WEBVTT - This Week in Crypto: Court is in Session 0:00:03.120 --> 0:00:06.439 This is Bloomberg Crypto, a daily Bloomberg I Hood podcast, 0:00:06.600 --> 0:00:10.559 and I'm Annereira, senior editor for Bloomberg News. It's Friday, 0:00:10.680 --> 0:00:28.160 March eleventh. Welcome to the wacky and wild world of 0:00:28.240 --> 0:00:32.760 crypto legal battles, tough regulators, and a troubled bank. It's 0:00:32.760 --> 0:00:37.280 all happening in the crypto markets this week, another major 0:00:37.280 --> 0:00:41.920 crypto player is down because of FTX Silvergate, the troubled 0:00:41.920 --> 0:00:45.519 crypto friendly bank plans to wind down operations and liquidate 0:00:45.560 --> 0:00:49.600 itself after a long struggle with US regulators. But that's 0:00:49.640 --> 0:00:52.520 not all. The court gavels are knocking loud and clear 0:00:52.640 --> 0:00:55.440 as Gray Skille fights the SEC over the bitcoiny tf 0:00:55.800 --> 0:01:00.920 and ftx's Alameda over redemptions. Meanwhile, Voyager also one court 0:01:00.920 --> 0:01:04.200 approval to sell itself to Finance US. Joining me in 0:01:04.240 --> 0:01:06.160 the studio to help me make sense of this week's 0:01:06.160 --> 0:01:18.320 news are Bloomberg reporters Emily Nicole and Justina Lee. Another week, 0:01:18.360 --> 0:01:22.959 another crypto failure. Now, actually it's reached traditional finance in 0:01:23.000 --> 0:01:25.880 a way, right, So Silvergate, which is like a crypto 0:01:25.920 --> 0:01:29.800 friendly bank based in California, has decided to sort of 0:01:29.840 --> 0:01:34.120 liquidate its bank. What's what's going on there? Just you 0:01:34.160 --> 0:01:37.080 know what happened. Yeah, I mean, there was a last 0:01:37.120 --> 0:01:40.840 dish effort to try to find investors to shore up Silvergate, 0:01:40.920 --> 0:01:43.640 but it appears that all of those efforts have fallen through, 0:01:44.040 --> 0:01:47.920 and so Silvergate has decided to wind down operations and 0:01:48.000 --> 0:01:51.720 liquidate the bank. And it's kind of it's kind of 0:01:51.760 --> 0:01:55.840 interesting because Silvergate is entangled in the FTX collapse. You know, 0:01:55.880 --> 0:02:00.600 it famously was the bank for FTX slash Alameda, and 0:02:00.680 --> 0:02:05.120 I think early on they kind of identified avoid in 0:02:05.160 --> 0:02:07.200 the market, which is that a lot of big banks 0:02:07.200 --> 0:02:10.760 were simply too risk averse to bank for cryptoclients, and 0:02:10.840 --> 0:02:14.880 so by expanding aggressively into this space they could capture 0:02:14.960 --> 0:02:17.400 a lot of that business. But things kind of turned 0:02:17.520 --> 0:02:22.360 last year with the cryptowinter because obviously, with crypto prices falling, 0:02:22.400 --> 0:02:25.280 a lot of their cryptoclients started to withdraw. But at 0:02:25.320 --> 0:02:28.119 the same time, it was a double whammy because they 0:02:28.160 --> 0:02:31.959 had invested a lot of that money into you know, 0:02:32.120 --> 0:02:36.040 fixed income securities, which were also depreciating because of US 0:02:36.120 --> 0:02:38.760 interest rate increases. I guess we can say those two 0:02:38.800 --> 0:02:42.600 things in a way are tightly correlated. Given that US 0:02:42.720 --> 0:02:46.240 rate increases we're also hitting crypto prices, and so in 0:02:46.320 --> 0:02:47.680 the end it kind of became a bit of a 0:02:47.720 --> 0:02:51.600 classic bank run and a mismatch between assets and liabilities. 0:02:52.160 --> 0:02:55.000 So it was like a crypto collapse, but not really. 0:02:55.080 --> 0:02:56.920 I guess the reason why it was a crypto collapse 0:02:57.000 --> 0:02:59.959 was because they started losing deposits because of what was 0:03:00.120 --> 0:03:02.920 going on in crypto naming the other failures. But it 0:03:03.000 --> 0:03:05.399 wasn't you know, like, in the end, it just did 0:03:05.400 --> 0:03:07.320 what banks do, but it didn't do it very well. 0:03:07.720 --> 0:03:10.200 So one of the things that Silvergate had was a 0:03:10.280 --> 0:03:13.520 network called sen which was a network which allowed crypto 0:03:13.560 --> 0:03:16.880 companies to settle payments between each other as fast as 0:03:16.960 --> 0:03:19.919 like crypto trades, because obviously there's a mispatch between how 0:03:19.960 --> 0:03:22.200 fast trades settle on a blockchain or like how fast 0:03:22.240 --> 0:03:26.280 crypto trades can sort of be executed and how traditional 0:03:26.320 --> 0:03:28.560 payments work, especially in the US where they're very slow. 0:03:28.639 --> 0:03:31.919 So that not running anywhere could potentially pose a problem 0:03:32.000 --> 0:03:33.760 for crypto firms because like, how are they going to 0:03:33.840 --> 0:03:37.120 do payments? Do they go back to sort of the 0:03:37.440 --> 0:03:40.560 dark ages of before. But then there's also like an 0:03:40.560 --> 0:03:44.800 ongoing question about you know, what happens to crypto firms 0:03:44.800 --> 0:03:46.960 looking for a bank because one of the reasons silver 0:03:47.040 --> 0:03:49.400 Gate exploded, it was also because it wasn't very easy 0:03:49.440 --> 0:03:53.400 for crypto firms to find other other people or other 0:03:53.440 --> 0:03:56.080 firms to give to give them a bank account. So 0:03:56.520 --> 0:04:00.119 what are how is this banking sort of a problem 0:04:00.120 --> 0:04:03.880 for crypto in general. Well, suer Gate is gone now 0:04:03.960 --> 0:04:06.920 and the other alternative used to be a signature bank, 0:04:07.600 --> 0:04:10.560 you know, another American bank, but they've recently announced a 0:04:10.640 --> 0:04:14.400 decision to retreat from the crypto business, and we already 0:04:14.400 --> 0:04:18.320 seeing ramifications across the market. By Bit, a pretty major 0:04:18.360 --> 0:04:22.880 derivatives exchange recently announced that they're stopping dollar transfers. I mean, 0:04:22.920 --> 0:04:26.080 Finance has done the same, and so I mean this 0:04:26.200 --> 0:04:29.680 has really left the industry searching for you know, banking partners, 0:04:29.800 --> 0:04:32.280 especially for dollars, and I don't think there's an obvious 0:04:32.279 --> 0:04:36.720 solution at all. I mean, one solution is just to 0:04:36.920 --> 0:04:39.920 kind of focus more on crypto transactions, you know, using 0:04:39.960 --> 0:04:44.160 stable coin. Some people have talked about turning more to europairs, 0:04:45.120 --> 0:04:47.320 but I think ultimately, you know, it's still the same issue, 0:04:47.360 --> 0:04:49.400 which is that you know, for a lot of retail 0:04:49.480 --> 0:04:52.400 investors having a FIAT on and off ramp has been 0:04:52.480 --> 0:04:57.520 very convenient, and that is now severely lacking. But another 0:04:57.920 --> 0:05:01.520 long standing crypto issue which is even more sort of 0:05:01.920 --> 0:05:04.039 or not let's say, it's not not as as long 0:05:04.080 --> 0:05:06.800 as the banking problem, but also, like along saga has 0:05:06.839 --> 0:05:09.000 been will the US ever get a bitcoin ETF? And 0:05:09.040 --> 0:05:12.200 we've had some developments this week with one of the 0:05:12.200 --> 0:05:14.200 biggest proponents of it, which is gray Scale, which is 0:05:14.200 --> 0:05:16.480 one of the companies which is part of DCG Group, 0:05:16.680 --> 0:05:20.080 who also on Genesis, who's which lending armament bankrupt. So 0:05:20.160 --> 0:05:22.200 they've been in the news a lot. But what's going 0:05:22.200 --> 0:05:27.080 on with Grayscale and the SEC. Well, there's currently a lawsuit, 0:05:27.520 --> 0:05:31.440 you know, with Grayscale kind of suing the SEC about 0:05:31.480 --> 0:05:36.200 their rejection to convert the Bitcoin Trust into an ETF. 0:05:36.800 --> 0:05:39.680 And the basic the basis of their argument is that 0:05:39.760 --> 0:05:43.719 since the SEC did approve, you know, the Bitcoin future 0:05:43.760 --> 0:05:46.680 is ATF, there's no good reason for it not to 0:05:46.720 --> 0:05:50.160 do the same for a spot bitcoin ETF because essentially 0:05:50.240 --> 0:05:53.760 the two kind of move in the same direction. The 0:05:53.839 --> 0:05:56.760 other lawsuit, very much in focus today relates to Grayscale 0:05:57.080 --> 0:06:00.920 versus the SEC and oral arguments perhaps wearing more toward 0:06:01.000 --> 0:06:04.600 the gray scale under the spectrum then maybe was previously anticipated. 0:06:04.600 --> 0:06:07.440 Traders are now betting on a higher probability of Grayscale 0:06:07.480 --> 0:06:10.960 actually winning going into the case Bloomberg Intelligence. And the 0:06:11.000 --> 0:06:14.360 reason does this is significant issue is because the Grayscale 0:06:14.360 --> 0:06:17.520 Bitcoin trust has been the bane of many crypto players 0:06:17.600 --> 0:06:21.599 existence and arguably kind of contributed to the downfall of 0:06:21.640 --> 0:06:24.880 the crypto Hutch Fund Three Arrows Capital. And the reason 0:06:24.920 --> 0:06:27.000 that is is because you know, in the early days, 0:06:27.040 --> 0:06:29.719 when it was pretty hard for retail traders to access 0:06:29.760 --> 0:06:33.240 bitcoin in a regulated product, it was a pretty popular 0:06:33.279 --> 0:06:36.320 product that got to charge i would say higher than 0:06:36.400 --> 0:06:40.279 market management fees for kind of holding bitcoin and being 0:06:40.360 --> 0:06:44.479 a liquid will not do liquid investment product. But kind 0:06:44.480 --> 0:06:47.560 of as the Bitcoin Futures etf came to be and 0:06:47.600 --> 0:06:51.640 then there were more retail products to buy bitcoin, that 0:06:51.680 --> 0:06:56.200 product kind of became increasingly unpopular and started trading at 0:06:56.200 --> 0:07:00.800 a discount to the bitcoin and actually held. And at 0:07:00.839 --> 0:07:03.280 the same time, the other issue is that once you 0:07:03.520 --> 0:07:06.799 buy into that trust, you can't just redeem it whatever 0:07:06.839 --> 0:07:09.720 you want. And the reason why it kind of entrapped 0:07:09.720 --> 0:07:12.200 a lot of crypto players is because they had bard 0:07:12.280 --> 0:07:16.600 shares of this etf to kind of conduct this rather 0:07:16.680 --> 0:07:19.800 complicated arbitrat trade and they couldn't get their money out 0:07:19.840 --> 0:07:23.920 when they wanted to, which segues perfectly into another news 0:07:23.920 --> 0:07:27.040 of the week, which is someone who seems to be 0:07:27.040 --> 0:07:29.160 coming back from the dead. Right. I read the headline 0:07:29.160 --> 0:07:31.480 and it took me a minute to realize. But Alameda, 0:07:31.680 --> 0:07:36.600 which was sam Bank when Freed's hedge fund, is issuing Grayscale. Now, 0:07:36.640 --> 0:07:40.680 so's what's going on. Yeah, so Alameda was FTX is 0:07:40.720 --> 0:07:42.800 trading outfit. We all used to say they were separate 0:07:42.800 --> 0:07:44.720 back in the day, and now we firmly know that not. 0:07:44.880 --> 0:07:49.560 Alameda is now trying to recover assets wherever it can. Right, 0:07:49.640 --> 0:07:52.160 it's supposedly the one part of the FTX and buy 0:07:52.200 --> 0:07:55.800 that probably lost the most money of the creditor assets 0:07:55.800 --> 0:07:59.080 it still owes, and one of those is in gray Scale. 0:07:59.280 --> 0:08:03.320 Alamida says it has about two hundred and ninety million 0:08:03.400 --> 0:08:06.440 dollars worth of shares in the various crypto trust that 0:08:06.520 --> 0:08:10.080 gray Scale offered, and you know, depending on whether or 0:08:10.120 --> 0:08:13.000 not gray Scale was to honor those shares at the 0:08:13.040 --> 0:08:16.080 current price of the cryptocurrency, because, as Justina said, it's 0:08:16.120 --> 0:08:18.280 at a discount at the minute, that could actually be 0:08:18.320 --> 0:08:21.679 about five hundred and forty million dollars worth of stuff 0:08:21.720 --> 0:08:23.720 to come back to Alameter if they won the case. 0:08:24.640 --> 0:08:26.720 It's an argument that has been made by quite a 0:08:26.760 --> 0:08:28.840 few people who own gray Scale trust, Like a lot 0:08:28.840 --> 0:08:31.119 of the crypto community used to love gray Scale because 0:08:31.120 --> 0:08:34.559 it offered this liquid route to bitcoin owning, and now 0:08:34.600 --> 0:08:37.160 everybody is it's a little bit on the other side 0:08:37.200 --> 0:08:38.760 of the coin because they can't get their money out 0:08:38.760 --> 0:08:42.360 while bitcoin's down, and Alameter is one of those basically 0:08:42.440 --> 0:08:44.680 piping up in a courtroom saying like, this is the 0:08:44.760 --> 0:08:46.560 argument that we're putting forward. This is the argument that 0:08:46.559 --> 0:08:49.480 everybody else also says, which is that it's not fair 0:08:49.520 --> 0:08:52.160 to be able to be withholding this amount when Bitcoin 0:08:52.320 --> 0:08:54.360 is trading so much higher than what the price of 0:08:54.360 --> 0:08:56.960 gray Scale shares are. And just because there's difficulties going 0:08:56.960 --> 0:08:59.400 on elsewhere doesn't mean we should be able to shouldn't 0:08:59.400 --> 0:09:01.400 be able to cash out those shares as well. But 0:09:01.480 --> 0:09:04.520 while this spot ECF decision is going on, it also 0:09:04.640 --> 0:09:08.000 makes everything extremely complicated for gray Scale. Yeah, I mean, 0:09:08.000 --> 0:09:11.439 it just feel like in the ballmarket days, the high 0:09:11.520 --> 0:09:15.480 crypto prices were covering a lot of the underlying issues. 0:09:15.640 --> 0:09:18.560 I mean, we're talking about these gray Scale lawsuits and 0:09:18.640 --> 0:09:21.840 there are actually two more from as A managers that 0:09:22.000 --> 0:09:24.440 say that you know, you know, one of them said 0:09:24.480 --> 0:09:28.439 gray Scale misled them about the chances of an ETF conversion. 0:09:28.640 --> 0:09:31.400 And now that you know, we're in a bit of 0:09:31.400 --> 0:09:33.840 a crypto winter, we're definitely kind of starting to see 0:09:33.880 --> 0:09:36.280 these lawsuits coming up. One thing I do think was 0:09:36.320 --> 0:09:39.719 interesting this week is we saw the regulators get the 0:09:39.760 --> 0:09:43.000 brunt of the legal fight. So we had three cases 0:09:43.040 --> 0:09:45.040 going on this week. We had gray Scale against the 0:09:45.160 --> 0:09:48.280 SEC for the spot at TWENTYTF. We had Ripple versus 0:09:48.280 --> 0:09:50.720 the SEC to its first arguments for that case which 0:09:50.720 --> 0:09:53.559 has been ongoing for ages. And we also had a 0:09:53.679 --> 0:09:57.760 judge approve the sale of Voyage's assets to Binance Us. 0:09:58.000 --> 0:10:01.560 Those are three cases where regulators have come out and said, 0:10:01.600 --> 0:10:04.520 you know, like we disagree with this, whether it's like 0:10:04.559 --> 0:10:07.000 grace Gus shouldn't have a spot bitcoinetia for you know, 0:10:07.080 --> 0:10:09.280 in the case of Ripple, that they think that x 0:10:09.600 --> 0:10:13.560 XRP should be considered security. And so far, actually it 0:10:13.600 --> 0:10:16.079 hasn't really all been going the regulators way. Obviously, we're 0:10:16.080 --> 0:10:18.280 still at the early stages of these cases, and we're 0:10:18.280 --> 0:10:21.320 still yet to hear some other arguments as well, but 0:10:21.640 --> 0:10:24.480 Ripple was very confident talking about it. It's hearing yesterday 0:10:24.520 --> 0:10:27.400 that it had quite a bit of a strong argument 0:10:27.480 --> 0:10:29.720 against the SEC who had two of the experts they 0:10:29.760 --> 0:10:32.880 were speaking they were using in the case struck from 0:10:32.880 --> 0:10:35.960 the record. And then like a lot of regulators all 0:10:36.000 --> 0:10:39.920 over the US, protested about Binance buying Voyager and that's 0:10:39.920 --> 0:10:41.480 when I returned too, it's going to it's going to 0:10:41.520 --> 0:10:43.800 get to be able to do that. So, yeah, not 0:10:43.840 --> 0:10:47.040 been a good week for them in court. Emily, do 0:10:47.040 --> 0:10:48.760 you want to maybe explain a bit more what's going 0:10:48.800 --> 0:10:52.320 on with Voyager and on what's happened there maybe like 0:10:52.600 --> 0:10:54.600 taken a little step back, like who's going to buy 0:10:54.640 --> 0:10:58.079 Voyager when it collapse? And then why didn't they? Yeah, 0:10:58.120 --> 0:11:00.760 So Voyager is one of the crypto unders the collapse 0:11:00.840 --> 0:11:02.360 last year. There were quite a few of them, but 0:11:02.400 --> 0:11:04.760 the Voyager was one of them, and it was one 0:11:04.800 --> 0:11:06.480 of the ones that was more high profile, I think 0:11:06.520 --> 0:11:10.559 because they had previously kind of given the the indication 0:11:10.640 --> 0:11:13.480 that maybe some of their customer assets would have had insurance, 0:11:13.480 --> 0:11:15.319 and so when it went when it went bankrupt. That 0:11:15.400 --> 0:11:18.120 everybody was pretty shocked to find out that actually nothing 0:11:18.240 --> 0:11:22.600 was covered. And originally the company that was going to 0:11:22.640 --> 0:11:25.880 buy Voyager out last summer was FDx. They had already 0:11:25.880 --> 0:11:28.480 extended quite a lot of credit to Voyager in the 0:11:28.480 --> 0:11:30.760 form of loans. Alameda had given it something like close 0:11:30.760 --> 0:11:34.280 to five hundred million in dollar five hundred million dollars, 0:11:34.679 --> 0:11:37.720 and so FDx was all set to buy Voyager. Then 0:11:37.720 --> 0:11:40.760 FDx went bus so that deal went and put Voyager 0:11:40.800 --> 0:11:43.160 then also, you know, was owed quite a lot of 0:11:43.240 --> 0:11:45.000 money that they may or may not have to go 0:11:45.040 --> 0:11:47.800 back to the FCX estate because of those loans that 0:11:47.880 --> 0:11:50.360 accepted before, and so it had to go through the 0:11:50.360 --> 0:11:54.560 auction process again. And Binance US, the US exchange that 0:11:54.640 --> 0:11:58.560 is separate from the big Binance International entity UM put 0:11:58.559 --> 0:12:00.000 its hand up said oh, we want to buy Voye 0:12:00.600 --> 0:12:02.880 and it won that bid with about I think it 0:12:02.880 --> 0:12:05.320 was about a billion was the bid for Voyager, compared 0:12:05.320 --> 0:12:07.880 to one point four billion that FTX of previously bids, 0:12:07.880 --> 0:12:09.679 so a bit of a discount in those few months. 0:12:09.720 --> 0:12:11.600 But a lot of regulators put their hands up and said, 0:12:11.960 --> 0:12:14.080 we don't think this is a good idea. We can't 0:12:14.080 --> 0:12:17.000 see you know everything about Finance and its financials. They're 0:12:17.000 --> 0:12:20.360 all pretty obscure. We don't fully understand the separation between 0:12:20.360 --> 0:12:23.360 Binance and Binance US. Can we really trust this company 0:12:23.400 --> 0:12:26.360 to be owning another US entity like Voyager, which has 0:12:26.360 --> 0:12:28.800 a very large amount of assets under management that needs 0:12:28.800 --> 0:12:32.000 to go back to creditors or be remanaged as under 0:12:32.280 --> 0:12:34.920 in terms of this deal. So that was the issues 0:12:34.920 --> 0:12:38.120 at stake. We'll be right back with more from Bloomberg 0:12:38.160 --> 0:12:52.079 as Justina Lee and Emily Nicole. So just just to 0:12:52.120 --> 0:12:54.360 get a bit of context on Binance, because Binance has 0:12:54.400 --> 0:12:56.840 also been in the news. There was a story recently 0:12:56.840 --> 0:12:59.000 which wasn't our story, but the Journal did a story 0:12:59.040 --> 0:13:02.480 about sort of finances history, specifically in the US and 0:13:02.520 --> 0:13:05.520 the separation between the two entities that Emily mentioned. She 0:13:05.600 --> 0:13:08.840 mentioned US and Binance dot Com, So can you discuss that. 0:13:09.400 --> 0:13:12.960 So in twenty nineteen, Finance started a US arm that 0:13:13.040 --> 0:13:15.840 they call Binance dot US. And the reason they did 0:13:15.920 --> 0:13:20.080 that is because with a US entity that is more 0:13:20.160 --> 0:13:23.840 compliant with US law, they were trying to insulate the 0:13:24.200 --> 0:13:28.680 global cash cow, which is their international website, Binance dot Com, 0:13:28.800 --> 0:13:33.720 from potential US regulatory actions and US lawsuits. But the 0:13:33.800 --> 0:13:36.560 problem with this is that obviously it depends a lot 0:13:36.640 --> 0:13:40.280 on the two entities actually being separate, and this has 0:13:40.320 --> 0:13:44.080 always been something that has divided a lot of people. 0:13:45.160 --> 0:13:47.280 And this week we had a story from the Wall 0:13:47.320 --> 0:13:50.640 Street Journal kind of detailing the contact between the two 0:13:50.640 --> 0:13:54.640 exchanges and it used some text messages among the key 0:13:54.679 --> 0:13:58.000 executives to show that all along the Binance dot Com 0:13:58.000 --> 0:14:02.800 executives were quite heavily involved with the running of dot us. 0:14:02.800 --> 0:14:06.160 You know, for instance, the dot Us teams would report 0:14:06.240 --> 0:14:09.520 a lot of their work to the dot Com executives. 0:14:09.679 --> 0:14:13.120 Or for instance, when dot Us started trading, it was 0:14:13.160 --> 0:14:18.480 actually triggered by an engineer in Shanghai. And that is because, 0:14:18.480 --> 0:14:21.760 you know, according to the Journal article, the software code 0:14:21.960 --> 0:14:26.160 that operates Finance dot us is actually done out of Shanghai. 0:14:26.720 --> 0:14:29.400 And now Finance's defense for all of this has always 0:14:29.440 --> 0:14:31.760 been that, you know, dot Us does have a licensing 0:14:31.800 --> 0:14:34.480 agreement with the Global Exchange. But I think putting all 0:14:34.520 --> 0:14:37.080 of this together, it does kind of raise questions over 0:14:37.200 --> 0:14:40.880 exactly how separate they are, because you know, after all, 0:14:40.920 --> 0:14:45.800 the same person CZ is the largest shareholder in both 0:14:45.880 --> 0:14:49.440 dot Com and dot us, and I think you know, 0:14:49.520 --> 0:14:54.200 especially with the rising regulatory scrutiny into finance dot com. 0:14:54.240 --> 0:14:56.720 I mean, I think there is even more attention on 0:14:56.760 --> 0:14:59.680 this question now and if the two entities are actually 0:14:59.680 --> 0:15:02.440 not that separate, and that it kind of raises a 0:15:02.520 --> 0:15:06.040 question of what US regulators might do with dot com. 0:15:06.160 --> 0:15:08.840 We should be clear though, that the text the Wall 0:15:08.840 --> 0:15:11.680 Street Journal said they had seen were from twenty eighteen 0:15:11.720 --> 0:15:16.400 to twenty twenties, so they're not like recent ones. Moving on, 0:15:16.480 --> 0:15:18.880 you mentioned Emily that you know, it's not been a 0:15:18.880 --> 0:15:23.840 great week for regulators, but the global regulatory cracktone on 0:15:23.920 --> 0:15:27.080 crypto has continued. We had some action in India, of 0:15:27.160 --> 0:15:29.640 all places, which was already pretty tough on crypto. These 0:15:29.680 --> 0:15:32.600 sort of like the markets kind of semi dead there now. 0:15:32.960 --> 0:15:34.520 And then also the UK. Do you want to like 0:15:35.000 --> 0:15:38.560 quickly run down what's happened in India and then we 0:15:38.600 --> 0:15:41.840 could talk about the UK, which is mine And maybe 0:15:41.840 --> 0:15:44.120 I wasn't being fat I should say the US regulators 0:15:44.120 --> 0:15:47.160 of a bit of a tough week. But in India 0:15:47.240 --> 0:15:49.560 they announced some changes to anti money laundering laws to 0:15:49.560 --> 0:15:52.400 bring crypto companies under that. So they had already made 0:15:52.440 --> 0:15:54.760 it pretty tough for crypto exchanges to operate in the 0:15:54.800 --> 0:15:58.000 country last year with changes they made there then some 0:15:58.120 --> 0:16:00.280 you know, some punitive tax measures and things like that 0:16:00.360 --> 0:16:03.640 for users, and now it's like officially under that umbrella 0:16:03.720 --> 0:16:06.560 that if cryptocompanies see fraud on their platform, if they 0:16:06.600 --> 0:16:09.360 see something that doesn't look quite right, they have to 0:16:09.440 --> 0:16:11.600 report that to the authorities. Previously it was a bit 0:16:11.640 --> 0:16:14.040 of a like if you want to find but I mean, 0:16:14.440 --> 0:16:16.360 really it's up to you. And now it's like, you know, 0:16:16.600 --> 0:16:18.440 like any other financial company, you're going to have to 0:16:18.440 --> 0:16:21.520 submit those kinds of reports. And then in the UK 0:16:22.080 --> 0:16:24.880 the Financial Conduct Authority made some changes last year that 0:16:25.240 --> 0:16:28.560 meant that bitcoin ATMs is like calling like cash points 0:16:28.600 --> 0:16:31.240 where you can withdraw bitcoin rather than cash, need just 0:16:31.360 --> 0:16:35.280 be register registered with the regulator. And since then there 0:16:35.280 --> 0:16:38.200 are still ATMs operating all across the country, but none 0:16:38.240 --> 0:16:40.520 of them are registered with the regulator. Nobody has yet 0:16:40.520 --> 0:16:43.640 come forward to register their cash machines or bitcoin cash 0:16:43.640 --> 0:16:46.920 regiser to say. And in East London this week a 0:16:46.920 --> 0:16:49.000 bunch of bitcoin ATMs were found in the back of 0:16:49.040 --> 0:16:51.880 some shops by the Metropolitan Police and the FSA went 0:16:51.920 --> 0:16:55.160 along to do a little bit of an investigation. Inspection, 0:16:55.280 --> 0:16:57.360 see what's going on, and mostly, you know, just re 0:16:57.520 --> 0:17:00.720 up the warning to everybody. The bitcoin ATMs are currently 0:17:00.880 --> 0:17:03.480 not regulated unless they're registered, and none of them have 0:17:03.560 --> 0:17:06.520 been registered yet. So if you're hanging around in shortage 0:17:06.520 --> 0:17:09.440 and the SWAT team arrived and took down then ATM, 0:17:09.520 --> 0:17:11.359 that that's what was going on. If you think it 0:17:11.400 --> 0:17:13.359 was funny, I wonder if they arrived all masked. But 0:17:13.440 --> 0:17:15.159 it did make it seem as it was like in 0:17:15.200 --> 0:17:17.280 my head it was like an Essex thing. I don't know, 0:17:17.560 --> 0:17:21.040 you know it's shortage bitcoin ATMs or maybe you know Hackney, 0:17:21.320 --> 0:17:24.159 this is too niche for this podcast. Yes, but I 0:17:24.200 --> 0:17:27.640 just imagine them arriving like throwing down the door, kicking 0:17:27.680 --> 0:17:31.840 down the you're under arrest. The suits follow behind with 0:17:31.880 --> 0:17:34.800 the little clipboard exactly. Yeah. It'd be curious because we've 0:17:34.840 --> 0:17:37.600 done stories before about how volumes had dropped on bitcoin ATMs, 0:17:37.640 --> 0:17:39.960 so I wonder if there's actually any money flowing through them. 0:17:40.040 --> 0:17:42.680 The final blows basically we had India give the final 0:17:42.720 --> 0:17:45.680 blow to crypto there and then they here the ATMs 0:17:45.680 --> 0:17:47.760 are finally knocked out. I guess, yeah, but they're still 0:17:47.840 --> 0:17:50.720 very popular in developing countries like El Salvador and in 0:17:50.800 --> 0:17:53.240 Latin America. They are one of the ways that the 0:17:53.320 --> 0:17:55.240 government in El Salvadore has been trying to get people 0:17:55.240 --> 0:17:58.200 to use more bitcoin, so they do still exist. Cool. 0:17:58.280 --> 0:18:01.160 So on this great positive note about bit quinn ATMs 0:18:01.200 --> 0:18:03.760 in developing countries, I think we can wrap it up. 0:18:03.800 --> 0:18:06.280 Thank you so much for joining me. Thanks, thank you. 0:18:07.040 --> 0:18:10.760 That was Bloomberg reporters Emil Nicole and Justina Lee. You 0:18:10.800 --> 0:18:13.040 can find more of their work on the Bloomberg terminal 0:18:13.280 --> 0:18:16.440 on Bloomberg dot com. For more, be sure to check 0:18:16.480 --> 0:18:25.240 out our twice weekly newsletter, Bloomberg Crypto. This is Bloomberg Crypto, 0:18:25.440 --> 0:18:29.280 a daily podcast from Bloomberg and iHeartRadio. 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