Latest / Monero Talk / J.W. Verret’s Debrief of the SEC Roundtable on Financial Surveillance & Privacy | EPI 373

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J.W. Verret’s Debrief of the SEC Roundtable on Financial Surveillance & Privacy | EPI 373 · Monero Talk

• Speaker 1 Privacy starts as anonymity and then I as a sovereign citizen get to decide what to share with you and when That's how I view it and that's how the founders viewed it Speaker 2 Monero Talk is sponsored by Cake Wallet, a trustless, open source wallet that gives you the keys to your crypto. Invoice, donate, and trade your Monero with peace of mind, peace of cake. And by StealthyX, an instant exchange where privacy is a top concern. Go to stealthyx.io to instantly exchange between Monero and 450 plus assets without having to create an account or register and with no limits. Making StealthyX a simple way to purchase Monero with crypto anonymously. Monero Talk is also made possible from contributions by viewers and listeners like you. And supporting us is easier than ever by typing in MoneroTalk.Crypto in your Monero.com or Cake Wallet send address field to send us a tip. Speaker 3 All right, we are live. JW, how's it going, man? Speaker 1 Pretty good, Doug, pretty good. Speaker 3 You, uh, you had a big week this week, huh? Speaker 1 Big week man. Big week. We had a roundtable of the SEC on privacy. I think the title was surveillance and privacy. That was good. Commissioner Purse, our libertarian SEC commissioner, the only person in the SEC to ever care about privacy was the leader who put that on and she was terrific. And we had two panels and we talked about a lot. Speaker 3 How did this how did this all come together man? I have a feeling you were a big part of just this panel roundtable coming together because I know you used to work at the SCC right and You know my life was some insight into how this ended up going down Speaker 1 Yeah, well, you know when the SEC gave the commissioner commissioner purse leadership of the task force that created this task force Um, she had some ideas for what she wanted to do I don't know whether I contributed or not But I did I did send them in some paper with some ideas and one of the ideas I had was do a bunch of roundtables Let everybody in crypto native crypto cipherpunk people come in and talk and they did that so hopefully I help contribute to to that initial brainstorming but It was a privilege to be there on this this what I think is maybe the last of the big crypto panels they're going to do and uh, okay, nobody else but haster would would would care about a privacy focused panel Um, so it was a good it was a kind of surreal because we had a chance to You know offer some critical views on fin sin and treasury and offac and i'm sure that those treasury Aml bureaucrats they hated the idea of this panel. I'm sure they like it at all So yeah Speaker 3 It's interesting that it happened at the SEC, right? Because that's not really what you would consider like a fundamental SEC issue, right? And you're saying it happened there because the chair is open to these ideas, right? Speaker 1 I think he is. I mean, he gave a banger speech. Chairman Acton's gave a banger speech that targeted problems. And, uh... Speaker 3 he sounded like he sounded like like me or you I was like wait what I was like so I was even thinking like did like so who who helps like do you know who's helping him with his like policy and stuff I mean is it uh Speaker 1 and it would've gotten you in there, Doug. Speaker 3 Massey, I don't know, Massey's pretty good man, Massey's pretty dumb-based. Speaker 1 That guy's all that guy's awesome as an aside Let me let me I decide one time I went and briefed members of Congress on the crypto and privacy issues maybe three years ago and Three members showed up Warren Davidson Tom Massey and Tom Emmer that was it So I was preaching the choir, you know, but Massey was so based. He's like, he's like, hey, here's my cell phone Just text me any time and he didn't know me from Adam and he goes and he shows me he says He's got this pin his digital lapel pen that shows the national debt in real time and Built it and he set it up So it finds whatever the nearest Wi-Fi is and connects to it and goes to this before AI tools and stuff so he Built it to go in and and you know Call in the current national debt and update the lapel pen on this miss lapel So he was always going to know go one more story. I'm sorry. I had finished Hold on into crypto he said but I did once sell a cow for a Bitcoin. It's like dude, that's pretty base He sold a cow for a Bitcoin on your home farm Anyway, then zed is there. I think he's probably helping out a lot. He's good good coin center alumni working on the team Anyway, we gotta get we gotta get Speaker 3 I'm going to get Massey on XMR Bazaar, but what is his crypto take actually, because I don't hear him say a lot. I've never heard him say things like, let's treat crypto like cash. And I want to get into that a little bit as we start to talk about things, but do you know what Massey's take is on those types of things? Speaker 1 and Speaker 3 There's Tom Emmer, you actually hear him say these ideas, like, you know, we need something to replace cash and blah, blah, blah. So yeah, he really vocalizes it. And yeah, to hear the... Speaker 1 One of the fights that, there's so many scary things you don't even know about until you read the bill, Massey's been a great help on a fight against a mandate to install in every car, eventually an off switch, have you heard about this? That eventually every new car is going to have to have an off switch inside it? Not that you can turn every engine off, but I mean like an off switch that can be accessed remotely where it's supposed to help people with DWIs that the government can... They want to put it in every car? They're going to put it in every car, and if you have a DWI, they'll let you drive, but then there's an algorithm that sees if you're driving strangely and then it shuts off the car. Which, fine. If you get a D2B and you go to a program, like put something in their car, whatever, do whatever you have to do for that. Don't put that in my car, and the issue, the concern is that it's going to start randomly shutting off people's cars if they just drive a little differently and it's going to... It's just kind of a privacy nightmare. Anyway, he's been burning that pretty... pretty base. Speaker 3 Yeah, the fact that that's even being considered. I think I kind of missed that one. I think that was even being seriously discussed. Yeah, in terms of the chair of the SEC, like I said, I mean, that was I love I think you did a great job. You did a great job getting some things out there. We'll talk about them. But I was most impressed by his comments because, you know, that's coming from the regulator, right? That's coming from the government. And he is seemingly pro privacy in crypto. And he sees transparent cryptos as a potential problem even, you know, describing it as becoming like a panopticon, right? That it can be used for, you know, mass financial surveillance and saying how that's a bad thing. We can't allow that to happen. So I was like, yeah, I was really blown away. That was like my most like I was more excited about that than I think anything else I heard at that round table. I don't know. What do you think? Speaker 1 Yeah, it was good. It's a it's a good chance for people to get to know the chairman of the SVC He's been a friend of mine for almost 20 years now and and I knew him before you know after he had been a commissioner at one point And to send it a lot and when I was in law school I wrote a paper based on one of his dissents there was this rule make all hedge funds register The bureaucrats said hedge funds are unregistered. That's scary. They all have to register. We only serve private wealth That's very sophisticated investors. They don't need all the securities laws Um, so he dissented against it and I supported that and wrote about it and he saw what I had written supportive of his dissents We just reached out to me while I was a law student said hey, it's a great paper kid Uh, I want to take you out to lunch when you're dc. And so we've been for instance then he's the guy who reads libertarian philosophy And by that, I mean, I don't just mean like he's red rose to serfdom. Everybody's read wrote to serfdom He's read the full collected works of frederick. Hi Uh, so he's he's a libertarian guy he and commissioner perse Deeply libertarian this is a moment. We're not going to have again. So we got to max out the relief we get on this right now Speaker 3 How how do we do that? I mean like we're saying like saying what can that SEC really do? You know to kind of help us and if not them where do we go from here and like what's what's really the ultimate goal? Speaker 1 Yeah, I mean, this was kind of tangential to our primary issue as people in the privacy coin space, right? The boss for us is DOJ The STNY is the final boss and we have problems with facts and their problems with AML KYC and stuff So this was an opportunity to raise those issues from a platform over at the SEC I think this specific securities law issue that has a privacy Uh spin on it is not about traditional crypto because now now that we have a new regime It's pretty clear that everything traditional crypto is not the SEC's business Crypto is not a security but for tokenized equity. I think it's possible to have a version of tokenized equity of traditional stocks that lives in DeFi and that lives in DeFi KYC free Imagine how cool it would be if you could buy tokenized Tesla tokenized Space X if it goes public one day and you buy it in DeFi KYC free Yeah Speaker 3 Yeah, I know. I was describing that to a normie today, right? Like, if I could buy Apple stock with Monero without KYC, right? I mean, that's... Speaker 1 And that opens up, you know, all around the world, there's all these capital controls, which I consider to be very abusive capital controls, especially in countries that have high hyperinflation, don't have a lot of investment opportunity. If you're an entrepreneur trying to make it in a city in any one of the growing cities in Africa, you'd love to buy Tesla, but you can't get a Robin Hood app. They don't serve Africa. But imagine if you could, you can, you can always access DeFi. I mean, as long as they're not geofencing and they don't geofence Africa, you can access that stuff in DeFi. Then you open up, invest in the US equities tokenized, living in DeFi, KYC free, you open up to the rest of the world and suddenly have this mass inflow of investment in the United States just as the baby boomers are, you know, dying off and their demand for stocks is waning. We need that demand in US equities and they need those investment opportunities in the developing world. So it's a, it's a great match and it gets us all around, gets us out of capital controls and local country restrictions on investing overseas. And you start to build real wealth among entrepreneurs in the developing world. I mean, that's something you can feel good about. Speaker 3 Oh, yeah. I'm just imagining the possibilities. We're also going to have scenarios where we'll be like an AI agent, just like trading stocks and everything and building an empire anonymously with Monero and Zcash. There's also that scenario. It's going to be wild. So, where do you see the... What should the SEC... I mean, basically, you want the SEC to do nothing, right? To announce that they're going to do nothing and not interfere with this, right? It's not that you want them to take any action. It's what you want them to announce. Speaker 1 In order to build it out, I think you need to get some sort of an exemptive release from the SEC saying, is this permitted? Um, and then people will build it. Speaker 3 Very cool. So do you see that potentially happening under this regime? I do. I think it's possible. Wow. That's incredible. Any timeline? Hopefully... Speaker 1 There's a lot of the time that's going on right now. So we'll see first half of next year. Wow. We'll see. I don't know if we'll see this the first half next year, but we'll, we'll start to see a lot of exemptions for tokenized equity. And hopefully this makes the cut. I mean, it's, it's. Speaker 3 Just curious what has made you focus on that obviously that's a tremendous thing But what has made you like a focus on that concept as being? You know vital for you know for having the SEC, you know, take some kind of action for it Why are you like excited about this particular concept? Speaker 1 Uh, because the hottest thing right now at the SEC and the crypto space is tokenized equity. Okay. Part of the reason for that is because crypto is not a security. So we don't have to, hopefully we submit things so that we, native crypto never has to worry about the SEC ever again. Um, so the, the, I'm a securities lawyer, also just some other stuff in money laundering and forensic accounting, but part of my life is a SEC lawyer. So this is the one issue left where we're going to really fight. We won already. So that's moving over to, to unregulated trading in defy and regulated trading on, on, on commodities, merchant platforms that corn base and cracking in all those people and crypto.com are all building a, which is great. All that stuff's going to be great. Hopefully all of it lists Monero, every, every exchange should list Monero and Zcash. There's no reason not to. Speaker 3 For sure. Wow. Speaker 1 But, yeah, it's an area where I can help in the SEC space, with crypto, with privacy, with sovereignty. And to me, there's a lot of discussion about tokenized equity. TradFi talks about it, and they build just the most bastardized version of it that makes trading within their systems that are still grounded in the Depository Trust Corporation a little bit more efficient, but it's not life-shattering, it's not a big deal. TradFi likes to grab interest in the topic to sell something, but it's mostly nothing. To me, the only interesting thing about tokenized equity, why would you even want this, is sovereignty. The only reason why tokenizing a thing is useful is because it allows me to own it in a sovereign way, so I'm not dependent on all these intermediaries. Now, if you buy a share of Tesla stock now, you don't really have a share, you have an interest with your broker, and the broker has an entry in their book, and the entry in their book tells them what they owe you relative to the entry they have on the Depository Trust Corporation's price. Speaker 3 It's not a true bearer asset, nobody's holding their stocks natively. Speaker 1 but now there's prohibitions on bear stocks. We want to get something as close to bear stocks without actually being a bear stock. That's the idea, tokenized equity, living and deploying KYC free. Speaker 3 Yeah, no. And we saw just Coinbase just announced yesterday, their version of that. Obviously, it's not decentralized. I don't know where they're headed with it, but they are trying to be the bridge to that. I roughly saw what Coinbase launched. Speaker 1 Yeah, I haven't seen all the launch news. I saw there's a huge slew of stuff and I need to go back and watch that webcast of all their new product offerings. But I do believe historically Coinbase Wallet was really great about being a bridge to DeFi and they have a good commitment to building crypto natively. So I think I expect eventually that we'll see all kind of cool stuff emerging out of all that. Speaker 3 Awesome. Yeah. So back to the roundtable. Like I said, I thought you did a great job. I thought the panel you were on was really... A lot of information was put out. It was exciting to hear being spoken about out in the public and in front of government regulators and them agreeing. Is there anything you wish you liked that would've came up that didn't come up? Just curious because I gave it a pretty good listen. Oh, yeah. Speaker 1 I wish we could have spent more time talking about the founders. That's where I wanted to start, and that's why I think we should all start in government is the founders. Those people were privacy and anonymity maxis, man. They were hardcore, and they understood John Adams wrote the Fourth Amendment for a reason, and he had been a prosecutor. Think about that. John Adams was kind of a law and order guy, but yet he wrote the Fourth Amendment to limit search and seizure to a warrant requirement. Because he had been a prosecutor, he had seen what prosecutors can do with unlimited power, and the founders themselves were very, don't tread on me, anonymity. Privacy is anonymity. Part of what I went in there, I went in there a little hot because my kind of opponent or my foil, my debating point on the panel was Carol House. She's a nice person. She's a nice person. She's a veteran, and I salute ... I honor that. She's worked at Fincin for a number of years, so we weren't going to be friends, right? We were going to disagree. I guess we could say we were friends, but we completely disagree about the view of the world. She worked at Biden White House on the crypto executive order that a lot of people had a lot of hope in initially, but didn't pan out. The administration post-FTX flipped and just wanted to burn crypto alive. Anyway, we had a debate, and one of the things that gets me really energized is one of her arguments. She made it while she was National Security Advisor at Biden. She made it here. She says, I'm all for privacy, but privacy doesn't mean anonymity. That really rubs me the wrong way. It's me. Privacy starts as anonymity, and then I, as a sovereign citizen, get to decide what to share with you and when. That's how I view it, and that's how the founders view it. I quoted a case called McIntyre, is the name of the case. Justice Thomas wrote a concurrence in McIntyre. It was a free speech case, not a money surveillance case, but closely related. Supreme Court kind of treats money as speech in Citizens United. So anyway, I think it's an important precedent. In there, Justice Thomas goes into the history of the founders and their understanding of the importance of anonymity, that the First Amendment really requires anonymity of speech. This history is all about the founders, all anonymously bashing each other in print. That's what they use the printing press for, man. It was like Twitter, just an older technology, anonymously, anonymously bashing each other all the time. This was the origins of the feud between Alexander Hamilton. Speaker 3 Yeah, the federal's papers were anonymous, right? Speaker 1 Favors were anonymous, publius, yeah, and they stayed anonymous. Almost all of them stayed anonymous until the 1800s. So for like 30 or 40 years, no one knew who wrote most of them, or I won't say no one, but most people didn't know, unless you really, really were in the circle. And there was another writer named Cincinnatus, who was a frequent cometer and critic of state winner fought it and then eventually won. So there were a lot of these examples of these just really not like they would, they would, they would write anonymous letters and be like, yeah, this guy has a child out of wedlock and he's got he's having an affair and then they would do that each other in the print and everybody would want to go buy this, this soap opera media. Speaker 3 Really, I didn't even know if that's true, so it really was like Twitter. Speaker 1 The founders were such jerks, man, but it's helpful for residents to be because they cared about anonymity. They knew how important it was, and ultimately, they ended in a sophisticated way, too, with political arguments about the good and about what a civil trial should be in the Federalist Papers, but they also had some fun stuff, too. Speaker 3 Well, this is really the fundamental arguments that are being made. Privacy versus security, anonymity, should the government allow for unbreakable anonymity? Should cash be treated equivalently to speech and information? What am I missing? Those are really the fundamental arguments that need to be made. I think those are the primary ones and those are the ones that were coming up during your talks, during the roundtable. Ultimately, how do you see that working out? Obviously, we believe these things. We believe these ideals align with the founding of the country and whatnot and the constitution. But how do you see it actually shaken out? Especially the privacy versus security. It always comes down to, oh, but national security. They seem to always win on that one. We've seen it with the Patriot Act, already to see with the Bank Secrecy Act. How do we win on this one to the point where, yes, we should be treating Zcash and Monero like traditional cash? Speaker 1 Yeah, I think it is a hard fight. It is the last boss. And, you know, we've kind of crypto is one at the SEC and the CFTC. We've pretty much completely won. It's just now just finishing the victory and having a party. Treasury is still a challenge. We've had some victories there. And Coin Center has been great in fighting for those victories. They've kept Fincin and Jack. Fincin has dialogued with Coin Center and listened to them, I think, which is why we got the 2019 guidance that says that if you're not a custodial intermediary, you're not a money transmitter, which is what the tornado cash developers tried to rely on and should have been able to rely on. I think Coin Center had a lot to do with that being created in the first place. So we've made some headway. DOJ stuff still disappoints me. The fact that we might be looking at Keone, not at me or missing Chris, if that man misses a day of the holidays, I'm gonna be angry. At the same time, like that day, the same day we did this roundtable was the day Trump said, Oh, should we all look in the party? I was like, I was walking out of that roundtable and I saw it on Twitter and I just like jumped up in the air right outside the SEC. I was like, Yeah, man, I shouldn't say that on that. I'm so excited about that because because he's a good guy and we should talk about samurai a little bit too. Yeah, I don't know if there was there's always been a little bit of love between men are in the same run guys, right? He built this. Speaker 3 Yeah, yeah, yeah, yeah. I remember they were adding Monero. They added Monero to Samurai, but they never doubled down on Monero. They always said Monero is just a tool, but really, we're Bitcoin maximalists, and that's a store of value. That's what it should be. So there was always a little David of energy there. Exactly. But no, they are, I'm sure they're more pro-Monero than ever, seeing how things have played out with Bitcoin. Yeah, it is insane what's happening with them, and it does feel like a little miracle that Trump, like Word did get to Trump, props to that reporter who brought it up there. Right? Wow. Yeah, I don't know who that guy, yeah. Who is he? Good for him. I would say it looks pretty positive. What do you think? Do you have any good insight into that? Speaker 1 Not really. I mean, I don't know the White House or the DOJ very well. My guess is that The Attorney General who's doing a lot of good work in a lot of good ways It's probably listening to the national security prosecutors. She's got there and that's that's our problem. That's our challenge on these But you know It's better than was before. I just hope hope hope and pray that Keone gets to stay home He's good. He's good, man, and I know you've you've had on oh, by the way, I never told I don't think I ever Came here and told you this. Well, I volunteered on US vs. Stirling off And work with Tor Eklund and Mike Hastert and do you know how I got to that taste? I was listening to Monero talk We're interview of them on Monero talk and I was like, wow, this is an injustice This is horrible and I emailed Tor Eklund right? Hello after I listened to that and I said I have to get involved in this in some way I'll be willing to work for free if I have to better to get paid But I work for free if I have to and did it working for free because the government froze all of his assets They were able to raise money to help a little bit. But anyway, it ended up being pro bono, but it was thank you for doing that Man, yeah It was it's something we could talk about all night as well But yeah, I came to it by listening to Monero talk and listening to you with them and I think you They went to Monero topia to also present about yeah, they've been Speaker 3 there a few times you should come to Manero topia man you would you would freakin love it yeah I think I would Speaker 1 I think I would. Speaker 3 It's happening in it's happening in February. I don't know if you could somehow swing it. That would be amazing. It's City I know I know I know that's the bring our super into private schools. You can bring them down, man Yeah, I'm bringing my kids. My kids will be down there Others will be bringing their kids. It's the 12th to the 15th in Mexico City and actually I've been trying to get Zcash involved, but you know, there's this drama there between the Monero and Z cashers I've been trying to like heal those wounds and make bridges See, um, thank you for side. Oh, you've always been like that. You've always Speaker 1 thank you for doing that I mean I really think zuko was sincere and wanted to see you guys get funded for this, yeah Speaker 3 No, I think he was, but I think Vlad, I don't know how close you were following it, but Vlad was definitely just trolling because... Oh, really? Yeah. Like I said, it's very generous of Z-Cachers to start donating to Monero things, but they're trying to play it like Monero's funding system is fundamentally broken. But if you look at it, millions of dollars have been funded throughout the years for developers, and the full chain membership proof that that fundraise was for one particular developer, for one particular thing he was doing. He's been continuously funded throughout the years. And I'm sure he would have been funded in this instance too. And then I think Vlad just took it as an opportunity because Vic had mentioned like, hey, I just donated. Let's get this funded. No, you cheap bastards. Nobody else is donating yet. And Vlad ran with that as, nobody donates in Monero. Their funding model is broken. So there was that aspect to it. But hey, if Z-Cachers want to start trolling us by making donations to our fundraisers, by all means, please. Speaker 1 the I've seen a person a lot and I use the agree with them the that I'm not patrolling at all Speaker 3 He's a big troll. He's a big troll. He actually was the host at the last Monero-Topia, and he was great. He did a good job, but then he's since had a falling out with Monero, as he became more of a Z-Cacher. But instead of just being into both, he's been trolling Monero as he does. I just wanted to protect my boy, too, because he's a great guy. Speaker 1 Because I think oh, yeah Speaker 3 No, I think he was, you know, the more I see Zuko, the more I understand, you know, I think he's obviously, you know, I always had always had mad respect, always had mad respect for the guy, because I knew he was like, literally one of the first guys talking to Satoshi and he, you know, he started working on the privacy thing before anybody else. And he's, he's just an old school photographer. Speaker 1 like work on digital cash pre-bitcoin that had some Speaker 3 You know, I think, but I'm seeing, but I'm also seeing like his personality too. He's just, you know, he's just a nice humble guy from like the Midwest. Like, you know, like, like, I think he like, like, he doesn't like the trolling and the stuff. It's not a style, right? He's offended by it. And I see it. I understand. No negative vibes. If, yeah, yeah, all right. So I think that's, that's cool, man. So, you know, I think you just kind of misunderstood, you know, the big, the Monero people are trying to like to everybody's so based in Monero and like, like, okay, that, you know, there's a little too much of that in Monero. Like they're trying to like act like, you know, we're the most badass people in the world. Right. But like, you know, Zuko is pretty freaking badass too. Right. I mean, I was literally working on Bitcoin with Satoshi from the get go. Right. So before, uh, Matt, Speaker 1 I'm gonna guess about who Satoshi is, it's gotta be Zuko, but I would never say it. Speaker 3 Yeah, yeah. Yeah, he's got to have some guesses for sure. But yeah, that's so yeah, it would be it would be amazing if you could come down because you would be a good bridge between the Monero and Zcash community. I have been talking with them and like they were going to do it. But then like, you know what, given all because that was also to when there was all the beef, it was like the Monero people were attacking the Zcash dev, the one that's like a transvestite. Speaker 1 Oh, that got nasty. I really I have been yeah, I don't know this that works Manero specific, but a lot of people were in it Well, they Speaker 3 It made it look like it was the whole Monero community. It was kind of an attack on the Monero community. Somebody did it to make it look like it was coming from the Monero, you know, it was a bad, it was like really bad, you know, it was like, and so it got to the point where Zcash people just didn't want to deal with us, and so I'm trying to heal those wounds. I think you really stay above the fray, like you don't even notice half this garbage that's out there, which is a group. Thank you. Speaker 1 I have one enemy, the government. I'm there to fight. Speaker 3 I guess what I'm saying is whatever you could do to help me continue to build these bridges, please. Yeah Yeah, yeah Yes, so what uh, let me see what I did take some notes listening to so this this idea of this unbreakable anonymity Do we think the government will ever be okay with us? ultimately like Speaker 1 I think what the best weapon we have is the whole AML KYC construct, the whole Bank Secrecy Act is grounded on this third party doctrine idea that the Supreme Court says, oh, well, you don't have a right to privacy, Fourth Amendment doesn't apply a warrant, it's not required. If all the info is given to a bank, bank is all the info government can go get it because of the third party doctrine. And I have problems with that idea to begin with, but let's start there. That helps us because there is no third party holding custody of your funds when you're trading peer to peer, when you're doing peer to peer transactions, or when you're doing stuff in DeFi for that matter. So if the government tries to overreach and tries to do the things that Carol House wants to do, she's got some wacky ideas. I don't think the third party doctrine is going to give them the constitutional authority to do it. She wants her vision is like, regulate everyone, regulate the validators, regulate the miners. Everybody is a regulated party, and every miner has to KYC people that are interacting with your chain. It's crazy town, right? Just destroy blockchain. There's no reason to use a blockchain if you're doing all that. But the third party doctrine is a constitutional limit on how much KYC AML can grow. Now, there are other issues about regulated exchanges and trying to keep privacy coins on those exchanges. I'd love to see Monero listed on every exchange. There's no reason why it can't be, especially because Zcash is there too, and Dash is in a lot of them. So there's no reason not to. It's harder on Bitcoin if you were going to try to rebuild coin joins. The government's eventually going to go after that. Even if they pardon Keoni tomorrow, he can't go back to doing what he was doing before because eventually they would go after him again. Maybe there's a different way to design it so you have less of an attack vector. I know Samurai was trying to decentralize the call function that helped, or the coordinator function that helped coordinate the coin joins, so that coordination of coin joins, that very limited thing that he did to coordinate coin joins together into batches, would be done by a hundred different nodes rather than just him. I think they were trying to move towards that design. But even still, man, if I was Keoni, I think I'd be done with crypto after all this. Even as soon as he gets support. Speaker 3 No, I'm curious, and I really think he will, but yeah, I'm curious to see what he does after. I mean, a big part of that too is that they were profiting off of it as well, right? So they technically didn't have custody, and that's why it shouldn't have been considered illegal what they were doing. They weren't running a money-transmitting business. They didn't need a license. They never held custody, and that was the advisement that they had received that was being given by governments at the time was that as long as you're not taking custody, you should be fine. But yeah, where they seemed to have crossed the line was in that they were profiting off of it as well too, right? That seemed to be playing into it a lot. Speaker 1 it's part of it and and you know they they can't challenge because they gave the right to challenge with the plea deal but hope we're hoping for pardon from them but I think money transmitter stuff is still I think Roman still has a good shot to challenge that in Roman storm has a good shot to challenge that in court we'll see Speaker 3 Yeah, you mentioned, obviously, Monero should be on all exchanges. I couldn't agree more with you. But do you think there's still something there with the difference between Monero and, let's say, Zcash, Monero being private by default, not having these transparent addresses that exchanges can integrate with? Or do you think that should just kind of, at this point, given what you're seeing, you're understanding the law, there's no reason why Monero should be treated any differently than, say, a Zcash? In the eyes of a regular... Speaker 1 And I mean, even for an exchange that is in a jurisdiction that has the most aggressive version of the travel rule in place, you can still create something so that they have to know the destination of the outflow, but you can share your private key with your exchange. The customer can say, here's the private key of my destination address. And that's not a real privacy threat, but you just have to know the exchange has a record of the first address you sent it to, but then you have to just do a recent after that, right? So they've complied with the travel rule. They saw the address it went to, and they know the person associated with the address it went to, but then you just got to do another hop. And then they have no, if your privacy, if your anonymity is protected by your transaction, by your chain, then you don't have to worry about the exchange knowing that second hop. So yeah, they should be able to re-list the average jurisdiction. Unless I think Europe has a like a, in addition to travel rule, I think Europe's considering like a privacy-going ban that's not in place, but they're thinking about it. Or maybe part of Europe, I don't follow Europe that closely. Speaker 3 Yeah, mica, mica law that they're talking about mica Speaker 1 Part two or something. Speaker 3 Right, yeah. Speaker 1 Yeah, you're might be hopeless but but you know, there's all these attack vectors, right? They've gone after for Bitcoin and for Monero, they've gone after the I forget what's it called the services where people would would meet you in person and trade cash for Monero, like local. Speaker 3 local Monero, local Bitcoin. Speaker 1 look like a local Monera, which is a shame, but Speaker 3 We hit we have I have XMR Bazaar running up and running and you know as far as I could tell we're not doing anything illegal Yeah, if you want to give it all take on that I'll take it but Yeah Speaker 1 I don't think these were I mean these were like trade cash for coins and and they say well, you're Do it one time and it's okay But if you do it too many times you're a business and therefore I'm not actually in their foreign places. Yeah, exactly Speaker 3 Yeah, so people trade Monero for cash in XMR Bazaar and I always tell people, you should make it clear that you don't do it for business purposes, right? Out of a need, you need to exchange Monero into cash at times. So that is happening there. But yeah, that's something they definitely clamp down on. Do you see that coming back? Because you think we move in that direction where those things become more... Was that? Speaker 1 prosecutors are capable of anything. Yeah. Speaker 3 I mean, that's that's the other thing, too, right? I mean, we have we have a seemingly very good, you know, crypto friendly regime right now. They sound like they're even privacy coin friendly at this point. But these regimes change every couple of years. What what is your thinking on that? Like, what what can we do to, you know, prevent the issues that inevitably is going to happen when the regime does change? Like things we can other things we could do now, like you said, you're celebrating at the SEC, you guys have basically won that battle. Any other like kind of key battles in your mind, things that we need to get done before Trump leaves office. So we're ready for the next regime that may not be as friendly. Speaker 1 Yeah, Treasury could codify this 2019 guidance that says that if you're not taking custody, you're not a money transmitter. We can codify that. It'd be great to see some statutory reform of the money laundering statute to limit... I mean, you can pretty much do whatever you want with the money laundering statute these days. And we could talk more about the prosecution against Stirlingoff and the injustice of that. That's a whole other show. Maybe we should do one with... Speaker 3 conspiracy to commit money laundering. It's like. Speaker 1 That's data conspiracy can be anything it can be I watched a prosecutor in that case sit there and tell a jury Any act in furtherance of the conspiracy makes you liable for the whole conspiracy Roman Stirling off Just to dig into that a little bit as a great example and and you know We should have a we should have a show with tour Mike and me about the appeal And and you know kind of post game But the prosecutor's theory there was so Bitcoin fog, you know moved a lot of post silk road Bitcoin I think most of the post silk road Bitcoin moved through Bitcoin fog Roman testified that that back in he was early to Bitcoin bought a lot of Bitcoin early in 2010 so it's hard not to get pretty rich buying Bitcoin in 2010 and He said he wasn't sure whether or not he was involved in a project to create the site Bitcoin fog calm He made a lot of websites at the time. They would always work in this group of sort of pseudo anonymous IT people around the world who'd meet on a billboard chat and they kind of knew each other and some customer would say hey I really want to juice my Google search numbers. Can you guys help my website kind of get some fake traffic? They did shit like that. It's not not that exactly the up-and-up, but it's not money loner And so it did stuff like that juice your Google search presence by creating a bunch of fake websites that come to your website basically did all kind of stuff like that and He says he I don't remember whether I helped him people create this website. We'd come together in a group We'd have an account was with some money in it that went into these intermediary Exchanges like Orem exchange and then we pay for websites and stuff with that Sometimes we pay for it with Bitcoin. So I might have bought it I don't know but I had no idea what it was about or what it would later become When I if I was involved in that website and that might have been how I learned about Bitcoin fog and he later used it and they took his funds out of Bitcoin fog and brought it back to his crackin KYC'd account. So if you're the mastermind, would you really do that with the proceeds of running a mixture? He'd bring it back to your KYC Kraken account and then you send it to gift cards you spend in your life that are also kyc bit cards You know that you can do non kyc bit cards. He didn't he Give cards. He didn't do any of that. He just used kyc gift cards. So he's not some mastermind running Running Bitcoin fog and he lived a modest life too. This is a part of my testimony He was a very modest life. He spent about fifty thousand dollars a year. He bought a Tesla at one point That was the only kind of extravagance, but we showed that whoever ran fog Probably earned about a hundred to two hundred million dollars at least this kid didn't live that life. Not at all I don't know. He lived in a little bit apartment. He he wrote code He tried to create a couple businesses that fails tried to create a VPN service. He could buy Bitcoin You could buy with Bitcoin. Speaker 1 That was his idea, but he'd never got off the ground I mean there's prosecutors throwing a couple of raspberry pies They found in his luggage and being like look how scary Jerry. He's a hacker Raspberry Pies He's and he had a rare very pies in its luggage Must be he must have ran Bitcoin fog didn't he and I mean with the DC area of people who are bored working in the post Office like yeah, what the hell seems right? I mean, that's pretty much what happened That's the injustice of this whole thing But a better part of that was conspiracy that if if he bought the website in 2011 and then for 10 years later He didn't do anything They said that gets that gets you into the whole conspiracy, which is crazy Speaker 3 That's crazy. That's crazy. I mean, hopefully we'll see Trump take action for him as well, right? I mean, is that will be great Is that in the cards? Are you hearing anything about that? Well Speaker 1 I was really pleased that Ross mentioned Roman Sterling off. He just did a call for more pardons He said there are people in my situation that deserve the same pardon I got and he listed all the people I would have listed Sterling off Roman storm Keone and Bill And someone else I wasn't familiar with but he he called for that. So hopefully that's gonna bring the attention that we need Speaker 3 Oh, Ian, Ian Freeman, probably in for the yeah. He's another one. Yeah, man, so I hope we I hope we do see Trump take action. I don't know. Maybe maybe he'll maybe he'll I don't know how what he's what he's waiting for. I mean, who knows who knows what the guy you never know. You never know what that guy is going to do. Speaker 1 We made it we made an alliance with him crypto and libertarians for Trump and we said part of the deal We want to pardon for Ross and he held up his end so hopefully he he understands that this Alliance libertarians and crypto enthusiasts and Privacy focus people we voted for him So, you know, hopefully That's a good deal for him and he knows that this is something we care about and you know what? I'll give a lot of credit to You might not think it's cypherpunk to work with a DC Trade Association But you know what the Blockchain Association those guys are based as could be like they just had a policy summit this week I'll give them a lot of credit. They Were members of the Zcash Foundation they had Roman storm Present at like a 10-minute video to all the members of the Blockchain Association Saying this is where I am. I'm reporting to jail soon But I'm Eventually after reports of jail, but I'm still appealing there's a new hearing with the judge Thank you for all your support and a bunch of members of be a paradigm wrote like a million dollar check to him So I like my blockchain Association people they're good for privacy in the back and Romans play here Which is good. No, there's no other trade association that does stuff like that Speaker 3 That is awesome. So do you see any other events coming down the pipe in terms of government regulators talking about privacy and surveillance? Not like this. Speaker 1 It's a big shot. This is our big shot. Okay. Yeah, but we got to keep fighting Speaker 3 God damn it man, I wish you would've said Monero just once. You would've just said a- Speaker 1 And it's not much, you know, I wanted to talk I want a Speaker 3 It's hard to fit fit everything in. Yeah. Yeah. No, I'm buying it. I think it's been arrow. I'd mention it I know I'm just I'm just busting your chops But I want I mean it is it is a little weird from a Monero We can't talk about that for a second I like so like the people involved in this obviously Z cash you go like yeah 100% and I get how they got there Right because they they do lobby right? They they know guys like you right? They know how to you know and they and they have They have the group of people to work on that Monero a group Speaker 1 Like it's like two or three of us did Speaker 3 Yeah. All right. Well, you guys are very, very impactful. Well, thanks. Yeah. But, you know, but like some of these other projects, like there were things I never even heard of, right? Like they're like, oh, I'm working on this project. Like, I'm like, why were the like, why were those projects there? It was like, seems a little weird. I mean, I guess because those are the projects that are really trying to work with regulators is maybe like what I was sensing there. Yeah. And there were some situations Speaker 1 Me and them because there are some providers that say we do compliant privacy and I was like We know what that is, but I don't like it already. What do you mean compliant privacy? I'm here for cypherpunk We're here. We're here to be a legal extra judicial. That's what the point of cypherpunk guys but now they're selling compliant privacy products where You know you you give them some information and then they let you do some stuff. That's not so available whatever not for me and I was there to say like There are also some people they're talking about zero knowledge proof compliance like you can build Zk proof ID that only shows that some aspect of you, but not everything about you I am American. I'm not whatever and I said, you know that that toolkit for Financial institutions that have to do a milky see that have no choice that toolkit can make that regime less onerous I get that that's fine, but don't impose that on defy And on the rest of crypto don't by rule or law regulation or nudge from the regulators because that's going to destroy what everybody's trying To build here that like it's not okay for It doesn't make it okay to have onerous compliance requirements in a defy smart contract Like native in the smart contract that doesn't make it cypherpunk It's still a tyrannical limit of my freedom and I try to give some examples They are like a compliant compliance providers zk compliance providers What if what if the new rule is no illegal immigrants in the US can ever use defy? Are you gonna be proud to implement that into smart contracts? What if the rule is, you know, don't whatever don't buy a gun don't pay for an abortion left or right you can find your example of some political thing that people wanted to ban you from paying for and So I was there to ask the question. Hey compliance providers Are you ready to do that because they're in government who would want to you to implement that form made them kind of awkward. They're like Speaker 3 They didn't really respond to that, right? They didn't really have a response, right? Speaker 1 Not really, but I was there to make the point and. Speaker 3 Yeah, you basically said how tyranny of the smart contract Speaker 1 the smart contract that's what I want to avoid that's what I would Speaker 3 Yeah, I like that. I like that. Let me quickly play a Monerotopia conference ad for it's a minute long and we'll jump back and we'll close things out. I know you got to get back to the fam life. So here we go. Here we go. Speaker 2 Do you love coffee and Monero as much as we do? Consider making gratuitous.org your daily cup. Pay with Monero for premium fresh beans and if you like what you taste, send a digital cash tip directly to the farmers that made it possible. Proceeds help us grow this channel, gratuitous and Monero. Speaker 3 all right that was cool now it is it is just like that it really really is it's great i'm telling you it's for it's Speaker 1 Give you actually that out of you just trying to show me because it looks really cool. I'm ready to go Speaker 3 Even that music they played live that song was played live that we have a live music that takes that goes down over there and We have big marketplace. Everybody accepts Monero for the weekend. It's it's it's it's it's it's fun Yeah, man. What do you think? What do you think about privacy season? Obviously you're partaking it in a very big way By you know showing up at the SEC and and shilling Privacy coins privacy tech, but what do you think in general what we're seeing here like that the price, right? It seems like everything else is kind of and Z cash obviously like 10x Monero has been holding up pretty well. I'd say compared to the others are just what are kind of your general thoughts there on the privacy season? Speaker 1 Yeah, I love it man. I love it and it's gonna it's gonna build development. You know, I'm glad For your price action your community. I'm glad for it in mine I don't own much of anything and I'm down bad on so many So many defy DJ and things I've done that haven't worked out This is not me getting rich, but this is this is it's a great feeling when you know in the Zcash foundation Like two or three years ago We were looking at like we've got a year or two of runway and then that's it and now dude now It's all we we have the public we have public filings of our finances as a foundation And then we also have a lockbox that comes from the founder's reward goes from a lockbox now And then we have to have a community decide what to do. But between those two there might be I don't know between our foundation that there might be like 70 80 90 million dollars worth of funding for Zcash development in the next 10 20 years This is great. I like two years ago. I was willing to ride this whole thing to zero and now we're Next 20 years, you know, that's great. Yeah, that's great. All this dead Speaker 3 Yeah, I mean the bootstrapping of crypto does work quite well when it goes up. But I mean, are you concerned about perhaps it being too speculative, too parabolic? And obviously Monero, maybe this is just cope in the Monero community, right? But the positive of not being on exchanges is, yeah, price doesn't pump as much, but it also doesn't dump as much, right? It's like it just kind of organically goes up out of need. Whereas with Zcash, you saw this, you know, mega rally, which Speaker 1 I can't it's drives me crazy what over now. I just forget Speaker 3 That's like being on a rollercoaster sorry, but any concerns there with it like you know is out here Speaker 1 Yeah, all my stuff is in cold storage, and I don't have the C phrase It's hidden in all kinds of places you we would have to go to accountants and lawyers and grandmas and grandpa's World if you want to wrench attack me, so let's just say that exactly yes Speaker 3 Yeah, no, everybody should know about me as well, right? Like, yeah, you can hit me in the head with a wrench, but that's not gonna help you, you know? I don't have, you know. Speaker 1 the red sack the Speaker 3 Exactly. You could have the Monero I have on my phone. But yeah, no, but are you concerned about volatility there with Zcash? Obviously, yeah, it's great today, whatever, 90 mil, but things can go volatile in the other direction. Speaker 1 Our lockbox is all Zcash, so it's obviously subject to that volatility. As a foundation, we are a sizable portion of our holdings are in Bitcoin. So we're Zcash and Bitcoin. That helps us a little bit. I mean, Bitcoin's definitely helps too, but it's a lot more anchored than Zcash have been. And I give a lot of credit to our last and second director. He diversified into Bitcoin, and we've got a lot of crap in the community for it. You've got to be a true believer. You've got to be Zcash only, and our view was like, we can actually fund more Zcash stuff if we're diversified, at least Bitcoin diversified. And that's proven out. I mean, Bitcoin did it 10X while we were about half Bitcoin invested. So that thesis proved out a lot. It worked out pretty well. Oh, yeah. More resources now to spend on Zcash. Speaker 3 That's great. Yeah. I mean, I don't think the Manero community would have done that. Right? They're like, Manero only baby. So no matter what. Speaker 1 High Without a lot of exchange press Maintaining a solid price and I don't some an era. I Don't follow it. I use cake all the live. I use cake wallet to buy stuff. It's great product I like I like your I like Vic and what he's built and and I think dark, right? We were slower to get Zashu wallet, but a lot of the similar design features are in Zashu to cake, but But yeah, I like cake wallet cake my school Speaker 3 Yeah, kick is fantastic and I think they will be adding Zcash at some point, I know. Speaker 1 Is that going to be a, I knew Vic got a lot of stress for that. Is that going to, are people going to be mad at him if he does that? Speaker 3 I don't know at this point. I don't think so I mean cuz he has the Monero calm wallet, which has been arrow only and cake wallet Obviously, you know, there's a lot of cryptos on there, right? So I don't know what the argument would be as to why not Z cash, right? But like there's there's other things on it looks like like coin on there. I like like mister I mean Z cash is much more, you know much more although I you know, you have like coin and web but Yeah, I was I had I had a good thought on the tip of my tip of my tongue here What else what else were you saying there? You were talking about the Monero's Speaker 1 and Speaker 3 Oh, the thought did come back. Yeah, so just we'd like to get your opinion on this. I mean, the way I'm looking at kind of a narrow versus the rest of crypto and Zcash in particular, right? Because I mean, they're both privacy coins, right? They're both really trying to do the same thing, right? They're trying to be digital cash. And you're alluding it to, right? The fact that Monero isn't on exchanges. How do you view that, right? Monero seems to be the more detethered crypto, right? The most detethered of all, I'd say, right? It hasn't integrated with the system at all as opposed to Bitcoin, right? There's Bitcoin ETFs. There's Bitcoin, right? There's companies that are holding Bitcoin in their treasury. There's whatever. It's on every exchange. Zcash, right? It's listed on all the exchanges. It's done things. It's made design changes so that it can better integrate with the existing financial system. Monero has done the opposite. I'm just curious. Do you see value in that concept itself of kind of like a crypto that remains detethered from the financial system? Speaker 1 Well, I mean, you guys do you, we'll do us. Speaker 3 No, I'm just kidding, and like if you think about that as like Speaker 1 What's that your design is great for you and our design is great for us I remember this meme I saw years ago when I first started getting the privacy coins and it it turns out to be true It's um or not. It's true. It's an exaggeration. I was just an exaggeration, but like all memes are but it was something like See cash is for computer science PhDs computer science nerds a choreography PhDs and Math at math conferences Monero is for people who sell heroin online Speaker 3 Yeah, yeah, yeah. Speaker 1 saying that I'm just saying it's like it's like the meme is showing like scientists do your science nerdy stuff like live and and and and survive out there in the bush like like Speaker 3 Yeah, like grass, grassroots using it from day one. Speaker 1 I think it's great for the world that both experiments are going on. Speaker 3 Yeah, no, I was just curious, and like you said, and you do you as well, right? And I definitely see great value in Zcash for sure. Like I said, anybody who's a big Zcash person, I think they should hold a hedge in Monero. Anybody who's a big Monero person, I think they should hold a hedge in Zcash because they're both trying to do something in that same piece of the pie, right? Of being the digital cash tool, but taking slightly different approaches. But yeah, I was just curious if you see value in that concept of like a detethered version, you know, one that really stays interesting. Yeah, it's cool. Speaker 1 Yeah, yeah, and I think we've got some of that too. I mean we've we've I'm very proud that we The percentage of zek that is shielded has been going parabolic right forget that so that I'm I don't care about the Speaker 3 that that's very yeah you know I mean that caught my attention for sure it's like okay it's like I think it's Speaker 1 six million out of 18 million like it's we have anonymity set now for privacy where that was a challenge in the past and that's that's partly wrapped up in zashi wall it makes makes it makes make it easy and and transfers into zashi or private by default shielded by default um so yeah Speaker 3 Good for us. Awesome, man. Thank you so much for jumping on. I know you had a big week this week. Yeah, well, thank you. I enjoyed it. Speaker 1 Thanks for the kind words about Zuko. I said I said I'll come on if you say something nice about Zuko, so yeah you did Speaker 3 I had already said it. I showed you how to, you didn't even have to tell me. I had already said it. Speaker 1 I don't even need to say it. Thank you for doing that. Thank you for having me on. I appreciate it. Thank you for having me. I appreciate that. Speaker 3 You got it. Yeah, let's stay in touch. If you do, let me know. Maybe you can come down to Monero Topia, Mexico. Maybe it's not. Speaker 1 It does sound like fun. I just gotta ask Mrs., but it very much sounds like fun. Speaker 3 I will DM you and try to follow up with you. Or maybe at the very least, maybe you could also just then try to find me somebody else that can come rep Zcash in some way. I know you wouldn't be repping Zcash per se, but you would at least bring some Zcash vibes, whatever it is you come and talk about. But maybe you could also find somebody that could actually come and rep on their behalf. Speaker 1 Yeah, I'll find somebody and go down to Mexico City. Speaker 3 All right, then we'll be attached have a good one. Merry Christmas. Appreciate it. Merry Christmas dad. All right Speaker 1 See ya. Speaker 2 Hi, Monero Land. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to our show on YouTube, Odyssey, iTunes, Spotify, or wherever you listen to podcasts. Go to MoneroTalk.live for a full list of places where you can watch and listen. If you want to interact with us, guests, or other podcast listeners, you can follow us on Twitter, Mastodon, or any of our social media platforms. MoneroTalk is also made possible from contributions by viewers and listeners like you, and supporting us is easier than ever by typing in MoneroTalk.crypto in your Monero.com or cake wallet send address field to send us a tip. Once again, thanks so much for listening, and we look forward to being back next week.