Who Is Bharat Ramamurti? | Alex Thorn & Nic Carter

Transcript

I think operation show point was a success as in it imposed a significant headwind on the industry uh the major Pro crypto Banks don't exist anymore right okay I can't underscore that enough right like silvergate no longer exists hey everyone this episode is brought to you by say after several months of effort say's V2 launch is live whoop let's go and introduce the first high performance parallelized BM to the world stay up to date by following say it's say that's SEI Network or you can experience the speed firsthand at say.

today thank you very much for being a partner to bcrb say all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the de now let's jump into the episode all right everyone welcome back to another episode of bell curve today I'm joined by Alex Thorne and Nick Carter fellas welcome to the show thank you yeah thanks Mike yeah uh pump to be here Nick this is the first time that uh

you and I have chatted actually post your uh very Victorious MMA debut so just want to say congratulations man when is when is the next fight taking place one and0 baby um the next fight is uh September 9th 19 in Singapore oh it's not MMA it's pure boxing this time I'm going to be there I'm going to be in Singapore then I got to go yeah come through Krypto Fight Night me versus hedg toog hedg hedgehog this is a nice time because you can say that you're actually undefeated as a fighter so that's got to feel pretty good and so it shall remain and so it shall remain you've also never you've never made it to uh like scoring right this was a KO yeah 100% undefeated 100% knockout record going to keep it that

way dude was there we got a lot to cover here we're going to be talking about operation joke Point 2.0 but was there a little part of you that was a little bit afraid going on that like if you had gotten knocked out that was a gift that was going to follow you around for the rest you were very active on Twitter you know yeah I wasn't afraid of like uh alre my opponent Cody I wasn't afraid of the violence of the fight I was afraid of embarrassing myself and the social implications of getting knocked out so yeah I knew if I did then people would clown on me forever so I was was locked in it adds a dimension of Bravery I'm not gonna lie so good for you dude there is a lot at stake um all right guys uh let's get

into it so Nick's Nick's fighting escapades aside I want to talk to you guys about operation chokepoint 2.0 and Alex you had a a thread that went pretty viral earlier this week I will say and I want to get into all of that but before we get into some of these new potential Pointes uh from the Cala or from the Harris Administration I actually want to rewind the clock a little bit back and Nick I think you were the first one to call out this operation choke point 2.0 um and so you you wrote something in Pirate wires I think of March of last year where you formally just kind of did some of the mapping that was going on behind the scenes so could you just kind of rewind the clock back uh for listeners who might not be familiar with operation choke point 1.0 and then 2.0

just give us the whole background here yeah so I mean look crypto people have had issues with banking forever that's why stable coins exist in the first place so it's always been tricky to have a bank account as crypto firm or individual it got much harder after the collapse of FTX and um we didn't know it at the time but it turns out it was an explicit Movement by the Biden Administration to uh choke out the crypto industry of course that it was a multi-pronged maneuver but one of the main things they did was signal to the financial Regulators the fed the FDIC and the OCC to encourage uh the banks to drop their crypto clients and uh this was a real

thing this happened uh the at the same time roughly speaking the major proc crypto Banks also went out of business uh which is related to it as well that wasn't just a coincidence uh and so chokepoint and I called this operation chokepoint 2.0 that is our branding that wasn't what the government called it to my knowledge I don't know if they've referred to it at all maybe there's a memo somewhere but choke point1 point0 was a real thing that was the name that the Obama Administration gave to a real program that they ran um in in Obama's uh I guess second term which focused on um using uh the bank Regulators to persuade the banks to

drop payment processes that were serving certain politically disfavored Industries and some of them were like conservative leaning Industries like Firearms manufacturers the adult industry was another one which I don't think has a political lean one way or another initially was hashed to deal with payday lenders so the Obama admin didn't like payday lenders they didn't have they didn't pass a law to ban it instead they use this more subtle tactic to intimidate the banks into dropping payday lenders then it expanded to actually dozens of different Industries most of them being industries that were disfavored for some reason or other that ended when Trump came into office in my opinion it was unconstitutional but it never came to that it wasn't ever

litigated in front of the Supreme Court and then post FTX um it appears that uh the Biden admin admin felt uh political license to do the same thing uh they had the same FDIC chairman Marty gromberg he ran it under Obama he came back in office under Biden and they ran the same Playbook this time focusing on the crypto space and effectively uh there were a number of ways they did this but one of the ways was by going to some of the major Bank servicing crypto companies and imposing a deposit cap saying you can only a 15% of your deposits attributable to crypto clients and at the time there were banks that had 95% of their

deposits focus on crypto so overnight banks with that business model became Obsolete and then systematically and they've continued to do this Banks uh have been encouraged uh to drop grow field clients and and that's where we are today and it's still ongoing as far as I can tell yeah it's a really good uh I'm part of what I want to do in this conversation is I want to draw the curtain back here and you know you mentioned Marty grunberg and the FDIC and I want to shed a little bit of light on who are the actors that are involved in this sort of stealth sting operation and also some of the key players actual people um I don't know Alex if you had anything to comment on that but I want to get into some of the specifics here yeah I

think the FED also I mean very involved I don't think people realize I mean maybe maybe some in Bitcoin and crypto have are well versed in the lore of the FED but it is not a government organization it's there's almost no oversight whatsoever over the fed by the US government which means also by the people and they are deeply involved here and in fact I'm still hearing that they've adopted a new tactic and what we definitely consider to be operation choke point 2.0 which Nick deserves enormous credit for publicizing and like sort of formalizing and congealing what people had been experiencing into really what we do believe is a CO coordinated and co uh coercive effort by Bank regulators and by policy makers in the

White House and by Congress and and by the Fed so I don't want to leave the FED out of this and and a new tactic that I'm hearing about is just simply not replying to normal standard requests um that involve say realtime payments networks or any type of like you know Prudential request if it involves like onboarding a new crypto related client they're just they're just ignoring at this point um so I I think it is definitely still going on so don't leave the FED out um there are other players though I mean I can start listing them if you'd like I mean and and that's was the focus really of the thread that I was writing yesterday um a lot of them I think unsurprising to this audience emanate from Elizabeth Warren's fear of influence and certainly from her wing of the Democratic party but in many cases

directly from her office right um we all we all know that SEC chairman Gary Gensler is allied with Senator Warren um I I as far as I know he never worked for her um but he did work at MIT in between the cftc and the SEC and that's in Cambridge where Senator Elizabeth Warren Works um I'm pretty sure they met a fair number of times that would be reasonable to believe um but also in particular the the Biden uh Economic Policy advisor cohort is heavily derived from her literal office and her campaign for president in 2016 um notable figures Barat Ram mury who was the deputy director of the National Economic Council um Brian De is

known to be close to who who her who ran the National Economic Council uh was was Brat's boss when B left he was replaced by John donenberg who also worked for Senator Elizabeth Warren and to be clear like these people were her Chief of Staff her Chief legislative counsel her top economic advisor her top her campaigns top top economic adviser it's not like you know some Aid who got a new good job and like fondly looks back upon his time at his working for his former boss right um and and there there were one of the things I think that alerted a lot of us and and and Nick and I know in his pirate wires first pirate wires piece too was literal coordinated actions across Departments of the government that are not formally

connected right one one of the most iconic is on January 27th 203 uh 2023 so last January 27th the fed the National Economic Council uh dick Durban the number two Democratic senator in the in the Senate um All released content and and they they denied custodia master account and their fed member application on that day they released new guidance that expanded their uh joint letter from January 3rd that year which banned banks with the FDIC and OC banned basically National Banks from touching crypto at all it's more nuanced than that but that that was the effect they extended that guidance on January 27th to All State Banks again this is an organization whose sole statutory responsibility is

to maintain price stability and work towards full employment in the economy but this is all Bank oversight and supervisory stuff that you know I guess we know they have a derivative mandate for but it certainly is not in their statutory powers and they effectively have God powers to do it Brian De who's apparently now advising kamla Harris's campaign aign on economic policy along with Barat he penned a Blog that was called mitigating the risks of cryptocurrencies basically it was ostensibly a thoughtful piece about the Biden administration's um economic policies and Innovation policies towards cryptocurrency derived from all the work that the Departments did in response to President Biden's 2022 executive order

on looking into crypto and literally the word fraud and risk is mentioned like dozens of times throughout this with merely like one or two sentences of lip service paid to the idea that this technology can even be Innovative so the whole thing was here's how we're going to protect the government and the people from crypto the FED blocking the the first crypto you know related Bank seeking to join by the way a fully collateralized Bank dick Durban went to the senate floor and praised the fed and and The Regulators for blocking custodia also called out Abby Johnson like insane floor speech which I linked in that thread and then of course this blog from the National Economic Council all the same day um and that that's where you're like keep in mind the FED doesn't report

to the NEC right like dick Durban doesn't report to the NC like there some there's a Nexus here yeah I I'll add some color too um initially at the time there was the fog of War so I didn't 100% know what was going on since then I've received a lot of clarifying details we know now that it was the regional Feds that imposed that 15% threshold on crypto activities at these Banks so if you were a bank that had a lot of crypto clients overnight your business evaporated there was a direct mandate from the FED there so I initially thought it was the FDIC which was the the primary instrument of choke point 1.0 uh it looks like that one came through the regional fed Banks there's a lot of other specific things that

happened L do you think we're bluffing that also are indicative like silvergate voluntarily liquidated because their business became obsolete they didn't collapse or fail they didn't lose money they voluntarily shut down because of this and they were you know one of the main Banks focusing on crypto signature we believe was shuttered while solvent uh sent into Administration basically um there's some debate on whether that was because of they were crypto or whether Adrien Harris just had some kind of Vendetta against them but they were of course another uh big crypto focused Bank both signature and silvergate had a crypto business which was not allowed to

be sold or disposed of by the OCC which uh took over effectively those Banks when they went into liquidation or shutdown their crypto business was not allowed to be passed on to acquiring Banks and Sen and Signet their clearing networks which were focused on crypto companies and stable coins were not allowed to be sold or passed on uh there's a ton of other things like the custodia thing of course like crypto Focus banks are not allowed to be brought into existence right so the market cannot clear uh there's that as well but yeah there's a lot of very specific things we know that basically give us more evidence for this story yeah and a few more people real quick

too at the OC is it's Mike Sue right it's he's the acting uh comproller of the currency the effect which is the head of the OCC which is a national bank regulator Mike Sue is a longtime antagonist to crypto he came to the uh uh Global DCA blockchain some I think it was in Washington and said and gave a keynote speech in 2021 and said many of you may know that I don't like crypto that's true and then proceeded to lambas the crypto industry audience for you know uh an hour and a half right so like there's there's a whole bunch obviously grunberg at the FDIC you know out for different reasons I should also mention Nick too I know I'm sure you know this but Signature Bank also well known for

banking Trump and other conservative and rep Republican uh property developers in New York as well which could have played a role and one quick thing on Michael suit on day one in office he rolled back Ryan Brooks's Fair access rule the fair access rule was a rule specifically focused in ending chokepoint style behaviors okay so this is all very explicit on its face it's not a secret it's all very evident if you look at the record the fair access roles Trump's and Brooks's attempt to stop use stop the politicization of banking so it wasn't like Trump came into office like okay we're going to do a counter choke point and go after abortion clinics and leftest causes and universities he could

have done that based on the infrastructure the Obama admin had built but he didn't he said banking should be depoliticized there should not be insinuations used to suspend banking from valid businesses they didn't they did the fair access rule day one Michael Sue rolled that back so that was a statement of intent and it got worse from there hey everyone this episode is brought to you by SE SE believes that the evm is here to stay but they also believe that the evm and its current iteration lacks performance and scalability for developers say's recent V2 upgrade has introduced the first high performance parallelized evm which coupled Lightning Fast block times and finality of just 390 milliseconds that is sub 400 millisecond block time very very cool this V2 upgrade unlocks a new

design space with 100x the throughput even the fastest evml 2 so if you're a developer who spent most of your time building in the evm you can do you can now build on say faster block times much quicker finality you get a lot of the uh benefits of the environment that you're used to so if you're a developer definitely go check them out and thank you very much say for sponsoring this episode so I want to try to get a sense of what you think is the connective tissue here between these various entities because some of this stuff at least on its face right you could it sort of makes sense right the FED is the regulator for banks um and the OCC and the FDIC I totally understand but then there are sort of there's you know there's a huge Elizabeth Warren component to this and a lot of these

individuals are are linked to her and then you have this this is frankly something that I just don't understand super well and Alex I was poking around after your thread but you know these special economic advisers like Barat or Brian Beast that I it just it doesn't make sense to me and I can't remember this might have come from um from Caitlyn long who you know custodia is is in the process of suing their regulator the FED because an application that should have taken by the fed's Zone estimate 5 to seven business days took over two years and they felt like their hand was forced and they were going to go out of business but you know there was this question raised which really stuck with me which is why are these mid-level policy advisers single-handedly determining the fate of crypto in the United States and that's

what I'm scratching my head and wondering too like what is the connective tissue here and how do these you know it doesn't how how do these people have so much power around this type of thing I I don't think there is I don't think Biden himself was you know like wielding power here directly and so I think he delegated a lot of it to AIDS and to the basically the policy folks that were in his cabinet the people I've talked to that have kind of firsthand knowledge here tend to think that Barat is at the center of all this so uh clearly there was some dictate that went out from the White House to the various Financial Regulators we haven't seen this we haven't seen a memo or anything like that but that must have happened and I would love to eventually find out what happened yeah the the folks that I

talked to on this told me that they I think it was Barat doing the coordinating I've heard the same thing that Barat is the key figure that even Brian De at the time his job was sort of ambivalent I you have to remember that um crypto is not a big deal right in the scheme of even today in the scheme of National Economic Policy it's it's still pretty small right the entirety of circulating stable coins is like a seventh of jpm's balance sheet right so it's not it's it's not like that big a deal so absent I think a very senior figure caring significantly one way or another like other relatively minor policy positions it's going to be outsourced two groups like The National Economic Council which is one of the

main economic policy shops that advises the president right so it's not actually crazy for um someone to be you know the deputy director or in the case of D the director of that organization which is one of the president's primary resources for economic policy to actually have if nobody's telling him that we have this actual policy you know the president's not saying I need to have a different policy on crypto it's going to get outsourced to those bureaucrats and then keep in mind like Barat was the you know he was the deputy in charge of this policy iter there uh uh item there he was the policy director for economic policy for Elizabeth Warren in the Senate he was her senior Council on banking on the B on Banking and economic

policy for Elizabeth Warren in the Senate before that when he left he was replaced by her Chief of Staff in that job so like this is to me an anchor position and it's sort of like absent overruling from Biden or for example Harris now in that campaign like to me it's important to get the the actual politicians and leaders to care because otherwise it will get outsourced and now we then you fight a whole different Battle of which faction of their party uh has influence over Economic Policy because in the absence of an overriding figure you know Barat is going to set the tone in my view so why do you get so let's talk about Barat a little bit here what do you sense from your guys conversation we should not you know all

of this is um you know it's it's tough to get anything on the record and confirmed about this but why is this guy so anti- crypto where does this all come from is this Elizabeth Warren ties or what's what's the animous here behind this perspective yeah I I struggle to um understand why even Senator Elizabeth Warren herself is on such a crusade against you know it's not a political winner we know that it's I don't think crypto is going to drive the anti crypto Army has got to be one of the biggest political blunders of all time yeah you're not going to vote again make your vote against crypto there's no single issue voting block that is anti- crypto I don't believe that there certainly is one that's Pro so you lose politically I think more than you gain um I think it comes down to questions of control view

of how the economy should be managed by uh the government that they prefer a Consortium a cabal of Highly regulated Banks and then they can use The Regulators to then impact economic policy on the ground through the banks that's always sort of been my way of reconciling the fact that Democrats are are very friendly with the big Banks they're not so friendly with the little smaller Banks the regional Banks um who have been declining in number for decades but you know I mean you even take JP Morgan right Jamie Diamond's a good example here when he goes and speaks before Senate Banking Committee and Elizabeth which Elizabeth Warren is a prominent member of he agrees with her repeatedly on many issues right there's

there's some chumminess that is between the world's biggest bank and ostensibly the Senate's biggest consumer safety Advocate I think it's easy to to say that you're for Consumer safety and obviously crypto's done itself no favors with the you know years of various high-profile frauds and blowups and scams that constantly have plagued the industry but um at the core that's one of the things some data points it's been publicly reported I I cited two instances but Leo Schwarz you know a a strong crypto industry reporter at Fortune he reported that the stablecoin bill deal that had been being worked out last summer in 2023 between uh house Financial Services chairman Patrick McKenry and ranking me member Maxine

Waters which would have formalized and legalized stable coin issuance in the US um it was killed by Barat basically brat was the one that picked up the phone and said like the president wants you to kill this bill Maxine don't and so what they did was they create they had Maxine or Maxine adopted following these phone calls which was another anti-crypto reporter separately praised Barat for having done this in his reporting so got two sources on the rec like journalists who have literally said it was BR but I mean I think most people assumed it was the National Economic Council which was Barat and Bryant de and later John donenberg warn acolytes what they said was the the negotiating position should be only the FED can oversee or or

National Banks can issue stable coins that should be the democrat's position in the house Financial Services Commission whereas the the Republicans and Patrick McKenry were saying look the National Banks State chartered trusts potentially even Credit Unions should be able to do it which are all regulated by the way right we don't want to pick a winner or loser for example and of course New York state is very in favor of that because the nydfs has multiple stable coins under its jurisdiction and while you know an onerous regulation the bit license is it nonetheless functions right and so States want the ability you big Banks like bny melon are State chartered trusts right like there obviously they also have fed membership but the the problem the intellectual dishonesty behind that that we now know

was coming from Barat and the NEC to the Democrats on house Financial Services as the negot the the president and the administration's preferred negotiating tactic is that just months before they had worked with the fed and and Dick Durban on that January 27 stuff which specifically barred States and National Banks from touching crypto so by saying that only fed member banks can do the stable coins they know already the FED has prohibited those Banks from doing stable coins so it's it's an intentionally dishonest negotiating position and that's what killed the stablecoin bill and it supposedly came from Barat so your broader question Mike about like why they hate it so much I

think there's some reasons I'll let nio Pine more too yeah no I I totally agree I think it has to do with control and they would rather that there's a small handful of heavily regulated Banks and uh financial institutions that they can influence uh and watch closely as opposed to a constellation of less regulated entities this is why even progressives are often against fintex even uh because they feel that they're outside of the regulated Ambit and they're unaccountable and uh if you actually if you look at the progression of choke point it's gone beyond encouraging Banks to on Bank crypto and it's gone towards now embedded Finance or banking as a service um it's now targeting fintex that don't even have a

crypto practice actually if you look at all the recent FDIC examinations you have a far far higher likelihood of being examined um or facing some kind of consent order from the FED if you're a partner Bank to these fexs Beyond just crypto so it's something everyone should care about actually because it will make your ability to as a startup or small business to get banking modernday efficient banking from a you know quality ftech partner um it makes it a lot harder and I think the common threat is this view on the Progressive side that banking should be the purview of the government and finance should be something that's

closely monitored presumably for the projection of political objectives you know social goals whatever those might be so that that's kind of my synthesis and think about it the fact that they've said that it's been proposed by that Wing that they you should get your banking services from the post office right it's a hyper nationalization of the banking system is sort of at the core it leads to this like you have red Banks and blue Bank situation which is the politicization of the banking industry which is not a good thing it should be thought of more as like a public utility you should you should have the right to a bank account of course you don't um the founders didn't see it fit to put that in the Bill of Rights but like you functionally need it to operate in the country so you can

ruin people's lives with by by stepping in and blocking their banking access this could be a good moment to talk about the constitutionality of this so to be clear in my opinion operation choke point is deeply unconstitutional it just hasn't reached the Supreme Court and what there's this really chilling issue where a lot of the folks affected are not willing to make a case uh the Banks and the entities that were affected by choke point it's kind of hard to prove that this thing exists again it's all very much based on insinuations and threats off the record conversations there's not a lot written down um but in my opinion there's a good dra uh legal draft written by law fir

Cooper and Kirk last year saying they believe this violates due process the Fifth Amendment because the government is stigmatizing a specific legal industry uh and and U you know causing Banks to stop doing business with them so there are certainly constitutional questions if the government wanted to ban crypto they could pass a law saying you can't do crypto this is a way to go around the legislative process to use executive power over Financial Regulators to achieve the same goal without having to pass law so I believe that it's unconstitutional I do recommend you look at the Cooper and Kirk draft all right

we can link that in the show notes and I guess maybe this is a a good point in the conversation as well to turn towards you know this is where we move into the realm of speculation a little bit here we've gotten little drips out of what I mean frankly we just don't really know what the what the Harris Administration would really look like we haven't heard you know a firm Declaration of their platform or their policy um but you know Alex you did a little bit of sleuthing here and you you found uh Barat and Brian De um as potential advisers axios did a little bit of reporting as well in terms of who some of the picks might be either for SEC chair or someone like treasury um some of that looks relatively positive for Tech and crypto some of it looks decidedly more negative

um Wally Ado I can never pronounce yeah ad yeah Adamo is in the running for that and he has been a pretty staunch crypto critic he was part of that pretty Frosty uh reset zoom call that that the uh the Harris Administration tried to have with some of crypto crypto Executives um last week and so I would love to get a sense from you guys about how think things would change either under a Harris Administration or a trump Administration yeah I I think a Harris Administration is decidedly no matter how it goes in our you know in crypto's favor or not is decidedly less favorable to or constructive I should say to the crypto industry than than a republican Administration a trump Vance Administration I think that's pretty

obvious um I I'm sort of of the camp that I don't think it really could get much worse than the Biden Administration I think the sort of worst case is the same as now and you know I think despite all of the headwinds and and unconstitutional barriers and deplatforming that have happened it's not like the industry is dying it's just you know certainly held back I think to me we don't know really anything about Kamala Harris's positions I think she is set to give her big speech unveiling some of those economic plans in in Raleigh on the 16th I think in basically on Friday if I recall the date but very imminently I'm certain she will not

mention crypto in that speech so from what I'm told from some credible people it is still undecided what their policy will be um and there is tonight on Wednesday the 14th this crypto for Harris call um there are prominent Democrats joining that call Richie Torres is going to speak on that call he's very supportive of crypto um he's explicitly come out against operation chokepoint 2.0 so there are Democrats that she could be talking to I don't know that she is but that she should talk to I'll say um that are prominent and are thoughtful and do not agree with the current approach so I think part of the game is when you look at though people like Brian De and Barat and Wally

adiamo Wally's not I would say personally as negative as Barat um he but he's the head of fin well he's the number two at treasury but his his big thing is kyc ml stuff I personally don't think he's qualified to lead treasury just in general um but he so he falls in the camp on a policy side sort of where he's quite negative I would say for crypto is that he sort of agrees with Warren on the digital asset anti-money laundering act stuff which is that validators minor should have to kyc all transactions and so sort of on the in the finsen world is my understanding but he's not positive to my view is if we don't get other people around comma who have a more constructive Fair View of

technology and Innovation and you know and crypto um it's likely to Def to not be important and default to who she's got around her right now and those that is not good right this isn't that big an issue for the Harris campaign I think if the race tightens it could become a tighter issue I think we've actually lost the industry significant amount of influence as Trump's poll numbers more recently have declined I think it'll tighten again I think there is a voting block to court here and they'd be very wise to include more voices there are a lot of Democrats who don't agree uh with this I I do think chair Gensler will not be the chair of the SEC under Harris Administration that's my guess um I think in general Democrats don't favor

um a as vocal of a sec chairman um it's not just crypto the asset managers are all up in arms about a variety of rulemaking that the SEC has proposed as well I don't so my guess is the but you know yeah if it's Barat as his replacement I think they all know it wouldn't it's I think it's not likely to be a warant acolyte at sec in particular maybe that's optimistic of me so I think it would be flat to slightly better as a Biden of a Biden Administration like in our downside case which you know again you know we're still gonna be here if a haris the goal really needs to be explaining the positives of of blockchains and stable coins and Bitcoin to this in administration

yeah I mean I I generally agree with Alex like of course Trump has made crypto core part of his platform and has advisors and folks in his potential cabinet around the table that own crypto and are pro crypto so there's no question there also regarding choke point again that's something we actually know where Trump stands on it based on his first term and they tried to undo uh Obama's choke point and be fair so they didn't do a counter choke point or anything they just said don't politicize banking so no real issues there on the Harris side we don't know I agree I don't think it is a priority for them there's probably other issues that they want to make the campaign about and crypto certainly isn't one of them one

thing that we should really keep in mind is the Senate uh the Senate you know has to confirm all the appointments and uh if they the Electoral math is slightly favorable to the Republicans on the Senate side um if Trump loses on the land slide it probably won't matter because the down ballot races will be affected but if the Republicans carry the Senate the Harris Administration if she wins will not be able to appoint all of the most uh you know liberal cabinet members and the Republicans four years ago were not attuned to this now they are right they're activated around the issue of crypto so if it's if it's a split congress with the S Senate falling

into Republican hands uh these confirmations will be blocked for the most you know Troublesome or metalsome uh Regulators so it is possible that under Harris Administration things could get materially better if Harris feels that given Republican control of the Senate they have to nominate moderates and I do think Republicans will be on notice for the next grunberg the next gsor Etc so I yeah neutral because again hard to imagine how crypto policy could get worse in this country short of them passing a law Banning stable coins which they might try and do right like the

future of stable coins does kind of hang in the balance and it is a kyc AML issue like stable coin transactions on the blockchain are not surveilled necessarily so that's an issue that might actually come to a head at some point um but yeah my my base case is is neutral status quo under Harris or again slightly better especially if the Senate goes Republican so I I I think also just uh you know all of these appointments nothing is set in stone yet right so you know Alex you're a good detective work aside we don't know uh what Bar's position would be same thing with this axios report which I'll link in the show notes there are several different choices like I know Gina rundo has been a name that's been thrown around for SEC

chair Al there also could be like a Caroline krenshaw uh which would be decidedly worse and it's the same thing for all of these different positions right we just we just aren't 100% sure yet I I here here's one thing I'd be curious um from your guys standpoint as advocates of the industry um there are sort of two viewpoints on this let's say you believe and I think there's mounting evidence to suggest that it would just be materially more positive for crypto in the US under with a trump Administration as opposed to a Harris Administration so what do you guys think is the best way to advocate for that outcome you know you've kind of got two different you know viewpoints on Twitter I would say which is one which like hey guys like we gotta fight this is a partisan issue let's just lean into it

and accept it and you know lean in as hard as we can uh and then the other the other perspective would be like look it's you know the there's a long period of time here right and uh and ultimately you want technology like if you look at most industries that are out there with some noticeable exceptions NRA is very right Silicon Valley historically has been very left although that's changing like banking is very neutral right it's very like an even mix in between Republicans and Democrats and maybe for like the long run of crypto and mass adoption we don't want to like totally tether ourselves here to one party or the other where do you guys fall like how would you for people who are listening on this podcast how would you recommend that they advocate for the best outcome here yeah good question I

mean uh fairshake has an interesting model I would say it's the biggest single issue super pack in the US which is very impressive frankly uh they aren't just a conservative super pack they are active on both sides they get active in the primaries and they are helping primary Democrats that are anti- crypto and Elevate the campaigns of in Democrats as well that are pro crypto I think that will actually bear fruit so there's ways to advocate for the industry that aren't necessarily okay you're hard right or hard left you know there are Democrats that are more moderate on this this issue for sure you

know we can't we can't ignore that so fair Shake's model is quite interesting I think but by the way funny thing there's that is happening right now there's a very contentious race going on between sherid brown and Bernie Marino uh funny thing about Bernie Marino he was actually my next door neighbor growing up no way really I learned to swim in his swimming pool uh yeah true story yeah went to school with his kids and everything yeah W that's like the most critical Senate race in my it's like it's pretty surreal it's like my f it was a conversation in my family um just about watching like our old nextdoor neighbor run for this race which is yeah I mean there there are others in terms of tipping the balance but sherro Brown is chair of Senate banking right that's a key key post um

even if the Republicans were to take the Senate he'd still and if he survives he's probably the ranking member right and he's shirro is a tough character in this story because he um it doesn't actually seem to care that much I would say personally about the issue but he will defer and has deferred to Elizabeth Warren on this repeatedly and that's a powerful post the Senate banking chair yeah um yeah I I don't know that we take a view I mean I certainly respect Nick's view on this I think I I I I am very firm in the belief that blockchains Bitcoin are St I mean the Apper whatever are are almost entirely apolitical I think it's obviously true that um

different of the features say if we just stick with Bitcoin as an example are kind of inherently libertarian they're you know a fixed monetary Supply comes out of the Austrian School there there's obviously things that appeal to the a more libertarian minded person and so it's not you know independence from government Etc but there's also things that appeal towards a sort of a classic like Li you know American liberal like disintermediating um empowering people right like having access to your own money right you e even we could argue I would say a deflationary money that helps protect you know the working people's savings since they don't have broad access to invest in stocks right and the things you need to do to avoid inflation so I think it should be

apolitical and with that I think it objectively can be viewed as apolitical the technology I think it should be nonpartisan it obviously is becoming very partisan particularly with Trump's full Embrace and now the question Heming and hawing from the his opponent I mean it was Pro I think it's probably a little bit less partisan now than it was four or six weeks ago before Harris stepped in for to become the you know the top of the ticket um solely because we knew what Biden's policy was and was pretty clear now at least we're unsure and the campaign seems to be privately signaling that perhaps there might be a change although again we've you know we've talked about

whether we're going to have to wait and see if that materializes so I you know I think we focus on playing the game that's on the field I I don't when we Advocate and when I advocate for this space I we we talk yes to members of Congress Senators right people that actually work on policy in try to help you know explain why this policy would either be detrimental in an extreme way or at all explain how the industry works and how to get to a constructive you know framework if you're if it's Market structure or stable coins or whatever it is that you know protects American jobs and promotes American economic prosperity and that c it's It's Tricky I mean I I do think that it could come down and it it appears at the moment to

be kind of like this if you are a single issue voter this election matters for crypto there's no doubt about that I think I'm very focused on trying to work to get you know smart Innovation Centric Democrats voices involved in the presidential campaign so that because I think longterm we don't want it to turn into like Bitcoin and and ethereum and and crypto and blockchains are like a red state blue State issue they it doesn't make sense and it would be detrimental for their long-term success so I think everyone should be involved and we try hard to to to reach out on all sides yeah and you know I don't do proactive Outreach I just you know will occasionally take calls with um you know political people and both sides the

aisle like I talked to members of the Biden White House and I will say though that my most constructive conversations have been with conservatives by a country mile that's for sure uh but I'm nevertheless willing to talk to anyone in the white house or Congress that wants to learn more about crypto and get involved and see how it could be useful and supportive for us interests it's just that 90% of the inbound is on the Republican side yeah I also want I I think it is reasonable for crypto voters to wait for Harris to come to crypto before crypto should have to go to Harris like we should see tangible evidence that they're not going to continue operation chokepoint 2.0 before

you like feel comfortable as a single issue voter voting for Harris I mean I think it's totally reasonable I think our whole goal is to try to try to first of all Define her position and let's hope and try to make it one that's palatable and constructive and fair I think the other thing too that just bear is repeating here is that you know I was going to ask you guys this at the outset but you know how would you it's really difficult to prove the counterfactual here but how effective do you think this operation choke point or chokepoint 2.0 has been and you know it it's it's it's it does feel like this Administration was success in pushing a lot of the growth um of this industry outside of the United States I really

don't think that it's permanent um you know I still think that the most important market for crypto today Remains the United States I think most of the technical Talent is here but I mean Nick you probably have a perspective on this as a you know as a venture investor but you know a lot of Founders that I know are moving out of the us a lot of the VCS that I know are much more comfortable investing in non- us-based Founders than us-based Founders that's insane we see it from our business you know I have audience statistics I could show you I have conference statistics I could show you but like it I I I think the reason why this this four years is so important is yes will we still be here 100% but you know for it's kind of like okay there was an actual Dent here in the last four

years I I even myself like I'm a little unsure of what four more years of this I think it would materially change the makeup of the industry but I'm yeah I mean look I think operation show point was a success as in it it imposed a significant headwind on the industry uh the major Pro crypto Banks don't exist anymore right yeah okay I can't underscore that enough right like silvergate no longer exists signature doesn't svb you know got taken over and shed their crypto element uh the major banks are not able to touch crypto at all uh Sab 121 121 is still in effect right um they can't really touch stable

coins so that was an issue from a startup perspective you can get banking it's just significantly more expensive and um the the Contours the banking landscape is CH they're changing all the time as the major sponsor banks that serve crypto firms fintex things like that they're getting taken out one after the next and it's funny like I'll talk to someone you know the people the banks are like okay I'm the head of digital at this bank I'm going to do crypto we're launching a crypto practice six months later they've left the bank and the entire crypto team gets laid off digital team gets laid off right so this keeps

happening new it's like a wacko game like new banks will pop their head out they see a market opportunity hey there's tons of deposits that uh from the crypto space they want banking that bank gets a consent order they get an enforcement action and um Austin Campbell had a really good threat on this recently um you know the main issue I think is that the BSA requirements are so onerous that it makes virtually any kind of complex banking activity de facto against the rules and so then at that point the government can just pick and choose their targets they full discretion on who they want to go after because everything is effectively against the rules because the rules are

so burdensome so I I think it's been a significant issue it's dramatically raised cost for startups and it's meant that it's much more Capital intensive to start and grow a business in this country and this should be an afterthought like nor normally in Venture Capital when you're injecting money into a company you're not worried about their ability to get banking it's just should be an automatic thing now it's like this whole issue I mean it's crazy and it's also in a much more fragile state because there's fewer pillars that these startups can depend on what one other just comment on that as well you know we spent most of this conversation talking about operation

choke point 2.0 but they're also this slew of indictments that are coming out you know from the SEC towards you know basically any and every you know crypto company some operating in the US some not and it's it's really pushed Founders outside of the United States to the point where there are lots of teams that we work with that are afraid to even step foot on us soil you know for fear of being arrested and look I'm a realist as well I know not everything is 100% above board and crypto but there are tons and tons of really good well-meaning Founders who are just you know concerned about being prosecuted unjustly right and caught up in this weird uh you know political drag net that's happening and on top of that you know being you know even optimistic to dream for something that we should have

right I just imagine a world where we actually provided some sort of guidance for this like Fair Harbor rule you know that Hester Pur has been describing forever I I was listening to this old podcast Acquired and one of the challenges that bill Gates had when you were starting Microsoft is there was no IP protection for software back in the day so when they were shipping software anyone could just copy it and it wasn't protected by law they had to change that that was like a three-year process and so you know this kind of like the mem coin defi value acrel where is Capital flowing it's like our our regulation is currently I think actively detrimental to effective Capital formation in crypto and you know not maybe this is a heretical thing to say but maybe we do need a little bit of support jurisdictions all over the world to

build businesses just like every other industry has relied on you know since time in memorium so I think even outside of this there's all this other dimension of just not worrying about being arrested providing sensible guidelines to innovate and actually create businesses and generate wealth which is basically the business model of the United States and so it was a little bit of a rant but you know that would be my hope as well I feel like that's where we should be it's ridiculous that we're even fighting and clawing for banking rights it's just embarrassing too that like Congress which has done this repeatedly over the decades on many issues just continues to abdicate its responsibility and Make Way for this unitary executive where unelected bureaucrats can like do stuff like this to our businesses and economy right like Nick made this point earlier but like if

you want to ban crypto then ban crypto let's not have these backdoor fake you know thwarting through like Arcane regulatory processes we didn't even mention Sab 121 from the SEC which is also fundamentally an a banking restriction that blocks Banks from doing crypto um also from Gary Gensler couldn't you know explain where it even came from um so it shouldn't be that like right there is a process for regulation by the way they could invite industry in conduct a formal R making process like they haven't done that it's it's actually insane that this is how the world's best and biggest economy it's most deep and liquid and advanced Capital markets is being run um so I I hope that that's why we're so positive I

mean even if there's things in like the market the fit 21 dccp or stable coins that like you know need to be changed or industry doesn't like or whatever like any action that formalizes it by the actual people that were elected I would say would be a very positive thing because it just should not be that these unelected bureaucrats have so much power in this economy yeah I I'm not not supportive of Regulation I think there's many many cases in the history of capital markets where regulation came in and made those markets flourish because there were rules of the game and good actors knew what they were allowed to do and what they weren't and Bad actors were weeded out so I've for a long time s uh my entire career in crypto I've

sought to see some kind of uh you know disclosure regime for crypto assets so that maybe we can have uh some kind of security light model for a crypto asset which has a capital return which has a cash flow mechanic the fact that we don't have that makes our crypto assets much more ambiguous and much less useful to investors and much less clear and that's why we have meme coins because they don't promise anything so they don't violate the Hoy test I guess uh you know so I I think it's a misconception of the crypto industry is universally against regulation I think reasonable regulation would be a huge

unlock and would better than us which is very embarrassing because we are meant to have the best and most liquid and fairest Capital markets in the world all right guys I want to actually uh I know we've only got a couple minutes left here and I actually wanted to ask you a little bit of a markets based question so you know uh Nick I saw you tweet uh tweet out a couple of weeks ago hey maybe it wasn't the best idea to turn BTC into a trump win uh coin and I would just be curious that was a funny tweet but I I would just be curious to get uh a sense from you guys you know because ever since I think Trump's election OD peaked right after his uh failed assassination attempt and have since been trending slightly lower and it

looks like crypto is trading in line with that so I want to get a sense from you guys how much do you think the perception of the election odds here are actually impacting uh crypto markets um yeah actually let's just let's just start there yeah I mean I think it explains let's say 50% of the variance in in bitcoin price at the moment um you know you could do a regression to get a better sense of it but I think until the election the market is kind of holding its breath to see uh what happens and crypto I mean you can see proxies all over the place like small cast versus large caps like there are baskets it's like the Camala trade the Trump trade uh crypto I think is the purest expression of the political binary event that we

have here I think if Trump wins you're seeing Bitcoin trade at new alltime highs and um if Harris wins probably status quo so certainly I think we are exposed to in a very very meaningful way there's not a lot we can do about that that's just the way it played out yeah I I agree I think you know if we step back and think about what catalysts outside of you know grind higher I mean I think it's reasonable for you know absent catalyzing positive or negative Market event whether it's macro geopolitical uh setting aside the politics for one second like I think there's every reason to believe Bitcoin trades in a range between 50 and 70k at least until the election right I think

that in fact the way I've been saying it is that like as we've both agreed I think downsides relatively capped I mean it could certainly trade down to 49k it just did so we know that's possible but I I think the from a political standpoint you're likely to get slightly better than the status quo simply because they are literally different people even if they enact even if you know a president Harris were to enact very similar economic policies still you'd see some rotation and I just don't know and we don't know who else is out there that could you know come in in place a Gensler or a John Don John donenberg at the NEC or whomever or Mike Sue at OC like I maybe there is another Mike Sue and a Gary gor that come in right behind them but in which case

that's about as bad as it is now I think um but I do I see a lack of catalysts you were looking at overhang from Supply whether it was like gax coins or US Government Silk Road coins which are moving today again probably to custody we think but I mean you had a lot of payouts there's a bunch of token unlocks on the calendar that are that are pretty chunky um I think where most of this is priced in the FED cuts are likely they're probably priced in unless they surprise to the upside with more Cuts right like I it seems like the main catalyzing trade here is the election um and I think you know frankly I think the fact that bit Bitcoin hasn't degraded further with Trump's odds is semi-positive I don't I don't I I think

this is going to come down to be a very close election to be clear like I don't think I think you know you've got a new candidate who hasn't spoken once off a t a prompter and has annunciated no policy positions so sure she's riding a positive media wave because it turns out apparently even though no one seemed to care for the last 14 months that Democrats are extremely happy not to have Biden at the top of the ticket um so they're they're in the honeymoon phase I think as you get closer you get debates and stuff it's going to tighten um but I do think yeah I mean I I totally agree I like I like that tweet from Nick I I think that's right I think we did some correlation analysis on on bitcoin price and and and Trump uh predict it odds uh favorability or

likelihood to win the election saw some correlation but you can just look at the charts I mean like I you don't need to get you know whether like a login price change daily on bitcoin price like has this regression perfectly like I it's pretty obvious that Trump is very bullish for Bitcoin and crypto and we just have a question mark I think if they come out with an anti-crypto position that correlation will tighten further right it'll it'll come higher so um you just have to wait and see um she's not going to say I I I'm going to go look there must be a I saw poly markets for uh Trump on elon's xace about what words he would say I would bet although I I don't bet on poly Market I would bet though that she doesn't mention the word in her in her

economic uh platform uh at all so it's going to be more about who's around her right don't forget policy people are policy right that's how it works like you hire an expert and you get their expertise so like who she surrounds herself with with where she to win you know we might get more I don't know I don't think they've done it yet but they they do need to spin up a transition team to actually prepare to take power should they win oftentimes the people put in charge of recruiting and looking into and vetting candidates for various roles oftentimes the veters end up being the candidate so we really need to see who's put on that that that could offer more um Clarity into who might surround her by the way if you if people who are listening to the show are like hey I you

know feel really strongly about this and I want to get involved in one way or the other I actually got to give a shout out to uh coinbase who put together a really great it's I mean you guys might know better resources than than me but this is uh stand withth crypto.com literally go and email or or call your Congress person to talk about this and that is what actually moves the needle here so big shout out to coin I don't know if you guys have any other recommendations for tools or platforms or the way that you would recommend

doing this but yeah it's a great resource yeah I use it a lot actually to get a very quick understanding of where a specific uh member of Congress stands on crypto and if you don't if you haven't looked by the way iconic of this problem we currently have with Harris Waltz campaign is both Tim Walt and KLA Harris's entries say pending because as far as I can tell they've never uttered the word mhm I mean we gota we it would be great to know I guess we're gonna know on Friday so um we'll get something we'll find out something fellas I appreciate you guys I know this is relatively short notice as well so thanks for hopping on here on the Pod and talking about it I'm sure everyone listening to this already knows

you guys but if folks want to follow you find out more about the work you're doing what's the best way to do that NE C on info or uh Twitter of course September 16th Marina Bay Sands first Knock first round let's go yeah just intangible coins on Twitter glxy Research on Twitter is probably the best hell yeah all right appreciate you guys this was a great one thanks Mike thanks Mike all right guys one more shout out here to this episode's title sponsor say there are a ton of reasons to build on say if you're itching to get started building or using the ecosystem head over to say.

that's se. iio get started and be sure to let them know that we sent you thank you sir