ROLLUP: CZ Steps Down From Binance | SEC Attacks Kraken | Argentina's Crypto President

Bankless Weekly Rollup 4th Week of November, 2023 ------ 🎙️ Tap into the Bankless Premium RSS Feed https://bankless.cc/premiumfeed ----- 🌐 Near's Cost Effective Data Availability https://bankless.cc/near ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask https://%E2%81%A0https//bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum https://%E2%81%A0https//bankless.cc/Arbitrum ⁠ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 👾GMX | V2 IS NOW LIVE https://bankless.cc/GMX 💲 USDV | NATIVE OMNICHAIN STABLECOIN https://bankless.cc/usdv ------ TIMESTAMPS 0:00 Intro 00:03:39 Markets https://pro.kraken.com/app/trade/btc-usd https://pro.kraken.com/app/trade/eth-usd https://www.coingecko.com/en/global-charts 00:04:39 CZ and Binance https://www.wsj.com/finance/currencies/binance-ceo-changpeng-zhao-step-down-plead-guilty-01f72a40 https://x.com/jacqmelinek/status/1727055732657246582?s=20 00:08:28 What is CZ Charged For? https://x.com/cz_binance/status/1727063503125766367?s=20 https://x.com/tier10k/status/1727112081361834432?s=20 00:12:44 Yellen's Threat https://x.com/BanklessHQ/status/1727074910370214051?s=20 https://x.com/jacqmelinek/status/1727068905083154619?s=20 00:17:22 Takes https://x.com/SenWarren/status/1727075454258180374?s=20 https://x.com/PapiChuloGrim/status/1727072835842265315?s=20 https://x.com/TrustlessState/status/1727012179780788372?s=20 https://x.com/nic__carter/status/1727090868908396745?s=20 https://x.com/RyanSAdams/status/1727035378371305712?s=20 https://x.com/RyanSAdams/status/1727022257250136447?s=20 https://www.coindesk.com/consensus-magazine/2023/11/21/binances-cz-and-the-end-of-the-borderless-crypto-company 00:31:23 SEC Attacking Kraken https://www.sec.gov/news/press-release/2023-237 https://blockworks.co/news/kraken-commingle-customer-funds https://x.com/nic__carter/status/1726742215601394147?s=20 https://x.com/jespow/status/1726862770635936101?s=20 00:38:39 What Does Kraken Do About This? https://x.com/krakenfx/status/1726753079201034466?s=20 https://x.com/jespow/status/1726794688433369290?s=20 https://twitter.com/RyanSAdams/status/1726735133435113869?t=SRaRCiQMqLAJgPnBBWwnTQ&s=19 https://twitter.com/RyanSAdams/status/1726735133435113869?t=SRaRCiQMqLAJgPnBBWwnTQ&s=19 00:44:37 Blast Launch https://x.com/Blast_L2/status/1726747087906464024?s=20 https://x.com/Blast_L2/status/1726747105056989438?s=20 https://x.com/Blast_L2/status/1726747111994351627?s=20 https://blast.io/en/about 00:51:18 Blast Takes https://x.com/matthuag/status/1726794007169392798?s=20 https://x.com/bkiepuszewski/status/1726885938482266589?s=20 https://twitter.com/_Enoch/status/1726789502100795705?s=20 https://x.com/josephdelong/status/1726807950696800717?s=20 https://x.com/buchmanster/status/1727012742031368503?s=20 https://twitter.com/adietrichs/status/1726973122400989520 https://x.com/dankrad/status/1726912734388765067?s=20 00:59:12 Argentina's New President https://www.reddit.com/gallery/17zpatk https://www.youtube.com/watch?v=pysVxVg9Y28 https://www.reuters.com/world/americas/argentina-readies-vote-likely-presidential-election-thriller-2023-11-19/ https://twitter.com/balajis/status/1726448609871458645?s=20 https://x.com/brian_armstrong/status/1727013818524660197?s=20 01:02:52 Coindesk Sold https://blockworks.co/news/bullish-acquires-coindesk-dcg https://twitter.com/JasonYanowitz/status/1726611872353591392 https://x.com/elitanjourno/status/1726753641363550440?s=20 01:07:28 Optimism News https://x.com/optimismFND/status/1727105321817219488?s=20 https://twitter.com/OPLabsPBC/status/1727007225552748712 01:09:33 Meme of The Week https://twitter.com/alancarroII/status/1727037504119837108 Moment of Zen https://x.com/BanklessHQ/status/1727348869401636953?s=20 ----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosuresBankless

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

• 0:00David Hoffman?

  CZ is going to serve an 18 month jail time, allegedly. And then also Binance is going to pay $4.3 billion. And then, once that is over, Binance will have the green light from the United States, which is an expensive tax to pay. But that is a hugely like, good thing for Binance in the very long term.

• 0:21Ryan Sean Adams?

  Bankless Nation, it is time for your Friday weekly roll up. We've got a lot to talk about, David. What are we starting with?

• 0:26David Hoffman?

  CZ stepping down from Binance and stepping into jail? And also, Binance paying $4.3 billion to the Department of Justice.

• 0:36Ryan Sean Adams?

  Yeah, we got to find out what that means. Also, the SEC is attacking Kraken, the crypto exchange, for the terrible charge of what? Being a crypto exchange?

• 0:46David Hoffman?

  But also co-mingling funds? Question mark? What the hell is the deal with that? So we'll unpack all of those details. CoinDesk, crypto's largest, earliest crypto news media company, is sold out of Barry Silbert's Digital Currency Group to who? We will discuss. Also, Blast, a new Layer 2 on the scene, has caused a bunch of controversy among crypto Twitter and why many people in the crypto industry are kind of just fed up with paradigm. Talk about that. And Argentina is getting a new president, a new president elected to Argentina, pro the dollar and pro crypto? Question mark? We will unpack all of this and more.

• 1:22Ryan Sean Adams?

  We should also say, it is going to be Thanksgiving. You know what? I think I said Happy Friday Morning, and this is actually coming out on Thursday morning. So, Happy Thanksgiving to all US listeners. I hope you have a fantastic time trying to convert your family members into crypto zealots as they ask you, hey, honey, how's that crypto thing going? I hope you have a fantastic reply to them because you are listening to Bankless, so you'll know exactly what to say. And none of it will probably make sense to your family members, as usual.

• 1:53David Hoffman?

  Oh, honey, I heard one of your crypto friends got put in jail again this week. It's like, really bad timing.

• 1:59Ryan Sean Adams?

  And David, you're actually on the West Coast over to visit family for the holidays as well. So, are they going to be asking you about crypto?

• 2:07David Hoffman?

  Oh, well, they know, they know I'm very deep in the crypto sphere. So they, they, they already did. I was home last night. My mom was asking me about it. Yeah. Bankless, longtime bankless listeners will know when this is my background. David's home for some holiday reason. This is the home, Ryan, that I started my crypto rabbit hole journey in. This is where I like was losing blood. I was cutting my fingers on the sheet metal while I was putting together mining computers for Ethereum back in 2017.

• 2:30Ryan Sean Adams?

  Wow.

• 2:31David Hoffman?

  Yeah. That was how many years? Six years ago. Yeah.

• 2:34Ryan Sean Adams?

  Yeah.

• 2:35David Hoffman?

  Crazy, crazy.

• 2:36Ryan Sean Adams?

  Literally started your crypto journey with blood.

• 2:38David Hoffman?

  Yeah.

• 2:39Ryan Sean Adams?

  Pretty impressive to add.

• 2:40David Hoffman?

  I have scars on my hands from trying to put together mining computers. Yeah.

• 2:44Ryan Sean Adams?

  All right, Dave, we've got to get into the markets. But before we do, want to shout out our friends and sponsors over at Near. They've got a new data availability layer. David, tell us about it.

• 2:52David Hoffman?

  The Near Layer One is also now a data availability layer for Ethereum rollups or rollups generally. Uh, and so data on Ethereum is still pretty expensive. World War III resistant block space is expensive. Uh, so the Near data availability is 8,000 times cheaper than currently Ethereum data availability. So if you are launching an app chain, like in the Cosmos ecosystem, or a layer two on Ethereum, or a rollup just somewhere in the crypto verse, well, those are kind of your only two options. Uh, use Near for data availability. Near's data availability layer already has some very early partners. Madera by Starknet, Caldera, Fluent, Vistara, Movement Labs, and a few others. So the price of data, Lin Web 3, like all things, is getting cheaper thanks to Near.

• 3:35David Hoffman?

  There is a link in the show notes, bankless.cc/near to get started.

• 3:39Ryan Sean Adams?

  All right, let's get to the markets, David. Uh, the Kraken charts this week, what are they telling us about Bitcoin?

• 3:44David Hoffman?

  Look at that up line up into the right. I mean, you're zoom super far out on the one month, but that is just an upward trend line with plenty of volatility. Bitcoin started the week at 36,000, ending the week at 36 and a half thousand dollars. Up a little bit, keeping, keeping the markets alive. Moving into ETH price also just looking like a straight line up again with some volatility. Starting the week at $2,000, ending the week where we are now at $2,040. The ratio between Bitcoin and Ether, a little bit up, but relatively flat. And of course, the total crypto market cap, 1.44 trillion dollars. Uh, blue chips, Bitcoin and Ether up. Marginally up, some altcoins down the market cap stack down. But overall, I would say we are floating, we are floating up, I would say.

• 4:25Ryan Sean Adams?

  This is definitely bull market territory and thanks to Kraken for providing those charts. Of course, no securities traded on Kraken. These are crypto tokens, aren't they, David? We'll get to that story a little bit later, but before we touch on Kraken, let's talk about CZ. CZ, the founder of Binance is out, David. Take us through the story. So how did this happen and what happened over the last couple of days?

• 4:50David Hoffman?

  So the Department of Justice of the United States has actually been investigating Binance for a very long time, since 2018, 2019, and it has finally come to a head, finally come to a conclusion. So CZ is going to plead guilty on Friday, here in Seattle, by the way, in a court in downtown Seattle, to money laundering charges, as well as Binance is going to pay $4.3 billion. This is a settlement between Binance and the Department of Justice and also the CFTC, the Commodities Futures and Trading Commission versus Binance. The SEC is not, not involved here.

• 5:26Ryan Sean Adams?

  Yeah, so that's, that's what's interesting about all of this. He said, um, he's going to plead guilty, right? He hasn't actually pled guilty and he's going to be pleading guilty in front of a court in Seattle, which coincidentally, David, that's where you are right now. I don't know how that ended up happening. You always seem to end up in the funniest places when crypto stuff goes down.

• 5:45David Hoffman?

  People to crypto leaders going to court for some reason, all the time.

• 5:49Ryan Sean Adams?

  Yeah, okay, so, so he hasn't pled, but they're putting out all of this, these press releases ahead of that, basically. We already know what he's going to plead. We already know what the fines are. We already know what the settlement actually is. And here's a tweet with some of those details that you just recapped. So Binance has to pay $4.3 billion in fines. Binance is reaching an agreement with FinCEN, OFAC, the CFTC, and will give them $1.8 billion. That's part of the $4.3 billion. CZ actually made a statement, "Better to ask for forgiveness than permission toward operating in the US." So he's like, "Oh, oopsie, that was my strategy and, you know, this is how it's playing out."

• 6:28David Hoffman?

  The opposite of the Brian Armstrong approach, I'd say.

• 6:30Ryan Sean Adams?

  The opposite. And then CZ, he is resigning and he can't operate Binance for three years from the start of the agreement. Interesting though, David, he gets to keep all of his equity. So he can operate it. But he's not forced to sell any of it. So he gets to realize all of the upside. He is still a, you know, hyper billionaire. I have no idea what his net worth is, but it's, it's multiple billions, many billions. In fact, at one point in time, I think Forbes estimated CZ was like maybe the second most wealthy person in the entire world. Like top five. And so he gets to keep all of that. There's also though, David, talk of some jail. Like there might be an actual, you know, sentence. Can you tell us about that?

• 7:12David Hoffman?

  So he CZ is going to be released on bail, $175 million bail. And the agency, the Department of Justice is looking to seek an 18 month sentence for CZ. Now, like, why do we know all of these details? It's because this is a settlement agreement between Binance and the Department of Justice. So rather than just carry this out even longer, perhaps like CZ is avoiding a much longer sentence, perhaps life. There's just, this is the terms of CZ. This is the cost of Binance to pay for a clean slate from the United States government. So post this, CZ is going to serve an 18 month jail time, apparently, allegedly. And then also Binance is going to pay $4.3 billion.

• 7:56David Hoffman?

  And then, once that is over, Binance will have the green light from the United States, which is an expensive tax to pay. But that is a hugely like good thing for Binance in the very long term.

• 8:10Ryan Sean Adams?

  So he's actually going to jail though? That, that's crazy. I wonder if this is like house arrest, if he can negotiate that? Or if it's actual jail, jail? If it's like, uh, is this kind of like, you know, the white collar cushy jail? Or is this just-

• 8:22David Hoffman?

  Is it Arthur Hayes jail? Or is it Sam Bankman-Fried jail? Like where on this, on this spectrum?

• 8:27Ryan Sean Adams?

  That seems to be unclear. Can we talk really quick, David, about what Binance is actually being charged for though? Like what crime did they commit? And what, what, what is CZ actually pleading guilty to here?

• 8:38David Hoffman?

  I'm sure they would love to go after CZ and Binance for every single thing under the sun, but the thing that has finally come to a head here is allowing knowingly allowing money laundering and terrorist financing to occur on Binance. Binance famously was pretty loose in the early days about KYC on the exchange. You could, you could just kind of flub your KYC, your VPN, like, check, I'm not a United States citizen. And then you could just like use Binance. And so they, and there were reports, remember when the Signal chats that came out with CZ and other executives at Binance, they knowingly allowed terrorists to, to operate on Binance.

• 9:19Ryan Sean Adams?

  There's pretty ironclad proof of this.

• 9:21David Hoffman?

  There's ironclad proof of this. And so it was not only like they allowed it, but they also knew about it and they didn't do anything about it. And so this isn't, this is why the SEC is notably absent from this. This is not child's play of Gary Gensler and his influencer campaigns. This is the Department of Defense having a problem with Binance allowing for terrorists to funnel money through Binance. And CZ is like, we're turning a blind eye. And so it's kind of like the highest level of offenses you could make towards the United States government.

• 9:54Ryan Sean Adams?

  Yeah. You said that the Department of Defense and they're kind of associated here. It's like the agencies of FinCEN and OFAC. And by the way, if you're not familiar with what these agencies are, we did an entire podcast on the financial surveillance apparatus that you should absolutely check out. But notably, what CZ did not do and what Binance did not do, it was not an FTX style fraud.

• 10:14David Hoffman?

  Right.

• 10:15Ryan Sean Adams?

  Okay. So there was not a missing funds from the exchange of billions of dollars. And by the way, that, that was rumored earlier in here, at least on crypto Twitter. It's just like, oh my God, CZ is doing the same thing that FTX is doing. That's not what these charges are for. And you have to assume that these investigators went through absolutely everything they could. There's no gaping hole on the balance sheet. So it's not that. And as you said, it's not an SEC snafu. It's all about financial surveillance. It's OFAC, it's, it's FinCEN. It's not Doing the AML KYC. This is the statement from CZ. David, you want to read some of this?

• 10:53David Hoffman?

  CZ tweets out, "Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally, but I know it's the right thing to do. I made mistakes. I must take responsibility. This is the best for our community, the best for Binance, and the best for myself." And then he announces that Richard Tang, the former head of global regional markets, is now the new CEO of Binance. And he discusses like the qualifications of Richard and who he is. And then he talks about what's next for him. And I thought this was like a pretty crazy line. "I will take a break first. I have not had a single day of real phone-off breaks for the last six and a half years." CZ, who's been grinding for six and a half years.

• 11:34David Hoffman?

  "After that, my current thinking is I will probably do some passive investing, being a minority token shareholder in startups in areas across blockchain, Web3, and DeFi, AI, and biotech. I'm happy that I will have more time to spend looking at DeFi. I cannot see myself being a CEO driving a startup again. I'm content being a one-shot entrepreneur." On that note, I am proud to point out that in our resolutions with United States agencies, they do not allege that Binance misappropriated appropriated any user funds and do not allege that Binance engaged in any market manipulation. Funds are "Saifu," which is a meme for safe. "With that, I look forward to seeing the new leadership take the reins. Please join me in congratulating Richard on his well-deserved promotion." Onwards, CZ.

• 12:20Ryan Sean Adams?

  So no misappropriation of user funds, no market manipulation, but clearly doing legal activity with respect to financial surveillance laws and regulations that are in the book. We'll talk what this means, like how people are reacting to this and how CZ might be viewed through history. But all of this also came to a head in a press release that the Department of Treasury and I believe the CFTC kind of stood up at 3:00 PM on Tuesday, November 21. And actually, when they announced all of this, some of this news came out ahead of that and some of it was tied up in this press release. And Janet Yellen actually spoke about this. And here she is addressing crypto specifically in what I would say is a not-so-veiled threat. Let's listen.

• 13:01Speaker 02

  And let me be clear. We're also sending a message to the virtual currency industry more broadly today and for the future. If virtual currency exchanges and financial technology firms wish to realize the tremendous benefits of being part of the US financial system and serving US customers, they must play by the rules. And if they do not, the US government will take action.

• 13:34Ryan Sean Adams?

  There it is, David. If you want to play in the US and you are a crypto company or a crypto project, you must play by US rules.

• 13:43David Hoffman?

  Okay, but who is she referring to? Because Binance, okay, got them, the number one exchange. Who's the number two exchange? Coinbase, extremely compliant. Who's the number three exchange? In volume, after those two, Kraken, extremely compliant. After that, we have Bybit, OKX, and KuCoin, who are Asian exchanges. So maybe this message is to them. But we're now talking about the long tail of volume. There's no one left. FTX is gone.

• 14:11Ryan Sean Adams?

  Yeah, no. Well, she's just saying this in general. David, what I think this is, is this is a statement of like, we're in control, right? Like, we're in the driver's seat. Okay, like, let me show you who's boss. Bend the knee. It actually doesn't matter what rules we say. In fact, what the subtext here is, we're not even necessarily going to give you clarity on what the rules are. But when we say jump, you jump. We are the bosses here, or else we will shut you out of the US market. And what that means is you're disconnected from the entire Western market, right? It's like, Europe kind of follows suit. If you're shut out, that's the stick that Janet Yellen really carries here. We'll talk about this a little bit more when we get into the Kraken case. But

• 14:53Ryan Sean Adams?

  do you know what is also crypto Twitter found hilarious was the way she pronounced Binance, David? She said the entire time, she must have mentioned this, I don't know, five, six, seven times, Binance is her pronunciation of Binance. So that's like high-class finance.

• 15:07David Hoffman?

  Right. Well, I remember back in 2017, back in 2018, I would the early days of Binance. People called it Binance all the time. It was like, it was back in the day when people also would say ETH or ETH. People referred to ETH as ETH.

• 15:22Ryan Sean Adams?

  Yeah, but if someone started saying ETH, ETH right now, and if someone says Binance right now, it just shows that they either don't care what everyone or they're disconnected.

• 15:31David Hoffman?

  They don't have any crypto friends. That's for sure.

• 15:33Ryan Sean Adams?

  Yeah, they definitely don't. So how big of a deal is this? Let's look at this from the Binance token itself, because there is a token out there that is maybe a proxy for what's going on in Binance world, the BNB token. That is down, what, 12% here on the day?

• 15:47David Hoffman?

  Down 12%, yeah. So at a fully diluted market cap of $35 billion, we're losing a couple billion dollars of market cap off of the BNB token, down 12%. But I will also say, like, that's not far off from like the regular old market like right now. Like, for example, Solana is also down 12% right now. Layer two tokens like Optimism, down 8% on the week. XRP down 7% on the week. So you can't even really say I would that the market even reacted to this.

• 16:17Ryan Sean Adams?

  It's a little bit of a reaction, but kind of.

• 16:18David Hoffman?

  It's a little bit of a reaction. Yeah, but like 12% in crypto, like, whatever. Okay, that's fine.

• 16:24Ryan Sean Adams?

  Another big question, though, David, for Binance or Binance, I should say, is where is all of this coming from? This $4.3 billion, do they have the funds to actually pay for it? What's this tweet?

• 16:35David Hoffman?

  Yeah, so Connor put out a little audit of Binance's crypto holdings from Binance's proof of reserves disclosures that they publicize because they're cool and they do that. So what reserves does Binance have? $6.35 billion in total assets, $3.2 billion in stable coins, and this does not include any off-chain cash balances or held in funds that they don't disclose. So they will likely be able to pay that $4.3 billion fine without actually having to liquidate any crypto.

• 17:05Ryan Sean Adams?

  Wow.

• 17:06David Hoffman?

  They're not going to dump on us.

• 17:07Ryan Sean Adams?

  So Binance, Binance is basically like, oh, $4.3 billion, we'll write you a check. Here you go. You know, it's like a cost of doing business, basically, for a company of this size.

• 17:17David Hoffman?

  And honestly, like, they probably saw this coming. They probably knew this was coming.

• 17:22Ryan Sean Adams?

  You said, investigation since 2018. So they've been in the thick of it for a while. So let's talk about some different takes. One angle is, what is the Elizabeth Warren anti crypto army take? This looks like

• 17:34David Hoffman?

  I'm waiting on baited bread. Elizabeth Warren says about this.

• 17:37Ryan Sean Adams?

  Do you like victory laps, David? Because I think this screams of Elizabeth Warren doing a victory lap. The CEO of the world's largest crypto exchange pleaded guilty to breaking anti-money laundering laws. This is part of a larger trend of criminal activity in the crypto industry and sadly predictable. She told us all about this in advance. I urge the Justice Department to investigate Binance for lying to Congress. She goes on, law enforcement and national security officials need additional authorities and resources to pursue money laundering, sanctions evasion, blah, blah, blah, blah, blah. I'll keep working to pass bipartisan legislation to address this serious and dangerous problem. P.S. I was right about Hamas, too. I'm not giving you guys any ground. That's not what she said, but I think she's thinking that, David. This is definitely a victory lap from the Elizabeth Warren camp.

• 18:23David Hoffman?

  Nice dunk. But let's, let's carry, let's compare this to some banks. So Poppy Chulo Grim, Twitter, crypto Twitter account, says, the enforcement against CZ is insane. For perspective, in 2010, Wakovia Bank, owned by Wells Fargo, was shown to have purposefully laundered $378 billion from the Sinaloa cartel. I think that's a Mexican drug cartel.

• 18:45Ryan Sean Adams?

  Yes, it is. Wow.

• 18:46David Hoffman?

  Between 2004 and 2007. So $378 billion. How much was Wakovia Bank fined? $160 million. Okay, Liz Warren. Okay, explain that one. Go after the banks who are subsidizing your narrative against crypto. Like, come on.

• 19:04Ryan Sean Adams?

  Yeah, yeah. David, you've got a take about this. So there's another question of what does this mean for crypto in general? Is this bearish? Is this bullish? You say it's bullish. This is David Hoffman tweeting. A Department of Justice settlement with Binance is hugely bullish. Binance takes a hit but gains U.S. approval and regulatory clarity moving forward. The whole industry gets further legitimized. So David, you choose to interpret this news as bullish. Why?

• 19:31David Hoffman?

  Do you remember when the

• 19:35David Hoffman?

  Do you remember when the Bitcoin was seized from the Silk Road and then it was auctioned off by the government?

• 19:40Ryan Sean Adams?

  Oh, yeah.

• 19:41David Hoffman?

  And there was a premium on that Bitcoin because people wanted to buy Bitcoin that was like blessed by the United States government. If the United States government is selling you Bitcoin, that Bitcoin is clean. And this was back in the days of when just like everyone was worried about like the UTXO traces of their Bitcoin coming from dirty sources. So people paid like a 5 to 10% premium on Bitcoin that was clean. So I'm kind of making this same comparison. Binance is going through the trials of the Department of Justice. CZ is paying his debts in 1.5 years of jail time and $50 million fine personally that he has to pay. Binance is paying $1.43 billion to wipe the slate clean. This is what happens now.

• 20:25David Hoffman?

  Moving forward, Binance now has a clean slate. They now have a green light of being washed by the government and they are now further legitimized so long as they don't do anything wrong moving forward.

• 20:36Ryan Sean Adams?

  Yeah.

• 20:36David Hoffman?

  And so going back to like, who are the now the biggest exchanges that own over 90% of crypto centralized crypto trading volume? Binance, which is clean now, Coinbase, which is regulatory compliant, and Kraken, which is regulatory compliant. So like, come on, like that is, that's just massive tailwinds for crypto skeptics to get on boarded into crypto.

• 20:56Ryan Sean Adams?

  Yeah, I'll note that the regulators didn't shut Binance down. Okay. They let CZ keep his, you know, $4.3 billion, that sounds like a lot, but it's a slap on the wrist. So they're indicating that they want to control these exchanges, not shut crypto down. And that is some certainty that has been injected into the market. I think there's another question though here is Binance CZ, good or bad? You know how we all like to put people in, in, you know, especially in crypto, in binary camps? You're either good or you're bad. It's dark or it's light. This is a Nick Carter take on Binance and CZ. "I think we can acknowledge that Binance has been a critical linchpin of crypto adoption globally while also granting that knowingly facilitating 1 billion in flows to sanctioned entities is extremely bad and not a victimless crime."

• 21:41Ryan Sean Adams?

  So this is Nick Carter saying, it's kind of mixed, right? They did some good things, they did some bad things, not a victimless crime. This is a danger reflecting a similar sentiment. A little sad by the Binance suit, but at the same time, it seems relatively reasonable, given all the evidence. Binance was shady indeed towards governments. As far as I can tell, they did right by their users, the true crypto ethos. Maybe this skews a bit more kind of light, which is very interesting. My personal take is, say what you want about CZ. He did onboard millions of people in crypto and he didn't steal our money. We've had a lot, we've had a lot worse bankers, David. We've had Alex Maschinsky in this space. We've had Sam Bankman Fried in this space. We've had the BlockFi people.

• 22:24Ryan Sean Adams?

  And the bottom line for me is like, I still probably trust CZ more than US regulators. And I don't know what that says about US regulators or what that says about CZ. So I'll grant that he's kind of like a neutral type of, of character here. My take is, he was definitely a profit maxi. He definitely was sloppy with respect to AML KYC compliance. He probably caused some-

• 22:48David Hoffman?

  Sloppy? No, risky, risky, pushing the limits.

• 22:51Ryan Sean Adams?

  Yeah, he pushed the limits, I would say. And it cost him-

• 22:54David Hoffman?

  Well, he broke the limits, actually.

• 22:55Ryan Sean Adams?

  He broke the limits. It cost him in the end. And, but there's also a question of like, ethically, what do you actually think about AML KYC, right? I, I think our posture on bankless has, has been, if you have the ability to block the bad guys, right, then you should be regulated to block the bad guys. If you are a credibly neutral protocol, it's just, it's open for everybody. You have no ability to block anyone. And by the way, the good of credibly neutral protocols outweigh the bad. But Binance was not a credibly neutral protocol. It was more like a bank. It was an exchange. And so it should have some type of rule structure, regulation apparatus. And Binance clearly dodged that. What's your take on CZ? Are you like team, uh, team CZ good or team CZ bad? Or do you fall somewhere in the middle?

• 23:40David Hoffman?

  Yeah, I'm trying not to be warped by all of the bad people that have redefined what it means to be bad. Like Sam Bankman Fried really pushed the limit on what it means to be bad. You know, Alex Maschinsky, Do Kwon, Daniel Sesta, just like, I didn't realize how bad people could get. And so like, maybe had I come in with more like virgin eyes into this space, I would-

• 24:05Ryan Sean Adams?

  More innocent, more innocent David would have been like, oh, you're not a great guy.

• 24:09David Hoffman?

  He's pretty bad, yeah. He's like allowing fine terrorists financing on his platform. But like, man, like- Going, I'm about to go to Argentina in January.

• 24:18Ryan Sean Adams?

  Yeah.

• 24:19David Hoffman?

  They use Binance, dude. They use Binance to get banked. They use Tron on Tether. And that's, well, that's not Binance, but it's just like, they use the Binance exchange and the Binance app to send money around. This is also true for Africa. And so, uh, yeah, I mean, like the simple take is like, we support DeFi protocols that terrorists can use. And also the rest of the world. And we believe that this is a net positive outcome in the grand scheme of things. CZ tried to operate under those principles, but he didn't have that same foundation. Like, he could have stopped the terrorists.

• 24:53Ryan Sean Adams?

  No.

• 24:53David Hoffman?

  And he chose not to.

• 24:55Ryan Sean Adams?

  He was not an internet protocol like TCP IP. All right. He had his own walled garden platform. And, uh, there's some responsibility when you have something like that. David, you alluded to it earlier, but one other question here is, okay, what does this mean for centralized exchanges? And, uh, you said, I mean, this is very good for a Coinbase. This is very good for a Kraken, basically. Because Binance is pretty much stultified in Western markets. Anywhere that the, kind of the US touches or the US influence overshadows, Binance is kind of cut out of that. And it looks like, I think to me, that, uh, US regulators are doing some king making here. They're slapping around Coinbase. We'll talk about it soon. They're slapping around Kraken as well. But that will also boost up Coinbase and, and Kraken, I think, in these markets.

• 25:40Ryan Sean Adams?

  And so that is a, that is a massive, uh, factor here.

• 25:44David Hoffman?

  I saw one last take to, to round this out on. I saw this one take from Emily Parker, uh, the end of the borderless crypto company. She wrote this in, uh, CoinDesk, basically is saying, um, Bitmex was also a borderless crypto company. And Bitmex got axed like right before the start of this, uh, this last bull market, I think in like 2020. That was Arthur Hayes's exchange, uh, and it just famously operated like very light KYC AML and just use crypto as payment rails. And Emily Parker's take is like, well, well, Binance was the last borderless crypto company, the last like pirate bay are the, you know, the one that you couldn't really stop.

• 26:20Ryan Sean Adams?

  Just like skipping around jurisdiction, jurisdiction, like, where am I located? Our offices are virtual, that kind of thing.

• 26:26David Hoffman?

  Exactly. So one passage that I liked was, "We will probably never see another company quite like Binance. Crypto itself might be borderless, but crypto companies may find it increasingly hard to operate outside of legal or geographical boundaries. In the early days of crypto, it seems possible to launch a massive exchange that slipped through the grasp of any jurisdiction. Those days are gone." And Ryan, thematically, this kind of lines up with where we see the globe heading, like, generally. We, as a globe, are not globalizing. We are balkanizing. The internet is becoming balkanized. The walls between China and the United States are going up. The walls between Russia and the EU are going up. Walls, generally, across all domains, digital or physical,

• 27:09David Hoffman?

  are generally going up. And I think this fits into that story. And what else fits into that story is underlying Web 3 decentralized, credibly neutral protocols that give no Fs about those walls. And so this is the increasing, like, retreat from globalism, the increasing, like, strength around borders, and also the increasing ripeness for protocols that slip right around those borders. I think this is perfectly in theme with the thing that we've been seeing over the last five years or so.

• 27:40Ryan Sean Adams?

  Yeah, you're right, David. I think crypto exchanges are going to have to be geopolitically aligned moving forward. Some axis of power, and they can't be in both camps at the same time. It's further balkanizing. We got a lot more to talk about, including another crypto exchange that's on the hot seat. The SEC is accusing Kraken of what? Being a crypto exchange. Very different charges here. And also, maybe co-mingling funds?

• 28:04David Hoffman?

  Ooh, what's up with that?

• 28:05Ryan Sean Adams?

  Let's unpack that.

• 28:06David Hoffman?

  Did they really, Gary?

• 28:08Ryan Sean Adams?

  Yeah, did they?

• 28:09David Hoffman?

  Did they really?

• 28:10Ryan Sean Adams?

  Come on, Gary. Also, there's a new Layer 2 on the scene. It's called Blast, and everyone is super happy about it. Actually, not so much. There's a lot of controversy. We'll get to those things and more. But first, we want to tell you about the sponsors that made this episode possible, including our number one. Hear this, Gary Gensler. The number one. Preferred crypto exchange. Preferred crypto exchange. Kraken. Only tokens, no securities. It's called Kraken. It's called Kraken. In solidarity, right now, if you're listening to this, go create a Kraken account.

• 28:42David Hoffman?

  Kraken knows crypto. Kraken's been in the crypto game for over a decade. And as one of the largest and most trusted exchanges in the industry, Kraken is on the journey with all of us to see what crypto can be. Human history is a story of progress. It's part of us, hardwired. We're designed to seek change everywhere, to improve, to strive. And if anything can be improved, why not finance? Crypto is a financial system designed with the modern world in mind. Instant, permissionless, and 24/7. It's not perfect, and nothing ever will be perfect. But crypto is a world-changing technology at a time when the world needs it the most. That's the Kraken mission, to accelerate the global adoption of cryptocurrency, so that you and the rest of the world can achieve financial freedom and inclusion. Head on over to kraken.com/bankless to see what crypto can be.

• 29:27David Hoffman?

  Not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to US and US territory customers by Payward Ventures EK, PVI, doing business as Kraken. Introducing USD V, a better type of stablecoin. Currently, billions of dollars in stablecoin yield each year are paid to Tether, Circle, and other central issuers of major stablecoins. But what if yield could be shared with the protocols that use it? Those protocols, in turn, can decide how to reward their users. USD V shares its yield with a community of apps and developers that mint it. Every USD V is backed one-to-one by US Treasury bills which pay yield. This yield flows out to the community of USD V issuers, so your protocol or app can get paid for helping end-users convert other stables into USD V. This works thanks to a breakthrough technology called Colortrace from Layer Zero.

• 30:12David Hoffman?

  Without it, it was impossible to attribute users of a token with a specific issuer. But now we can. USD V is live on Ethereum, Optimism, Arbitrum, and other chains, and it's already available on over 20 exchanges such as Curve, Bitget, Velodrome, and Stargate. Start participating in the yield from Treasury-backed stablecoins at bankless.com/USDV.

• 30:32David Hoffman?

  Introducing GMX, the deepest on-chain futures market to trade Bitcoin, Ethereum, and leading altcoins. GMX is a permissionless decentralized exchange that offers perpetual futures and spot trading, lightning-fast trade execution and competitive pricing with the security and self-custody of a decentralized exchange. GMX is live now with V2, bringing new optimizations to on-chain leveraged trading. And even more than an improved trading experience, GMX will reward you for just participating. All GMX users can easily set up a referral link. And with $12 million of Arbitrum grants being distributed as incentives, and over $150 billion in trading volume to date all settled on-chain, GMX is leading the charge in terms of opportunities for DeFi liquidity providers. The future is on-chain

• 31:17David Hoffman?

  with your wallets, with your trades, and with your money in your own hands. Try it out now at app.gmx.io.

• 31:23Ryan Sean Adams?

  The SEC is attacking Kraken this week. New charges dropped from Gary Gensler's SEC. I'll read the press release title. "The SEC charges Kraken for operating as an unregistered securities exchange, a broker, a dealer, and a clearing agency. Otherwise, I think, David, known as a crypto exchange. Maybe you can't do that in America. I'm not so sure. David, tell us some of the details here. What are the claims that are being filed against Kraken by the SEC?"

• 31:50David Hoffman?

  Yeah, so the SEC alleges that Kraken provides a marketplace that brings together the orders for securities and multiple buyers and sellers, and thus operates as an exchange. The only part about that is that they use the word "securities." "Engages in the business of affecting securities transactions for the accounts of Kraken's customers and thus operates as a broker. Engages in the business of buying and selling securities for its own account without an applicable exception and thus operates as a dealer. Serves as an intermediary in settling transactions in crypto asset securities by Kraken's customers and acts as a securities depository and thus acts as a clearing agency." All of these, Ryan, are normal crypto exchange operations. The only thing that is different here is that they are being...

• 32:35David Hoffman?

  Flavored by this security word, basically saying that hell, all those things that you are doing, all those assets, all those tokens, all those coins are all securities and therefore everything you do makes you a securities exchange.

• 32:47Ryan Sean Adams?

  Yeah, and if I'm reading this, David, they, of course, as usual, needs to get, they dropped a similar suit against Coinbase, right? So this isn't the first time, but they, they mentioned a few, you know, token, what they would call securities. We call these just, you know, crypto assets or cryptocurrencies, ADA. So that is Cardano, Algorand, Atom, File, Flow, all sorts of things as usual. But they're basically saying these are all securities. I know we've, you know, clarity, they don't admit to that, but these are all securities and you've been running a securities exchange illegally in America and they're taking them to court over this.

• 33:24David Hoffman?

  And this, Ryan, in combination with the Department of Justice going after CZN Binance, I think is one of the reasons why the long tail crypto assets, the market is down this week, like Bitcoin and Ether relatively unfazed this week, like Ether is actually up, but like tokens are down this week, like the long tail, like Matic, Solana, Filecoin, like all the ones, all these ones like listed here are, are down. And that's the same thing that happened last time the SEC did this, when they actually named names. And I think just like these three letter agencies going after crypto is kind of like rattling the markets and scaring them out of like the altcoin season. So I, my take here is that, well, okay, well, we'll just kind of see a bounce back on that because that's what we've seen before and there's nothing really new here, except there is something new, right? In line 221 of this

• 34:09David Hoffman?

  complaint, there's this co-mingling funds thing that the SEC has accused Kraken of co-mingling funds with its own accounts and customers. So customers' funds are being co-mingled with each other's and also Kraken is using customer funds to pay its bills. And so this is the one thing that's like different and new that like flagged my attention is like, yo, what, what do you mean co-mingling funds? What, what does that mean? Because that sounds very FTX-y. And in the press release of the, from the SEC,

• 34:41David Hoffman?

  They have like all of these bullets that I read out earlier, right? You know, engages engages in the business affecting security transactions, provides marketplace, blah, blah, blah. And those are the illicit allegations. But then like there's this separate paragraph that's like, oh yeah. And also, by the way, they co-mingled funds and they use customer funds to pay bills. It's like, it's like, why wouldn't you?

• 35:01Ryan Sean Adams?

  Why wouldn't you lead with that?

• 35:02David Hoffman?

  Why wouldn't you put that in the bullets? And so like, oh, by the way, they also did this thing. And it's out and like the verb is that they use sounds very FTX-y, right? Just like, you know, co-ming, we all have the trauma, the PTSD of like FTX using customer funds. And that's definitely what they are alluding to in this, in this press release. Okay. So what do they, what do they mean? Like they have the statement in line 221 and 222 of the accusation. Here's what they say. Separately, Kraken treats some fiat and custodial accounts as its own and not the customers, supposedly because Kraken's customers owe Kraken fees arising from the customers trading. This is true. For example, Kraken has at times paid operational expenses using funds held in customer custodial

• 35:47David Hoffman?

  accounts. This is another example of improper co-mingling of funds that increases investor risk, which registered security intermediaries intermediaries are prohibited from engaging. Kraken does not disclose to its customers that Kraken co-mingles customer and corporate fiat in either customer custodial accounts or Kraken's corporate operating accounts. Once again, what does this mean? Here's how this works. And this is how all crypto exchanges work, Ryan, is that when you deposit your crypto onto Kraken or Coinbase, and then you make a trade, that trade incurs a fee. This is how exchanges make business trading fees. And so all of a sudden, the crypto that you deposit to them, some of them, some of that crypto becomes the exchanges because of the fee.

• 36:28David Hoffman?

  But because that state is not immediately reflected on chain, well, then all of a sudden, the fee that is collected by Kraken and the customer deposits from the customer is still in the same wallet, is still in the same address because Kraken's internal ledger and the Ethereum blockchain or like the Polygon Layer two or Solana, they don't update that and immediately. And so in a one moment of time, there is a co-mingling of funds because of that discrepancy.

• 36:56Ryan Sean Adams?

  It's just a temporary co-mingling is what you're saying. Yeah, this is, this is Nick Carter, who's talking about this. So something people don't understand is that there's always crossflow between customer and exchange funds, as there's always some overlap due to ordinary latency in operations. Co-mingling is a big boogeyman, but all exchanges definitely have some overlap, even if short periods, even if for short periods. Is this, is this seriously what the SEC is? Like, they are talking about it as a kind of an add-on in their list of allegations, which lead with, with securities, but they are like, it seems like intentionally making it sound as if Kraken is running an FTX SBF-style scheme.

• 37:38David Hoffman?

  Right.

• 37:39Ryan Sean Adams?

  And really, it's just a technicality in the way the business operates.

• 37:44David Hoffman?

  Implementation detail.

• 37:44Ryan Sean Adams?

  Are you effing serious?

• 37:47David Hoffman?

  So you can imagine Jesse Powell, one of the, the co-founders of Kraken, how frustrated he is with this. So he follows up to Nick's tweet and says, "It's so ridiculous. There's no statutory requirement to segregate. Fees paid are, quote, 'co-mingled' until they are moved out. Exchanges can have customer accounts for foreign exchange or whatever, like any other business customer. And four, there are reorgs, chargebacks, failed settlements, and bank errors. These are all things that would lead to like a discrepancy in the ledger that needs to be accounted for with time." So, yes.

• 38:19Ryan Sean Adams?

  Nice. Again, like, it's a good little, like, good little jab, good little... They're, they're putting in the press release, "Those allegations will not hold up in a serious court system," right? They're just adding it to, like, flavor the, the entire list of complaints here.

• 38:34David Hoffman?

  Political sphere, yeah.

• 38:35Ryan Sean Adams?

  Yeah, that's, that's absolutely bogus. So the big question here, though, is what is Kraken going to do about this? And I'll also, like, remind folks that earlier this year, David, it was nine months ago, Kraken was charged again by the SEC, this time for its staking service. And at that point in time, it decided, rather than go to the court system, do all these things, basically the mob boss is coming and kind of collecting, it decided to pay the penalty rather than fight the SEC.

• 39:02David Hoffman?

  Thirty million dollars.

• 39:03Ryan Sean Adams?

  Thirty million dollars. That was nine months ago. Okay, so now the SEC is like, "Oh, so you're willing to pay. I guess we'll drop some more charges on you." That's what it seems like to me. So what is Kraken going to do, David?

• 39:15David Hoffman?

  So here's David Ripley, operating CEO of Kraken, who says, "We strongly disagree with the SEC claims, stamped firm in our view that we do not list securities and plan to vigorously defend our position." Yes. As we've seen before. You in court, Gary. "The SEC argues that Kraken should come in and register with the agency when there is no clear path to registration. Words that we've heard for like three years now. Its allegations are factually incorrect, contrary to law, and the wrong way to create policy in the United States. As an industry leader, we will stand up to these allegations and defend the crypto industry's right to exist in the United States." That's right. "We believe congressional action is the most appropriate path to resolving the lack of regulatory clarity in the US and will continue to support these efforts to bring clarity and certainty to the chaotic environment that has been created in the US," saying,

• 40:00David Hoffman?

  "Congress, will you please rein in your boy Gary Gensler?" Somebody's got to. Jesse Powell put out, retweeted this blog post from Kraken, and he says, "USA's top D-cell, decelerationist," and this is coming out of the backs of like, D-cell is now a word that we use to describe anti-innovation in Silicon Valley and tech and crypto. Okay, so USA's top D-cell is back with another assault on America. He's calling the SEC and Gary Gensler a D-cell, decelerationist. "The masochists haven't been happy with the beatings that they've been taking in New York." I'll unpack that in a second. "And are shopping for a different flavor in the reg-dom in California." Regulatory dominance? Yeah.

• 40:44David Hoffman?

  Wow, this is unhinged. "I thought we settled all their concerns for $30 million in February. Now they're back for seconds." The message is clear. $30 million buys you about 10 months before the SEC comes back around to extort you again. Lawyers can do a lot with $30 million, but the SEC knows that a real fight will likely cost $100 million and valuable a time. If you can't afford it, get your crypto company out of the United States war zone." That's great. I just love, I love the energy out of Jesse. Like, just calling it how it is. It's like, they're just back. Extortion. Yeah, extortion. Extortion. I want to unpack the, "The masochists haven't been happy with the beatings they've been taking in New York

• 41:28David Hoffman?

  and are shopping for a different flavor of reg-dom in California." Is he talking about the Ripple case? Well, so all of the cases that the SEC has filed in New York have gotten shut down.

• 41:39Ryan Sean Adams?

  Lost.

• 41:40David Hoffman?

  The New York courts have said Gary Gensler, go home. And so this, this allegation against Kraken was filed in California.

• 41:50Ryan Sean Adams?

  Yeah.

• 41:51David Hoffman?

  Which is brand new, clean slate regulatory jurisdiction that SEC is like, hey, California, all you liberals over there, I'm a liberal, I can say that. You guys, will you guys like, please like, help us take down Kraken? Like, New York's not doing it. Like, can you guys help us?

• 42:07Ryan Sean Adams?

  Well, they're diversifying their court cases, basically. They got a new exchange and they've got a new court system in a new state and they're trying to, like, they keep losing, but what does it cost them? I mean, they're getting paid by tax funder dollars. It doesn't cost them anything to keep bringing these court cases. Gary Gensler clearly doesn't care what the crypto industry thinks of him. He clearly doesn't care about the legitimacy and credible neutrality of the SEC as a governing entity. He is here to advance the career and political aspirations of Gary Gensler. So he could drop whatever court case he wants at any point in time and he does not care if he loses. That's what's so insidious. It's such a stupid tax on American innovation and our entire industry. And ultimately, the one in five Americans that actually own crypto.

• 42:49Ryan Sean Adams?

  I think, David, this man, Gary Gensler, is, under his leadership at the SEC, he is a political liability for the Democratic Party.

• 42:58David Hoffman?

  He's treasonous. It's treason. It's treason.

• 43:01Ryan Sean Adams?

  Treason.

• 43:03Ryan Sean Adams?

  It goes right to treason.

• 43:04David Hoffman?

  He's treason.

• 43:05Ryan Sean Adams?

  Oh, man. So that's what's going on there and it's great to see Kraken pushing back on this absolute sham of a regulator. I guess one thing we have to add at this point, of course, is full disclosure. If you're not already aware, Kraken is a sponsor of Bankless. And that's why we picked them. We picked them because they protected users for over 12 years. Gary Gensler has not even given us a Bitcoin ETF in the last 12 years. Kraken has a stellar reputation. They were first to initiate proof of reserves. We believe they are right and the SEC is wrong. Haven't lost a dime. However.

• 43:35David Hoffman?

  And like, and I just want to pull this out one more time.

• 43:37Ryan Sean Adams?

  Yeah.

• 43:38David Hoffman?

  Kraken is not doing anything wrong, according to the SEC, other than trading securities. And the SEC is going to Kraken and being like, hey, you guys are trading securities. But then they list a bunch of securities and they're not going out to the securities that they issue and say, hey, you guys made securities. They're going to Kraken and say, you guys are listing securities. And like Kraken's like, yo, we didn't make these things. And so they're going after the people that aren't responsible for the inception of the alleged securities in the first place. Because they can't actually go and take Filecoin or Solana to court because they probably don't want to lose that one either.

• 44:16Ryan Sean Adams?

  Well, they may, they may, yeah. It's still early here, David.

• 44:18David Hoffman?

  Then why aren't they doing it?

• 44:19Ryan Sean Adams?

  Well, I bet they, who knows? Who knows what this mastermind's plans are? And the whole point of that section was to tell you that Kraken is a sponsor. And of course.

• 44:28David Hoffman?

  Love sponsor.

• 44:29Ryan Sean Adams?

  Love sponsor. And of course, guys, if you want to be extra sure, just don't keep your crypto on any centralized exchange ever. Go, go bankless. That's also what we encourage. All right, David, are you ready to get blasted, man? Because there's this new, there's this new layer two. It's called Blast and it blasted on my Twitter timeline this week and there's some controversy about it. I've been busy looking at other things. Can you tell me what this thing is?

• 44:52David Hoffman?

  Blast notably raised $20 million from Paradigm. And this is where people's like attention gets funneled into Blast because Paradigm is like, you know, dopamine, dopamine for like the Twitter degenerates.

• 45:03Ryan Sean Adams?

  They did Friend Tech.

• 45:04David Hoffman?

  Exactly. They did Friend Tech, right? And like you're gonna, you're gonna notice, they also did Blur and you're gonna notice like a lot of Blast is cut from the same cloth as Friend Tech and Blur.

• 45:12Ryan Sean Adams?

  Just dialed up.

• 45:13David Hoffman?

  Just like really dialed up. And so introducing Blast, the only layer two with native yield for ETH and stable coins. And so, okay, what, what does that mean? TLDR is that if you submit your Ether or your stables into the Blast deposit contract, they just convert it to Lido Staked ETH or they deposit it into the MakerDAO T-bill engine. And then your ETH balance on Blast just naturally increments up like .02, .03.

• 45:41David Hoffman?

  Overtime as ETH staking does. So it just converts your ether into staked ether on your behalf, and then just gives you more ether on a layer two. Same thing with stables. So like, oh, yeah, kind of cool, I guess, but.

• 45:53Ryan Sean Adams?

  That's kind of cool. Yeah, you're depositing everything, every asset is yielding. I mean, there's some risk associated with that. So people have to.

• 45:59David Hoffman?

  Right. Yeah. Is it really any different than depositing staked ETH or our ETH and then minting our ETH on a different layer two? Actually, straight up, no, it's not, it's not.

• 46:09Ryan Sean Adams?

  Maybe arguably better UX. It just saves you some transactions.

• 46:12David Hoffman?

  Maybe. Okay.

• 46:15David Hoffman?

  So built by Pacman Blur, the Blur founder. And so this is when we thought, well, it's not only just cut from the same cloth, it's made by the same founder. And this is where a lot of the financial engineering, financial gamification that Blur pioneered is now being like that playbook is being repeated again. And also Blur, you know, investment from Paradigm. Interesting set of investors, a lot of the crypto Twitter trade influencer accounts that also, again, that is a playbook from FriendTech, where they kind of just like gave the crypto Twitter influencers early access and investment into FriendTech, so that they could like promote the whole FriendTech thing. So we're starting to see like a reproduction, a lot of the same strategies.

• 46:58Ryan Sean Adams?

  Well, yeah. And we were looking at a tab earlier, David, that that actually shows it's not just the ETH yield and the USDC yield in Maker, but there's something called like Blast Rewards.

• 47:07David Hoffman?

  Blast Rewards.

• 47:08Ryan Sean Adams?

  Okay. The longer I keep my funds on Blast, the more.

• 47:12David Hoffman?

  You get rewards. You get rewards. Yeah.

• 47:15Ryan Sean Adams?

  Okay.

• 47:16David Hoffman?

  On the Blast website, you go to the website, it's Blast, and it's Airdrop is the first tab on Blast.

• 47:24Ryan Sean Adams?

  Unabashed about this.

• 47:26David Hoffman?

  Unabashedly. I remember when I opened up FriendTech, I was like, oh, man, they've made an Airdrop tab. That's bold.

• 47:32David Hoffman?

  Also gated release with invitation codes à la friend tech. And so like, you know, you don't have access. You got, you got to get an invite code.

• 47:41Ryan Sean Adams?

  I mean, but the whole branding, they're leaning into the, um, this feels very Robin Hood. I would say, right? They're just totally leading into, leaning into the Dgen of like fast money. Like, you know, if it's deposit here, you're earning, you're earning. It's just kind of leaning into that kind of culture. Uh, it seems like to me. So what's the problem with this though? David, why?

• 48:01David Hoffman?

  It, it keeps getting worse. It keeps getting worse. Uh, so here's how invites work. Uh, and so this is literally from their website. I'm reading a section from their website. How invites work? You get points when your invites earn points, your invites, the people you invite. When they earn points and then when their invites also earn points, you earn points. You get 16% bonus points when your invites earn points and 8% when their invites earn points. If you invite a whale, you get a lot of points and you'll move up the leaderboard. So like shout out to the graphic designer who made this last section a square and not a pyramid. This is a pyramid. This is a pyramid.

• 48:43David Hoffman?

  And so if you are just getting points, if your invites come in on board and then also if they invite, you get their points too. It's just a, that's a pyramid.

• 48:51Ryan Sean Adams?

  Pyramid scheme technology.

• 48:52David Hoffman?

  Pyramid scheme for invitation codes, right?

• 48:54Ryan Sean Adams?

  Okay. So what is the wisdom of the elders here? We got another pyramid scheme. What do, uh, respected members of the Ethereum community say about this?

• 49:01David Hoffman?

  Right. Okay. So remember how they called it a layer two? Well, it's not a layer two. It is a one-way deposit contract that is a three of five multi-sick. The layer two launches in Q1 2024. Right now it is like a centralized side chain with a three of five multi-sick that you cannot withdraw from. It does not go backwards. It only goes one way.

• 49:27Ryan Sean Adams?

  That doesn't sound great.

• 49:29David Hoffman?

  Yeah.

• 49:29Ryan Sean Adams?

  We're amping up the risk here and there's already at the time this tweet 30 million, but I think there's more.

• 49:34David Hoffman?

  No, there's a hundred and over a hundred and twenty million dollars deposited very, very early in the early days of this yield bearing layer two, which again, I contest the idea that is the first yield. I have my assets on optimism and I have that in our ETH. Is, does that make optimism a yield bearing layer two? Because it's effectively the same technology.

• 49:57Ryan Sean Adams?

  Okay, so, okay, so it's not a real layer two. Here's another take.

• 50:01David Hoffman?

  It's not a real layer two. It's not truly yield bearing.

• 50:04Ryan Sean Adams?

  The duality of Paradigm. They've raised the bar in terms of technology. Founder, ref, alloy are wonderful. They've won the hearts of engineers I love. I respect Georgios and think he cares. They've made my life as a lowly application developer better, but my God, the behavior of their investments. I thought Blend was awesome, but Blur, Blast should be seriously ashamed of launching an L2 in this state. There's not even anything to roll up. It's a multi-sig wrapping a proxy to an unverified contract. It's gross and no different than people shoveling ether directly to influencer EOAs in hopes of a shitcoin allocation. Wow, some condemnation here from a crypto developer. What's your take on this?

• 50:46David Hoffman?

  Yeah.

• 50:46Ryan Sean Adams?

  Oh, actually, I gotta read this. But I can't throw stones, same poster here. I claimed my airdrop. I bridged two. I'll still keep drinking that garbage. I just wish it didn't have to be this way. I don't know about that. Like, if you wish it didn't have to be that way, but you're still participating in the pyramid scheme.

• 51:07David Hoffman?

  It's incentives, right? It's the gamification. It's the incentives. Like, it's not lost on me that Matt Huang from Paradigm wrote that Casino on Mars blog post, like, in the middle of launching, like, three different casinos. So here's a take from, like, and the casinos, like Blur, Blend, Friend Tech, these are all just, like, gambling platforms. And so, like, at some point in time, Paradigm was like, you know what? Like, we're just going to fund casinos. We're going to fund casinos. That's what we're going to do. We're just going to lean into it. And that's why they've gotten all the crypto Twitter trader influencers on board. This is Joseph DeLong, who just tweets out, "Did Paradigm just turn into a pump and dump sweatshop?" Like, pump and dump sweatshop? It's like, I would have called it a casino sweatshop. But, like, yeah, that's like what people are critiquing is what Paradigm is really like, what they're investing in.

• 51:54David Hoffman?

  Here's Ethan Bookman from Cosmos. Remember when Paradigm, like, took crypto off of their website and then they had to re-add it and they did crypto, crypto, crypto? Well, now it's, now it's just like Ponzi, Ponzi, Ponzi. This is not actually what their website is, but this is like the edit, right? So like, people on crypto Twitter are just saying, like, yo, like, kind of gross and ick. And it's the same, like, financialization Ponzi playbook being repeated over and over and over again. Here's Dankrad, who says, "This is a very bad idea." And this is referring to like the native yield aspect of it. ETH and liquid staking derivatives are different assets with different risk profiles. And users should have a choice about which ones they want to use.

• 52:34David Hoffman?

  The same is true for different types of stablecoins, saying that just like, oh, if you stay, deposit your assets into BLAST. And then they swap it out for staked ETH or and Maker Dout Treasury. It's like, that is a choice that they are enshrining into the quote, unquote, layer two as removing user choice.

• 52:50Ryan Sean Adams?

  Okay, but so let me push back on that. Is there the possibility, David, you're being a bit puritanical about this, maybe, right? So this is Udi, of course, who's always the one to call out. And any hint of, you know, maybe puritanism or what we might call sobriety says, actually, the thing you're calling a very bad idea would actually be more accurately described as a trade off. Isn't this just a trade off? Dan Grad replies and says, I'm not against the trade off, but against misnaming things to confuse users. They can make their base asset form an LSD, but they should call it that instead of ETH. There's an element, David, of like, I mean, are they doing like, are they doing anything? Like, if you don't like the pyramid scheme mechanics of it, just don't participate, right?

• 53:31David Hoffman?

  Sure.

• 53:31Ryan Sean Adams?

  I think that's a, you know, a counter to this. It's not, you know.

• 53:35David Hoffman?

  Sure.

• 53:35Ryan Sean Adams?

  But also, I understand the reaction and I think the reaction from the crypto community is just, oh, God, another pyramid scheme. Is that all we're offering to the world? Like, we're just kind of tired of this. And I certainly feel that way. Like, I'm just, I'm done with the roller, like, the roller coaster of like, the exact same mechanic, only in this mechanic, it's more pyramid scheming. That's not really innovation. That's not really going to like, change the world. And I think Paradigm maybe, and this particular project caught crypto in a moment where it feels like it's just jumped the shark. You know, like, we're just kind of done with it.

• 54:11David Hoffman?

  Yeah.

• 54:12Ryan Sean Adams?

  And the mood has shifted. And I think Paradigm and maybe BLAST is taking the full brunt of that mood shift, fair or not, for this particular project.

• 54:20David Hoffman?

  Well, they're the jumping the shark thing is just like, oh, well, we saw the gamification of incentives on Blur. We saw the FriendTech invite code system work. Let's like, put everything that we've learned and just go full casino. Let's just turn it up to 11 on the casino side of things. And like, to some degree, there are the crypto Twitter trade influencers, the one that's like listed in the announcement. And there's all of that money sloshing around, playing games, independent from like, the innovations in the layer two space. It's not about like, any of the optimizations that Salon is making. It's not any of the optimizations that the superchain is making. It's just like the casino, the casino on Mars. And so, that casino on Mars just happens to be very proximate

• 55:03David Hoffman?

  to more like, the EF members, the more of the idealists out there. And that is a friction point. We have like, the D gens right next to the idealists, and now like, we're talking about it. And so, maybe that's just like, this paradigm is just making this product, and it's not for us, but they just happen to also be in our community. And there's just something weird about just like, the duality of paradigm, that one blog post where like, Georgios is working super hard to fix like, roll up composability, like cross-chain and roll up composability. He built Rust Ethereum, which devs love. And so, like, you have this just like, just extremely prestigious, hardworking, like, bunch of researchers tackling very hard problems. And then their products are casino Ponzi's.

• 55:47Ryan Sean Adams?

  Yeah, no, I get it. I think my biggest issue with this is that it's a multi-sig.

• 55:53David Hoffman?

  A one-way multi-sig.

• 55:55Ryan Sean Adams?

  That's probably my biggest. Otherwise, I feel like it the same way I feel about FriendTech, which is like, it's a pyramid, you know, scheme. That's what they're doing is their growth strategy. I guess I'm neutral to like, not feeling great about it. But I hope to God, this is not all that crypto produces. Like, we gotta show the world a little bit more than this. All right, David, we got some more stuff coming up. Coinbase just got sold. We talk about who the new buyer is, and whether we should be concerned or not. And also, is there a new crypto president of Argentina? But before we get to all that, we want to shout out our friends and sponsors over at MetaMask. And if you have not opened the new MetaMask portfolio app and all of the updates, That are coming your way. Go check it out. It's a great place to look at your portfolio.

• 56:36David Hoffman?

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• 57:20David Hoffman?

  Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared his excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why? The Cello Layer 2 will bring huge advantages like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Cello have grown over 500% in the last six months. With the Cello Layer 2, gas fees will stay low, and you can even pay for gas using ERC20 tokens.

• 58:04David Hoffman?

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• 58:47David Hoffman?

  your own orbit chain, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, an enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum. Experience Web3 development the way it was always meant to be: secure, fast, cheap, and friction-free. Visit arbitrum.io and get your journey started in one of the largest Ethereum communities.

• 59:11Ryan Sean Adams?

  Javier Malley is his name. David, this is a picture of Javier. He is dressed as his superhero alter ego called General Ancap. The Ancap, I think, stands for "nacrocapitalist."

• 59:24David Hoffman?

  Anarcocapitalist.

• 59:25Ryan Sean Adams?

  Yeah, definitely on the skews libertarian, let's say. Have you been following this?

• 59:30David Hoffman?

  A little bit, a little bit, yeah. So I saw this video of him waving a chainsaw around outside of the roof of his car as, because like, he's waving the chainsaw saying like, "We're gonna cut out the government." It reminds me of actually a little bit of our Vivek interview, where he's like, "We're just gonna gut half the government."

• 59:46Ryan Sean Adams?

  There was no chainsaw in the Vivek interview.

• 59:49David Hoffman?

  Yeah, Vivek is a lot more. This guy is an eccentric character. This guy is like, he's kind of like a rock star. Like, he should have a guitar and he should be on like the Rolling Stones. Like, that's-

• 1:00:00Ryan Sean Adams?

  A little bit crazy.

• 1:00:01David Hoffman?

  He's a little bit crazy. Super crazy. He's a big performer, very like loud and boisterous, very like right-wing, elected right-wing libertarian is now the new president with 87% of the votes counted, 56 to Malley, 44% to the opponent. So like, what's his deal? Like, what does he want? Why do people even think that he's like pro-crypto? His major narrative is what is being called "economic shock therapy." So he's just gonna rustle things up with the Argentine economy. And by the way, Argentine economy, if anyone can solve that problem, they'll get like a Nobel Prize. Because they add like 100% Argentine peso inflation year-over-year, like the amount that people like demand for dollars in Argentina is through the roof. So,

• 1:00:46David Hoffman?

  he wants to shut down the central bank, wants to ditch the peso. He wants to just cut half the government, like slashing spending and then potentially very painful reforms. And so his first presidential speech, he goes, "The model of decadence has come to an end. There's no going back." So this guy wants to shake up Argentina. And I think the question is, is like, the Argentine economic situation is a very large problem. And now we have this very loud and boisterous human promising to shake things up. And is the human able to be as large as the problem? Because some people in Argentina are like, it doesn't matter who is president. The economic situation is so terrible that like it's that one man can't do anything about it. It's a larger problem. It's any, it's bigger than any one man.

• 1:01:31Ryan Sean Adams?

  The Balogies take here is that this is the second Bitcoin president. So he congratulated him. And there's one clip here where Javier is saying about Bitcoin, "What Bitcoin is representing is the return of money to its original creator, the private sector." He also says, "We have to understand that the central bank is a scam." So not a big central banker. I believe though, David, he's not doing the El Salvador play of like adopting Bitcoin, but rather kind of casting aside the peso and adopting the dollar as sort of the stablecoin. So it, maybe it remains to be seen how crypto friendly he is, but, but certainly I would think he would be stablecoin friendly, would he not?

• 1:02:09David Hoffman?

  Yes. Stablecoins has got to be in any rational person who's leading Argentina with the intent to dollarize. Stablecoins has got to be on their menu of like first things to consider. The reason why people are calling him pro crypto is because he wants to get rid of one fiat for the more strong fiat and is anti-central bank. It's like crypto vibey, like crypto adjacent, like there's no concrete plans, like, yeah, we're going to be a crypto country. It's just like, we're going to get rid of our shitty fiat in favor of the better fiat.

• 1:02:39Ryan Sean Adams?

  Well, David, you are going to Argentina pretty soon, right? It's like the beginning of next year, I believe. So.

• 1:02:45David Hoffman?

  Three weeks and one week in Buenos Aires, two weeks in Patagonia. So I'm going to, yeah, hang out with a bunch of Argentines. I'll get their take.

• 1:02:50Ryan Sean Adams?

  Yeah, get some person on the street takes too. David, some other big news this week, CoinDesk was sold and they were sold to a crypto exchange. This is one of the largest media companies in crypto. And they were bought by a company called Bullish. This is the crypto exchange. David, do you remember who Bullish is? And like, it's from my distant past. I've never called his name.

• 1:03:10David Hoffman?

  And you really had to dust off the old like memory attic to get downloaded on this one. So DCG Digital Currency Group, also the conglomerate that owns Grayscale and Genesis, and is in a lawsuit with Gemini. They need to raise capital to pay to fill the hole in their balance sheet to pay back Gemini and all the other creditors of Genesis who has like a billion dollar hole in it as a result of all the fallout from 2022. So in that end, they have accepted a bid to sell CoinDesk, the 10-year-old crypto news company, to Bullish, a crypto exchange. Where did Bullish come from? Bullish is a subsidiary of Block1, which was launched, a crypto exchange, Bullish, subsidiary of Block1. Where is Block1?

• 1:03:53David Hoffman?

  This is going to be for like the long time crypto people. Block1 is the people that made the EOS blockchain. And so this is, if any Ethereum person is calling like Solana the EOS of this cycle, this is like why we're getting like, some people get like the PTSD of Block1 and invoking that. Block1 raised a $4 billion 2018 ICO to do this high throughput, free transaction fees EOS chain. And they raised $4 billion in Bitcoin. And Ryan, they didn't sell any of that Bitcoin. So that $4 billion in Bitcoin in 2017 to 2018, when they were raising that money, is worth some crazy amount of money now.

• 1:04:32Ryan Sean Adams?

  164,000 Bitcoin.

• 1:04:35David Hoffman?

  That is more Bitcoin than MicroStrategy. They have more Bitcoin than Michael Saylor. Why don't people talk about them? Well, because like on the Bitcoin Treasuries website, it's a Treasury is for public companies. And Block1 is like this private conglomerate that has this massive amount of Bitcoin that they got from like this very dubious ICO to make this very high-performance blockchain.

• 1:04:58Ryan Sean Adams?

  Okay. The big question here is, is this good or bad for crypto media? And this is Jason from Blockworks, who gives his takes. And I think he says it's bad. The Coinbase and Bullish acquisition is bad for our industry. And then he lists some thoughts. Why is Jason saying this is bad, David?

• 1:05:16David Hoffman?

  He's basically worried about the conflict of interest between CoinDesk, a journalist company, journalist media organization, and being bought by a crypto exchange. And he says, "This is like NASDAQ buying The Wall Street Journal," or like Binance buying CoinDesk. "It crushes editorial integrity of the brand. I'd assume every reporter will leave within six months." Now, Jason, founder of Blockworks, is inside of the media world, and so he would, he probably would be concerned about this and also perhaps has a bias. On the flip side of things, Eli Tan, who's a journalist at CoinDesk, fun fact, Ryan, we've had him on Bankless. I interviewed him. He's one of the few in-person interviews that I did in my apartment.

• 1:06:01David Hoffman?

  Eli Tan retweeted this tweet from Yano and said, "How many market-nuking scoops does CoinDesk have to have to prove its editorial independence?"

• 1:06:10Ryan Sean Adams?

  Interesting.

• 1:06:11David Hoffman?

  Yeah. And I remember back in the day, editorial independence was a big problem at CoinDesk. Like, the bags of Barry Silbert and the articles that went out of CoinDesk in like 2017 to 2019 were very, very aligned. That is no longer the case. And I think now, I'm willing personally to extend CoinDesk the benefit of the doubt. I think they have totally proved themselves to be editorially independent. Why the founders of Bullish are interested in buying CoinDesk is perhaps up to be scrutinized, but anyone inside of CoinDesk, I think, totally gets the benefit of the doubt.

• 1:06:48Ryan Sean Adams?

  Yeah, I mean, they broke the FTX story and ended up costing their parent company everything, DCG everything.

• 1:06:55David Hoffman?

  Ended up causing this selling of CoinDesk.

• 1:06:58Ryan Sean Adams?

  They still broke it. Yeah, I guess I'll give them the benefit of the doubt for a while, but you really have to wonder how CoinDesk will operate when it's under new management. So, under the previous management, I think they proved that they had editorial independence, whether that continues moving forward or not. But I do think the big signal will be How many of the journalists actually stay? Those with integrity, if they stay and if they feel comfortable operating under new management, that's probably a signal that they're able to maintain their editorial independence. So I guess for me, it's to be determined, David.

• 1:07:28David Hoffman?

  Getting into some optimism news, there was this blog post that came out that really got me excited, Ryan, talking about shared upgrades for OP stack change. So this is a roadmap for some upcoming technical improvements to the OP stack. Two main components. This first component focuses on changes that will impact OP stack nodes and node operators, enshrining a protocol version. That means that anyone using the OP stack for their chain can easily track whether their infrastructure is up to date and in sync with the official latest protocol version. That's component number one. The second component of two just simplifies the multi-chain contract upgrades with a multi-chain upgrade contract. So eliminating hardcoded configurations, superchains, all the OP stack chains that

• 1:08:13David Hoffman?

  are part of the superchain can share one set of implementation contracts and therefore perform multi-chain protocol upgrades inside of a single transaction. So one single transaction upgrades the optimism mainnet, the base chain, Zora, public goods network, anything that is an OP stack chain that wants to be a part of the superchain can all upgrade in unison. So this is one of many mechanisms that it would take to have to recompose the Ethereum many layer twos into like this one singular system. There's no one single silver bullet, Ryan, for reintroducing composability across Ethereum layer twos. One of my tweets this week, Ryan, was the layer two fragmentation on Ethereum is just going to die 8,000 cuts.

• 1:08:55David Hoffman?

  And this one is a very deep cut, I would say, like single unison protocol upgrades for all OP stack chains that want to be a part of the superchain. Pretty cool. So the governance process to implement this multi-chain contract upgrades will kick off in early 2024.

• 1:09:09Ryan Sean Adams?

  Yeah, I think that has been a major criticism of Ethereum and its layer two strategy this year is just like fracturing of governance, fracturing of the user experience, fractioning of composability and liquidity. And so now the story is some of that's true, actually, in exchange for scalability. But the story is, how does Ethereum stitch it all back together? And I think there's some promising solutions ahead that we'll be talking about in the weeks to come. David, you ready for me in the week, man?

• 1:09:35David Hoffman?

  I am. Let's do it.

• 1:09:36Ryan Sean Adams?

  All right. Happy Thanksgiving to you. And this was the this was the meme of the week we decided. Saw one of your crypto friends got in trouble this week. David, we're looking at a picture of an awkward family dinner, get together, sitting around the Thanksgiving table, all of your relatives looking at you and asking you about your crypto friend who got in trouble this week.

• 1:09:56David Hoffman?

  And that would be CZ Binance, all of our crypto friends. Right?

• 1:09:59Ryan Sean Adams?

  Happy Thanksgiving.

• 1:09:59David Hoffman?

  I'm actually gonna be sharing the day after Thanksgiving with CZ because I'm gonna go down to the courthouse and I'm gonna

• 1:10:04Ryan Sean Adams?

  Wait, wait, wait. Tell us more about that. Okay, so we talked about earlier, you were actually in Seattle. This is just

• 1:10:09David Hoffman?

  I'm in Seattle right now.

• 1:10:10Ryan Sean Adams?

  I don't know how you do this. Whenever you go to a mountain, something bad happens to Gary Gensler. You went to Montenegro and

• 1:10:17David Hoffman?

  Where Do Kwon was arrested in

• 1:10:19Ryan Sean Adams?

  Do Kwon just happened to be there. Now you just happen to be in Seattle and CZ is there. So you're actually gonna go to his

• 1:10:26David Hoffman?

  He's got a date in the Seattle courthouse at 9:00 AM, Seattle time on Friday.

• 1:10:33Ryan Sean Adams?

  Where he's gonna plead guilty.

• 1:10:34David Hoffman?

  Where he allegedly is going to plead guilty. And yeah, he's got a date with the court and

• 1:10:39Ryan Sean Adams?

  Are you gonna say hi CZ? You're gonna shout out?

• 1:10:42David Hoffman?

  If I can, yeah, like, I'm gonna go watch this. Yeah. I remember going to this courthouse like way back when where I had to like contest a parking ticket, no speeding ticket.

• 1:10:51Ryan Sean Adams?

  Yeah.

• 1:10:52David Hoffman?

  Yeah. I've been to this courthouse. Yeah.

• 1:10:54Ryan Sean Adams?

  That's hilarious. All right, guys, we got a moment of zen for you. If you enjoy how Janet Yellen pronounces Binance, you will enjoy this, I think. Some disclosures, of course. David and I, we are investors and advisors for optimism, big fans of that project. Also, as we mentioned, Kraken is a strategic sponsor of the show. We are long-term investors. We're not journalists. We don't do paid content. There's always a link to our disclosures at bankless.com/disclosures. And you gotta know, crypto is risky. You could lose what you put in, especially if you deposit in blast. But we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:11:30Speaker 03

  We are here today to announce that the Justice Department has secured felony guilty pleas from the world's largest cryptocurrency exchange, Binance.

• 1:11:39Speaker 02

  Actually, it's Binance.

• 1:11:43Speaker 03

  Finance.

• 1:11:44Speaker 02

  Benance.

• 1:11:46Speaker 03

  Finance.

• 1:11:47Speaker 02

  Benance. And let me be clear. It's benance.

• 1:11:53Speaker 03

  Finance.

• 1:11:55Speaker 02

  Benance.

• 1:11:57Speaker 03

  Finance.

• 1:11:58Speaker 02

  Binance. And let me be clear. It's benance. Binance. Binance.

• 1:12:07Speaker 03

  Finance.

• 1:12:09Speaker 02

  It's benance. It's benance.

• 1:12:12Speaker 03

  Finance.

• 1:12:13Speaker 02

  Let me be clear. It's benance. Binance. Binance. Binance.

• 1:12:22Speaker 02

  Binance.