Two giant river boys and their missing $1,000,000,000: the Winklevoss Twins (Feat. Ed Zitron) – Crypto Critics' Corner

Bennett Tomlin and Cas Piancey are joined by Ed Zitron to discuss how Tyler and Cameron Winklevoss portray themselves as the regulated alternative, but frequently flout the rules. Additional resources: Ed's newsletter about Gemini Earn Better Offline HTX is probably insolvent This episode was recorded on March 12th, 2024.

Cas Piancey and Bennett Tomlin are joined by Ed Zitron to discuss how Tyler and Cameron Winklevoss portray themselves as the regulated alternative, but frequently flout the rules.

This podcast was recorded on March 12th, 2024.

Where to find the podcast:

• Spotify
• Apple
• Google
• Overcast
• RSS Feed

Other episodes mentioned in this episode:

• Episode 112 – Toilet Apes and NFT Exploitation (feat. Ed Zitron)
• Episode 127 – Let’s talk about Number Go Up with Zeke Faux
• Episode 99 – Continuing Crypto Collapse (Recorded Live)
• Episode 71 – Terra, Luna, and Algorithmic Stablecoins
• Episode 72 – We Never Want to Discuss Terra and Luna Again…and yet
• Episode 78 – Pre-Philanthropic Billionaires and Bitcoin (Feat. Mario Gibney)
• Episode 126 – They May Be All-In, But We’re Out
• Ryan Breslow’s lending company also lied
• Ryan Breslow gave away his DAO to a fraudster
• Episode 145 – Read, Write, Own: Web3’s Broken Promises (feat. Molly White)
• Episode 104 – Did Satoshi run a drug cartel: The Paul Le Roux Story (feat. Evan Ratliff)
• Episode 147 – MONEY TIME: Deltec Bank moved customer funds from FTX to Alameda Research

Other resources mentioned in this episode:

• Ed’s newsletter about Gemini Earn
• Better Offline
• HTX is probably insolvent

Subscribe to get each episode delivered to your inbox:

Where to find Crypto Critics’ Corner:

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• Cas’ Twitter
• Bennett’s Newsletter
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English Transcript:

00:00:05:02 - 00:00:06:11
Cas Piancey
Welcome back, everyone. I

00:00:06:11 - 00:00:11:11
Cas Piancey
am Cas Piancey. I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. How are you today?

00:00:11:11 - 00:00:12:21
Bennett Tomlin
I'm doing well. How are you? Yes.

00:00:12:21 - 00:00:19:12
Cas Piancey
doing good. We're joined by a guest who's previously been on the show, one of our favorites, Ed Zitron. How are you doing today?

00:00:19:12 - 00:00:20:10
Ed Zitron
I'm doing great.

00:00:20:10 - 00:00:22:13
Ed Zitron
enjoying the other side. Metaverse.

00:00:22:13 - 00:00:34:21
Ed Zitron
I was so annoyed. I thought I'd be able to buy another day to go in, but I. I can't. I don't think my accountant would speak to me again if I bought a border app. Also, I don't want to buy a border app.

00:00:34:21 - 00:00:41:21
Cas Piancey
remember Zeke Fox by bought a board ape in his in his book and went to one of the

00:00:41:21 - 00:00:45:12
Cas Piancey
went to one of the parties and had a extraordinary time.

00:00:45:17 - 00:00:47:11
Cas Piancey
You know everyone should have a board

00:00:47:11 - 00:00:53:03
Bennett Tomlin
Well, 10,000 people. 10,000 people should have a board. And those are the only people on this planet who matter.

00:00:53:03 - 00:00:56:22
Cas Piancey
right. Everyone should have one. But you will buy a bored ape at the price you deserve.

00:00:56:22 - 00:01:00:23
Ed Zitron
As an avowed leftist, I believe the government should provide everyone with a border chip.

00:01:00:23 - 00:01:05:06
Cas Piancey
A board ape in every wallet.

00:01:05:06 - 00:01:08:09
Cas Piancey
we're not here to talk about bored apes, unfortunately. I mean, I

00:01:09:01 - 00:01:11:04
Bennett Tomlin
Just had to get in her cheap shots.

00:01:11:04 - 00:01:17:11
Cas Piancey
could just spend hours and hours talking about bored apes and UGA labs. But we're. We're here to talk about something.

00:01:17:11 - 00:01:19:22
Cas Piancey
God, something I call them something.

00:01:19:22 - 00:01:22:08
Ed Zitron
something, though, right? Yeah.

00:01:22:08 - 00:01:32:00
Cas Piancey
we're here to talk about a couple of individuals who surprisingly, Bennett and I have really spent almost no time talking about over the many years that we've been doing this podcast,

00:01:32:00 - 00:01:34:10
Cas Piancey
The Winkle VI, the Winklevoss twins,

00:01:34:10 - 00:01:37:10
Cas Piancey
Cameron and Tyler Winklevoss.

00:01:37:10 - 00:01:41:01
Cas Piancey
these lads who I assume most people are pretty familiar with them.

00:01:41:01 - 00:02:02:04
Cas Piancey
If you're not, I'll just quickly run through their their brief history here is that they went to Harvard, met Mark Zuckerberg, helped fund Facebook, sued Mark Zuckerberg, won in the lawsuit against Mark Zuckerberg, made most of their money from that lawsuit, founded a cryptocurrency exchange called Gemini.

00:02:02:04 - 00:02:21:12
Cas Piancey
After buying a lot of Bitcoin and have subsequently had a lot of problems. But I want I want ED to dive into that more than I just did. I think I just gave a real basic summary. Ed, can you can you talk about more of the problems, the recent issues for for the Winklevoss twins?

00:02:21:14 - 00:02:34:07
Ed Zitron
so the Dinklebrothers. So important detail is they got offered. I think they agreed to like a $40 million settlement with Mark Zuckerberg, which they then appealed and the court just went after. For God sake, just. Just. No,

00:02:34:07 - 00:02:39:23
Ed Zitron
just take the money. We don't want to talk about. It was like years of back and forth litigation.

00:02:40:04 - 00:02:56:00
Ed Zitron
And I think the appellate court just was like, I can't do any more. I can't hear you too well. Him or any of these people talk about take the money and leave. What they did after that was kind of depressing. It's actually made them a lot of money. They bought about 90,000 Bitcoin,

00:02:56:00 - 00:02:58:03
Ed Zitron
which is now worth billions of dollars, of course.

00:02:58:03 - 00:03:11:20
Ed Zitron
And he they they made a killing off of that. And what's interesting is when you dig into the press around how little journalism actually happened, there was one New York Times story and they were just like, they're making a venture capital fund or maybe an ETF

00:03:11:20 - 00:03:20:02
Ed Zitron
is like 2050, like it was a remarkably long time ago. They went and they looked there was New York Times articles like them.

00:03:20:04 - 00:03:26:17
Ed Zitron
They're making an ETF, we'll take them out of their word and they just never checked in again. So that never happened. And they founded what is now known as Gemini,

00:03:26:17 - 00:03:48:03
Bennett Tomlin
I just wanted to interject. And something that also happened kind of shortly after they started Gemini and when they were still working and getting that ETF approved is also the first time they ran afoul of the law, which is when Gemini had their earlier settlement with the CFTC over market manipulation because two executives of Gemini, who owned a massive amount of Bitcoin who were never named in the suit.

00:03:48:04 - 00:04:12:14
Bennett Tomlin
So we'll just have to guess which two executives of Gemini had enough bitcoin to do this were manipulating the volume of certain markets that they intended to be used as part of this eventual eventual ETF product. So they settled with the CFTC for that back in like 2017, 2018. It was years ago. But yeah, shortly after they founded Gemini as in pitched it as the most regulated cryptocurrency exchange.

00:04:12:15 - 00:04:15:20
Bennett Tomlin
They ended up having to settle with the CFTC for breaking the laws.

00:04:15:20 - 00:04:22:17
Ed Zitron
Which is not good. But nevertheless they were allowed to keep doing stuff with money which proves that the government is working perfectly.

00:04:22:19 - 00:04:32:20
Ed Zitron
So they found Gemini and then around 2020 towards the end of the pandemic these guys like, well we already have billions of dollars and we're already unfathomably rich.

00:04:32:20 - 00:04:42:13
Ed Zitron
What if we were more rich? So they founded something called Gemini Earn Gemini earn an interest bearing account. Now, you may think that, like language sounds a lot like a bank account.

00:04:42:13 - 00:04:43:10
Ed Zitron
And you'd be right.

00:04:43:10 - 00:04:56:13
Ed Zitron
these accounts, they said, were treated much like a regular bank account. They were risk risk adjusted. That they put them through a risk management framework. And they mentioned multiple institutional partners, plural.

00:04:56:13 - 00:05:11:07
Ed Zitron
That is a very important detail, plural. So some stuff happened and people put in billions of dollars flowed into Gemini, which is giving anywhere between like a 5 to 8, 10% of one point interest return per annum on your crypto.

00:05:11:09 - 00:05:25:23
Ed Zitron
Not a huge amount, definitely smaller than a lot of the dodgy ones you were like, okay. I mean little bit lower than trustworthy ones. Like Blockfi who was very trustworthy and nothing happened with them. Then some stuff happened in 2022,

00:05:25:23 - 00:05:33:05
Ed Zitron
2022 happened. There was the whole thing with terra luna, everything fell down there and the Winklevoss were very quiet at that time.

00:05:33:05 - 00:05:39:14
Ed Zitron
Nothing really going on. And then suddenly I'm with Sam Bankman-fried. And then around November 2022,

00:05:39:14 - 00:05:44:17
Ed Zitron
company called Genesis started to fall apart. Have you guys done anything on Genesis?

00:05:44:17 - 00:05:56:05
Bennett Tomlin
We talked about it a little bit during that November meltdown, just because it was one of several firms which were just all collapsing at that point because they had some exposure to massively fraudulent enterprises.

00:05:56:05 - 00:06:09:21
Ed Zitron
well, here's a fun story. So they're owned by a company called Digital Currency Group, and I'm going to truncate this story because it's quite multi-layered. As you both know, Digital Currency Group owns a number of companies grayscale Bitcoin Trust, which is a whole nother pain in the ass.

00:06:09:23 - 00:06:19:12
Ed Zitron
They own Genesis, which is a institutional lender. People lend their money. They lend money to other people supposedly trustworthy. And then, of course, Coindesk,

00:06:19:12 - 00:06:29:05
Ed Zitron
which is the publication that destroyed the crypto industry by covering it. God bless them. Ian Allison, the Goat. Nick Baker as well. Nick. They’re great. I like Coindesk actually,

00:06:29:05 - 00:06:38:15
Ed Zitron
then the Winklevoss, they put out an announcement saying that due to some issues with their institutional partners, they were pausing access to Gemini on that.

00:06:38:15 - 00:06:40:09
Ed Zitron
You could no longer withdraw your money

00:06:40:09 - 00:06:48:16
Ed Zitron
over the next course the next few months. It revealed that they had not got institutional partners, plural. They had one,

00:06:48:16 - 00:07:00:20
Ed Zitron
and that partner was Genesis. Now, where did Genesis keep their money? Where did they lend the most money to? Well, the answer is two great places. Number one, three Arrows Capital

00:07:00:20 - 00:07:02:00
Ed Zitron
and number two FTX.

00:07:02:05 - 00:07:27:13
Ed Zitron
So all of the money that Gemini had claimed was going in to institutional partners who had they would then get preferential interest rates on to loan out this money. Cool. Great. It's going to no it all went to Genesis It went to one place, one goddam place that then immediately spanked into the worst hedge fund ever, which then put it into FTX, which then put it into Terra Luna and everything collapsed that I'm not going over the Terra Luna thing.

00:07:27:18 - 00:07:28:21
Ed Zitron
Nevertheless,

00:07:28:21 - 00:07:55:16
Ed Zitron
over the next few months, there was the world's most pathetic slap fight between Barry Silbert, who owns Digital Currency Group, which owns Genesis, and he's a crook as well. And the Winklevoss and the Winklevoss is would post these like tiny font letters in images on Twitter that were just like impossible to read, but they'd be like, Yeah, single mothers have put their kids college funds in here and kids have put their bar mitzvah money in here.

00:07:55:18 - 00:08:08:07
Ed Zitron
And it was just really dramatic. And then skipping ahead a bit, New York attorney general did a lawsuit against the Winklevoss says and against Barry Silbert, DCG and Genesis and all this

00:08:08:07 - 00:08:21:21
Ed Zitron
and revealed a little detail which is since 2021 Gemini knew how risky Genesis was. They were like, yeah, they're on the Collateralized. In 2022, a member of Gemini's board said that compared them to Lehman Brothers

00:08:21:21 - 00:08:28:12
Ed Zitron
and in October 2020 to the Winklevoss has had a meeting very sober embarrassed Barry went yeah you can't withdraw the money and they're like Why?

00:08:28:12 - 00:08:32:22
Ed Zitron
And it goes, it will bankrupt it, the entirety of Genesis.

00:08:32:22 - 00:08:49:03
Ed Zitron
And they're like, okay. Now to be clear, they actually gave notice to Gemini. Genesis saying Gemini OWN is paused. We're not going to do this anymore. It took them till October 2022 to actually shut it down. Now, you would think when they paused

00:08:49:03 - 00:08:53:07
Ed Zitron
this program, they would stop sending money to Genesis.

00:08:53:07 - 00:09:17:06
Ed Zitron
That is not the case. They spent at least 11 million more dollars of customer funds while they were like, Yeah, this this company is just burning this cash. boy. Well, I wouldn't touch them, but we will keep sending you money for now and then to add a little bit of insult to injury, part of the collateral they got, say, in case Genesis lost all their money was actually in the grayscale Bitcoin trust.

00:09:17:06 - 00:09:20:06
Ed Zitron
They had a certain amount of shares that they took as collateral.

00:09:20:06 - 00:09:28:16
Ed Zitron
Gemini then sold all of these shares the second that they got them out of escrow because the agreement was defaulted on.

00:09:28:16 - 00:09:39:22
Ed Zitron
And then in bankruptcy court, the Genesis estate. And just to be clear, a bankruptcy court does not give a fuck about anyone. They're just like, we need the most money for the most senior creditors who, by the way, would be institutional partners way before Gemini owned customers.

00:09:40:04 - 00:09:44:01
Ed Zitron
And they went, Yeah, because you guys sold all that stock.

00:09:44:01 - 00:09:46:05
Ed Zitron
We don't actually owe you any of that money.

00:09:46:05 - 00:09:54:10
Ed Zitron
And also you flaunted very basic bankruptcy law, so you just lost your customers $500 million. It was a whole slap fight. But then

00:09:54:10 - 00:10:03:22
Ed Zitron
the Winklevoss announced an announcement with the way the New York Department of Financial Services saying we agreed to give $1.1 billion back to customers.

00:10:03:22 - 00:10:06:07
Ed Zitron
It's a good thing. It's actually really good news.

00:10:06:07 - 00:10:13:15
Ed Zitron
Few problems with it, a problems as I see it. They've agreed. But the bankruptcy courts for Genesis actually need to agree to this deal.

00:10:13:15 - 00:10:16:19
Ed Zitron
Also, it's unclear where these funds are coming from

00:10:16:19 - 00:10:23:05
Ed Zitron
because Genesis doesn't have $1.1 billion. All the Winklevoss is going to give up that money. Where is the cash come?

00:10:23:05 - 00:10:33:00
Ed Zitron
It's not coming from the estate. The estate does not have the money. But throughout this whole time, the big copper on this is the Winklevoss has publicly and repeatedly lied.

00:10:33:00 - 00:10:48:13
Ed Zitron
They misled their customers in this insane level, in this craven way. The NYAG lawsuit. And I really encourage anyone listening to this to actually go and read it is just time after time which just people internally at Gemini being like, yeah, Genesis is terrible.

00:10:48:13 - 00:10:59:21
Ed Zitron
We should not be putting money. This is insanely risky. And then maybe six months before everything fell down, one of the Winklevoss is go, Yeah, can someone give me a one pager? On whether Genesis is good or bad?

00:10:59:21 - 00:11:04:09
Ed Zitron
And they're like, We've been telling you, we've been telling you, man, this is a bad idea.

00:11:04:09 - 00:11:05:17
Cas Piancey
I just want to mention here,

00:11:05:17 - 00:11:11:02
Cas Piancey
you're talking about this in such a way that it just really harkens back to an episode that Ben and I did

00:11:11:02 - 00:11:28:01
Cas Piancey
Ben and I didn't ever do an episode that, for instance, explicitly talked about Genesis or DCG, But there's an episode featuring a gentleman that we spoke with once named Mario Gibney, and he was working with a Bitcoin lending company at the time.

00:11:28:01 - 00:11:30:21
Cas Piancey
And one of the questions I asked him during that interview was,

00:11:30:21 - 00:11:32:14
Cas Piancey
where does the yield come from?

00:11:32:14 - 00:11:35:04
Ed Zitron
Well, secret.

00:11:35:04 - 00:11:36:00
Ed Zitron
It's crime,

00:11:36:00 - 00:11:38:03
Cas Piancey
well, he goes, Well, so we lend it out

00:11:38:03 - 00:11:40:14
Cas Piancey
to trusted instant institutional

00:11:40:14 - 00:11:47:01
Cas Piancey
third parties who they capture that yield and pass it on to us, and then we pass it on to our customers.

00:11:47:01 - 00:11:49:23
Cas Piancey
And I go, okay, trusted institutions.

00:11:49:23 - 00:11:55:19
Cas Piancey
So where do they get the yield? And he was like, well, I mean, I don't

00:11:55:19 - 00:12:10:23
Cas Piancey
like, I don't work for them. I don't, I don't know. And so the answer for where does the yield come from that you're passing on to customers was, I don't know. And Genesis does it. And it was like, okay, Genesis says they do it, but how do they do it?

00:12:11:04 - 00:12:32:02
Cas Piancey
Why? Don't know. Well then, so they're just saying they do it and everyone just trust them because they're institutional investors. Like, sorry that this is the shit that I've heard for so long with so many of these things. It's something Bennett and I discuss regularly where people go, it's arbitrage, and you're supposed to just take that as an actual answer, like it means anything,

00:12:32:02 - 00:12:34:11
Ed Zitron
I mean, the arbitrage one wrongs

00:12:34:11 - 00:12:39:02
Ed Zitron
doesn't make any sense. It doesn't make any sense if you think about it for more than 2 seconds.

00:12:39:02 - 00:12:57:06
Cas Piancey
just is. I mean, the arbitrage just is it just exists and they take advantage of it. You're not you're not an institutional investor. You wouldn't get it. And and this is my thing where I reflect on my first question, I'm an idiot. And my first question was, where's the yield come from? And there was no answer.

00:12:57:06 - 00:13:19:20
Cas Piancey
And I think to myself, these people who are the most sophisticated investors in cryptocurrency, some of them, you know, we've talked about the all in podcast before, some of these people are the most sophisticated investors supposedly in the world, and they're not asking that fucking question. I'm sorry, but like, what in the fuck is happening? Like, I it's willful ignorance, right?

00:13:19:21 - 00:13:20:16
Cas Piancey
Like, it has to be

00:13:20:16 - 00:13:33:04
Ed Zitron
It is willful. I don't think that anyone, when they really thought about it. So in my early crypto days, when I was just investigating fucking around the stuff, you'd go on things and they'd be like, Where's this coming from?

00:13:33:04 - 00:13:34:19
Ed Zitron
They'd be like, we just create it

00:13:34:19 - 00:13:41:20
Ed Zitron
it's like they would be like, yeah, it's just generated from the contract and hopefully it won't get hopefully the price stays up like that.

00:13:41:20 - 00:13:46:20
Ed Zitron
I kind of respect as a degree of just like, yeah, it's, it's a scam just sorry.

00:13:46:20 - 00:13:59:21
Ed Zitron
I think the thing especially couldn't see this in the all import cost. Well that is the mistake. These aren't sophisticated investors. These are investors that have done well. Jason Calacanis doesn't know shit about fuck about where they, where the money comes from.

00:13:59:21 - 00:14:02:03
Ed Zitron
And the answer is other customers.

00:14:02:03 - 00:14:08:07
Ed Zitron
The yield is getting other people into the system could call it a scheme. I suppose

00:14:08:07 - 00:14:10:15
Bennett Tomlin
is a word, I think, for that type of scheme

00:14:10:15 - 00:14:26:07
Ed Zitron
But also with this it's insane. This was like a billion more than $1,000,000,000 of money and they threw it into the fire and it's not even like they threw it in then they were like, We trust Genesis and they misled us. No, it's just that repeatedly they're just like this.

00:14:26:07 - 00:14:43:08
Ed Zitron
It's probably really bad. I hope. I hope that this doesn't come back to bite us somehow. I hope it's okay. And it never was. It was always bad from the very beginning. The way Sue says that they knew from the beginning that they could barely cover their balances.

00:14:43:08 - 00:15:00:23
Bennett Tomlin
And part of what makes it so frustrating for me and what makes the winkle vay in general so frustrating for me is their entire pitch since founding Gemini, since founding this exchange that practically no one uses has been it's okay that no one uses us because we're taking regulation seriously.

00:15:01:03 - 00:15:20:22
Bennett Tomlin
We're taking our responsibilities seriously. And we want to be a serious place for serious people to trade serious assets. And meanwhile they're acting like a bunch of fools doing billions of dollars around the industry to Zhu Su and Sam Bankman-fried Right. Like, sure, they put an intermediary in before the money got to there. They made Barry Silbert check it around.

00:15:20:22 - 00:15:41:12
Bennett Tomlin
The industry said to them specifically, but they have entirely marketing themselves using this like very thin facade that still at times gets like believed in repeat it. Like when people are talking about Gemini products, they still tend to act as though Gemini is a more serious exchange than its competitors. And that's always frustrated me

00:15:41:12 - 00:15:44:18
Ed Zitron
I want to read you something here. So the resolution in this situation,

00:15:44:18 - 00:15:49:11
Ed Zitron
first thing I'm going to do is read you here, the statement from my DFS

00:15:49:11 - 00:15:58:12
Ed Zitron
Gemini failed to conduct due diligence to an unregulated third party later accused of massive fraud, harming earn customers who are suddenly unable to access their assets.

00:15:58:12 - 00:16:09:11
Ed Zitron
After Genesis Global Capital experienced financial meltdown, said Superintendent Dan Harris. That they might face today's settlement is a win for our customers who have a right to the assets they entrusted to Gemini

00:16:09:11 - 00:16:16:14
Ed Zitron
and just to be clear what Gemini said, this is how Gemini spend this. They said

00:16:16:14 - 00:16:29:14
Ed Zitron
today we shared with our news is that we have finally reached a settlement in principle with Genesis and other creditors in the Genesis bankruptcy that will, if approved by bankruptcy court, result in all earning users receiving hundred percent of their assets back, which is true, by the way.

00:16:29:16 - 00:16:47:06
Ed Zitron
And just to be clear, they then said we worked tirelessly over the past 15 months to advocate for own uses and seek the return of their assets and as responsible stewards of the crypto ecosystem. We know that our customers value the ability to hold their digital assets through the ups and downs of crypto market cycles,

00:16:47:06 - 00:16:51:23
Ed Zitron
and we recognize the hardship presented by this lengthy process and we're deeply appreciative of our customers.

00:16:51:23 - 00:17:19:06
Ed Zitron
Patience, motherfucker. You're not stewards of this industry. You are big and illegal criminals in a just society. You will be in jail. Yet the respectable stewards of this industry. What I like is that all the all the old were at the all time high. Right now all these guys are like, well, told you

00:17:19:06 - 00:17:30:21
Bennett Tomlin
Zach from Blockfi who recently got hired at some new real estate company, the former CEO of Blockfi is now doing something else and in his post announcing it, he's like, We add 100% recovery.

00:17:31:02 - 00:17:43:04
Bennett Tomlin
No, you fucking didn't. You converted cryptocurrency liabilities to cash liabilities at a time cryptocurrency like tripled since then. And so now you have like 33% recovery that looks like 100.

00:17:43:04 - 00:17:49:00
Cas Piancey
Right. This is the same people who say RTX is getting 100% back and it's like, sorry, that actually isn't how

00:17:49:00 - 00:17:51:01
Ed Zitron
But weirdly enough, Gemini did though,

00:17:51:01 - 00:17:55:14
Bennett Tomlin
yeah yeah. Gemini did with the well if the if the 1.1 comes through

00:17:55:14 - 00:18:02:08
Ed Zitron
if it comes through and I think it's likely to but we won't know for another week. And if it somehow doesn't

00:18:02:08 - 00:18:05:04
Ed Zitron
I just these fucking guys

00:18:05:04 - 00:18:13:15
Cas Piancey
fully expect the money to come through as well especially considering how many assets DCG had to sell off to make this like

00:18:13:15 - 00:18:24:18
Cas Piancey
a thing that they could do, including Coindesk, which I felt was really unfortunate. I continue to feel like it's really unfortunate and ultimately is sending Coindesk in the wrong direction.

00:18:24:18 - 00:18:32:00
Cas Piancey
I guess we'll see. But you know, it was it was Peter Thiel and his his friends buying up Coindesk, which is like,

00:18:32:00 - 00:18:36:08
Cas Piancey
it's hard to think that that's a good thing for cryptocurrency to have

00:18:36:08 - 00:18:41:18
Cas Piancey
not even arguably what is the number one most trusted name in cryptocurrency news

00:18:41:18 - 00:18:45:16
Cas Piancey
up until that moment got purchased by Peter Thiel and his friends.

00:18:45:16 - 00:18:48:03
Ed Zitron
I don't know if that's worse than Barry Silbert though.

00:18:48:03 - 00:18:56:01
Cas Piancey
I used to believe that as well. But I do actually think that just based on the people who I had spoken with back in the day at Coindesk,

00:18:56:01 - 00:19:04:11
Cas Piancey
that Barry Silbert pretty much kept his nose out of the journalism stuff, whereas based on Peter Thiel's history,

00:19:04:11 - 00:19:06:01
Cas Piancey
I guess I'll say in case

00:19:06:03 - 00:19:07:11
Ed Zitron
He loves journalism.

00:19:07:11 - 00:19:10:01
Cas Piancey
guess. Yeah, I'd call him the number one fan of journalists and honesty.

00:19:10:01 - 00:19:12:04
Cas Piancey
am concerned with all of that stuff.

00:19:12:04 - 00:19:16:03
Cas Piancey
I also think that it is

00:19:16:03 - 00:19:17:14
Cas Piancey
interesting to me

00:19:17:14 - 00:19:25:20
Cas Piancey
we were actually all talking about Billy McFarland in second chances before we jumped, jumped on and started recording.

00:19:26:01 - 00:19:26:14
Cas Piancey
But

00:19:26:14 - 00:19:28:10
Cas Piancey
here we are, we're talking about

00:19:28:10 - 00:19:38:20
Cas Piancey
the Winklevoss I and it's kind of astounding, right? Like how many times they've lost and yet they're still here, you know what I mean? Like, Mark Zuckerberg

00:19:38:20 - 00:19:51:12
Cas Piancey
really created Facebook and made them look silly, but they still made a lot of money from that lawsuit. And then they bought Bitcoin, which is not like people will say it's actually holding Bitcoin for that long is a sign of your dip.

00:19:51:12 - 00:19:53:16
Cas Piancey
It's like, no, they bought a speculative

00:19:53:16 - 00:19:59:12
Ed Zitron
They were able to not do anything. They were able to just sit because they had enough money. Otherwise,

00:19:59:12 - 00:20:05:17
Cas Piancey
And then they started an exchange that has been at points out nobody uses except for the Winklevoss

00:20:05:17 - 00:20:10:01
Ed Zitron
isn't that meant to be legit though? That's meant to be the legit one as well,

00:20:10:01 - 00:20:15:03
Cas Piancey
yeah, yeah, well it's meant to be the legit one because they do KYC,

00:20:15:03 - 00:20:16:13
Ed Zitron
right?

00:20:16:13 - 00:20:19:07
Cas Piancey
exchanges that does KYC and has a cash off ramp.

00:20:19:07 - 00:20:21:22
Cas Piancey
But like if no one's using it

00:20:21:22 - 00:20:38:17
Cas Piancey
and there's no liquidity, like Bennett has pointed out or like you're suggesting like how legitimate is that? If you have none of the liquidity and you're trading none of the Bitcoin and none of the cryptocurrencies really is that legitimate? Is this where the legitimate money like I don't understand that at all either,

00:20:38:17 - 00:20:41:12
Ed Zitron
So when you say nobody uses it, how do you judge them?

00:20:41:12 - 00:20:45:16
Bennett Tomlin
volume reported volume share of total like spot Bitcoin volume,

00:20:45:16 - 00:20:49:01
Bennett Tomlin
they massively lag even like Bitstamp.

00:20:49:01 - 00:20:52:03
Cas Piancey
nothing. Right? Like 191 million is nothing

00:20:52:03 - 00:20:55:07
Cas Piancey
in $1,000,000,000,000 asset class, right?

00:20:55:07 - 00:20:58:04
Cas Piancey
And if you look at and if you look at Binance, it's probably

00:20:58:04 - 00:21:00:21
Cas Piancey
hundreds of billions of dollars or something like that. Like

00:21:00:21 - 00:21:20:16
Ed Zitron
It's like $25 billion. But also the thing with that is can you really then again this I'm looking at Coingecko here and it's telling me that gate two dot IO and Kucoin are more trustworthy than Gemini and I'm just beginning to what they also claim Binance is ten out of ten and so is Bybit.

00:21:20:18 - 00:21:29:17
Ed Zitron
That's the trust score. It's a rating algorithm developed by COINGECKO to evaluate the legitimacy of exchange trading volume.

00:21:29:17 - 00:21:33:00
Ed Zitron
That's so cool. I love that. Just even today,

00:21:33:00 - 00:21:41:04
Ed Zitron
after everything that happened, it's same shit, same shit. actually, Gemini does not. Gemini has a nine out of ten.

00:21:41:04 - 00:21:46:05
Bennett Tomlin
Well see Gemini Gemini has actually had to settle for market manipulation before

00:21:46:05 - 00:21:48:20
Ed Zitron
and these guys don't settle for market manipulation.

00:21:48:22 - 00:21:50:02
Ed Zitron
It's a part of their life.

00:21:50:02 - 00:21:52:16
Bennett Tomlin
They strive for it.

00:21:52:16 - 00:21:53:23
Ed Zitron
part the product.

00:21:53:23 - 00:22:02:12
Cas Piancey
most of the exchanges they list are like I mean, I don't even know how. So like if I go, if I scroll way down or something to, I don't know,

00:22:02:12 - 00:22:08:19
Cas Piancey
Max may coin exchange or bullish for that matter, which is Peter Thiel owned.

00:22:08:19 - 00:22:26:02
Cas Piancey
No one knows what these are. They move no money whatsoever. I think their daily volume if I just yeah that's the monthly visits okay their monthly visits are 100,000 people or something. How in the world is that getting a seven out of ten. And if I if I see a seven out of ten, I'm thinking, well like that doesn't sound that bad.

00:22:26:02 - 00:22:27:03
Cas Piancey
That sounds fine, but

00:22:27:03 - 00:22:32:12
Bennett Tomlin
That's a C. C’s get degrees.

00:22:32:12 - 00:22:50:05
Ed Zitron
man, Crypto dot com is ten out of ten. Like, it's so cool, this industry so good and now it's back up again. These people are like, Yeah, this is the proof that this is legit, baby. Woo

00:22:50:05 - 00:23:03:02
Bennett Tomlin
and many of these individuals argue that they don't need a strong regulatory state because they are going to be capable of forming self-regulatory bodies and appropriately making sure that they like establish a level of trust in the industry.

00:23:03:06 - 00:23:05:08
Bennett Tomlin
You know, ten out of ten trust

00:23:05:08 - 00:23:07:08
Ed Zitron
Correct on all counts.

00:23:07:08 - 00:23:31:15
Cas Piancey
Benet, you're really going to love this one of their, their fifth, their fifth most trustworthy exchange. This is according to Coingecko is h t x the Justin Sun the Justin Sun purchased, I guess we'll say advised Justin Sun advised exchange that has been repeatedly hacked and had its own token go to like near zero because of the antics that Justin Sun has been doing.

00:23:31:15 - 00:23:34:17
Bennett Tomlin
Not to mention the probable insolvency.

00:23:35:00 - 00:23:36:14
Ed Zitron
Have they run that guy down.

00:23:36:14 - 00:23:37:11
Ed Zitron
Yeah.

00:23:37:11 - 00:23:39:19
Bennett Tomlin
No. Soon they'll probably,

00:23:39:19 - 00:23:50:05
Cas Piancey
I never got to the end of my question. So the end of my question was, we've seen we've seen these guys be unlucky repeatedly, unlucky and lucky repeatedly in terms of

00:23:50:05 - 00:23:51:09
Cas Piancey
staying

00:23:51:09 - 00:23:54:00
Cas Piancey
meaningfully solvent, I guess.

00:23:54:00 - 00:23:55:02
Cas Piancey
And I look at it

00:23:55:02 - 00:24:07:04
Cas Piancey
and I see the people left and it's like, yeah, we've got Justin Sun, we've got the Winklevoss twins, we've got Brian Armstrong, we've got like a handful of people

00:24:07:04 - 00:24:08:01
Cas Piancey
and

00:24:08:01 - 00:24:10:14
Cas Piancey
none of them are trustworthy.

00:24:10:16 - 00:24:14:23
Cas Piancey
None of them represent anything positive about this industry.

00:24:14:23 - 00:24:23:03
Cas Piancey
But then are they like untouchable and are they just going to like, do you see do you see a bad end for the Winklevoss at all? Or is this

00:24:23:03 - 00:24:24:03
Ed Zitron
No,

00:24:24:03 - 00:24:25:15
Cas Piancey
the. Yeah, they got the good ending

00:24:25:15 - 00:24:35:15
Ed Zitron
None of these people will ever see heaven, but they will certainly not see any kind of prison cell or real repercussions. They ended up paying $40 million for what they did.

00:24:35:15 - 00:24:39:01
Ed Zitron
However, to be clear, if they don't somehow get this deal through,

00:24:39:01 - 00:24:45:05
Ed Zitron
Amway, DFS will shut down their throat like they will M0. DFS is extremely aggressive when you don't work with them

00:24:45:05 - 00:24:46:12
Ed Zitron
and they will come down on them.

00:24:46:12 - 00:24:56:01
Ed Zitron
But no, none of these people get in any trouble. Brian Armstrong doesn't get in trouble, despite the fact that every time crypto hits a certain amount of money, coindesk's Coinbase even stops working.

00:24:56:01 - 00:25:01:12
Ed Zitron
That's one of my favorite things. Justin Sun What's happened with him? He's like an actual criminal

00:25:01:12 - 00:25:08:08
Ed Zitron
and he's just fine. No one's got him. Yeah, they got token because Token like very obviously did crimes.

00:25:08:10 - 00:25:23:22
Cas Piancey
Even that is crazy to me where it's like Doc Kwan is still in Montenegro and they're refusing to extradite him to the U.S. now, and he's going to get extradited to the to South Korea instead to the Republic of Korea instead. And like, okay, what, what does that mean for him?

00:25:23:22 - 00:25:30:19
Ed Zitron
is he a South Korean like, like his Is there a reason he. Okay so I actually don't know

00:25:30:19 - 00:25:38:18
Ed Zitron
how notable he is. It's in South Korea but if he is in any way and he did big illegal financial crimes, they may actually just make an example out of him.

00:25:38:18 - 00:25:39:20
Ed Zitron
That's what I hope.

00:25:39:20 - 00:25:43:08
Ed Zitron
I hope that happens. I hope these little creeps get it, but they won't.

00:25:43:08 - 00:25:51:21
Ed Zitron
Like this is the thing. This is why people are disenfranchized with the world. This is why I get cynical sometimes because the Winklevoss is knew from the beginning

00:25:51:21 - 00:25:57:19
Ed Zitron
and the way I so I hope continues but will probably get dismissed if they end up getting the money in there.

00:25:57:23 - 00:26:14:07
Ed Zitron
And the Winklevoss is in a stable real industry. Coinbase should have been like Brian Armstrong should have said what you did was disgraceful. They should have acted against them. There should have been a an industry wide spitting at the Winklevoss. What they did,

00:26:14:07 - 00:26:22:07
Ed Zitron
what they have done is worse than what Mark Zuckerberg did with Cambridge Analytica. Maybe a little more widespread, but at least on the level

00:26:22:07 - 00:26:27:21
Ed Zitron
Barry Silbert, same fucking deal he is the amount of shit that BCG in Genesis did.

00:26:27:21 - 00:26:41:01
Ed Zitron
They just burned money. They lended they loaned money from themselves to themselves. They gave a $1.1 billion promissory note from DCG to Genesis to cover up the budget shortfall. But they never sent any money.

00:26:41:01 - 00:26:46:09
Ed Zitron
They just used it as a way to lie on their balance statements. These people are crooks

00:26:46:09 - 00:26:50:02
Ed Zitron
and the crypto industry has nothing. And this is kind of standard for the tech industry.

00:26:50:02 - 00:27:09:00
Ed Zitron
Tech industry doesn't call out PayPal. Ryan Breslow from Bolt basically defrauded all of his investors. He lied about what Bolt could do. He lied about customers like, no, he he just got a negative Forbes article talking about how big a liar he is, which linked to the glossy Forbes story about his made up wellness company.

00:27:09:00 - 00:27:13:13
Ed Zitron
we are going to repeat these these things until worse happens and it will keep getting worse.

00:27:13:13 - 00:27:15:02
Ed Zitron
People will take the piss more.

00:27:15:02 - 00:27:36:18
Cas Piancey
Well as you, as you point, you're like, well why isn't Brian Armstrong or why aren't these other exchange owners and operators coming out against this horrible thing that they saw happen? And I just go, well, people in glass houses shouldn't throw stones, right? Like that's why they're not doing it. And it goes back to simple things like what you just mentioned, where it's like Coinbase went down twice in one week.

00:27:37:00 - 00:27:59:11
Cas Piancey
I can tell you if my brokerage account showed a zero in it, even just one time ever, I would immediately be looking for a new brokerage to put my money in because I'd be like, Why did my brokerage numbers say zero on it? That's mental. And like this happened twice in one week at Coinbase. How, how did that happen?

00:27:59:11 - 00:28:22:07
Cas Piancey
Not not only did the brokerage go down and you couldn't trade, which is crazy, but your brokerage account said zero. I mean, these are fatal flaws for most businesses that are in finance, and yet Coinbase chugs along, you know. No, no, fine for that. No. No issues, no like no regulators after them for something that I think is like, I mean, that's terrifying.

00:28:22:07 - 00:28:25:04
Cas Piancey
You could give someone an actual heart attack over that, right?

00:28:25:04 - 00:28:28:10
Ed Zitron
killed himself. A guy killed himself because of his Robinhood account,

00:28:28:10 - 00:28:34:14
Ed Zitron
because of the options he used, believing that he owed Robinhood like a couple hundred. Yeah,

00:28:34:14 - 00:28:55:15
Cas Piancey
that. I remember that. Yeah. But this is exactly what I'm talking about. Where, like, of course, Brian Armstrong isn't going to say anything. He doesn't want to. We saw what happened. We actually got a really good idea of what happens when an exchange owner talks shit about another exchange owner and cryptocurrency because Sam Bankman-fried is in jail now and Changpeng

00:28:55:15 - 00:29:02:22
Ed Zitron
I kind of love that. That was what It's very clear what brought him down was just him being a nasty little bitch.

00:29:02:22 - 00:29:04:09
Ed Zitron
They were all like.

00:29:04:11 - 00:29:16:13
Ed Zitron
There were like, arguing little madams being like, You can't say that to me in Telegram up because I'm going to get you arrested. I'm going to. I'm going to burn down the pocket. Watch me, watch me now. Ooh, watch.

00:29:16:13 - 00:29:21:13
Ed Zitron
I also think there is a simpler, more annoying answer, which is Brian Armstrong doesn't fucking care.

00:29:21:13 - 00:29:28:03
Ed Zitron
He doesn't care. He doesn't care that they did that. Even if Coinbase is on the up and up, he doesn't give a shit.

00:29:28:03 - 00:29:39:15
Ed Zitron
If Gemini isn't, it doesn't benefit him to make Gemini look bad. He's not going to make any less money because of that. All it's going to do is send shocks through the industry, which would

00:29:39:15 - 00:29:46:21
Ed Zitron
hurt him in some way, despite him having sold enough Coinbase stock that he's now filthy rich so he can do nothing all day.

00:29:46:21 - 00:29:50:13
Ed Zitron
Miserable shithead Michael Stipe looking as fucking

00:29:50:13 - 00:29:59:13
Bennett Tomlin
you mentioned how there's kind of this broad disenchantment with the regulatory and law enforcement system in the way it engages with this type of problem because it it doesn't engage.

00:29:59:18 - 00:30:36:11
Bennett Tomlin
And the extent to which it will engage is a risk slap and move on. Right. And like the other thing I think we need to remember is Coinbase has been engaged in several important lawsuits with regulators for quite some time now. So they're also in a position where they don't want to attract any additional attention. And that's true for basically every exchange is under some kind of investigation or has been try to send out like a Freedom of Information Act request to any regulator about any cryptocurrency exchange, and you'll immediately get back to law enforcement exemption on it, because they're all under some kind of investigation.

00:30:36:13 - 00:30:52:03
Bennett Tomlin
And so none of them will say shit despite their stated gestures towards self-regulation, because all of them have or are accused or are being investigated for various untoward things they have done. It's a really great industry. Things work smoothly,

00:30:52:03 - 00:30:53:01
Bennett Tomlin
nothing better

00:30:53:01 - 00:30:57:17
Ed Zitron
But also, where is the media right now? Where is the media?

00:30:57:17 - 00:30:59:05
Bennett Tomlin
laid off.

00:30:59:05 - 00:31:12:23
Ed Zitron
What up? How much Bitcoin? $72,000 maybe. I don't know. But this bitcoin time I will say. I will say Kevin Bruce. I kind of have respect for Kevin Roose. So. Chris Dixon

00:31:12:23 - 00:31:18:02
Ed Zitron
big old bitch of Andreessen Horowitz. That's a style wrote my own.

00:31:18:02 - 00:31:33:23
Ed Zitron
He did not respond to my request to come on better offline. My podcast Cowardly acts. They scared of me, scared them all. Why you should buy Nevertheless he he went on the New York Times Hard Fork podcast and to to Kevin Bruce's

00:31:33:23 - 00:31:40:08
Ed Zitron
defense. He actually sat there and just roasted him and Casey knew and you bloody coward Kevin was cooking.

00:31:40:08 - 00:31:58:03
Ed Zitron
Chris Dixon He was cooking, he was roasting him. He was actually getting somewhere. He for the first time, someone got one of these creeps in a room which like, No, no, no, no. That's not what you said. Actually, what you said was this. And Casey was like, Well, well, well, we got to move on. I did need to find out what Mark Zuckerberg wants me to I mean, what Mark Zuckerberg said.

00:31:58:03 - 00:32:10:23
Ed Zitron
I don't think that people realize how disenfranchizing this is for regular people because people are not stupid. And I think that that's what's really getting me with this is I think sometimes the media either has no memory

00:32:10:23 - 00:32:12:14
Ed Zitron
or thinks people are dumb

00:32:12:14 - 00:32:16:21
Ed Zitron
because the the crypto people think people are dumb, but they've proven that dumb again.

00:32:16:21 - 00:32:35:07
Ed Zitron
They just lie. They lie again. Nothing happens to them. So they lie more. The media, however, has a chance here to say, Hey, this time back the fuck up. This is not the time to draw. Even if bitcoin is at 69 grand or what have you don't invest right now or even they don't even need to say don't invest.

00:32:35:07 - 00:32:50:17
Ed Zitron
Just say, be very careful. These are the forces at play. The same time, the same guy who said 2017 was market manipulation said that 2021 was market manipulation. I don't know. Every crypto article needs to have disclaimers now. They're on.

00:32:50:17 - 00:32:56:13
Ed Zitron
not a bloody want to be seen. It's like, it's a volatile asset. Well, ETFs are here, so now it's legitimate.

00:32:56:13 - 00:33:10:22
Ed Zitron
It's just it's disgraceful and also they built nothing. Nothing's happened. Where is the stuff? Where are the things? Where are the decentralized carpet stores Like where is the fucking Dukie? Dash is an iOS game now.

00:33:10:22 - 00:33:19:02
Ed Zitron
Dukie Dash, look at the others, the other side. Metaverse I'm sorry, I used to review massively multiplayer online RPGs.

00:33:19:02 - 00:33:22:01
Ed Zitron
I have seen so many of these games.

00:33:22:03 - 00:33:26:01
Ed Zitron
I was doing that in 2007, I think,

00:33:26:01 - 00:33:27:22
Ed Zitron
and this game looks like those

00:33:27:22 - 00:33:44:18
Ed Zitron
it looks worse than I'm thinking of like a 2007 monocle. Like tabula rasa. Tabula rasa. Look better than this. And this is a game released in 2007, 2008, and Ducks Dash and other side they released in 2023, 2024.

00:33:44:18 - 00:33:54:15
Ed Zitron
Where are the regulators where where's the any what like it's just so weird and I get that the government moves slowly but can they not see what's being done here?

00:33:54:15 - 00:33:56:13
Ed Zitron
Can they not see who's getting rich?

00:33:56:13 - 00:34:02:03
Cas Piancey
I do think that we've almost hit this point of no return.

00:34:02:03 - 00:34:19:18
Cas Piancey
so the reason that I bring that up though right, is that I think all of these tokens, these chains, these nfts, right. Even Nfts, if we have we use the example of there was that what was it called stoner cats or whatever like Mila Kunis and,

00:34:19:18 - 00:34:27:08
Cas Piancey
team of other idiots made me their NFT nft thing, but they got sued and they had to get rid of it right?

00:34:27:08 - 00:34:33:22
Cas Piancey
But like, okay, so you got the famous rich people and they paid their fine and they got rid of the NFT.

00:34:33:22 - 00:34:42:06
Cas Piancey
Okay, so now do like the 30,000 other NFT is like, what are you going to do? What are you going to go after all of those people like you're not we know you're not going to do that.

00:34:42:12 - 00:34:52:06
Cas Piancey
And at what point does it become this is like this is something Bennett and I have also discussed, where it's like when it's clear that the regulator has caught the top guy,

00:34:52:06 - 00:34:58:14
Cas Piancey
they need to stop being like, okay, well, we're going to give you a slap on the wrist and then we'll work with you to get these other smaller.

00:34:58:14 - 00:35:12:06
Cas Piancey
And it's like, Well, no, you got the top guy. What Are you doing why? Why are you trying to make this some like weird honeypot for normal retail investors? That's that's super strange. Why don't you just get the big guy

00:35:12:06 - 00:35:18:18
Ed Zitron
how will or how about when two giant riverboat boys

00:35:18:18 - 00:35:34:18
Ed Zitron
at the very least risked $1,000,000,000, proved complete recklessness and absolute lack of regard for due diligence for risk management? How about you say you can't do this job anymore?

00:35:34:18 - 00:35:38:07
Ed Zitron
We, as the New York Department of Financial Services,

00:35:38:07 - 00:35:54:09
Ed Zitron
do not allow you to touch money like this ever again. You must divest yourselves from Gemini, a company that we have as the mighty FS. We have said that you have done things to hurt the company because they stated that what they did affected the material health of Gemini

00:35:54:09 - 00:35:55:23
Ed Zitron
at this point.

00:35:56:01 - 00:35:56:21
Ed Zitron
But I'm out

00:35:56:21 - 00:35:59:06
Cas Piancey
here's just two here's two counters to this in that

00:35:59:06 - 00:36:02:02
Cas Piancey
Bennett feel free to push back on this on this kind of

00:36:02:02 - 00:36:14:14
Cas Piancey
imagined reality but I think the three most trusted American crypto currency exchanges in terms of like considered trustworthy would be Gemini, Coinbase and Kraken.

00:36:14:16 - 00:36:28:13
Cas Piancey
And if we look at these three exchanges, Coinbase, here's a fact that not everyone knows, but Coinbase actually custody a lot of their customer exchange, their customers funds and their own funds on Bitfinex when Bitfinex got hacked.

00:36:28:13 - 00:36:36:04
Cas Piancey
And so the only reason that they didn't get a haircut. So Bitfinex gave every customer a 33% haircut or something like that, 30

00:36:36:04 - 00:36:37:19
Bennett Tomlin
30.6.

00:36:43:21 - 00:36:47:04
Bennett Tomlin
Well, except for at least one customer,

00:36:47:04 - 00:37:01:03
Cas Piancey
Sorry, except for at least one customer. And that customer was Coinbase because Coinbase threatened to sue Bitfinex if they gave them a haircut. Right. So now you're now you're talking about this weird like why were you keeping customer funds on bitfinex at all?

00:37:01:03 - 00:37:07:17
Cas Piancey
That's crazy. You shouldn't be doing that. But then let's go to, for instance, Kraken, where

00:37:07:17 - 00:37:15:09
Cas Piancey
Jesse Powell, who is the CEO of Kraken, has openly discussed on Twitter X, whatever you want to call it,

00:37:15:09 - 00:37:26:18
Cas Piancey
He's openly discussed how he would utilize PayPal accounts and like other other like third party payment processors to run Kraken back in the day.

00:37:26:18 - 00:37:36:01
Cas Piancey
Like that's I mean, that's illegal. There's no way that that's a legal thing that you're doing that is unacceptable. He did it anyway. And so

00:37:36:01 - 00:37:39:03
Cas Piancey
not only are do I think you're right in that

00:37:39:03 - 00:37:40:22
Cas Piancey
none of these people care. And like

00:37:40:22 - 00:37:41:10
Ed Zitron
Yeah.

00:37:41:10 - 00:37:47:06
Cas Piancey
and Jesse and the Winklevoss, they don't care that this is not something that they do care about.

00:37:47:10 - 00:38:09:11
Cas Piancey
But if they did care or if they did want to say something about the other exchanges, they're already compromised. They've already openly shown that they are fallible to a an extreme and that they and that they've done some very illegal things. So like none of them could say something about each other even if they wanted to. And like, that's where we're at.

00:38:09:11 - 00:38:14:10
Cas Piancey
And I don't know, like, I don't think any of these exchanges are going away either, to be quite honest with you. You know,

00:38:14:10 - 00:38:17:14
Ed Zitron
Yeah. But I think it comes back to a basic thing of

00:38:17:14 - 00:38:32:10
Ed Zitron
why the folks can ban people from the financial services industry. They they have that power and they have the justification here that if the if the reason you ban people from a financial system is because they are dangerous to the system, these guys have been dangerous to the system.

00:38:32:10 - 00:38:36:22
Ed Zitron
They proven themselves bad with customer money. They they're dangerous to New York businesses,

00:38:37:03 - 00:38:45:23
Bennett Tomlin
I like D&O bans. I think D&O bands are a good idea for more of these regulation things and would at least make people feel like something happened after them.

00:38:45:23 - 00:38:49:10
Ed Zitron
it would give them a temporary ban

00:38:49:10 - 00:38:50:22
Bennett Tomlin
Yeah, five years, ten years.

00:38:50:22 - 00:39:03:05
Ed Zitron
Yeah but even a year bench them make them make it clear that the result of doing this isn't financial because right now $40 million the Winklevoss is what they have in the couch cushion

00:39:03:05 - 00:39:06:22
Ed Zitron
they don't give a shit that they and also by the way the Winklevoss just didn't pay that Gemini did

00:39:06:22 - 00:39:09:18
Bennett Tomlin
That's like that was like their prep school tuition back in the day.

00:39:09:18 - 00:39:13:04
Ed Zitron
that's how much they spend on beautiful handmade boats every week

00:39:13:04 - 00:39:15:01
Bennett Tomlin
that was their ivory tower tuition.

00:39:15:01 - 00:39:18:17
Ed Zitron
which is that an actual real tower that they had built of ivory.

00:39:19:10 - 00:39:23:12
Ed Zitron
it's just frustrating because there are mechanisms to fix this, there are things to do. But also

00:39:23:12 - 00:39:27:09
Ed Zitron
they more DFS negotiate with them, what they were like, Well, we won't quit, we won't get the money.

00:39:27:09 - 00:39:32:05
Ed Zitron
But fuck, you know, we like they can stop you, they can stop you,

00:39:32:05 - 00:39:50:05
Cas Piancey
it's crazy and it's crazy how how far this goes. Like, this is not a new problem, right? Like, I instantly as you mentioned this, I think of Milken. I think of Michael Milken, who in case anyone is unfamiliar, just I mean, I just I'm just going to call him a scam artist, but he's a fucking very, very rich scam artist.

00:39:50:11 - 00:40:02:10
Cas Piancey
And he did go to prison for his financial crimes, but it was for like a year or something. And then he came out and he could just go back into the financial sector, like,

00:40:02:10 - 00:40:08:10
Bennett Tomlin
and he has not shut up since then, claiming he wasn't actually guilty when he pled guilty.

00:40:08:10 - 00:40:14:16
Cas Piancey
so that's what I'm saying is like, instead of it, like, clearly prison actually wasn't enough, right?

00:40:14:18 - 00:40:23:00
Cas Piancey
It would have been enough is saying you you, your whole business model was ripping people off. You're banned from finance forever

00:40:23:00 - 00:40:37:06
Bennett Tomlin
Now, we should say I think he was partially banned. I think he did have a D&O ban from certain types of business. And so so he ended up coming back in as like a consultant where he was telling other people how to do it. He used to did. He just wasn't doing it. You know,

00:40:37:06 - 00:40:50:10
Cas Piancey
Yeah. Yeah. And now he runs the Milken Institute and he does all these other which are like pretty influential, you know what I mean? Like, these are influential think tanks and like, businesses that he's in charge of, and that's crazy.

00:40:50:14 - 00:41:02:17
Cas Piancey
And the system has been broken that it's just like shows it's not new. It is it's not even 20 or years old. It's probably been broken for 50 or 60 or 70. Like this is not a new thing that these guys,

00:41:02:17 - 00:41:07:04
Cas Piancey
everyone talks about them not getting prison sentences, but it's like exactly what you guys are talking about.

00:41:07:04 - 00:41:09:16
Cas Piancey
It shouldn't just be that like they should.

00:41:09:16 - 00:41:15:02
Ed Zitron
Prison doesn't work. Stopping them, being able to do stuff works. And

00:41:15:02 - 00:41:22:14
Ed Zitron
I to know they're like, we'll stop innovation in the space. Fuck you. What innovation? What has happened in crypto? I mean, in general

00:41:22:14 - 00:41:30:05
Bennett Tomlin
Gemini Dollar. Everyone remembers Gemini Dollar, right?

00:41:30:07 - 00:41:57:13
Bennett Tomlin
yes. It was their stablecoin that they were paying people to use, which meant it got like one firm took advantage of that and they took a bunch of their money and then ditched all the stablecoin in the know the stablecoin got redeemed. Did they really? no. We've been fooled. I think it was three AC in combination with Celsius.

00:41:57:16 - 00:41:58:20
Bennett Tomlin
It was doing that loop,

00:41:58:20 - 00:42:02:21
Ed Zitron
But at some point you have to wonder what's it going to take to make regulators do anything?

00:42:02:21 - 00:42:07:07
Ed Zitron
what's do we need a bigger, nastier FTA? Is that what's going to happen?

00:42:07:07 - 00:42:28:18
Bennett Tomlin
Cass and I've talked about this before, the regulatory state is gutted. Like you go back to the foundation of the SEC, right. And think about how bad things needed to get for the core investigation to even start for this kind of thing, to even have a chance of happening. And then you look at like the SEC structure and we're most often looking at them through the eyes of crypto because that's nominally what this podcast is about.

00:42:28:20 - 00:42:46:07
Bennett Tomlin
But like if you look at the SEC more like their ability to use their administrative courts is being actively diminished through some specifically targeted appeals, some of their ongoing rulemaking in regards to like their climate disclosures and other changes in disclosures are being tied up in Congress.

00:42:46:07 - 00:42:49:07
Bennett Tomlin
structurally the SEC is having these difficulties.

00:42:49:08 - 00:43:15:13
Bennett Tomlin
Well their funding has been flat or down and well, these cryptocurrency exchanges and these cryptocurrency businesses many of them but this does not apply to Gemini take more and more steps to try to make themselves resistant to the reach of the SEC to make it as inconvenient as possible for the SEC to go after them. Which is not to say the SEC cannot go after international firms, just that it's going to require a larger investment from the SEC.

00:43:15:14 - 00:43:37:13
Bennett Tomlin
And so like you have these combination of these structural issues that make the SEC worse which makes people perception of the SEC worse, which means the SEC gets less support, less political will to go after their projects and you end up in like this negative feedback cycle which eventually leads to an $18 Million fine for EOS, a whatever million fine for etc. down and down the line.

00:43:37:15 - 00:44:04:13
Bennett Tomlin
So you say are we going to need something bigger than FTX? I kind of think we will, and I kind of think it will need to be a US domiciled firm where they'll be able to do it relatively cleanly. Otherwise they're going to keep going for settlements and deferred prosecution agreement and things like that, that they can reliably get, they can get the payment and they can at the end of the year, say we closed this number of cases and got this amount of dollars, and that's big.

00:44:04:13 - 00:44:06:20
Ed Zitron
Very depressing. I don't know what else to say.

00:44:07:01 - 00:44:18:18
Ed Zitron
And I think the I don't think the Coinbase is the one that does it. I think they are as legit as one of these companies can be. I think they may just fall apart due to classic bad business problems.

00:44:18:18 - 00:44:20:10
Bennett Tomlin
Not earning enough money

00:44:20:10 - 00:44:22:17
Ed Zitron
not making more money than they spend

00:44:22:17 - 00:44:26:09
Ed Zitron
on their in insane. How is a casino that that expensive to run?

00:44:26:09 - 00:44:28:12
Ed Zitron
I don't know but Brian Armstrong got his

00:44:28:12 - 00:44:33:23
Bennett Tomlin
because they got to invest in like their NFT casino. They launch and then forget about and invest in like the

00:44:33:23 - 00:44:34:12
Ed Zitron
use that

00:44:34:12 - 00:44:49:20
Bennett Tomlin
which. Okay, this is not the point of this episode, but how did Coinbase like perhaps the best positioned company in America to launch an NFT marketplace? Like they have a captive audience, they have all these people with funds ready to deploy.

00:44:50:01 - 00:44:52:16
Bennett Tomlin
How could they not trade JPEGs? Well,

00:44:52:16 - 00:45:01:21
Ed Zitron
because I mean, the market manipulator machine didn't work so good. I like one actually buys NFT is like that's

00:45:01:21 - 00:45:12:20
Ed Zitron
none of this is real. And I, I think so if I had to sit here gun to my head, which I mean, very easy to think about when you talk about this stuff is

00:45:12:20 - 00:45:20:14
Ed Zitron
I think the thing that could actually really damage this is in the event that there is another massive, very quick crash and a lot of these ETFs get washed down.

00:45:20:14 - 00:45:23:13
Ed Zitron
I think if real institutional money gets burned here,

00:45:23:13 - 00:45:27:00
Ed Zitron
I think that there are going to be some consequences.

00:45:27:00 - 00:45:30:01
Cas Piancey
You just mean if they closed like if the ETFs closed down. Is

00:45:30:01 - 00:45:33:22
Ed Zitron
know if the ETF is just the people investing in the ETFs lose a shit ton of money

00:45:33:22 - 00:45:46:00
Ed Zitron
very suddenly. Yeah, but very suddenly if they get burned by the volatility, that probably won't be enough. Folks, trading has existed for years and has burned people multiple times

00:45:46:00 - 00:45:47:21
Ed Zitron
then is probably going to have to be another FTX.

00:45:48:02 - 00:45:51:19
Ed Zitron
It's probably just going to have to be something bigger, nastier, worse.

00:45:51:19 - 00:45:54:20
Cas Piancey
I will say this, I still think that

00:45:54:20 - 00:46:05:16
Cas Piancey
as much as I have a lot of issues, especially like pig butchering now and these other kind of scams that are going on in in cryptocurrency mainly, I think that's mainly where they're happening.

00:46:05:16 - 00:46:11:12
Cas Piancey
Of course these are happening outside of cryptocurrency as well. But I think that's we have some hard evidence that

00:46:11:12 - 00:46:19:10
Cas Piancey
the numbers in the report are a little seemingly exaggerated in my humble opinion. But still there's some crazy numbers that are

00:46:19:10 - 00:46:31:07
Cas Piancey
certainly happening getting scam wise in the industry. However, I will say that to this day, like I think the wakeup call for regulators won't be in FTX, you know what I mean?

00:46:31:07 - 00:46:48:20
Cas Piancey
Like, it's not going to be some crypto exchange that wakes regulators up to the needed changes in finance as a whole. It's going to be a bank failing. It's going to be a it's going to be one of the biggest. Like if Tesla goes to zero, maybe regulators will start going, we need to really ask some questions.

00:46:48:20 - 00:46:49:20
Cas Piancey
That's

00:46:49:20 - 00:46:51:19
Ed Zitron
But that won't change Crypto.

00:46:51:19 - 00:47:06:15
Cas Piancey
it will in that if these larger finance financial institutions get rung in and and have to like clean up the way that they behave, I think it will alter the way that

00:47:06:15 - 00:47:12:17
Cas Piancey
they interact with the cryptocurrency industry and that will have a

00:47:12:17 - 00:47:22:19
Cas Piancey
hindering effect on the ability for people to just put money in however however they want and send it to wherever they want.

00:47:22:21 - 00:47:25:16
Cas Piancey
And I and that could be a good thing actually, to like

00:47:25:16 - 00:47:42:06
Cas Piancey
have these institutions pay a little bit more attention to it. I think that regulators have been gutted, like Bennett said, and banks, for instance, community banks or or whatever, just kind of behave however they they feel like it and regulators catch up to them later on

00:47:42:06 - 00:47:47:08
Cas Piancey
and yeah, like you need a disaster for regulators to realize that is not an acceptable way to operate.

00:47:47:08 - 00:47:55:13
Ed Zitron
needs to be a bigger disaster than with crypto because I just don't think that stocks changing is going to affect crypto just because

00:47:55:13 - 00:48:03:00
Ed Zitron
these people barely talk to each other. The people who handle the stock part, like they just I just don't I don't see that I know what you're getting at.

00:48:03:00 - 00:48:15:12
Ed Zitron
And I think that I'm not saying what you're saying is impossible. I just think a bigger, more illegal, more stupid thing happen. Maybe it is Coinbase, maybe it is one of these companies. Maybe if Coinbase ended up being dodgy

00:48:15:12 - 00:48:19:12
Ed Zitron
and I'm not saying it is, but I'm also saying it acts in a way that certainly suggests that

00:48:19:12 - 00:48:20:04
Ed Zitron
all the time.

00:48:20:06 - 00:48:24:00
Ed Zitron
Like the fact it goes down every time there's too much traffic is really something.

00:48:24:00 - 00:48:26:13
Ed Zitron
I just think that there's a decent chance that

00:48:26:13 - 00:48:36:17
Ed Zitron
the only thing that will change anything is something bigger and worse. The fact that the Gemini owned thing was not big news is an indictment of the media

00:48:36:17 - 00:48:41:13
Ed Zitron
for fucking stop. I'm disgusted that more places were not like this is

00:48:41:13 - 00:48:43:19
Ed Zitron
amount of when I wrote that piece

00:48:43:19 - 00:48:45:02
Ed Zitron
the end of last year.

00:48:45:04 - 00:48:48:00
Ed Zitron
I was hailing this people like, Wow, I haven't heard about this. It's like,

00:48:48:00 - 00:48:57:16
Ed Zitron
why am I the guy? I have a day job, I'm doing stuff in the day. I have other things to work. I can't be the guy that tells people this. I have to happy to help my podcast, whatever. But

00:48:57:16 - 00:49:01:10
Ed Zitron
why am I the person? Why are the crypto people, why are the crypto people doing this?

00:49:01:10 - 00:49:04:12
Ed Zitron
And it's just weird. It's weird. Reading the crypto pub sometimes

00:49:04:12 - 00:49:15:07
Ed Zitron
is weird that these people incredulously say, Yeah, hell yeah, yeah, this is definitely for real. We're building software, right? When What software? How does it work? When does it work?

00:49:15:07 - 00:49:17:20
Ed Zitron
When will the when will the software do something?

00:49:17:20 - 00:49:21:08
Cas Piancey
casinos that go down when there's too much volume. So that's something right?

00:49:21:08 - 00:49:28:16
Ed Zitron
But also at this point, the other thing is, well, the SEC might be trying to do is just get Ethereum classed

00:49:28:16 - 00:49:42:11
Ed Zitron
That's a security that might actually be how they get rid of everything. And that has been hinted about in some of the ether ETFs. And I respect those guys for like trying to push that. They're like, Yeah, we'll do an ETF. If you do. If there's a scare, it gives a shit.

00:49:42:11 - 00:49:43:20
Ed Zitron
Who gives a fuck? Yeah,

00:49:43:20 - 00:49:47:16
Cas Piancey
grayscale has like opened up about ten different

00:49:47:16 - 00:49:53:00
Cas Piancey
trusts now for Yeah, for Ethe, for Solana, for

00:49:53:00 - 00:50:01:12
Cas Piancey
a bunch of these different cryptocurrencies. And I suspect that's exactly what you're saying, where the goal, the end goal for every single one of those trusts is to become an ETF

00:50:01:12 - 00:50:05:00
Ed Zitron
but if any of those get mocked, the security Coinbase, is that

00:50:05:00 - 00:50:05:05
Ed Zitron
what?

00:50:05:06 - 00:50:15:10
Ed Zitron
How the hell the hell can Coinbase operate going forward if any of those things get pose a security, their business model is dead. They will not be able to do it.

00:50:15:10 - 00:50:15:20
Bennett Tomlin
sure.

00:50:15:20 - 00:50:20:15
Bennett Tomlin
I think it is very unlikely that ether gets named. Security

00:50:20:15 - 00:50:27:05
Bennett Tomlin
Hinman's comments were unofficial, but they still put the S.E.C. in an awkward position and like the

00:50:27:05 - 00:50:45:15
Bennett Tomlin
filings for, like the ether, ETFs largely center around kind of similar arguments to the Bitcoin ETF, which is that there already exist these large markets overseen by the CFTC, be it like the CME trading of these assets and things like that.

00:50:45:17 - 00:50:46:12
Bennett Tomlin
And so

00:50:46:12 - 00:51:08:01
Bennett Tomlin
I think that ether is now the case the FCC wants to make because it would be the case they would have to make and every single crypto dollar would be against it. And crypto commissioners have previously kind of hinted that they weren't going to do that, but back in 2018 or whatever. So six years later, it makes it politically harder to go after something like that.

00:51:08:06 - 00:51:23:06
Bennett Tomlin
And so if you can't go after ether, they can continue to go after Coinbase as they are picking individual assets listed and things like that. But Coinbase can at least maintain likely, I think bitcoin and ether trading.

00:51:23:06 - 00:51:26:15
Ed Zitron
But just if they want, if they lose the RC 20 though

00:51:26:15 - 00:51:31:15
Ed Zitron
if like AMP or any of those gets mounts to a what happens then.

00:51:31:17 - 00:51:34:12
Ed Zitron
Like they can't they don't have the bitcoin pipeline.

00:51:34:12 - 00:51:37:02
Cas Piancey
will. That one asset class they'll take down, it doesn't mean

00:51:37:02 - 00:51:42:05
Ed Zitron
Yeah but no but they will they will get scared of others. If one gets knocked surely

00:51:42:05 - 00:51:52:17
Bennett Tomlin
Yeah, well, and there's objections to Coinbase's business model as it is doing all the coin peddling. They are right. They still struggle to consistently make more money than they spend.

00:51:52:17 - 00:51:53:18
Ed Zitron
Which is insane.

00:51:53:18 - 00:51:57:18
Bennett Tomlin
Coinbase as a business model is potentially at risk there. Sure.

00:51:57:18 - 00:52:00:05
Ed Zitron
also every crypto exchange in America will be.

00:52:00:05 - 00:52:03:17
Cas Piancey
sure, I, I, I also think it's really important, though, you know,

00:52:03:17 - 00:52:09:17
Cas Piancey
for what it's worth, Binance US, for instance, is like already saying that they've failed as a as a company.

00:52:09:17 - 00:52:11:11
Ed Zitron
Yeah, they are dead.

00:52:11:11 - 00:52:18:22
Cas Piancey
Yeah they're dead right Like you don't need you don't need regulators to necessarily cause these businesses to have to shut down.

00:52:18:22 - 00:52:23:19
Cas Piancey
And I also think it's worth saying that while certainly these

00:52:23:19 - 00:52:31:14
Cas Piancey
these exchanges have gone out of their way to walk this very fine gray line, right between black market and normal market,

00:52:31:14 - 00:52:42:15
Cas Piancey
but that regulatory arbitrage speaks to the poor job that regulators are doing as well and have doing for a significant amount of time. And you can look at a different industry.

00:52:42:15 - 00:52:50:04
Cas Piancey
You can look at something like like we've talked about Paul Le Roux with our buddy Evan Ratliff on this podcast before

00:52:50:04 - 00:53:08:07
Cas Piancey
he he was getting involved in online pharmaceuticals back in the early Internet days. And that wasn't illegal. Right. And that speaks to the problem that regulators had in catching up to the way people were doing business then and that they should have been pouncing on that and stopping it when Paul Le Roux was doing it.

00:53:08:12 - 00:53:12:11
Cas Piancey
But Paul La Rue was able to do it for years without any real consequences whatsoever,

00:53:12:11 - 00:53:31:07
Cas Piancey
and not least of which because he could say this is a gray area, I'm allowed to do it. And regulators were kind of like, yeah, well, I mean, he's right. So I think that this has long suffered from a lot of that as well, especially when they started Coinbase actually stayed away from a lot of these shit coins for a very long time while

00:53:31:07 - 00:53:33:02
Bennett Tomlin
until they went public,

00:53:33:02 - 00:53:34:07
Cas Piancey
until they got listed publicly.

00:53:34:07 - 00:53:34:17
Cas Piancey
That's right

00:53:34:17 - 00:53:36:01
Cas Piancey
Yes. Has it changed their

00:53:36:01 - 00:53:43:00
Cas Piancey
business model. I presume so. But also I think that it just shows the complete

00:53:43:00 - 00:53:50:20
Cas Piancey
knee bending and weakness of regulators and that that is that's the other half of this issue that needs to be solved for, you know.

00:53:50:20 - 00:53:56:11
Ed Zitron
I hate seeing these assholes win as well as just personally, I feel like these people are just out and out criminals.

00:53:56:13 - 00:54:14:05
Ed Zitron
And I think the what people don't realize is this will have a knock on effect on young people. Either they will become radicalized into believing that actually crime is good and that cheating is good and this is how you get ahead. Or they'll feel that the only way that people can do that is by cheating and just feel a Great Depression.

00:54:14:07 - 00:54:17:07
Ed Zitron
Great despondency. And I understand that. And

00:54:17:07 - 00:54:22:17
Ed Zitron
I don't think people realize how poignant that is. I think people are

00:54:22:17 - 00:54:33:11
Ed Zitron
perhaps not the guys in this call, perhaps not people who listen. But I think an alarming amount of people in society don't realize how depressing being a young person has become. I'm 37, so I guess you can't really call me young.

00:54:33:11 - 00:54:37:19
Ed Zitron
But people, my generation, people before that, generation after that as well.

00:54:37:19 - 00:54:49:15
Ed Zitron
it's because of this sense that the classical ways to accumulate wealth are gone. You can't just work a job, go. You can't go to college, work a job, buy a house. 2.4 children, and be happy.

00:54:49:15 - 00:54:58:23
Ed Zitron
Most people can't actually buy a house, for example. Most you can't just put money in for a1k and like you'll be okay at retirement anymore.

00:54:59:01 - 00:55:02:22
Ed Zitron
Most people are not able to accumulate wealth in any way

00:55:02:22 - 00:55:07:09
Ed Zitron
that matches a normal path, that matches a default path.

00:55:07:09 - 00:55:26:05
Cas Piancey
I'm not even sure the American dream that you just which which I I'm quite from like I remember hearing about it all the time and hearing my parents talk about the American dream and it being precisely what you just described. But I, you know, I don't think that that is necessarily the American anymore either, where I think it's like

00:55:26:05 - 00:55:30:09
Cas Piancey
I think the American dream for a lot of these people who are younger than me as well.

00:55:30:10 - 00:55:36:02
Cas Piancey
A lot younger than me as well from what I from what I see, it's I want to get hilariously rich.

00:55:36:02 - 00:55:45:21
Cas Piancey
There is no like there's no other parts of that. It's not like so that I can do this and so that I can do that and so I can build a family and own a home. It's like I need to make a ton of money.

00:55:45:23 - 00:55:52:12
Cas Piancey
I'll buy a bunch of cars, I'll buy a bunch of houses. But there's no like thought as to why you would want a bunch of cars or a bunch of houses or a bunch of whatever.

00:55:52:12 - 00:55:55:21
Bennett Tomlin
it's because they want to solve the existential risk of pandemics.

00:55:55:21 - 00:55:56:23
Cas Piancey
Right. Yeah.

00:55:56:23 - 00:55:59:12
Ed Zitron
would like to push back on that a little bit.

00:55:59:12 - 00:56:07:13
Ed Zitron
Not saying you're wrong, but I think there's a piece missing, which is I think before that there was a sense that a lot of young people just feel like they're surviving.

00:56:07:15 - 00:56:35:08
Ed Zitron
They're just like, I am just getting by. I like people who were in college when I was in college. That was like the end of any thought of a standard, like, I will buy a house and I will be happy. And I think as people as the standard system started to collapse around the financial crisis in 2008 and has basically the ability to get a mortgage became much, much, much harder because it became way too easy.

00:56:35:10 - 00:56:57:16
Ed Zitron
People then stopped college, started getting way more expensive and started being worth less. The calculations of college being worth it started to such a through New York Times podcast. Michael barbaro. Awful guy, but about how all of the calculations about why college is good failed to count how much college counts sorry costs. Even so, people are like, just all of the math is wrong.

00:56:57:16 - 00:56:59:13
Ed Zitron
They're college maybe isn't worth them.

00:56:59:13 - 00:57:02:08
Ed Zitron
And they're seeing the on ramps to adulthood and they're saying,

00:57:02:08 - 00:57:03:01
Ed Zitron
fuck,

00:57:03:01 - 00:57:16:15
Ed Zitron
I can't just work. And then they're seeing hustle culture, things like Gary Vaynerchuk and he's evil, deeply cruel, evil, noxious creature, horrible, manipulative narcissist, freak Gary Vaynerchuk.

00:57:16:15 - 00:57:23:21
Ed Zitron
the reason that that has taken hold and indeed things like Andrew Tate have taken hold, which is a cousin to that, is because

00:57:23:21 - 00:57:31:00
Ed Zitron
think about it, if I can't just do a job and get a house and have a nice life, of course I want to get hilariously rich.

00:57:31:02 - 00:57:43:21
Ed Zitron
Of course I want to hustle. And because if I have to grind, I'm not grinding for mediocrity, I'm grinding for it. All big cars, bunch of fucking staff. It's a nice lipstick thing. And you're right, People want it for no reason.

00:57:43:21 - 00:57:58:17
Cas Piancey
No, I agree. Yeah. See, this is where I do agree with you, but I think you need, you need like. Yeah, it's like, you can't get the things the way that you can't just get a factory job, work for ten years, put it, put your down payment on your house, have your wife and kid already get, you know.

00:57:58:17 - 00:58:23:13
Cas Piancey
Everybody is going to get a good education. And you're right, you can't get that anymore. It's pretty disheartening. And then you're right that on the other end of that, though, is that after disheartened by not being able to do that, it's like, okay, well, you better start Amazon Dropshipping and and you know, doing having 16 jobs and also list that you're an entrepreneur and a thought leader in your Twitter profile or whatever

00:58:23:13 - 00:58:25:14
Ed Zitron
Everything is a personal brand.

00:58:25:14 - 00:58:36:11
Bennett Tomlin
You got to have a podcast and a newsletter. If you digital ID, if

00:58:36:11 - 00:58:46:15
Ed Zitron
you're right, though. You're right, though. It is like you've got to have a podcast newsletter. You got to have a tick tock channel. You got to do all these things so that you can have a lifestyle that is comparable to your parents.

00:58:46:15 - 00:58:52:22
Ed Zitron
So of course people want this, but also all the hustle culture stuff is a convenient answer and it isn't true.

00:58:53:00 - 00:59:14:22
Ed Zitron
You can't do what Gary Vaynerchuk says, the Dropshipping stuff. You can't do that. It might work for a bit, but it's an incredibly unsustainable business that can drop and pop at random, go into crypto. Well, this guy made a bunch of money. Doesn't mean you will, but you can rationalize that it's all an outcrop of the same thing, which is people are desperate and the systems aren't working.

00:59:14:22 - 00:59:27:10
Ed Zitron
And hustle culture really is kind of horrifying to me. I haven't written about it in a while, but it's horrifying because it's really glorified a deeply dark part of society, which is you can't just work anymore. There is no

00:59:27:10 - 00:59:36:05
Ed Zitron
real honest living for a lot of people. You can't do that unless you just want to be renting for the rest of your life and probably staying in or around where you grew up.

00:59:36:05 - 00:59:58:08
Ed Zitron
There is no economic mobility for a lot of people. College is too expensive now. It's just too expensive and you basically need it for a lot of jobs. It's insane. So of course the hustle culture then of course Andrew Tate works, even though most of what he says, all of what he says frankly is just nonsense. And that which almost makes sense is just crap from others.

00:59:58:08 - 01:00:09:12
Ed Zitron
And then he adds a little bit of sexism, like this mindset bullshit that all of these guys fucking have, this manipulative stuff. It all comes down to they are con artists that realize the system have failed.

01:00:09:12 - 01:00:14:19
Ed Zitron
Crypto is an outgrowth of that. Decentralized money is as a concept, not evil,

01:00:14:19 - 01:00:18:19
Ed Zitron
but the way that it is executed. It has become evil.

01:00:18:21 - 01:00:24:14
Ed Zitron
Decentralized software is theoretically a good idea. Theoretically, but in execution. Really not

01:00:24:14 - 01:00:27:10
Cas Piancey
Well, it's just generally unnecessary for most

01:00:27:10 - 01:00:34:15
Ed Zitron
Yes, exactly. Like there's no fucking point of it. I can see the idea of a social network that is decentralized,

01:00:34:15 - 01:00:41:11
Ed Zitron
but Then again, how the hell do you actually do that? Is it decentralized?

01:00:41:11 - 01:00:57:09
Bennett Tomlin
not really, you can kind of federate the data storage, but the core relay functions and stuff are all still centralized and blue Sky Mastodon is a little bit more like Federated in a real way, but that causes then issues in like data portability and data reproduction instances.

01:00:57:13 - 01:01:07:21
Bennett Tomlin
It's really fucking hard to make like an actually decentralized system that both works and is actually decentralized, which is why they either don't work or aren't decentralized.

01:01:07:21 - 01:01:18:10
Cas Piancey
we consistently gotten some hate for this now and, and this is not us endorsing Bitcoin or anything like that. I am not I don't own any Bitcoin. I don't tell anyone to buy Bitcoin.

01:01:18:12 - 01:01:31:01
Cas Piancey
I am not calling it an investment. Like please don't take this the wrong way. But when we're talking about a decentralized network that operates the way that it designed to. Well, there you go. I mean that

01:01:31:01 - 01:01:31:20
Bennett Tomlin
Okay, Shield

01:01:31:20 - 01:01:39:05
Cas Piancey
Yeah, there we go. Right. I'm I'm now I'm now just the number one Bitcoin proponent but I like what what does it do?

01:01:39:06 - 01:02:03:18
Cas Piancey
Well it's a ledger, you know? It really isn't It's that's all it fucking is. It's a database where you can put shit into and not have it get changed. Likely. Right. And so like that is what it does and that's all it does and it works in that, in that sense. Okay fine. Like as you're saying, you want to build a social network, Will, now you've just made it infinitely more complex, right?

01:02:03:21 - 01:02:08:22
Cas Piancey
You want to you want to do a decentralized game. I don't know why, but now it's way more

01:02:08:22 - 01:02:12:13
Ed Zitron
that one. I have no idea. I have no goddamn idea.

01:02:12:13 - 01:02:28:16
Cas Piancey
don't you want to be able to port your Skyrim sword into GTA? Well, no, I don't, but okay. If you, if that's something that you think we need to have like you just made games way more complex for, for really very little value gain at all.

01:02:28:16 - 01:02:34:22
Cas Piancey
And so like for most things decentralization isn't just unnecessary, it actually is stupid

01:02:34:22 - 01:02:37:06
Cas Piancey
I think we're all in agreement there

01:02:37:06 - 01:02:54:16
Cas Piancey
all you have to do is look at the people you're attracting to the space to see. You know, it's not just the Winklevoss twins, it's not just Brian Armstrong. It's actual, just like retail level crooks and pig butchering like shit like that is what's driving

01:02:54:16 - 01:02:57:14
Cas Piancey
a lot of people into cryptocurrency in general.

01:02:57:14 - 01:03:02:17
Cas Piancey
And hopefully a lot of cryptocurrency advocates would actually agree with that statement, I guess. I don't know. But

01:03:02:17 - 01:03:18:07
Ed Zitron
they wouldn't. They would. They would go the route of the apologists and they would say these are the vast majority of users, the vast majority of users of crypto. They what I'm saying is they would lie and they would say the vast majority of crypto users believe in that centralized future.

01:03:18:07 - 01:03:33:05
Ed Zitron
No. And actually, I would respect a lot more of these people if they would just like, yep, we create a kind of volatile asset class that directly benefits us. It's kind of fucking sweet. I love getting rich. If they said that, I would at least be like, You know what? Respect to the scam,

01:03:33:05 - 01:03:35:13
Ed Zitron
respect to being like this shit rocks.

01:03:35:15 - 01:03:37:00
Ed Zitron
I mean, what Michael

01:03:37:00 - 01:03:40:05
Bennett Tomlin
that guy is a scumbag, but at least he's not lying.

01:03:40:05 - 01:03:43:13
Ed Zitron
Michael Saylor, he's he's a he a piece of shit

01:03:43:13 - 01:04:01:20
Ed Zitron
piece of fucking big, big Ronnie turd. But he just gets on, he talks to Katie Greifeld on Bloomberg every so often goes, I bought a bazillion bitcoin. I'm so rich Woo! And I think he's a scumbag. And then they just say he'd be begging for scraps, but at least he's not like, This is the future.

01:04:01:20 - 01:04:06:21
Ed Zitron
This is the future. No, he's just like, money, money, money, money. Now. Yum, yum, yum. Every

01:04:06:21 - 01:04:10:23
Bennett Tomlin
He he does try to say it's the future though.

01:04:10:23 - 01:04:27:19
Ed Zitron
Yeah. He just says in the vaguest way he's not fucking. I don't have to read a fucking. I don't get an email from KOIN, from Michael Saylor. Like there was Coinbase being like Please help me abuse this congressman who has suggested that we need to change crypto.

01:04:27:19 - 01:04:47:21
Ed Zitron
Please, please write your your congressman right now to say that crypto is actually good. No, Michael Saylor just goes on Bloomberg and says Bitcoin future Bitcoin money. Yum, yum, yum. And then disappears up his own Iyo every day. And that's it's not fine. He should not. That's the thing though I think that that that's what it really comes down to.

01:04:48:00 - 01:04:56:18
Ed Zitron
You're seeing the biggest piece of shit when you're seeing real nasty bitches when so much money in the most crooked way and it's just

01:04:56:18 - 01:05:01:06
Ed Zitron
this is what sucks. Like you should be able to just invent a new currency like this.

01:05:01:06 - 01:05:07:21
Cas Piancey
Well, I think like you should, but who the fuck? Why would anyone like why would anyone buy it? Right. Like under any

01:05:07:21 - 01:05:16:04
Ed Zitron
Okay, You should be able to invent it, but it should have to do something to versus if you if you do market manipulation.

01:05:16:04 - 01:05:26:08
Cas Piancey
you go to Disney World, right? Like you. That's fine, I guess, but like, it's also stupid. I, like everyone should acknowledge how stupid it is as well, unfortunately.

01:05:26:11 - 01:05:42:07
Cas Piancey
And as you're saying, a lot of people aren't even willing to go that far. But I also think it is exactly what you're talking about. And this is this is my thing that I've talked to Bennett about with like when when we were talking about FTX and SBF, it's well, yeah, should he go to jail for a really long time?

01:05:42:09 - 01:06:08:21
Cas Piancey
100%, yes. Also, is is it looking like CZ is going to get off with? Probably no jail time whatsoever? Yeah, that's crazy because CZ has definitely broken probably more rules and regulations and fucked with more of his customers money over a time period than SBF did. But like there will be no repercussions for that. And like, that's crazy to me.

01:06:08:23 - 01:06:19:21
Cas Piancey
That is crazy to me and it is crazy to me that that you said it's so funny. You said yum, yum, yum money. And I, I almost thought you were talking about someone else who's one of my favorite people in

01:06:20:10 - 01:06:22:10
Ed Zitron
yeah. The the

01:06:29:12 - 01:06:46:01
Ed Zitron
yes. This is like money time. Yeah. Honestly, if I was being sent hundreds of millions of dollars, I would be doing the same thing. But I would also never I would never text about it.

01:06:46:01 - 01:06:56:13
Cas Piancey
Exactly like this is and you work in a bank and this goes back to the very beginning of our conversation today where it's like these are the most sophisticated people with money. And you know what?

01:06:56:13 - 01:07:07:07
Cas Piancey
Yeah, exactly. They're not they're not the most sophisticated people. And it turns out that they're just like you and me and if not stupider, because you and me aren't going to write down yummy, yummy money time

01:07:07:23 - 01:07:11:03
Ed Zitron
Crime. I'll send that to wire fraud chat.

01:07:11:03 - 01:07:13:11
Cas Piancey
Yeah, crazy, crazy.

01:07:13:11 - 01:07:24:15
Cas Piancey
think we largely agreed on all this stuff today. before we let you go, and I think you should talk about your new podcast Better Offline.

01:07:24:15 - 01:07:41:23
Ed Zitron
Right. So toward the end of last year, I was approached by also media who do behind the bastards. It could happen here and never had politics and a bunch of other great podcasts and they they're part of iHeart Radio and they were like, we have read your newsletter, we like your newsletter, and we've been looking to do a weekly tech show.

01:07:41:23 - 01:08:04:21
Ed Zitron
And it was something like someone who is critical but doesn't just hate it with their entire soul. Robert was a little more eloquent than that. And so that's kind of what it's turned into. It's just the same thing I do with my newsletter, which is I am in business, in tech, and I also a writer. And so I put on a show every week where I go through stuff this week as a by the time this runs, it'll probably be out.

01:08:04:23 - 01:08:09:05
Ed Zitron
I talk with David Fahrenthold from the Times about the Elon Musk charity story.

01:08:09:05 - 01:08:22:03
Ed Zitron
I did the Winklevoss brothers week before the week before. That was the Metaverse, week before that was the Winklevoss things. And the big thing is, is it comes down to something that I think you've done very well with this podcast, which is people are not stupid.

01:08:22:05 - 01:08:38:02
Ed Zitron
A lot of tech stuff is written in such a way that it's meant to be. To your point you made earlier, where's the yield come from? These are actually very simple things that people can understand when these companies add up layers of obfuscation, and they're hoping that you never go that deep.

01:08:38:02 - 01:08:40:13
Ed Zitron
Something like the metaverse. Most people were like, What the hell was that?

01:08:40:13 - 01:08:41:19
Ed Zitron
And the answer was nothing.

01:08:41:19 - 01:08:51:03
Ed Zitron
It was nothing. It wasn't anything. Everyone light and just look, look at them. People do this in plain sight. A lot of A.I. stuff is just

01:08:51:03 - 01:09:02:19
Ed Zitron
buzz buzzwords. It's just sexy autocomplete. We know it. We're all seeing it. And I think that's something we better off. What I'm doing is trying to just break down stuff in a way that isn't condescending, but explain stuff.

01:09:03:00 - 01:09:09:19
Ed Zitron
Explain stuff that I don't believe is well explained, but also just gives people. It's straight from my opinion. I'm not pretending. It's like

01:09:09:19 - 01:09:23:07
Ed Zitron
I'm an academic or anything, but I generally have good good sources. I generally do my research and although it's been a lot of fun, people seem to like it. Certain Reddit's don't like me, but I mean that happens.

01:09:23:07 - 01:09:26:18
Bennett Tomlin
Occupational hazard.

01:09:26:18 - 01:09:38:12
Ed Zitron
I'm afraid. But now it's and I think it's something like I said, that you guys have done well it's just a lot of these things can be talked out in plain English in a way not. And I think that the fact that that's the case

01:09:38:12 - 01:09:41:17
Ed Zitron
is exactly why there's need for more of this kind of thing.

01:09:41:17 - 01:09:46:09
Ed Zitron
The fact that so many people obfuscate this stuff and it isn't just rewriting press releases,

01:09:46:09 - 01:09:53:04
Ed Zitron
it's what does this actually mean in English straight up and what are the ramifications of that?

01:09:53:04 - 01:09:58:04
Ed Zitron
I know it sounds stupid, an obvious thing for a podcast, but Jesus Christ, there's not many that do it.

01:09:58:04 - 01:10:01:08
Ed Zitron
Mostly just to boring white guys. No offense, guys.

01:10:01:08 - 01:10:19:23
Ed Zitron
I'm not referring to you who just like or in the case of Lex Fridman, one boring white guy and yeah, and just just grumbling and mumbling through tech and it's either completely bland or just the thing where it's like,

01:10:19:23 - 01:10:27:02
Ed Zitron
yes. So I was using Chat GPT the other day and I asked it to tell me what George Washington would look like if he was Chinese.

01:10:27:04 - 01:10:36:14
Ed Zitron
And I got very angry at my computer when he showed me. And it's just the same anti-woke this nonsense because a lot of the rich guys in tech are just very boring pieces of shit.

01:10:36:14 - 01:10:38:04
Ed Zitron
Anyway, listen to the show

01:10:38:04 - 01:10:42:12
Cas Piancey
On that note, also check out Ed's Where's your Ed at newsletter?

01:10:42:12 - 01:10:51:19
Cas Piancey
last one. Before we put this episode out, he wrote, Are we watching the Internet die? Went over the Reddit IPO and some other some other stuff.

01:10:52:00 - 01:11:14:18
Cas Piancey
But yeah, I urge for all of it. Yeah. Okay. So. So there you go. Yeah, that's I think that's going to do it for this episode. If you guys want to donate your cash coin to the Cast Coin Foundation, feel free to visit.

01:11:14:18 - 01:11:19:20
Cas Piancey
Make sure that you visit cas Coin Foundation dot org. We're trying to raise money for me