Episode 117 – Crypto Critics’ Corner Copes at CoinDesk Consensus Crypto Conference

Cas Piancey and Bennett Tomlin discuss the recent CoinDesk Consensus 2023 conference and our takeaways.

This episode was recorded on April 30th, 2023.

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00:00:05:01 - 00:00:12:00
Cas Piancey
Welcome back, everyone. I am Cas Piancey. I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. How are you today?

00:00:12:00 - 00:00:14:13
Bennett Tomlin
I'm exhausted. It's been a busy few days.

00:00:14:22 - 00:00:36:29
Cas Piancey
It's been a busy week plus for for both of us. I think we should start just by talking about what we've been busy with. So what you and I both went to this past week was Consensus, which if you're unfamiliar with Consensus, it is. I believe this is still true, the largest cryptocurrency related conference in the world, and it's hosted by CoinDesk.

00:00:37:00 - 00:00:46:21
Cas Piancey
And yeah this was our first time going to it. It's been going on for a long time. How long? 2016? 2015? I don't know. Maybe at least 2015.

00:00:46:25 - 00:00:56:29
Bennett Tomlin
It might have started even before then. Right. So, this was CoinDesk 10th year, but it wasn't Consensus its 10th year, so it might have been like 2015.

00:00:57:00 - 00:01:09:24
Cas Piancey
So yeah, this is a big deal to the cryptocurrency industry and it was our first time going there. Bennett You got there before I did. Why don't you talk about the the first day at Consensus for you?

00:01:09:25 - 00:01:33:07
Bennett Tomlin
Sure. Which was actually the second day of Consensus. I made it in on Wednesday afternoon, but I'd been up since like 3 a.m. in the morning and just could not bear walking into a convention hall full of cryptocurrency people. It would have put me right over the edge. And so instead I came in on Thursday morning and sat through quite a few sessions that day trying to get an understanding of what this is like.

00:01:33:16 - 00:02:02:08
Bennett Tomlin
And it is an utterly strange experience like as I was walking into Consensus, I had two pieces of paper shoved into my hand. One was a Cardano wallet full of a dog themed coin called Hosky, presumably named after Charles Hoskinson, who only sometimes pretends to be Satoshi Nakamoto. And the other piece of paper was for a multichain event headlined by Ben Armstrong, also known as BitBoy.

00:02:02:22 - 00:02:23:11
Bennett Tomlin
You get past that through the metal detectors and finally into the exhibition hall and the very first thing you see is a protocol or a product advertising how their proof of sql is going to revolutionize cryptocurrency. If you finally push back there and through the rest of the booths that are similarly ridiculous, you can make your way to the stages.

00:02:23:23 - 00:02:49:06
Bennett Tomlin
And the very first session I decided to see was one entitled Remember Why We're Here Crypto's True Purpose. This was led by Michael Casey of CoinDesk and included Erik Voorhees of ShapeShift Nahar Narula of the Digital Currency Initiative out of the MIT Media Lab and Caitlin Long of Custodian bank. And it was a disaster for me. I had to fact check both Caitlin Long and Erik Voorhees during the session of it.

00:02:49:14 - 00:03:05:11
Bennett Tomlin
Caitlin because she said right now 8 billion people could download Lightning software and start transacting in fiat backed by assets, and Neha had to go. No, the network cannot handle that. We cannot on board that many users. We cannot open that many channels. That's not how this works right.

00:03:05:11 - 00:03:29:23
Caitlin Long
Now, today, 8 billion people in the world could download the Lightning Network software and start transacting in fiat currencies that are collateralized by sats. Tha is easy to do. There are there are channels right now that anyone in the world could use to create a U.S. dollar and transact inthe US dollar without permission.

00:03:29:23 - 00:03:32:21
Neha Narula
Something I want to point out really fast.

00:03:32:23 - 00:03:44:09
Neha Narula
Maybe a lot of people don't know this. The networks, as they exist today, cannot handle 8 billion people using them in a non custodial fashion. We need real serious breakthroughs to make that work.

00:03:44:13 - 00:03:49:29
Bennett Tomlin
And Erik got fact check because he said, oh, what was it?

00:03:50:07 - 00:03:53:08
Cas Piancey
It was the Ethereum thing. He got the wrong year for a theory.

00:03:53:11 - 00:04:19:17
Bennett Tomlin
Yeah. Erik was saying that the 2017 ICO bubble was a good thing because at least Ethereum came out of it. For those that don't remember, the Ethereum ICO started in like late 2014 and the chain actually launched in 2015, which is not 2017, whatever, whatever. Regardless, the entire session was supposed to be about why we're here and there couldn't even seem to be during this consensus any kind of agreement on why that is.

00:04:19:28 - 00:04:43:01
Bennett Tomlin
Erik cared about the Austrian money part. Caitlin kept talking about an honest ledger, whatever that means. Neha had to spend half of her speaking time, fact checking the other people on the panel like, and there was no, like, real thrust to it and like, that was kind of the pattern throughout. Many of the sessions were disappointing in a lot of different ways.

00:04:43:01 - 00:04:59:03
Cas Piancey
Well, we're going to have plenty of time during this whole entire conversation to rag on some of these totally irrelevant discussions with, Yeah, we'll get there. I think you were tweeting about probably the most important one, so why don't you go ahead and get into that instead?

00:05:00:04 - 00:05:29:03
Bennett Tomlin
So FTX was a cryptocurrency exchange, as none of you know, and there was a panel on it called What Happened, moderated by a Polk Award winning journalist Tracey Wang, and including Brett Harrison and Anthony Scaramucci. Brett Harrison, for those who don't know, is the former president of FTX US and the current CEO and founder of Architect, a firm doing crypto currency trading infrastructure, I think Doesn’t matter.

00:05:29:12 - 00:05:58:00
Bennett Tomlin
Anthony Scaramucci, of course, is the former Trump guy who now runs SkyBridge Capital. And they were talking about FTX and there were several interesting parts, wasn't the one that happened earlier on. And then we'll get to the really big one. Scaramucci was asked about FTX Ventures investment in SkyBridge Capital, which I had largely forgotten about. It was included on the list of investments that the Financial Times had been able to compile.

00:05:58:14 - 00:06:34:13
Bennett Tomlin
But like it, Scaramucci Who cares? But apparently FTX Ventures had purchased a one third stake in SkyBridge Capital, with the understanding that eventually they would acquire the whole firm. Scaramucci also revealed during that question that as a condition of that deal, he had to buy $10 million in FTT in FTX token. And like when he was being asked by Tracy, are you worried about these funds being clawed back, he's like, our lawyers are talking to the bankruptcy court will do what we need to do.

00:06:34:23 - 00:06:51:13
Bennett Tomlin
We ended up losing money in our FTT token, which again, I was not aware was a condition of their deal that they had to like basically it was like a mini round trip, like the FTX Sequoia one, right, but done through SkyBridge instead. And so that was interesting. If we want to talk about that.

00:06:52:14 - 00:07:12:13
Tracy Wang
Anthony, you talk a little bit about the FTX venture stake in SkyBridge. Now that FTX is in bankruptcy and FTX Ventures is one of those Silos Are you what's kind of the fate of that SkyBridge stake? Are you trying to unwind those?

00:07:12:13 - 00:07:27:12
Anthony Scaramucci
The problem is the bankruptcy proceedings are always they take a long time. I don't want to be cynical about it, but there's a tremendous amount of legal fees they get running in a bankruptcy proceeding, and so there's an incentive to slow things down.

00:07:27:15 - 00:07:51:17
Anthony Scaramucci
We contacted the investment bankers and the bankruptcy lawyers related to the stake, and I've talked about this before, is pretty open about it. What Sam bought was a 30% interest with an understanding that he would have the right to buy the remaining part of the company over a two year period. And so I think the good news for us, there was less of a concern about having minority shareholder.

00:07:51:17 - 00:08:19:12
Anthony Scaramucci
Right? So there's no economics associated with that. Not the bankruptcy says I'm entitled to deferred income or anything like that. And it had no management control or board. So it's really not valuable to anybody other than us. And I guess at some point we'll be able to buy it back or frankly, not buy it back. And so if we don't buy it back, it's okay with me as well, because, you know, we took capital onto our balance sheet.

00:08:20:01 - 00:08:41:21
Anthony Scaramucci
Some of it we lost in the FTT token. I sold that token at a loss. But and just to clarify, you know, some of the a portion of the funds that Sam gave as part of the investment we got for cash, we agreed to buy $10 million of the FTT token. Um, but I also, you know what a pretty large position in Bitcoin.

00:08:42:00 - 00:09:11:05
Cas Piancey
Yeah, I think, I think there's a, yeah, there's some crazy criminal shit going on there that is being admitted too, which is wild. And I'm just if anyone is unfamiliar with SkyBridge and Scaramucci, like these guys were accumulating a ton of money and I am just looking at his Wikipedia page and this is just beautiful. As of March 2023, SkyBridge, his assets had dwindled to about $2 billion from a peak of $9 billion in 2015.

00:09:11:05 - 00:09:44:15
Cas Piancey
So despite the market in general going only up between 2015 and now, I mean, that's wild, right? Investors lost about 30% of their value from the beginning of 2020 through 2023, 39% in calendar 2022. The fund had reduced the ability of investors to withdraw funds and reduced staffing. So if you need just a basic summary of Scaramucci, his investment strategy and how good he is with other people's money, I think that kind of just gets you through the basics.

00:09:45:28 - 00:09:50:20
Cas Piancey
But yeah, go into kind of yeah, like the details of why Yeah, yeah, yeah.

00:09:51:02 - 00:10:22:17
Bennett Tomlin
So apparently on like November six or November seven, a few days before they were like really getting ready to declare bankruptcy. Apparently our friend Anthony Scaramucci, the Mooch, got a call from Joseph Bankman Sam Bankman-Fried father, in which Sam Bankman-Fried is Father Joseph Bankman, a Stanford law professor, convinced Scaramucci that there was currently an asset liability mismatch was the word that Scaramucci used at FTX.

00:10:22:24 - 00:10:48:02
Bennett Tomlin
Somewhere around $1,000,000,000 is what he initially got the impression of. And so Scaramucci decided to take this information from Sam Bankman-Fried’s father and fly down to the Bahamas to hang out in the war room with Gary Wang's and Bankman-Fried and Nishad Singh, Caroline Ellison and the rest of the friends to help them with their fundraising for their emergency liquidity money.

00:10:48:03 - 00:11:20:29
Anthony Scaramucci
What happened to me is I was actually speaking in Sarasota, Florida. There was rumblings that day, I think it was November the sixth or something like that or seventh. The Monday was the seventh. And then I got back to New York and I spoke to Sam's dad about the problem, and it was intimated to me that it was a asset liability mismatch, that they were meeting redemptions and there were assets available, but they weren't necessarily liquid and they needed time to get the liquidity and they were looking for some rescue funding.

00:11:21:18 - 00:11:41:20
Caitlin Long
And so at that time, I was, you know, a good citizen that I'm a partner in the business. Effectively, they owned a piece of my business. I was certainly trying to help them on their fundraising round And then I talked to his dad later in the day. How much money were they? Well, they were talking about it. I said, we're talking about $1,000,000,000, which seem.

00:11:42:09 - 00:12:02:22
Caitlin Long
Yeah, a lot of money. That certainly would be manageable in the context of the size of the business. But later in the evening, that number went from 1000000000 to 4 and a half billion. And then I said, okay, there's obviously a problem and it's a bigger problem than they want to admit to. And so I made the decision that evening.

00:12:02:22 - 00:12:23:14
Caitlin Long
I got on my phone, I took myself a JetBlue flight down to the Bahamas, and I wanted to see for myself what was going on. You know, listen, I put my name and reputation at stake. I introduced, introduced, and a lot of people, Brett and I, one short year ago, and I believe you were there with us, we had Crypto Bahamas at the Baja Mar hotel.

00:12:23:14 - 00:12:55:00
Caitlin Long
I organized a dinner for the likes of Tony Blair and Bill Clinton and a whole host of luminaries one short year ago. And fast forward, sort of still hard to believe that we're where we are right now. And so I needed to see it for myself. And so I went down there and I would say that the war room was despondent and I would say that it was clear to a few people that there was a very small group of people that had done some things that they didn't let the other group of people into.

00:12:55:15 - 00:13:39:24
Bennett Tomlin
Now, there's a few interesting pieces of this story. One Joseph Bankman knowing the finances of FTX specifically enough to know that there was a hole Joseph Bankman being empowered to reach out to advisors about to potentially bring in assistance to deal with the hole Scaramucci deciding he should be in the fucking war room in the Bahamas for his expertise in fund raising money and the fact that they were trying to fundraise money with this still developing story about this hole in their balance sheet, because Scaramucci also during that section, said like I heard 1 billion when they called, by the end of the day, it was 4.5 billion and then it was whatever.

00:13:39:24 - 00:13:59:27
Bennett Tomlin
And so like during this period, apparently Scaramucci was still down there in the Bahamas helping them try to fundraise to deal with this asset liability mismatch, which was also probably a bad way to phrase it. Right. And he tried to cover it up quickly like some of the assets just aren't liquid. But we've talked about this a little bit on here before.

00:13:59:29 - 00:14:20:00
Bennett Tomlin
There's a difference between illiquidity and insolvency. Right. And often when it comes down to is like a duration issue. If you have certain assets that take a certain amount of time to reach their value, you can end up in cases where you're illiquid but not necessarily insolvent. That should never happen for a cryptocurrency exchange rate. None of these assets really have that type of duration risk.

00:14:20:08 - 00:14:38:28
Bennett Tomlin
If there wasn't asset liability mismatch. That means when Scaramucci got that news, he knew there was some bigger issue. They were running fractional reserve. There had been a hack, there had been funds or assets lost that were not obtainable. And so he knew that information four days before they declared bankruptcy. Well, they were fundraising.

00:14:39:05 - 00:14:51:07
Cas Piancey
Yeah. Really not a good look. And, you know, to me, it sounds like there's a lot of illegal things going on there. Who knows? Maybe nothing illegal happened. Maybe there was nothing unsavory. It was all totally moral and aboveboard.

00:14:52:02 - 00:15:11:14
Bennett Tomlin
It's definitely going to make it more awkward for Joseph Bankman in any of his conversations with regulators or prosecutors to now have to explain why this person is making these claims about his knowledge. Because I believe his public claims so far have been like I was just helping out with some of the charity stuff and filled out a couple contracts.

00:15:11:22 - 00:15:13:11
Bennett Tomlin
I didn't know what was going on.

00:15:13:19 - 00:15:43:27
Cas Piancey
Yeah, yeah, yeah. So that yeah, I think that was probably the most interesting thing. I know that. I know that. Also, what happened on that day was or maybe was on the first day was I was told a story about Laura Shin. Well and Dan Horovitz,(*Berkowitz) who Dan Horovitz, (*Berkowitz) who has worked for the SEC and the CFTC, Dan Horovitz (*Berkowitz) and Laura Shin, were having a discussion about something related to securities.

00:15:43:27 - 00:16:07:17
Cas Piancey
And supposedly Dan Horovitz (*Berkowitz) got booed, uh, and heckled by a bunch of people who were claiming that he had helped them lose a bunch of money, which just shows you how people own up and acknowledge and take responsibility for their own actions in this industry where, you know, you're supposed to do don't trust, verify and do your own research and all that.

00:16:07:17 - 00:16:23:03
Cas Piancey
So glad to see people taking responsibility for their actions and not blaming government regulators for cryptocurrency stuff. But yeah, so then what else did you go to before I arrived? What? What else happened?

00:16:23:05 - 00:16:44:27
Bennett Tomlin
Sure. I listen to Phillip Davis, the prime minister of the Bahamas, talk about the DARE Act and how great it is and how wonderfully it is helped put and really how even at this point, they're glad FTX came to the Bahamas, because it put the Bahamas on the crypto regulatory map and that's what they wanted more than anything else.

00:16:44:27 - 00:17:05:27
Bennett Tomlin
I heard that. Then I went to listen to an A16z general partner, Sriram Krishnan talked about how Web3 can fix social media and consumer apps. And apparently the answer to that is ownership. Let people make money. Also don't have financial incentives because it means you can't scale.

00:17:06:24 - 00:17:20:00
Cas Piancey
Also wasn't part of the wasn't part of the question like what role VCs play in this and how they don't harm decentralized finance. If the goal is for it to be decentralized finance, like aren't there, aren't there bad.

00:17:20:00 - 00:17:21:01
Bennett Tomlin
That wasn't touched on?

00:17:21:12 - 00:17:27:04
Cas Piancey
Oh, I thought that that was part of it, that there was like the wrong incentives for venture capital. And I was like.

00:17:27:16 - 00:17:55:15
Bennett Tomlin
So is there? Yes, there was kind of a question about this, like because as Krishnan had made this claim that, like in order for these Web three social networks to scale, you needed to be very careful about putting financial incentives in early, which is also a crazy thing to say when your portfolio includes a decent rate where the entire point of that this bitclout was to have these massive financial incentives in right away is your way to bootstrap the network, right?

00:17:55:15 - 00:18:24:03
Bennett Tomlin
What's your thesis here that includes both BitClout and not having incentives? Why are you investing in all of these token social media things if you don't want financial incentives? But yes, Angela Lau, who was the one from Forkast Labs, who was basically asking these questions of Krishnan asked about like if that's true, that you don't want include these financial incentives, how do you build it in a way where it still matches with the VC expectations of an eventual eventual hundred or a thousand X times return rate?

00:18:24:22 - 00:18:45:09
Bennett Tomlin
And Krishnan kind of dodged the question and said, Oh, it's not that financial incentives are bad or returns are bad. You just got to wait, you got to scale, you got to figure it out first and like, yeah, sure. But that net and like the most frustrating thing during this is during this entire session, this 20 minute long session.

00:18:45:19 - 00:18:59:12
Bennett Tomlin
At no point did they ever actually answer the title of the session. How Web3 Can Help Fix Social Media in Consumer Apps. Web three was never even really defined, except that Web three means ownership.

00:18:59:16 - 00:19:12:15
Cas Piancey
And that just reminds me also of when we were watching. There was like a little point. We went to the CoinDesk TV area and they were discussing the metaverse and like one of the things they explicitly said.

00:19:13:09 - 00:19:15:23
Bennett Tomlin
A districuted global network of thought leadership.

00:19:16:19 - 00:19:35:01
Cas Piancey
That was the worst definition I've ever heard. But I also heard someone say, Well, we can't really define it, which is like, So both of these answers are terrible because either you can't define it at all or your definition makes me think it should immediately be burned to the ground. Like I don't want a decentralized network of thought leaders.

00:19:35:28 - 00:19:37:23
Cas Piancey
So yeah, but just sound fair.

00:19:37:23 - 00:19:40:29
Bennett Tomlin
You need it to get fortuitous convergences of thought leaders.

00:19:41:18 - 00:19:41:28
Cas Piancey
Right?

00:19:42:17 - 00:20:05:20
Bennett Tomlin
These are real phrases that were used by you guys. I'm not making this up. I'm not that creative. But when after that, after hearing this A16z partners say nothing for 20 minutes after promising it was going to be the most entertaining 15 minutes I had that day, it wasn't. The Mooch was far more entertaining. Sorry, Krishnan you can't measure up to The Mooch.

00:20:06:15 - 00:20:22:01
Bennett Tomlin
I then listened to Paul Grewal from Coinbase talk about their wells notice, and basically they're mad because the SEC let them go public and they said, and he said, How in the world how in the world? Because the SEC let Coinbase go public.

00:20:22:10 - 00:20:25:25
Paul Grewal
Why on earth was this company allowed to list as a public.

00:20:25:25 - 00:20:48:02
Bennett Tomlin
Company, as Coinbase, Chief legal officer, clearly having a good handle on what's going on around him and his. The general thrust of their argument is that this was our business back when we filed our S-1 to go public context here, Let me slow down for a second. The S-1 is the registration document you filed with the SEC in preparation for public issuance of securities.

00:20:48:12 - 00:21:07:19
Bennett Tomlin
It has a certain amount of things you need to disclose that were established initially in the 1933 Securities Act and have been expanded as part of the rulemaking process since then. Coinbase's primary thrust is that we said this is our business back then. Why did they say our S-1 was okay and we were good to go public if we were breaking the law?

00:21:08:07 - 00:21:30:28
Bennett Tomlin
And this gets into you and we've talked about this with the SEC before, the SEC is primarily a disclosure and enforcement regime. And what I mean when I say that is their role is to make sure the companies they regulate are filing their their required disclosures. And then when they find a breach to enforce against the actors, they are not they do not prevent things.

00:21:31:01 - 00:22:09:00
Bennett Tomlin
They are not set up for that. That's not in their mandate. And the 1933 Securities Act itself said neither. The fact that the registration statement for security has been filed or is in effect, nor the fact that a stop order is not in effect with respect thereto shall be deemed a finding by the Commission that registration statement is true and accurate on its face, or that it does not contain an untrue statement of fact or omit to state a material fact or be held to mean that the Commission has in any way passed upon the merits of or given approval to such security.

00:22:09:15 - 00:22:32:03
Bennett Tomlin
It shall be unlawful to make or cause to be made to any prospective purchaser, any representation, contrary to the foregoing provisions of this section, that's the 1933 Act that defined like the role of the SEC at this point. We talked about this back in our episode on the SEC, and apparently and this is my frustration is Paul knows that Paul very well knows that that's the SEC's role.

00:22:32:07 - 00:22:54:20
Bennett Tomlin
What they're trying to do with the video release and playing to the media is to muddy the waters, is to make it seem like there's ambiguity there. I even went back to Coinbase's S-1 just to make sure. And they had like a thousand words in total of risk factors related to potentially changing legal or regulatory risks that was disclosed to investors, and that's the SEC SEC stance on disclosure.

00:22:54:28 - 00:23:06:03
Bennett Tomlin
If it's in the risk factors the investors knew. Right. And so like the the entire thrust of their argument was why were we allowed to go public? Because you filled out the form accurately.

00:23:06:24 - 00:23:13:04
Cas Piancey
And I don't know this this goes back to the lawsuit that they're bringing against the SEC or the filing that they made.

00:23:13:13 - 00:23:47:02
Bennett Tomlin
It doesn't. It doesn't. Right. Because like, there's that there's the Coinbase has received a Wells Notice. This was their Wells submission, basically their argument back to the SEC saying, here's why it's not worth suing us. Separate from that, they had previously filed an administrative request related to SEC rulemaking and they now filed a request in a Delaware court to try to compel the SEC to either say they will create a new rule or explicitly say, no, we are not going to create a new rule for you Coinbase.

00:23:47:09 - 00:24:09:10
Bennett Tomlin
And so all the SEC is going to do is say, okay, this went from pending to denied congratulations Lawsuit over so that that's most that's but like it's still like you're saying part of their broader media strategy they're trying to flood the plain and muddy the whole thing with this kind of conflicting information and make it seem one way, even if that's not reality.

00:24:09:10 - 00:24:27:01
Cas Piancey
They also just like their entire to me, their entire argument is baseless. And like I hear a lot of cheerleaders and people who I respect, you are like, I don't want to suggest that only cheerleaders are the ones saying that Coinbase stands a chance here. I don't think they do. Maybe I'll be proven wrong. I've seen lawyers say they have a chance here.

00:24:27:01 - 00:24:37:18
Cas Piancey
Maybe I'm wrong. I'm not a lawyer. But like to me their arguments seem trivial and baseless and destined to fail. But, you know, we'll find out. I don't know.

00:24:38:27 - 00:25:13:23
Bennett Tomlin
Yeah. Yeah. There was one last session I was able to handle that day before. I just had to leave the convention center before I did something rash. And that was in the compliance trenches with Binance, which was Danny Nelson interviewing Tigran Gambrayan and the head of investigations for Binance. And again, this was a couple of interesting statements coming from one of these people with the head of investigations saying at one point that he helped kick off the North Koreans who were trying to use Binance to launder funds, which does give the impression they were there before.

00:25:14:26 - 00:25:51:23
Bennett Tomlin
Also when asked. So the CFTC lawsuit and some of the supporting materials revealed that Binance's Angels had told mainland Chinese users where Binance was supposedly not operating, that if they got the Paula e citizenship, they could still use that to verify at Binance. Tigran was asked about this and basically said KYC is only a piece of our compliance work and he repeatedly called these IDs fake IDs like four separate times during the course of this brief question.

00:25:52:04 - 00:26:29:26
Bennett Tomlin
And the reason I'm highlighting these things here is because I think they are potentially challenging if they're found to be untrue. So, for example, if in the near future prosecutors in western Washington were to file an indictment against someone that happened to include that Binance was serving Lazarus group money launderers or something like that, it would be embarrassing if you had just been on stage saying you had kicked them all off, or if you kept referring to something as a fake I.D. It would be embarrassing if it turned out that there was a bunch of people using that ID on the exchange you work for.

00:26:31:00 - 00:26:35:03
Bennett Tomlin
And so I thought those two comments during that were really the most interesting to me.

00:26:35:10 - 00:26:46:12
Cas Piancey
Yeah. Um, yeah, either way. Oh, yeah. Not looking good. And what was it? Yeah, What did he say? If someone is going to jail, it's not me. Yeah, that's, that's something, you know.

00:26:46:21 - 00:27:12:10
Bennett Tomlin
Yeah. Yeah. And they also like, reiterated and talked again about how they collaborate with law enforcement, like some of the funds seized in the recent indictment of some of those North Korean moneylenders were funds Binance that they had helped turn over to the feds. And they talked about how they go around and help train law enforcement and that like their team of 200 investigators or whatever, is mostly former law enforcement in some former chainalysis.

00:27:12:23 - 00:27:16:01
Bennett Tomlin
So they were they spent part of their session bragging about that as well.

00:27:16:07 - 00:27:34:28
Cas Piancey
I am curious because, you know, the ones that get shut down that we hear about, you know, Silk Road or Liberty Reserve, I suspect that they're they never cooperate with law enforcement or never did. You know, and I, I do wonder if these guys get brownie points for for playing ball a bit.

00:27:35:06 - 00:28:03:02
Bennett Tomlin
So, yes, we talked about this a little bit in our recent Binance's in Trouble episode. I think it was 114 about the CFTC case. And basically my thought then was and this was in part based on the Binance spokesperson response rate is that we've been working with the CFTC for two years and this was very unexpected. We know that they have the former chief of MLARS money, less money laundering and Asset Recovery Service inside the DOJ, negotiating on their behalf in Washington.

00:28:03:17 - 00:28:35:10
Bennett Tomlin
My gut instinct with the way the whole Binance thing ends up playing out is an agreement for a deferred prosecution, and possibly with some agreement that Changpeng Zhao has to divest or something. But I expect that Binance will still be able to continue operating in some form conditional on them actually doing the things they say they do, like KYC and every user like kicking people off for Wash trading, like not trading against their customers, you know, all the things they say they're already doing they'll have to actually do.

00:28:35:10 - 00:28:41:25
Bennett Tomlin
And at that point, like we've seen every other time in exchange ads, mandatory KYC, the volume will go somewhere else.

00:28:41:25 - 00:29:01:10
Cas Piancey
So that was the that was the first day, I think it's worth saying it's worth mentioning to people that we didn't pay our employer didn't even have to pay for our ticket. Yeah, thankfully we were speaking, so we got free tickets in there. But normally the kind of tickets that we were granted would cost. I think you told me $3,000.

00:29:02:04 - 00:29:04:00
Bennett Tomlin
Yeah, I think that's what it was for the purposes.

00:29:04:10 - 00:29:16:23
Cas Piancey
So it's not cheap. Let me put it that way. This event is not cheap to get into. I think you're right in the idea. Like the badges where I was like, Wow, these people are awkward and this is sad if you're you're.

00:29:16:23 - 00:29:22:13
Bennett Tomlin
Hoping to get some contacts. Their cars are listeners don't necessarily know why the badges were said.

00:29:23:16 - 00:29:56:07
Cas Piancey
Yeah well I mean to me there's a it's just this like bright pink badge that you're wearing while walking around in public that was screaming, Look, I'm at a cryptocurrency conference. I'm, I'm, I'm one of the cool kids. I don't know. It just was incredibly sad to me. But I'm going to caveat this with if you were there to network, like you said, and you know, if you're paying $3,000 or 1500 dollars or $2,000 or whatever it costs, you know, to go there, I guess you better be networking because that's expensive.

00:29:57:07 - 00:30:30:01
Cas Piancey
Then you know, I guess I get it. I still think it's a little unforgivable, forgivable, but whatever. And I'm just commenting on some of the basic stuff here really quick, which is, yeah, getting kind of I fucked as soon as you walked into the convention center, um, by all of the booths. That made no sense. I mean, most of the stuff was stuff that we probably hadn't even heard of, but then there was always stuff like, you know, Tron, Dao and Circle and you name it.

00:30:30:01 - 00:30:31:08
Cas Piancey
It was probably there. Well.

00:30:32:13 - 00:30:54:29
Bennett Tomlin
And again, some of these booths were like, explicitly deceptive. I tweeted about, Oh yeah, where they said, like they had this chart that had them appearing to have like 80% of the spot volume of Binance, when in actuality they have like 12% of the spot volume of Binance. Right. But they couldn't show that on the graph because it would look bad.

00:30:54:29 - 00:31:01:29
Bennett Tomlin
So their bar instead looks basically the same as Binance is. And that's that's a massive exchange. That's just fucking lying.

00:31:02:03 - 00:31:11:24
Cas Piancey
Deceiving, I don't know, because they were they were honest on the graph. It was just deceitful chart making. It was chart crimes. It was not not necessarily that they lied.

00:31:12:17 - 00:31:17:03
Bennett Tomlin
But it was $2,000 for the pro, not three. I was off.

00:31:17:12 - 00:31:42:09
Cas Piancey
Okay. $2,000. Still. I mean, $2,000 is a very expensive ticket. And, you know, we didn't have to pay for that. So I assume that skews our perspective a bit. Yeah, It's just wandering into the convention hall was kind of a trip, especially for us being no corners and having very little like, you know, there was a booth for bullish in a booth for new lending platforms and NFT related stuff.

00:31:42:16 - 00:32:00:21
Cas Piancey
We just I mean, I didn't go up to a single booth and ask questions or do like I don't know if you did, but I like that was not something I took in. Yeah, that was not something I partook in. Maybe that would be worth it if I went back again to like kind of push and see what what these people are saying about their stuff on the CME that.

00:32:00:21 - 00:32:01:12
Bennett Tomlin
Maybe.

00:32:01:16 - 00:32:02:00
Cas Piancey
That was like.

00:32:02:04 - 00:32:02:26
Bennett Tomlin
What are the odds.

00:32:02:26 - 00:32:03:19
Cas Piancey
That interesting.

00:32:03:27 - 00:32:09:28
Bennett Tomlin
Yeah, but like, what are the odds that the people working the booth are people who are going to be able to answer the type of questions we're going to have?

00:32:10:03 - 00:32:19:15
Cas Piancey
I mean, that might be part of the reason to ask, right? I don't know. But anyway, we didn't do that the second the day I arrived. Um, second day for Bennett

00:32:20:22 - 00:32:22:04
Bennett Tomlin
Third day for the convention.

00:32:22:17 - 00:32:45:08
Cas Piancey
And third day for the convention. Um, the last day for the convention, I, we, we, the first thing we went to was a, uh, a thing hosted by Yat Siu and Anand God I'm gonna fuck this up. I'm so sorry, Anand for for screwing your last name of Venketaswaran.

00:32:45:19 - 00:33:13:16
Cas Piancey
Uh, and Yat Siu who is an NFT guy. He founded and is the CEO of Animoca Brands, which is like one of the largest NFT related companies in the cryptocurrency industry. Most people I know have not heard of it. They do. They, they were they like they did the sandbox and they were investors in Decentraland and I don't know you name you name a cryptocurrency related project.

00:33:13:16 - 00:33:44:19
Cas Piancey
They probably have invested Bennett and I know about them because they were listed on the Australian Stock Exchange and then you got delisted because they didn't provide the proper paperwork and since then their brand has only grown in value and it's just kind of other otherworldly and unbelievable. But anyway, we went to this talk with these two guys and, you know, I don't mean to be rude and I know this is going to sound fucked up, but it was just completely vapid.

00:33:44:20 - 00:34:02:23
Cas Piancey
It was absolutely just the most vapid discussion I've ever heard. And that was my introduction to Consensus was like these two guys who were supposed to be some of the richest people involved with Nfts, and they were saying nothing for a half hour. They said, Yeah.

00:34:03:06 - 00:34:31:05
Bennett Tomlin
Like the the name of the session was Who are you in Web3 exploring tokenized identity and the thesis initially presented during this and I'm doing my very best to like Steel man, man. What they were trying to say here is that the power of tokenized pseudonyms is that you can wear it like an exo suit and then later someone else can wear it, you can sell it and someone else can borrow the beneficial aspects of that identity.

00:34:31:16 - 00:34:57:27
Bennett Tomlin
But Anand, when he was talking about it because he used to be troubadours.eth, him and Metakovan were the two who bought beeple's $69 million nft he was talking about how he hasn't. Like he no longer uses that troubadour identity and it's supposedly for sale, but he really is it ready to part with it. He grew attached to his identity because of course he fucking did.

00:34:57:27 - 00:35:20:09
Bennett Tomlin
That's what an identity is. You dumb motherfuckers like the idea of putting enough of yourself into an identity that people like connect to and relate to. And then thinking you can just sell that to another person and that the identity will persist and that that will be a good transaction for everyone involved is something I can't wrap my head around.

00:35:20:14 - 00:35:24:13
Bennett Tomlin
And like, even during the course of it, they never really strongly supported that.

00:35:24:13 - 00:35:34:18
Cas Piancey
Yeah, I do want to. Yeah, I like I might as well get into some of the details of this one because then I think we can just skip the other stupid ones that we that we heard. For the most part. I don't think I think.

00:35:34:18 - 00:35:37:03
Bennett Tomlin
We should talk briefly about the CFTC.

00:35:37:09 - 00:36:07:27
Cas Piancey
No, no. I want to talk about some of the better ones that I got. You talk about. But I don't we don't need to touch on any other stupid ones because I think that this kind of sums up the bad ones in like in perfection and in some of the stuff I remember hearing and I wrote this down, they brought up they brought up Harry Potter as an example of like and as an example of a movie, not of a book, guys, as as an example of a movie where no one remembers the person who played Harry Potter, but they all remember Harry Potter.

00:36:07:28 - 00:36:26:19
Cas Piancey
Buddy, I hate to break it to you, everybody remembers who played Harry Potter. It was Daniel Radcliffe like he is one of the most famous actors of our generation. Now, you know that like, it's a very, very odd suggestion, but okay, it was also a book first. So I don't know. I don't know what we're talking about here.

00:36:26:19 - 00:36:55:05
Cas Piancey
Like you're talking about the separation of identity between Harry Potter and Daniel Radcliffe. Harry Potter was a fictional character invented by J.K. Rowling. So I like very odd comparison there. And the other Iron Man. Yeah, the other comparison by Anand was was with Iron Man and Robert Downey Jr and how oh, Robert Downey Jr is Iron Man and he can't separate from his This is actually making the opposite point which was that Robert Downey Jr can't separate from the Iron Man identity.

00:36:55:05 - 00:37:14:00
Cas Piancey
An Iron Man can separate from Robert Downey Jr. But then again, yeah, Iron Man existed like 50 years before Robert Downey Jr played him so very odd. Again, like just really strange suggestions didn't make any sense. And then they just did more and more of this. Quoting Hamlet.

00:37:15:26 - 00:37:37:10
Bennett Tomlin
One of my favorite was the wedding Rings. When. Yeah. Oh Yat Siu Said that NFTs or like profile pics in some of these tokenized identity markers are like wedding rings because they become part of your identity. He wasn't wearing a wedding ring just as an aside, and he said that you wouldn't buy a second hand wedding ring and you wouldn't sell your wedding ring.

00:37:37:15 - 00:37:46:29
Bennett Tomlin
And I just need to say I messed up because I bought my wife's diamond on consignment. And apparently, according to Sue, who wasn't wearing a wedding ring, I'm not allowed to do that.

00:37:47:13 - 00:37:57:23
Cas Piancey
Yeah, Yeah, it's bad luck, according to him or something. And. And you can't sell them, even though obviously there's a market for wedding rings. So I like and again.

00:37:58:02 - 00:38:09:25
Bennett Tomlin
It's not a particularly great market, right. Like often what you can actually get for a diamond will be far less than what it's appraised for. But that's because it's an illiquid specialty. Market like NFT is you motherfuckers.

00:38:10:10 - 00:38:33:04
Cas Piancey
Yeah. Which they also that was the only point they kept. They, they kept without really giving any reason why they kept suggesting that illiquidity was great and that you don't need liquidity for these markets. I mean, okay, I don't know what to say about that. And then my favorite quote from that was culture is the biggest tvl of any economy and sorry for anyone who's under total value locked of any economy.

00:38:34:04 - 00:38:34:25
Bennett Tomlin
I forgot that.

00:38:34:25 - 00:38:48:15
Cas Piancey
What are you. What the fuck are you talking like? I just don't even know how to respond to that kind of shit. So we're just going to move right past it anyway. Yeah. One of the worst talks I heard for sure. And I. And I hope everyone else in the in the audience at the time felt the same way.

00:38:48:15 - 00:38:51:17
Cas Piancey
But I'm not sure. I don't I don't think they necessarily did also.

00:38:51:20 - 00:39:02:23
Bennett Tomlin
But based on the number of hands that went up when they asked how many of you own multiple profile picture Nfts, I think that crowd might have felt differently than we did about some of that. Guests.

00:39:02:29 - 00:39:14:11
Cas Piancey
Sure, sure. And then in between the other one that we went to, there was a bow tied. Was it was that the one with bow tie? Oh, whatever that was booted bull. Somebody said.

00:39:14:12 - 00:39:14:29
Bennett Tomlin
We only saw.

00:39:14:29 - 00:39:15:15
Cas Piancey
Something along.

00:39:15:15 - 00:39:17:02
Bennett Tomlin
A couple of minutes of that, but.

00:39:17:26 - 00:39:32:20
Cas Piancey
Yeah, that guy was talking about building an island. And then the moderator talked about just moving between Canada and the U.S. to avoid taxes. Totally unhinged, weird shit. But let's get to the good one now. So our buddy Nick.

00:39:32:22 - 00:39:54:28
Bennett Tomlin
Can we talk about. Sorry, sorry, sorry, sorry. Before you get to the good one, we need to be a little more specific about this tax trick. The moderator for this session at Consensus is standing up on stage, says, I have this great tax trick. I live in the border of Canada in the United States, and I make sure to spend less than six months in either country.

00:39:55:02 - 00:40:07:27
Bennett Tomlin
And that way I owe taxes to no one. And sir, I'm not a lawyer. I'm certainly not a tax lawyer. But I have to tell you, I think both the United States and Canada are going to disagree with you on that.

00:40:08:25 - 00:40:39:08
Cas Piancey
Yeah, he owes a lot of taxes. He owes a lot. But whatever, man, he'll figure that out in due time on his own. Let's get to the the more interesting discussions that were had. So our boy, Nick, over at CoinDesk, who we've had on here before, I think we had him on to talk about like doing good journalism in cryptocurrency and how, you know, how difficult it can be the, you know, the accusations that can't being just being a CoinDesk, it gets you as a journalist.

00:40:39:08 - 00:40:50:16
Cas Piancey
I think we talked about that, some of that stuff with him, but he got to interview Christy Goldsmith Romero from the CFTC, and I wrote down some quotes, But why don't you go ahead and get us started?

00:40:50:18 - 00:41:25:03
Bennett Tomlin
I'm right about a lot of things a lot of the time. And Christy Romero helped back that up. Like I suggested earlier last year, that at some point exchanges were basically going to start blocking deposits from mixers. And one of the first things that Christy talked about was how regulated entities need to distance themselves from mixers, then added, It's a national security risk to not be able to verify, like the identity in the chain through it, and that these exchanges and these regulators have a national security interest in making sure they're distant from these mixers.

00:41:25:25 - 00:41:48:00
Bennett Tomlin
And what's wild is she pushed this through the discussion about Defi as well. So when they started talking about Defi in the debate, contracts like that, there was the same recommendation that these protocols should not be allowing things associated with mixers. And there was even kind of the implication that these protocols have a responsibility to know who is using them.

00:41:48:13 - 00:41:54:21
Bennett Tomlin
So it seems like at least one commissioner at the CFTC thinks Defi should be doing KYC.

00:41:54:28 - 00:42:16:00
Cas Piancey
She specifically said, Because I have some good quotes from her, she specifically said that financial privacy is good, but it's not the same as anonymity, which I thought was like a really interesting point to make. Like she she makes a good point. I don't know how you solve for that in in the dystopian future that we are quickly quickly approaching but is a really interesting and and I think true statement.

00:42:16:00 - 00:42:16:29
Cas Piancey
She's right you know.

00:42:18:27 - 00:42:21:19
Bennett Tomlin
I'm not sure she is I think she's not.

00:42:21:20 - 00:42:48:09
Cas Piancey
Realizing data anonymizing data is different than doing KYC or AML. And I think that that's essentially the point that she's trying to make. I don't know, maybe maybe I'm speaking too much for her. I don't know. But like, as I look through her comments here, you know, like, they're not they're just not that silly, like enforcement proof. So following all the laws like that is a pretty damn solid statement of fact, right?

00:42:48:09 - 00:43:10:00
Cas Piancey
Enforcement proof does not mean like, oh, we're going to make it so that that SCC and the CFTC, you'll never know who did this I like whether the next Satoshi Nakamoto like good fucking luck dude you're probably not the next Satoshi Nakamoto and like that. The best advice you could possibly give as a regulator is to say, like, if you don't want us to come down on you, make sure you got your I's and cross your TS.

00:43:10:00 - 00:43:18:26
Cas Piancey
It's reasonable. Almost everything is commodity. It can be a security to a lot of these things are going to be securities. I just I heard a lot of stuff that was very reasonable and rational.

00:43:18:27 - 00:43:43:01
Bennett Tomlin
Yeah. So yes, the the enforcement proof actually was a specific reference to a specific CFTC case we've talked about on here B0 x slash Ooki DAO because in some of their internal communications, when they were preparing to hand over the busy X protocol to what was originally in the busy DAO leader Yuki Doh was that this will make US enforcement proof.

00:43:43:10 - 00:44:21:06
Bennett Tomlin
In the CFTC press release when this came out was like look at this isn't enforcement proof and none of this is in in the discussion surrounding Ooki DAO there were some interesting comments made. She talked about how it will come down to the markers of decentralization, but then added even if it's like fully decentralized, where perhaps the individual members can't be held accountable, the CFTC will still attempt to hold the organization accountable, which I thought was an interesting comment, and then added that these defi protocols need to register if they're doing activity that requires registration.

00:44:21:21 - 00:44:43:11
Bennett Tomlin
And so like this, in combination with the comments around privacy and anonymity in Defi makes me think that her conception of Defi is not really defi right. Like what the CFTC is imagining here is privacy in the sense of like a bank offers you financial privacy. They don't share your transactions with most people, but when the government transactions they could effortlessly get them.

00:44:43:20 - 00:44:48:25
Bennett Tomlin
So you're not anonymous, but you're relatively private. I think that's the standard she was reaching for.

00:44:49:02 - 00:45:08:17
Cas Piancey
But I think that she maybe yeah, again, maybe I'm putting too much emphasis on what I think she was trying to emphasize. But I do think she was mostly talking about centralized actors exchanges. We're talking about lenders exchanges like people spinning up their own cryptocurrencies and doing ICOs and, you know, or Daos doing it under the umbrella of a corporation.

00:45:08:17 - 00:45:19:23
Cas Piancey
Like at some point, these people have to acknowledge like they are not sufficiently decentralized at all and then something is going to happen. Regulators will do something that they absolutely will.

00:45:19:27 - 00:45:46:15
Bennett Tomlin
Yeah, and we've talked about this a little bit on here before it like Inner Ooki DAO episode I was referring to before. But like these cases have a serious implication for many daos and especially their governance token holders, because in the case of Ooki DAO, they held it as an unincorporated association and each of the governance members participate since were potentially liable for the actions of the DAO even if they voted against the law breaking action.

00:45:46:15 - 00:46:20:11
Bennett Tomlin
Right. That was the thrust of the CFTC case against Ooki DAO and their version of holding the organization accountable. There was also a class action lawsuit against Ooki DAO in California and recently a judge there held all governance token holders potentially liable for the actions of the organization, even if they did not participate in voting. So if you have the token, even if you never voted or even if you vote against lawbreaking, you can still be liable for the lawbreaker thing that occurs.

00:46:20:22 - 00:46:39:03
Bennett Tomlin
And so if those cases end up being seen through to the end, the implications are unlike token based governance and daos is massive and to my impression, almost entirely unappreciated by people who participate in daos or hold governance tokens.

00:46:39:09 - 00:47:23:13
Cas Piancey
I think that's that's right. Yeah. The the last one I want to personally discuss and, you know, feel free to to bring one up after this. I went to a talk called Turf War, CFTC versus the SEC. I apologize. I got the name wrong earlier. It's Dan Berkovitz, not Horowitz. Dan Berkovitz, who has worked for the CFTC in the SEC, Brian Quintenez who worked for the CFTC and now is the one of the, I don't know, general counsel for A16Z, and then Ryan Van Grech, who is a I don't know, like a securities related executive at Citadel.

00:47:24:03 - 00:47:50:29
Cas Piancey
I went in thinking that it was just going to be a bunch of people talking about how regulators have been doing this entirely wrong. But I think I was surprised in a really nice way. For once. Brian Quaintance did the classic like A16z bullshit. He was very much driving the narrative that there's no clarity, only enforcement and and that this would ultimately hurt so many businesses.

00:47:50:29 - 00:48:11:08
Cas Piancey
One of his examples was if ether is a security than the futures contracts trading on the CME are illegal. The SEC is not forthright in what the law is. That got applause. But then thankfully, what I appreciated was that Birk Berkovitz Dan Berkovitz said until the SEC says ether is a security, it's legal for it to be traded on the CME.

00:48:11:14 - 00:48:34:10
Cas Piancey
And then Ryan Ryan van Brack came in and said until the SEC officially weighs in, it's a commodity. So it was like you had this you had this guy at A16z trying to spin this narrative that like the SEC isn't doing their job, they're failing miserably. And then you had both people who had worked with the SEC, worked with the CFTC or for this boat.

00:48:34:13 - 00:48:58:18
Cas Piancey
Both of those are government agencies saying like, dude, that is not true. Like they're not going to get hurt if this changes. They're just going to have to change their product, like they're going to have to change things, register things differently, and do things differently. It's not like they're doing anything illegal right now, and I appreciated that. Dan Berkovitz also said the legislative solution won't solve securities laws.

00:48:58:18 - 00:49:09:06
Cas Piancey
The agency's role has been consistent across administrations. It isn't Partizan, which I thought was interesting. I guess I don't know you, and I think Jay Clayton appeared to not do much.

00:49:09:12 - 00:49:35:10
Bennett Tomlin
I had the feeling they both say, listen, listen, saying any part of the executive branch that is led by someone who is politically appointed is nonpartisan is fucking stupid. Of course it's fucking partizan. Of course it's fucking political. They're politically appointed and they depend on their political patrons in order to maintain their positions. Of course it's partizan.

00:49:35:17 - 00:50:09:08
Cas Piancey
I guess part of why he's saying that is because is because if I look at this, he got appointed by Donald Trump to serve as commissioner of the CFTC in 2018, and then he announced he would serve as general counsel for the SEC in October of 2021. So he's working for these two different administrations, and it doesn't seem to him, I am sure it doesn't seem to be a partizan issue, because clearly he's able to work for both parties.

00:50:09:13 - 00:50:30:08
Cas Piancey
I mean, good for him. I don't think you're right. That's like generally not the case, but okay. And then I think one of the other huge things that was said during that talk that I think people might want to give some thought to, was that Van Gregg said we're going to be seeing an additional wave of enforcement actions, more meaningful enforcement actions.

00:50:30:08 - 00:50:52:08
Cas Piancey
Legislation isn't close to being materialized. There isn't a lot of oxygen in the air to compel a legislative solution. So now through 2023 will be enforcement actions dictating the narrative. I thought that was very interesting. And if he's right, bummer. You know, bummer for a bunch of a bunch of people launching their their cryptocurrency stuff right now because they might be getting in trouble.

00:50:52:26 - 00:50:56:29
Cas Piancey
And so, yeah, that was the last one I went to. Is there any more that you wanted to go into?

00:50:57:01 - 00:51:15:09
Bennett Tomlin
No, I mean, right after that bold type bull when you were talking about you and I both thought about sitting through yachts who have animoca brands. Oh, and just for anyone who's fans of some of my videos and the general Fridge best invested in Animoca brands, that'll be a fun fact for the future.

00:51:15:09 - 00:51:25:17
Cas Piancey
Temasek So did Temasek. Yes, real like just some Temasek is the Singapore like one of the national I don't know what to call it. National Venture Funds.

00:51:27:15 - 00:51:29:14
Bennett Tomlin
So Sovereign wealth fund.

00:51:29:21 - 00:51:37:29
Cas Piancey
Sovereign wealth funds that Fred, is a bad investor, but like maybe Animoca clearly is wooing a lot of people. I don't I don't know anymore.

00:51:38:07 - 00:52:10:23
Bennett Tomlin
Oh, no, sure. I'm I'm just shilling my videos. Yeah. The other session that I thought about going to was where is Web three headed? Which featured yacht Sue again. But I sat there for like 2 minutes and he started making almost the exact same points word for word as he did in the tokenized identity session. And so then I stood up, walked away, and found someone I enjoyed talking to, to talk to for the next 45 minutes, because that was better than sitting in the session.

00:52:11:15 - 00:52:23:02
Cas Piancey
Yeah. And around this hour I do want to say that we got to hang out with some really awesome, wonderful individuals. We spent time with David Z Morris who moderated a panel we were on that was really wonderful. Our panelists.

00:52:23:03 - 00:52:24:23
Bennett Tomlin
It was Young's son, wasn't it?

00:52:24:26 - 00:52:45:02
Cas Piancey
Yes. A former employee for Terra Luna. We had a blast talking to him and opening his eyes up to the corrupt corruption and gross nature of American politics. He was having his mind melted. It was great. We got to hang out with Nik We got to hang out with Leo Schwartz from Fortune. We got to hang out with David Yaffe-Bellany from The New York Times.

00:52:46:01 - 00:53:07:27
Cas Piancey
I got to spend time some some time with James Seyfarrt over at Bloomberg, Bloomberg. We got to hang out with a bunch of journalists and cool people who we brb from cryptocurrency Twitter. We we had we had a good time. We got to spend a lot of good, nice moments with people we liked. So the conference had that going for it and I and I liked that about it.

00:53:09:02 - 00:53:28:23
Cas Piancey
Yeah. The final thing I want to add, we're closing in on an hour here, so I want to get this out of the way quickly. I also attended another separate conference hosted by Offshore Alert, which is if you're unfamiliar with it, I recommend everybody check it out. It's a really great service. Offshore alert dot com. We'll put it in our description of the episode.

00:53:29:23 - 00:53:54:19
Cas Piancey
David Marchant runs it. He's an English dude who lives out in I don't know if it's the BVI or where in the Caribbean, but he basically is constantly monitoring Caribbean corporate corporate stuff, legal action, exit scams, all sorts of stuff. He's keeping a pulse on the Caribbean because that's where a lot of this corporate malfeasance goes on. And he did a conference in Miami this this year.

00:53:54:19 - 00:54:17:12
Cas Piancey
And I got invited again to speak, which was lovely. I was sitting on a panel with Dirty Bubble Media and I'd been folding from The Wall Street Journal, from The Wall Street Journal. And yeah, again, I got to meet some wonderful people and sit through some crazy interesting talks. I'm one of the ones that I hope I can get a chance to delve into deeper that I thought was fascinating.

00:54:17:12 - 00:54:40:14
Cas Piancey
And if any of it pans out the way they think it will is going to be a wake up call for cryptocurrency enthusiasts. I'm not sure I buy into it, but it was interesting to hear there were all these asset recovery folks, lawyers etc. And I raised my hand and I asked them a question because their talk was about how about asset recovery in cryptocurrency?

00:54:40:14 - 00:55:15:07
Cas Piancey
And and one of the things they were saying was that it eventually will be cheaper and more efficient than traditional asset recovery. And so I kind of wanted to push back on that. I wasn't sure about it. And I said, how about like, how can you make that? How can you make that assumption when when there are so many examples of asset recovery taking a long, insane amount of time and people still not getting their assets back and oftentimes the assets being like gone forever, i.e. if we look at Mt. Gox, like they pushed back and said, well, the assets are worth far more than they were at the time of the loss.

00:55:15:07 - 00:55:18:26
Cas Piancey
And I'm like, okay, like that's pure luck. But okay, what?

00:55:19:02 - 00:55:23:12
Bennett Tomlin
Not to nominated against what? Not nominated again. Jack Quinn still.

00:55:23:12 - 00:55:48:03
Cas Piancey
Lost a bunch of their money, though, right? Exactly. So there was Mt. Gox. And then I brought up Quadriga six, which I don't know if anyone if they listened to our Quadriga episode or if they're familiar with Quadriga Cryptocurrency Exchange based out of Canada. The founder died in India under strange, mysterious circumstances. But outside of that, his exchange was insolvent before he died.

00:55:48:12 - 00:56:07:27
Cas Piancey
And the reason part of the reason it was insolvent was because he had sent 60,000 a theory. I believe it was 60,000, Ethereum to the wrong address and yeah, that kind of cost him everything. And those those will never be you can't get those Ethereum back. That's what I was saying. I was like, those are theorem are gone forever.

00:56:08:02 - 00:56:35:27
Cas Piancey
And the asset recovery lawyers were like, Well, that's just not true. And I was like, Well, how do you mean that's not true? Like it's sent to the wrong address. How could you possibly get it back? How are you going to you're going to wake up the address. There's now like, what are you talking about? And they were like, Well, no, you just compel the government to force the node operators to move to make sure that those assets are essentially sent back to where they're supposed to be and handed it out to the people they're supposed to be handed out to.

00:56:36:05 - 00:56:54:28
Cas Piancey
I mean, look, if the government can compel every node operator of every cryptocurrency to do their will, you know, like I'm I'm going to be fascinated if that if that's something that happens, it kind of destroys the entire use case for cryptocurrency.

00:56:54:28 - 00:57:25:02
Bennett Tomlin
So do you guess do you remember our episode Stablecoins will fork you chained if they went to fork or my article got them for working stablecoins because like basically what they're proposing is effectively a DAO level of hard fork each and every time they need to recover these assets. Right. And my thesis in that episode, this is back in like the thirties or something like that was that it's actually easier to force a hard fought now because you don't pressure the node operators.

00:57:25:19 - 00:57:47:12
Bennett Tomlin
What you do is you press your circle and you tell circle you need to move to this new version of the chain. This is the version of the chain that you will recognize. And on this version of the chain, we made this change. And then the other node operators need to follow circle because circle is so important to the ecosystem built on top of a theory.

00:57:47:25 - 00:58:03:11
Bennett Tomlin
Circle collateralize is Makerdao's Circle is built into so many protocols. That is, that circle is basically the deciding factor in a fork. And so but I don't think they can compel every node operator but circles the U.S. domiciled company.

00:58:03:20 - 00:58:22:26
Cas Piancey
Sure circles the exception to the rule here. And I think what you're suggesting would ultimately we would see the same kind of thing that we see with cryptocurrency exchanges when they have to enforce rules finally. Right. Which is not that like, oh, well, now, now all the exchanges are following the rules. Awesome. No, of course not, dude. Everybody flees.

00:58:22:26 - 00:58:51:00
Cas Piancey
BitMEX When BitMEX has to institute KYC and everyone flees Bitfinex when Bitfinex starts instituting KYC, AML Binance was so afraid to institute KYC AML properly, they lied on these emails. They're like, We don't want our customers to just leave. So I, like you can see how this plays out. And I think that like, yeah, you can compel Circle to do it, but then you just have tether getting stronger and stronger and stronger, don't you?

00:58:51:21 - 00:59:01:19
Cas Piancey
And you're going to have some other operator that's going to if tether starts to obey the rules, then you're going to have some other stablecoin come in that's going to be willing to bend and break them. I mean. Well, all right.

00:59:01:24 - 00:59:03:08
Bennett Tomlin
Really, I think you are fundamentally.

00:59:03:08 - 00:59:03:16
Cas Piancey
Fixing.

00:59:03:16 - 00:59:25:29
Bennett Tomlin
That. Fundamentally, what I think this leads to is the conclusion that stablecoins fundamentally undermine the censorship resistance of any chain they're on. And since censorship resistance is the fundamental value add for cryptocurrency is that if your chain has stablecoins on it, it is worse than it would be otherwise.

00:59:26:15 - 00:59:46:26
Cas Piancey
Yeah, I think that's probably an opinion I've felt about cryptocurrency. I do think that Stablecoins from the very beginning have introduced an unnecessary risk to the entire cryptocurrency industry and I'm, I'm much more keen to, uh, to see them disappear for the most part. I know you're going to have people trying to use them and they're going to continue to exist no matter what.

00:59:46:26 - 00:59:55:06
Cas Piancey
But I do think that the industry would be better off without them, and that's fine. That's just my opinion. Well, it doesn't really matter, but.

00:59:55:06 - 01:00:09:11
Bennett Tomlin
That is except for the that is except for Cas coin cash. If you have a chain out there and you want to make your chain better. Cas Coin cash is the way to do it. That's the one fully legit in censorship resistant Stablecoin.

01:00:09:17 - 01:00:21:23
Cas Piancey
It's an algorithmic stablecoin though. I mean. Cas Coin cash only the only way. Cas coin cash operates is because it's collateralized with Cas Coin and the Oracle system that we have, uh, called, uh.

01:00:22:05 - 01:00:30:04
Bennett Tomlin
Tasker Well, and sometimes, sometimes we have to call up, jump to help us out, but they'll always help us out. So that's not a big deal.

01:00:30:04 - 01:00:48:08
Cas Piancey
I mean, they help everybody out. So and, you know, while we did lose one of our major backers who's now under house arrest and fortunately, we don't have to get into the details about that. Cas coin is been fine. Like we I don't even think the price and I do think the illiquidity I think illiquidity is a good thing.

01:00:48:08 - 01:01:01:13
Cas Piancey
And that's part of why Cas Coin has done so, so well. Despite the crypto winter. And yeah, next year, not only are we going to be a Consensus, I think I think Cas Coin is probably going to end up sponsoring the whole entire thing if we can.

01:01:01:23 - 01:01:06:05
Bennett Tomlin
Well, we'll be one of the, we'll be one of those top sponsors like Justin Sun was this year.

01:01:06:11 - 01:01:24:14
Cas Piancey
Yeah. Albeit the sponsor. The sponsor staged the entire conference anyway. Hey, I haven't said this in a while, you know, fucking like subscribe leave a review because without it, Cas coin fails. And if Cas coin fails, the future fails. I'd be future proof.

Crypto Critics' Corner

Episode 117 – Crypto Critics’ Corner Copes at CoinDesk Consensus Crypto Conference

Crypto Critics Cope at Consensus Conference – Crypto Critics' Corner

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Episode 117 – Crypto Critics’ Corner Copes at CoinDesk Consensus Crypto Conference

Crypto Critics Cope at Consensus Conference – Crypto Critics' Corner

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