Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This is Bloomberg Business Week with Carol Messer and Tim
Speaker 2: Stenebek on Bloomberg Radio. Carol, the amount of money from
Speaker 2: the crypto industry that's gone into this election has just
Speaker 2: been staggering. Yeah, we're talking about fair Shake. It's the
Speaker 2: political action committee which supports crypto friendly candidates from both parties.
Speaker 2: It was poised to spend as much as well more
Speaker 2: than forty million in the final weeks of the twenty
Speaker 2: twenty four US elections, after already deploying one hundred and
Speaker 2: forty million on dozens of congressional races nationwide. They're already
Speaker 2: thinking about twenty twenty six. It's one of the most
Speaker 2: powerful packs in Washington. They've now have more than thirty
Speaker 2: million in the bank, forty eight million in commitments for
Speaker 2: next election cycle. Yeah, we're talking about the twenty twenty
Speaker 2: six midterms already.
Speaker 3: Yeah, it's not like there's something at stake, although we
Speaker 3: know there is, and we know that crypto has certainly
Speaker 3: been something that has come up among the presidential candidates.
Speaker 3: Stephen mccluk is CEO at the digital asset focused investment
Speaker 3: firm Canary capital and Ken. Thank you all, Rod I
Speaker 3: wanted to say correctly, or I wanted you too. Its
Speaker 3: co founder and chief experience officer at Solidus Labs, which
Speaker 3: calls itself quote first crypto native Security and Compliance hub
Speaker 3: tailored for digital assets. We talk a lot about crypto,
Speaker 3: Tim and I do both joining us here in our
Speaker 3: Bloomberg Interactive Broker studio. Let me ask Steven. Let me
Speaker 3: start with you in terms of you, guys are digitally asset,
Speaker 3: you're investing. How are you thinking about the elections and
Speaker 3: the election outcome, and it's not just elections but potentially
Speaker 3: congressional elections that might have some thoughts in terms of
Speaker 3: regulatory oversight and in terms of where crypto goes. How
Speaker 3: are you thinking about the outcomes?
Speaker 4: Yeah, no, thank you and thanks for having us well.
Speaker 4: First of all, I do believe that the congressional races
Speaker 4: are going to be more important than the presidential races
Speaker 4: this time because right now the Senate.
Speaker 1: UH.
Speaker 4: If the Senate changes and the Senate it begins to
Speaker 4: support crypto, particularly the Senate Banking Committee, that's the most
Speaker 4: important thing right now. We could see a thriving crypto
Speaker 4: industry in the US if we get some changes in
Speaker 4: the Senate. Congress is already supportive, or the House is
Speaker 4: already supportive. We just need to get the Senate supportive
Speaker 4: as well.
Speaker 2: Kind I'm going to get to you in a second,
Speaker 2: but I want to follow up Steven with you for
Speaker 2: a minute. Why should the Senate support crypto? I mean,
Speaker 2: people think about this from the perspective. I think, if
Speaker 2: you're not deeply involved in the industry as an industry
Speaker 2: that's rife with scam and grift. There are people behind
Speaker 2: bars right now as a result of some of these
Speaker 2: scams in grift, it's something that's.
Speaker 4: Used for.
Speaker 2: Buying stuff on the dark web, ransomware and the like,
Speaker 2: why should the Senate be supporting it?
Speaker 4: Yeah, Well, to back up a little bit, let's just
Speaker 4: talk about bitcoin for a moment. Bitcoin actually makes it
Speaker 4: easy for law enforcement to track monetary trans actions. So
Speaker 4: the FBI has has software that they track every single
Speaker 4: movement that is made on the bitcoin network, every single wallet.
Speaker 4: They were spoken in the folks from Chanalysis in the past. Yeah, absolutely,
Speaker 4: and Chanalysis is full full of x FBI agents and
Speaker 4: so so Bitcoin actually makes it possible to track down criminals.
Speaker 4: But the reason why, you know, about transactions on the
Speaker 4: dark web, and the reason why people are in jail
Speaker 4: and the reason why people are being caught is because
Speaker 4: of these transactions. FTX is another good example of of
Speaker 4: of a massive fraud that occurred. But if people had
Speaker 4: only looked at the chainalysis of what was going on,
Speaker 4: they would see that not everything equated to what to
Speaker 4: what the executives that FTS are saying. So so bitcoin
Speaker 4: is actually really good for law enforcement in my opinion,
Speaker 4: first of all. Second of all, as an industry, it's
Speaker 4: it's it's really on the cutting edge of technology. Even
Speaker 4: if you look like a big coin mining which essentially
Speaker 4: data centers, a lot of those data centers are being
Speaker 4: transformed into AI data centers, which is you know, obviously
Speaker 4: the future after seeing some of the results today. So
Speaker 4: we want to be leading that in the US. We
Speaker 4: don't want it to be offshore. We don't want it
Speaker 4: to be in China, we don't want it to be
Speaker 4: in the Bahamas. We want it to be in the US.
Speaker 3: Ken come on in on, thanks, because I'm curious what's
Speaker 3: at stake for you based on the election outcome?
Speaker 1: Right, So, first of all, I just want to agree
Speaker 1: with Steven. I mean crypto has issues. It's a new industry.
Speaker 1: People are still learning about it. I think that technology
Speaker 1: is still being battle tested. There's fraud, there's scams. There
Speaker 1: are issues, but let us not forget that those still
Speaker 1: exist in traditional finance as well. And just to kind
Speaker 1: of echo Stephen's points, the largest recovery of funds ever
Speaker 1: in the history of the Department of Justice actually happened
Speaker 1: thanks to bitcoin, four point one billion dollars. It was
Speaker 1: the bitfoinix hack. A few years later they were able
Speaker 1: to trace it despite thousands of transactions. So there are issues,
Speaker 1: there are also a lot of opportunities, and I think
Speaker 1: today most law enforcement I agree with Stephen you'd speak
Speaker 1: with would tell you that it actually, you know, in
Speaker 1: a lot of ways, provides opportunities to make finance safer,
Speaker 1: automatically detect stems.
Speaker 3: How does it stay true to what it's supposed to
Speaker 3: be kind of something that is not part of the
Speaker 3: traditional establi establishment with so many different hands and layers
Speaker 3: in it, So how does it stay true to that?
Speaker 3: But then get the proper transparency and regulatory oversight that
Speaker 3: many would say is necessary that the traditional you know,
Speaker 3: financial system.
Speaker 1: Has already financialism has and yet you know, once every
Speaker 1: few years we have a madeof or we have a
Speaker 1: Lehman Brothers like just to say, you know, you know,
Speaker 1: wherever there's money to make, some people would probably make
Speaker 1: some bad decisions and hurt others. But you know, first
Speaker 1: of all, you know, one of the fundamental ideas of
Speaker 1: an asset like bitcoin, no government can print it. So
Speaker 1: you know that's that's a really important fundamental idea. You know,
Speaker 1: as an inflation hedge, et cetera. You can even today
Speaker 1: working with centralized companies, they can support you in setting
Speaker 1: up a wallet that is yours and they cannot control.
Speaker 1: So there are a lot of different ways in which
Speaker 1: this allows people already to control their money better. And
Speaker 1: you know, and I'm just mentioning a few examples.
Speaker 3: I get the control. But where's then the oversight? Right?
Speaker 3: If the whole idea of cryptocurrencies is this currency that is,
Speaker 3: you know, not part of the establishment, right and kind
Speaker 3: of cleaner in terms of the thoroughfare, if you will,
Speaker 3: then how but then many would argue, after FTX and
Speaker 3: SBF that we do need some oversight. It's a regulatory oversit.
Speaker 3: So we're how do you mesh those two.
Speaker 1: So I guess I'll say a couple of things, and
Speaker 1: I'll connect it also to the other question. You know,
Speaker 1: first of all, from you know, if you look at FTX,
Speaker 1: for example, a lot of people got hurt. I think
Speaker 1: there's a very strong argument that can be made that
Speaker 1: had it been regulated, less people would get hurt. In
Speaker 1: New York, for example, FDx could not get a New
Speaker 1: York license because there's a clear regulatory framework that the
Speaker 1: New York Department.
Speaker 3: Of one of these guys were outside of the United
Speaker 3: States rights.
Speaker 1: And one should ask not regulating it and instead just
Speaker 1: looking to enforce but not regulating, which means that ultimately
Speaker 1: Americans who want it. There are surveys ahead of the
Speaker 1: elections that's say that thirty to forty percent of Americans
Speaker 1: have engaged with digital assets. One out of seven of
Speaker 1: every likely voter sees it as an important issue. There's
Speaker 1: a question that needs to be asked that I think
Speaker 1: people in Washington should ask themselves. By not regulating it,
Speaker 1: regulating it, are you protecting Americans or are you abdicating responsibility.
Speaker 1: N FTX is a great example for that.
Speaker 2: Well, speaking of regulating this, I talked to a lot
Speaker 2: of folks who agree on one thing in the crypto industry,
Speaker 2: and that's their universal unapproval of Gary Gensler, the SEC chairman.
Speaker 2: I'm wondering if you think that Gary Gensler will leave
Speaker 2: if Kamala Harris wins, and if so, do you think
Speaker 2: a new SEC chair would take a different approach toward crypto.
Speaker 4: Yeah, I do think a new chair would take a
Speaker 4: different approach. I was actually one of the few people
Speaker 4: that was a fan of Gary Ginsler's.
Speaker 2: Really, I was, Okay, tell us why you're like the
Speaker 2: first person I've talked to you in weeks in the
Speaker 2: crypto community who say.
Speaker 4: That, Yeah, I mean so, by the way, I agree
Speaker 4: with all the questions that you guys are asking on
Speaker 4: regulation and oversight. This is the whole reason why I
Speaker 4: fought for the last seven years to get a bitcoin
Speaker 4: spotty TF And obviously it was one of the one
Speaker 4: of the ones that launched one with Valkyrie, and but
Speaker 4: if you remember, we didn't get a spot bitcoin ETF
Speaker 4: until Gary Ginsler was the chair. Now a lot of
Speaker 4: people will say, okay, there's a lot of other different
Speaker 4: reasons of why that I've heard.
Speaker 2: I've said that on Aaron. People have pushed back, and
Speaker 2: they've said, well, it was the lawsuits that did it,
Speaker 2: it was the legal system that allowed it.
Speaker 4: Yeah, I mean the lawsuits did definitely push it over
Speaker 4: the edge. But but Gary Ginsler has been a fan
Speaker 4: of bitcoin all along. He's working under, you know, and
Speaker 4: an administration that doesn't want to allow it, primarily coming
Speaker 4: from the Senate, coming from Elizabeth Warren, who's on the
Speaker 4: Senate Banking Committee, which is the most you know, powerful
Speaker 4: organization in the Senate when it comes to regulating things
Speaker 4: like banks and bitcoin, but and and the sec. But
Speaker 4: I believe that Gary Ginsler has been wanting this all along,
Speaker 4: and he's been asked to hold off. So I've I've
Speaker 4: been a fan. We've gotten a big quarte.
Speaker 3: Are you a fan?
Speaker 1: Well, you know, I'm not going to make any predictions.
Speaker 1: The Jewish Tom Wood says prophecies were for the full right.
Speaker 1: But but I will remind people that when Gary Ginsler,
Speaker 1: again to echo Steve, when Gary Ganster was appointed, the
Speaker 1: industry celebrated. The industry thought he was a bit of
Speaker 1: a messiah. He taught, of course, it was a professor
Speaker 1: at MIT for blockchain. So I'll just remind people that
Speaker 1: whoever gets appointed next, like, it gets more complicated when
Speaker 1: someone is in the position. There's a lot of interests
Speaker 1: in politics you need to cater to, you know, knowne
Speaker 1: as a messiah. But I think there's generally I thin
Speaker 1: I think I speak for the industry for many industry,
Speaker 1: and I say that the general sentiment is that whoever wins,
Speaker 1: things are going to be different after the elections. It's
Speaker 1: in part because the crypto industry has organized and you know,
Speaker 1: you know, you talk about all the money that crypto
Speaker 1: has been pouring into this. Crypto is not making this up.
Speaker 1: It's just joining a lot of other industries that are
Speaker 1: doing that as well, right, But it's also it's more
Speaker 1: than that. It's it's also that people want this. I
Speaker 1: mentioned one out of seven likely voters according to a
Speaker 1: survey by what do.
Speaker 3: They wanted for that? Because I think there's still a
Speaker 3: debate about what exactly is it. Well, I don't see
Speaker 3: a lot of people transacting with it.
Speaker 1: True, and there's still a lot of development of various
Speaker 1: use cases and products. But I think that you know,
Speaker 1: you know, people want to try new things, and and
Speaker 1: also sometimes it's not necessarily the role of the government
Speaker 1: to ask why do they want it, you know, I
Speaker 1: think one fundamental reason why the Senate should care for
Speaker 1: this is because it's innovation and we're trying new things.
Speaker 1: We're challenging things that you know, the traditional financial industry.
Speaker 1: I'm not saying that all of this will replace traditional finance,
Speaker 1: but it's already pushing very you know, old incumbenty institutions
Speaker 1: to think differently, to try differently. I don't necessarily think
Speaker 1: all of us will be paying each other in bitcoin.
Speaker 1: I don't think that's the point. I think the point
Speaker 1: is giving giving opportunities to create, to offer people more
Speaker 1: ways to engage with finance, more decentralized, less decentralized, more intermediate, less, less,
Speaker 1: more disintermediated. Uh and and why do people want it?
Speaker 1: There are a lot of different reasons. I mentioned inflation, hedge,
Speaker 1: I mentioned just curiosity. But is that really an important question?
Speaker 1: If the people want it?
Speaker 2: We only have like ten seconds left, So one word
Speaker 2: answers from each of you. Who's better for crypto Harris
Speaker 2: or Trump?
Speaker 4: Trump?
Speaker 1: By a mile?
Speaker 2: Harris or Trump.
Speaker 1: I'm not going to pick aside. I'm also not going
Speaker 1: to disagree, but I will say that the industry has
Speaker 1: to be a nonpartisan here. This is too important to
Speaker 1: make his political. The Democrats have been catching up with
Speaker 1: their farm attacks since Harris was nominated, and whoever wins,
Speaker 1: they made a lot of promises that they need to
Speaker 1: fulfill to our industry.
Speaker 3: Would say it also has to be global in terms
Speaker 3: of the approach and make sure that they're working with
Speaker 3: global leaders. Steve mclerk and Horad, thank you so much.