1 00:00:01,600 --> 00:00:04,120 Speaker 1: Look, I think the crypto industry more broadly, if it's 2 00:00:04,160 --> 00:00:08,239 Speaker 1: going to have any success going forward, has to come 3 00:00:08,280 --> 00:00:15,680 Speaker 1: into compliance with basic public policy about disclosure, about avoiding conflicts, 4 00:00:15,760 --> 00:00:21,640 Speaker 1: about properly segregating customer funds, and guarding against fraud manipulation. 5 00:00:22,120 --> 00:00:27,440 Speaker 1: Without that, this whole area stands the chances of collapsing 6 00:00:27,560 --> 00:00:28,760 Speaker 1: like a house of cards. 7 00:00:29,160 --> 00:00:33,519 Speaker 2: That very serious sounding person is Gary Gensler. He's the 8 00:00:33,600 --> 00:00:37,400 Speaker 2: chairman of the US Securities and Exchange Commission and perhaps 9 00:00:37,479 --> 00:00:42,240 Speaker 2: the most feared and loathed man in the world of cryptocurrency. 10 00:00:43,280 --> 00:00:46,440 Speaker 2: In the eight months since the shocking implosion of Sam 11 00:00:46,479 --> 00:00:51,280 Speaker 2: Bankman Freed's FTX exchange, Gensler and other federal officials have 12 00:00:51,440 --> 00:00:55,880 Speaker 2: stepped up their demands for stricter federal regulation of the industry. 13 00:00:56,480 --> 00:00:59,640 Speaker 2: The sec has also launched lawsuits against two of its 14 00:00:59,720 --> 00:01:04,800 Speaker 2: large players. Bloomberg's Hannah Miller and Alison Versuero report that 15 00:01:04,840 --> 00:01:09,120 Speaker 2: all this government's scrutiny has spooked some investors and raised 16 00:01:09,160 --> 00:01:11,920 Speaker 2: serious questions about the future of crypto. 17 00:01:12,440 --> 00:01:15,560 Speaker 3: Yes, it got this mainstream recognition, but the stakes were 18 00:01:15,560 --> 00:01:19,920 Speaker 3: that much higher. So these falls, these scandals, these implosions, 19 00:01:20,360 --> 00:01:23,320 Speaker 3: they've just hit the industry super hard. 20 00:01:23,400 --> 00:01:24,920 Speaker 4: One of the things that we have to remember with 21 00:01:25,000 --> 00:01:27,240 Speaker 4: these two lawsuits we've seen so far is that they 22 00:01:27,240 --> 00:01:29,120 Speaker 4: could just be the tip of the iceberg. 23 00:01:36,680 --> 00:01:40,039 Speaker 2: I'm Wes Kasova today on the Big Take Ken Washington 24 00:01:40,120 --> 00:01:42,600 Speaker 2: and Crypto Learn to get along. 25 00:01:49,120 --> 00:01:52,000 Speaker 5: Sam Bankman Freed has been arrested in the Bahamas, and 26 00:01:52,000 --> 00:01:54,360 Speaker 5: we got that confirmation from the Bahamas attorney. 27 00:01:54,440 --> 00:01:54,840 Speaker 3: Just try to. 28 00:01:54,840 --> 00:01:59,200 Speaker 6: Calculate the contagion here because investors are not expecting much 29 00:01:59,240 --> 00:02:00,960 Speaker 6: in terms of their funds here. 30 00:02:01,000 --> 00:02:03,280 Speaker 5: I've been so many twists and turns in the case 31 00:02:03,320 --> 00:02:07,360 Speaker 5: that US officials are building against FTX founder Sam Bankman Free. 32 00:02:07,360 --> 00:02:10,000 Speaker 2: But now we have Hannah. I think by now all 33 00:02:10,040 --> 00:02:13,840 Speaker 2: of us are really familiar with the spectacular failure of 34 00:02:13,960 --> 00:02:18,120 Speaker 2: Sam Bankman Freed's FTX exchange. And in fact, just to 35 00:02:18,160 --> 00:02:21,040 Speaker 2: give you a shout out, you recorded a whole podcast 36 00:02:21,040 --> 00:02:25,440 Speaker 2: with Bloomberg and Wondering called Spellcaster The Fall of Sam 37 00:02:25,520 --> 00:02:28,400 Speaker 2: Bankman Freed. It is terrific, by the way, and I 38 00:02:28,480 --> 00:02:32,480 Speaker 2: encourage everyone to give it a listen. Can you start 39 00:02:32,480 --> 00:02:36,040 Speaker 2: by telling us what's happened since? Because the entire industry 40 00:02:36,080 --> 00:02:38,680 Speaker 2: has really been shaken to its bones. 41 00:02:38,960 --> 00:02:43,200 Speaker 3: We're still seeing fallout from the collapse of FTX. There 42 00:02:43,200 --> 00:02:46,200 Speaker 3: are companies like Block five that had FTX exposure that 43 00:02:46,240 --> 00:02:50,000 Speaker 3: had to file for bankruptcy. There have been lawsuits against 44 00:02:50,040 --> 00:02:54,400 Speaker 3: celebrities who endorse FTX. I'm talking about Steph Curry, Tom Brady, 45 00:02:54,480 --> 00:02:58,280 Speaker 3: Gissell Bunchin. The other thing, too, is that the cryptocurrency 46 00:02:58,320 --> 00:03:01,160 Speaker 3: market is still reeling. I mean, it's lost about one 47 00:03:01,160 --> 00:03:04,919 Speaker 3: point eight trillion dollars in value, and you know, there 48 00:03:04,960 --> 00:03:09,560 Speaker 3: are a lot of questions on whether this industry can survive, 49 00:03:09,720 --> 00:03:14,200 Speaker 3: nevermind thrive. The US Securities and Exchange Commission recently filed 50 00:03:14,320 --> 00:03:18,560 Speaker 3: two lawsuits against Binance and Coinbase, which are the two 51 00:03:18,880 --> 00:03:20,240 Speaker 3: biggest crypto exchanges. 52 00:03:20,360 --> 00:03:22,400 Speaker 6: Have two different things happening on two different days. You 53 00:03:22,400 --> 00:03:25,000 Speaker 6: have Binance, the largest exchange in the world, but some 54 00:03:25,080 --> 00:03:27,760 Speaker 6: of the allegations being made against Binance are very different 55 00:03:27,760 --> 00:03:30,400 Speaker 6: than the ones being made against Coinbase. Here at Binance. 56 00:03:30,440 --> 00:03:33,680 Speaker 3: Coinbase is based in the US. Binance does not have 57 00:03:33,760 --> 00:03:37,880 Speaker 3: an official headquarters, but is you know, sprawling across the 58 00:03:37,880 --> 00:03:41,080 Speaker 3: world and has run into issues with regulators around the globe. 59 00:03:41,240 --> 00:03:43,840 Speaker 3: So these are two you know, very powerful companies, very 60 00:03:43,840 --> 00:03:46,080 Speaker 3: different in their own ways, but both of them are 61 00:03:46,080 --> 00:03:48,600 Speaker 3: facing regulatory trouble at the moment, and. 62 00:03:48,560 --> 00:03:52,200 Speaker 2: We're going to get into all the details about those 63 00:03:52,280 --> 00:03:55,720 Speaker 2: lawsuits in just a little bit, But Helle, I wanted 64 00:03:55,720 --> 00:03:59,560 Speaker 2: to ask you, because you cover financial regulation Washington, it's 65 00:03:59,560 --> 00:04:02,440 Speaker 2: been taken a really hard look at crypto from the 66 00:04:02,560 --> 00:04:06,640 Speaker 2: very beginning. Why has it been so hard for them 67 00:04:06,680 --> 00:04:09,960 Speaker 2: to kind of put guardrails on this industry the way 68 00:04:10,000 --> 00:04:11,120 Speaker 2: they do with others? 69 00:04:11,760 --> 00:04:14,280 Speaker 4: So, I mean, it's been really difficult because it comes 70 00:04:14,320 --> 00:04:19,400 Speaker 4: down to basic characterization, right nobody knows necessarily, or at least, 71 00:04:19,400 --> 00:04:23,400 Speaker 4: there's a gray area over which digital assets are securities 72 00:04:23,440 --> 00:04:27,320 Speaker 4: that would be regulated by the sec or are commodities 73 00:04:27,400 --> 00:04:30,400 Speaker 4: that currently you know, if you have a futures based 74 00:04:30,400 --> 00:04:33,080 Speaker 4: product on something like bitcoin, that can be regulated by 75 00:04:33,120 --> 00:04:36,599 Speaker 4: the Commodity Futures Trading Commission, but anything kind of in 76 00:04:36,640 --> 00:04:39,960 Speaker 4: the underlying commodity basket would be regulated at the state level. 77 00:04:40,000 --> 00:04:42,440 Speaker 2: Right now, all right, So let's take a second and 78 00:04:42,480 --> 00:04:45,280 Speaker 2: to find our arms here, because this gets pretty weedy, 79 00:04:45,400 --> 00:04:48,400 Speaker 2: and yet it's really really important to understand. And one 80 00:04:48,400 --> 00:04:52,960 Speaker 2: of the big tensions here is is crypto currency a 81 00:04:53,080 --> 00:04:57,080 Speaker 2: security or is it a commodity? And can you tell 82 00:04:57,160 --> 00:04:59,400 Speaker 2: us just a bit about the difference between those two 83 00:04:59,440 --> 00:05:01,120 Speaker 2: things and why it matters so much. 84 00:05:02,040 --> 00:05:05,840 Speaker 4: Yeah, so securities were kind of are regulated under this 85 00:05:06,160 --> 00:05:07,600 Speaker 4: test that's called the Howie test. 86 00:05:07,600 --> 00:05:09,040 Speaker 7: It's from a nineteen forty six. 87 00:05:08,920 --> 00:05:13,119 Speaker 4: Supreme Court ruling was actually related to sales of tracks 88 00:05:13,160 --> 00:05:16,000 Speaker 4: of of Florida centrist growths to investors. So nothing to 89 00:05:16,040 --> 00:05:18,679 Speaker 4: do with you know what we traditionally think of securities now, 90 00:05:19,080 --> 00:05:20,359 Speaker 4: which are stocks? 91 00:05:20,800 --> 00:05:22,719 Speaker 2: Really? I think most people would think of it as 92 00:05:22,800 --> 00:05:24,600 Speaker 2: you know, a security, as a stock or a bond, 93 00:05:24,640 --> 00:05:25,920 Speaker 2: something that you would invest in. 94 00:05:26,240 --> 00:05:29,120 Speaker 4: Yeah, I mean, at the simplest level, it's basically anything 95 00:05:29,120 --> 00:05:32,960 Speaker 4: that involves investors kicking money with the intention of profiting 96 00:05:33,279 --> 00:05:37,679 Speaker 4: from the efforts of an organization's leadership. So, you know stocks, 97 00:05:37,720 --> 00:05:40,120 Speaker 4: for instance, if I invest in Apple stock, you know, 98 00:05:40,160 --> 00:05:43,200 Speaker 4: I expect that Tim Cook or Apple's leadership are going 99 00:05:43,200 --> 00:05:46,840 Speaker 4: to make certain decisions that will increase the value of 100 00:05:46,839 --> 00:05:47,320 Speaker 4: that stock. 101 00:05:47,640 --> 00:05:50,640 Speaker 2: So you're investing in an enterprise like a company, yes, 102 00:05:50,760 --> 00:05:53,440 Speaker 2: or even like in the case of a bond, a government right. 103 00:05:53,600 --> 00:05:56,640 Speaker 4: And you know, so if you're not a security which 104 00:05:56,760 --> 00:05:59,799 Speaker 4: is regulated by the sec then maybe you're a commodity 105 00:05:59,800 --> 00:06:03,280 Speaker 4: with which could eventually be regulated by the CFTC if 106 00:06:03,360 --> 00:06:05,880 Speaker 4: Congress acts, and so you know a lot of people 107 00:06:05,920 --> 00:06:09,040 Speaker 4: will say that they think digital assets are more like commodities, 108 00:06:09,040 --> 00:06:12,279 Speaker 4: that they're more like digital gold. And there's actually laws 109 00:06:12,320 --> 00:06:14,560 Speaker 4: that kind of just list out what commodities are. So 110 00:06:14,600 --> 00:06:16,760 Speaker 4: that's wheat, gold, you know, some of those other things 111 00:06:16,760 --> 00:06:20,040 Speaker 4: we think of. And so the main test that the 112 00:06:20,040 --> 00:06:22,919 Speaker 4: industry is kind of put on itself is, you know, 113 00:06:23,080 --> 00:06:26,200 Speaker 4: is there some sort of central entity that's making decisions 114 00:06:26,240 --> 00:06:29,080 Speaker 4: to you know, increase the price of a crypto asset. 115 00:06:29,240 --> 00:06:32,080 Speaker 4: And the industry has kind of increasingly develop their projects 116 00:06:32,120 --> 00:06:33,480 Speaker 4: to try to get more. 117 00:06:33,400 --> 00:06:35,080 Speaker 7: Decentralized is how they call it. 118 00:06:35,520 --> 00:06:37,839 Speaker 4: And so that's kind of a development that we've seen 119 00:06:37,880 --> 00:06:41,919 Speaker 4: over the last couple of years. It's also you know, 120 00:06:41,960 --> 00:06:44,039 Speaker 4: I will point out that the crypto industry would prefer 121 00:06:44,240 --> 00:06:47,000 Speaker 4: to not be regulated by the SEC. This is something 122 00:06:47,040 --> 00:06:49,000 Speaker 4: that would be really costly for them. They are all 123 00:06:49,040 --> 00:06:52,840 Speaker 4: of these disclosures, they are stricter investor protections, even though 124 00:06:52,880 --> 00:06:54,800 Speaker 4: the CFTC will say, you know, our rules are just 125 00:06:54,839 --> 00:06:57,760 Speaker 4: as strong. And there's also this question right now, you know, 126 00:06:58,760 --> 00:07:02,279 Speaker 4: the CFTC doesn't have the ability right now to directly 127 00:07:02,440 --> 00:07:06,760 Speaker 4: regulate cryptotokens. It would need Congress to act to actually 128 00:07:06,760 --> 00:07:10,440 Speaker 4: make that possible. They can regulate bitcoin futures, ether futures, 129 00:07:10,480 --> 00:07:12,560 Speaker 4: but not necessarily the tokens themselves. 130 00:07:12,960 --> 00:07:17,119 Speaker 2: Hannah, you've written in great detail about the really rough 131 00:07:17,200 --> 00:07:20,320 Speaker 2: state of the crypto industry, and when you look back 132 00:07:20,400 --> 00:07:24,120 Speaker 2: to bitcoin's high point in twenty twenty one, when I 133 00:07:24,160 --> 00:07:27,840 Speaker 2: think crypto was at like sixty nine thousand dollars, what 134 00:07:28,000 --> 00:07:32,960 Speaker 2: surprises you most about where the industry finds itself now. 135 00:07:33,480 --> 00:07:38,720 Speaker 3: Yeah, well, the crypto industry is no stranger to scam scandals, crimes, 136 00:07:39,360 --> 00:07:44,000 Speaker 3: things like that, but I think the scale of these 137 00:07:44,040 --> 00:07:46,360 Speaker 3: obstacles that it's faced in the past year or so 138 00:07:46,760 --> 00:07:49,840 Speaker 3: was just unimaginable. Prior to this, I mean, nobody saw 139 00:07:50,280 --> 00:07:54,080 Speaker 3: the collapse of FTX coming. That was preceded by, you know, 140 00:07:54,560 --> 00:07:57,240 Speaker 3: the implosion of three Hourro's Capital, which was a major 141 00:07:57,280 --> 00:08:01,560 Speaker 3: crypto hedge fund. Celsius, a crypto las went into bankruptcy. 142 00:08:02,000 --> 00:08:05,200 Speaker 3: So it's just been one thing after the other and 143 00:08:05,320 --> 00:08:09,440 Speaker 3: the pace of that has really just thrown the industry off. 144 00:08:09,520 --> 00:08:12,360 Speaker 3: And it's been very interesting to see you know, both 145 00:08:12,440 --> 00:08:16,520 Speaker 3: founders and venture capital investors who were once the industry's 146 00:08:16,560 --> 00:08:19,520 Speaker 3: biggest cheerleaders. It's been very startling to see some of 147 00:08:19,560 --> 00:08:22,480 Speaker 3: them start to migrate away and look at other industries 148 00:08:22,560 --> 00:08:25,560 Speaker 3: like artificial intelligence. You know, that's like the newest tech 149 00:08:25,600 --> 00:08:27,680 Speaker 3: trend that's you surve crypto at this point. 150 00:08:27,960 --> 00:08:30,800 Speaker 2: And also a lot of people who weren't big name 151 00:08:31,080 --> 00:08:33,040 Speaker 2: investors got burned too. 152 00:08:34,520 --> 00:08:36,840 Speaker 3: I mean, there are still people waiting to get their 153 00:08:36,880 --> 00:08:39,760 Speaker 3: money back from FTX. They have no idea whether they're 154 00:08:39,800 --> 00:08:42,640 Speaker 3: going to be able to recover, in some cases, their 155 00:08:42,760 --> 00:08:46,960 Speaker 3: entire life savings that they put on this crypto exchange. 156 00:08:47,320 --> 00:08:50,040 Speaker 3: And I think what also sets the crypto industry apart 157 00:08:50,080 --> 00:08:54,200 Speaker 3: is that so many celebrities, you know, started promoting crypto companies, 158 00:08:54,240 --> 00:08:59,320 Speaker 3: doing commercials promoting coins on social media, particularly in ftx's web. 159 00:08:59,440 --> 00:09:02,040 Speaker 3: You know, they did a commercial with Larry David during 160 00:09:02,080 --> 00:09:04,000 Speaker 3: the Super Bowl, you know, where he was supposed to 161 00:09:04,040 --> 00:09:07,520 Speaker 3: be this crypto skeptic, but was overall, you know, lending 162 00:09:07,559 --> 00:09:09,600 Speaker 3: his face and his fame to this company. 163 00:09:10,040 --> 00:09:12,280 Speaker 2: Like I was saying, it's FTX, it's a safe and 164 00:09:12,320 --> 00:09:13,320 Speaker 2: easy way to get into a crypto. 165 00:09:14,559 --> 00:09:17,200 Speaker 4: I don't think so, and I'm never wrong about this 166 00:09:17,240 --> 00:09:23,880 Speaker 4: stuff never. 167 00:09:21,600 --> 00:09:24,120 Speaker 3: So I think that has also put a lot of 168 00:09:24,120 --> 00:09:27,079 Speaker 3: people on edge that here you have these very wealthy individuals, 169 00:09:27,320 --> 00:09:31,520 Speaker 3: these famous people promoting these companies and cryptocurrencies, profiting from it, 170 00:09:31,880 --> 00:09:35,280 Speaker 3: and they may have not seen the same fallout that 171 00:09:35,400 --> 00:09:39,960 Speaker 3: just individual investors have. And you know FTX. They renamed 172 00:09:40,040 --> 00:09:43,040 Speaker 3: an arena in Miami where the Heat. 173 00:09:42,880 --> 00:09:44,559 Speaker 7: Plays after FTX. 174 00:09:44,920 --> 00:09:49,120 Speaker 3: You could see Coinbase's logo on basketball courts for NBA games. 175 00:09:49,559 --> 00:09:53,400 Speaker 3: MLB umpires wore FTX patches on their uniforms. Like these 176 00:09:53,440 --> 00:09:55,959 Speaker 3: companies were everywhere, and it was really crazy to see 177 00:09:56,000 --> 00:09:57,559 Speaker 3: them breaking over into the mainstream. 178 00:09:58,880 --> 00:10:12,400 Speaker 2: After the break, government takes crypto to court. Ellie, we 179 00:10:12,800 --> 00:10:15,839 Speaker 2: mentioned a little bit earlier about these two lawsuits that 180 00:10:15,880 --> 00:10:20,840 Speaker 2: have been filed against the two biggest of the crypto exchanges. 181 00:10:21,240 --> 00:10:25,320 Speaker 2: One is against Binance. Can you tell us about finance 182 00:10:25,760 --> 00:10:27,679 Speaker 2: and what the charges are against it? 183 00:10:28,480 --> 00:10:28,800 Speaker 7: Sure? 184 00:10:28,920 --> 00:10:32,400 Speaker 4: So, Binance is actually facing two lawsuits. There's one from 185 00:10:32,440 --> 00:10:36,040 Speaker 4: the CFTC that was actually filed first earlier this year, 186 00:10:36,400 --> 00:10:38,760 Speaker 4: and then we had one filed in June by the SEC. 187 00:10:39,360 --> 00:10:42,880 Speaker 4: Both of these have registration failures essentially, you know, operating 188 00:10:42,920 --> 00:10:46,040 Speaker 4: as unregistered exchanges or clearing agencies. 189 00:10:46,320 --> 00:10:48,880 Speaker 7: But then we also have a slew of. 190 00:10:48,960 --> 00:10:53,680 Speaker 4: Kind of different accusations over mishandling customer funds. That feels 191 00:10:53,679 --> 00:10:55,960 Speaker 4: a little bit FTX. 192 00:10:55,600 --> 00:10:59,960 Speaker 1: Like parallels here to the FTX of fraud and minute 193 00:11:00,000 --> 00:11:04,520 Speaker 1: pulation that we saw and we allege against Sam Bakmin 194 00:11:04,559 --> 00:11:10,360 Speaker 1: Freed where he had sister organization Alameda and the special 195 00:11:10,520 --> 00:11:13,400 Speaker 1: arrangements with that trading platform FTX. 196 00:11:13,840 --> 00:11:16,240 Speaker 4: For instance, the SEC alleged that a total of at 197 00:11:16,320 --> 00:11:18,679 Speaker 4: least one hundred and ninety million dollars was transferred from 198 00:11:18,760 --> 00:11:23,160 Speaker 4: the US based Binance Exchange to an account with this 199 00:11:23,240 --> 00:11:26,400 Speaker 4: company called Sigma Chain, which was a trading firm that 200 00:11:27,080 --> 00:11:32,280 Speaker 4: the SEC said was controlled by Binance's CEO, Chenpeng Jao, 201 00:11:32,559 --> 00:11:33,840 Speaker 4: who goes by cz. 202 00:11:33,920 --> 00:11:38,120 Speaker 1: SO here Binance. At his sister organization controlled by mister 203 00:11:38,240 --> 00:11:42,760 Speaker 1: Zao called Sigma Chain, we alleged that they had corrupted 204 00:11:42,880 --> 00:11:47,280 Speaker 1: their trading volumes by a lack of risk controls about 205 00:11:47,280 --> 00:11:51,240 Speaker 1: their affiliate Sigma Chain and wash trading. There are challenges 206 00:11:51,280 --> 00:11:54,920 Speaker 1: of custody throughout this space. There's a business model that 207 00:11:55,160 --> 00:11:59,920 Speaker 1: bundles and co mingles functions that we don't see nor 208 00:12:00,080 --> 00:12:03,600 Speaker 1: would we allow elsewhere in finance. 209 00:12:04,080 --> 00:12:06,080 Speaker 4: And so basically they also said from that amount there 210 00:12:06,120 --> 00:12:09,080 Speaker 4: was eleven million dollars I was drawn to purchase a yacht. 211 00:12:09,320 --> 00:12:11,760 Speaker 4: Some of that money was customer funds. There was another 212 00:12:12,360 --> 00:12:15,160 Speaker 4: firm that was controlled by CZ that also was kind 213 00:12:15,160 --> 00:12:18,320 Speaker 4: of seeing co mingled customer money and company money. We've 214 00:12:18,360 --> 00:12:21,679 Speaker 4: also seen in the CFTC side of things, they're alleging 215 00:12:22,160 --> 00:12:24,920 Speaker 4: that Binance took kind of purposeful steps to evade US 216 00:12:25,000 --> 00:12:28,280 Speaker 4: laws to allow American VIPs, for instance, to access the 217 00:12:28,320 --> 00:12:33,200 Speaker 4: International Exchange illegally. Also not having sort of effective anti 218 00:12:33,280 --> 00:12:37,360 Speaker 4: money laundering procedures or safeguards for determining the true identity 219 00:12:37,360 --> 00:12:42,240 Speaker 4: of customers. So we're seeing a lot of different allegations 220 00:12:42,280 --> 00:12:43,560 Speaker 4: thrown out there against Finance. 221 00:12:47,160 --> 00:12:49,680 Speaker 2: Can you tell us a bit about Binance? 222 00:12:50,160 --> 00:12:55,240 Speaker 3: Finance is the leading crypto exchange in terms of trading volume. 223 00:12:55,520 --> 00:13:01,200 Speaker 3: It really outpaces its competitors. It's probably the biggest name 224 00:13:01,400 --> 00:13:04,560 Speaker 3: in the industry, and there's been a lot of i 225 00:13:04,559 --> 00:13:08,600 Speaker 3: think intrigue and interest in this company. It has this 226 00:13:08,720 --> 00:13:11,480 Speaker 3: very global presence. It does not have, you know, an 227 00:13:11,520 --> 00:13:12,760 Speaker 3: official headquarters. 228 00:13:13,320 --> 00:13:13,959 Speaker 7: It does have a. 229 00:13:13,880 --> 00:13:18,440 Speaker 3: Big office in Dubai, but this company has clashed with 230 00:13:18,559 --> 00:13:22,760 Speaker 3: regulators in many of the countries it's done business in 231 00:13:22,760 --> 00:13:26,920 Speaker 3: including in the US, and it's CEO CZ You know, 232 00:13:27,040 --> 00:13:30,120 Speaker 3: he's a very interesting figure in crypto. He has sort 233 00:13:30,160 --> 00:13:34,560 Speaker 3: of this cult following. He's active on Twitter. He is 234 00:13:34,720 --> 00:13:38,720 Speaker 3: very confident in the business's company does and the influence 235 00:13:38,760 --> 00:13:42,120 Speaker 3: that they have over the industry. So it's been very 236 00:13:42,160 --> 00:13:46,400 Speaker 3: interesting to see how they've reacted to the lawsuit. You know, 237 00:13:46,520 --> 00:13:49,040 Speaker 3: Caz kind of shook it off. He has this signal 238 00:13:49,160 --> 00:13:52,080 Speaker 3: that he tweets to followers, which is the number four, 239 00:13:52,760 --> 00:13:56,079 Speaker 3: and that means to ignore FUD, which stands for fear, 240 00:13:56,280 --> 00:13:59,320 Speaker 3: uncertainty and doubt. It was number four on his list 241 00:13:59,360 --> 00:14:02,040 Speaker 3: of New Year's that was it ignore fuds. So when 242 00:14:02,040 --> 00:14:04,440 Speaker 3: he does for that's what he's talking about. It's a 243 00:14:04,480 --> 00:14:07,440 Speaker 3: company that is really leading the way. So for it 244 00:14:07,480 --> 00:14:10,559 Speaker 3: to have these issues in the US, I think at 245 00:14:10,559 --> 00:14:13,400 Speaker 3: this time it's really questionable about whether Binance can ever 246 00:14:14,040 --> 00:14:15,240 Speaker 3: do business in the US. 247 00:14:16,120 --> 00:14:17,200 Speaker 7: And I'll jump in there too. 248 00:14:17,280 --> 00:14:19,040 Speaker 4: I mean, I think one of the things that we 249 00:14:19,120 --> 00:14:21,280 Speaker 4: have to remember with these two lawsuits we've seen so 250 00:14:21,360 --> 00:14:23,320 Speaker 4: far is that they could just be the tip of 251 00:14:23,360 --> 00:14:27,280 Speaker 4: the iceberg. So we know from prior reporting, including our own, 252 00:14:27,440 --> 00:14:32,920 Speaker 4: that the Justice Department, the IRS's Criminal investigation unit. They're 253 00:14:33,000 --> 00:14:37,120 Speaker 4: also investigating Binance, so we could see charges come from 254 00:14:37,120 --> 00:14:39,960 Speaker 4: those avenues as well. You know, those things are still ongoing, 255 00:14:40,000 --> 00:14:42,240 Speaker 4: so we haven't had any sort of resolution, but it's 256 00:14:42,240 --> 00:14:43,200 Speaker 4: something to keep an eye on. 257 00:14:43,720 --> 00:14:46,920 Speaker 2: And Allie you mentioned something that I think is important, 258 00:14:46,960 --> 00:14:51,400 Speaker 2: which is that the government is coming after them in 259 00:14:51,480 --> 00:14:54,680 Speaker 2: part for their failure to register, and that kind of 260 00:14:54,680 --> 00:14:56,720 Speaker 2: gets at the heart of it, right, because these crypto 261 00:14:56,720 --> 00:15:01,480 Speaker 2: exchanges say, well, they're not subject to the sorts of 262 00:15:01,560 --> 00:15:04,120 Speaker 2: regulations that would make them have to file, So what 263 00:15:04,200 --> 00:15:06,160 Speaker 2: do they say about that charge. 264 00:15:06,440 --> 00:15:09,360 Speaker 4: Finance is an interesting case, right because you have Binance 265 00:15:09,480 --> 00:15:11,720 Speaker 4: kind of the international company, and then you have this 266 00:15:11,800 --> 00:15:15,160 Speaker 4: separate entity called Binance US that it is supposed to 267 00:15:15,200 --> 00:15:18,600 Speaker 4: be separate. But you know, these lawsuits both sort of 268 00:15:18,640 --> 00:15:21,320 Speaker 4: allege that that's not actually the case, that Finance US 269 00:15:21,400 --> 00:15:22,920 Speaker 4: is just sort of a front for. 270 00:15:22,880 --> 00:15:24,040 Speaker 7: The international company. 271 00:15:24,320 --> 00:15:27,360 Speaker 4: But even so, setting that aside, a lot of US 272 00:15:27,400 --> 00:15:30,320 Speaker 4: based crypto exchanges will say, you know, we don't have 273 00:15:30,360 --> 00:15:32,680 Speaker 4: to register with the SEC because the tokens that we 274 00:15:32,720 --> 00:15:37,120 Speaker 4: have on our platform are not securities. We've done internal vetting, 275 00:15:37,200 --> 00:15:39,480 Speaker 4: we've determined they don't meet the how we test that 276 00:15:39,640 --> 00:15:42,720 Speaker 4: test of about Citrus Groves that I mentioned earlier, and 277 00:15:42,760 --> 00:15:45,480 Speaker 4: so that's kind of the argument they've made. They've also 278 00:15:45,560 --> 00:15:48,720 Speaker 4: said that at times they've tried to attempt to work 279 00:15:48,760 --> 00:15:51,960 Speaker 4: with the SEC to register, and that they claim, you know, 280 00:15:52,120 --> 00:15:54,880 Speaker 4: SEC chair Gary Gensler is just doesn't really want them 281 00:15:54,920 --> 00:15:58,040 Speaker 4: to register, doesn't provide a pathway for them. And so 282 00:15:58,240 --> 00:15:59,920 Speaker 4: that's kind of the point that we're at it right now. 283 00:16:02,000 --> 00:16:05,240 Speaker 2: And so those are the cases against Finance. Let's now 284 00:16:05,280 --> 00:16:08,240 Speaker 2: move to Coinbase because they too are the subject of 285 00:16:08,280 --> 00:16:09,239 Speaker 2: a lot of scrutiny. 286 00:16:09,480 --> 00:16:13,880 Speaker 4: So in the SEC Coinbase case, they basically said the 287 00:16:13,960 --> 00:16:19,080 Speaker 4: company was operating unregistered securities exchange broker clearing Agency Chair 288 00:16:19,120 --> 00:16:22,440 Speaker 4: Gensler has repeatedly said he thinks these different functions, like 289 00:16:22,480 --> 00:16:25,560 Speaker 4: if you're holding assets for customers and allowing them to trade, 290 00:16:25,600 --> 00:16:28,240 Speaker 4: that these should be separate, regulated entities. 291 00:16:28,280 --> 00:16:30,080 Speaker 7: So that's kind of what they're dinging them on here, 292 00:16:30,240 --> 00:16:30,600 Speaker 7: plan that. 293 00:16:30,640 --> 00:16:33,800 Speaker 6: The SEC is making that they are acting as an 294 00:16:33,880 --> 00:16:38,160 Speaker 6: unregistered broker dealer and listing on registered securities, which has 295 00:16:38,200 --> 00:16:40,720 Speaker 6: been up for debate in the cryptocommunity when it comes 296 00:16:40,720 --> 00:16:44,479 Speaker 6: to regulators at least for a long time now. Coinbase 297 00:16:44,520 --> 00:16:46,160 Speaker 6: we know says that a lot of the things that 298 00:16:46,200 --> 00:16:49,800 Speaker 6: they've listed are not securities, while the Securities and Exchange 299 00:16:49,800 --> 00:16:51,880 Speaker 6: Commission believes they are, and they have a varia And. 300 00:16:51,840 --> 00:16:55,440 Speaker 4: They also said that thirteen of the different cryptotokens listed 301 00:16:55,480 --> 00:16:59,800 Speaker 4: by the exchange were actually securities. Obviously things that Coinbase 302 00:16:59,800 --> 00:17:00,960 Speaker 4: has denied. 303 00:17:00,920 --> 00:17:02,560 Speaker 2: And Hannah tell us about Coinbase. 304 00:17:03,000 --> 00:17:07,719 Speaker 3: Coinbase is the first publicly traded crypto exchange in the US. 305 00:17:07,960 --> 00:17:10,879 Speaker 3: It's CEO, Brian Armstrong, is a force within the industry. 306 00:17:11,200 --> 00:17:15,440 Speaker 3: They have really made a name for themselves. They follow 307 00:17:15,480 --> 00:17:18,160 Speaker 3: behind Binance in terms of trading volume when you look 308 00:17:18,160 --> 00:17:22,200 Speaker 3: at crypto exchange rankings and Brian Armstrong, you know, he's 309 00:17:23,000 --> 00:17:28,640 Speaker 3: really tried defending against the SEC's allegations by pointing out that, hey, 310 00:17:29,240 --> 00:17:32,080 Speaker 3: you guys have proved us to go public, how can 311 00:17:32,119 --> 00:17:35,200 Speaker 3: you say now that we're in violation of federal securities laws? 312 00:17:35,359 --> 00:17:38,119 Speaker 3: But in talking to legal experts, they've said that this 313 00:17:38,200 --> 00:17:41,520 Speaker 3: is actually not an adequate legal defense, that just because 314 00:17:41,520 --> 00:17:44,080 Speaker 3: you get an IPO approved does not keep you from 315 00:17:44,359 --> 00:17:47,159 Speaker 3: being accused of federal security law violations. 316 00:17:47,480 --> 00:17:50,920 Speaker 2: And Hennery, when you talked to Coinbase and talked to Binance, 317 00:17:51,200 --> 00:17:52,960 Speaker 2: what do they say about these charges. 318 00:17:53,720 --> 00:17:58,360 Speaker 3: They've really always kind of directed to the responses that 319 00:17:58,400 --> 00:18:02,119 Speaker 3: their respective CEOs have put online. Finance also did an 320 00:18:02,200 --> 00:18:06,840 Speaker 3: extensive blog posts denying the allegations. Both Coinbase and Finance 321 00:18:06,880 --> 00:18:10,359 Speaker 3: have also been extremely critical of the SEC's approach here 322 00:18:10,440 --> 00:18:13,560 Speaker 3: that they say, you know, we've been asking for regulatory 323 00:18:13,640 --> 00:18:18,600 Speaker 3: clarity in the US, and you've just provided enforcement, like 324 00:18:18,680 --> 00:18:22,960 Speaker 3: you've never laid the groundwork for us to effectively register 325 00:18:23,000 --> 00:18:26,320 Speaker 3: our tokens a securities. So there's I think a lot 326 00:18:26,359 --> 00:18:30,560 Speaker 3: of tension here between these crypto exchanges and between the regulators, 327 00:18:30,680 --> 00:18:32,879 Speaker 3: and what a lot of people in the industry are 328 00:18:32,920 --> 00:18:35,880 Speaker 3: pending hopes on is that these lawsuits will drag out 329 00:18:35,880 --> 00:18:38,680 Speaker 3: for years and that there will be time for changes 330 00:18:38,800 --> 00:18:41,800 Speaker 3: and developments within the industry and that maybe they'll find 331 00:18:41,840 --> 00:18:43,520 Speaker 3: some way to adapt or. 332 00:18:43,520 --> 00:18:46,520 Speaker 4: Even you know, a change in the administration someone maybe 333 00:18:46,560 --> 00:18:49,399 Speaker 4: you have a Republican president or folks come in that 334 00:18:49,440 --> 00:18:51,800 Speaker 4: are a little bit more sympathetic to the crypto industry. 335 00:18:52,119 --> 00:18:53,760 Speaker 4: But also, you know, i'd like to point out with 336 00:18:53,840 --> 00:18:57,359 Speaker 4: the argument about this going public, and you know, you 337 00:18:57,400 --> 00:18:59,640 Speaker 4: allowed us to go public, so it's unfair that you've 338 00:18:59,640 --> 00:19:02,440 Speaker 4: brought this lawsuit now and talking with former officials, they've 339 00:19:02,440 --> 00:19:04,200 Speaker 4: made sort of the same argument, and they've said it's 340 00:19:04,240 --> 00:19:07,840 Speaker 4: mostly when companies go public, it's about disclosure and making 341 00:19:07,880 --> 00:19:10,840 Speaker 4: sure that they're making proper disclosures. And you see that 342 00:19:11,040 --> 00:19:14,080 Speaker 4: in the early filings that coinbase made. You know, they 343 00:19:14,119 --> 00:19:17,920 Speaker 4: say that the rules around digital assets and what's a 344 00:19:17,960 --> 00:19:21,240 Speaker 4: security and what's a commodity are unclear that they could 345 00:19:21,240 --> 00:19:24,360 Speaker 4: potentially face regulatory scrutiny, So a lot of that is 346 00:19:24,440 --> 00:19:27,200 Speaker 4: kind of forewarned in those documents. 347 00:19:29,680 --> 00:19:33,520 Speaker 2: And Hannah, we've been hearing about how the argument of 348 00:19:34,000 --> 00:19:38,160 Speaker 2: the industry is that crypto is not a commodity, crypto 349 00:19:38,280 --> 00:19:41,120 Speaker 2: is not a security and shouldn't be regulated. But why 350 00:19:41,160 --> 00:19:44,800 Speaker 2: do they say that, Like, what is their argument to say, 351 00:19:45,000 --> 00:19:47,920 Speaker 2: you should buy this, but it should be entirely free 352 00:19:47,920 --> 00:19:48,520 Speaker 2: of regulation. 353 00:19:49,200 --> 00:19:53,960 Speaker 3: The industry has long argued for decentralization. You know that 354 00:19:54,680 --> 00:19:57,920 Speaker 3: they are focused on peer to peer interactions with people 355 00:19:57,960 --> 00:20:00,760 Speaker 3: can engage directly with each other, that men are cut 356 00:20:00,800 --> 00:20:05,399 Speaker 3: out like brokers, And I think they've also argued that 357 00:20:05,800 --> 00:20:09,000 Speaker 3: crypto is different, that this is a financial tool, that 358 00:20:09,040 --> 00:20:12,920 Speaker 3: this is a technology that can change the world. And yes, 359 00:20:13,000 --> 00:20:16,720 Speaker 3: they've argued for regulatory clarity and you know, clearer guidelines 360 00:20:16,760 --> 00:20:19,120 Speaker 3: and things like that, but that doesn't change the fact 361 00:20:19,160 --> 00:20:23,280 Speaker 3: that there are serious questions over whether cryptotokens are actually securities. 362 00:20:23,760 --> 00:20:28,639 Speaker 2: So they're arguing that they're intrinsically different than other forms 363 00:20:28,680 --> 00:20:30,159 Speaker 2: of investment that are. 364 00:20:30,040 --> 00:20:32,280 Speaker 4: Regularly The argument that they'll make is, for instance, if 365 00:20:32,320 --> 00:20:34,399 Speaker 4: you're a token issuer, so you issue you know, X, 366 00:20:34,480 --> 00:20:37,320 Speaker 4: y Z token, they'll argue that, you know, the current 367 00:20:37,400 --> 00:20:41,040 Speaker 4: rules just don't make sense, that there are unique aspects 368 00:20:41,040 --> 00:20:45,800 Speaker 4: of blockchain technology that aren't you conceived of in existing rules, 369 00:20:45,840 --> 00:20:48,000 Speaker 4: And so they'll say, SEC, we really need you to 370 00:20:48,040 --> 00:20:50,640 Speaker 4: come in and update this because we actually can't even 371 00:20:50,640 --> 00:20:53,480 Speaker 4: register because we can't abide by the current disclosure forms 372 00:20:53,480 --> 00:20:55,680 Speaker 4: are the current rules, And the SEC will say that's 373 00:20:55,680 --> 00:20:59,719 Speaker 4: all blow ny. You know, it seems both sides are 374 00:20:59,720 --> 00:21:02,679 Speaker 4: sort of entrenched right now and kind of their thinking. 375 00:21:03,200 --> 00:21:08,320 Speaker 2: So, Alison, we have these multiple lawsuits among government entities. 376 00:21:08,600 --> 00:21:10,280 Speaker 2: When you look ahead, where do you see this going? 377 00:21:10,320 --> 00:21:12,680 Speaker 2: How long will it take for these cases to kind 378 00:21:12,680 --> 00:21:13,760 Speaker 2: of play themselves out? 379 00:21:13,920 --> 00:21:15,800 Speaker 4: You know, I think we could see these going on 380 00:21:15,920 --> 00:21:19,200 Speaker 4: for years. We also see on the fringes of other 381 00:21:19,240 --> 00:21:23,240 Speaker 4: regulators getting involved. So banking regulators putting out warnings about 382 00:21:23,440 --> 00:21:26,200 Speaker 4: banks kind of working with crypto firms or taking deposits 383 00:21:26,200 --> 00:21:29,520 Speaker 4: from crypto companies. We're definitely going to continue to see 384 00:21:29,760 --> 00:21:34,199 Speaker 4: Congress attempting to write legislation, though getting something across the 385 00:21:34,200 --> 00:21:37,520 Speaker 4: finish line is always difficult, as we've seen in the past. 386 00:21:38,040 --> 00:21:40,800 Speaker 4: The main pieces that we have right now are Patrick McHenry, 387 00:21:40,840 --> 00:21:44,200 Speaker 4: he leads the House Financial Services Committee, and Glenn Thompson, 388 00:21:44,240 --> 00:21:47,200 Speaker 4: who leads the House Ad Committee, have a big bill 389 00:21:47,240 --> 00:21:49,719 Speaker 4: that they've been working on to kind of make it 390 00:21:49,760 --> 00:21:53,080 Speaker 4: clear what's a commodity, what's the security. Can you start 391 00:21:53,119 --> 00:21:55,440 Speaker 4: as a security and then be a commodity, which the 392 00:21:55,480 --> 00:21:57,879 Speaker 4: crypto industry argues for a lot of the tokens Through. 393 00:21:57,760 --> 00:22:01,359 Speaker 8: Your leadership, this year's Exchange Commissions brought nearly fifty separate 394 00:22:01,440 --> 00:22:04,520 Speaker 8: enforcement actions against digital asset firms. At the same time, 395 00:22:04,760 --> 00:22:08,320 Speaker 8: you've refused to provide clarity on whether digital assets offered 396 00:22:08,600 --> 00:22:11,960 Speaker 8: as part of an investment contract or subject to securities laws, 397 00:22:12,600 --> 00:22:16,959 Speaker 8: and more importantly, how these firms should comply with those laws. 398 00:22:17,000 --> 00:22:20,240 Speaker 8: You're punishing digital asset firms for allegedly not adhering to 399 00:22:20,280 --> 00:22:23,080 Speaker 8: the law when they don't know it will apply to 400 00:22:23,119 --> 00:22:25,400 Speaker 8: them it's nonsensical, so. 401 00:22:25,320 --> 00:22:28,080 Speaker 4: That legislation's being worked on, but right now it's mostly 402 00:22:28,119 --> 00:22:32,280 Speaker 4: Republican backing, so we'll see if it can get democratic support, 403 00:22:32,320 --> 00:22:35,240 Speaker 4: especially in the Senate that it would need to get enacted. 404 00:22:36,080 --> 00:22:38,960 Speaker 2: When we come back. What do crypto purists think about 405 00:22:38,960 --> 00:22:51,240 Speaker 2: the government's plans to regulate the industry, And I guess 406 00:22:51,280 --> 00:22:54,160 Speaker 2: I'm kind of wondering how we got to this point, 407 00:22:54,200 --> 00:22:57,960 Speaker 2: because when crypto first started, it was this kind of new, 408 00:22:57,960 --> 00:23:01,160 Speaker 2: exciting thing, a little seed of the pan. It grew 409 00:23:01,320 --> 00:23:05,159 Speaker 2: very quickly, probably much faster than anyone expected, and that 410 00:23:05,280 --> 00:23:07,359 Speaker 2: was part of the allure for a lot of the 411 00:23:07,440 --> 00:23:10,879 Speaker 2: early investors. Can you talk about what these kind of 412 00:23:10,960 --> 00:23:14,879 Speaker 2: founding principles of crypto are and do they still exist 413 00:23:14,960 --> 00:23:17,960 Speaker 2: or are they now just kind of evaporated as we've 414 00:23:18,000 --> 00:23:20,520 Speaker 2: seen how crypto works in the real world. 415 00:23:21,040 --> 00:23:24,159 Speaker 3: I talked a little earlier about this idea of decentralization 416 00:23:24,320 --> 00:23:28,120 Speaker 3: and peer to peer transactions. So, you know, cryptocurrencies like bitcoin, 417 00:23:28,200 --> 00:23:32,520 Speaker 3: we're seen as ways for people to easily exchange money 418 00:23:32,560 --> 00:23:37,720 Speaker 3: in a trusted, simple, decentralized way, and it's been very 419 00:23:37,760 --> 00:23:41,440 Speaker 3: interesting to see in the evolution of the industry that yes, 420 00:23:41,480 --> 00:23:43,720 Speaker 3: there are people who still want it to be decentralized, 421 00:23:43,840 --> 00:23:49,440 Speaker 3: but centralized entities like coinbase, like finance have really stepped 422 00:23:49,480 --> 00:23:53,120 Speaker 3: in and gained a lot of influence over the industry 423 00:23:53,119 --> 00:23:56,920 Speaker 3: as a whole. So I think for crypto, it's gone 424 00:23:56,960 --> 00:23:59,560 Speaker 3: through many evolutions. A lot of people point to the 425 00:24:00,640 --> 00:24:03,920 Speaker 3: nature of crypto that you have these booms and busts, 426 00:24:04,200 --> 00:24:06,679 Speaker 3: but that it always comes back. I think what's different 427 00:24:06,720 --> 00:24:10,439 Speaker 3: this time around is that the scale at which everything 428 00:24:10,440 --> 00:24:15,359 Speaker 3: has happened, Like you saw these extraordinary highs and these 429 00:24:15,520 --> 00:24:19,560 Speaker 3: incredible falls, and crypto did break over to the mainstream, 430 00:24:19,640 --> 00:24:22,720 Speaker 3: like people knew what bitcoin was. You know, my grandma 431 00:24:22,720 --> 00:24:26,120 Speaker 3: was asking me questions about dogecoin, which is a joke 432 00:24:26,160 --> 00:24:27,720 Speaker 3: cryptocurrency that. 433 00:24:27,720 --> 00:24:30,000 Speaker 2: Actually took off and people invested in it, like we 434 00:24:30,080 --> 00:24:31,520 Speaker 2: started as a joke but then became a. 435 00:24:31,520 --> 00:24:33,159 Speaker 7: Real Yeah exactly. 436 00:24:33,680 --> 00:24:37,120 Speaker 3: So, yes, it got this mainstream recognition, but the stakes 437 00:24:37,119 --> 00:24:41,679 Speaker 3: were that much higher. So these falls, these scandals, these implosions, 438 00:24:42,119 --> 00:24:45,080 Speaker 3: they've just hit the industry super hard. 439 00:24:45,840 --> 00:24:45,959 Speaker 1: Ell. 440 00:24:46,080 --> 00:24:48,240 Speaker 2: You mentioned earlier that Congress has taken a hard look 441 00:24:48,240 --> 00:24:51,280 Speaker 2: at this, and there are some bills at least advancing 442 00:24:51,359 --> 00:24:57,560 Speaker 2: through committees. Who gets to decide ultimately how crypto is regulated. 443 00:24:58,359 --> 00:25:00,320 Speaker 4: I mean, so right now it's kind of being left 444 00:25:00,400 --> 00:25:03,640 Speaker 4: up to enforcement actions and it's sort of a battle 445 00:25:03,680 --> 00:25:06,480 Speaker 4: of wills right now between the SEC and the CFTC. 446 00:25:06,880 --> 00:25:09,240 Speaker 4: I mean, you'll see the Binance lawsuit is a really 447 00:25:09,280 --> 00:25:12,720 Speaker 4: good example. Both of them listed Binance USD, which is 448 00:25:12,760 --> 00:25:15,240 Speaker 4: a type of token called a stable coins pegged to 449 00:25:15,280 --> 00:25:18,680 Speaker 4: like the US dollar, and basically one of them said 450 00:25:18,680 --> 00:25:20,919 Speaker 4: it was a security, the other said it was a commodity. 451 00:25:21,280 --> 00:25:23,600 Speaker 4: So you'll see those kinds of things continuing to pop 452 00:25:23,680 --> 00:25:25,520 Speaker 4: up in lawsuits and then that'll have to. 453 00:25:25,480 --> 00:25:27,000 Speaker 7: Get worked out by the courts. 454 00:25:27,320 --> 00:25:29,480 Speaker 4: Congress can step in and to define these things, and 455 00:25:29,760 --> 00:25:33,159 Speaker 4: the bill I mentioned from McHenry and Thompson right now, 456 00:25:33,480 --> 00:25:36,560 Speaker 4: they do kind of require the two agencies to come 457 00:25:36,600 --> 00:25:41,920 Speaker 4: together and decide on certain definitions, decide on regulations. It 458 00:25:41,960 --> 00:25:43,960 Speaker 4: does sort of keep you know, anything that kind of 459 00:25:44,040 --> 00:25:47,000 Speaker 4: qualifies under the Howie test I mentioned that's still under 460 00:25:47,000 --> 00:25:51,240 Speaker 4: the SEC's raimit and crypto firms can come in and 461 00:25:51,280 --> 00:25:54,480 Speaker 4: say we think we're decentralized enough. They certify that to 462 00:25:54,480 --> 00:25:58,200 Speaker 4: the SEC. SEC can object, and you know, we kind 463 00:25:58,200 --> 00:26:01,960 Speaker 4: of go through this process to make things a lot clearer, 464 00:26:01,960 --> 00:26:04,280 Speaker 4: you probably need Congress to step in. But you know, 465 00:26:04,320 --> 00:26:05,720 Speaker 4: that's kind of the place we're at right now. 466 00:26:05,880 --> 00:26:08,560 Speaker 2: And as you say, I mean, that's so dependent on politics, 467 00:26:08,560 --> 00:26:11,560 Speaker 2: where you have a very activist sec under Joe Biden, 468 00:26:11,960 --> 00:26:14,719 Speaker 2: whereas if you had a Republican president, maybe they wouldn't 469 00:26:14,720 --> 00:26:17,600 Speaker 2: be as activists if you have a Republican Congress versus 470 00:26:17,640 --> 00:26:20,240 Speaker 2: the Democratic Congress. So so much of this is at 471 00:26:20,240 --> 00:26:22,200 Speaker 2: the whims of just Washington politics. 472 00:26:22,640 --> 00:26:23,000 Speaker 7: It is. 473 00:26:23,080 --> 00:26:24,960 Speaker 4: And I will say, you know, one of the points 474 00:26:24,960 --> 00:26:26,720 Speaker 4: that people have made to me is with the crypto 475 00:26:26,920 --> 00:26:29,720 Speaker 4: bills or proposals that we're seeing right now, they've kind 476 00:26:29,720 --> 00:26:33,400 Speaker 4: of said if nothing advances by this fall or maybe 477 00:26:33,400 --> 00:26:35,600 Speaker 4: even the end of this year, that it probably won't 478 00:26:35,600 --> 00:26:38,400 Speaker 4: advance before the presidential elections, because everyone knows that once 479 00:26:38,440 --> 00:26:41,440 Speaker 4: you start getting into kind of campaign season, things sort 480 00:26:41,480 --> 00:26:44,280 Speaker 4: of slow down on the hill. So it could mean 481 00:26:44,280 --> 00:26:46,639 Speaker 4: that we're still waiting a year, two years, you know, 482 00:26:46,840 --> 00:26:50,040 Speaker 4: maybe longer before there is actually any sort of congressional action. 483 00:26:52,880 --> 00:26:54,520 Speaker 2: Anna you've written. They given all the troubles of the 484 00:26:54,520 --> 00:26:57,440 Speaker 2: industry is having in the US, that coinbase is now 485 00:26:57,520 --> 00:27:00,120 Speaker 2: looking at other markets around the world, are they getting 486 00:27:00,119 --> 00:27:03,560 Speaker 2: a warmer reception outside the US. Yeah. 487 00:27:03,560 --> 00:27:05,600 Speaker 3: So I had the chance to sit down with a 488 00:27:05,640 --> 00:27:09,720 Speaker 3: coin based executive who helps oversee their international strategy, and 489 00:27:10,280 --> 00:27:13,160 Speaker 3: he really spoke about how they're doubling down on their 490 00:27:13,200 --> 00:27:17,240 Speaker 3: efforts outside of the US. So for right now, their 491 00:27:17,440 --> 00:27:21,320 Speaker 3: top international market is the UK. We've seen the UK 492 00:27:21,440 --> 00:27:25,080 Speaker 3: government express, you know, some friendliness towards crypto, and you've 493 00:27:25,119 --> 00:27:28,640 Speaker 3: already seen people sees on that. Andreson Horowitz, which has 494 00:27:28,680 --> 00:27:31,240 Speaker 3: one of the biggest crypto venture funds, actually is planning 495 00:27:31,280 --> 00:27:34,239 Speaker 3: to open a new office in London in cite it 496 00:27:34,320 --> 00:27:37,800 Speaker 3: this warm environment there for crypto, So you know, we've 497 00:27:37,880 --> 00:27:41,160 Speaker 3: already seen it happening. People are looking abroad, they're recruiting 498 00:27:41,200 --> 00:27:44,080 Speaker 3: talent abroad. Other markets that are interesting is you know, 499 00:27:44,200 --> 00:27:47,719 Speaker 3: just Europe as a whole. They actually have regional legislation 500 00:27:48,200 --> 00:27:51,680 Speaker 3: for crypto that people see as a better approach than 501 00:27:51,720 --> 00:27:55,120 Speaker 3: the enforcement actions that US regulators have taken. And then 502 00:27:55,280 --> 00:27:58,840 Speaker 3: also in Asia, Singapore and now Hong Kong. Hong Kong 503 00:27:58,920 --> 00:28:02,000 Speaker 3: was previously pretty anti crypto and has kind of come 504 00:28:02,040 --> 00:28:05,040 Speaker 3: back the other way. So those are two growing crypto 505 00:28:05,119 --> 00:28:06,000 Speaker 3: hubs in Asia. 506 00:28:06,680 --> 00:28:10,440 Speaker 2: So despite all this scrutiny. Despite the whip sign up 507 00:28:10,480 --> 00:28:13,800 Speaker 2: and down a Bitcoin, all the collapses, all the drama 508 00:28:13,800 --> 00:28:16,080 Speaker 2: we've seen, people still want to put their money in this. 509 00:28:16,520 --> 00:28:19,280 Speaker 3: Yeah, there are still true believers. There are still people 510 00:28:19,600 --> 00:28:22,760 Speaker 3: who you know are holding on to their bitcoin for 511 00:28:22,800 --> 00:28:27,120 Speaker 3: dear life and you know are invested in this industry. 512 00:28:27,720 --> 00:28:30,160 Speaker 2: Hannah Ali, thanks so much for coming on the show. 513 00:28:30,640 --> 00:28:32,800 Speaker 7: Thanks for having me, Thank you for having. 514 00:28:32,600 --> 00:28:36,320 Speaker 2: Me, Thanks for listening to us here at The Big Take. 515 00:28:36,480 --> 00:28:39,720 Speaker 2: It's a daily podcast from Bloomberg and iHeartRadio. For more 516 00:28:39,720 --> 00:28:43,840 Speaker 2: shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or 517 00:28:43,880 --> 00:28:46,560 Speaker 2: wherever you listen, and we'd love to hear from you. 518 00:28:46,640 --> 00:28:50,040 Speaker 2: Email us questions or comments to Big Take at Bloomberg 519 00:28:50,040 --> 00:28:53,480 Speaker 2: dot net. The supervising producer of The Big Take and 520 00:28:53,560 --> 00:28:57,360 Speaker 2: the producer of this episode is Vicky Bergalina. Our senior 521 00:28:57,400 --> 00:29:01,680 Speaker 2: producer is Catherine Fink. Raphael Celia is our engineer. Our 522 00:29:01,720 --> 00:29:05,400 Speaker 2: original music was composed by Leo Sidrin. I'm west Kosova. 523 00:29:05,680 --> 00:29:07,960 Speaker 2: We'll be back tomorrow with another Big Take.