ROLLUP: The SBF & FTX Aftermath | ETH Goes Ultra Sound | NEW Ethereum Roadmap | OpenSea Royalties

2nd Week of November ------ 📣 Earnifi | Check For Your Unclaimed Airdrops, POAPs, & NFTs https://bankless.cc/earnifi ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/?utm_source=banklessshowsyt 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 💠 NEXO | CRYPTO FINANCIAL HUB https://bankless.cc/Nexo 🔐 LEDGER | NANO HARDWARE WALLETS https://bankless.cc/Ledger ⚡️FUEL | THE MODULAR EXECUTION LAYER https://bankless.cc/Fuelpod ------ Timestamps: 0:00 Intro 4:29 BTC Price 5:50 ETH Price 6:10 ETH/BTC 6:33 Total Crypto Market Cap 7:43 ECONOMY 7:50 Inflation drops to 7.7% from 8.2% in September https://twitter.com/WatcherGuru/status/1590698393260609536 8:15 CPI Chart https://www.nytimes.com/live/2022/11/10/business/inflation-cpi-report 10:08 U. S. Election 12:10 Layoff SZN 14:20 UltraSoundMoney - 5000 ETH Burnt https://ultrasound.money/ 21:58 Surreal week…. https://twitter.com/RyanSAdams/status/1590474030263730176 https://twitter.com/SBF_FTX/status/1590709200665333762 https://unusualwhales.com/news/ftx-faces-liquidity-shortfall-of-up-to-8-billion-sam-bankman-fried-told-investors https://www.wsj.com/articles/ftx-tapped-into-customer-accounts-to-fund-risky-bets-setting-up-its-downfall-11668093732 https://www.coindesk.com/business/2022/11/09/sam-bankman-fried-no-longer-a-billionaire-after-146b-overnight-wipe-out/ 39:30 Tether freezes FTX USDT https://twitter.com/Pentosh1/status/1590711432378621952 40:18 Gensler and the SEC https://twitter.com/colinwilhelm/status/1590694062490734593 41:00 Captain hindsight https://twitter.com/collins_belton/status/1590686389511028737 42:25 Tom Emmer https://twitter.com/RepTomEmmer/status/1590717374801809409 44:25 Brian Armstrong take & ratio’ing sen warren https://twitter.com/brian_armstrong/status/1590511022104010753 45:45 Dogetoshi https://twitter.com/Dogetoshi/status/1590736426068766721 46:20 Larry https://twitter.com/lawmaster/status/1590750976298090496 47:00 Employee chatter https://twitter.com/tackettzane/status/1590541872212357120 52:20 THIS KEEPS HAPPENING https://twitter.com/RichardHeartWin/status/1590689840068448257 1:04:36 ETH 1:04:40 New Ethereum Roadmap https://twitter.com/VitalikButerin/status/1588669782471368704 1:06:30 NFTs 1:06:35 OpenSea Royalties https://www.theblock.co/post/183518/opensea-creates-tool-to-help-nft-collections-enforce-royalties-on-chain 1:07:50 Peaster take https://metaversal.banklesshq.com/p/the-future-of-nft-royalties 1:08:05 SuperRare RarePass https://twitter.com/SuperRare/status/1588173906241736704 https://twitter.com/BanklessHQ/status/1589641261685915650 1:08:50 Regulation 1:11:45 SEC subpoena HEX influencers https://cointelegraph.com/news/sec-issues-subpoena-to-influencers-promoting-hex-pulsechain-and-pulsex 1:13:18 While all this was happening…LBRY ruling takes https://twitter.com/lbrycom/status/1589645453091827712 https://twitter.com/lex_node/status/1589655558029643777 https://twitter.com/lbrycom/status/1589718365924634624 1:15:45 Misc Polkadot’s Native Token DOT https://twitter.com/Web3foundation/status/1588593793519210497 1:18:00 UK Bank Santander NGMI https://decrypt.co/113702/uk-bank-santander-will-block-payments-to-crypto-exchanges 1:18:19 Releases Zerion to take on MetaMask https://www.theblock.co/post/183304/zerion-prepares-to-take-on-metamask-with-in-browser-wallet 1:19:05 Raises WalletConnect - $12.5M https://twitter.com/WalletConnect/status/1588154492465418240 1:19:20 JOBS https://pallet.xyz/list/bankless/jobs Be like Tim https://twitter.com/timgarth/status/1588269857920925705 1:24:34 TAKES Future of Crypto https://twitter.com/HHorsley/status/1590463556902096897 Worst events in crypto history https://twitter.com/thedefiedge/status/1590131252056756226 No one wants to hear it https://twitter.com/TrustlessState/status/1590760792877862913 Thanks Gary https://twitter.com/TrustlessState/status/1590721196957761537 1:36:44 MEME of the Week https://twitter.com/BanklessHQ/status/1590447780132450306 1:37:20 Moment of Zen https://twitter.com/netcapgirl/status/1590431481385857024

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

• 0:00Ryan Sean Adams?

  Some good news, too. We'll get into the macro markets, of course. Inflation, a little bit lower than expected this month, maybe a bit of a silver lining. Hey, it's only, it's only 7.9%. Only 7.9%.

• 0:14Ryan Sean Adams?

  Bagels Nation, happy 2nd Friday of November. Maybe I should have said unhappy, David. I see you've got the Wojak meme. Yeah, sad boy. Covering your face. You're feeling pretty sad today. Yeah, it's not, it's not a good week. It's been a rough week in crypto, probably the worst I've seen in terms of sentiment, in terms of feeling. Walking into this roll up, I mean, how many live streams have we been doing over the last few days? One, one per day since Tuesday, so this will be number three. Yeah, well, this isn't a live stream, but still, same, feels the same. You and I were up late last night with Kobe and Luger up only having a therapy session. Yep.

• 0:57Ryan Sean Adams?

  I mean, but there's just so much to cover, so much to talk about, and the way this event has unfolded. For those of you not familiar, of course, we're talking about FTX, SBF, how SBF, Sam Bankman-Fried wrecked this for everyone. I mean, he really screwed us over, and we're gonna talk about how we feel about that. What's, what's been happening since, I guess, yesterday? Give you the summary of what's happened this week and talk about picking up the pieces. I guess grab your morning coffee, or maybe something a little stronger if you need it today. Put some Baileys in that coffee, for sure. Are you a Baileys plus coffee? No, you, hey, you told me if you put anything in your coffee, it becomes a beverage.

• 1:39Ryan Sean Adams?

  Yo, the people need a beverage this, this week, this Friday. David makes exception for Baileys. We're gonna talk about that. That's gonna be a big, big subject, I think. Get you guys up to speed, and even a lot's happened since the last time we livestreamed. Got off the livestream at like 1 a.m. last night. Also, we are 1 year anniversary from all-time highs. Isn't that ironic? Hooray. Like, are we supposed to be happy about that, too? How far are we down from all time highs?

• 2:10David Hoffman?

  76% crypto market cap is down 76% from 365 days ago. So, congrats. It is worth noting that it was, it's about one year of time from the 2017 top to the 2018 bottom. That was also about one year. And then we had a two-year bear market where we touched that same bottom two more times. And then it was DeFi summer.

• 2:33Ryan Sean Adams?

  Some good news too. We get into the macro markets, of course, inflation a little bit lower than expected this month, maybe a bit of a silver lining. Hey, it's only, it's only 7.9%.

• 2:43David Hoffman?

  Only 7.9%. All right.

• 2:46Ryan Sean Adams?

  Happy, happy days. Okay, guys, of course, if you enjoy the rollups, if you enjoy the work that David and I put into the podcast, everyone behind the scenes, making this happen, make sure you like and subscribe, rate and review. That's how we get the top of the charts.

• 3:00David Hoffman?

  That's how you get me the dopamine hits to keep on doing this.

• 3:04Ryan Sean Adams?

  Because weeks like this, it's kind of hard.

• 3:07David Hoffman?

  It's rough. It was a rough week.

• 3:09Ryan Sean Adams?

  I mean, just, we'll get into more of that later, but, but first, some good news from our friends and sponsors at Earnify. If you're feeling down, why don't you plug in your wallet, your crypto wallet, your Ethereum address, the space where you can maybe find some unclaimed airdrops. I had a friend last week text me and be like, oh, I listened to that Earnify. I plugged some of my dresses in and I walked away with 3K.

• 3:34David Hoffman?

  Oh, he got some dopamine? Good.

• 3:35Ryan Sean Adams?

  Yeah.

• 3:35David Hoffman?

  Good. It's a little dopamine finder.

• 3:37Ryan Sean Adams?

  Not just dopamine, David.

• 3:39David Hoffman?

  Money.

• 3:39Ryan Sean Adams?

  I mean, this is cold, hard cash.

• 3:40David Hoffman?

  Yeah.

• 3:41Ryan Sean Adams?

  At the end of this, what does Earnify do?

• 3:43David Hoffman?

  Yeah, Earnify takes your Ethereum address and then it scans the whole library of airdrops, Po apps, NFT mints that you may or may have not gotten. And so it's just like the, it's a little robot to make sure that it, it goes and checks all of your pants pockets for the $20 bill that you left in your pants pockets. But airdrops tend to be worth a lot more than $20. So all you have to do, it's free to use, but you can sign up to get some, some extra perks and privileges. It's free to use, you can just put in your Ethereum address and it will go scan the blockchain to make sure that you haven't left any money in any corner of Ethereum or any other blockchain, for that matter.

• 4:19Ryan Sean Adams?

  Good to go find your money right now on a week, a week like this. Go to banklist.cc/earnify. That's E-A-R-N-I-F-I to find out more about that. All right, David, let's get into the markets. Deep breath, you ready? Okay, Bitcoin, what's it looking like?

• 4:35David Hoffman?

  Bitcoin, start of the week at $20,275, down 14.5%. Congrats Bitcoin for setting a new low for the year, a new low in this bear market. We've ticked the bottom at $15,513. We are currently at $17,300. So hit a low of $15,500, the new low for the year, but back up to $17,300.

• 5:01Ryan Sean Adams?

  David, I'm gonna be honest, I wasn't sure we'd ever see 15K Bitcoin, but now 10K Bitcoin and under is in sight, right? I mean, we're like 50% off of that. And what's crazy is this is 365 days of down, right?

• 5:17David Hoffman?

  To the day, yeah. Tomorrow will be 366. But yeah, we are at the one-year anniversary of the Bitcoin all-time high, where the high was $69,000, nice, at $44 for Bitcoin. Down about 74% from the all-time high.

• 5:34Ryan Sean Adams?

  Pretty brutal. I mean, I've seen worse, though.

• 5:40Ryan Sean Adams?

  I mean, last cycle, Bitcoin get down to 83% from all-time high, 85%, something like this. Of course, Ether got to 94% all-time high. Speaking of Ether, what's that looking like on the week?

• 5:51David Hoffman?

  Started the week at 1550, down 17.8% to where it is currently at 1270. It got up to as high as like 1330 earlier, but down to 1270 right now, so down 18% on the week.

• 6:06Ryan Sean Adams?

  And what's this chart showing us here?

• 6:08David Hoffman?

  There is the ratio. We are down 0.076, where we were last week to 0.073. Again, for what it is, if it was last cycle, Ether would be wrecked during a week like this. It's holding up okay.

• 6:21Ryan Sean Adams?

  It's holding up okay. Ratio's holding up okay, but down, down bad. So 14% for Bitcoin and then 18% for Ether. Pretty crazy. How about the crypto market cap as a whole?

• 6:35David Hoffman?

  Hit a new low of $830 billion total market cap. We are bounced back a little bit to $910 billion. That lower-than-expected CPI print has saved us a little bit, created a little bottom.

• 6:51Ryan Sean Adams?

  A bottom. How about crypto punks? You wanted to put some NFT news in here and there was a flippanting that happened. It wasn't the ETH Bitcoin flippanting, but it was a NFT flippanting.

• 7:00David Hoffman?

  Yeah, I am a biased punk holder, so take that with a grain of salt, but punks are now, once again, above apes. So the OG NFT now has a higher floor price than the apes. One ape, a floor ape will cost you about 60 ETH. A floor punk will cost you about 66 ETH.

• 7:18Ryan Sean Adams?

  Just a stronger holder community. Is that what's happening? Basically, it's kind of the, you know, the tourists leave, the settlers stay. People with less conviction on other assets. I mean, punks are an older project as well.

• 7:31David Hoffman?

  They are the oldest NFT project. They are the OG. They are the Bitcoin of NFTs, yeah.

• 7:36Ryan Sean Adams?

  So that is like the NFT of last resort, I guess, for this, for this entire market. So, yeah, that's interesting to see. Well, let's talk a little bit about the economy. Well, we're talking about, and then we'll get to crypto, but inflation has officially dropped to 7.7%.

• 7:53David Hoffman?

  Dropped to 7.7%.

• 7:55Ryan Sean Adams?

  Yes, and we're happy about that. And the reason why we're happy is because last month it was 8.2%. And it came in a little bit lower than expectations. I think 0.2% below expectations. So you can see the chart here. This is like all the way from 1965 to 2023. And so you could say, maybe we've peaked. It's kind of looking like maybe we peaked sometime this summer from an inflation perspective and we're on our way down. And I guess that would make sense because we're going to get to more things later, but there's layoffs. It's like the economy is turning. Interest rates, of course, have been hiked right up. How could inflation continue to rise if we are spinning towards recession?

• 8:40Ryan Sean Adams?

  It really, it really can't unless we get some, some situation like stagflation should be even worse. So this is an expected drop. Maybe, maybe the good news is the Fed starts to relent on their policy. The good news, at least for markets. And what are we looking at here, David?

• 8:58David Hoffman?

  Yeah, this is the SPY. So SPY jumped four and a half percent on this news. So the index, the SPY index goes from 374 to 390, up four and a half percent because of the drop in inflation. So markets happy, markets happy. I'm kind of worried about the whiplash of CPI. Like what happens if CPI just like plummets to zero while we're laying off people? That would be called a deflation, which I mean, we like it in Ether, but we don't like it in the dollar. That's what I'm worried about. But still, inflation coming down is good.

• 9:30Ryan Sean Adams?

  Well, we've, we've got a long ways to go. I mean, I think the Fed is hopeful it can get to like the three to four percent range. If that's even possible, but markets like that, risk on assets up on that news and so is crypto. Although it had a much worse week.

• 9:44David Hoffman?

  After, after being down bigly, we had the positive CPI print. Well, the lower CPI print, which was positive news and then the markets, including the crypto markets, did like that. But I mean, FTX collapse, inflation half a percent lower than expected.

• 10:02Ryan Sean Adams?

  Band-aid on a bullet wound. Yeah. Well, it's not helping us much this week. Uh, let's just touch on the elections.

• 10:08David Hoffman?

  Yeah, let's, let's not talk about crypto as much as possible. We'll punt on that conversation.

• 10:13Ryan Sean Adams?

  This has turned into a political podcast, election results for 2022 Senate. So the, it's still undecided. I get, this is the US election, of course. Still undecided election results. Majority is unknown. Apparently each party needs to win two of three more races that are still in dispute. Georgia, Arizona, Nevada and Georgia, the runoff will actually happen in December. So we won't know who controls the Senate until then. Also in the House, Republicans gained six seats, Democrats lost seven. That was expected, but actually is, I think it's kind of expected the Republicans would, there'd be some kind of a red wave.

• 10:56David Hoffman?

  Yes, which has not materialized, which is just the news that I've heard.

• 11:01Ryan Sean Adams?

  Yes, has not has not materialized, but yeah, I mean, it's kind of still the way it was before almost. I mean, no real changes. We'll see who controls the Senate past December.

• 11:12David Hoffman?

  But no change is considered an L for the Republicans. They wanted they wanted the red wave. They didn't get it. So the same is a loss for the Republicans. That's what I've heard.

• 11:22Ryan Sean Adams?

  What's interesting about this is crypto had a role to play, a minor role, of course, but if you add up the numbers about, according to the Wall Street Journal, $73 million went into the 2022 elections from crypto. I think SBF was like 70 million of that.

• 11:40David Hoffman?

  Oh, sick. So it was.

• 11:41Ryan Sean Adams?

  A lot. It was a lot, which, right, we'll get we'll get to a little bit later. What does this mean for crypto is the question, election results? And the answer, I think, David, is what? Probably nothing.

• 11:54David Hoffman?

  Probably probably nothing. Yeah.

• 11:56Ryan Sean Adams?

  I mean, I don't think this impacts it. I think the SBF events of this week and FTX meltdown of this week impact crypto in a big way, which we'll talk about. David, it's also layoff season. What headline are we looking at?

• 12:10David Hoffman?

  Yeah, so Silicon Valley kind of down bad. Meta, the parent company of Facebook, laying off more than 11,000 employees, but they are not the only one. Silicon Valley overall has got a collective layoffs of tens of thousands. So Twitter laid off 3,700 people. I don't know if that was like economics related or Elon Musk related. Definitely Elon Musk related.

• 12:33Ryan Sean Adams?

  Definitely Musk related. And that's 50% of the workforce, right?

• 12:36David Hoffman?

  Yeah. Oh, wow.

• 12:37Ryan Sean Adams?

  I mean, a combo, but lots of Musk in that.

• 12:40David Hoffman?

  Stripe laid off 1,000 people. Robinhood laid off 1,000 people. Lyft laid off 700 people. Open Door, 550. Netflix, 450. It goes on. Yeah. So collectively, like, tens of thousands of people laid off across the tech sector in just the Bay Area, just San Francisco.

• 12:57Ryan Sean Adams?

  That's crazy. I mean, tech just really expanded during COVID over the past two years, and now they're they're completely contracting.

• 13:04David Hoffman?

  Yep.

• 13:05Ryan Sean Adams?

  It's starting to happen in crypto a little bit, too, David.

• 13:08David Hoffman?

  Yeah, Dapper Labs cutting 22% of staff. Because NFT markets not not great, not great.

• 13:16Ryan Sean Adams?

  Yeah. When's the last time you heard about NBA Top Shot?

• 13:19David Hoffman?

  Oh, I have not. The headline here says, "Sales volumes for Dapper Labs NBA Top Shot has declined to $2.6 million from 20 or from $224 million in February of 2021." That is a 99% reduction in revenue.

• 13:37Ryan Sean Adams?

  Wow.

• 13:37David Hoffman?

  That's that's bad.

• 13:39Ryan Sean Adams?

  Uh, yeah, that's very bad. I mean, that 22% might uh might ratchet up throughout all of this. You know, one thing, the last time I think I've heard of NBA Top Shots in the context of people actually starting their crypto journey through NBA Top Shots.

• 13:55David Hoffman?

  Yeah.

• 13:55Ryan Sean Adams?

  They no longer do it. They no longer, maybe they have some some old NFTs from NBA.

• 13:59David Hoffman?

  Yeah, they got into the harder stuff.

• 14:01Ryan Sean Adams?

  It brought a lot of people into crypto, brought a lot of people like I talked to Ethereum and DeFi. It's like, uh, when I talk to them, I'm like, oh, so what brought you into crypto? And you're gonna laugh at this NBA Top Shots. That was the thing. I guess, let's try to look for some bright spots here and the big bright spot, maybe the only this week. I mean, there are some other things that are positive that have gone on, but um is uh is Ethereum. And the the the burn rate, I mean, it sucks that this was the week that Ethereum finally went ultrasound. Cause that was a milestone we had planned to actually celebrate. I mean, the very beginning of the uh, when is the Justin Drake episode? Almost like two years ago now?

• 14:46David Hoffman?

  Not almost a year and a half ago. Yeah.

• 14:48Ryan Sean Adams?

  A year and a half ago, uh, where he coined the phrase on Bankless Podcast, "ultrasound money", to describe Ethereum's monetary policy. And this is the week it actually went ultrasound, at least ultrasound since the merge. What are we looking at here, David?

• 15:04David Hoffman?

  Yeah, this is of course the ultrasound money website. Supply change since the merge negative 5,400 ether. Ryan, we have burned about 6,000 ish ether, maybe, maybe 7,000 in the last two, three days. 6,000 ether burnt in the last three days, bringing us a negative 5,400 ether. And like the, this is the through line, the message here I want to convey is that this is a anti, anti fragile mechanism. Crypto broke this week. Liquidation's happened, prices go down, FTX is insolvent. And all of that volatility creates the ether burn.

• 15:46David Hoffman?

  And that ether burn overall makes Ethereum more secure. And so the why this is like, if the, if you're anti ETH maxi, you're like, oh, these people are just like circle jerking about the burn like they always do. Maybe. I am here to say that this is while there is chaos, at least ether becomes more anti fragile because its security gets cheaper as we burn ether. And so while there's destruction everywhere, at least Ethereum is a little bit more anti fragile and that is because of the burn. And we are now since the merge negative point 03% on yearly issuance and we continue to decline.

• 16:28David Hoffman?

  So this is the bright, the one bright shining star that I have that's making me a little bit happy this week, Ryan.

• 16:34Ryan Sean Adams?

  Yeah, I mean, and I think that's a big one in the, in the context of crypto, right? Ethereum performed very well this week. I know you're talking in some of the streams you did earlier this week about this, the sense that for a lot of people who are in kind of the, the Ethereum bankless DeFi world and didn't keep their money in kind of the, the SAM coins, as Kobe calls them, you know, FTXs of the world, but also in, or the Solanas and some of these other assets and in FTX. I like, I felt somewhat like unaffected personally by this, right? Of course crypto prices are down, but we've already seen lower crypto prices.

• 17:14David Hoffman?

  Right.

• 17:14Ryan Sean Adams?

  Even even of the summer, even recently.

• 17:17David Hoffman?

  Yeah.

• 17:18Ryan Sean Adams?

  So it was it was sort of weird to feel like another case of the DeFi Ethereum community. We're not insulated from this because obviously FTX is.

• 17:29David Hoffman?

  We're down 15% in prices on the week.

• 17:31Ryan Sean Adams?

  Yeah, massive down, and this is terrible for everyone, yet not as drastically affected as those that were maybe a little closer to the FTX community, for instance, who can't withdraw their money at this point in time. And certainly, our hearts go out to people who who've gotten wrecked in that way. But it sort of reminds me of Luna and Terra as well. It's just like, I wasn't personally affected by that because fortunately, we were able to stay away from that catastrophe completely. There are some things that smelled bad about that.

• 18:05David Hoffman?

  Right. There's like, there's this core of crypto that has a ton of activity. It's Uniswap, it's Aave, it's Maker, it's Compound, it's a few other applications, too. And being like a power user of those applications while not having an FTX account, never touching Terra Luna, like if you have been in OG DeFi 1.0 Ethereum applications, you have been in this like tiny little like bubble of protection while it seems the whole rest of the industry has just like blown up around you. That's kind of how it's felt like for me lately.

• 18:41Ryan Sean Adams?

  Yeah, it totally is like that scene of like somebody leaving an explosion and there's like, you know, everything behind them is blowing up and there's fire.

• 18:49David Hoffman?

  Mortars going off, bullets whizzing by, and like, if you're if you're just tinkering with just Aave, Uniswap, you know, some layer twos, you're you're fine.

• 18:57Ryan Sean Adams?

  I do think, look, I don't want to discount the role luck plays into all of that.

• 19:03David Hoffman?

  Yes.

• 19:03Ryan Sean Adams?

  Because, look, one of these, one of these smart contracts, something could happen in Ethereum at any point in time. What do we always say? This is risky, it's not for everyone, you could lose everything. And yet, I think some of the bankless principles have held up pretty well through the storm that is 2022, right? Even just the idea of going bankless. The idea of making sure that you don't have funds on a public exchange, that you're taking custody of your own keys, right? That thing would have saved people from Voyager, from Celsius, and even from FTX. And that's what we're going to get into next, because FTX was the bank, the crypto bank, that people thought was secure, people thought was safe.

• 19:45David Hoffman?

  Honestly, I did. I thought it was fine.

• 19:47Ryan Sean Adams?

  I did too. If someone asked me, here's the test, right? If someone asked you, "Hey David, I'm thinking of getting into crypto, Coinbase, FTX, do you think one's riskier than the other? Like, I know you have a preference, but is FTX okay?" What would you say?

• 20:00David Hoffman?

  I would say, yeah. I think I've been asked this question before, and I think I've said, yeah, Coinbase, FTX, they're fine.

• 20:06Ryan Sean Adams?

  So have I. It was definitely not fine. Guys, we're gonna be right back with that, the story of SBF and FTX, the final day, the judgment day, I guess, where all of this has come to light. We'll be right back, but before we do, we want to thank the sponsors that made this episode possible.

• 20:22David Hoffman?

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• 21:05David Hoffman?

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• 21:50David Hoffman?

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• 21:58Ryan Sean Adams?

  The downfall of FTX, Sam Bankman-Fried, the owner of FTX, irresponsible with depositors' money. That is the story. Brought total wreckage to the crypto industry this week. David, could you just give us a quick recap of what happened? I know we have episodes about this already, if people want the full story. But what's the 92nd version?

• 22:22David Hoffman?

  92nd version. SBF rose to fame through this trading fund called Alameda Research, which he is, I believe, like the 90% owner over. Alameda Research just would trade in crypto, do a lot of positions, like hedge fund, like head trading, all this stuff, made a ton of money. He was a great trader. And that's where SBF made a lot of his initial money. And that's where Alameda grew a lot of its capital. And then he slowly passed off responsibility to others. Meanwhile, he makes FTX exchange. Seemingly, Sam Bankman-Fried is a great builder, great operator. FTX, the exchange, rose to fame in a time where no one really thought it was possible to make another exchange.

• 23:07David Hoffman?

  FTX just made a great product, a good exchange, good services, good financial tools. Everyone seemed to be really impressed by Sam. And Sam, as a figure, grew in prominence for these two massive successes. He slowly passed off all this responsibility of Alameda Research to somebody else, a team of people, and totally focused and doubled down on the FTX empire, which grew in a crazy fashion.

• 23:34David Hoffman?

  There was always this loose association between Alameda Research and FTX, where Alameda would market make on the FTX exchange, making FTX extremely liquid and a great place to just have liquidity beyond just the basics. And so there were the symbiosis between Alameda Research and FTX helped FTX rise in fame. We saw FTX buy naming rights for the Miami Heat Stadium. We saw FTX like sign deals with like Tom Brady and just like a huge success story out of 2021 and, you know, raise billions of dollars in capital. Then a report out of CoinDesk from a leaked financial document about Alameda's balance

• 24:18David Hoffman?

  sheet reported that a lot of Alameda's balance sheet, basically all their assets were the FTX exchange's token FTT, and it had a ton of FTT as collateral backing a bunch of loans. And so Alameda had loans that were backed by FTT. It was in a precarious position, and that alerted CZ. And now Binance was an early investor in FTX.

• 24:43Ryan Sean Adams?

  CZ, of course, is the co-founder of Binance, a different kind of exchange empire that he's built and the rival to SDF.

• 24:50David Hoffman?

  Much bigger exchange empire.

• 24:50Ryan Sean Adams?

  Yes.

• 24:51David Hoffman?

  Yeah. And so Binance invested in FTX equity, and as a result, they had $2.1 billion of FTT. And CZ says, "Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books. This is largely a result of the precarious nature of FTT because it was such strong, it was a huge position of Alameda's books." It was basically all of Alameda's assets were basically FTT tokens. People are like, "How did Alameda have such, I thought they were trading like Bitcoin and Ether. Why are so much of their assets all denominated in FTT?" That was a big question mark. And so CZ was like, "Okay, that's not good. We're going to start selling our FTT because of

• 25:29David Hoffman?

  this precarious nature," which starts to first plummet the price of FTT, scaring Alameda, but then also trigger fears that there is some sort of contagion between Alameda and FTX. Because people always knew that there was a link between these two firms from SBF. And these were loosely correlated somehow. And people were worried that somehow there was going to be a run on the bank on FTX because of the shared asset, the shared balance books between FTX and Alameda, which was hypothesized. That turned out, Ryan, to be true. That there was co-mingling of assets between Alameda and FTX.

• 26:11David Hoffman?

  So moving forward in this story, the next morning after Cece said he's going to dump all this FTT, FTX appeared to stop processing user withdrawals. So they ran out of money. And that's basically where it was revealed that FTX was insolvent. How insolvent was FTX? We didn't really know at the time. We still don't know. But we initially hypothesized something like $1 to $5 billion of insolvency, which is already a big hole. It's now coming to be somewhere around in the $8 to $10 billion that is missing from the FTX balance sheet, which is largely coming out of user deposits.

• 26:49Ryan Sean Adams?

  So what we're talking about is we've got a somebody who operated an exchange and a hedge fund. And in order to bolster the books of the hedge fund, he used depositors' money in the exchange to basically do that. He gambled away depositors' money in the exchange. I mean, that would be a super simple explanation of what happened. And so now there's a hole.

• 27:14David Hoffman?

  It's important to know that Alameda probably was wrecked along with everyone else during the Three Arrows Capital contagion back in May.

• 27:23Ryan Sean Adams?

  Yes.

• 27:23David Hoffman?

  The reason why they weren't is because they had this relationship with FTX. And so they were able to have to not be wrecked because they FTX sent them a bailout, a secret, under-the-table bailout.

• 27:36Ryan Sean Adams?

  And it was a bailout with like backed by depositors' funds.

• 27:41David Hoffman?

  Whatever money that they had, including depositors' funds.

• 27:44Ryan Sean Adams?

  Absolutely insane. I mean, where he said in our podcast is like you go to a bank and you go to exchange, right? You deposit your funds. It's not Theirs to go like play with and gamble with and use in their side hedge fund. It's it's supposed to stay there. Right, it's supposed to. When the user comes back and says, okay, now I'd like to withdraw my funds. Those funds can just be withdrawn. And so the balance sheet should be very simple deposits and withdrawals. Deposits and withdrawals, all user user funds are deposited and then withdrawn. Uh, and that completely broke. And so I guess, you know, one of my takes about all of this is because

• 28:27Ryan Sean Adams?

  um, we're still seeing what the fallout might be in crypto. And um, it's absolutely massive. I think this is the big biggest single event that's occurred in crypto. Maybe since Mt. Gox. In some ways, it's sort of exceeded this because uh, this is somebody who is supposed to be trusted, trusted in Wall Street. Sort of somebody. He was in lobbying in DC. He represented us. He had the ears of senators and and uh, folks in Congress. Uh, he represented us as kind of like the the cleaned up version of crypto without all of the the crypto anarchists, the shenanigans. Yes, I mean, he kind of didn't for the different mystique, but yes, he would wear a tie. In fact, we've we've seen him in front of Congress, uh, kind of like talking about crypto.

• 29:12Ryan Sean Adams?

  Anyway, all of this just really sunk in with me last night. Um, and uh, this was yesterday evening and I was just thinking, David, like how surreal the last 48 hours had been as this story has has developed. Because like, I just, I don't know how to overstate how big a figure Sam was. Like crypto trading god, exchange god, like rock of um, I don't know um, how to how to last and how to persist and how to do things right in crypto. It just, his exchange he built was just a phenomenal product. Yeah, which is sad because that product's gone now. And what's crazy to me is uh, as of yesterday, it was 11 days ago

• 29:55Ryan Sean Adams?

  that we hosted this debate between. Between SBF and Eric Voorhees. Sam Bank Benfried and Eric Voorhees. And uh, you remember that? This is a screenshot from from that debate. And Sam.

• 30:08Ryan Sean Adams?

  Was lecturing us and talking to us about the merits of crypto regulation. We were having this debate about crypto values. And in the background, David, this guy had maybe an eight to 10 billion dollar hole that was developing on his balance sheet. He was talking about crypto values and discussing the merits and costs of like DeFi, talking about ways to regulate DeFi front ends. Meanwhile, he's like playing with depositor money. He's gambling it away. He's been, it's gotta be the most irresponsible figure that's done the most damage to crypto that I've ever seen, that this industry has ever seen.

• 30:53Ryan Sean Adams?

  And this was 11 days ago. We were having a conversation with this guy. I don't understand. Like, it's even hard for me to believe that we had this conversation. Like, you were there, right? Like, this happened.

• 31:09David Hoffman?

  He was so frazzled. He was more frazzled and inarticulate than I had ever seen him before. Like, I've seen him give his talks at Capitol Hill, and he's like decently articulate. That call, he was a different person. And it's, it's just interesting that 11 days later, we discover an eight billion, 10 billion dollar hole in FTX.

• 31:31Ryan Sean Adams?

  Well, let's talk about what's developed, and this is as of Thursday morning.

• 31:33David Hoffman?

  So yeah, that was all the recap.

• 31:35Ryan Sean Adams?

  Yeah, that was just the recap. This is the apology that's just come out. This is a tweet thread from SBF. Do you want to read a few of these?

• 31:44David Hoffman?

  Yeah, SBF goes, "I'm sorry. That's the biggest thing. I effed up and should have done better. I also should have been communicating more very recently. Transparency, my hands were tied during the duration of the possible bid and steal. I wasn't particularly allowed to say much publicly. But of course, it's on me that we ended up there in the first place. So here is an update on where things are. FTX International currently has a total market value of assets at collateral higher than client deposits, moves with prices. But that's different from liquidity for delivery. As you can tell from the state of withdrawals, the liquidity varies widely from very little, from very to very little."

• 32:18Ryan Sean Adams?

  What does that mean here? He's saying that the...

• 32:21David Hoffman?

  He has, he's saying that the value of the assets and collateral that FTX has is more, is higher than what their client deposits are.

• 32:32Ryan Sean Adams?

  Based on what? Like, what's the value of these assets if you actually can't sell them and no one will buy them?

• 32:37David Hoffman?

  Yeah, but he's saying that that's different from liquidity. So they have the assets, but they don't have them liquid.

• 32:41Ryan Sean Adams?

  They have some paper value, is what you're saying.

• 32:43David Hoffman?

  Yeah, paper value, yeah. SPF continues, it goes, "The story here is one I'm still fleshing out every detail of, but at a very high level, I effed up twice. The first time, a poor internal labeling of bank-related accounts meant I was substantially off from my sense of users' margin. I thought it was way lower. My sense before: leverage, zero. US liquidity, ready to deliver 24x the average daily withdrawal. Actual, 1.7x leverage and liquidity, 80% of Sunday's worth of withdrawals. But of course, when it rains the pours, we saw roughly $5 billion of withdrawals on Sunday, the largest by a huge margin. That was the thing that CZ triggered."

• 33:24Ryan Sean Adams?

  He basically precipitated a bank run.

• 33:26David Hoffman?

  Yes.

• 33:27Ryan Sean Adams?

  With some of these things. And that's what he's talking about. The 5 billion of withdrawals on just one day alone.

• 33:35David Hoffman?

  Right. And so SPF says, "And so I was off twice, which tells me a lot of things, both specifically and generally, that I was shit at. And a third time, I'm not communicating enough. And just a reminder, a third time, I'm not communicating enough. I should have said more. I'm sorry, I was slammed with things to do and didn't give you updates at all."

• 33:54Ryan Sean Adams?

  David, why would a bank run actually matter if like, I mean, if Coinbase got a bank run and everyone withdrew all of their ETH and all of their Bitcoin, right? Like, why would that be a problem? Because all of the ETH and all of the Bitcoin is there. It's not a fractional reserve system.

• 34:14David Hoffman?

  It is a fractional reserve system. It shouldn't be a fractional reserve system. It was a fractional reserve system.

• 34:19Ryan Sean Adams?

  Very fractional.

• 34:20David Hoffman?

  Yeah. And like, the whole like line, his whole tweet, like, "Mislabeled bank accounts."

• 34:28Ryan Sean Adams?

  Clerical error.

• 34:29David Hoffman?

  That, that caused an $8 billion hole?

• 34:34David Hoffman?

  Like, that's what did it? I don't think so. Anyways, so he finishes off. Anyways, my number one priority by far is doing right by users and I'm going to do everything I can to do that, to take responsibility and do what I can. So, right now, we're spending the week doing everything we can to raise liquidity. I can't make any promises around that, but I'm going to try and give everything I have to make that work. There are a number of players we are in talks with, letters of intent, term sheets, etc. We'll see how that ends up. Every penny of that and the existing collateral will go straight to users unless or until we've done right by them. After that, investors, old and new, and employees who have fought for what's right for their career and who weren't responsible for any of the fuck-ups. Because at the end of the day, I was CEO, which means I was responsible for making sure that things went well.

• 35:16David Hoffman?

  I ultimately should be, have been on top of everything. I clearly failed in that. I'm sorry.

• 35:22David Hoffman?

  So, what does this mean going forward? I'm not sure. He loves to say, "I'm not sure." First, Alameda Research is winding down. They are probably liquidated. They aren't doing any of the weird things that I see on Twitter and nothing large anymore. One way or another, soon they won't be trading on FTX at all. Second, in any scenario in which FTX continues operating, its first priority will be radical transparency. Transparency probably all we should have been giving, giving exactly, giving as close to on-chain transparency as I can so that people know exactly what is happening on it.

• 35:53Ryan Sean Adams?

  Kind of like DeFi?

• 35:54David Hoffman?

  Kind of like DeFi.

• 35:55Ryan Sean Adams?

  The transparency of DeFi?

• 35:56David Hoffman?

  Yeah.

• 35:58David Hoffman?

  Yeah, I mean, I feel like that's, that's a good.

• 36:00Ryan Sean Adams?

  He goes on. But there was, there was one thing he said. A lot of sorrys, of course, with this tweet number 20. "At some point, I might have more to say about a particular sparring partner, so to speak." He's talking about CZ. But you know, glass houses. So, for now, all I'll say is, "Well played. You won." Heavily implying that CZ was his downfall. And of course, there was that CZ tweet on Sunday that precipitated part of this. But if he wasn't running a fractional reserve system where he's lending out depositors' money, it wouldn't have been a problem, right? So CZ kind of poked some holes in the structure and the whole rotting thing fell down. And it's his fault.

• 36:44Ryan Sean Adams?

  It was a rotting structure to begin with, and then a few little pokes would-

• 36:48David Hoffman?

  If a few tweets can collapse your empire.

• 36:51Ryan Sean Adams?

  You're not, you gotta, you might have a problem.

• 36:54David Hoffman?

  You might have a problem.

• 36:55Ryan Sean Adams?

  By the way, did you see this? This is a tweet from Kobe that's kind of related to SBF's thread. But there is some similarities in-

• 37:07David Hoffman?

  Chef Nomi and Sam Bankman-Fried, yeah.

• 37:09Ryan Sean Adams?

  Yeah, and Chef Nomi, of course, was a sushi swap founder that-

• 37:13David Hoffman?

  The OG sushi swap founder who did the OG sushi swap rug, which kind of gave this sushi swap curse in the first place. And after rugging the treasury out of sushi swap, Chef Nomi tweeted to everyone, "I fucked up and I am sorry." Which is kind of the same language.

• 37:30Ryan Sean Adams?

  Look at this.

• 37:30David Hoffman?

  Which is what Kobe's poking at. "I'm sorry, that's the biggest thing. I fucked up and should have done better."

• 37:33Ryan Sean Adams?

  Interesting, interesting. Anyway, there were some ties.

• 37:35David Hoffman?

  That wasn't the only association between sushi swap and Sam Bankman-Fried. That was, there's been more, there's been relations-

• 37:44Ryan Sean Adams?

  I mean, at this point, David, I would not be surprised. This would not surprise me in the least.

• 37:48David Hoffman?

  We saw Do Kwon behind those Algo stablecoins as an Anon and then start-

• 37:55Ryan Sean Adams?

  Rick Sanchez, he telegrammed me and told me about Basis Cash was his original Ethereum Algo stablecoin. Would not surprise me in the least. So, I don't know, what do you make of that? Was it an apology? Is it just a nothing burger? Like, what is he doing here? What is he trying to accomplish?

• 38:17David Hoffman?

  I don't know, man. I don't know.

• 38:19Ryan Sean Adams?

  The big question, I think, is where he's going to find the $8 to $10 billion to fill that hole of depositors' money, because-

• 38:27David Hoffman?

  Right, so right now, FTX is worth $1. It is on the market to anyone who wants to buy it for $1. If you buy FTX for $1, you are taking on somewhere between $8-ish billion of liabilities. You get the FTX empire, which it comes with-

• 38:46David Hoffman?

  The low, low price of $8 billion of liabilities.

• 38:49Ryan Sean Adams?

  Absolutely brutal. And of course, CZ looked at this, apparently, and then completely walked away from it.

• 38:55David Hoffman?

  Was like, hell, no.

• 38:56Ryan Sean Adams?

  Yeah.

• 38:56David Hoffman?

  Took him about 24 hours to reject that deal.

• 38:59Ryan Sean Adams?

  This is also cost SBF from a net worth perspective, of course, like at his peak, I don't know, he was in the twenties of billions, something like this. I've heard close to 30 billion. But he lost an estimated $15 billion, which at the time is nearly 94% of his total wealth. I bet that's even more now. Like, I mean, who knows?

• 39:20David Hoffman?

  Right.

• 39:20Ryan Sean Adams?

  Where he's gonna end up.

• 39:21David Hoffman?

  He could be at zero, yeah.

• 39:23Ryan Sean Adams?

  Definitely cost him a lot. What is this tweet, David?

• 39:26David Hoffman?

  Yeah, so this is, okay, so at this point, we are on the frontier of the story. So things are now developing. But Tether has frozen FTX's USD address. So Tether, or FTX, all the tether that FTX has, about $46 million of it is now frozen. You could only imagine that regulators came knocking on Tether's door. I said, hey, go freeze FTX's tether supply. And Tether was like, sure.

• 39:55Ryan Sean Adams?

  Happy to do that.

• 39:56David Hoffman?

  Yeah, happy to.

• 39:57Ryan Sean Adams?

  And of course, I mean, USDT is just kind of an IOU. It's not like actually money. So, I mean, they can do this sort of thing whenever they want to. There's, hopefully, there's assets backing this money. The money wasn't really lost. Gary Gensler has entered the picture a little bit here.

• 40:19David Hoffman?

  Right.

• 40:19Ryan Sean Adams?

  You could imagine he'd have some things to say. So he went on CNBC earlier this morning at our time of recording. And what did he say?

• 40:27David Hoffman?

  He said that he, Gary, was hoodwinked by FTX after meeting with them in March. And says he is now building the evidence, building the facts, which often takes time, as to an answer as to what he is doing with FTX.

• 40:40Ryan Sean Adams?

  Gary was hoodwinked. A lot of us were, to be fair.

• 40:44David Hoffman?

  Yes.

• 40:44Ryan Sean Adams?

  But Gary in particular. This is another follow up.

• 40:47David Hoffman?

  It's his job to not be.

• 40:49Ryan Sean Adams?

  It's true.

• 40:50David Hoffman?

  So Gary also tweeted out, I'll be joining Squawk CNBC at 8 a.m. Eastern. So that was this morning to discuss recent developments in the crypto markets. And Collins Beltin, he's a lawyer, actually interviewed about the tornado cash stuff. He replies to this tweet out of Gary and says, ideally, you'll spend some time to explain how, once again, the commission's enforcement priorities focused on entities trying to deploy technology to prevent these market failures and asymmetries while you are meeting with the perpetrators or overlooking their malfeasance. And so this is just a tweet of a picture of Gary's Tuesday, March 29th schedule, which was a meeting with like eight different FTX representatives, executives.

• 41:32David Hoffman?

  So it's interesting that Gary Gensler and FTX had met and.

• 41:36Ryan Sean Adams?

  But did you see this move? Gensler is definitely distancing himself from SBF and FTX. And a lot of politicians who receive political donations and have been in conversation with SBF are doing the same thing. You've got to imagine, I mean, SBF is just like toxic at this point. It's crypto's biggest, it's not a Ponzi scheme, but it's like, it's a scheme of that type, right? And so no one wants to be associated in DC with that. This is part of why this is going to cost crypto so much is we've taken a major black eye here and lost a whole lot of legitimacy from the serious adults, I think, you know, the regulators, DC, Wall Street, institutions, that sort of thing.

• 42:21David Hoffman?

  Ryan, this is developing. We have an email with Tom Emmer's staff to try and get him on the show to talk more about this, but he retweets Gary Gensler's tweet about joining Squawk CNBC. And Tom Emmer, Representative Tom Emmer says, interesting. Gary Gensler runs to the media while reports to my office allege he was helping SBF and FTX work on legal loopholes to obtain a regulatory monopoly. We are looking into this. That is all we know at this time. It was the fear of the crypto industry that SBF's work in DC was to. Specifically produce regulatory oper- operage for FTX by closing the door behind them after making sure that whatever they were doing was legal.

• 43:04Ryan Sean Adams?

  Even closing the door on all of DeFi.

• 43:06David Hoffman?

  Right, on De- on DeFi, right. And so, uh, Tom Emmer says that they had reports that Gary Gensler and SBF were working to create legal loopholes to create a regulatory monopoly. I, I hope we can get Tom Emmer on the show to talk about this soon. Um, that is interesting.

• 43:25Ryan Sean Adams?

  More, more developing too. Of course, Elizabeth Warren weighed in on this and said, "The collapse of one of the largest crypto platforms shows how much of the industry appears to be smoke and mirrors. We need more aggressive enforcement and I'll keep pushing the SEC to enforce the law to protect consumers and financial stability." So Elizabeth.

• 43:41David Hoffman?

  At face value, I love that tweet. I don't have any problem with that tweet. "The collapse of one of the largest crypto platforms show how much of the industry appears to be smoke and mirrors." That's what FTX was. It was smoke and mirrors. Uh, and so I do not have a problem with that. Uh, we need to be more aggressive enforcement and keep pushing the SEC to enforce laws to protect, like, I would, if this means that we are forcing the SEC to do more, great, fine.

• 44:04Ryan Sean Adams?

  To do more, that's helpful. To do more that prevents, uh, the actual problem. Like, it's, it's, it's definitely a problem if, if Gary Gensler is kind of setting up a monopoly for crypto bankers like SBF, uh, and using regulatory power to do that. Brian Armstrong's response to, uh, Elizabeth Warren right under this tweet, I thought was good too. Uh, he says, "FTX was an offshore exchange, not even regulated by the SEC." Elizabeth, "The problem is that the SEC failed to create regulatory clarity here in the US, so many American investors and 95% of trading activity went offshore."

• 44:44Ryan Sean Adams?

  Punishing US companies for making this, uh, for this makes no sense. And that is actually the facts of the case.

• 44:51David Hoffman?

  Yeah.

• 44:52Ryan Sean Adams?

  It wasn't FTX.us, which was more regulated in the US.

• 44:55David Hoffman?

  Which is fine. If you have assets in FTX US, you are fine.

• 44:59Ryan Sean Adams?

  So if you're an American and you're using FTX US, you're totally fine.

• 45:03David Hoffman?

  Yep.

• 45:04Ryan Sean Adams?

  All, all deposits are, are. There withdrawals are enabled and that's like 1% of all of FTX's assets.

• 45:12David Hoffman?

  It's the minority of the business because they could.

• 45:16Ryan Sean Adams?

  It was pushed out.

• 45:17David Hoffman?

  It was pushed out, but also because, you know, they could actually take customer deposits and go gamble them if they were not inside of the United States.

• 45:25Ryan Sean Adams?

  Right. So Brian's making the case, hey, you have to work to make it easier for retail to have safe access to these products. And you're not doing that with the current regulatory regime. David, there's also some talk of maybe some FTX transactions appear to be processing. So of course, no one can get their funds out of FTX. That's locked. That is a one-way ticket. They no longer exist. They're not there. But we're looking on chain and some things do seem to be withdrawing. What's this?

• 46:01David Hoffman?

  Yeah. So this is Steven out of The Block who's done some great research and snooping, on-chain snooping. But just noticed that funds were coming out of FTX and going into various accounts. No one knows how or why, but that is what we are able to see on chain. This is Larry Sirmak, says the withdrawals from FTX seem to be really weird. Some of them actually go to the Binance deposit addresses and some of them appear to be fresh wallets, which could indicate a consolidation, pretty large $100,000 processing as well. What all of this is, I don't think we know.

• 46:34Ryan Sean Adams?

  So I think one of the biggest pieces of this story is everyone, a lot of people trusted Sam and a lot of people were wrong about Sam. A lot of people were duped. I think myself and you included, not fully trusting Sam, not ever trusting fully a centralized exchange, but to think that FTX could just evaporate, that they were like gambling away their depositors' money, that was unthinkable to me. This is a tweet thread from some of the people that were sticking up for FTX and SBF in the beginning. And there was a lot of this chatter as the rumors persisted that, hey, maybe something's going on at FTX and Alameda, you should look into it. This is somebody, an account austerity side.

• 47:16Ryan Sean Adams?

  I don't delete tweets, so I'm not going to delete this, even as people laugh and troll and mock me. Yes, I was wrong. The tweet stays up. Kudos for keeping the tweet up. But on November 6th, this was the tweet that the the the poster posted. Imagine thinking Alameda is the next Three Ours Capital. Side effect of the increased counterparty due diligence process, he goes on. Anyway, it was this conversation like, they're not going to go Three Ours Capital. Everything's fine. It's Alameda.

• 47:43David Hoffman?

  They're fine. They're so responsible.

• 47:45Ryan Sean Adams?

  Yeah, I mean, look at Sam. He's like

• 47:47David Hoffman?

  Right.

• 47:47Ryan Sean Adams?

  the pinnacle of responsible exchange operator. He's kind of a a younger, faster moving Brian Armstrong. This is actually from some of the employees that that respond to this thread. And this is an employee named Zane Tackett. Many people internally and externally were fooled. I'll leave my tweets up as well and take all the heat I deserve for defending something I didn't have all the details on. Somebody says, I can't believe this is real, Zane. You're not the only one, man. But in a state of complete shock, he goes on to say, I don't want to speak for others. Remember, this is an employee of FTX. I don't want to speak for others, but just complete disbelief and feelings of betrayal. What bothers me the most is that I went out and defended FTX and Sam in public. Said the news was FUD.

• 48:33Ryan Sean Adams?

  We're fine. When they knew that wasn't true and they didn't have the decency to warn me. Employees as well, feeling betrayed by this. What do we do about this, David? I mean, I I guess I have kind of two questions for you. It's like, first, how long do you think this is going to take to recover? I mean, this is clearly a wound in the crypto industry. And then I want to ask you where we go from here. But time to recovery. How long is it going to take this one to heal? I mean, we've had wounds in the past. We've definitely had damage before. This isn't the first time. But how about this? How long will it take for us to get out of this one?

• 49:12David Hoffman?

  How long is it going to take to forget the name FTX?

• 49:16Ryan Sean Adams?

  Oh, I don't think we're ever going to forget the name FTX.

• 49:18David Hoffman?

  For normies to forget the name FTX.

• 49:20Ryan Sean Adams?

  I think it's going to be a Mt. Gox. But yes, I guess Mt. Gox is kind of faded, except for the the crypto historians who bring it up.

• 49:27David Hoffman?

  Right. It's, I mean, yeah. We're not, we're gonna be living with this for a while.

• 49:36Ryan Sean Adams?

  I think, my take is years, David.

• 49:39David Hoffman?

  Years.

• 49:40Ryan Sean Adams?

  Yeah, I think it's years and, you know, I'll say it again, I don't think any single individual has ever done more damage to crypto than, than SBF. I mean, it's things like as far as total crypto market cap, we lost more in Mt. Gox than we did in FTX, okay? But there's something different about this and the difference is Mt. Gox was not taken seriously by anybody.

• 50:03David Hoffman?

  Right.

• 50:03Ryan Sean Adams?

  Like crypto was in its infancy.

• 50:06David Hoffman?

  Infancy and like the token distribution of Bitcoin at the time was still so much more concentrated. Mt. Gox had like 6.5% of all Bitcoins.

• 50:17Ryan Sean Adams?

  It was a choke of an exchange, too.

• 50:18David Hoffman?

  It was Magic the Gathering Exchange, that's the name.

• 50:21Ryan Sean Adams?

  Yes.

• 50:22David Hoffman?

  And the Mark Carpelli's, was Mark Carpelli's, he was kinda like this neckbeard guy. He wasn't going to Congress to testify for regulation, rubbing shoulders with Gary Gensler.

• 50:33Ryan Sean Adams?

  100%. So the thing, the thing that will take a long time to recover, and I'm not necessarily saying actually markets, David. I don't necessarily, I don't necessarily think it'll take two to three years for markets to recover. I'm just talking about the, the black state, like I'm just talking about the legitimacy recovery.

• 50:52David Hoffman?

  Right.

• 50:52Ryan Sean Adams?

  The Ontario Pension Fund was an investor in FTX, one of the first pension funds to do things in crypto, right? When's the next time a pension fund is going to do this? When, when's the next time a senator is going to take a meeting with somebody in the crypto industry?

• 51:09David Hoffman?

  Right.

• 51:10Ryan Sean Adams?

  They're distancing themselves from it.

• 51:11David Hoffman?

  Right.

• 51:12Ryan Sean Adams?

  How much?

• 51:12David Hoffman?

  We have, we have like just such a smaller foundation to stand on.

• 51:17Ryan Sean Adams?

  Yeah.

• 51:17David Hoffman?

  We have made like the, the work for people like Brian Armstrong and Jake Shervinsky and people who we need to have trust. We have made their jobs 10 times harder as a result of this.

• 51:28Ryan Sean Adams?

  Totally dude, I just, I, I can't, I feel like we're coming in the night after a crazy house party, right? And like the kids have been super irrespons, I guess this is, this is Ryan the dad, I guess coming out. The kids have been super irresponsible, like there's furniture broken, computers stolen, like.

• 51:47David Hoffman?

  Dude, there are kids who drove home drunk and crashed and died.

• 51:51Ryan Sean Adams?

  That's what it is, you know, it's even worse than that and, and the cops are, you know, showing up and then

• 51:56David Hoffman?

  Yeah.

• 51:57Ryan Sean Adams?

  we have to pick up the pieces in our community? For like, and why? And like, why? Why did this happen? I mean, FTX was a fantastic exchange.

• 52:09David Hoffman?

  It was a good product.

• 52:10Ryan Sean Adams?

  It worked. You had product.

• 52:11David Hoffman?

  It was good.

• 52:12Ryan Sean Adams?

  You had a product market fit, but you had to be what you had to run hedge fund?

• 52:17David Hoffman?

  You had to run it as a fucking Ponzi scheme, dude.

• 52:21Ryan Sean Adams?

  So where do we go from here is the next question? Like, how do we actually start recovering? I mean, here's the thing, here's the story about 2022 is it's just a story of this keeps happening. And if it was just one thing, if it was just FTX, you know, that would be one thing. But no, we had, we had, uh, Theres Capital, but I mean, before that we had DoKwon, uh, Totally Rec.

• 52:47David Hoffman?

  Celsius.

• 52:48Ryan Sean Adams?

  Celsius. And then I saw you tweet this out, by the way. Okay, answer me this. Uh, Theres Capital liquidated, Alameda liquidated, FTX insolvent. Then who made the money and who shows up? Richard freaking Hart goes, hi there, I made all the money. Okay, this dude is a scammer. He, he runs, he, he's got a coin called Pulse. He's preying on people, making tons of money. And he's actively scamming and I feel like our industry is still full of people like this. For every Vitalik, for every Brian Armstrong, for every, uh, Hayden Adams or Stani from Ave.

• 53:33Ryan Sean Adams?

  We have like a hundred Richard Hearts.

• 53:38Ryan Sean Adams?

  And that just sucks.

• 53:41Ryan Sean Adams?

  So what do we do about this? How do we move forward?

• 53:45David Hoffman?

  I got nothing, man.

• 53:47Ryan Sean Adams?

  How are you feeling about this, David?

• 53:51David Hoffman?

  It's like, we have these like super awesome foundations and that's like, they just keep on enabling the worst.

• 53:59Ryan Sean Adams?

  Do you think that?

• 54:00David Hoffman?

  Like it's hard to justify what the hell we're doing here, man.

• 54:05Ryan Sean Adams?

  Do you think this is a layer zero problem? Is it a problem with kind of the social layer?

• 54:11David Hoffman?

  If we will make these super cool applications and then scammers just can leverage them better.

• 54:19David Hoffman?

  It's like we're running out of ways to explain it to normies.

• 54:25Ryan Sean Adams?

  So when someone asks you about crypto after this week, do you have a different answer for them about why it's important?

• 54:32David Hoffman?

  Don't even want to talk about it.

• 54:36Ryan Sean Adams?

  I mean, I think you're like reflecting how a lot of people feel right now.

• 54:42Ryan Sean Adams?

  We've really just been brutalized by this.

• 54:47Ryan Sean Adams?

  I guess I'll give my take on where we go from here.

• 54:54Ryan Sean Adams?

  And let me know if you have any other thoughts, David. I know this one hit you really hard. Not that you had any funds at risk, right?

• 55:02Ryan Sean Adams?

  It's just what? It's just like

• 55:06Ryan Sean Adams?

  the impact, the social impact.

• 55:10Ryan Sean Adams?

  It's just the... Yeah, what is it? How like, why is this hitting you so hard, do you think, versus the other ones?

• 55:17David Hoffman?

  It just gets worse the more that it happens. It's just like...

• 55:22David Hoffman?

  I don't know, man.

• 55:25Ryan Sean Adams?

  One answer I think for us is

• 55:29Ryan Sean Adams?

  going back.

• 55:33Ryan Sean Adams?

  I think in our livestream last night, Kobe mentioned this to you of like, you know, where do we go after this? And his answer was, I don't know, maybe somewhere like 2016, 2017, something like this.

• 55:47Ryan Sean Adams?

  And I really feel like we need to take a step back and reevaluate kind of why we're here as an industry.

• 55:57Ryan Sean Adams?

  You know that phrase that from the earliest Bankless podcast, we're talking about like protocols, not people? That's where we put our trust in. I feel like crypto believed that at one point in time. And a segment of crypto still does. But we lost a whole bunch of that. With the fast money and the demagogues and the Richard Hearts, like I feel like we lost our way.

• 56:23Ryan Sean Adams?

  And I don't mean everybody. There's still fantastic people building incredible things. But I mean enough that it made a difference. Enough that it enabled the FTXs of the world and the Alamadas and the three hours capitals and

• 56:39Ryan Sean Adams?

  the terras of the world. And I think what we need to do is go back and rediscover the principles and the reasons this industry exists. It's all about, it's code, not kings. That's what we're, that's what we're trusting in. It's protocols, not people. And this is about going bankless, not trusting another banker. Maybe I'll, I'll throw out some, some hope for you, David, because it feels like you're pretty down on this, but like,

• 57:06Ryan Sean Adams?

  DeFi weathered this quite well.

• 57:10Ryan Sean Adams?

  Ethereum weathered this quite well. I mean, the, the problem that we saw was with a centralized exchange is with another bank. And

• 57:26Ryan Sean Adams?

  one of the reasons I think we started this, this podcast and, and this movement, which bankless listener, I'm glad that you're, you're joining us on and you've been on with us is to make sure that crypto didn't replace the old system with a new system of bankers. It's no good if we just swap out Jamie Dimon for SBF. Right? I mean, what, what do we gain? What do we benefit from? And I felt like over the past two years or so, particularly in this, in this bull market, we were starting to veer towards that. Where the bankers were getting more and more control. We, we forgot about first principles

• 58:09Ryan Sean Adams?

  of like, why we're here. And we put trust in the wrong people. And I'm hopeful, David, that this is actually like a

• 58:20Ryan Sean Adams?

  Another wake up call, another cleansing process for us, another reason to go back to those roots. And ultimately, I think we'll end up stronger on the other side. It doesn't feel like that in a week like this, but I'll just remind people Ethereum kept going, DeFi kept going, we had the transparency, we have the crypto economic protocols, we just didn't use them. And the system broke where they weren't in use.

• 58:56David Hoffman?

  I remember that there's one part out of our interview with Palenya, and they said, "I'm so bullish on a human trust that we don't actually need protocols in the future." Like, I think that's what's missing. It's like, I want to be able to trust SBF. I want to be able to hand him my private keys and then get them back later with all the funds intact. I feel like I can do that to Brian Armstrong. But like, at this point, like, well, I don't even know, man. Like, who the hell's left?

• 59:26Ryan Sean Adams?

  This sounds like it's a deeper thing. It's like a faith in humanity, kind of. Or faith in the industry, faith in the people in the industry, faith in the layer zero.

• 59:36David Hoffman?

  Yeah.

• 59:37Ryan Sean Adams?

  Yeah. That's the struggle here.

• 59:40David Hoffman?

  Yes, well, it's like, who are the biggest characters of the last year? Like, we have these cult of personalities. We have like Do Kwon and like Alex Moschinsky tried to make this about him and like Suzu in Three Hours Capital.

• 59:54Ryan Sean Adams?

  Danny Sesta.

• 59:54David Hoffman?

  And Danny Sesta, and then SBF. Like, everyone's got, everyone who's super loud grows this massive cult of personality around them. And they all F it up, every single one of them. And like, that's why I just respect the hell out of Brian Armstrong so much, just because like, he does, it's not about him. It's not about him. And he doesn't want it to be about him. It's one of those, it's where, there's that line of just like, the people that you want to be in power don't want power. And the people that want power, you don't want them to be in power.

• 1:00:28Ryan Sean Adams?

  Yeah, I um, I will say David, a lot of the people that we've that we've met in crypto, though, over the past three years, four years, they are here for the right reasons. So, you know, which point I would quit this industry is if Vitalik Buterin screwed us over.

• 1:00:52Ryan Sean Adams?

  At that point, I'd be like, faith in humanity lost. But there's enough Vitaliks, there's enough Bryans, there's enough people on the blacklist journey that are doing this for the right reasons and who care about these core founding values. And I actually think we're just gonna get back to rediscovering these things and hopefully build, build this thing back stronger.

• 1:01:18David Hoffman?

  Why does it take a pain to learn? Like, we're the most dumb monkeys of all time, dude. Like, we're supposed to be able to learn without having to feel pain. Pain is like the last resort. Like, we're supposed to be smart.

• 1:01:32Ryan Sean Adams?

  I don't know, were you smart the first cycle? How smart were you?

• 1:01:36David Hoffman?

  Uh, I mean, I bought a bunch of ICOs.

• 1:01:38Ryan Sean Adams?

  2017, how smart was David? Was he, why was he here?

• 1:01:43David Hoffman?

  Now I'm thinking a lot smarter than I was originally letting on.

• 1:01:48Ryan Sean Adams?

  You think you were smarter than?

• 1:01:50David Hoffman?

  Than all the other dumb monkeys in this industry that keep giving bankers their money? Yeah.

• 1:01:55Ryan Sean Adams?

  I mean, I, I think it's just, it's just, every generation has to learn these things.

• 1:02:02Ryan Sean Adams?

  And, yeah, like I said, I mean, the systems that used our crypto economic protocols, that used DeFi, held up in all of this. And the flaws in the system were where we had trusted intermediaries. And isn't that the freaking point of crypto? To remove the trusted intermediaries?

• 1:02:21David Hoffman?

  Right, but we're, we're not even doing that. Like, no one's, a few people are using that stuff.

• 1:02:28Ryan Sean Adams?

  More, more though. I mean, every year, it's a little bit more, a little bit more, a little bit more. And, yeah, I, I think we'll get out of this. Guys, um...

• 1:02:41Ryan Sean Adams?

  We've got more to cover, some Ethereum roadmap stuff. We're going to talk about the seizure of $3.4 billion from some dude's closet in Gainesville, Georgia. It was just crazy. But before we do, we want to thank the sponsors that made this episode possible.

• 1:02:56David Hoffman?

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• 1:03:41David Hoffman?

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• 1:04:25David Hoffman?

  while adopting the improvements made by the Rust tooling ecosystem, letting the Fuel development environment go beyond the limitations of the EVM. If you want to learn more, there's a link in the show notes to see how you can get involved with a Fuel network.

• 1:04:36Ryan Sean Adams?

  Alright guys, we're back. David's feeling better, because we are looking at the Ethereum roadmap. The newest version, a new Vitalik Buterin roadmap just dropped. This is Ethereum. It's got all of the stages, David. We're looking at the merge, the surge, the scourge, the verge, the purge, and the splurge.

• 1:04:52David Hoffman?

  And if you were paying attention, you would have noticed there's a new urge. The scourge is new. So we'll walk through the scourge, which is to ensure reliable, incredibly neutral transaction, including inclusion, and avoid centralization amongst MEV risk. So this is, has to do with all of the increased emphasis on censorship resistance of Ethereum. So he's carved out this new urge, and put some things that fit under this category. Things that already existed, but now we have an urge to explain it. And also, Vitalik Buterin would like you to know that all of these things are happening in parallel. This is not a serial order of operations, starting from the merge and ending at the splurge.

• 1:05:33David Hoffman?

  All of these things are being built, worked on in parallel from left to right. And this is the updated state of the Ethereum roadmap.

• 1:05:43Ryan Sean Adams?

  Anything else new here, David? I mean, this is everything that, you know, are there any other major features here? Anything unexpected?

• 1:05:50David Hoffman?

  Nope, everything else is the same. Like, he's just like moved forward the progress bars. I guess, yeah, he's added some new things here, but

• 1:05:58David Hoffman?

  it's more or less, it's more or less what we expect, is there's just updated now.

• 1:06:02Ryan Sean Adams?

  If you want, I think the most recent thing that we've heard from Vitalik on the roadmap, check out our previous episode. We did that, what, six weeks ago? Maybe it was a little longer? With Vitalik, where he goes through some of the roadmap, and I think it's reflected here too. David, we got OpenSea. They are creating new tools to help artists collect royalties on chain. What does this mean?

• 1:06:23David Hoffman?

  Yeah, so there's been this royalty problem in the NFT world, where you have royalties baked into tokens, but they're actually not enforced at the smart contract layer, level, which actually makes sense, right? Because if you own an NFT and you want to transfer it to another wallet address, another, just like go from wallet A to wallet B, just want to send it to someone, yourself, you want to gift it, you don't have to pay the royalty, because it's not a sale. So where do the royalties? royalties actually come in. Well, they come in at the exchange level, but the exchanges have to opt into royalties in order for royalties royalties to be paid.

• 1:06:55Ryan Sean Adams?

  That kind of sucks.

• 1:06:56David Hoffman?

  It does kind of suck. It makes it makes royalties an opt in thing, which kind of ruins the point of a royalty. And so OpenSea, Devin Finzer and OpenSea said that we are making a better system. So they have made a new little widget to help enforce royalties for tokens that have royalties. And so I think the way that this works is that if you want to add this little widget to your NFT, it makes that NFT only saleable on exchanges that opt into this little widget.

• 1:07:25Ryan Sean Adams?

  So you can write that in code, though.

• 1:07:27David Hoffman?

  You can write that in code. Yeah. And so it's a it's a step in the right direction to making sure that we keep royalties into the tokens, which is one of the reasons why NFTs have made the inroads into the artist communities in the first place.

• 1:07:40Ryan Sean Adams?

  Yeah, you can't just be like, I I choose not to pay royalties.

• 1:07:43David Hoffman?

  Right.

• 1:07:44Ryan Sean Adams?

  And that shouldn't be a decision available to you. William Peaster had a whole article on this, about the future of NFT royalties in Metaverse. So if you're not subscribed to Metaverse, by the way, that's a Bankless subnewsletter. If you're into the NFT space, Peaster's got it for you.

• 1:07:57David Hoffman?

  It's by far the most useful NFT newsletter that exists.

• 1:07:59Ryan Sean Adams?

  That's Metaverse. Metaverse dot banklesshq.com, of course. SuperRare doing some NFT stuff, too. They're pulling a Kevin Rose here, it feels like, and creating like a curator pass for art?

• 1:08:12David Hoffman?

  Yeah, it's basically like a a pass that gives you privileged access to the SuperRare ecosystem. So a monthly airdrop from a legendary artist, they claim. Three times opportunities a month to win a one of one unique NFT, an exclusive PAC's passholder community access, and additional benefits to be announced. I think it's just going to be like the the membership passport towards SuperRare. I think this is a business model that many people are going to be experimenting with.

• 1:08:41Ryan Sean Adams?

  Ah, big fan of passports, David. How about you?

• 1:08:43David Hoffman?

  Oh, I love, I love NFT passports, my man.

• 1:08:45Ryan Sean Adams?

  Also experiments.

• 1:08:46David Hoffman?

  Also experiments.

• 1:08:47Ryan Sean Adams?

  This is crazy. Did you catch this story, by the way? It's like, it was just before all the FTX news broke. But the US apparently seized $3.36 billion worth of Bitcoin. They did this a year ago, but they just announced it earlier this week. And this is from a guy who stole 50K of Bitcoin from the Silk Road. So, you know, Silk Road, OG, kind of a drug for crypto marketplace. 10 years ago, somebody stole 50K worth of Bitcoin. And this guy was just hanging out at his house in Gainesville, Georgia. And I guess the Fed knocked on the door one day.

• 1:09:24David Hoffman?

  Gainesville.

• 1:09:24Ryan Sean Adams?

  Yeah. And, you know, it was like, hey, we know you have something. And I'm not sure what the process went like from there. Apparently, he voluntary, in quotes, kind of gave up the crypto to him. I'm sure there's some plea bargains involved. I'm sure there's a lot involved here. But yeah, can you imagine sitting in Georgia with $3 billion in your basement somewhere worth of Bitcoin?

• 1:09:51David Hoffman?

  Not, not in the basement. Do you know where he hid it, Ryan?

• 1:09:54Ryan Sean Adams?

  No.

• 1:09:56David Hoffman?

  So the quote, the quote from the GainesvilleTime.com, I'm reading it right now. The, it was a small computer in a underground floor safe that was submerged under blankets in a popcorn tin in the bathroom closet or something.

• 1:10:14Ryan Sean Adams?

  Oh, my God. Well, sir, he was bankless, though, wasn't he?

• 1:10:21Ryan Sean Adams?

  I mean, didn't have to worry about FTX. Just had to worry about this problem of what to do on-chain.

• 1:10:27David Hoffman?

  If you, if you own your own assets, you can still be in trouble for stealing them.

• 1:10:31Ryan Sean Adams?

  And just, well, just a reminder, on-chain crime is, is also forever. It is also immutable. So what happened was the feds, the authorities, upgraded their on-chain analytics tools and were somehow able to, to find this individual and go request those funds be returned. I'm not sure what happens to it from there, David. That'd be an interesting story. Is that, did the authorities just auction this off?

• 1:10:55David Hoffman?

  Uh, they will. I think that's how they did it last time. And people really, really liked it. What was, what did they auction it from? I can't remember. I think it was, I think it was a Silk Road. It was Ross Ulbricht's Bitcoins from the Silk Road.

• 1:11:07Ryan Sean Adams?

  Adam Draper bought a bunch or something.

• 1:11:09David Hoffman?

  And Adam Draper bought a bunch and everyone wanted them because they assumed that if the government is selling them the Bitcoins, that they are government-approved Bitcoins. And so they went for a premium and Adam Draper paid that premium. I don't think that premium was, has been justified, but.

• 1:11:24Ryan Sean Adams?

  Uh, well, but he paid a lot less for them. I don't know, he'd win the hundreds of dollars per Bitcoin.

• 1:11:28David Hoffman?

  Oh, yeah, yeah, yeah, yeah, yeah.

• 1:11:29Ryan Sean Adams?

  Yeah, it's definitely justified.

• 1:11:30David Hoffman?

  He paid a premium at the time.

• 1:11:31Ryan Sean Adams?

  Ah, I see, I see. Uh, yeah, so pretty crazy. And by the way, that's the second-largest, uh, financial seizure in history. Happened to be with Bitcoin, happened to be with crypto. Um, the other thing that's happening, given what we were just talking about, you might be excited about this, David.

• 1:11:49David Hoffman?

  Yeah, I am.

• 1:11:49Ryan Sean Adams?

  The SEC issued a subpoena to influencers promoting Hex, Pulse Chain, and Pulse X. These are all shady scam.

• 1:11:57David Hoffman?

  Yeah.

• 1:11:58Ryan Sean Adams?

  Uh, yeah, Ponzi-type projects promoted by Richard Hart.

• 1:12:03David Hoffman?

  And, and a collection of influencers. We are not going after Richard Hart, sadly. Where does Richard Hart live? And can we go get him?

• 1:12:09Ryan Sean Adams?

  There, I'm sure they're going after. I'm sure it's some, I'm, they can't just go after the influencers and not Richard Hart, right?

• 1:12:15David Hoffman?

  Yes, yeah. Where, I'm Googling this. Where does Richard Hart?

• 1:12:20Ryan Sean Adams?

  Can we just say, can we just say, this is what the SEC should be doing? Thank you.

• 1:12:24David Hoffman?

  Yes.

• 1:12:25Ryan Sean Adams?

  Like, thank you. Thank you, SEC. This is what we want. This is what crypto has always asked for, is your help in identifying and rooting out and, uh, bringing the scammers to justice. Don't stop legitimate entrepreneurs and real businesses, but give clarity to our industry. Help Brian Armstrong with Coinbase so that 95% of trading activity doesn't happen outside of the US. Uh, and then also help us collect some of the scammers. There's a lot of work to do in this space. As you just said, crypto still has a lot of, uh, scammers, shady individuals to go chase after. So you can keep yourself busy there. And that's what's happening with some of these influencers.

• 1:13:06David Hoffman?

  I don't know. He's from America. I don't know where he lives. This article, there's nothing, yeah, I can't imagine. Well, it's not in the US.

• 1:13:13Ryan Sean Adams?

  Not in Gainesville, Georgia, huh?

• 1:13:14David Hoffman?

  Not in Gainesville, yeah. All right, this is a tweet out of Library, Library.com. It says, "We lost. Sorry, everyone." What is this about? Well, Library was going up against the SEC about a securities offering. So the SEC sued them for issuing securities. They say that they violated securities laws by selling the native LBC tokens without registering as a US securities and exchange, with the US Securities and Exchange Commission. And this happened back in March of 2021, so a little bit over a year and a half ago. The SEC alleged that the LBC tokens were securities, that the startup had violated securities laws by selling them without registering, blah, blah, blah. Library pushed back, claiming the LBC tokens were not securities, of course,

• 1:13:57David Hoffman?

  and that the SEC did not give it fair notice that the sale of LBC were subject to securities laws, thus violating the company's rights to due process. But they have lost this legal battle with a specific judge. And the problem with this, and this is coming out of Gabe Shapiro, is that the Library judge reasoned that even if the team is completely silent about efforts, no promises, no promotions, no contracts, but then they premine the token to give themselves some tokens, that alone creates a sufficient expectation of profits from their efforts in a common enterprise to pass the Howey test, a very bad result. Basically, just the mere act of giving oneself tokens is enough to produce a common enterprise

• 1:14:38David Hoffman?

  is the precedent that was just set. And that's bad, because that basically takes care of the whole industry.

• 1:14:46Ryan Sean Adams?

  It means a lot of things. Our tokens, according to, or securities, according to this judge. Now, it's one judge.

• 1:14:53David Hoffman?

  Just one judge.

• 1:14:55Ryan Sean Adams?

  Yeah, this is not the Supreme Court. This is just one case. But yeah, there's going to be some more fights ahead involving this, for sure. Library says, "The most F part about this whole situation is that even after five years of fighting and a court ruling, we still honestly do not know how to legally launch a public blockchain in the US." Does anybody?

• 1:15:16Ryan Sean Adams?

  That's the question. What do we do?

• 1:15:19David Hoffman?

  Nope.

• 1:15:19Ryan Sean Adams?

  I mean, this is an example of, okay, uh, go find kind of the, the scammers and the Richard Hearts of the world. Um, but allow the legitimate entrepreneurs and businesses to legally, compliantly launch a token. Figure out how to do it. What are the bounds? We don't have any clarity still, even after five years and, uh, library's just been, been stifled out. Um, the Web3 Foundation, although Polkadot is claiming a different experience in working with the SEC. So, uh, I don't know if you read this tweet thread. It was sort of a mysterious tweet thread.

• 1:15:56David Hoffman?

  It was weird, dude. It was weird. I didn't really understand it.

• 1:15:59Ryan Sean Adams?

  They tweeted this out. Web3 Foundation, this is Polkadot, um, the foundation that, that guides the Polkadot project, announces Polkadot's native token, dot, has morphed and is software, not a security, exclamation point.

• 1:16:09David Hoffman?

  They're announcing that their native token, dot, has morphed and is software, not a security. They're announcing that it's not a security.

• 1:16:18Ryan Sean Adams?

  It's just like, you can do that? Like, I am not a criminal. We, this is not a security. You could just do that. Um, and so I was like, okay, there must be something here. Um, I actually read the post and, uh, the post doesn't say very much more, David. Um, it basically says they, they took Gary Gensler up on his invitation of come in and talk to us. And after three years of going in and talking to the SEC, ta-da, now they're not a security.

• 1:16:46David Hoffman?

  Wait, Gary Gensler's been around for three years?

• 1:16:48Ryan Sean Adams?

  I don't know. Whoever is.

• 1:16:50David Hoffman?

  Okay, they've been in talks with the SEC for three years.

• 1:16:51Ryan Sean Adams?

  Jay Clayton, whoever, whoever was previous to Gary Gensler. And I don't know that that's how it works. Like, there's no kind of letter produced. You just, it's just to come in and talk to us.

• 1:17:00David Hoffman?

  So somebody went through the dark forest of talking with the SEC and on the other side, we get this announcement that they are not a security and we don't have any sort of details as to that.

• 1:17:10Ryan Sean Adams?

  No corroboration with the SEC saying.

• 1:17:12David Hoffman?

  No, no for A to B. There's just like complete black box between those two steps.

• 1:17:15Ryan Sean Adams?

  Right, and there's not, there's not even the confirmation from the SEC that this is. There's just a post that says, we're not a security.

• 1:17:24Ryan Sean Adams?

  From the project itself.

• 1:17:26David Hoffman?

  Well, actually, you know, maybe this is a little bit of 4D chess. If they are announcing that they have worked with the SEC and they are not a security.

• 1:17:33Ryan Sean Adams?

  Yeah.

• 1:17:33David Hoffman?

  And the SEC is like,

• 1:17:35Ryan Sean Adams?

  That's what this is.

• 1:17:35David Hoffman?

  No, you're not. We didn't say that. Well, are they like forcing them to giving them clarity? I don't know.

• 1:17:42Ryan Sean Adams?

  It's like, me first. Not it. It's that kind of thing?

• 1:17:44David Hoffman?

  Not it.

• 1:17:47Ryan Sean Adams?

  I literally think that's what's happening because there's nothing substantiating this from the SEC. No evidence produced, just that they came in and talked and now suddenly they're not a security. They're just software. Fantastic. Wonderful.

• 1:18:00David Hoffman?

  UK bank Santander will block payments to crypto exchanges. Well, I will block payments to Santander. That's the headline.

• 1:18:09Ryan Sean Adams?

  I don't know that they care, David, but yeah, we'll do what we can. I'm not going to make it. I don't know how banks can do this over the long run. This is cool. On the release aside, what's Zirion cooking up?

• 1:18:19David Hoffman?

  Zirion prepares to take on MetaMask with an in-browser wallet. Somebody who has been suffering the Ledger, MetaMask, Chrome, just Bermuda Triangle.

• 1:18:29Ryan Sean Adams?

  You still have problems with that?

• 1:18:31David Hoffman?

  I don't know how, dude. New computer. I have, I have my laptop.

• 1:18:35Ryan Sean Adams?

  Are you on Windows?

• 1:18:36David Hoffman?

  Well, I'm on Windows now, but it was broken before I was on Windows.

• 1:18:39Ryan Sean Adams?

  I know. It was for a while and then it got fixed. You have to update things.

• 1:18:43David Hoffman?

  I've updated MetaMask. I've updated Chrome. I got a, I built a brand new computer. I've updated the firmware on my Ledger and like I still can't use Chrome in my Ledger. I use Firefox now. Yes.

• 1:18:55Ryan Sean Adams?

  One of, one of those two will eventually work.

• 1:18:58David Hoffman?

  Anyways, Zirion, please fix. Congratulations on the release.

• 1:19:02Ryan Sean Adams?

  Do you know Wallet Connect is trying to fix that too?

• 1:19:04David Hoffman?

  Yep. Wallet Connect raised $12.5 million in an ecosystem round aimed at driving the next evolution of their growth. Congratulations on the raise from Wallet Connect.

• 1:19:13Ryan Sean Adams?

  Is this a weird week to tell people to get a job in crypto? I don't think so, just because we do it every single week. All right. This is our weekly reminder to tell you to get a job in the crypto. David's not in the dancing mood. Okay. And I just don't dance. No one wants to see that. So I'm just going to read a few things out at you. But David, you got to be excited about the script writer. That is the. Number one position bank.

• 1:19:34David Hoffman?

  That's gonna be a fun job if you want to work with me.

• 1:19:37Ryan Sean Adams?

  Swell Network is hiring smart contract engineer as well. This is a staking provider. Swell Network, a senior front-end engineer. Swell Network, a senior back-end engineer. Uniswap Labs, developer relations. Uniswap Labs, a senior front-end engineer, some NFT engineers from Uniswap as well. Uniswap just keeps hiring.

• 1:19:56David Hoffman?

  Open hedge optimism. Swell and optimism just are crushing it on the jobs.

• 1:20:00Ryan Sean Adams?

  But this is the hottest job board on the planet, I think, because these are all companies I would love to to work for.

• 1:20:07David Hoffman?

  You know, all of those people that got laid off from Silicon Valley?

• 1:20:10Ryan Sean Adams?

  You can go check out this.

• 1:20:11David Hoffman?

  Yeah, they should go check out the job board.

• 1:20:12Ryan Sean Adams?

  Yeah, absolutely. All right, guys, we will be right back with some more takes from around crypto. And also talk about what we're bullish on, even in this crazy week that was overly bearish. We'll talk about some bullish things, but before I do, we want to thank the sponsors that made this episode possible.

• 1:20:30David Hoffman?

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• 1:21:13David Hoffman?

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• 1:21:58David Hoffman?

  with significantly lower gas fees. With Arbitrum's recent migration to Arbitrum Nitro, it's also now 10 times faster than before. Visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app. With Arbitrum, experience Web3 development the way it was meant to be: secure, fast, cheap, and friction-free.

• 1:22:18Ryan Sean Adams?

  All right, guys, we are back. Didn't get a chance to go through the questions to the nation, so I think I'm just gonna ask a question that's probably on everyone's mind in Bankless right now, which is: is crypto dead? Is crypto dead? People are saying that the collapse of FTX is proving that there's nothing really there in crypto, that it's dead, that it's dying, that it's not ready for mainstream, that it never will be. Once again, crypto, is it dead, David? What do you think?

• 1:22:49David Hoffman?

  The whole point of crypto is that it cannot die. That is why we're here. You know, Ryan, that I just love the intersection of nature and crypto systems, crypto-economic systems, and that's why I'm here. If there wasn't this property of anti-fragility in these crypto systems, I wouldn't be here. The whole point is that this biomimicry of the crypto world means that it cannot die. It can take a punch, it can take a bullet, it can take 10 bullets, it can get its head chopped off, and it will always come back if you just give it enough time. FTX, Sam Bankman-Fried is not crypto. The reason why Bitcoin, Ether, some of these, Uniswap,

• 1:23:32David Hoffman?

  these things cannot die, that's the point. People may forget about them. But eventually, they will return, as they always do, because these are anti-fragile systems, and if you are anti-fragile, you will always come back. It is inevitable that crypto takes over. It's inevitable that Ether goes up in price so long as Ethereum gets built upon. And so crypto cannot die. That's why we are here.

• 1:23:59Ryan Sean Adams?

  Dig in. Let's get some grit here. I mean, do you really think that someone by the name of Sam Bankman-Fried, he literally had bank in his name, and we gave him billions of dollars? What were we doing? Do you think we're going to let Sam Bankman-Fried kill crypto?

• 1:24:16David Hoffman?

  He can't kill crypto. No one has the power to kill crypto. That's the whole point.

• 1:24:20Ryan Sean Adams?

  Yeah. I mean, I think the answer, as it has been in the beginning for this industry, is return to these values of DeFi, Ethereum, and going bankless. Let's get to some takes this week, David. This one from Hunter, Hunter Horsley. He says this, "The future of the crypto industry is two paths. Number one, onshore regulated US platforms and firms, or, number two, fully decentralized. Investors have lost trust for the in-between."

• 1:24:46David Hoffman?

  Love it.

• 1:24:46Ryan Sean Adams?

  Remember the whole C-Defi thing?

• 1:24:48David Hoffman?

  C-Defi? Yeah, get the hell out of here.

• 1:24:51Ryan Sean Adams?

  Remember this whole blend of like, "Yeah, we could have a blockchain, but it's like fintech." It's the space in the middle that is just ripping to shreds. And I think that's what hap- My take was like, the fintech bro, or the finance bro era of crypto is over. I feel like that's what we got a lot of in the last couple of years.

• 1:25:09David Hoffman?

  Get back to being cypherpunks. Yeah.

• 1:25:11Ryan Sean Adams?

  Cypherpunks, or you go full bank. One or the other.

• 1:25:14David Hoffman?

  Cypherpunk or bank. Yes. And this fits into my model of, if you can be regulated, you ought to be regulated. If you can't be regulated, that means you're fully decentralized, and you are regulated by code, which is the whole, again, the point of why we're here.

• 1:25:29Ryan Sean Adams?

  This is some context for us. The worst events in crypto history, the Mt. Gox hack

• 1:25:35Ryan Sean Adams?

  2014, the Dow hack 2016, the Terra Luna collapse 2022, FTX sells to Binance 2022, Three Arrows Capital collapse 2022. Of course, FTX didn't sell to Binance, but the FTX collapse, we'll call it. Three of the worst events in that list in crypto happened this year. If you survive this year, you've earned your stripes.

• 1:25:58David Hoffman?

  Yeah, this actually really makes me reconsider like last bear market was bad because we all ran out of money, but this bear market is bad because everyone

• 1:26:07Ryan Sean Adams?

  We ran out of legitimacy?

• 1:26:09David Hoffman?

  Yeah, we ran out of legitimacy. Yeah.

• 1:26:11Ryan Sean Adams?

  I, um, yeah.

• 1:26:12David Hoffman?

  I think at the end of this tweet, I really, really like, if you survive this year, you've earned your stripes.

• 1:26:17Ryan Sean Adams?

  Oh, definitely.

• 1:26:18David Hoffman?

  I remember, uh, I think it was when, I think it was like 2020 ish, early 2020, where somebody called me an OG for the first time, a crypto OG.

• 1:26:28Ryan Sean Adams?

  Yeah.

• 1:26:28David Hoffman?

  And I got into crypto in 2017.

• 1:26:30Ryan Sean Adams?

  It's because you survived it.

• 1:26:31David Hoffman?

  I didn't, I didn't feel like an OG, but somebody called me an OG in 2020, and then more people started calling me OGs and more people started calling me an OG. I mean, if you got in in crypto in like maybe early 2020, I think your time to start being considered an OG is pretty damn soon here.

• 1:26:47Ryan Sean Adams?

  You've earned it. Yeah.

• 1:26:48David Hoffman?

  You've earned it.

• 1:26:48Ryan Sean Adams?

  If you're through here on the other side, I, I think that this bear market is no less harsh than the, the, the 2018 bear market.

• 1:26:57David Hoffman?

  2018 was harsh because we all ran out of money, but we didn't get rug pulled. We didn't get scammed. We didn't have these collapses. We were just poor.

• 1:27:09Ryan Sean Adams?

  And now like Many of us did stupid things with ICOs.

• 1:27:11David Hoffman?

  Yes. Yeah. Uh, this, making it through the gamut of this bear market, I think was maybe minimum twice as hard.

• 1:27:20Ryan Sean Adams?

  You're gonna feel great on the other side.

• 1:27:22David Hoffman?

  You're gonna, you're gonna deserve the hell out of it for sure.

• 1:27:25Ryan Sean Adams?

  You're gonna feel great. Um, this is a take from you, David. I'm gonna read it. The sad part is this week's events proved why we need DeFi, but the DeFi brand has lost meaning. Luna, Sesta, Crony, farming, old school DeFi is the bright shining star keeping me going. Uniswap, Dai, Rye, Ave, Nosis, but we don't even have a name for it. David is sad. You have been sad this episode, David. That's not like you. You're super like, so, um, DeFi as a brand.

• 1:27:57David Hoffman?

  Yeah, we've lost our brand, man. And this is actually, this was in, uh, came out of an inspiration from a conversation with Vitalik I was having in Telegram. So actually, this is basically Vitalik's take, uh, but he didn't tweet it, so I did. Um, but yeah, man, like, what do we even call, like, the good stuff? Because like even the DeFi brand, like Web3, no one takes that name, that name seriously anymore. DeFi is now associated with scams for the outside world. Like, what do we call the good stuff? What do we, what do we call the protocols that are actually anti-fragile? Like, we don't even have a name for that. Or even our name has been stolen from us.

• 1:28:31Ryan Sean Adams?

  Well, we don't. I mean, but this has happened to other names in the past, like blockchain. You remember, you remember blockchain used to mean something, and then it was enterprise blockchain, and then it got kind of diluted and stupid. But yeah, it pains me the most, I think, to, uh, to lose, uh, the term DeFi. Um, remember when we originally wanted to call this whole thing Open Finance?

• 1:28:51David Hoffman?

  Uh, OpFi, ObFi.

• 1:28:53Ryan Sean Adams?

  Never stuck. Uh, I don't know about that. Maybe, maybe Bankless Finance. Maybe there's a future for that.

• 1:28:57David Hoffman?

  Maybe we just, yeah, we just call it Bankless. We'll just do that.

• 1:29:02Ryan Sean Adams?

  We'll do it. See if anyone else does.

• 1:29:04David Hoffman?

  Yeah.

• 1:29:05Ryan Sean Adams?

  This is another take. Thank God Gary Gensler chose to protect us from checks notes. Kim Kardashian! Woo!

• 1:29:13David Hoffman?

  I feel so protected.

• 1:29:15Ryan Sean Adams?

  Gary, uh, what's the background on this? There, I mean, there was a settlement with Kim Kardashian for pumping a token.

• 1:29:23David Hoffman?

  For, for pumping a security, and then they charged Kim Kardashian, and then Gary Gensler went on the speaking tour to say, "Hey, we got Kim Kardashian for promoting..."

• 1:29:30Ryan Sean Adams?

  Got her. Got the bad guy.

• 1:29:32David Hoffman?

  Yeah. Meanwhile, I'm gonna go meet with Sam Bankman-Fried for lunch.

• 1:29:36Ryan Sean Adams?

  Eight billion dollars in the hole later. Uh, very sad. Although, to be fair to Gary, a lot of us missed that one. A lot of people.

• 1:29:44David Hoffman?

  But it's, okay, it's not our job. It's his job. That's his job.

• 1:29:47Ryan Sean Adams?

  All right. All right. Fair enough. All right. Can you find something to be bullish on? Got to ask you that question as we do every week. What are you bullish on?

• 1:29:55David Hoffman?

  So Ryan, I bottom ticked Ether so far is what I'm bullish on. So I don't.

• 1:30:01Ryan Sean Adams?

  People don't know the trading vernacular. What's bottom ticking mean, David?

• 1:30:05David Hoffman?

  Is that you? Are you asking?

• 1:30:07Ryan Sean Adams?

  I know what bottom ticking is.

• 1:30:10David Hoffman?

  So I set two limit orders, one at 1150 Ether and one at 1075. I think the bottom of ETH was like 1038 dollars, 1,038. And so my buys went through like while I was sleeping. I don't usually set limit orders. I usually just hit market buy, but had some cash. Bought on Coinbase, which I don't usually do.

• 1:30:32David Hoffman?

  But I usually use Gemini, but this time I use Coinbase for reasons. And I just feel really good because it's up since then. And so I just feel good about buying at least what is a local bottom. And let me tell you, if I had bought like two days ago and then it dumped, I'd be feeling way worse. But I'm just bullish on ticking the bottom. I've ticked the bottom pretty well so far.

• 1:30:54Ryan Sean Adams?

  You must believe in the future of this whole ecosystem. We're still buying ETH at these prices.

• 1:30:58David Hoffman?

  Yeah, yeah, it's the only thing I really believe in, man.

• 1:31:02Ryan Sean Adams?

  ETH is still the asset you return to?

• 1:31:05David Hoffman?

  Yes.

• 1:31:05Ryan Sean Adams?

  Is this kind of what the Bitcoin maximalists felt in the aftermath of 2018, 2019? Where they're just like?

• 1:31:12David Hoffman?

  Stop venturing out. Stop going to the frontier. Just stick with the thing you know is going to work.

• 1:31:19Ryan Sean Adams?

  Rebuild our base.

• 1:31:20David Hoffman?

  Because go back to the core. Let's go back to the base. ETH is ultrasound money. I bottom ticked it. I'm happy about that.

• 1:31:27Ryan Sean Adams?

  I'll just remind people, bottom so far.

• 1:31:30David Hoffman?

  Well, I bought 897 during the Alameda crash. Or it's not the Alameda. I bought 897 during the Three Arrows Capital crash. And then I bought 1075 to add the Alameda FTX crash. I actually think that like everyone's worried about contagion in the future. Like I'm not one to call bottoms, except so far.

• 1:31:52Ryan Sean Adams?

  You are calling bottoms with your buys, sir.

• 1:31:54David Hoffman?

  Three Arrows Capital, the worst. When everyone was freaking out about Three Arrows Capital about, oh, there's going to be so much more contagion in the future. That was actually the moment to buy. And that's what people are saying right now. There's going to be so much more contagion. We'll have to see the contagion. See how bad the contagion is for Alameda and FTX. That's when I bought. And I'm feeling good about it. That's what I'm bullish on.

• 1:32:18Ryan Sean Adams?

  I'm still waiting for my triple digits, to be honest, but I may not get there.

• 1:32:22David Hoffman?

  You may not get there. Alright, so if that's not what you're bullish on, then what are you bullish on?

• 1:32:25Ryan Sean Adams?

  Uh, David, I'm bullish on the bankless thesis. I, um, you know, I think it's just really struck me that crypto has learned through 2022 that it can't leave its destiny in the hands of the banks, of a bunch of centralized bankers. And I think we veered into that. It's just like, there's something very easy about solutions like FTX. Someone takes custody of your keys and the user experience is better. There's no gas fees and, you know, there's someone with a suit responsible for it, willing to go in front of Congress. There's something very settling about this, right? And we did settle for it. We settled for centralized exchanges and that's been the problem.

• 1:33:10Ryan Sean Adams?

  But I feel like the bankless thesis has held really strong. Like, we have to rebuild the future of crypto, not on centralized exchanges. I mean, like, we could never build them on centralized exchange. We have to rebuild the future on DeFi. So I kind of feel pretty good about the bankless thesis coming out of this. It's just like crypto banks are not going to solve our problems. They're going to cause more problems. It's interesting, you know, a lot of our conversation in the past few months before this debacle, it's been about censorship resistance. And that is one of the benefits of decentralization, right? Censorship resistance and freedom, and that's super important. But here, this was not a failure of, like, Sam was not censoring anyone's transactions.

• 1:33:55Ryan Sean Adams?

  He was stealing the money, okay? Like, he was taking depositors' funds and doing other things with them. It was a trusted intermediary problem. It was a banker problem. We got screwed by the bankers again, David, okay? This is like... 2008, this is like every sort of banker crisis that we've seen where we've been screwed by the bankers. This is why this is not a problem with DeFi, it's not a problem with Ethereum. Like, DeFi didn't do this. Right. DeFi solves this problem and yet here we are in this place. And this is why I understand your sadness and frustration part of this episode is just like, didn't we already know this? Aren't we better than this? Aren't we supposed to be the ones who aren't trusting the Sam Bankman-Frieds of the world?

• 1:34:41Ryan Sean Adams?

  So anyway, I do feel like the bankless thesis has kind of held up even while crypto is suffering. And we're probably going to rebuild this entire space on top of that thesis. And this is why I am ultimately optimistic and bullish that we come out, that we come out stronger. And I'm hopeful, listener, that if you lost some money this week, if you're affected by FTX, I'm sorry, you know, that's really tough. We said in other times this has happened in the past, take some time with family, go for a jog, clear your head, take a break, step away for a bit.

• 1:35:18Ryan Sean Adams?

  We hope you come back because I think that people in crypto need veterans with the type of experience that you've just received. If you didn't have any funds in FTX, you saw what happened to those around you. And crypto needs people with that experience. This is how we make a stronger Layer Zero for next time. Because who's going to warn the class of 2025 or 2026 when they go do something stupid? This is the only reason David and I know enough to kind of talk about this, going bankless. It's just because we've seen it before. And so one generation, it's their responsibility to teach the next generation. So you're developing your battle scars, your veteran skills.

• 1:36:01Ryan Sean Adams?

  And yeah, we need you here and we need you to push the bankless thesis forward.

• 1:36:07David Hoffman?

  Yeah, that's the cool thing about crypto is that it takes about three years to become a veteran. There's not many industries where like usually you need to be 30 years in experience in something to be a veteran. But like this is how human wisdom is passed down from village elders to the young folk. And we actually have the privilege in crypto where it only takes three years to become like a village elder who can be wise.

• 1:36:32Ryan Sean Adams?

  Because every year is like 10. I feel like this week was like 10 years for me, dude. I'm exhausted.

• 1:36:37David Hoffman?

  I'm exhausted, man.

• 1:36:39Ryan Sean Adams?

  I've rarely been this tired. Yeah. All right. Let's end it with a meme of the week. What are we looking at, David?

• 1:36:45David Hoffman?

  Meme of the week, we are looking at FTX Arena in Miami, but it's actually a spirit Halloween store. Because that's where that's where rundown buildings go to die.

• 1:37:00Ryan Sean Adams?

  You gotta laugh or you'd cry. Guys, we hope you've enjoyed Bankless this week. It's been a crazy week and we have a moment of zen for you, so stick around for that. But of course, as always, risks and disclaimers. Crypto is risky. You could lose what you put in, but we're 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.

• 1:37:21Speaker 02

  Last thing that I'll say is if you look at what precipitated some of the 2008 financial crisis, you saw a number of bilateral bespoke, non-reported transactions happening between financial counterparties, which then got repackaged and releveraged again and again and again. Such that no one knew how much risk was in that system until it all fell apart. If you compare that to what happens on FTX or other major cryptocurrency venues today, there is complete transparency about the full open interest. There is complete transparency about the positions that are held. There is a robust, consistent risk framework applied. And we're excited to work with the CFTC on our US licensed and regulated venue.

• 1:38:01David Hoffman?

  Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks and exclusive content and even the Bankless token for airdrops, raffles and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders, Ask Me Anything's and weekly rollups where we summarize the week in crypto and other

• 1:38:46David Hoffman?

  fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.