Latest / The Paul Barron Crypto Show / Trump Strikes CLARITY Deal!🚨Vote Incoming!🔥INTERVIEW Solana Policy Institute Kristen Smith

Transcript

Trump Strikes CLARITY Deal!🚨Vote Incoming!🔥INTERVIEW Solana Policy Institute Kristen Smith · The Paul Barron Crypto Show

• 0:00
  Speaker 1: A clarity vote is incoming. It is bound to happen today.
• 0:03
  Speaker 1: We're going to be breaking all of that down, so
• 0:05
  Speaker 1: you don't want to miss it.
• 0:06
  Speaker 2: It's going to be good.
• 0:08
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• 0:59
  Speaker 1: in just a few taps. I want to talk about
• 1:02
  Speaker 1: the timing here, because timing is going to be almost
• 1:05
  Speaker 1: critical here. Even though that says sixteen days, that actually
• 1:09
  Speaker 1: will shrink a lot, guys, because you're talking about certain
• 1:11
  Speaker 1: days of conerences is not in session. You also have
• 1:14
  Speaker 1: weekends involved in this, so this could get very narrow.
• 1:17
  Speaker 1: So I wanted to bring on one of our experts,
• 1:20
  Speaker 1: and that of course is Kristin Smith, who's coming over
• 1:23
  Speaker 1: from the Salona Policy Institute.
• 1:25
  Speaker 2: Nice to see you again. How are you.
• 1:27
  Speaker 3: It's good to be back, Paul. Thanks for having me.
• 1:29
  Speaker 3: It's a really critical time.
• 1:31
  Speaker 1: Yes, So we are on the last leg of everything.
• 1:34
  Speaker 1: I think Bess and said, we're like the one yard line.
• 1:37
  Speaker 1: I'll show a tweet on that. But let's get into
• 1:39
  Speaker 1: where this goes, because there are some big issues. One,
• 1:43
  Speaker 1: the probability jumped significantly this week actually in the last
• 1:47
  Speaker 1: few days, from what was around thirty two percent up
• 1:50
  Speaker 1: to where we're hovering right now with a forty eight
• 1:52
  Speaker 1: percent chance. Kristin, what has happened to cause this major move?
• 1:58
  Speaker 3: Yeah, well, listen, I think it's a important to remember
• 2:00
  Speaker 3: when we get to the end stage of the legislative
• 2:03
  Speaker 3: process like this, there are a lot of highs and
• 2:06
  Speaker 3: lows and ups and downs. I think you know, we
• 2:09
  Speaker 3: go from good weeks and bad weeks, to good days
• 2:11
  Speaker 3: and bad days, to good hours and bad hours, and
• 2:14
  Speaker 3: I think we're somewhere between the hours and days right now,
• 2:16
  Speaker 3: where everybody gets really excited because there's been a positive development,
• 2:20
  Speaker 3: and then you know there will be a negative reaction
• 2:22
  Speaker 3: and people are bad. But I think the important thing
• 2:25
  Speaker 3: to know is that is actually part of the process,
• 2:27
  Speaker 3: and that if we weren't having these highs and lows,
• 2:30
  Speaker 3: I would actually be more worried about the outcome of
• 2:33
  Speaker 3: the legislation. The fact that these conversations are happening, I
• 2:36
  Speaker 3: think is really really critical.
• 2:38
  Speaker 4: So you're right.
• 2:39
  Speaker 3: We only have about two and a half weeks left
• 2:43
  Speaker 3: before the August recess. After the August recess, it becomes very,
• 2:47
  Speaker 3: very difficult to find enough time to move. But we
• 2:51
  Speaker 3: did have a really big breakthrough yesterday and that the
• 2:55
  Speaker 3: White House and President Trump himself has signed off on
• 2:59
  Speaker 3: some level of ethics for visions. We have not seen
• 3:03
  Speaker 3: the language yet. The the White House has sent what
• 3:07
  Speaker 3: they have agreed to up to Capitol Hill, and today
• 3:11
  Speaker 3: Republican senators are meeting Democratic senators. I don't believe have
• 3:15
  Speaker 3: seen the language yet, but they are also meeting and
• 3:18
  Speaker 3: discussing what they need, and so you know, folks are
• 3:21
  Speaker 3: starting to sit down at the table and really hone
• 3:24
  Speaker 3: in on, you know, exactly what they need in order
• 3:27
  Speaker 3: to support this bill.
• 3:29
  Speaker 4: So I think it's really promising.
• 3:31
  Speaker 3: I think, you know, the next step is we really
• 3:33
  Speaker 3: need to see the language, you know, because when the
• 3:37
  Speaker 3: language comes out, you know, that will be the public
• 3:40
  Speaker 3: will be able to react to that. The full you know,
• 3:43
  Speaker 3: the senators who have to vote on it, will be
• 3:45
  Speaker 3: able to react to that. And so I think what
• 3:48
  Speaker 3: we're we really need to see that as quickly as
• 3:50
  Speaker 3: possible because once that's out and people can see it
• 3:53
  Speaker 3: and react to it, then they can go file the
• 3:56
  Speaker 3: motion to proceed and kick off the clock to getting
• 4:00
  Speaker 3: the series of votes needed to get this done.
• 4:03
  Speaker 4: I also think once they file the motion.
• 4:04
  Speaker 3: To proceed, that will force any negotiations on any outstanding
• 4:09
  Speaker 3: issues that may exist. But yeah, listen, we're in the
• 4:12
  Speaker 3: thicket things. I think I agree with Secretary Bessett. We are.
• 4:16
  Speaker 3: We are at the one yard line, maybe the two
• 4:18
  Speaker 3: yard line, but we are very close to the end
• 4:21
  Speaker 3: zone here, and I think that, you know, I get
• 4:25
  Speaker 3: a little bit more optimistic every day that this is
• 4:28
  Speaker 3: going to get done and you know there's a real
• 4:30
  Speaker 3: pathway here.
• 4:31
  Speaker 4: To do it.
• 4:32
  Speaker 5: Well.
• 4:32
  Speaker 1: Of course, one of the biggest scenarios has been and
• 4:35
  Speaker 1: we've talked about this what Senator also Brooks continues to
• 4:38
  Speaker 1: push on and this is what her statement is is
• 4:40
  Speaker 1: an unseerious offer and says she wouldn't support the Ville
• 4:44
  Speaker 1: basically around this enforcement option and this is a reference
• 4:48
  Speaker 1: to ethics. But she also left it open saying, hey,
• 4:51
  Speaker 1: we're going to keep working on the floor to get
• 4:52
  Speaker 1: the agreement that holds us all accountable, which I thought
• 4:55
  Speaker 1: was an interesting statement, holds us all accountable. Does that
• 5:00
  Speaker 1: mean that this could extend into Congress and maybe into
• 5:03
  Speaker 1: other areas.
• 5:05
  Speaker 3: Yes, No, I think the way that it's been described
• 5:08
  Speaker 3: to me is that this is a provision that would
• 5:11
  Speaker 3: apply to the president, to the spouse, to the Vice president,
• 5:16
  Speaker 3: and to Congress. And so you know, I think that's
• 5:19
  Speaker 3: important because whatever they come up with is something that
• 5:23
  Speaker 3: everybody is going to have to live by. And I
• 5:26
  Speaker 3: actually think that's a good way to do it because
• 5:28
  Speaker 3: it makes it not be too burdensome to one person
• 5:31
  Speaker 3: versus the other. And so, yeah, I think that that's important.
• 5:35
  Speaker 3: And I think, you know, the senators realize that, and
• 5:39
  Speaker 3: I think that will sort of narrow the window within
• 5:42
  Speaker 3: which they're they're working. And so of course we all
• 5:44
  Speaker 3: need to see this again that these are You know,
• 5:46
  Speaker 3: there's a lot of rumors flying around Washington about what's
• 5:49
  Speaker 3: what Trump has agreed to, you know, what the Democratic
• 5:52
  Speaker 3: senators want. I think there's a couple of key issues
• 5:54
  Speaker 3: that have been spoken about publicly, but nobody's actually seen
• 5:57
  Speaker 3: the text, and so I think I think getting that
• 6:00
  Speaker 3: out is a really really important step.
• 6:02
  Speaker 1: Well, someone that I'm sure has is privy to a
• 6:05
  Speaker 1: little bit of the taxes bestent and with his statement,
• 6:09
  Speaker 1: you know, we've been talking about it at the one
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  Speaker 1: yard line. I mean, Kristen, come on one yard line.
• 6:14
  Speaker 1: This seems to me like you are right there. So
• 6:17
  Speaker 1: just speculate. What do you think they have done to
• 6:21
  Speaker 1: be able to get best and to be this committed
• 6:24
  Speaker 1: that he thinks this is going to go through?
• 6:27
  Speaker 3: Well, I mean, I you know, you have to look
• 6:29
  Speaker 3: back and see how long it's taken us to get here, right,
• 6:31
  Speaker 3: I started the Blockchain Association where I previously worked came
• 6:37
  Speaker 3: together eight years ago, you know, the summer of twenty eighteen,
• 6:41
  Speaker 3: and at that time there was a lot of uncertainty
• 6:45
  Speaker 3: and everyone knew we needed to come together and start
• 6:47
  Speaker 3: laying the groundwork for legislation. So we've seen five or
• 6:51
  Speaker 3: six different versions of market structure legislation.
• 6:54
  Speaker 4: Over the past eight years.
• 6:56
  Speaker 3: We're now to the point where, you know, the House
• 6:58
  Speaker 3: is past the Clarity Act. Both the Senate ad Committees
• 7:01
  Speaker 3: and the Senate Banking Committees have passed the Clarity Act,
• 7:04
  Speaker 3: as Leader Foon has said, they're going to bring it
• 7:07
  Speaker 3: to the floor. President Trump has signed off on some
• 7:10
  Speaker 3: degree of ethics language. You know, this is like the
• 7:13
  Speaker 3: month and the moment, and so you know, when I
• 7:16
  Speaker 3: see something about the one yard line, you know, we've
• 7:19
  Speaker 3: genuinely come so far, so much further than we ever
• 7:22
  Speaker 3: have as an industry before. And I think that, you know,
• 7:26
  Speaker 3: it's probably that breadth of history that Senator Bestin is
• 7:28
  Speaker 3: talking about.
• 7:29
  Speaker 4: But you know, I do think we're closed.
• 7:31
  Speaker 3: I think the real negotiations are going to happen in
• 7:33
  Speaker 3: the you know, the next couple of days, and you know,
• 7:36
  Speaker 3: we could see some action on the Senate floor starting
• 7:41
  Speaker 3: later this week and then probably headed into next week.
• 7:44
  Speaker 1: Okay, So for me, I look at this, and I
• 7:47
  Speaker 1: wonder to what extent this ethics provision could be really
• 7:52
  Speaker 1: routed in because you've got I think the Democrats have
• 7:55
  Speaker 1: been very very vocal about this. Obviously, it's one of
• 7:59
  Speaker 1: the cornerstones of what many of them have kind of
• 8:01
  Speaker 1: points to. Bernie Moreno was talking about this right here
• 8:05
  Speaker 1: where he said, this is the most aggressive ethics language
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  Speaker 1: in the history of the United States.
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  Speaker 2: If that were the case, if that really were the case.
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  Speaker 1: What would the Democrats complain about, If this in fact
• 8:18
  Speaker 1: is truly that, what would they have to complain about?
• 8:22
  Speaker 3: Just give me the Yeah, well, listen, I think this
• 8:24
  Speaker 3: is not so much about the policy of, you know,
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  Speaker 3: how to have good ethics, but it is much more
• 8:32
  Speaker 3: the politics of it right now. And so you know,
• 8:35
  Speaker 3: I think anytime President Trump says, hey, this is my plan,
• 8:38
  Speaker 3: you know, it's not the Democratics and Democrats and sink
• 8:42
  Speaker 3: to be like, yes, we will go with your plan,
• 8:44
  Speaker 3: you know, they're going to try to negotiate. And until
• 8:46
  Speaker 3: there's that moment, until there's that forcing function of a
• 8:50
  Speaker 3: vote where they really need to decide yes or no,
• 8:53
  Speaker 3: you know, they're going to kind of try to continue
• 8:54
  Speaker 3: to negotiate.
• 8:55
  Speaker 4: I think that's just good.
• 8:57
  Speaker 3: You know, those are the skills that they have, and
• 8:59
  Speaker 3: they know they know how to use them. And so listen,
• 9:02
  Speaker 3: I think, you know, from what has been rumored to
• 9:05
  Speaker 3: be in this deal, I think, you know, President Trump
• 9:08
  Speaker 3: has come very far.
• 9:09
  Speaker 4: I think Bernie Marino's right.
• 9:10
  Speaker 3: I mean, this is, you know, kind of unusual to
• 9:13
  Speaker 3: have something apply to a specific type of asset like this.
• 9:17
  Speaker 3: This is highly highly unusual, and I you know, I
• 9:19
  Speaker 3: give credit to President Trump for agreeing to that. But
• 9:22
  Speaker 3: you know, we also like this is a bill that
• 9:25
  Speaker 3: absolutely needs sixty votes, and that means you're going to
• 9:28
  Speaker 3: have to have some Democrats on board and to ask
• 9:31
  Speaker 3: the Democrats to support you know, their Donald Trump's top priority.
• 9:36
  Speaker 3: You know, they're going to need to be able to
• 9:39
  Speaker 3: explain to their constituents and others that they were able
• 9:42
  Speaker 3: to get something in return.
• 9:43
  Speaker 4: So, you know, I think this is this is how
• 9:45
  Speaker 4: negotiations happen.
• 9:47
  Speaker 3: I you know, I keep saying President Trump knows the
• 9:50
  Speaker 3: art of the deal.
• 9:51
  Speaker 4: I like to think he knows what he's doing.
• 9:52
  Speaker 3: And I think, you know, the Democrats that are in
• 9:55
  Speaker 3: the room on this are are very capable as well.
• 9:57
  Speaker 3: So you know, we need to let the process play out.
• 9:59
  Speaker 3: But the important thing is there is a table. People
• 10:01
  Speaker 3: are sitting at it and they're talking, and you know,
• 10:04
  Speaker 3: these these are the ingredients we need to get this
• 10:06
  Speaker 3: cross finish line.
• 10:08
  Speaker 1: Here's the most important question, and that is does Senator
• 10:13
  Speaker 1: Warren vote yes?
• 10:15
  Speaker 2: If she's never gonna happen? Okay, never gonna happen.
• 10:20
  Speaker 4: We gave up on her long ago. Let's we're not
• 10:25
  Speaker 4: going to try it. We're not going to.
• 10:27
  Speaker 1: Try We're going to all right, so let's go there.
• 10:32
  Speaker 1: So focusing elsewhere, Uh, this was an interesting development that
• 10:37
  Speaker 1: I thought, this actually gave me a little bit of
• 10:39
  Speaker 1: hope here.
• 10:39
  Speaker 2: And this was Patrick Witt.
• 10:41
  Speaker 1: We did a show and we mentioned this not too
• 10:43
  Speaker 1: long ago in reference to Patrick Witt had a military
• 10:46
  Speaker 1: duty that he was going to be going and going
• 10:48
  Speaker 1: to so he was gonna stepping down and we announced
• 10:51
  Speaker 1: it here on the show. I thought, Okay, he's you know,
• 10:52
  Speaker 1: he's got to go serve No big deal, bad timing here.
• 10:56
  Speaker 1: But I asked the question, why can't the president is
• 10:59
  Speaker 1: call somebody say hey, listen, the guy's in the middle
• 11:01
  Speaker 1: of something. Can he just do a couple of weeks
• 11:04
  Speaker 1: here and get this done? And sure, enough he got
• 11:08
  Speaker 1: this somebody made the phone call because the guy who
• 11:12
  Speaker 1: was replacing him, Harry Jung.
• 11:15
  Speaker 2: I mean, this is banker one oh one. So I
• 11:18
  Speaker 2: was a little concerned about that.
• 11:20
  Speaker 1: In terms of that stepping up, that's just my conspiracy theory.
• 11:23
  Speaker 1: What do you think it is Patrick going to walk
• 11:25
  Speaker 1: this through the line and say, hey, we finally got
• 11:27
  Speaker 1: something done.
• 11:29
  Speaker 3: Yeah, I know, listen, I think I think Patrick is
• 11:32
  Speaker 3: here for the for the long run. I think he
• 11:34
  Speaker 3: wants to see this through. And I you know, credit
• 11:37
  Speaker 3: that the folks, you know, with the National Guard and
• 11:40
  Speaker 3: the White House and others that recognize that. I mean,
• 11:43
  Speaker 3: he is He's the quarterback of this football game, so
• 11:46
  Speaker 3: we need him in that position. And I think the
• 11:49
  Speaker 3: fact that you know, they were able to work out
• 11:51
  Speaker 3: for him to stay is incredibly bullish because I don't
• 11:55
  Speaker 3: think this is going to be done by Friday.
• 11:57
  Speaker 4: I think that was supposed to be his last day.
• 11:59
  Speaker 4: So listen, I think he would have done a fantastic job.
• 12:02
  Speaker 4: You know, he was at the CFTC before. He knows
• 12:04
  Speaker 4: these issues very well.
• 12:06
  Speaker 3: But it turns out Harry is now actually going to
• 12:08
  Speaker 3: be the one leaving, but Patrick is going to stay
• 12:11
  Speaker 3: and I think, you know, that makes sense. He's been
• 12:13
  Speaker 3: in the weeds on this for the past year. He's
• 12:15
  Speaker 3: built up relationships with the senators. He knows the issues
• 12:18
  Speaker 3: inside and out. So I think the fact that he's
• 12:21
  Speaker 3: staying is incredibly bullish.
• 12:23
  Speaker 2: Yeah, it's a it's a bullish sign.
• 12:25
  Speaker 1: I think going going into this another bullish sign that
• 12:28
  Speaker 1: I think is starting to develop. But granted, I am
• 12:33
  Speaker 1: highly skeptical, only because I have seen this happen so
• 12:36
  Speaker 1: many times, and that is with the banking side of
• 12:38
  Speaker 1: things and the ABA very powerful lobby. You get to
• 12:41
  Speaker 1: go head to head with them every week. But I'm
• 12:44
  Speaker 1: looking at some of the data coming out of some
• 12:46
  Speaker 1: of these reports and earnings calls, and I saw something
• 12:50
  Speaker 1: that was very interesting, and that was the deposits. Deposit
• 12:54
  Speaker 1: averages are up seven percent year over year, So that
• 13:00
  Speaker 1: I kind of blew up this idea of flight of
• 13:02
  Speaker 1: capital in a bad way, I think for the bank.
• 13:08
  Speaker 1: So dare I say, has the ABA lost this battle?
• 13:14
  Speaker 3: I mean, I think they've certainly lost credibility because you
• 13:17
  Speaker 3: can't go around saying, oh, this is deposit flight, this
• 13:20
  Speaker 3: is hurting us, and then you know, have JP Morgan
• 13:22
  Speaker 3: come out and have the record profits, right, I mean,
• 13:25
  Speaker 3: it's just not a real argument. I think the bigger
• 13:28
  Speaker 3: problem is the banks don't have anyone on the Hill
• 13:31
  Speaker 3: that is looking to go to bat for them any further.
• 13:34
  Speaker 3: I think, you know, they had a very strong champion
• 13:37
  Speaker 3: and Senator Tillis and also Brooks. I think that Senator
• 13:40
  Speaker 3: Tillis and also Brooks actually delivered on almost every single
• 13:43
  Speaker 3: thing that the banks were asking for, like they got
• 13:47
  Speaker 3: it all. So, you know, they can keep coming up
• 13:50
  Speaker 3: with new ideas and new things, but you know that
• 13:53
  Speaker 3: the concerns they raised have been addressed.
• 13:56
  Speaker 4: That language, you know, was changed.
• 13:58
  Speaker 3: I think it is a closed issue, and I don't
• 14:00
  Speaker 3: think it's one, uh that is that is going to
• 14:03
  Speaker 3: be reopened anytime soon. And so I think the banks
• 14:07
  Speaker 3: know this. You know, we've seen some advertising around town.
• 14:10
  Speaker 3: You bump in a few folks on the Hill and
• 14:12
  Speaker 3: things like that. But you know, I think I think
• 14:14
  Speaker 3: this is an issue that is gonna going to stay closed.
• 14:16
  Speaker 3: And I think that you know, listen to the crypto
• 14:19
  Speaker 3: industry lobby in Washington, which I've been a part of
• 14:22
  Speaker 3: for over eight years now, is certainly smaller than the
• 14:26
  Speaker 3: Banking Committee, but we're feistier.
• 14:29
  Speaker 4: We're ready, we know what to do.
• 14:31
  Speaker 3: We're aggressive, like we've had to battle the SEC and
• 14:33
  Speaker 3: we've had to have all these all these fights over
• 14:36
  Speaker 3: the past few years.
• 14:37
  Speaker 4: We're we want to get this done.
• 14:39
  Speaker 3: And I think with the exception of me, who's here
• 14:41
  Speaker 3: talking to you right now, about every single lobbyist and
• 14:44
  Speaker 3: crypto is up on the hill. There's briefings going on today,
• 14:48
  Speaker 3: meetings in all offices, maybe except for Elizabeth Warren because
• 14:51
  Speaker 3: that's a waste of time. And we you know, like
• 14:54
  Speaker 3: everyone is going out and explaining the issues, explaining any
• 14:58
  Speaker 3: misconceptions around elicit finance or deposit flight or some of
• 15:02
  Speaker 3: these other things. And I think, you know, it's it's
• 15:04
  Speaker 3: in full force and everyone is motivated and we really
• 15:07
  Speaker 3: want to get this done.
• 15:09
  Speaker 2: So banks are very quiet this week.
• 15:11
  Speaker 1: Do you anticipate any last minute, you know, explosion coming
• 15:16
  Speaker 1: out of the banks something?
• 15:18
  Speaker 4: Yeah, I mean, I I don't think so.
• 15:23
  Speaker 3: You know, certainly, you know, they can use the various
• 15:27
  Speaker 3: you know, direct lobbying media, they can pull any of
• 15:30
  Speaker 3: any of the tricks out there. But I think there's
• 15:33
  Speaker 3: a real understanding that, you know, we can't have sixty
• 15:37
  Speaker 3: two million Americans who own crypto and have don't not
• 15:42
  Speaker 3: have a comprehensive regulatory framework to cover that. And I think,
• 15:47
  Speaker 3: you know, this bill has you know, gotten a lot
• 15:50
  Speaker 3: more complex than when it came over to the House.
• 15:52
  Speaker 4: There's a whole illicit finance title in.
• 15:55
  Speaker 3: There that wasn't there before they beefed up the spot
• 15:58
  Speaker 3: market protections. There's a disclosure regime for new projects that
• 16:02
  Speaker 3: want to launch in the US, and so you know,
• 16:04
  Speaker 3: there's a lot of real substance of stuff in here.
• 16:07
  Speaker 3: And to you know, prevent that type of consumer protection
• 16:13
  Speaker 3: from becoming law is you know, I think it's just
• 16:16
  Speaker 3: it's just the wrong wrong.
• 16:18
  Speaker 4: Side history to be on.
• 16:19
  Speaker 2: Very bad look, yeah, very bad look.
• 16:21
  Speaker 1: And you're going into mid terms, I think, especially after
• 16:23
  Speaker 1: the bank earnings that.
• 16:24
  Speaker 2: Have been so highly publicized.
• 16:27
  Speaker 1: It really was good timing for the banks, but bad
• 16:30
  Speaker 1: timing for the banks as well for all of us
• 16:33
  Speaker 1: coming to.
• 16:33
  Speaker 2: To the to the head. Hey listen, but the fud
• 16:36
  Speaker 2: has not stopped.
• 16:38
  Speaker 1: One of our favorite fudters that has been out there
• 16:42
  Speaker 1: has re emerged, and that is Carol House. She is
• 16:45
  Speaker 1: going right at us again. And there were some interesting
• 16:49
  Speaker 1: points that she got into, and I want to just
• 16:52
  Speaker 1: address this right here. You guys have probably heard us
• 16:54
  Speaker 1: talk about Carol before. She's been very against what's going
• 16:58
  Speaker 1: on with crypto and and clarity in general.
• 17:01
  Speaker 2: But this one I thought took the cake.
• 17:03
  Speaker 1: And that is now that because of an example of
• 17:07
  Speaker 1: AI agents where you know, they're out negotiating payment terms,
• 17:11
  Speaker 1: et cetera, that essentially courts and regulators need to bear
• 17:15
  Speaker 1: or figure out and determine who bears responsibility. What is
• 17:20
  Speaker 1: this saying that now an AI agent is somehow responsible
• 17:24
  Speaker 1: or for evasion or market manipulation or any of those
• 17:28
  Speaker 1: kind of things.
• 17:29
  Speaker 3: Yeah, I mean, listen, I think that these are potentially
• 17:32
  Speaker 3: some novel questions that aren't related to what's going on
• 17:36
  Speaker 3: in the skill and there but no hearings on this.
• 17:38
  Speaker 3: There's no discussion of this. I think that, Yeah, you know,
• 17:42
  Speaker 3: I think that if this is something people want to
• 17:44
  Speaker 3: look at later, this is too far out of the scope.
• 17:47
  Speaker 3: This is sort of regulating problems that don't exist yet.
• 17:52
  Speaker 3: And you know, if we try to predict where the
• 17:55
  Speaker 3: future is going, you know, too far ahead, then you know,
• 17:58
  Speaker 3: we might prevent it from playing out in the way.
• 18:00
  Speaker 2: That it's supposed to go.
• 18:01
  Speaker 3: So I you know, I don't think that that argument
• 18:06
  Speaker 3: carries much weight, and I don't think it's gonna, you know,
• 18:10
  Speaker 3: delay the progress that's happening on anyway.
• 18:13
  Speaker 1: Anything to make of this July twenty second, you know
• 18:16
  Speaker 1: meeting that's coming up, and this is going to be
• 18:19
  Speaker 1: around the Risk of Clarity Act to National Security.
• 18:23
  Speaker 2: Do you see any major issues right there?
• 18:26
  Speaker 6: You know?
• 18:26
  Speaker 3: I think, listen, there are endless discussions on the intersection
• 18:30
  Speaker 3: of crypto and national security. As I mentioned earlier, there
• 18:34
  Speaker 3: is an entire section of the bill that has been
• 18:37
  Speaker 3: added on a list of finance. There's new requirements that
• 18:41
  Speaker 3: are required, and you know, I think there are going
• 18:44
  Speaker 3: to be these sort of pop up efforts to try to,
• 18:48
  Speaker 3: you know, disagree with the direction of the bill, But
• 18:50
  Speaker 3: I don't know. I think the momentum that we have
• 18:53
  Speaker 3: is real, and I think when you actually pick up
• 18:55
  Speaker 3: the bill and read through the pages, you see that
• 18:57
  Speaker 3: there is a tremendous amount in there that addresses any
• 19:01
  Speaker 3: concerns related to national security. I mean, I think the
• 19:04
  Speaker 3: reality is this is a technology that is being integrated
• 19:07
  Speaker 3: into our financial system today, and if we don't do
• 19:11
  Speaker 3: it here at the US, others around the world will
• 19:14
  Speaker 3: do it first. And I think, you know, the US
• 19:17
  Speaker 3: wants to lead. I think Congress wants the US to lead.
• 19:20
  Speaker 3: President Trump wants the US to lead. And so you know,
• 19:23
  Speaker 3: there's going to be folks that are out there that
• 19:25
  Speaker 3: you know, maybe don't have the most credibility, that are
• 19:28
  Speaker 3: going to try to argue against it. But you know,
• 19:30
  Speaker 3: at the end of the day, I think, you know,
• 19:32
  Speaker 3: the reality is this is this is coming, and we want.
• 19:35
  Speaker 4: To be a part of it, and we want to
• 19:36
  Speaker 4: regulate it appropriate.
• 19:37
  Speaker 2: I like, yes, listen, Kristin. I like your attitude on this.
• 19:40
  Speaker 1: I like that tenacity and that you're saying, hey, we
• 19:43
  Speaker 1: got this, We're there, We're close. But listen, As a journalist,
• 19:47
  Speaker 1: I have to be skeptical constantly, and I'm always looking
• 19:51
  Speaker 1: at you know, these nuances. One of course, was this
• 19:54
  Speaker 1: fence in meeting, and I want to play a clip
• 19:57
  Speaker 1: because this even surprised me.
• 19:59
  Speaker 2: Let's go to the clip standards.
• 20:01
  Speaker 7: Will you explicitly commit today to preserving this bright line
• 20:04
  Speaker 7: distinction so American software and hardware developers are not improperly
• 20:08
  Speaker 7: regulated as financial intermediaries, cheer Davidson. Let me apologize. My
• 20:15
  Speaker 7: time's expired, so I'll ask for that.
• 20:17
  Speaker 5: In writing we know Crypto is here, we know that
• 20:20
  Speaker 5: AI is here, so maybe we can talk about that offline.
• 20:24
  Speaker 4: Thank you, mister Chairman, and I you back yep, thanks miss, But.
• 20:26
  Speaker 6: I'm concerned in reading that circle the other day did
• 20:31
  Speaker 6: not take action to freeze and burn potentially suspicious that
• 20:36
  Speaker 6: elicted accounts arguing they had to be ordered to do
• 20:39
  Speaker 6: that by the government. What are they talking about?
• 20:43
  Speaker 8: This is something I am not personally tracking. I would
• 20:45
  Speaker 8: like to get back to you on this circle.
• 20:47
  Speaker 1: Chose not to intervene t'ather did under some circumstances, and
• 20:51
  Speaker 1: so is this an area.
• 20:52
  Speaker 2: Where you actually need some clarity out of Congress?
• 20:56
  Speaker 8: This is something I would like to look into the
• 21:00
  Speaker 8: you know, the I would I'd like to understand this
• 21:03
  Speaker 8: a little bit more before I can provide an answer.
• 21:06
  Speaker 5: Will you include the information that I just described by
• 21:11
  Speaker 5: the President of the United States.
• 21:13
  Speaker 2: And his family.
• 21:14
  Speaker 8: I cannot speak to that at this moment.
• 21:17
  Speaker 5: Why can't you speak to it at this moment?
• 21:21
  Speaker 8: Ring Member Rorias, I you know today I want to
• 21:23
  Speaker 8: talk about what FinCEN has done.
• 21:25
  Speaker 5: I respect what you would like to talk about, and
• 21:28
  Speaker 5: I'm asking are you going to take up what is necessary?
• 21:33
  Speaker 8: I'm here to talk about Fincenn and FinCEN's work.
• 21:35
  Speaker 5: Let the records show that the witness evaded the question
• 21:39
  Speaker 5: and that we will continue to point to the corruption
• 21:42
  Speaker 5: that's undermining this country.
• 21:45
  Speaker 7: Thank you, miss Waters.
• 21:47
  Speaker 2: Okay, so not happy people.
• 21:49
  Speaker 1: That of course was Ghaki, who is the Director of
• 21:52
  Speaker 1: Financial Crimes Enforcement and wasn't answering a lot of quote.
• 21:57
  Speaker 1: I mean, I don't understand the FinCEN seems like they're
• 21:59
  Speaker 1: almost toothles us here in the sense of being able
• 22:02
  Speaker 1: to do some of these things. So where do you
• 22:05
  Speaker 1: think this has any bearing right now on how many
• 22:10
  Speaker 1: of the enforcement models may play out from clarity in itself,
• 22:14
  Speaker 1: if FinCEN is in fact going to be in charge
• 22:16
  Speaker 1: of this.
• 22:18
  Speaker 3: Yeah, well listen, fincent in a financial Crimes Enforcement network.
• 22:22
  Speaker 3: They are an agency or within the Treasury Department, and
• 22:27
  Speaker 3: they have a very specific mission and it's not related
• 22:31
  Speaker 3: to any sort of criminal enforcement, but they are there
• 22:34
  Speaker 3: to help implement regulation related to anti money launering policy,
• 22:40
  Speaker 3: et cetera. And you know, they have a very limited job.
• 22:43
  Speaker 3: So I have some sympathy for her and that she
• 22:46
  Speaker 3: is only allowed to say things that are clearly within
• 22:48
  Speaker 3: the scope. I do think what we're seeing though, both
• 22:51
  Speaker 3: with the Genius Act that was signed into law a
• 22:53
  Speaker 3: year ago and with the Clarity Act is really a
• 22:56
  Speaker 3: kind of more comprehensive tool set so that you know,
• 23:00
  Speaker 3: the Treasury Department has the tools that they feel like
• 23:03
  Speaker 3: they need in order to enforce things. I mean, I think,
• 23:07
  Speaker 3: you know, I have some sympathy for Circle because the
• 23:09
  Speaker 3: way they are regulated today it does make them you know,
• 23:12
  Speaker 3: there's are challenges there. They're not able to just go
• 23:14
  Speaker 3: and like freeze things even when they see it as suspicious,
• 23:17
  Speaker 3: and so I think there are ways that the private
• 23:20
  Speaker 3: sector companies within crypto can work with law enforcement and
• 23:24
  Speaker 3: get the kind of information sharing that they need in
• 23:26
  Speaker 3: order for things to move more quickly. But you know,
• 23:30
  Speaker 3: I think that's why we're doing this Clarity Act. You know,
• 23:33
  Speaker 3: there's again I mentioned the whole section mounelst of Finance
• 23:36
  Speaker 3: in there that will you know, provide the type of
• 23:38
  Speaker 3: clarity that that we do need. But I would say,
• 23:42
  Speaker 3: you know, going back to the very first opening question
• 23:45
  Speaker 3: from Warren Davidson around developer protections, you know, there is
• 23:49
  Speaker 3: a fine line there and I think that is something
• 23:52
  Speaker 3: with the Blockchain Regulatory Certainty Act that is included in
• 23:55
  Speaker 3: the Clarity Act that does protect those that are really
• 23:59
  Speaker 3: only contributing cod they take no control of customer funds.
• 24:02
  Speaker 4: It's keeping them, you know, sort.
• 24:04
  Speaker 3: Of protected from some of the requirements that would be
• 24:07
  Speaker 3: impossible for them to comply with.
• 24:09
  Speaker 4: So I think there's a lot to go on there.
• 24:11
  Speaker 3: But I think that's why we are having these discussions
• 24:14
  Speaker 3: as part of this legislation. And I think, you know,
• 24:17
  Speaker 3: I'm optimistic that that, you know, when this gets done,
• 24:21
  Speaker 3: you know, the committees will have more comfort with the
• 24:25
  Speaker 3: powers that the government has and also the limits to
• 24:28
  Speaker 3: the powers that the governments have.
• 24:30
  Speaker 1: When you look at Genius and how that has now
• 24:32
  Speaker 1: started to make its way into policy, and we have
• 24:35
  Speaker 1: so many of these bureaucrats, and I understand why you're
• 24:38
  Speaker 1: being political. I won't be, and that is that these
• 24:40
  Speaker 1: bureaucrats contempt in most cases are completely incompetent and or
• 24:46
  Speaker 1: lack the knowledge of being.
• 24:47
  Speaker 2: Able to execute on getting any things done.
• 24:49
  Speaker 1: So you still have that barrier to cross right now, Kristen,
• 24:53
  Speaker 1: So I think that is a concern of mind. We're
• 24:55
  Speaker 1: already seeing this playing out kind of in in sense
• 24:58
  Speaker 1: right now, what's happening with Genius, And remember the Genius Acts.
• 25:02
  Speaker 1: July eighteenth deadline was missed originally, and that was finalizing
• 25:07
  Speaker 1: the Stablehorn rules. How much of an impact do you
• 25:10
  Speaker 1: think that's going to have when maybe we get Clarity
• 25:13
  Speaker 1: through or maybe we don't on missing a deadline here?
• 25:17
  Speaker 1: Is there any correlation between what happened then and what's
• 25:20
  Speaker 1: happening right now in front of us.
• 25:23
  Speaker 4: No.
• 25:23
  Speaker 3: I think it's common for there to be extensions in
• 25:27
  Speaker 3: the rule making process. You know, this is a process
• 25:29
  Speaker 3: where they take the legislation and write the details. I
• 25:31
  Speaker 3: think when Clarity passes, there are dozens of rulemakings that
• 25:35
  Speaker 3: are demanded in the Clarity Act, but most of those
• 25:39
  Speaker 3: apply to the SEC and the CFTC and less so
• 25:44
  Speaker 3: to those that are implementing the Genius Act. So there's
• 25:47
  Speaker 3: going to be a tremendous amount of work to do.
• 25:49
  Speaker 3: If you are in law school, I'd highly recommend learning
• 25:52
  Speaker 3: about crypto. There's decades of work in the legal space
• 25:56
  Speaker 3: ahead for those who do it, and so you know,
• 25:59
  Speaker 3: there's there's you know, the end of the road is
• 26:02
  Speaker 3: not Genius, but or is not getting Clarity and Genius
• 26:04
  Speaker 3: signed into law. But I think those are hugely important
• 26:07
  Speaker 3: milestones because that does put the top level framework in place,
• 26:10
  Speaker 3: and it will allow more investment to come into crypto assets.
• 26:14
  Speaker 3: It will allow traditional financial institutions to integrate the technology.
• 26:18
  Speaker 3: I think it's going to unleash economic activity in a
• 26:21
  Speaker 3: way that'll make the US continue to be the leader
• 26:25
  Speaker 3: in the financial and technology sector for decades to come.
• 26:29
  Speaker 4: So I think there's a lot of benefit.
• 26:30
  Speaker 3: To getting those done, and I think that's one of
• 26:32
  Speaker 3: the reasons why we're having so much attention to it
• 26:34
  Speaker 3: on Capitol Hill, just as even as we speak.
• 26:37
  Speaker 1: And one of the things too, Kristen, because what happened
• 26:40
  Speaker 1: in Japan was a landslide, and I think a hallmark
• 26:45
  Speaker 1: change of being able to deal with what was like
• 26:48
  Speaker 1: a fifty percent taxable crypto event versus reducing that down
• 26:53
  Speaker 1: to twenty percent. And now we're looking at tax bills
• 26:57
  Speaker 1: potentially for crypto that could be lost within this. How
• 27:01
  Speaker 1: could we even get something going on these crypto tax bills,
• 27:05
  Speaker 1: but yet Japan's over here doing it.
• 27:07
  Speaker 3: Yeah, Well, there is starting to be more attention to
• 27:11
  Speaker 3: tax policy on Capitol Hill. We've seen a couple of
• 27:14
  Speaker 3: bills introduced by members of the House Ways and Means Committee,
• 27:17
  Speaker 3: and it is their job to originate tax legislation. I
• 27:21
  Speaker 3: think you know, whether or not crypto tax gets done
• 27:25
  Speaker 3: this year, I think is an open question.
• 27:27
  Speaker 4: I think one of the things that's interesting.
• 27:29
  Speaker 3: About tax policy is you very rarely have standalone tax bills,
• 27:34
  Speaker 3: you know, be signed into law.
• 27:36
  Speaker 4: Market structure legislation is different.
• 27:38
  Speaker 3: The only way for that to get done is to
• 27:41
  Speaker 3: do it as a standalone bill. We cannot attach market
• 27:44
  Speaker 3: structure to the Defense Authorization bill or in appropriations you know,
• 27:49
  Speaker 3: omnibus package or something like that, because in order to
• 27:52
  Speaker 3: do so, you would have to have sign off from
• 27:54
  Speaker 3: all of the committee chairs and ranking members, and Elizabeth
• 27:57
  Speaker 3: Warren will never.
• 27:58
  Speaker 4: Allow that to happen.
• 27:59
  Speaker 3: So it is an incredibly heavy lift to get market
• 28:02
  Speaker 3: structure done because we need standalone floor time.
• 28:05
  Speaker 4: Crypto tax can ride.
• 28:07
  Speaker 3: On any tax package, and so I think there's a
• 28:10
  Speaker 3: lot more opportunity to move that. I think the really
• 28:14
  Speaker 3: real question is do we have the details right? Is
• 28:16
  Speaker 3: everybody comfortable with where the tax policy is? And have
• 28:20
  Speaker 3: we done enough education as an industry on those tax
• 28:24
  Speaker 3: writing committees so that they feel comfortable moving forward? And
• 28:27
  Speaker 3: you know the reality is we haven't as an industry
• 28:30
  Speaker 3: spent a lot of time with HOUSEWISM means and Senate
• 28:32
  Speaker 3: Finance because we've been playing defense at the SEC with
• 28:36
  Speaker 3: other federal regulators, and now over the past two years
• 28:39
  Speaker 3: have been focused so deeply on the Clarity legislative process.
• 28:43
  Speaker 3: But I think once we get the Clarity Act passed,
• 28:46
  Speaker 3: it's going to be all attention shift and focus to
• 28:49
  Speaker 3: the tax committees. And I think there's going to be
• 28:52
  Speaker 3: a real urge to get the tax policy updated to
• 28:55
  Speaker 3: catch up with where we're at, you know, with the market,
• 28:58
  Speaker 3: and so you know, I think it's it's not an
• 29:02
  Speaker 3: if tax will get done, it's a when. But you know,
• 29:05
  Speaker 3: we want to trust the process. This is how we
• 29:07
  Speaker 3: get good policy, and I think it'll it'll happen.
• 29:10
  Speaker 4: In due time.
• 29:11
  Speaker 1: Listen from what I hear you saying, Kristen, is that
• 29:15
  Speaker 1: this is kind of step one of many that's going
• 29:17
  Speaker 1: to be taking place over the next few years. Moving
• 29:20
  Speaker 1: into that in terms of a change, obviously the rule
• 29:23
  Speaker 1: making will start to coincide with what you know, our
• 29:26
  Speaker 1: bureaucrats are going to be pretty much implementing now, which
• 29:29
  Speaker 1: I'm a little concerned as to how that's going to
• 29:31
  Speaker 1: play out, even with Clarity, because there are some to
• 29:35
  Speaker 1: a certain extent, loopholes within that, but some of it
• 29:37
  Speaker 1: may even fall within this new verbiage around ethics. So
• 29:42
  Speaker 1: all of this could change things quickly, very much so.
• 29:45
  Speaker 2: So we'll definitely keep you on.
• 29:47
  Speaker 1: The front page of the Rolodex here, so when things
• 29:50
  Speaker 1: start moving in DC, we'll give you a call. But
• 29:52
  Speaker 1: thanks for coming in today. We appreciate the breakdown.
• 29:55
  Speaker 4: Thanks for having me fall.
• 30:03
  Speaker 1: If you like this video, like and subscribe, drop a
• 30:06
  Speaker 1: comment down below, and also join our free private member group.
• 30:09
  Speaker 2: The links in the description