macy's
• 22:57
  Speaker 3: and your customers, you're coming in using Visa or MasterCard,
• 23:00
  Speaker 3: it doesn't do you much good. But if they came
• 23:03
  Speaker 3: in using a Macy's stablecoin, and you could say to
• 23:07
  Speaker 3: Macy's stablecoin users, you get an additional 5% off. You
• 23:11
  Speaker 3: get early notice of certain sales. You get other discounts.
• 23:15
  Speaker 3: That seemed to me to make a lot of sense.
• 23:16
  Speaker 3: I think you might see a similar thing happen in
• 23:19
  Speaker 3: with tokenized securities, where if you're a shareholder in the company,
• 23:23
  Speaker 3: you're a Macy's shareholder, you get an additional 5% off.
• 23:26
  Speaker 3: So it pays to own Macy's equity. Again, we're looking
• 23:31
  Speaker 3: at a new technology that enables these. They could have
• 23:35
  Speaker 3: been done before, but it'd be very, very hard to
• 23:37
  Speaker 3: do in our analog shareholding system. This technology unlocks that opportunity.
• 23:43
  Speaker 3: And I think the right response, and I think you'll
• 23:45
  Speaker 3: get the right response from regulators as we have today,
• 23:49
  Speaker 3: at the SEC and the CFTC is to say, we're
• 23:51
  Speaker 3: not going to stop these good things. We're just going
• 23:53
  Speaker 3: to put these good things in the appropriate regulatory framework.
• 23:57
  Speaker 2: Yeah.
• 23:58
  Speaker 1: Well, I hear you, Chris, and I believe that you're
• 24:02
  Speaker 1: in the right place because I know you've gone through this.
• 24:04
  Speaker 1: You've had a chance to kind of shift policy for
• 24:06
  Speaker 1: the CFTC before, and it stuck, and that stuck through administrations. Yeah,
• 24:12
  Speaker 1: so that's a good point. We did a video on
• 24:15
  Speaker 1: this one, guys, if you didn't watch this brawl. what
• 24:20
  Speaker 1: was happening between DeFi and TradFi. And we had the
• 24:23
  Speaker 1: whole breakdown here on the CFTC. And this was ceiling bases, basically,
• 24:29
  Speaker 1: versus Terry Duffy.
• 24:31
  Speaker 2: And it was interesting. If anything, it was very entertaining.
• 24:36
  Speaker 3: I tell you, if they haven't seen it, they've got
• 24:38
  Speaker 3: to watch this.
• 24:38
  Speaker 2: They've got to watch this one. Because we got some
• 24:41
  Speaker 2: of the best clips.
• 24:43
  Speaker 3: This is a championship wrestling that's all scripted. This is
• 24:47
  Speaker 3: live and on the air. Exactly.
• 24:49
  Speaker 1: So my question is, does Terry Duffy just sit back
• 24:53
  Speaker 1: and bide his time here, just wait for a new administration?
• 24:57
  Speaker 1: And does this put a lot of pressure on these
• 24:59
  Speaker 1: innovators to get their clamps into this market much faster?
• 25:05
  Speaker 3: Well, let me tip my hat to Terry Duffy, who
• 25:08
  Speaker 3: I've had the pleasure of knowing for 20 years. Terry's
• 25:10
  Speaker 3: a brawler. He comes from the south side of Chicago,
• 25:13
  Speaker 3: not the Tony up north side. He's a rough and
• 25:18
  Speaker 3: tumble guy, and he's not afraid to lay down what
• 25:21
  Speaker 3: he thinks in the best interest of his company and
• 25:23
  Speaker 3: his shareholders, as any good CEO would do. I don't
• 25:27
  Speaker 3: think at the end of the day any of this
• 25:29
  Speaker 3: is personal. I think this is Terry being Terry. And
• 25:32
  Speaker 3: I think, by the way, Mike Selig is no slouch either.
• 25:35
  Speaker 3: He may be a young man, but he's as tough
• 25:37
  Speaker 3: as nails, and he's going to give as good as
• 25:39
  Speaker 3: he gets. Look, innovation sometimes comes slow, sometimes comes fast,
• 25:44
  Speaker 3: and sometimes can catch businesses a little bit caught off guard.
• 25:51
  Speaker 3: I think CME will do just fine, by the way.
• 25:54
  Speaker 3: I say this full disclosure. I'm a CME shareholder. I
• 25:58
  Speaker 3: have a lot of respect for what they built. I
• 26:02
  Speaker 3: think the march of innovation will go on. I think
• 26:04
  Speaker 3: the CME will find their way through it, and I
• 26:06
  Speaker 3: think the CFTC will continue to with their approach to things.
• 26:11
  Speaker 3: But it was a great moment of live television. Don't
• 26:14
  Speaker 3: miss it, ladies and gentlemen.
• 26:18
  Speaker 1: Listen, over the weekend, we had a little bit of
• 26:20
  Speaker 1: a brawl going out there with Cauchy and Polymarket.
• 26:23
  Speaker 2: This was an interesting statement.
• 26:25
  Speaker 1: Anyone can become a self-clearing member of the CFTC regulated
• 26:28
  Speaker 1: exchange as long as they meet a regulatory requirement. Fair
• 26:32
  Speaker 1: access is a reg requirement for us. And this is
• 26:36
  Speaker 1: what they were getting at. This is one of the
• 26:38
  Speaker 1: Cauchy guys My question is, is Polymarket in a better
• 26:43
  Speaker 1: position right now for being able to take advantage of what's.
• 26:47
  Speaker 2: Coming out of the CFTC and the SEC?
• 26:51
  Speaker 3: Well, you know, let me lay kind of a framework
• 26:55
  Speaker 3: to think about this for your audience. Cauchy and Polymarket may,
• 26:59
  Speaker 3: in many cases, appeal to the same market participants and
• 27:03
  Speaker 3: compete for their patronage, but the two platforms were formed
• 27:08
  Speaker 3: with very different principles in mind. Polymarket always aimed to be,
• 27:13
  Speaker 3: by its very name, Polymarket, a platform where people could
• 27:17
  Speaker 3: go on the platform and create their own marketplace. Their
• 27:22
  Speaker 3: ultimate goal is to be something of a Microsoft operating
• 27:25
  Speaker 3: system for people to create marketplaces. Therefore, they always aspire
• 27:31
  Speaker 3: to the type of decentralized platform that their international platform is. Unfortunately,
• 27:38
  Speaker 3: under CFDC regulation heretofore, it doesn't really recognize decentralization. It
• 27:47
  Speaker 3: requires a centralized operator in order to get a DCM registration. Kelshi,
• 27:55
  Speaker 3: on the other hand, was always meant to be U.S. compliant.
• 27:58
  Speaker 3: From day one, it was meant to be U.S. compliant,
• 28:01
  Speaker 3: and therefore, it's far more centralized, certainly, than the polymarket
• 28:05
  Speaker 3: offshore platform. Now, to operate onshore, polymarket acquired a more
• 28:10
  Speaker 3: traditional exchange, and today it operates both its offshore exchanges.
• 28:13
  Speaker 3: more decentralized platform, and it's onshore centralized platform, where Kalshi
• 28:18
  Speaker 3: pretty much operates everything through its US platform. I'm not
• 28:22
  Speaker 3: being a critic of either one. They both came to
• 28:24
  Speaker 3: this with a different orientation. And today, those different orientations
• 28:30
  Speaker 3: run through the DNA of the two firms. I think
• 28:33
  Speaker 3: they're both fine firms. I think they have both demonstrated
• 28:36
  Speaker 3: that prediction markets are not just attractive to those who
• 28:40
  Speaker 3: participate in, they're attractive to all of us that want
• 28:44
  Speaker 3: to see some indication of what the future may be
• 28:47
  Speaker 3: without relying on dodgy polls, but can look at the
• 28:51
  Speaker 3: wisdom of the crowds. And I think they both do
• 28:53
  Speaker 3: that in a very good way. And I think both
• 28:55
  Speaker 3: of them have real staying power. I think prediction markets
• 28:58
  Speaker 3: are here to stay in the same way that the
• 29:01
  Speaker 3: general public likes the weather report, even if it's occasionally
• 29:04
  Speaker 3: 10% wrong. People like prediction markets because most of the
• 29:08
  Speaker 3: time it's 90% right. And people like certainty. So I
• 29:11
  Speaker 3: don't think these markets are in any way going away.
• 29:15
  Speaker 3: They're approaching it from different ways. Now, it's well known
• 29:18
  Speaker 3: that the two CEOs, are very competitive with each other.
• 29:22
  Speaker 3: The firms are very competitive with each other. And sometimes
• 29:24
  Speaker 3: that competition spills over into social media and whatnot. But
• 29:30
  Speaker 3: I think there's plenty of room. If there's enough room
• 29:33
  Speaker 3: for Hertz and Visa, there's enough room for Pepsi and Coke,
• 29:36
  Speaker 3: there's enough room for Kelshi and Poly market in the
• 29:39
  Speaker 3: future prediction markets.
• 29:40
  Speaker 2: Well, okay.
• 29:42
  Speaker 1: Granted, yes, but this is definitely a different market than
• 29:45
  Speaker 1: Pepsi and Coke.
• 29:46
  Speaker 2: We're talking about essentially the futures market playing out. Do
• 29:49
  Speaker 2: you think, with all that being said, do you think the.
• 29:51
  Speaker 3: CFTC- Enough room for CB & I.
• 29:53
  Speaker 2: Okay. Well, that's a good point right there.
• 29:56
  Speaker 1: But do you think the CFTC- should be in the
• 29:59
  Speaker 1: position to essentially dictate who the market maker is versus
• 30:04
  Speaker 1: what you're talking about is essentially let the market decide.
• 30:09
  Speaker 3: Yeah. Now, the CFTC rules have often provided for intermediation
• 30:15
  Speaker 3: into our futures markets. As a retail investor, you can't
• 30:19
  Speaker 3: go in directly. You go through a futures commission merchant.
• 30:22
  Speaker 3: And one of the things that I know Mike Selig
• 30:25
  Speaker 3: is looking at is how do we open things up
• 30:29
  Speaker 3: and democratize things a little bit, and perhaps even allow
• 30:32
  Speaker 3: for decentralization in American marketplaces? It's hard, Paul, because the
• 30:37
  Speaker 3: whole structure of CFTC regulation of markets is to not
• 30:43
  Speaker 3: regulate products, but to regulate platforms. What the CFTC basically
• 30:48
  Speaker 3: does is say, okay, you want to offer products into
• 30:52
  Speaker 3: the market, You've got to register with us as a
• 30:55
  Speaker 3: platform called the DCM. And that's a rigorous process to
• 30:58
  Speaker 3: get that license. Against the years, it can take three
• 31:01
  Speaker 3: or four years to get that license. Under the Trump years,
• 31:05
  Speaker 3: it's now down to about nine months. But it's still
• 31:07
  Speaker 3: a rigorous process. There's over 150 fields that need to
• 31:11
  Speaker 3: be satisfied before one can get that license. Everything from
• 31:15
  Speaker 3: cybersecurity to how accounts are managed, how money is managed.
• 31:21
  Speaker 3: But once you get that license, then the CFTC allows
• 31:24
  Speaker 3: you to launch a product with as little as 24
• 31:27
  Speaker 3: hours notice because it doesn't want to stop product innovation.
• 31:31
  Speaker 3: It holds the platforms responsible for making sure that those
• 31:35
  Speaker 3: products meet the CFTC's core principles, but it doesn't tell
• 31:39
  Speaker 3: the platforms how to structure those products. It doesn't pre-approve
• 31:42
  Speaker 3: those products. Very different than a lot of exchanges around
• 31:45
  Speaker 3: the world. And so as we think about CalSheet and
• 31:48
  Speaker 3: PolyMarket coming to this market, The CFTC needs to think
• 31:51
  Speaker 3: about how does it hold the platform accountable for meeting
• 31:55
  Speaker 3: those core principles without stifling innovation in the development of
• 31:59
  Speaker 3: new products.
• 32:01
  Speaker 2: Yeah. All right.
• 32:03
  Speaker 1: So I want to kind of go in the direction
• 32:07
  Speaker 1: of what could happen down the road here also with
• 32:09
  Speaker 1: the DTCC. especially with Hyperliquid potentially being on short because
• 32:14
  Speaker 1: that's kind of a directive here, even from this administration.
• 32:16
  Speaker 1: But you've got the DTCC getting ready to start right
• 32:20
  Speaker 1: here in October. This means Russell 1000 stocks, stocks like NVIDIA, Apple,
• 32:26
  Speaker 1: et cetera, all are going to be eligible to be
• 32:29
  Speaker 1: converted into blockchain-based tokens. So that's going to happen. Here
• 32:33
  Speaker 1: is my question. If that launch doesn't go well, And
• 32:38
  Speaker 1: we do see a pullback. I won't say a pullback
• 32:41
  Speaker 1: from the DTCC, but maybe a position where they start
• 32:45
  Speaker 1: creating moats around this to try to lock up this innovation.
• 32:50
  Speaker 2: Do you think that's possible?
• 32:53
  Speaker 3: No. Now, first of all, I anticipate that launch to
• 32:56
  Speaker 3: go well. They've been testing it. They've done a lot
• 32:58
  Speaker 3: of prototype testing so far. This is being built on
• 33:04
  Speaker 3: the Canton network, which I'm very familiar with. And I
• 33:06
  Speaker 3: write about it in my new book, which has been
• 33:09
  Speaker 3: developed over 10 years time. That layer one is robust
• 33:13
  Speaker 3: and you can handle this. I expect this to go well.
• 33:16
  Speaker 3: The DTCC is a remarkable organization going back to the 1970s.
• 33:21
  Speaker 3: And under its leadership of Frank LaSalla, it's been way
• 33:25
  Speaker 3: out in the head, I think, of other utilities like
• 33:28
  Speaker 3: Swift and others. moving forward. So I fully expect that
• 33:31
  Speaker 3: to go well. The DTC is not in the business
• 33:34
  Speaker 3: of building moats. In many cases, the services they provide
• 33:38
  Speaker 3: are provided by others. Treasury clearing right now is also
• 33:42
  Speaker 3: offered by CME and ICE. And yet the DTCC does
• 33:47
  Speaker 3: its job and does it well. So I think this
• 33:49
  Speaker 3: is going to go well. I'm not worried about them.
• 33:51
  Speaker 3: I don't think it's their style to try to stifle innovation.
• 33:55
  Speaker 3: I think actually they get a hat tip for getting
• 33:57
  Speaker 3: out in front of this. And by the way, This
• 33:59
  Speaker 3: experiment is really important because what this does is will
• 34:03
  Speaker 3: enable much more collateral efficiency and collateral utilization of the market,
• 34:08
  Speaker 3: which should lead to more trades in the market and
• 34:11
  Speaker 3: more trading activity, which is good for market participants across
• 34:15
  Speaker 3: the board. So I think what the DTCC is doing
• 34:19
  Speaker 3: is a very important case. I expect it to go
• 34:22
  Speaker 3: quite well.
• 34:24
  Speaker 2: Well, listen, we'll follow up afterwards.
• 34:27
  Speaker 1: Because I'm still skeptical as to whether that will launch.
• 34:30
  Speaker 1: I think the shift has occurred in terms of where
• 34:34
  Speaker 1: trades are going to happen in the future. And, you know,
• 34:36
  Speaker 1: we kind of led to it earlier in terms of
• 34:39
  Speaker 1: the kind of investor that's going to be participating in
• 34:41
  Speaker 1: this next evolution.
• 34:43
  Speaker 2: You just look at Solana. This is a good example.
• 34:45
  Speaker 2: This is the number of.
• 34:45
  Speaker 1: Spot DEX trades versus TradFi exchanges. And that number is
• 34:51
  Speaker 1: pretty impressive right there, guys. 208 million trades versus the
• 34:55
  Speaker 1: New York Stock Exchange sitting at 189.
• 34:57
  Speaker 2: So it is clear. Believe me, this is just getting started.
• 35:00
  Speaker 1: So my question is, has Solana already won over the
• 35:06
  Speaker 1: next generation of traders and it never makes it to TradFi, Chris?
• 35:12
  Speaker 3: That's a great question. Look, all I can do is
• 35:15
  Speaker 3: point to historical events. analogies. The internet didn't take away
• 35:21
  Speaker 3: the mail service, but it changed it dramatically. Whenever you
• 35:25
  Speaker 3: see a new technology comes in, especially at the pace
• 35:28
  Speaker 3: of change, we're in this modern era, it usually is
• 35:31
  Speaker 3: evolutionary more than it's revolutionary. It builds over time. Remember,
• 35:35
  Speaker 3: most of the trading in the market is still quite institutional.
• 35:38
  Speaker 3: An institution still needs a degree of certainty. They will
• 35:42
  Speaker 3: adapt gradually from traditional systems to new systems. So I
• 35:47
  Speaker 3: can't say how it's going to play out. I do believe,
• 35:52
  Speaker 3: and I'd be shocked if I'm wrong, that within 10
• 35:54
  Speaker 3: to 15 years, every instrument that can be tokenized will
• 35:59
  Speaker 3: be tokenized. And I expect all of new issuance of
• 36:02
  Speaker 3: securities very soon will be issued in tokenized form as
• 36:06
  Speaker 3: new issues. And then eventually secondary shares will go there
• 36:09
  Speaker 3: as well.
• 36:11
  Speaker 1: I think secondary shares are going to move quickly, for sure,
• 36:14
  Speaker 1: based on the kind of growth we're going to see here.
• 36:16
  Speaker 1: But to your point, it's kind of the email and
• 36:19
  Speaker 1: mail example that you gave. If you think about it,
• 36:24
  Speaker 1: Solana literally could be the email of our era versus
• 36:28
  Speaker 1: something like a DTCC, which is traditional postal mail, which
• 36:32
  Speaker 1: I think is where the two industries are falling apart
• 36:35
  Speaker 1: right now, as opposed to embracing each other, because they're
• 36:38
  Speaker 1: completely different operational capacities and where the growth is going
• 36:41
  Speaker 1: to go and how people are going to use it
• 36:43
  Speaker 1: in the future.
• 36:43
  Speaker 2: So I don't know, man. All right.
• 36:47
  Speaker 1: Last question to you, because this also worries me, and
• 36:50
  Speaker 1: that is everything that's happening in the KYC era.
• 36:53
  Speaker 2: You had Revolut.
• 36:55
  Speaker 1: Hackers began to leak customer data, including passports.
• 36:58
  Speaker 2: Selfies, all kinds of stuff. Daily dumps of this.
• 37:01
  Speaker 1: This is Revolut, one of the largest financial institutions in
• 37:04
  Speaker 1: Europe due to what potentially will be, I think, more
• 37:09
  Speaker 1: AI hacks in the future. Isn't this, Chris, a nail
• 37:13
  Speaker 1: in the coffin for simple KYC? I mean, because you're
• 37:18
  Speaker 1: giving up all that information to these people who can't
• 37:22
  Speaker 1: control and protect it.
• 37:23
  Speaker 3: I wish it is, Paul. I wish it is, but
• 37:25
  Speaker 3: I got to tell you, the wooden insistence on analog-based
• 37:33
  Speaker 3: AML KYC that exists today amongst financial regulators, especially national
• 37:40
  Speaker 3: security and law enforcement agencies, is the weight that is
• 37:47
  Speaker 3: holding back this innovation. The biggest break on seeing the
• 37:50
  Speaker 3: benefits of this innovation right now in financial services is
• 37:54
  Speaker 3: a relatively last-generation insistence that they all comply with traditional AML-KYC.
• 38:03
  Speaker 3: The biggest disappointment I have, and I write about this
• 38:06
  Speaker 3: extensively in my new book, the biggest problem I've got
• 38:09
  Speaker 3: with the Genius Act is it makes what is otherwise
• 38:13
  Speaker 3: an unlocking of the power of the dollar and the
• 38:17
  Speaker 3: digitization of the dollar subject to the snail's pace of AML-KYC.
• 38:23
  Speaker 3: Every transaction is going to be subject to the Bank
• 38:25
  Speaker 3: Secrecy Act. And by the way, the same was present
• 38:28
  Speaker 3: in the clarity bill. And we have to reimagine law
• 38:34
  Speaker 3: enforcement for a new era. In my book, I talk
• 38:36
  Speaker 3: about how every generation has to reestablish the balance between
• 38:41
  Speaker 3: financial privacy and and law enforcement. Going back to Magna Carta,
• 38:46
  Speaker 3: which recognized the rights of privacy of individuals and the
• 38:50
  Speaker 3: notion that a person's home was their castle and government
• 38:53
  Speaker 3: couldn't bash down the door unless They had probable cause
• 38:58
  Speaker 3: of something going wrong and got a judge to issue
• 39:00
  Speaker 3: a subpoena. So privacy has never been absolute. It's always
• 39:04
  Speaker 3: been balanced against law enforcement, but law enforcement with limits
• 39:08
  Speaker 3: around it. Law enforcement does not have the right to
• 39:10
  Speaker 3: just know what you're doing with your money because they
• 39:13
  Speaker 3: want to know. They have to have probable cause, provable
• 39:17
  Speaker 3: cause evidence. that you're committing law breaking, and then they
• 39:20
  Speaker 3: can get a judge to issue a subpoena, and then
• 39:22
  Speaker 3: they can surveil your records. Well, unfortunately, in the last
• 39:26
  Speaker 3: 30 years, especially in the last 25 years since 9-11,
• 39:30
  Speaker 3: that's broken down and law enforcement surveils all of us
• 39:34
  Speaker 3: right now simply because they want to know what we're doing.
• 39:36
  Speaker 3: The Bank Secrecy Act is not about secrecy. It's about surveillance.
• 39:41
  Speaker 3: And we're all subject to government surveillance. And that surveillance
• 39:44
  Speaker 3: results in the government and registered entities stockpiling huge volumes
• 39:49
  Speaker 3: of information that hackers now go and get and use
• 39:53
  Speaker 3: against us. And that's the Bank Secrecy Act. The government
• 39:56
  Speaker 3: is warehousing information. The government is surveilling us. So we
• 40:00
  Speaker 3: need to rebalance this. And the opportunity exists. Blockchain presents
• 40:05
  Speaker 3: us with the opportunity to get the rebalance. And the
• 40:07
  Speaker 3: rebalance should be that government should be able to be
• 40:11
  Speaker 3: a node on blockchains observing traffic anonymously to see patterns
• 40:17
  Speaker 3: and to use pattern recognition. And then when they then
• 40:20
  Speaker 3: need to unmask that data, provided there's probable cause, If
• 40:25
  Speaker 3: my wallet does 45 transactions with a dodgy wallet address
• 40:29
  Speaker 3: in Kenya that's a known address for money laundering, government
• 40:33
  Speaker 3: should be able to unmask that data and get it.
• 40:35
  Speaker 3: But short of that, if I'm just conducting financial transactions electronically,
• 40:40
  Speaker 3: government should not be able to surveil that data or
• 40:43
  Speaker 3: warehouse that data. So we have to rebalance it. The
• 40:46
  Speaker 3: technology provides the opportunity. But right now, our innovators are
• 40:52
  Speaker 3: way ahead of law enforcement and way ahead of government
• 40:56
  Speaker 3: regulators that are simply saying, oh, it's a new technology.
• 40:59
  Speaker 3: Let's just slap AML KYC on it in its present
• 41:03
  Speaker 3: form and we're good to go. Well, we're not good
• 41:05
  Speaker 3: to go. That technology is the that analog technology is
• 41:08
  Speaker 3: the worst thing to slap on this new innovation. It's
• 41:11
  Speaker 3: going to slow it down. It's worse. It's going to
• 41:12
  Speaker 3: stymie it and stifle it.
• 41:14
  Speaker 1: Yeah, and that's the concern I have right now is
• 41:16
  Speaker 1: you now are moving into a generation that understands how
• 41:20
  Speaker 1: to use this technology, okay? And they're going to get
• 41:24
  Speaker 1: to a point where there is a breaking, I guess
• 41:28
  Speaker 1: a breaking point, much like what happened with Revolut. If
• 41:32
  Speaker 1: you find that a lot of Gen Z and Gen
• 41:34
  Speaker 1: Y start to see that their personal information essentially is
• 41:38
  Speaker 1: an attack vector and potentially could really harm them, not
• 41:42
  Speaker 1: only financially but personally, I think you're going to start
• 41:44
  Speaker 1: to see people disappearing from traditional AML rails that are
• 41:49
  Speaker 1: out there and moving into essentially the shadows, Chris, to
• 41:53
  Speaker 1: where this is basically untraceable until you get to a
• 41:57
  Speaker 1: point where you can lock that data up inside a
• 41:59
  Speaker 1: blockchain and only release it exactly to your point of
• 42:03
  Speaker 1: when it's required, as opposed to AML that is just
• 42:07
  Speaker 1: anyone and everyone.
• 42:09
  Speaker 3: I totally agree. Now, my worry, however, is that.
• 42:14
  Speaker 3: Depending on what's going to happen politically in the next
• 42:17
  Speaker 3: few weeks and then two years from now, Elizabeth Warren
• 42:21
  Speaker 3: doesn't want to give up any of that surveillance capability
• 42:23
  Speaker 3: over people's financial transaction. So I don't know how we
• 42:28
  Speaker 3: reform the AML-KYC Bank Secrecy Act system in any type
• 42:33
  Speaker 3: of meaningful way with the current political landscape we have.
• 42:37
  Speaker 3: But unless we do, I got news for your listeners,
• 42:40
  Speaker 3: we're all living in a surveillance state. And it's getting worse.
• 42:45
  Speaker 1: Yeah, well, I think it's both sides. It's not just
• 42:47
  Speaker 1: the Democrats. I think we've also seen this on the Republicans.
• 42:50
  Speaker 1: I totally agree.
• 42:52
  Speaker 3: There's the segment of the Republican Party. Yeah, yeah. The
• 42:55
  Speaker 3: Republican leadership of the Genius Act didn't use that as
• 42:58
  Speaker 3: an opportunity to reform AML-KYC, which they should have. Should
• 43:02
  Speaker 3: have done it. Exactly.
• 43:03
  Speaker 2: Should have done it. Right there. Exactly.
• 43:05
  Speaker 3: I'm sorry. I point Elizabeth Warren out as the poster
• 43:08
  Speaker 3: child for Luddite thinking on this.
• 43:11
  Speaker 2: Believe me, I'm happy to point it out.
• 43:13
  Speaker 3: But there's Luddites in both parties. Believe me, there's Luddites
• 43:16
  Speaker 3: on both sides of the aisle.
• 43:17
  Speaker 2: Hey, Chris, it's always fun catching up with you.
• 43:19
  Speaker 1: You guys go out there and check out Crypto Dad,
• 43:22
  Speaker 1: the new adventures book. It's going to be dropping on
• 43:25
  Speaker 1: October 27th, which is just around the corner. Chris, are
• 43:29
  Speaker 1: you doing any signings? Are you going to do anything
• 43:31
  Speaker 1: like that?
• 43:32
  Speaker 3: Oh, a lot, a lot. I've got a pub key
• 43:34
  Speaker 3: event on Thursday, November 5th to do some book signings.
• 43:38
  Speaker 3: I've got a whole bunch of events in New York
• 43:41
  Speaker 3: and Washington, Chicago and all over the country. So, yeah,
• 43:44
  Speaker 3: stay tuned. Follow me on LinkedIn and Twitter. If you're
• 43:49
  Speaker 3: not already, I'll be announcing these events.
• 43:51
  Speaker 2: All right. Chris Giancarlo, thanks a lot for stopping in today.
• 43:54
  Speaker 2: We appreciate it.
• 43:55
  Speaker 3: Great to be in the poll. Do it again soon.
• 44:04
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• 44:06
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• 44:09
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• 44:10
  Speaker 2: The link is in the description.