WEBVTT - Weekend Bonus: Crypto IRL, Episode 9, with Tim and Katie 0:00:03.640 --> 0:00:06.760 This is Bloomberg Crypto, a daily Bloomberg I Heard podcast, 0:00:07.120 --> 0:00:10.119 and I'm Stacy Marie Ishmael, Managing editor of Crypto for 0:00:10.160 --> 0:00:29.040 Bloomberg News. Yes, I know it's Saturday, but we're here 0:00:29.040 --> 0:00:32.520 to offer you our listeners a special audio only version 0:00:32.600 --> 0:00:35.640 of a new weekly video series called Crypto I r L. 0:00:36.200 --> 0:00:39.120 That's I r L Like in Real Life, and it's 0:00:39.159 --> 0:00:42.159 hosted by friends of the show, Katie Greifeld and Tim Stenovic. 0:00:42.440 --> 0:00:45.479 This is episode nine of Crypto I r L. If 0:00:45.479 --> 0:00:48.360 you want the full video experience, head over to Bloomberg 0:00:48.360 --> 0:00:51.159 dot com, slash qt or check it out on YouTube. 0:00:58.400 --> 0:01:08.720 Yesh h. The implosion of f t X has given 0:01:08.720 --> 0:01:11.240 ammunition to crypto skeptics. It's kind of this I Told 0:01:11.240 --> 0:01:13.240 You So a moment for those who've been against crypto 0:01:13.360 --> 0:01:16.280 from the beginning. At the same time, many of those 0:01:16.400 --> 0:01:19.320 said skeptics see the case against crypto is larger than 0:01:19.360 --> 0:01:21.640 the failure of one of the biggest crypto exchanges on Earth. 0:01:22.000 --> 0:01:25.080 To them, it's about utility and inherent value of crypto. 0:01:25.440 --> 0:01:28.000 It's about the concept. They don't actually buy the idea 0:01:28.040 --> 0:01:31.920 that you can use crypto to create an alternative financial system. 0:01:31.959 --> 0:01:34.360 Throughout the series, we've heard from the true believers who 0:01:34.400 --> 0:01:38.840 make passionate and extraordinary promises about crypto that bitcoin provides 0:01:38.920 --> 0:01:41.920 freedom because they, not a government, are in control of 0:01:41.959 --> 0:01:44.880 their money, for example. But there are also people out 0:01:44.880 --> 0:01:46.840 there who make it their mission to shine a light 0:01:46.920 --> 0:01:50.000 on what they see as the deficiencies. You're about to 0:01:50.040 --> 0:01:52.560 hear from three of those people, all of whom we 0:01:52.600 --> 0:01:55.320 spoke to before the f t X to bacle. And 0:01:55.360 --> 0:01:57.720 even though we don't yet know the ultimate fallout from 0:01:57.840 --> 0:02:00.400 f t X is collapse, how much money is gone, 0:02:00.440 --> 0:02:03.480 what clients will recoup or how, or if it will 0:02:03.560 --> 0:02:06.960 ultimately undermine confidence in crypto, we know that the skeptics 0:02:07.000 --> 0:02:09.799 are already using it as yet another example to make 0:02:09.840 --> 0:02:15.320 their case. I gotta say it's a little weird that 0:02:15.360 --> 0:02:18.600 this is our last episode. Well, we're making the case 0:02:18.639 --> 0:02:23.920 against crypto. We're talking to prominent voices who are anti crypto. 0:02:24.760 --> 0:02:27.120 It seems like a pretty good journalism thing to do, 0:02:27.200 --> 0:02:29.760 you know, get both sides of the argument, right, It's 0:02:29.760 --> 0:02:32.680 a noble pursuit, it's a higher calling, right. Yeah, We're 0:02:32.680 --> 0:02:35.960 out there collecting information about both sides and presenting it 0:02:36.080 --> 0:02:38.400 in an even handed way. And we got to meet 0:02:38.440 --> 0:02:45.080 the guy from the o C. How did you find 0:02:45.120 --> 0:02:49.040 yourself in this mess? Because people know you as Ryan 0:02:49.080 --> 0:02:50.960 Francis Outwood from the o C. They know you as 0:02:51.000 --> 0:02:55.160 a copy on other shows. Yes, on two separate shows 0:02:55.160 --> 0:02:58.120 where I played a cop. Yeah. Um, how did I 0:02:58.120 --> 0:02:59.480 find myself in this mess? So? I have a degree 0:02:59.520 --> 0:03:04.040 in economics UM from the University of Virginia UM, which 0:03:04.080 --> 0:03:08.200 I got for a while ago, uh, two decades ago. 0:03:09.760 --> 0:03:11.400 But of the pandemic, I had a lot of time 0:03:11.400 --> 0:03:14.880 on my hands. Um. Uh. The short answer is a 0:03:14.880 --> 0:03:18.520 buddy of mine from college, who has given me the 0:03:18.560 --> 0:03:22.440 worst financial advice of my life, came to me and 0:03:22.480 --> 0:03:26.040 said you should buy some bitcoin, and I said, Okay, 0:03:25.880 --> 0:03:30.200 I think that's a red flag some something might be 0:03:30.280 --> 0:03:33.160 up here. So I, UM. I hadn't paid attention to 0:03:33.160 --> 0:03:37.520 cryptocurrency really ever, um up to that point. I took 0:03:37.720 --> 0:03:40.600 UM Gary Ginsler. They had the SEC's course that he 0:03:40.680 --> 0:03:43.960 taught on blockchain and crypto in m T and he 0:03:44.000 --> 0:03:46.400 had made it available for free online, so I took it. 0:03:47.560 --> 0:03:51.360 Hours later. It was like I had a lot of information, 0:03:51.400 --> 0:03:54.320 but I had the same questions, which, to be honest, 0:03:54.360 --> 0:03:56.920 I started with with the word itself with language. You know, 0:03:56.960 --> 0:03:59.360 I'm a storyteller. UM, that's what I do for a 0:03:59.360 --> 0:04:01.640 living and work to have a lot of power. UM. 0:04:01.680 --> 0:04:07.120 And cryptocurrencies aren't currencies by any reasonable economic definition. There 0:04:07.120 --> 0:04:09.840 a poor medium of exchange, unit of account, and store 0:04:09.840 --> 0:04:14.800 of value UM. And so what they more closely resemble 0:04:16.360 --> 0:04:20.800 is a security UM where and securities are obviously regulated 0:04:20.880 --> 0:04:23.680 under American law. They're an investment of money in a 0:04:23.720 --> 0:04:27.040 common enterprise with the expectation of profit to be derived 0:04:27.040 --> 0:04:30.080 from the efforts of others. That's the four prongs of 0:04:30.120 --> 0:04:32.480 the how we test, which is how we define securities 0:04:32.560 --> 0:04:37.640 under American law. I saw a massive unregulated securities market 0:04:37.920 --> 0:04:42.880 UM that was drawing in millions and millions of people 0:04:43.160 --> 0:04:48.200 who I don't think we're aware of the potential fraud. 0:04:48.760 --> 0:04:53.120 UH that could that could ensue, that could be happening 0:04:53.320 --> 0:04:56.440 right as at that moment, and so UM. Anyways, I 0:04:56.480 --> 0:05:03.520 reached it. I got I got high one day and Uh, 0:05:03.760 --> 0:05:06.480 I decided that I should write a book about crypto 0:05:06.520 --> 0:05:08.640 and fraud, which sounds like a really good idea when 0:05:08.640 --> 0:05:12.320 I was high. UM. The next morning, sober, I realized 0:05:12.320 --> 0:05:14.680 I didn't actually know how to write a book. Um. 0:05:14.760 --> 0:05:19.599 So then, UM, I reached out to uh this journalist 0:05:19.760 --> 0:05:22.320 Jacob Silverman, who I had never met before, but I 0:05:22.320 --> 0:05:28.520 had followed him on on Twitter and he followed me back. Um. 0:05:28.560 --> 0:05:31.040 He had written an article called even Donald Trump and 0:05:31.040 --> 0:05:33.400 know his Bitcoin as a scam, which I thought was 0:05:33.440 --> 0:05:35.320 kind of funny and had brought together a few things 0:05:35.360 --> 0:05:36.960 that I was thinking about, this is why we always 0:05:37.000 --> 0:05:40.000 need to have our d m s open. Yeah. Anyway, 0:05:40.000 --> 0:05:41.800 and butt him to drinks and was like, hey, do 0:05:41.880 --> 0:05:43.479 you want to write a book about cryptoon fraud? And 0:05:43.480 --> 0:05:46.880 he's like, my wife just that they're about to have 0:05:47.000 --> 0:05:49.080 a pandemic baby. My wife and I had had our 0:05:49.160 --> 0:05:51.960 pandemic baby earlier, so he was going on parentally, so 0:05:52.000 --> 0:05:54.320 he's probably like, didn't have anything better to do, but 0:05:54.440 --> 0:05:56.800 he was like yeah, sure. So so it's funny that 0:05:56.839 --> 0:05:58.960 all of this kind of started in the pandemic for you, 0:05:59.000 --> 0:06:01.200 because that's actually when I started watching the o C 0:06:02.480 --> 0:06:05.920 Yeah with with my brothers. Actually it was very weird. 0:06:06.080 --> 0:06:09.200 You're like so late. I know, I know, but I 0:06:09.279 --> 0:06:11.240 got there, which is the important thing. That is the 0:06:11.240 --> 0:06:13.560 important thing. But listening to you, it sounds like most 0:06:13.760 --> 0:06:17.599 of your objections lie in the cryptocurrency part of the 0:06:17.600 --> 0:06:22.680 cryptocurrency universe, the currency part. But how how broad is 0:06:22.720 --> 0:06:25.400 your skepticism here, Like when you think about things like 0:06:25.480 --> 0:06:29.440 to centralized finance, like the promise of the blockchain, for example, 0:06:29.480 --> 0:06:34.800 do you see any merit or potential in those areas? UM? 0:06:34.839 --> 0:06:37.640 I think it's I think it's extremely difficult to tell 0:06:37.720 --> 0:06:41.320 right now until the dust settles on what I believe 0:06:41.560 --> 0:06:45.640 was effectively the largest planting scheme in history by in 0:06:45.800 --> 0:06:49.080 order of magnitude. UM. I know that's a bold claim, 0:06:49.160 --> 0:06:51.000 but I'm happy to back it up with you know, 0:06:51.040 --> 0:06:53.720 facts and figures and all sorts of stuff. Until we 0:06:53.839 --> 0:06:57.920 see that uh settle and we see what's left. It's 0:06:57.920 --> 0:07:01.400 difficult to find hard numbers and cryptois. You're it's probably no. 0:07:02.120 --> 0:07:04.520 But according to the Pew study that was done just 0:07:04.600 --> 0:07:09.640 this last month, they asked people, you know, did your 0:07:09.680 --> 0:07:13.840 investment in crypto the forty million Americans who have bought crypto, 0:07:14.440 --> 0:07:18.320 um of the adult population, did your investment in crypto 0:07:18.400 --> 0:07:21.960 live up to your expectations? UM? I think like fifteen 0:07:22.040 --> 0:07:25.920 sixtent said it exceeded them, said it was you know, 0:07:26.000 --> 0:07:28.840 kind of what they expected, and like said it was 0:07:28.880 --> 0:07:33.240 worse so just starting there, you're looking at like a 0:07:33.280 --> 0:07:37.200 three to one split right with like saying it was okay, 0:07:39.040 --> 0:07:42.200 we don't really know where it's gonna go yet, but 0:07:42.280 --> 0:07:44.440 if I'm optimistic, it sounds like you're open to it 0:07:44.680 --> 0:07:47.600 yea and totally opening. I was sorry I couldn't tell 0:07:47.600 --> 0:07:49.760 your biggeste guess I am. I am open to it. 0:07:49.800 --> 0:07:51.440 I mean, I don't I don't mean. I don't care 0:07:51.480 --> 0:07:54.160 about a distributed ledger right, that does not animate my 0:07:54.480 --> 0:07:56.440 like I don't think that your blood. I don't care. 0:07:56.800 --> 0:07:59.680 It's just a ledger, Like, if you can use it 0:07:59.760 --> 0:08:05.520 to you further. Um. The things that Crypto purports to do, 0:08:06.480 --> 0:08:09.960 then great. Right. I would love for our financial system, 0:08:10.000 --> 0:08:12.880 which has many many flaws, to be better. I would 0:08:12.880 --> 0:08:15.000 like for it to be more inclusive. I would like 0:08:15.120 --> 0:08:20.000 for the fraud to be lessened. Um, And I'd like 0:08:20.040 --> 0:08:22.679 for people to be able to transact easily and particularly 0:08:22.720 --> 0:08:26.600 overseas between countries. But unfortunately, Crypto I don't think accomplishes 0:08:26.640 --> 0:08:29.040 any of those things. I'm wondering how you think about 0:08:29.080 --> 0:08:32.920 what you're doing right now in the context of your identity, 0:08:33.280 --> 0:08:36.840 your professional identity, or your personal identity. You're a dad 0:08:37.559 --> 0:08:42.199 you're an actor, you're a crypto skeptic, you're writing a book. 0:08:45.080 --> 0:08:51.959 I guess my question is what's the end game with 0:08:52.040 --> 0:08:54.320 the crypto side of things? And how that kind of 0:08:54.920 --> 0:08:57.560 yeah for you, Like what's your goal with writing the book? 0:08:57.600 --> 0:08:59.520 Why are you doing it? Like? What what do you 0:08:59.559 --> 0:09:04.400 want to com indicate? Yeah, it's funny that you might 0:09:04.480 --> 0:09:06.719 talk to my therapist and he's like he said, he 0:09:06.880 --> 0:09:10.960 He's like, you're not the things you do. You're not 0:09:11.040 --> 0:09:13.240 the results of the things you do. That's why I said, 0:09:13.240 --> 0:09:16.400 your dad too, not that I talked to your therapist. 0:09:16.600 --> 0:09:18.160 That's fine. So, like, I don't like it when people 0:09:18.200 --> 0:09:22.800 I like you, you're you're, you're, you like your town. 0:09:23.000 --> 0:09:25.640 I'm not just a journalist. So what I hope to 0:09:25.679 --> 0:09:31.360 do with the book is tell a story about people 0:09:31.880 --> 0:09:35.520 and what they want and why they bought crypto um 0:09:35.559 --> 0:09:38.680 and what we can learn from the failures of crypto 0:09:39.200 --> 0:09:42.320 and where we might go from here. And back to 0:09:42.360 --> 0:09:45.600 your point is there are there things we can take 0:09:45.640 --> 0:09:49.520 from blockchain and decentralized technologies that they do offer value. 0:09:50.160 --> 0:09:51.840 And I'm very open to that, and I'm talking to 0:09:52.240 --> 0:09:54.080 academics and people that know a lot more about that 0:09:54.160 --> 0:09:57.400 than me. When you reflect on the rug pulls, the 0:09:57.440 --> 0:10:00.280 pig butchering that's gone on, how much flame do you 0:10:00.400 --> 0:10:05.000 place at the feet of regulators. There's a lot of 0:10:05.040 --> 0:10:07.800 blame to go around. UM, but it's funny. I'm actually 0:10:07.800 --> 0:10:11.840 writing that chapter now. UM A lot. It's been a 0:10:11.840 --> 0:10:17.640 massive failure across the board, both parties. Um. Um, there's 0:10:17.640 --> 0:10:19.280 a lot of reasons for that, I think. I think. 0:10:19.320 --> 0:10:21.760 I don't think there's a sort of I think there 0:10:21.760 --> 0:10:24.320 are simple answers to that question. Um. One of the 0:10:24.360 --> 0:10:26.520 things that I was struck by when I started to 0:10:26.520 --> 0:10:28.760 try to understand, like why this has gotten so big, 0:10:29.679 --> 0:10:32.800 um with so little regulation. Um. One of the things 0:10:32.840 --> 0:10:35.040 that I observed that I thought was just quite fascinating 0:10:35.160 --> 0:10:37.760 was the fact that we separate our commodities regulation from 0:10:37.760 --> 0:10:40.640 our securities regulation, which, as far as I'm aware, is 0:10:40.760 --> 0:10:42.559 we're the only country in the world to do so. 0:10:43.120 --> 0:10:47.360 You live in Brooklyn, Yes, I live in Brooklyn. Matt 0:10:47.440 --> 0:10:50.800 Damon lives in Brooklyn. You won't even yes, you know 0:10:50.840 --> 0:10:55.160 where I'm going without God. When you think of celebrities 0:10:55.160 --> 0:10:57.440 in crypto, you think of celebrities who have endorsed crypto. 0:10:57.920 --> 0:11:04.200 Matt Damon Larry, David Parakelton, Kim Kardashian Um. I mean, 0:11:04.240 --> 0:11:07.120 have you ever run into any of these celebrities, given 0:11:07.160 --> 0:11:11.200 that you're kind of the soul celebrity skeptic, I don't 0:11:11.200 --> 0:11:13.320 want to say soul, but you're among the most vocal 0:11:13.400 --> 0:11:16.880 celebrity skeptics. Do you ever run into Matt Damon, for example, 0:11:17.160 --> 0:11:20.320 that our weekly meetings, that your weekly meetings? No, I 0:11:20.360 --> 0:11:22.840 do not, um, So I haven't talked to them. So 0:11:22.880 --> 0:11:25.880 I don't view celebrities as so. The first article that 0:11:25.960 --> 0:11:28.439 Jacob and I wrote in October of last year was 0:11:28.440 --> 0:11:32.160 about Kim Kardashian UM and about the theory of max shilling, 0:11:32.240 --> 0:11:35.000 which was just pretty obviously scanny UM. And so it's 0:11:35.080 --> 0:11:38.640 it's pretty rewarding, I have to say, personally, and quite 0:11:38.640 --> 0:11:41.120 frankly to be a little indulgent that like, almost exactly 0:11:41.160 --> 0:11:43.000 a year to the day after we wrote that article 0:11:43.040 --> 0:11:45.160 at the STC, you know, reach a settlement with her 0:11:45.240 --> 0:11:49.960 for one point six million dollars. But um, But celebrities 0:11:50.000 --> 0:11:53.000 are just the megaphone that crypto needs in order to 0:11:53.360 --> 0:11:56.880 get more retail trader traders into the casinos. Like they're 0:11:56.920 --> 0:12:02.160 not I'm sure or the celebrities, you know, run the 0:12:02.200 --> 0:12:06.840 gamut in terms of their knowledge of cryptocurrency and block technology. 0:12:06.880 --> 0:12:10.480 But my suspicion is they're not deeply steeped in the 0:12:10.480 --> 0:12:11.960 they haven't all read the white paper. They have not 0:12:12.080 --> 0:12:14.840 read the white papers or perhaps taken Ginsler's course. Um 0:12:14.920 --> 0:12:17.520 they are, you know, they're selling stuff, as celebrities have 0:12:17.600 --> 0:12:22.679 always sold stuff since there have been celebrities. Ben Mackenzie, 0:12:22.920 --> 0:12:24.840 thanks for hanging out with us. Yeah, it's been a pleasure. 0:12:28.120 --> 0:12:31.880 Molly White so non seen. Carmona, thanks for joining us. 0:12:31.920 --> 0:12:34.079 It's good to see you both. Thanks for having us. 0:12:34.120 --> 0:12:38.079 Thank you, Molly. I want to start with you. I 0:12:38.120 --> 0:12:39.920 think a lot of people everyone knows about Web three 0:12:39.960 --> 0:12:42.360 is going great now, but I'm interested in your own 0:12:42.440 --> 0:12:46.600 journey because you have a background in computer science, you 0:12:46.600 --> 0:12:51.480 have a background in communities. It's kind of strange that 0:12:52.640 --> 0:12:56.880 you don't love crypto, given that we're talking computer science 0:12:57.760 --> 0:13:02.920 and communities, Like what's not to love? I think, um, 0:13:03.040 --> 0:13:06.800 crypto doesn't actually help communities in the way that it 0:13:06.840 --> 0:13:09.800 claims to be. UM. You know, I do care a 0:13:09.840 --> 0:13:12.880 lot about communities, and I care a lot about them 0:13:12.920 --> 0:13:17.400 being treated fairly and being um educated about what they're 0:13:17.400 --> 0:13:19.880 getting into and I don't think crypto does either of 0:13:19.880 --> 0:13:25.320 those things very well. This special audio only episode of 0:13:25.320 --> 0:13:27.400 Crypto I r L will be right back with more 0:13:27.440 --> 0:13:30.240 from Katie Greifeld and Tim Stanovic. If you want the 0:13:30.280 --> 0:13:33.600 full video experience, head to Bloomberg dot com slash qt. 0:13:44.880 --> 0:13:49.600 Tell us about your background? Is this live? Just kidding? 0:13:49.600 --> 0:13:53.600 Its not? Okay? So I know that a lot of 0:13:53.640 --> 0:13:58.440 your research has focus on inequity and sort of how 0:13:58.520 --> 0:14:01.800 crypto plays into that. So I mean, taking those comments, 0:14:02.080 --> 0:14:07.199 would you agree? So I, like you just said, focus 0:14:07.240 --> 0:14:11.040 on inequities. I was not a crypto researcher person, didn't 0:14:11.120 --> 0:14:12.920 think I was going to end up into the space. 0:14:13.040 --> 0:14:16.960 But I found that there were a lot of like 0:14:17.280 --> 0:14:20.560 recent reportings at least around the time I started looking 0:14:20.560 --> 0:14:24.680 into crypto, with you know, headlines around communities of color 0:14:24.760 --> 0:14:28.120 really being drawn to cryptocurrencies, and so I really came 0:14:28.120 --> 0:14:31.360 in extraordinarily curious. I just wanted to know, so, how 0:14:31.400 --> 0:14:33.960 does this work? How does this happen that you have 0:14:34.080 --> 0:14:38.800 these promises and it actually like comes true. And in 0:14:38.840 --> 0:14:42.520 doing that research is when I found one the promises 0:14:42.880 --> 0:14:47.920 weren't being met and then two it also there's this 0:14:48.040 --> 0:14:50.800 was this space with just a whole range of risks 0:14:50.800 --> 0:14:53.320 and drawbacks. Well in that research to not see I'm 0:14:53.320 --> 0:14:56.040 wondering if there was anything that you found that is 0:14:56.080 --> 0:15:00.320 promising in the technology, in the concepts to how build 0:15:00.360 --> 0:15:03.840 a more equitable society Because the financial system, I mean, 0:15:03.920 --> 0:15:06.400 is it fair to say that it is exclusionary in 0:15:06.440 --> 0:15:10.360 some ways? Oh? I think one of the things at 0:15:10.400 --> 0:15:14.840 least I talk about is that historically a lot of 0:15:14.960 --> 0:15:19.040 communities of color have been excluded from traditional financial institutions. 0:15:19.080 --> 0:15:22.400 That is absolutely true, But that doesn't mean that crypto 0:15:22.440 --> 0:15:25.400 is necessarily the solution. I don't agree with the status quo. 0:15:25.440 --> 0:15:28.080 I believe we should fix the status quo um. But 0:15:28.160 --> 0:15:32.200 then even digging deep into crypto, I don't disagree with 0:15:32.240 --> 0:15:36.560 the ideas of democratization of finance. I don't disagree with 0:15:36.960 --> 0:15:40.280 the claims themselves. I disagree with the fact that they're 0:15:40.360 --> 0:15:44.160 essentially false promises and so Molly, I mean bringing that forward, 0:15:44.200 --> 0:15:47.600 the work that you do, sort of chronicling all the 0:15:47.720 --> 0:15:50.640 risks and drawbacks. When you think about everything that has 0:15:50.680 --> 0:15:53.880 happened over the past few months, the scams that we 0:15:54.000 --> 0:15:56.880 have seen, the rugs that have been pulled, what would 0:15:56.880 --> 0:15:59.840 you the pinks that have been slaughtered. You know about 0:15:59.840 --> 0:16:04.880 this pig butchering. Have you heard of this UM? Well, 0:16:04.960 --> 0:16:07.800 in any case, actually called boats. So we're good the 0:16:07.920 --> 0:16:10.800 same effect at the end of the day. But what's 0:16:10.800 --> 0:16:13.920 the common denominator there between all these different scams, because 0:16:13.920 --> 0:16:15.920 it feels like they've taken a lot of different forms 0:16:15.960 --> 0:16:18.920 and shapes. But how what what would you say is 0:16:18.960 --> 0:16:22.640 the common linkage? They do take a lot of different 0:16:22.640 --> 0:16:26.480 forms UM, and I think they do differ in a 0:16:26.480 --> 0:16:30.000 lot of ways, but they often rely on the fact 0:16:30.040 --> 0:16:34.880 that people think crypto is really hard to understand. It's 0:16:34.960 --> 0:16:37.960 really you know, technologically complex, and so they're sort of 0:16:38.000 --> 0:16:42.280 willing to accept that maybe they don't understand it, but 0:16:42.480 --> 0:16:45.760 that they should still you know, buy into it. UM 0:16:46.000 --> 0:16:48.480 people will often just say, well, I don't really get 0:16:48.520 --> 0:16:50.720 how it works, but you know it's promising me these 0:16:50.760 --> 0:16:53.640 huge returns, and so I'm probably just not smart enough 0:16:53.640 --> 0:16:56.000 to understand it, but you know, they'll put their money 0:16:56.040 --> 0:16:59.720 in UM. And I think, you know, people actually generally 0:16:59.760 --> 0:17:03.200 are actually smart enough to understand what's happening in these schemes. 0:17:04.200 --> 0:17:11.680 I'm wondering if so, not seeing there's like any promised 0:17:11.760 --> 0:17:16.800 the idea of disintermediation, of getting rid of you know, 0:17:16.880 --> 0:17:20.800 quote unquote middleman, a third party. The decentralization here, the 0:17:20.880 --> 0:17:24.840 idea of people being able to send remittances to other 0:17:24.840 --> 0:17:28.320 countries without paying huge feast to some sort of third party. 0:17:28.560 --> 0:17:32.200 Isn't that at least promising? Right? So? I I guess 0:17:32.200 --> 0:17:35.320 your your question really to me, the thing that struck 0:17:35.359 --> 0:17:39.000 me was the fact that you said idea. The ideas 0:17:39.200 --> 0:17:42.679 are promising, um, But it's when you dig deep into 0:17:43.000 --> 0:17:49.560 the technology itself you find that disintermediation, that so called decentralization. 0:17:50.240 --> 0:17:53.160 I mean, one could actually quibble with that in itself, 0:17:53.200 --> 0:17:57.760 and that there are intermediaries within the technology itself. You 0:17:57.800 --> 0:18:01.080 have software developers who make decisions that you essentially have 0:18:01.200 --> 0:18:03.320 to rely on to make the right decisions, that they 0:18:03.359 --> 0:18:06.000 have the right incentives to make those decisions, that they 0:18:06.000 --> 0:18:08.399 don't have conflicts of interest as they're making decisions. You 0:18:08.480 --> 0:18:12.200 have miners with certain cryptocurrencies that make decisions. So those 0:18:12.200 --> 0:18:15.879 are mediaries actually exist. And when you zoom out the 0:18:16.040 --> 0:18:19.760 very like structures are additional technologies and platforms that are 0:18:19.800 --> 0:18:22.080 being built on top of the blockchain. You have a 0:18:22.080 --> 0:18:26.800 whole new set of Intermediaris. Molly, there's this this funny 0:18:26.800 --> 0:18:28.960 thing happened yesterday. I was on your website and there's 0:18:28.960 --> 0:18:32.480 this good news section sort of this good news tag, 0:18:32.720 --> 0:18:33.879 and I was like, Oh, I'll click this and it 0:18:33.920 --> 0:18:36.760 will be like all the good things that crypto has done. 0:18:36.880 --> 0:18:39.800 It's not. It's like the last entry I think it 0:18:39.880 --> 0:18:42.600 is July, and the good news was that some game 0:18:42.600 --> 0:18:45.240 developer is not going to use n f T s. Yes. 0:18:45.640 --> 0:18:48.919 So my challenge to you is name something good that 0:18:48.960 --> 0:18:52.480 has come from all of this. Well. I think the 0:18:52.520 --> 0:18:55.680 best thing actually about crypto and everything that has sort 0:18:55.680 --> 0:18:57.800 of sprung out of it is that it has put 0:18:57.840 --> 0:19:02.560 the spotlight on a lot of failures in existing systems 0:19:02.600 --> 0:19:05.160 that we deal with today. So I think a lot 0:19:05.200 --> 0:19:07.840 of people are actually a lot more aware of issues 0:19:07.920 --> 0:19:13.040 in the banking system or in you know, unbanked communities 0:19:13.119 --> 0:19:15.320 than they might have been if they hadn't started engaging 0:19:15.320 --> 0:19:18.639 in crypto. And I think that's great. This special audio 0:19:18.680 --> 0:19:20.959 only episode of Crypto I r L will be right 0:19:20.960 --> 0:19:24.000 back with more from Katie Greifeld and Tim Stanovic. If 0:19:24.000 --> 0:19:26.840 you want the full video experience, head to Bloomberg dot 0:19:26.840 --> 0:19:41.160 com slash QT. I want to get your thoughts on 0:19:41.200 --> 0:19:45.280 a conversation we were having with Matt Levine um and 0:19:45.560 --> 0:19:49.520 in his big piece on crypto for words, Tim and 0:19:49.560 --> 0:19:52.080 I read all of it. Um he makes the point 0:19:52.119 --> 0:19:54.200 that the reason you've seen a lot of trad five 0:19:54.240 --> 0:19:57.080 people go into crypto, leave big banks to go into 0:19:57.119 --> 0:20:00.639 crypto is because there's so much more room for creativity 0:20:01.040 --> 0:20:05.280 and innovation rather than waiting for you know, someone way 0:20:05.400 --> 0:20:08.240 high up at the bank too, Okay, your project, you 0:20:08.280 --> 0:20:11.119 can just you know, go onto the blockchain, build a 0:20:11.119 --> 0:20:13.960 smart contract, build some sort of application, just go out 0:20:14.560 --> 0:20:18.439 and do it. And I mean maybe in its present 0:20:18.480 --> 0:20:22.640 state that hasn't produced anything that has any real sort 0:20:22.680 --> 0:20:26.320 of tentacles into the real economy or hasn't made our 0:20:26.359 --> 0:20:30.200 lives better necessarily. But when you think about that sort 0:20:30.240 --> 0:20:34.280 of blue sky thinking that okay, there's lower guard rails here, 0:20:34.320 --> 0:20:37.760 maybe it'll produce something wonderful, does that cross your mind 0:20:37.760 --> 0:20:40.119 at all? Well, I think that's one of the things 0:20:40.160 --> 0:20:41.920 where you sort of have to push back and say, well, 0:20:41.960 --> 0:20:45.280 why is there so much um you know, why is 0:20:45.320 --> 0:20:47.400 it so slow to do it in the current system. 0:20:47.480 --> 0:20:48.840 And it could be that he's you know that a 0:20:48.920 --> 0:20:50.800 person is working at a huge bank and there's just 0:20:50.840 --> 0:20:53.800 a lot of bureaucracy there. But I would guess that 0:20:54.000 --> 0:20:56.840 you know, if you're asking why is the traditional financial 0:20:56.880 --> 0:20:59.879 system really slow, it's probably because of all the regulations 0:21:00.040 --> 0:21:02.920 have to comply with. And it's true that crypto doesn't 0:21:02.960 --> 0:21:05.560 have that many regulations and so people are able to 0:21:05.720 --> 0:21:09.640 quote unquote innovate in very interesting ways. But that's also 0:21:09.720 --> 0:21:13.200 where all the schemes and the you know, enormous disasters 0:21:13.240 --> 0:21:16.760 have been coming from too um and crypto I think 0:21:16.800 --> 0:21:19.200 has been you know, evangelists for crypto have been making 0:21:19.240 --> 0:21:23.600 the argument that you can't regulate crypto more strongly or 0:21:23.640 --> 0:21:26.960 you will squash innovation. Not where do you come down 0:21:26.960 --> 0:21:32.960 on regulation, Because if there's nothing actually useful there to 0:21:33.080 --> 0:21:37.520 be regulated, then is it sort of just a waste 0:21:37.520 --> 0:21:39.800 of time and a waste of resources to even think 0:21:39.800 --> 0:21:44.400 about regulation there. That's a great question. So to your 0:21:44.640 --> 0:21:46.760 point on the regulation, I was just thinking of like 0:21:46.800 --> 0:21:50.280 New York, they have a regulatory scheme. It's not perfect 0:21:50.280 --> 0:21:53.440 by any means, but it's something, and companies haven't left 0:21:53.520 --> 0:21:55.679 New York, so I think it also kind of just 0:21:55.760 --> 0:21:58.040 runs counter to the example that like, do you mean 0:21:58.080 --> 0:22:01.000 from a crypto perspective. Yeah, Yeah, from a crypto perspective, 0:22:01.040 --> 0:22:03.240 like companies are still operating in New York, they're still 0:22:03.240 --> 0:22:07.000 offering their services, they're still quote unquote like innovating, and 0:22:07.080 --> 0:22:10.159 so I just think that kind of helps debunk the 0:22:10.280 --> 0:22:14.440 argument that regulation is all bad. Are you frustrated with 0:22:14.960 --> 0:22:17.760 the slow pace of regulation at this point? I mean, 0:22:17.760 --> 0:22:20.240 I know that the SEC find Kim Kardashian one point 0:22:20.240 --> 0:22:24.240 three million dollars huge, but cryptos here, it's been here 0:22:24.240 --> 0:22:28.240 for a while, no indication it's going away, and we're 0:22:28.359 --> 0:22:33.320 still talking about alphabet soup at this point. I'm enormously 0:22:33.320 --> 0:22:37.600 frustrated with it. I mean, we've seen sort of piecemeal enforcement, 0:22:37.760 --> 0:22:40.600 you know, individual schemes that are being cracked down on 0:22:40.720 --> 0:22:43.080 by the SEC or the d J or various other 0:22:43.960 --> 0:22:48.119 uh groups. But it's very sort of whackall at this point. 0:22:48.400 --> 0:22:50.960 So to not seeing if if crypto doesn't solve the 0:22:51.000 --> 0:22:54.000 problems that you have done, that you've identified, the problems 0:22:54.040 --> 0:22:57.560 that you've studied, what does well, it depends on what 0:22:57.600 --> 0:23:01.199 you're trying, all right, exact because it all varies. So 0:23:01.280 --> 0:23:05.240 I mean financial exclusion inequities. So if you're talking about 0:23:05.320 --> 0:23:07.760 let's say, like unbanked or underbanked, it's just to me 0:23:07.800 --> 0:23:11.240 even fascinating that Again, this gets lumped in with people 0:23:11.280 --> 0:23:13.840 wanting to use crypto for like wealth building, like for 0:23:13.920 --> 0:23:16.639 unbanked or underbanked. What is it exactly we're trying to solve. 0:23:16.680 --> 0:23:18.800 Is it access to a bank account? Is it access 0:23:18.840 --> 0:23:22.159 to being able to make financial transactions? There are policymakers 0:23:22.280 --> 0:23:26.320 right now who provide a whole host of solutions. The 0:23:26.320 --> 0:23:29.320 thing is is that many of them don't necessarily require 0:23:29.359 --> 0:23:34.080 technology their policy based solutions. If we're talking about wealth building, 0:23:34.320 --> 0:23:37.159 which other people view like crypto as a mechanism for 0:23:37.200 --> 0:23:41.480 doing that, again, there are other policies that might actually 0:23:41.480 --> 0:23:44.520 help us do that. And what's fascinating is in this country, 0:23:44.800 --> 0:23:47.840 the federal government used to provide ample amount of support 0:23:48.240 --> 0:23:51.440