#920 Constantine Karides on Building The Leading Crypto Law Practice

Constantine Karides is a Lawyer and is currently a Partner at Reed Smith. In this conversation, we discuss intersections of law and Crypto and how Constantine's firm is leading the way in providing legal frameworks for this fast changing industry. ======================= This episode is sponsored by my favorite place to buy, trade, and stake crypto, Okcoin. They're the fastest growing US based exchange, serving over 190 countries globally with the easy onboarding and low fees. If you haven't tried them out yet, you should. They're on a mission to make learning about and buying crypto easier than ever, and they're all about bringing more financial literacy to everyone, something we can always use more of. From being the only exchange to integrate Lightning to contributing over $1M for Bitcoin core devs, they're doing incredible work to further the bitcoin ecosystem and they offer lots of other vetted utility assets from gaming to defi. With Okcoin, I feel confident that the future really will be ok. To get started, go to http://okcoin.com/pomp for some free bitcoin when you sign up. ======================= Fundrise is the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That’s right, Fundrise is making high-end private market real estate investing accessible to everyone via an easy-to-use, automated platform. See for yourself how over 190,000 investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Go to http://Fundrise.com/Pomp today and, for a limited time, get $10 when you place your first investment. That’s Fundrise.com/Pomp ======================= Crypto is all about giving the power back to the people and our sponsor, Pipe, is doing that in a big way. Pipe is the world’s first trading platform that allows you to trade recurring revenue streams for up-front capital. And with Pipe’s new API, companies with recurring revenue can build seamless, embedded financing options into their platforms. One of the most interesting uses for Pipe’s new API right now is Compass Mining’s “Mine Now, Pay Later” which powers payment plans on bitcoin mining hardware so more miners can start or scale with a smaller up-front investment. Whether you’re looking for mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with: No loans. No dilution. No restrictive covenants or warrants. Just growth on your terms And right now, Pomp Podcast listeners can access tens of thousands of dollars even millions fee-free for 12 months. Whether you are a bitcoin mining company looking to enable financing for your customers or a SaaS, DTC, or any business that has recurring revenue, sign up at http://pipe.com/pomp to start trading today. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Konstantin Karides is a partner at Reed Smith. In this conversation, we talk about the intersection of law and crypto and all the nuance that goes along with it. I really enjoyed this conversation with Konstantin and I hope you enjoy it as well. Before we get into this episode, I would love to talk about our sponsors. This episode is brought to you by OKCoin. They are my favorite place to buy, trade and stake crypto. They're the fastest growing US-based exchange, serving over 190 countries globally with the easy onboarding and low fees. If you haven't tried them out yet, you should. They're on a mission to make learning about and buying crypto easier than ever, and they're all

• 0:47Anthony Pompliano?

  about bringing more financial literacy to everyone, something we can always use more of. From being the only exchange to integrate Lightning, to contributing over $1 million for Bitcoin core developers, they're doing incredible work to further the Bitcoin ecosystem, and they offer lots of other vetted utility assets, from gaming to DeFi. With OKCoin, I feel confident that the future really will be OK. To get started, go to okcoin.com/pomp for some free Bitcoin when you sign up. Again, if you want free Bitcoin, go to okcoin.com/pomp today. Today's episode is brought to you by Fundrise. You all know I believe that the best investors both understand and seek out extreme asymmetry. Fundrise is here to help you do just that.

• 1:29Anthony Pompliano?

  It's the largest direct-to-investor real estate investment platform out there, giving you the opportunity to achieve upside of an asset class previously reserved for institutions and high net worth individuals. That's right, Fundrise is making high-end, private market real estate investing accessible to everyone via an easy-to-use automated platform. Its 1 million users already know that the investment with Fundrise is capable of producing strong appreciation returns and income generation while helping to stabilize a diversified portfolio. That's more important now than ever in our inflationary environment. See for yourself how over 190,000 other investors have built a better portfolio with private real estate. It takes just a few minutes to get started with as little as $10. Fundrise.com/pomp today and for a limited time you'll get $10 when you place your first

• 2:14Anthony Pompliano?

  investment. Again, that's fundrise.com/pomp. Go check it out and when you make your first investment, they'll give you $10 on top of it. Fundrise.com/pomp. Today's episode is brought to you by Pipe. Crypto is all about giving the power back to the people and our sponsor Pipe is doing that in a big way. Pipe is the world's first trading platform that allows you to trade recurring revenue streams for upfront capital. And with Pipe's new API, companies with recurring revenue can build seamless embedded financing options into their platforms. One of the most interesting uses for Pipe's new API right now is Compass Minings, mine now, pay later, which powers payment plans on Bitcoin mining hardware so more miners can start or scale with a smaller upfront investment. Whether you're looking for

• 2:59Anthony Pompliano?

  mining hardware or scaling any business with recurring revenue, check out Pipe to access growth capital with no loans, no dilution, no restrictive covenants or warrants, just growth on your terms. And right now, Pomp podcast listeners can access tens of thousands of dollars, even millions, fee-free for 12 months. Whether you are a Bitcoin mining company looking to enable financing for your customers, or a SaaS, DTC, or any business that has recurring revenue, sign up at pipe.com/pomp. Again, pipe.com/pomp to start trading today. All right, let's get into this episode. I hope you guys enjoy this one.

• 3:37Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:00Anthony Pompliano?

  We have Konstantin here from Reed Smith. How are you?

• 4:03Speaker 02

  I'm doing great, guys. How are you?

• 4:04Anthony Pompliano?

  All right, so you're a lawyer. I usually don't like lawyers, but I like you. First of all, what is on your shirt? That's a pretty good shirt. Lines not cheap, already. That's not exactly what a lawyer would normally wear. They usually wear shirt, suit, tie, you know, the whole nine yards. What, why, uh, why are you different?

• 4:18Speaker 02

  Uh, well, I'll tell you about the shirt first. I mean, there's a lot of reasons I'm different, but, uh, the shirt, uh, is kinda came into being during this pandemic when the whole world seemed to follow blindly government control and Group think.

• 4:34Anthony Pompliano?

  Facts.

• 4:35Speaker 02

  And spent tremendous amount of money getting people to conform to a single way of being in a way that really kind of startled me. So I wanted my kids to know that they shouldn't follow along in that fashion. They should think for themselves.

• 4:48Anthony Pompliano?

  I think that's pretty good.

• 4:48Speaker 02

  And they should be lions, not sheep.

• 4:50Anthony Pompliano?

  Did you, did you see that Philadelphia now has the, the mask mandate back?

• 4:53Speaker 02

  It's incredible.

• 4:54Anthony Pompliano?

  I, by the way, I'm not a scientist. I don't know. But like, I feel like you can't, you, you can't reneg on promises. You can't say like, hey, we're out. Oh, we're back in. We're out. We're back in. But seems to be going on. All right. So you guys have a massive law firm. How many, how many people work at Reed Smith?

• 5:10Speaker 02

  So our firm is 1800 lawyers globally. We've got 26 offices, 30 offices around the world from Singapore and Hong Kong through the Middle East. We even have an office in Kazakhstan. We can talk about why some other time.

• 5:24Anthony Pompliano?

  Well, no, what, let's hear that.

• 5:26Speaker 02

  We, we do a lot in the mining minerals and metals space and that's.

• 5:29Anthony Pompliano?

  Pretty hot spot.

• 5:30Speaker 02

  Basically a big mine.

• 5:31Anthony Pompliano?

  Are you guys in Afghanistan?

• 5:32Speaker 02

  We are not. We shut down that office a while ago. No, I'm just kidding.

• 5:38Anthony Pompliano?

  Dude, when lawyers have meetings with like internally, do you guys bill each other?

• 5:44Speaker 02

  I mean, I mean, the truth is depending on what you're talking about, we may be billing clients.

• 5:50Speaker 02

  But, you know, if it's not about work, we shouldn't be billing anybody.

• 5:55Anthony Pompliano?

  Yeah. All right. And the reason why you're here is not because we're going to make fun of lawyers.

• 6:00Speaker 02

  No, please do. I, I make fun of lawyers all the time.

• 6:03Anthony Pompliano?

  No, I know you do. That's why you're here. You are one of or the largest shareholder of this business. So you're not just a lawyer, but you also think about building a business and kind of what business lines you guys go into. Is that a fair categorization?

• 6:15Speaker 02

  Yeah, absolutely. I think, you know, I have a pretty, a pretty great spot within the firm. And as a result, I'm constantly thinking about how the law is evolving. Where are the opportunity sets that are attractive for law firms, even law firms of our size? And then try to figure out how to go attack those opportunities. And in terms of, you know, this space and the crypto digital asset space, for me. That has presented one of the most transformational legal opportunities in my lifetime. The ecosphere and the environment around it is energetic and contagious. And

• 6:56Speaker 02

  there's so much opportunity for lawyers to get involved. And so, you know, we decided that was an area that we wanted to be in. We have everyone from true believers to folks who see an opportunity to provide legal services and everyone in between, towards the pure believer side. And so, we went on this venture. You know, for me personally, I, during the pandemic particularly, kind of saw what governments were doing in terms of printing money and how they were doing exactly what folks like you had suggested was why Bitcoin was an important, you know, form of currency and future payment model

• 7:41Speaker 02

  for everything. So, you know, I said, well, I got to start thinking about that more permanently for our firm. So, we started kind of looking around and thinking about what we're doing in the space. And over the last quarter, over the course of the last two years, we have put together what I think is a market-leading digital assets and crypto group called Onchain, with over 100 lawyers globally, doing everything from representing founders, investors, exchanges, governments, even miners, covering the entire regulatory framework, data privacy, cybersecurity. We covered soup from nuts. And for me personally, it's probably the most exciting, at the risk of alienating my clients, it's probably the most exciting area for me right now because

• 8:25Speaker 02

  getting to work with folks like you, Pomp, founders, the energy, the enthusiasm, the excitement of this space is so palpable. And it's, and it kind of energizes you because we're also at a, we're also at the frontier of making law. So, nothing's set. You know, we have potential legislation coming out from Loomis and Gilles Debran pretty soon. I'm optimistic it'll at least provide a framework. Maybe it'll go too far for some folks, but at least it'll give some clarity to the industry that I think that's lacking. And with that, you have this, you know, really tremendous

• 9:03Speaker 02

  Area that we're really proud of what we've built and we'll continue to build on it. And one of the things we do that keeps us different apart from wearing logos on our shirts, or at least may is we fundamentally believe in order to service your clients in this space, you need to know what you're talking about, more so than any other space.

• 9:21Anthony Pompliano?

  Yeah.

• 9:21Speaker 02

  You can bullshit in a lot of other areas, you can't bullshit in this space, especially folks who are doing what you guys are doing and building these businesses and developing these payment systems. So we have a rigorous training program internally. We work with a firm called Inflection Points as part of that training program.

• 9:37Anthony Pompliano?

  What a stud. What a pro.

• 9:40Speaker 02

  And we have others that we work in. So that's a mandatory part of our group, and I think it helps us understand the marketplace. What I've discovered in this process is that our strongest lawyers in the space are younger lawyers, which probably doesn't surprise you guys because they are reading it, living it and digesting it. You know, the millennials are completely 100% conviction like you guys. And they come to the table knowing a lot more than we do. So it's been great, that process of connecting the older and younger generations as well at our firm.

• 10:16Anthony Pompliano?

  So a couple of things. First, you have 100 lawyers that are dedicated just to Bitcoin and crypto that you guys are going really, really deep at this and gonna help in a bunch of different ways, which I think is important. A lot of people, I think, think of, oh, lawyers and crypto, like they must be doing token sales, right? And sure, you guys do some of that, but it's also how do governments participate? How do politicians, how do exchanges go ahead and move globally, etc., which I think is a really important part. I have two data points on Reed Smith. First of all, I saw somebody in the chat say like, I am not surprised whatsoever that a lawyer that Pomp works with has a shirt that says Lions. So you and I both are on brand. We're winning. The second one is somebody said, ah, Reed Smith, I'm a recovering criminal defense attorney.

• 11:01Anthony Pompliano?

  I always worked in small environments, but my ex worked at Reed Smith for a couple of years. Ruthless environment, high-powered but great firm. I feel like that's exactly as a law firm. Like, somebody says ruthless environment, high-powered but great firm is like... Ultimate compliment. Yes, I feel like that's a good compliment.

• 11:19Speaker 02

  Hey, great compliment. That person could be Sater Masakis, though. I would say we ruthlessly execute for our clients. How about that? But I think the ethos is right. We're, you know, we're

• 11:33Anthony Pompliano?

  Get shit done.

• 11:34Speaker 02

  Yeah, we get shit done. Our clients are happy and, you know, we do well, but I think we also have a pretty good culture. So.

• 11:40Anthony Pompliano?

  Yeah, I agree. All right. Uh, let's talk a little bit about some of the stuff going on right now. So Jack Mahlers goes on Bitcoin conference stage and he announces that he's partnering with NCR, Blackhawk, Shopify, et cetera. And he's going to allow people to send dollars or Bitcoin across the lightning rails. What's your reaction to that? And like, how do you think about, uh, from a legal perspective, like any, uh, things that you get excited about or think that there's like pioneering there?

• 12:06Speaker 02

  Well, first, as an investor in the space, it's groundbreaking and transformational to see what he's, he's launching and his client list is already quite massive. I, I suppose, you know, the, um, the credit card companies are probably getting a little worried when they see what this model is capable of. And they should be, and we'll see if they react and how they react. They're pretty good at, you know, adapting to, um, to current trends. So I wouldn't necessarily count them out. Um, but what he's doing is smart because I think the way he's structuring this,

• 12:44Speaker 02

  he'll avoid the taxation at the point of sale, which has always been a big inhibitor for Bitcoin, um, transactions. And how you do it and who collects it and what kind of risk you have. So I think that's number one enormously helpful. And I, and because, you know, this is still a commodity trade. I think he avoids the regulatory overlay that it might be if this were security. So it's a brilliant concept. He is, um, I think bound for tremendous success. And, um, if he's listening, we'd love to help him out. So Jack, I don't know if you're out there, but.

• 13:17Anthony Pompliano?

  So one of the key things you're talking about is the taxation. So this whole idea that like, if I have, uh, if I go to dinner tonight, right? And I spend dollars on dinner. I pay for the cost of dinner. I pay for the sales tax. I tip the waiter. I walk out. I'm fine. Uh, I don't pay anything other than that.

• 13:30Speaker 02

  Right.

• 13:30Anthony Pompliano?

  If I buy that same dinner with Bitcoin or any other. Through cryptocurrency as well, I pay for dinner, I pay for sales tax, I tip the waiter, but I also pay capital gains

• 13:39Speaker 02

  Correct.

• 13:39Anthony Pompliano?

  on that transaction. And so like, what do you think it'll take to actually get, uh, whether it's a de minimis exemption, so you know, something $600 or less, uh, or just completely remove it if you're actually buying a good or a service? Like, i- is there a legal pathway or a precedent or anything you have there that to think of? Like, how do we get to the point where, uh, the purchase of goods and services with crypto doesn't trigger taxes?

• 14:03Speaker 02

  I think that's a little tricky, I thi- I think, just because of the way our system is built. You know, if you're buying Bitcoin at 10 and you're using it at 20, and you don't have to pay the taxes, even if it's for, you know, a small percentage of that uplift, there's a slippery slope to, you know, tax avoidance and loopholes. So I think that would be hard to accomplish. I think the flip side may be easier, and that is the recipient of them, of that Bitcoin. If they get it on Tuesday and they don't, you know, and, and they, you know, turn it into cash on, on Wednesday, you know, if they've lost some money or if they gained some money, they have a whole other accounting issue they gotta deal with, which I think can be administratively problematic.

• 14:48Speaker 02

  Uh, I think over time, because restaurants and hotels and retail businesses wanna be able to transact in Bitcoin, they're gonna come up with something that probably starts to think about how you handle this in a way that doesn't, you know, create instant, you know, gains that aren't taxed or

• 15:06Anthony Pompliano?

  Yeah.

• 15:07Speaker 02

  losses that are incurred for no reason, so.

• 15:10Anthony Pompliano?

  Well, and the, and the way that he's doing it, right, uh, in terms of Jack and Strike, is that, uh, you send dollars or you send, uh, or you receive dollars, euro, whatever currency you wanna choose, but if you're using the rails, but you're not using Bitcoin coming from the sender, uh, you use Bitcoin that's already on their balance sheet.

• 15:28Speaker 02

  Correct.

• 15:29Anthony Pompliano?

  And the way that that occurs is there's no, uh, for the user, there's no tax ramifications because they never sent Bitcoin.

• 15:37Speaker 02

  Correct.

• 15:37Anthony Pompliano?

  Which is a very unique way to, uh, uh, the, the intention was not, hey, how do we not have to pay taxes? It was, let's use these rails, but a, a nice side effect, uh, is the avoidance of, um, kind of egregious taxation. If you're using dollars for the transaction, you're just using a more superior payment rail.

• 15:54Speaker 02

  That's correct. And, and if, if, if that... Grows in a way that most people can transact on that basis, then you kind of can start dealing with this tax issue you're talking about.

• 16:04Anthony Pompliano?

  Yeah. When you think about some of the legal ramifications of Bitcoin from a payment standpoint, is there a world where the legacy payment folks can come at the maybe interfaces around Bitcoin? Or is there something that they could do, like maybe get into patents with like the Bitcoin payment system? Like it's decentralized, right? So like there's no, like you can't sue the Lightning Network.

• 16:30Speaker 02

  No.

• 16:32Anthony Pompliano?

  If you were playing offense, like what do you think those people are going to do? Do they just say, hey, like there's nothing we can do here. So like, let's not even try. We got to compete or what happens?

• 16:42Speaker 02

  Well, I mean, you know, the typical order of attack there would be we need to stamp this out, right?

• 16:48Anthony Pompliano?

  Yeah.

• 16:48Speaker 02

  We need to figure out legal strategy. Well, actually first we need to figure out a political strategy, right? And so I think you'll see a lot of effort around, around trying to block that through legislation, maybe. I don't know that it'll go anywhere because as you know, and as we've seen at the conference and otherwise, there's a growing consensus and a growing group of politicians who understand the value, the efficiency, the potential wealth transformation of being able to adopt and use Bitcoin in ordinary currency transactions. But that's where we'll start. And then if that doesn't work, they'll, they'll adopt, they'll have to adopt. I think one of the most exciting parts about Bitcoin is what it's causing everybody else to do, right?

• 17:32Speaker 02

  Because they have to, and you're seeing some of that in, I would say, older line businesses and technologies. If they don't, they're dead. You know, whether it's, you know, whether it's certain lending products are moving to decentralized strategy pretty quickly. You know, we're, we're, we're representing and launching credit funds pretty regularly right now that are crypto credit funds. We're seeing. Even some mortgage-related transactions happening on a decentralized basis. You know, that movement and that development of a lending infrastructure outside of the normal avenues that you typically see is something that everybody who's in the in the finance business needs to be wary of and think about how they're going to approach.

• 18:13Speaker 02

  And I think I think they are, you know, I mean, some people have their heads in their sand, but not everybody.

• 18:19Anthony Pompliano?

  Does decentralization render laws like non-applicable or like how like how does this work? And part of it is, I think that very elementary analysis is like, oh, if it's decentralized, then like the laws don't apply.

• 18:31Speaker 02

  No.

• 18:32Anthony Pompliano?

  There, as you just said, like, there's a more nuanced version of this. So like, explain from how you guys think about decentralization being compatible with the law.

• 18:44Speaker 02

  Yeah. So whatever activity is happening in a decentralized environment is still activity that falls to a bucket. And that bucket has a

• 18:57Anthony Pompliano?

  Rule set around it.

• 18:58Speaker 02

  It has a rule set around it.

• 18:59Anthony Pompliano?

  Yeah.

• 19:00Speaker 02

  So that's probably where you start in understanding what rules apply to those activities. And I think you're seeing that in some of the legislation that's being considered. You know, Gary Gensler came out and he started talking about how he wants, you know, the SEC to regulate, you know, Bitcoin cryptocurrency from a from a from at least a user perspective, if not from a securities perspective. And, you know, you're seeing that in terms of the approach to the rules around it as a commodity. So the the rules are there. The application and ultimate enforcement, I think, is what's more difficult. But ultimately, there are entities or individuals who have set up these structures and have

• 19:43Speaker 02

  some ownership, well, potentially have some ownership over some of these activities. And so they would be the folks who I think would be asked to comply with with the law.

• 19:53Anthony Pompliano?

  Yeah. The Uniswap one, I don't want to put you on the spot of a specific situation, but like that one to me is fascinating because my understanding, again, super uneducated idiot on the internet, but my understanding is that they create A decentralized smart contract

• 20:07Speaker 02

  Yep.

• 20:08Anthony Pompliano?

  That's built on Ethereum, which for this, we'll make the assumption is fully decentralized and can't be shut down. And in there, it's allowing the Uniswap kind of product to work. Now, they also built an interface to it that the Uniswap team oversees, controls and manages. But there's other interfaces as well around the Uniswap product. And so the regulators appear to either be asking questions or applying pressure, however you want to kind of categorize it, to the interface, because there's a team that obviously oversees that.

• 20:44Speaker 02

  That's where there's people, right?

• 20:46Anthony Pompliano?

  Correct. And even if you shut down that interface, my understanding is there's, you know, 50 other interfaces that people could still access the product through. It just wouldn't be the Uniswap team itself doing that. And so when that becomes the game, it's not like you go to Facebook and you're like, hey, Facebook, shut it down. And then somebody else pops up, oh, we're using the Facebook algorithm. And like, you know, here we are. So it just feels like there's like a whole new frontier that's very different.

• 21:12Speaker 02

  It absolutely is. And I think, you know, the regulators are way behind being able to even conceive about how to deal with the situation you're describing. Right now it's whack a mole in a way to try to understand where those interfaces exist and who's running them. But in time, my guess is that there will be an effort to get into those, you know, decentralized and smart contract platforms in a way that allows them to have some influence, if not control over them. You know, that's far off, but that's where I would imagine it would go.

• 21:44Anthony Pompliano?

  Yeah. Joe, John, what question do you guys got? What are the biggest challenges that you guys are facing from like that you're seeing on a legal level when it comes to crypto?

• 21:52Speaker 02

  Okay, I mean, first and foremost is, you know, whether an asset is a security or not. And, you know, no one wants to hear that it's a security. So I've always spoken with my team to, you know, say, let's think about just, you know, when you were speaking to the founder who has a great idea and they're ready to talk to us about their launch and say, hey, well, we're going to do this. And, you know, we don't want the first thing to be saying, well, that's a security. You got to do X, Y, and Z. That's a big turn off. It may be, but, you know, so that's number one. Whether something's a security and what that means in terms of regulatory burden, whether it's even then viable to do it in that form. So that's number one. The other is, I think.

• 22:34Speaker 02

  Data privacy and cybersecurity, you're seeing a lot of incidences. I had my Coinbase wallet swiped, which was a lesson for me to invest money with other people and not try to figure that I could trade coins. So is data privacy and cybersecurity? I think that's a huge area that we need to be really mindful of. And then it's just the overall moving landscape of the legal and regulatory framework that's not defined and is very ambiguous in many fronts. And so people are either taking an approach like, well, until I know for a fact 100%, I can't do it. I'm going to do behavior or engage in activity very profitable, but which may ultimately get kind of pulled back. And that's kind of an interesting way to approach it.

• 23:18Speaker 02

  Or you have other folks who are very conservative in their approach and are like, okay, well, we're going to follow all the rules as they are now and we're going to, you know, look for additional direction from the government.

• 23:29Anthony Pompliano?

  So let's start with the first one, right? Which is security versus non-security? Because I think that's one that we obviously hear a lot about. And when you're investing, people talk about constantly of certain projects or companies, et cetera. Is that something where there's just not enough guidance right now? Like you guys wish that it was clear? Or do you guys think you have enough information? It's just a project by project basis?

• 23:48Speaker 02

  I think more often than not, you know, if it's a security, just by the way it behaves. And then you figure out, is there another way to approach it to have the same economics or same outcomes without tripping those wires? And it's not necessarily prohibitive if you trip those wires, you just have to approach it differently, you know? And some folks who are doing, you know, tokens or other issuance of that in that vein, they just, from a US perspective, just choose not to transact in the US. And so they can develop a pretty successful and significant business.

• 24:29Speaker 02

  In that way, of course, once those if it's a token company and those tokens launch and they start trading and they start trading in the US, then you have the same issue that you were hoping to to avoid. So I think I would say largely you know, but there is definitely a bucket where where you have to kind of dig in and figure it out. And that's where I think good creative lawyers, and I like to think we have a bunch of them, can help you navigate that in the most profit maximizing way.

• 24:57Speaker 03

  And how has like the I don't know when you guys first started initially covering crypto or giving advice on crypto. But in general, how has the pace of kind of clients, I'm assuming it's picked up over time, but just talk a little bit about kind of what you guys are seeing there.

• 25:11Speaker 02

  It's a great question. And I guess I would say it mirrors a little bit the the asset class valuation in crypto. So as you've seen that.

• 25:23Speaker 03

  As the price increases, you guys.

• 25:24Speaker 02

  There's more business, there's more activity, there's more investors, there's more founders, there's more entrance into the marketplace, there's more regulations, there's more governments who are figuring out what to do. So it's been exponential growth. Our group was working kind of in disparate ways. And when we started our process to say, we need to organize this, we think we're doing a lot of great things, but we need to kind of put it into more cohesive and market facing manner. When we did that, we discovered, holy shit, we have so many people doing so many interesting things, great energy around it. And so we launched

• 26:05Speaker 02

  or and are launching in a way that we think is much more much more informative for our end users, which is which is clients. So our group is, you know, like, like we said, start about 100 lawyers. And over the past, I would say, over the past, let's say, 19, 20, 21, 22, we've seen, you know, 20 fold, maybe more in terms of opportunities. And I would say even between this year and last, as more people understand our place in the market, we're exponentially ahead of where we were last year in terms of clients and.

• 26:42Speaker 03

  Have you been surprised at the quality of people also, like people coming from traditional kind of jobs, whether it's in big tech or something similar?

• 26:50Speaker 02

  I've been blown away by the entire industry.

• 26:55Speaker 02

  The talent that is moving from traditional Wall Street into, you know, great companies like Block Tower, for instance, and what they're doing is really awesome. When we see terrific lawyers move in to take entrepreneurial positions. And a friend of mine at River Financial Services, brilliant guy, left a big law to do that. So the talent that is moving and has moved into this space is only growing. And here's another plug. And so when you see that and you're like, how do you fill all those jobs? And there's

• 27:39Speaker 02

  and one, you know, I know one firm that is doing great things in that space is Inflection Points.

• 27:46Anthony Pompliano?

  So John, what questions you got?

• 27:48Speaker 04

  It comes to, what's, obviously crypto is very new. So everyone kind of goes into it, not knowing clients coming to you saying, hey, can we get some advice on this? What's something crazy that someone's asked you to like, like an entity to set up or something like that? That you're just like, dude, you're not allowed to do that.

• 28:02Speaker 02

  No, that's, that's really a funny question. We've definitely had a few characters come across who are, you know, I mean, you could

• 28:13Anthony Pompliano?

  Now, what's the craziest one? Come on, like, what, what's something somebody tried to do where you were just like, no, like, that's not allowed?

• 28:19Speaker 02

  I think there, I mean, there are people who come in and say, you know, I'm creating a pet metaverse. And so I want to, I want to start trademarking pet names for the metaverse, which hasn't been built. And I mean, and then I want the pet, you know, metaverse to have ownership interests in real estate. I mean, it just kind of like

• 28:46Anthony Pompliano?

  Things that don't even make sense.

• 28:47Speaker 02

  They don't make sense.

• 28:47Anthony Pompliano?

  Yeah.

• 28:48Speaker 02

  So, you know, we've seen some of that.

• 28:50Anthony Pompliano?

  Can I ask another question? Sure. So this, again, don't want to put you on the spot, but I'm going to put you on the spot.

• 28:56Speaker 02

  If I don't know the answer, I'll make it up.

• 29:00Anthony Pompliano?

  When you look at all of these things like tornado cash or these tumblers or things where you can do like a coin join, etc. So the general idea, each one's a little bit different, but the general idea is for financial privacy purposes, I would like to not have someone be able to follow my Bitcoin on a blockchain. So what I do is I put it into this product and if I put two Bitcoin in, I get two Bitcoin out and you can't tell because we mixed them all up together for then I can go use it. Is that legal? Like, one part of me says like, the financial privacy argument is so strong when you have

• 29:42Anthony Pompliano?

  a public ledger like that. The other side of me has always wondered, you know, maybe we would need to wait for courts to somehow figure this out, is are they going to go after that as money laundering?

• 29:56Speaker 02

  Well, if

• 29:56Anthony Pompliano?

  And I don't, I would, I would make the argument that the privacy is the right argument, but like, what do you think?

• 30:04Speaker 02

  You're taking out the same amount of money that you're putting in?

• 30:06Anthony Pompliano?

  Correct.

• 30:07Speaker 02

  I mean, what's the difference between that and like a

• 30:10Anthony Pompliano?

  A bank.

• 30:11Speaker 02

  A bank account.

• 30:11Anthony Pompliano?

  Correct. That would be my argument, is you put your money in the bank and when you take it out.

• 30:15Speaker 02

  The same cash you're taking out is in the cash you put in. In fact, you actually didn't put cash in. You had some wires say you put cash in. So my first reaction is that should be fine as long as the source of the Bitcoin is verifiable and obviously when you get the Bitcoin.

• 30:36Anthony Pompliano?

  Basically, you didn't do anything illegal to get the Bitcoin.

• 30:37Speaker 02

  No.

• 30:38Anthony Pompliano?

  And so if you go and you use this, then it's a, it's a privacy feature.

• 30:42Speaker 02

  Yeah, I guess, I mean, is it kind of instantaneous?

• 30:47Anthony Pompliano?

  Each one's a little bit different. Some of them happen quickly. Some of them may take a little bit longer.

• 30:51Speaker 02

  Don't, I mean, you have a valuation question. That's a different issue.

• 30:53Anthony Pompliano?

  Yeah, yeah, yeah.

• 30:54Speaker 02

  But in terms of, I don't see why it wouldn't be legal, but I don't want to, you know, hold ourselves out as

• 31:00Anthony Pompliano?

  Yeah, yeah, of course.

• 31:01Speaker 02

  Giving an opinion on there, anyone out there?

• 31:02Anthony Pompliano?

  No, but, but I think

• 31:02Speaker 02

  Don't act on that.

• 31:05Anthony Pompliano?

  By the way, none of this is legal advice. All you geniuses at home, don't say, I saw Konstantin and Pops talking about it. But I think that that's my general reaction too. But I use that as an example of like, one, you would have to sit down with your team, right? Do much more work to kind of come to a full conclusion. But like, there's such nuance in so many different things. Like, no other asset in the world has a public ledger that is auditable by anyone in the world, which potentially could violate basic financial privacy. And therefore, the need to have things that would enhance your financial privacy. Like, that is a very nuanced situation. So you, of course, entrepreneurs are going to go solve problems. And so they went and they built this. There's multiple versions.

• 31:50Anthony Pompliano?

  But like, you can see how there's going to be someone somewhere who's like, oh, that's a bad thing. They're already saying just Bitcoin in general is bad, right? And so, of course, they're going to go after stuff like that as well, it feels like.

• 32:00Speaker 02

  You're going to have a, you know, people under the rubric, we care about consumers, want to know what's going on here because, you know, they're terrified of people, you know, creating wealth. And when you do that, you start asking questions like, well, who's holding? You know, what's the custodian of these, you know, the Bitcoin? Who are they? Are they regulated? That kind of thing. So that's, that's, that's more a question of, well, you want to make sure that when you do put your two Bitcoin and you do get two Bitcoin out. And so if you don't, you're, you know, you've been screwed. And we want to make sure we limit the opportunities of that mechanism to screw you. So that's, that's where I see where you'd see the regulatory burden.

• 32:41Speaker 02

  But the notion of intermingled Bitcoin being illegal, that strikes me as, as not likely, although I want to look at it. I have to say that's a part of the law.

• 32:52Anthony Pompliano?

  Last thing I want to ask is NFTs. Right, right after you, we have a 12-year-old kid coming on who's made millions of dollars in NFTs.

• 32:59Speaker 02

  I hope he has his cool T-shirt.

• 33:01Anthony Pompliano?

  I don't know if he's got a cool T-shirt. We tried to get him to take his first big windfall with a couple hundred thousand dollars. We told him to go buy.

• 33:08Speaker 02

  So he's issuing, he's issuing NFTs?

• 33:10Anthony Pompliano?

  Correct. It's called Weird Whales. And.

• 33:14Speaker 02

  His son's 12. He's trying to do the same thing. Maybe we.

• 33:16Anthony Pompliano?

  Bunch of, bunch of 12-year-olds out here going to take over the world. We told Benjamin that he should buy the naming rights to his school and then name it after himself.

• 33:24Speaker 02

  It's not a bad idea.

• 33:25Anthony Pompliano?

  Like, if you're in elementary school, you show up and you tell the teacher, like, you work at my school.

• 33:31Anthony Pompliano?

  In the NFT world, like, is there anything there that you guys find really fascinating? Or any kind of legal issues that you tend to think are interesting?

• 33:37Speaker 02

  But what's at the forefront of our NFT guys, and we have a tremendous talent in the NFT space, Gregor Prior in London, haven't seen him in Ramsey Hannah in Century City.

• 33:47Anthony Pompliano?

  You have 1,800 lawyers, you're not gonna be able to drop all their names.

• 33:49Speaker 02

  No, I dropped those guys' names because they're doing amazing things in the NFT space, and I figured I'd develop some capital with them.

• 33:57Speaker 02

  Fractionalized interests, how you manage that, how you deal with it, how you keep it from being stolen. Data privacy in NFTs is a big issue. The industry's booming, it's real.

• 34:13Speaker 02

  You know, one of the biggest issues I have with friends of my generation, believe it or not, in my early 50s, is they can't get their head around a new world emerging, and so they reject it out of hand because they don't understand it. And so, just as an aside, that's something, that attitude doesn't exist in our group, and we don't allow it. So, NFTs have certain, you know, fractionalized interests, buying and selling them, how you do that, you know, is really at the forefront in the NFT world. You know, I did want to mention before, I believe, Pomp is, it's my sister's birthday today, her name is Marina, she's, comes at it from a very different perspective, far left, but she's totally into Bitcoin, which is interesting because it marries, I think,

• 34:57Speaker 02

  political perspectives, and...

• 35:01Anthony Pompliano?

  We're in the politics is dumb, political class?

• 35:03Speaker 02

  Yeah.

• 35:04Anthony Pompliano?

  Like, we just, we opted out because we got confused.

• 35:08Speaker 02

  Yeah, I get confused all the time. And when I was listening, you're talking about, you know, El Salvador, I got that.

• 35:18Speaker 02

  And I wanted to mention my nephew, Ambrose, who got me into Bitcoin.

• 35:23Anthony Pompliano?

  How old?

• 35:24Speaker 02

  He's probably 20 now. He, he asked me if I was invested in Bitcoin in like 2014, and I was like, no. And he's like, well, you should be. I'm like, what do you know in the back of my head? And then, obviously stupid. And then, a little bit later, we talked about it again, I'm like, you know what? You're absolutely right. Um, that kinda led me on my journey. He, he also has, and I'm shameless, I know that. Um, a, a internet knife company that's killing it called Nico's Knives. You guys should go send them.

• 35:54Anthony Pompliano?

  Internet knife company? Like, like he sells knives on the internet?

• 35:57Speaker 02

  On Instagram, off Instagram. He's selling athletes, love it, pros, celebrities. He's just built this huge business.

• 36:03Anthony Pompliano?

  I, I wish that one of you guys were, uh, smart enough to make a knife company and then sell them on the internet and then we could all retire.

• 36:10Speaker 03

  Damn, these knives are legit.

• 36:12Speaker 02

  Have you seen Nico's knives? Have you pulled them up?

• 36:14Speaker 03

  Yeah, yeah. It's like, uh, they're, they're like.

• 36:16Anthony Pompliano?

  Is this it? Versatile handmade revolutionary? Yeah, yeah, we gotta run this.

• 36:21Speaker 04

  It's the homepage of the.

• 36:22Speaker 02

  Oh, you have it on the screen.

• 36:23Anthony Pompliano?

  What's the, uh, uh, scroll down a little bit, Matt? What, what's the, uh, oh, oh, he, he got the videos. Cutting, cutting up the, uh.

• 36:31Speaker 04

  Peppers and chicken.

• 36:32Anthony Pompliano?

  Anytime that you can show a knife can cut the peppers and the chicken at the same time, you know you got a good knife.

• 36:38Speaker 02

  He's got a great knife.

• 36:38Anthony Pompliano?

  Yeah. And then it's stuck in the wood. Like, these are versatile ass knives. Imagine going into your kitchen and being like, let me take my steak knife and I'm gonna go cut down this tree. That's Nico's knives.

• 36:51Speaker 03

  Imagine going into your kitchen, not having a Nico knives.

• 36:56Speaker 02

  This is great. You guys.

• 36:57Anthony Pompliano?

  Yeah, Nico.

• 36:58Speaker 02

  He's definitely gonna have to send you guys some.

• 37:00Anthony Pompliano?

  Hey Nico, uh, DM us and we'll send you our bank account details. You can send us the, uh, referral fee.

• 37:07Anthony Pompliano?

  People, people in the chat are, are trying to debate us to if it's, uh, Damascus steel or, uh, or other types of.

• 37:13Speaker 03

  Happy birthday to your sister.

• 37:14Speaker 02

  You getting a real live reaction to Nico's knives?

• 37:17Anthony Pompliano?

  Yeah, of course. Yeah.

• 37:18Speaker 02

  How about anything I said? Anything and then it was like.

• 37:21Anthony Pompliano?

  Oh, they were very.

• 37:22Speaker 02

  When are you gonna get the lawyer off the show and bring the 12 year old in?

• 37:24Anthony Pompliano?

  No, no, they, they were saying, uh, let's see. Oh, I told you what they said about.

• 37:28Speaker 03

  Happy birthday to your sister.

• 37:30Speaker 04

  If you don't know the answer, if I don't know the answer, I make it up. Spoken like a true attorney.

• 37:38Anthony Pompliano?

  And then somebody else said, uh, I did social media marketing for many criminal defense attorneys here in San Diego, California. The law of the land is fire. Facts. Which I don't really know what that is.

• 37:49Speaker 03

  Now they know we're reading the comments though, so they'll start sending reckless stuff.

• 37:51Anthony Pompliano?

  Yeah, now, now they'll start, uh.

• 37:53Speaker 02

  I didn't want you to go down that hole.

• 37:55Anthony Pompliano?

  People saying we should get you a beer. Uh, somebody said, uh, when you said, believe it or not, I'm 50. Uh, somebody said, you don't look a day over 60, sir.

• 38:08Anthony Pompliano?

  They said that you remind them of Joe Rogan.

• 38:11Speaker 02

  Really? Listen, I'm trying to pivot.

• 38:15Anthony Pompliano?

  Somebody said, I don't even need knives, but I bought 25 of them.

• 38:21Anthony Pompliano?

  The, you know, look, all, all kinds of stuff. That.

• 38:28Anthony Pompliano?

  Somebody said, talking to you, cousin, you took career advice from a 14 year old that now sells knives.

• 38:35Speaker 02

  Listen, kid's 20, kid. Listen, he's selling lots of knives. I acted on his investment advice and it's worked out very well.

• 38:44Speaker 02

  And it sounds like if I hang around, I'll get some great investment advice from a 12 year old, too.

• 38:50Speaker 02

  I may just do that.

• 38:51Anthony Pompliano?

  All right. What, where should we send people to find you on the internet or find more about Reed Smith?

• 38:59Speaker 02

  You guys can, you guys can reach out. You can check out our crypto and digital assets webpage.

• 39:07Anthony Pompliano?

  Hold on, timeout. We got the photo of you on Reed Smith. That looks like straight out of 1947 mobster suit store.

• 39:17Speaker 02

  I, I used to.

• 39:19Anthony Pompliano?

  If I saw you in the street, I'd go the other way.

• 39:21Speaker 02

  Yeah, you should.

• 39:25Speaker 02

  I get that a lot, actually. But, but we're, we're, we're linked now. So we're good. You know, I got your back completely.

• 39:32Anthony Pompliano?

  All right. Reed, Reed Smith.

• 39:34Speaker 02

  Just reach out to me. Konstantin Karides, there aren't that many out there. I've ventured, there are none others out there. And you'll find my contacts. See Karides at reedsmith.com or you, I don't want to give my number because.

• 39:46Anthony Pompliano?

  Yeah, don't give the number. The bad.

• 39:48Speaker 02

  After some of those comments.

• 39:52Anthony Pompliano?

  Bad things will happen. Lastly, you'll appreciate this is every time that we have to do ad reads and stuff like that. I always have to say, you know, read the terms and conditions. And there's one advertiser that their lawyers are very opinionated. They, they, they have a lot of, this is good, this is not good, whatever. So I just started talking directly to them on the show. I just say, hey lawyers, listen up. And all of a sudden they got real quiet. I haven't heard from them in like two months. So, you know, I feel like that's like, there's good lawyers and bad lawyers, but the, the key is you always need a good lawyer. Like that is actually a very, very good piece of advice for most people in life.

• 40:33Speaker 02

  A lawyer in a good position in a law firm to look after you.

• 40:38Anthony Pompliano?

  That's true.

• 40:38Speaker 02

  Depending where you're at.

• 40:39Anthony Pompliano?

  Yeah.

• 40:41Anthony Pompliano?

  Last thing I'll leave you with, just to really highlight how amazing our audience is. Somebody said, whenever I need a lawyer, I just do it myself. I don't trust anyone else to talk for me.

• 40:52Speaker 02

  Right. That's really.

• 40:53Anthony Pompliano?

  We're taking on self sovereignty. It's like a whole nother level with that. So, all right. Well, thank you so much for coming.

• 41:01Speaker 02

  Thank you guys.

• 41:02Anthony Pompliano?

  Anyone who is looking for legal services, in all seriousness, you should go check out Reed Smith. I use them. Konstantin has done a fantastic job, his entire team. You guys are making a massive investment in building out this practice. The name of it is Reed Smith on Chain, which if you're a dummy and you see that written somewhere on a website and you don't know that it's crypto, then you probably need to go ahead and call them because you definitely need a lawyer because you're going to make a lot of mistakes.

• 41:30Speaker 02

  It's about as cool as we got on Chain. You know, we had a bunch of other names and they were just terrible. So.

• 41:36Anthony Pompliano?

  What was the worst one?

• 41:39Anthony Pompliano?

  Not that one. What's that one?

• 41:42Speaker 02

  There's like Greek god names and stuff. I'm like, no one's going to fucking know what you're talking about.

• 41:46Anthony Pompliano?

  Can you imagine if he came in and he goes, we have a new unit at Reed Smith. It's called Reed Smith.

• 41:50Speaker 02

  It's called Zeus. It's called Zeus.

• 41:54Anthony Pompliano?

  Everyone's like, what exactly are you doing there?

• 41:56Speaker 02

  Yeah, no, it really just, but we had a great marketing team pull it together for us.

• 42:02Anthony Pompliano?

  Thank you for coming on. You're here in Miami, so we'll definitely bring you back at some point when we got legal questions. But I think you should become like the official lawyer.

• 42:10Speaker 02

  I'm really funny, so I can really, I can, I think I can help the show.

• 42:13Anthony Pompliano?

  We should make you the official lawyer of the show. And whenever we have legal questions, we can just like call you up. And be like, hey, is this legal? And then, you know, you just make up the answers.

• 42:23Speaker 02

  That's right. That's what you do. Without fee, without a charge.

• 42:27Anthony Pompliano?

  All right.

• 42:28Speaker 02

  Guys, thank you. This has been great. Really appreciate it. I'm excited I got to be on with you guys.

• 42:33Anthony Pompliano?

  All right, sounds good.

• 42:34Speaker 02

  Have a great day, guys.

• 42:35Anthony Pompliano?

  All right. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you subscribe on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to pompscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more and I'll meet you guys for the next episode.