ROLLUP: $3B ETH Whale, Roman Storm Verdict, and Trump’s 401(k) Crypto Order

TRANSCRIPT

Ryan Sean Adams:
[0:03] Bank station is the second week of august it's time for the bankless weekly.

Ryan Sean Adams:
[0:07] Roll-up david i declare this is tom lee week at bankless all right.

David Hoffman:
[0:11] Why why is it tom lee week tom

Ryan Sean Adams:
[0:14] Lee just became the number one largest eth holder at least that we know about that happened on the week he's got almost a million not a million dollars worth a million in supply of eath that's like three billion dollars we got to talk about how he got that.

David Hoffman:
[0:29] Well if i own ticker bmnr yes then i am a shareholder of the entity that holds the largest amount of eath yes is that hypothetical me and tom lee combined own three billion dollars of eath something like that wow

Ryan Sean Adams:
[0:45] Wow i didn't know i was speaking with such a whale here yeah do you actually own some bnmr.

David Hoffman:
[0:51] No i don't but not for any particular reason i just kind of have other than just like looking at the different leadership of all the east treasury companies i don't really have any other way to really like differentiate between the two yeah i know that i know i'm pretty sure that there are material differences but they don't broadcast their secrets like remember in the episode with tom lee i was like so tom lee like what strategies do you employ to that and he's like david these are inappropriate questions.

Ryan Sean Adams:
[1:17] Yeah, he said these are inappropriate. He stepped back.

David Hoffman:
[1:20] Step back, David Hoffman. You're going to strike two, buddy.

Ryan Sean Adams:
[1:25] Thank God I recovered that entire interview. No, but I've actually got some takes for you on ETH Treasury companies and their MNAPs. I'd love to hear them. I'd love to hear them. Actually, I want to hear what you say about this. Also, what's your favorite Tom Lee photo, David? Because look at him here.

David Hoffman:
[1:41] Dude, I can't believe this thread popped off. Was this you? Was this you on Twitter? Okay, so Ryan posted on the Bankless Twitter account, it's Tom Lee Day at Bankless. Post your favorite Tom Lee picture. There is a lot of quality. He's photogenic. There's a lot of quality Tom Lee pictures. Do you see him with the two Rockettes?

Ryan Sean Adams:
[1:58] No, let's get there. Okay, this is Tom Lee and Jensen right here. Tom Lee actually looking like it's been a long night there.

David Hoffman:
[2:05] Dude, the hair of Tom Lee every single time.

Ryan Sean Adams:
[2:07] Yeah, this is AI generated. Tom Lee is Superman.

David Hoffman:
[2:09] No, it's not.

Ryan Sean Adams:
[2:10] Yeah, I could tell. I could still tell. This is Tom Lee with some pudgy penguins.

David Hoffman:
[2:14] With a pudgy penguin, yep, yep, yep. Tom

Ryan Sean Adams:
[2:16] Lee's call for Bitcoin Bruce Lee.

David Hoffman:
[2:18] There we go look at the angle of his kick he's doing great

Ryan Sean Adams:
[2:24] God, that's bullish.

David Hoffman:
[2:26] That is a good rock head stance.

Ryan Sean Adams:
[2:29] I feel like that's a straight line up.

David Hoffman:
[2:31] Is that showing something? That leg is going up and to the right.

Ryan Sean Adams:
[2:35] There's a lot of Tom Lee fodder here. There's a lot.

David Hoffman:
[2:39] Of good Tom Lee material out there.

Ryan Sean Adams:
[2:42] Anyway, okay, that's not all we're talking about. There was a pretty big verdict on the week that we got to cover. So that was the Roman Storm trial. What are we talking about there?

David Hoffman:
[2:50] Yeah, I'm pretty jazzed about it. And I'm kind of very aware that I'm more jazzed than anyone else.

Ryan Sean Adams:
[2:57] Maybe more than me still.

David Hoffman:
[2:59] More than Ryan, more than some of the lawyers. We talked with Peter from Coin Center and also David Morris. And so we kind of got their opinion right after the verdict. I'm talking with Jake Stravinsky and Amanda Tuminelli on Monday. So I'm going to get their opinion. But I'm still of the opinion that we still have work to do. but there is

Ryan Sean Adams:
[3:19] A possible.

David Hoffman:
[3:20] Better outcome a better outcome than was ever possible before specifically downstream of the nature of the verdict that came out of roman storm so i will we will talk and i will give my case for why this is

Ryan Sean Adams:
[3:30] The verdict is in though and the verdict is like yeah it's it's a partial verdict so we'll get into all those details also the sec said stake tokens like um you know lido stake d they're not securities so we always knew this but good to see them say it succinct releasing their prover network why that is pivotal to scaling the ethereum layer one also uh base stopped producing some blocks we've got to talk about what went wrong there and david there's a trump executive order that's being signed today okay at the time of recording

Ryan Sean Adams:
[3:58] so we'll have already been signed crypto is now allowed in your 401k sir dude.

David Hoffman:
[4:04] This is an like no one saw this coming yeah right and he just decides donald trump just decides that crypto can go in the 401k, which is like, there's a reason why that's massively bullish. If you are in the 401k, you just have a constant buy pressure from everyone's two week pay period salary in America.

Ryan Sean Adams:
[4:23] Yeah, yeah, yeah. We'll get into that, including when it's starting. I did some research on this one. David, you know what? We should do this. We should shill. David,

Ryan Sean Adams:
[4:30] let's talk about the market. I want to talk. I was out last week, okay? So maybe this is the blame, but it seemed like crypto markets dipped on Friday. Are you responsible for this dip?

David Hoffman:
[4:39] That's why they dipped because you were out. I don't know. That means you can't leave.

Ryan Sean Adams:
[4:43] I was out and then I came back and now we're fine again. But what happened last friday saturday like what.

David Hoffman:
[4:49] I wasn't really tapped into this one because like i kind of didn't really think it was worth tapping into there was some like jobs report we revised some historical job numbers to revise them downwards people are like oh this is tariffs tariffs are finally catching up they're showing up in reduced jobs that's bad for the economy and then trump got in a tizzy and he fired someone and started like saying that the the numbers were fake news and labor secretary.

Ryan Sean Adams:
[5:16] Yeah, labor secretary.

David Hoffman:
[5:18] Yeah. But since like, I think we're kind of just bouncing back. I think we're fine now.

Ryan Sean Adams:
[5:21] You don't want to talk about it anymore?

David Hoffman:
[5:23] It's over? I am chalking it up to like, I don't need to go and pay attention to that one.

Ryan Sean Adams:
[5:27] Well, people are concerned. Did ETH price go, what, 3,200 and Bitcoin drop below?

David Hoffman:
[5:31] Yeah, people thought it was all over. And I'm like, maybe it's all over. But if we're bouncing back, then like the bull market just resumes and we're going up. We're going up another 70, 80 percent before we do another one of these things.

Ryan Sean Adams:
[5:41] It was on more like that. The blame for this is probably on some of the new tariff saber rattling coming from Trump, 70 plus countries. Also, the weak economic data really resulted from that. So they revised some of the early job reports down by a substantial amount. And people are saying, OK, is this the tariff like recession that we've been worried about? Actually, this is notable. People are looking on chain. Arthur Hayes sold a bunch. So he sold, you know, August 1st, I guess, then last week he sold, you know, adding this up about 15 million worth of crypto, including $8 million worth of ETH. And he actually gives a reason why. He said, the reason I sold is the UF tariff bill is coming due in Q3, All right. At least the market believes that after the NFP print, non-farm print payroll is probably what that means, the labor numbers, the jobs numbers. No major econ economy is creating enough credit fast enough to boost nominal GDP. So Bitcoin tests 100K, ETH tests 3K. Come to my Tokyo keynote October, August 25th for more info,

Ryan Sean Adams:
[6:42] back to the beach. He's basically like, hey.

David Hoffman:
[6:43] When did he tweet this?

Ryan Sean Adams:
[6:45] August 1st.

David Hoffman:
[6:46] August 1st. Okay, it was August 7th. We are higher right now.

Ryan Sean Adams:
[6:51] I bet he's back in already.

David Hoffman:
[6:53] Yeah, I think he's bought back in.

Ryan Sean Adams:
[6:55] This is why you don't trade. I don't trade. This is why I don't trade these things.

David Hoffman:
[6:58] I don't trade. I don't trade.

Ryan Sean Adams:
[6:59] I don't trade.

David Hoffman:
[7:00] I just buy more.

Ryan Sean Adams:
[7:02] Dips are going to come. It's going to happen. You either believe we're in a secular bull market or not. I happen to believe that we are.

David Hoffman:
[7:08] I believe we are in a secular bull market, not just in crypto, but also with the economy. When I hear news right now of like, oh, like a bad jobs market report came in and like we got scared. I'm just going to like, you know, in five days, I think we're going to be higher. And that has been true. Five days. In the S&P 500. The S&P 500 has momentum and strength right now. And the economy is strong. The macro people, the macro commentators that I listen to, they're all like, yeah, economy is pretty strong. I am in the category of both the stock market and the crypto markets are in a secular bull run.

Ryan Sean Adams:
[7:42] You know who agrees with you, David? You? The man of the week. No, not me. The man of the week, Tom Lee.

David Hoffman:
[7:48] Tom Lee.

Ryan Sean Adams:
[7:49] We're going to try to say his name at least 10 times this show.

David Hoffman:
[7:51] Tom Lee, Tom Lee, Tom Lee, Tom Lee.

Ryan Sean Adams:
[7:52] You already did it. Bitcoin price in the week. Where are we at?

David Hoffman:
[7:55] Bitcoin price actually down a percent and a half, down to $116,700. It's really down?

Ryan Sean Adams:
[8:02] Yeah. Oh my God, it's down.

David Hoffman:
[8:04] It's down one and a half percent. Call that flat. Call that flat.

Ryan Sean Adams:
[8:08] Well, one thing that's interesting about Bitcoin lately and the price lately is uh is volatility this is eric baltunas you know um bloomberg etf guy saying that since the launch of the etfs the volatility on bitcoin has plummeted you know the 90-day rolling volatility is between four is below 40 for the first time it was over 60 when the etfs launched he's basically saying that the etfs and institutionalization of bitcoin have actually made it less volatile that's.

David Hoffman:
[8:34] Not surprising not surprising at all that's always been the plan and especially as you grow in size. Volatility just goes down.

Ryan Sean Adams:
[8:41] I mean, as you get closer to gold's market cap, you become like gold's volatility.

David Hoffman:
[8:46] Right? Yeah, exactly.

Ryan Sean Adams:
[8:47] It's going to happen over time. It does seem like the timeline is sped up a little bit more with the ETFs and the institutionalization. David, tell me about ETH price in the week.

David Hoffman:
[8:56] ETH price up a percent and a half on the week, $3,830 is where we are, which is pretty good. Can you zoom out to the one month? I think we're like kind of close to tying for the highs yeah yeah we almost touched 4k we were like a hundred dollars higher maybe 10 days ago oh i've

Ryan Sean Adams:
[9:14] Got market cap on yes like we yeah we 3900 i guess was the july 28th high when we were feeling really good.

David Hoffman:
[9:21] So like we're kind of close to that number where like eth can potentially just do something you know once it gets to like four thousand dollars then it's gonna like there's gonna be some volatility but it could be volatility to the upside like yeah we're getting we're getting close to another uh what would you call um impulse move i think it's what they call it okay yeah

Ryan Sean Adams:
[9:41] I'll call it that i feel my impulses uh yeah directions how about the ratio what's that doing for your impulses david.

David Hoffman:
[9:47] And the the ratio is uh it's impulse is pulsing it's two percent Moving on.

Ryan Sean Adams:
[9:56] I'm going to say I missed some of that because, you know, there's some lag on the video here, David. But, you know, I get the cut of your job.

David Hoffman:
[10:03] Total crypto market cap, $3.9 trillion is where we are at.

Ryan Sean Adams:
[10:08] You know, back to the ratio, David. This is Chris Berninski. So it's not you saying this. This is Chris Berninski saying it. He said the ETH Bitcoin ratio doesn't look like it wants to stop. And he's like, I actually, I listened to your Ben Cohen episode too. With Ben. And the synopsis is, he kept saying the ratio has to go home. Basically, it had to go to Lowe's. It's gone home, and now he thinks it's all up from there.

David Hoffman:
[10:35] He thinks it's going to 0.05, 0.06. And I think that that is where, once you get to 0.05, 0.06, the traders will kind of get off of the trade.

Ryan Sean Adams:
[10:46] Yeah.

David Hoffman:
[10:47] But it could go higher. There's another reason why it couldn't go higher than that.

Ryan Sean Adams:
[10:51] No, I mean, he also said once it gets to 0.05 or 0.06, then he's going to revise his numbers. And I imagine he can revise them upward after that.

David Hoffman:
[11:00] Yeah, you could.

Ryan Sean Adams:
[11:00] But that's a sense for the direction. And if we're there, where are we in fiat terms? Is that like, you know, 6, 7K, something like that?

David Hoffman:
[11:07] Holding a Bitcoin price of like 120,000, let's call it, it's something like 7,000 ETH.

Ryan Sean Adams:
[11:12] All right.

David Hoffman:
[11:13] But Bitcoin would be higher. Bitcoin would be like 150. So call it 8,000 or 9,000 ETH.

Ryan Sean Adams:
[11:17] Let's get to the main event, okay? This is Tom Lee becoming the largest ETH holder in the world, at least publicly disclosed. Probably the largest ETH holder in the world. This happened earlier this week on August 4th. Bitmine Immersion, that is Tom Lee's Ethereum treasury. I almost said Bitcoin treasury because this is Bitmine, but used to be a Bitcoin miner. Now it's an ETH treasury company. Buys another 208,000 ETH worth $757,000. uh 757 million dollars okay so that's.

David Hoffman:
[11:49] A lot of eath

Ryan Sean Adams:
[11:50] That's a lot of eath you want to look at this on the who the hell.

David Hoffman:
[11:53] Sold 750 million dollars of eath to tom late

Ryan Sean Adams:
[11:56] Not me i would never do that yeah um look where's that.

David Hoffman:
[12:00] Eath coming from

Ryan Sean Adams:
[12:01] Look at these buys i mean from from i guess this is uh, july 8th all the way to um august 3rd yeah he has bought three billion dollars worth of eath okay that's 833k worth of eath they're all chronicled here they're all you know publicly traded 833k.

David Hoffman:
[12:22] Of eath not not dollars 833k ether has been

Ryan Sean Adams:
[12:27] Purchased yeah three three billion dollars worth right so we went through this in the episode i mean he's close to one percent of all each supply and he seriously does seem to want to get five percent and.

David Hoffman:
[12:40] He's not no one is size until they're above one percent everyone is small now all of these treasury companies are still small

Ryan Sean Adams:
[12:46] Yeah i mean i mean it's starting to make sbet look a little small i mean sbet's still got a healthy two billion i guess but yeah you hear that joe you gotta step up those buys.

David Hoffman:
[12:56] Yeah yeah tom lee thinks you're you're small

Ryan Sean Adams:
[12:59] You know but he's going at all of these treasury companies but especially tom lee he made the point in our interview earlier this week that um He is going at a pace that is 12x the speed of Michael Saylor, MicroStrategy buying Bitcoin. So it took MicroStrategy about five years to get to 3%.

David Hoffman:
[13:16] I mean, MicroStrategy had the luxury of time since there was no three or four other Bitcoin treasury companies. It's like just Michael Saylor doing this for free. With ETH, there's plenty of competition. And so there is absolutely a race to become memetically known as the ETH treasury company. Because right now, like we do these episodes every week, who are like, there are so many ETH treasury companies. There's another one this week we're going to talk about. But no one is known as mimetically the ETH treasury company. And that's what everyone is accelerating towards trying to get.

Ryan Sean Adams:
[13:48] Well, it's very much a fight for liquidity and velocity, it seems like, because those become reflexive. We've seen that really with the Ether and Bitcoin ETFs. You know, the big ones just keep getting bigger. The BlackRock's and the Fidelity's, they kind of consume the majority of the volume here. This is the new treasury company that you mentioned. Another ETH treasury company. This one called Cosmos Health.

David Hoffman:
[14:09] Global healthcare group?

Ryan Sean Adams:
[14:11] The ticker is COSM has secured up to 300 million to launch a new Ethereum treasury strategy.

David Hoffman:
[14:19] That's our second healthcare group. So we had the AN180 Life Sciences, which turned into ETHzilla. We have Sharpling Gaming, so we got one from the gaming world. This is our second healthcare company. Now Ethereum's just eating the world.

Ryan Sean Adams:
[14:32] Yeah, I mean, did you know anything about this? Cosmos Health? Fuck no. Fuck no. I feel like we try to keep a pulse on what's going on in crypto.

David Hoffman:
[14:40] Yeah, a pulse.

Ryan Sean Adams:
[14:40] Particularly these ETH treasury companies. And they just pop out without anyone I'm aware of knowing. Yeah. So a new one is there. Which makes the question.

David Hoffman:
[14:51] How many more will there be? $300 million is a lot.

Ryan Sean Adams:
[14:54] Yeah. I mean, they're probably going to consolidate, et cetera.

David Hoffman:
[14:58] But a lot of ETH. Where does $300 million put them? That puts them right at number 10th. That puts them in 10th.

Ryan Sean Adams:
[15:05] Yeah here's.

David Hoffman:
[15:06] 300 million dollars gets you 10th

Ryan Sean Adams:
[15:08] Here's a chart um this is um nate jirassi saying wild stat eath treasury companies and spot eath etfs have each bought approximately 1.6 percent of the total current eath supply since the beginning of june, is that impressing you three percent over three three point two percent of all eath supply since at the beginning of June.

David Hoffman:
[15:32] The name of the game is Momentum. We need Momentum because we need this to happen again and again and again.

Ryan Sean Adams:
[15:38] Why isn't price moving more than...

David Hoffman:
[15:40] I don't know, dude.

Ryan Sean Adams:
[15:43] I don't know. We're just going to come back one week and it's going to be a big step function change and we're going to be above all-time highs.

David Hoffman:
[15:49] I mean, the ETH price has basically made two moves in the last three months and it's been flat other than these two moves. And it was when ETH went from... $1,500, and it jumped up to $2,500, and then it was flat, and then it went $2,500 to $3,500, and it's been flat around that amount. And so basically all of the gains of Ether has happened over these very small amounts of time over the last three months.

Ryan Sean Adams:
[16:20] Yeah. And this is what Tom Lee confirmed. He thinks it's going to be another step function change or maybe a series of smaller step function changes. That's why it's so painful to be out of the market. That's why I'm not doing the Arthur Hayes thing where you're trading this market.

David Hoffman:
[16:33] Yeah, imagine you just missed that one day where ETH goes to $5,000.

Ryan Sean Adams:
[16:36] Exactly, exactly. I mean, I think there's another question, right? So if you're bullish on ETH, you can, of course, buy ETH. But how about buying ETH treasuries? And one thing that's kind of interesting here, because we see all of these new treasury companies entering. The question is, are we getting into frothy territory? This is a great treasury holdings kind of dashboard put together by Blockworks. And I want to show you kind of MNAV here, David. So look at this. MNAV, we've got some of the Bitcoin and ETH treasury companies. and salon of treasury companies, et cetera. But you could see the MNAV is actually like kind of close to one. Do you look at Sharplink?

David Hoffman:
[17:09] They've all kind of approached one, right?

Ryan Sean Adams:
[17:11] Right. And MNAV, of course, is the multiple valuation market cap of the assets that you have, of your treasury assets itself. So like SBET right now, 1.07. Very, very close to- That's not high.

David Hoffman:
[17:24] That's reasonable. That's not froth. And I think what's also being priced in here is that no one knows which one is going to be mimetically known as the ETH treasury company because that one would command a larger premium.

Ryan Sean Adams:
[17:33] That's right. That's right. BNMR right now, so that's Tom Lee's vehicle, 1.35. If you go back to kind of the- 1.35.

David Hoffman:
[17:40] Is pretty good by comparison.

Ryan Sean Adams:
[17:41] Sure. If you go back to the gold standard microstrategy, 1.64.

David Hoffman:
[17:47] Um that makes sense that makes sense

Ryan Sean Adams:
[17:49] They've been much higher at times like uh 2.8 and above i believe in that territory yeah.

David Hoffman:
[17:55] But that's why michael seeler has the ones goddamn bitcoin

Ryan Sean Adams:
[17:57] Well the question is like i mean to me i look at these these uh mnavs i'm actually

Ryan Sean Adams:
[18:03] like this does not look frothy at all it does.

David Hoffman:
[18:05] Not look frothy like this is very reasonable

Ryan Sean Adams:
[18:07] If you're looking at frothy treasury market it wouldn't you it wouldn't just be these new entrants all the time which we are seeing it would be like mnavs that are a lot higher than one right so i'm looking at that and i'm actually like wondering i mean are some of these treasury companies buys like were you compelled by the math that tom lee did in our episode which is he's basically like well staking alone if you do kind of the multiples mnav should be 1.6 for any eth treasury company that's like staking their eth and then you add velocity and you add liquidity on top of that and you get like two two plus maybe even the three zone the things get like really really hot now of course the backdrop against this is they are doing the atm kind of like things where they're diluting shareholders in order to purchase more of the treasury asset maybe they don't have access to the types of um leverage vehicles really nice like debt vehicles that um michael saylor's magic does with with what he's doing but like getting close to one are some of these treasury companies a buy to you yeah.

David Hoffman:
[19:09] And i do think like tom rey tom rey tom lee really has the momentum to command that premium which is showing up but it's not showing up like that much I will say as a I don't really know if this counts as froth, but I was on the subway in New York earlier this week and I'm coming out of Williamsburg, which is known to be ETH central of New York, of the world. Honestly, there's we have by ETH spray painted on the ground on the sidewalk here. What? Really? Yeah. Oh, yeah. It's all over. Yeah. And I just was looking at some dude's phone who is sitting like next to me in the subway. and I see the Robinhood notification pop up saying SBET is up 15% and I'm like, whoa, same, dude. I got that same notification.

Ryan Sean Adams:
[19:53] Does that mean he owns SBET.

David Hoffman:
[19:54] Basically? Probably. Or he's watching it. Yeah, exactly.

Ryan Sean Adams:
[19:58] Oh, that's great. All right. Well, that's signal of a sort, I think. I mean, on the other hand, if you want to look at the bear case, you do have a lot of treasury companies entering. This is a new Litecoin treasury company on the week. MEI Pharma is another healthcare company buying $100 million of Litecoin as a treasury asset.

David Hoffman:
[20:16] Charlie Lee and GSR as lead investors. You know, you can do this. I'm not actually going to call this froth. What would be frothy if there was a Litecoin treasury that had a big MNAV? Like if it comes out as like a 1.0 MNAV, then that is provably not froth. Sure. But if the Litecoin treasury has like a 3 MNAV, then what the shit's going on here?

Ryan Sean Adams:
[20:40] If you have a 1 MNAV, like you've created nothing of value you may as well not have done this.

David Hoffman:
[20:44] Yeah which means that you're like why did you do it with Litecoin go do something else go do it with a store of value a real store of value or something that spits out cash one of the two do

Ryan Sean Adams:
[20:54] You know Litecoin is number like 26 or something on the total you know top 100 coins.

David Hoffman:
[20:59] Or whatever it's got Lindy

Ryan Sean Adams:
[21:01] I mean, it's 26. There was a long time where it was like number two. Do you remember those days?

David Hoffman:
[21:05] Yeah.

Ryan Sean Adams:
[21:06] I remember number two, man. It was like silver to Bitcoin's gold.

David Hoffman:
[21:10] Yeah. Those were days where we would look at the top 10 in crypto assets and be like, what is this industry?

Ryan Sean Adams:
[21:15] I still have. No, I still very much do that. Okay. Then we started an XRP. David, what do we have coming up next?

David Hoffman:
[21:21] Coming up next, we're going to talk about the Roman Storm verdict. It's probably perhaps one of the most important court cases in crypto history. Definitely a positive and a negative side to talk about. for DeFi and privacy. Also, Trump signs an executive order so everyone can get crypto in their 401k. Ryan's going to talk about that. And then Bases Sequencer stopped producing blocks for 33 minutes. What happened? What was the impact to users? And what are the lessons? We're going to talk about all of this and more. But first, a message to talk about some of these fantastic sponsors that make this show possible. So after almost a month-long trial, we have the verdict in on Roman Storm's case. There were three counts that we were going to get the verdict for. There's counts one, two, and three. One and three were a hung jury, so there was not a unanimous decision, which means there's just no outcome. It doesn't mean he's not guilty. It also doesn't mean he's guilty. The prosecutors, the attorney of the United States, they have the opportunity, if they so choose, to retry counts one and three. And the counts one and three were the big ones. That was a conspiracy to assist in money laundering and also conspiracy to avoid sanctions as it relates to North Korea. So those were the big ones. Those were the reasons why Roman Storm could have gone to jail for 35 minutes. And there was no outcome there. Wait, 35 minutes?

David Hoffman:
[22:40] 35 years, excuse me. Slightly different. 45 years, yeah. The second count, which was being a money transmitter without a license, he was found guilty on and as a maximum of five years. Now, that is like, there's a lot to unpack there. The money transmitter thing is the thing that we have been fighting for against as an industry for a very long time. That is the same conversation as is the Uniswap front end or the Aave front end a money transmitter.

Ryan Sean Adams:
[23:11] Or the protocol itself even.

David Hoffman:
[23:12] Or the protocol itself. What is a money transmitter? And when we talk to Jake Stravinsky, when we talk to all the lawyers, when we talk to Coin Center, being a money transmitter or preventing our software from counting as money transmitters, so long as there's no custodian, there's no bank. If there's no custodian, if there's no one in control of the funds, it's always been crypto's position that they are not money transmitters and they don't need to file to be one.

Ryan Sean Adams:
[23:38] Can I just add, not just crypto's position, it's crypto's position as they interpreted the clear guidance from 2019 from FinCEN, who's the regulator responsible for all this money transmission legal framework. They basically said that if you are code. does not take custody of the funds, right? You're not a custodian anyway, then these things don't apply to you. That's what the 2019 guidance said and what the industry has been operating under. There's been no further guidance since besides this DOJ prosecution.

David Hoffman:
[24:10] So this begs the question, why was Roman Storm found guilty of being a money transmitter without a license? And there's a glass half full and a glass half empty perspective here. The glass half empty is, oh no, an open source software developer who did not have control of the funds was found guilty and that sets the precedent. And now other open source software developers need to be cautious because they might find themselves guilty of the same thing based off of the precedent of this court case.

Ryan Sean Adams:
[24:37] All of DeFi, basically.

David Hoffman:
[24:40] All of DeFi, all of DeFi.

Ryan Sean Adams:
[24:41] If you have a DOJ that is aggressive enough to prosecute any sort of DeFi and there's like some bad actor that has used a protocol for a swap, for a transfer, for a trade, for doesn't even have to be privacy, right? Then all of that is suspect because all of those protocols and all of those front ends could be quote unquote money transmitters. That's how the prosecution is basically labeling Roman Storm. It's the same principle here.

David Hoffman:
[25:04] Yeah. And it's bad that that precedent has been established. Oh no. Like every open source software should live in fear now. Like that's kind of the negative perception here and why lawyers like Jake Stravinsky and others have said this is a really bad day for crypto.

Ryan Sean Adams:
[25:17] Right.

David Hoffman:
[25:18] Either I'm naive, which is very possible, or I'm just thinking about these things differently. I'm seeing this with a glass half full perspective, which is they can't arrest all of us. They can't go arrest Hayden Adams from Uniswap based off of this court precedent. They can't go arrest other software developers who run a front end or who write smart contracts. We have been fighting this as an industry. And this was a procedural error, a legal error in the court case that we are going to go and fight as an industry. Now, when we talked to Peter Van Valkenburgh on the episode yesterday, he articulated that there's actually two different versions of this kind of guidance. There's the FinCEN guidance, and then there's the federal version of money laundering. You have to go watch the episode to get a clear articulation on it. But there's two different interpretations. And so Roman Storm, because there's a confusing status of the interpretation of the FinCEN guidance, he's able to go appeal this and be like, look, there's two different interpretations here.

David Hoffman:
[26:20] I can't follow both because they conflict with each other. And so therefore, I should be innocent. And that's totally going to totally be possible. The other way that this is good for the industry is that because that this was a legal error, we now have the surface area, the galvanization and the means to go fight this case and actually get a stronger win, a more clear win for the nature of open source development, software development in crypto than we were able to get prior. Roman Storm, when he left the courthouse yesterday, he was asked by a reporter, Eleanor Tarrant, like, hey, Roman, how you feeling?

David Hoffman:
[26:55] He smiled. He said the thing that he was charged for, the 1960 rule, is bullshit and he's going to fight it, which means he's going to continue to double down, not only for his own defense, but to set the precedent for the industry. So he's going to go appeal this and then we're going to get this thing reversed. And then hopefully we have enough motivation to get a law passed or something cleared up where this never, ever happens again. So while the current status is this is set to bad precedent for open source software developers, I think that there is a very clear and open window for us to totally make Lemonade out of this in a very big way that makes this never relevant for any other software developer after Roman Storm ever again. And we can use Roman Storm to get that done. And he is volunteering his court case, his life to go and make this the case. So I'm pretty riled up. I'm pretty stoked.

Ryan Sean Adams:
[27:50] Yeah, I'll sharpen the points of optimism here. Just, you know, to go with the glass half full. Roman got to go free.

David Hoffman:
[27:59] Roman's flying home today to go hang out with his daughter.

Ryan Sean Adams:
[28:01] The prosecution basically said, okay, because he was convicted on this count, he needs to go to jail immediately. He could be a flight risk. And the judge completely rejected that. The appeal process to get this tried again could take many months to years, right? And the prosecution, the DOJ basically wanted to have Roman Storm spend all of that time in jail. And the judge was not having it. And so Roman Storm was able to use his house as collateral to actually get out and be free on bail to fight again in court. It will be appealed. The appeal is very likely to go in. And I think you're very right, David, that in the appeal, there's a new chance at interpretation. Basically, the judge for this case said, hey, you know, the rule making that FinCEN said it doesn't really apply because there's some other criminal statutes that Roman could still be liable for here in this case. And basically pushed that interpretation onto the jury. So the jury was somewhat constrained in terms of how they had to judge this case based on the fact that, oh, okay, criminal, like Roman Storm non-custodial software could actually be a money transmitter.

Ryan Sean Adams:
[29:12] The judge's interpretation really set the framework for that and so kind of pushed the jury in a specific direction. The next time around, with a different judge, provided you get a judge that has a more favorable, more liberty-centric interpretation of the code here, it could be a completely different trial and Roman Storm could still score a big win. And in the appellate court, that's my understanding, that's where precedent is truly cemented. Right now in these lower courts, it's kind of like, it's more like guidance interpretations. It's not cemented precedence. There's also the case, David, this could go all the way to the Supreme Court. So the fight that you were talking about, this could be like a multi-month, multi-year-long fight. And there's also a get out of jail free card that I didn't know about quite clearly, but apparently there's a piece of legislation on the Clarity Act that would actually cement into law that non-custodial DeFi smart contracts are not money transmitters. And recall, the Clarity Act passed by the House, now it's going to the Senate. We could actually enshrine this in law as well. So that would not affect Roman Storm because it wouldn't be retroactive, but it would, like moving forward, cement this into kind of like hard code it in the US law system.

Ryan Sean Adams:
[30:28] So there's a lot of cause, I would say, for optimism. That said, man, it's disappointing. Like if they had just found him not.

David Hoffman:
[30:36] Guilty on

Ryan Sean Adams:
[30:37] That on that second count like we would be like feeling very good about this.

David Hoffman:
[30:42] It would be more simple that way it'd be all over we would all be popping champagne uh and that'd be great and roman would be like okay we're done here and yeah you know that's not a bad future that's not a bad version of the timeline to be in the timeline the version of the timeline that we could be in could end up in a stronger ultimatum, a better ultimatum with more work and more suffering to get there And so I continue to look at this in a glass half full perspective.

Ryan Sean Adams:
[31:13] Now, that is all dependent on our agency, I believe, as an industry. And so maybe I want to leave with this Jake Travinsky take, which, you know, he basically says, if the Trump administration wants the USA to be the crypto capital of the world, then the DOJ must not be allowed to retry the two deadlock charges. That's the other thing is still those those charges where he was found. It wasn't in all not guilty. It was a hung jury. So they can still charge him. Right. And if the DOJ.

David Hoffman:
[31:35] And we are waiting with like bated breath to hear if the DOJ is going to try and resume those. And if that does, then I'm like, that's actually a much worse place to be.

Ryan Sean Adams:
[31:43] We'll have an update on that soon. But in general, Jake says, this is existential. If you've been sleeping on the section, 1960, that's the count he was actually found guilty on, wake up. So it does depend very much on the actions of us in our industry to push this forward, make our voices heard.

David Hoffman:
[32:01] Yeah. So if Roman is volunteering, like I said, to fight this further, he's going to appeal this both for himself and for the industry. And we as an industry are going to need to support him in that. And what that looks like is donations. And so there's going to probably, I'm assuming, going to be another call for donations. Ryan and I and Bankless, we will be donating. We're going to ask you guys to

David Hoffman:
[32:20] donate in the future. So prepare yourself for those requests.

Ryan Sean Adams:
[32:24] Yeah, yeah. All right, next up, something a bit more bullish, an executive order. You can now have crypto in your 401k, David. So this is Trump. He is signing an executive order today, so it should be signed by the time people listen to this, that tells the Labor Department and the SEC to rewrite their rules so that cryptocurrency can appear as a regular investment option inside of 401ks. There is a lot of funds in America, in the U.S., in people's 401ks that will be unlocked by this. Like trillions? Yeah. You know I should have had the number. Trillions? Go chat to you guys. The number's here.

David Hoffman:
[33:04] I'm doing it.

Ryan Sean Adams:
[33:05] Let me ask you while you're doing that. Do you have a 401k?

David Hoffman:
[33:09] Don't we have that set up for the company?

Ryan Sean Adams:
[33:12] Yes, we have one set up at Bankless. Is that your only 401k or if you ever had previous 401ks?

David Hoffman:
[33:17] I think, yeah, when I got into crypto, I liquidated my 401ks and I bought ETH.

Ryan Sean Adams:
[33:21] You liquidated? Okay. So you have a 401k with Bankless. Do you recall like how difficult it is to actually get crypto in the 401k?

David Hoffman:
[33:30] So it's a huge pain in the ass.

Ryan Sean Adams:
[33:32] It's a huge pain in the ass. And if you go over 5% of in at least our bankless 401ks, right? We tried to find, by the way, the most crypto favorable 401k provider that we could.

David Hoffman:
[33:44] Yeah. It constrains you to a very low number.

Ryan Sean Adams:
[33:46] Yes. If you go over 5%, they send warnings. They're like freaking out. It's like, hey, like your 401k, you know, proportion is over 5% of the portfolios in crypto you're in a super risky asset like you sure you want to continue this like i get those emails all the time you get those emails you probably don't you probably know i don't check my email i'm like oh.

David Hoffman:
[34:04] Yeah i'm like yeah let's pump those numbers up

Ryan Sean Adams:
[34:06] Baby and that's the answer is 8.7.

David Hoffman:
[34:08] Trillion dollars ryan is in the aggregate united states citizens 401k portfolio

Ryan Sean Adams:
[34:13] Okay so that's a lot that's a lot of trillions and and the current state is there's not an outright ban so some people listening are like well actually i've been able to get uh crypto assets inside of my 401k but here's like the problem is for most 401ks the default is no crypto because the department of labor in 2022 under the biden administration issued a bulletin warning fiduciaries to use extreme caution they said with crypto so this was like a chilling effect on our all 401k providers and so employers were like we're not going to offer that as an option, So there are some workarounds like prior to this executive order where like you can buy Bitcoin through a self-directed brokerage window. Like Fidelity, for instance, has like a separate digital assets account that you have to jump through a whole bunch of hoops to go open. And it's only if your employer has opted in and if you've accepted the strict caps on how much you're actually going to contribute as a portion of crypto in your 401k. There's also extra fees. So it's like not the default at all. OK. Post this executive order.

Ryan Sean Adams:
[35:18] Crypto assets are going to be able to sit side by side, all of your mutual funds, your traditional stocks, all of your existing equity assets with all of the things you see in the 401k. So it's not separate container like special case. It's just like default with all of the other assets. So that is a big deal. And if you're telling me it's $8 trillion in capital, all of that will be available for individuals to make their own individual decision as to how much are their 401k they want to allocate to crypto, if any. So this is a big deal. And it's kind of under the radar. Like you were saying in the intro, you didn't see this coming. You didn't expect it.

David Hoffman:
[35:58] Yeah, it just happened.

Ryan Sean Adams:
[35:59] Yeah, it just kind of happened. And it can happen by executive work. Now, David, this is not going to happen right away.

Ryan Sean Adams:
[36:06] So what has to happen is it has to go through all of TradFi. The SEC has to tweak some rulemaking and then the platforms have to adopt it. So expect this, you know, the Fidelities and Black Rocks of the world, expect this over the next six to 12 months. And if you're employed somewhere with a 401k, start asking your employer about it.

David Hoffman:
[36:26] Be annoying about it.

Ryan Sean Adams:
[36:27] Yeah, be annoying about it. And that might make adoption happen even sooner.

David Hoffman:
[36:31] Okay. So there is currently $8.7 trillion in all 401k portfolios inside the United States. It's estimated new contributions for 2025 will be between one and one point four trillion dollars gets added. And so that's the flow, right? The flow into 401k. Some percentage of that is going to go into crypto assets like Bitcoin and ETH. And that's why this is so cool is because it's a constant flow of bids into crypto, into the blue chips. And that's just a wealth effect for crypto. And so being in the 401k is just like you've made it. You get the boomer bid, the retirement bid. You're always, every single week, everybody's like, paychecks, 15%, 10% goes out of their paycheck, goes into a 401k. And especially as the Zoomers grow up and millennials grow up, these generations are going to allocate more to crypto than the average.

Ryan Sean Adams:
[37:28] It's all of that. It's also like the education. I mean, all of these brokerage 401k platforms are going to start educating people on crypto. though, and it's going to seem like a normal investment asset, just like the rest of the equities. David, the base chain halted block production for a half an hour, I believe. What happened here?

David Hoffman:
[37:46] Yeah, so this happened on a Tuesday. Base's primary sequencer, the high throughput sequencer, started lagging due to a spike in on-chain activity. In order to maintain uptime, the system tried to do a handoff to a backup node, but that backup node wasn't fully set up apparently, and that halted in transaction processing. And so then I think it just broke at that point. So downtime for 33 minutes, transactions couldn't happen, deposits withdrawals, all app activity just froze. Liquidity on DeFi froze. and so the base core team had to manually transfer block production back to a healthy sequencer node which took 33 minutes no funds were lost nothing was compromised it just started working again and there was a question in my uh replies which is like you eat people always talk about ethereum uptime all the time 10 years of ethereum uptime and then base goes down what the hell is the deal with this like if you if you guys are selling ethereum to wall street and you're selling it through the uptime lens, but then base goes down. Like, how do you, how do you square these two things? I'm so glad you asked, Ryan. Here's my answer. My answer is actually base is, is not Ethereum. Base is actually wall street. Coinbase is a fortune 500 company that's building a layer two on Ethereum. It's a publicly traded company like listed on the, on the, the NASDAQ. And they're building a layer two on Ethereum because of Ethereum has 10 years of uptime.

David Hoffman:
[39:11] Like Coinbase, they don't care if their chain goes down. I mean, they definitely do care. They're going to get that thing back up as fast as possible, but they own the network. They own the chain. So long as Ethereum stays up and running and they don't have a dependency on Ethereum, then they're totally fine managing the centralization and the potential downtime of the base chain. And that's also true for Robinhood. And that's true for any other Wall Street entity that wants to go to Ethereum and build on Ethereum's 10 years of 100% uptime. That's my answer there.

Ryan Sean Adams:
[39:39] Yeah, there's more I could say there. I do think that the modular L2 design does make Ethereum much more fault tolerant, right? Individual layer two could go down, but the entire Ethereum ecosystem does not have to go down. And it's almost expected that if you're really pushing on high frequency throughput.

David Hoffman:
[39:57] Then things are going to break. If you're not going down, you're actually not pushing hard enough on your throughput.

Ryan Sean Adams:
[40:03] Look, maybe you also have some kinks you have to work out and some engineering you have to, you know, like I said, that could be another explanation. But at some level, the layer twos are pushing so fast and so hard so that Ethereum

Ryan Sean Adams:
[40:15] layer one doesn't have to, right? And it can be kind of the thing that never goes down. Anyway, we got more to cover, David. The first ZK Prover Network is going mainnet. That is succinct. It's up and running. You got to tell us about that. Also, Metamask is releasing a stablecoin, question mark, and China issuing warnings about WorldCoin and putting your eyeballs into the machine. We'll cover all that and more, but first, we want to thank our sponsors.

David Hoffman:
[40:39] The Succinct Prover Network is live. We officially have the mainnet of Succinct. What is Succinct? What is a prover network? I'm going to call this just like ZK infrastructure as a service. There are people out there who need ZK computations done by a decentralized network. Succinct is that decentralized network. So for any demand for a ZK computation, Succinct will just do that. And so it connects kind of buyers and sellers of proofs. So if you need a proof verified, you can just go to Sysynct. And so this is kind of like this critical piece of ZK infrastructure to make ZK accessible. Because if you have a ZK app, so you say you're building an app and you need some sort of ZK cryptography, you need people in the back end to do the verification and the proving of that ZK app. But as an app builder, you don't want to think about that. But succinct is this decentralized network of provers that will just allow you to plug in your app into this network of provers that has the uptime of Ethereum. That's the goal. And so ZK as a product can just work all the time as an app builder without any app builder thinking about like building a prover network behind it. That's kind of like the technical explanation. Yeah. semi-technical explanation for what's going on how would you articulate this ryan

Ryan Sean Adams:
[41:54] Well to me the big use case for like when you'd need a prover and this type of metric network is actually um ethereum validation so as ethereum moves to the kind of the next level of scaling up the layer one all of the clients are going to turn to zk clients essentially so if you're a validator you can run a zk validator ethereum layer one validator instead and rather than replaying all of the transactions. That's a bottleneck. That's why we only have, what, you know, 20 transactions per second. With a ZK EVM, you can essentially just submit a proof. You don't have to replay all of the transactions. And in submitting the proof, you can either run a prover at your house, let's say, if you're a home validator. But running a prover at your house requires some specialized hardware. You know, think ASICs that are going to consume a lot of power, a lot of energy, maybe like, you know, another Tesla or something, you know, battery power. So rather than run that at your house, you could just outsource that proving to a prover network. So essentially, this technology is going to be pivotal for scaling Ethereum.

David Hoffman:
[43:02] And I think Ethereum would be a customer of Sysync's prover network or Ethereum node operators who are running the ZK nodes would be.

Ryan Sean Adams:
[43:10] Exactly. So it's very much an enabling technology into scale. Do you know how at one point in time individual validators were doing the block building and now we have block building specialists as part of the block production like supply chain for ethereum we're gonna have proving specialist networks like succinct that fill that role so this is a huge part of ethereum scaling and it's incredible that succinct has come so far so fast i think vitalik in our episode said this is all happening five times faster than he actually thought zk would uh would happen so it's uh it's huge.

David Hoffman:
[43:43] I kind of think this is like, I don't know if I'm going to call this a ChatGPT moment for ZK, but it just does so much hard work in the background. It solves so much hard work to make ZK accessible to people. So I expect with the arrival of something like Sysynct, we're just beginning to be able to find ZK embedded in our apps more and more and more. And it's going to become just a lot more tangible to people because a lot of the hard work is done because that's what Sysynct has done.

Ryan Sean Adams:
[44:09] They do have a token. So it's the Prove token. Doing okay. Hey, fully diluted valuation of a billion dollars right now.

David Hoffman:
[44:15] One billy, one billy.

Ryan Sean Adams:
[44:17] David, the SEC said that liquid staking tokens are not securities. So they finalized this. They put out a ruling, I believe, formal statement that LSTs are not security offerings. So this is pretty pivotal. It allows integration of liquid staking tokens, like, you know, a staked ETH or something like that, into ETFs and other financial products. This is funny from Jesse Powell, right? He says, this has been a question for a long time.

David Hoffman:
[44:46] Can I get a refund?

Ryan Sean Adams:
[44:47] He goes, can I get a $30 million refund in response to tweeting this?

David Hoffman:
[44:56] What's the statute of limitations on the SEC? It's like seven years?

Ryan Sean Adams:
[44:59] Yeah, I don't know.

David Hoffman:
[45:00] I think if you change the law to make something legal that you took a $30 million

David Hoffman:
[45:05] fine on, you have to give the money back.

Ryan Sean Adams:
[45:07] Yeah, so the context here, if people don't remember, I don't know, was this 2024?

David Hoffman:
[45:11] Yeah, this is 23 or 24.

Ryan Sean Adams:
[45:12] Jesse Powell and Kraken had to pay the SEC $30 million because they enabled staking on Kraken. And now because the SEC alleged that, oh, if you're doing staking ETH on Kraken, that's a security. And now 18 months later, they're saying it's not a security.

David Hoffman:
[45:29] It's legal now. But they still had to pay $30 million. Thanks for your money. Thanks for your $30 million, Kraken. Wow.

Ryan Sean Adams:
[45:36] Oh, my God.

David Hoffman:
[45:37] I'm going to call that a racket. I think that's what a racket is.

Ryan Sean Adams:
[45:40] Yes, absolutely bizarre, man. Metamask is launching a stablecoin? Question mark? What's going on here?

David Hoffman:
[45:46] I mean, question mark, I think it's kind of the news. MMUSD, Metamask USD is going to be a US dollar stable, pegged stablecoin to enable more reliable payments and DeFi interactions with Metamask services, including swaps, payments, yields, and protocols like Aave, partnered with Stripe on this one. It's still in a proposal phase. Apparently there's some governance that needs to happen here. But yeah, MetaMask is getting a token. Interesting case study to see how it... You said it's not the token I wanted. Not the token, no, excuse me. Technically, they are getting a token. It's just not, it doesn't go up or down. It just stays flat at a dollar. It's going to be interesting to see, because there's some people out there that are like, oh, everyone's going to have a stable coin. And then there are other people out there that are like, not everyone's going to have a stable coin. So the success of the MetaMask stable coin, or not, will kind of be indicative of how many stable coins there will be.

Ryan Sean Adams:
[46:39] I think we'll get a stablecoin explosion for pretty soon.

David Hoffman:
[46:42] A quantity of stablecoin explosions?

Ryan Sean Adams:
[46:44] Yep, in the next year or two. And then it'll kind of thin out. It's first fragmentation.

David Hoffman:
[46:49] Tether's just like the Bitcoin of stablecoins.

Ryan Sean Adams:
[46:52] Yeah, something like that. Everyone's going to try their hands. This is MetaMask. Why not? It's the Coast Genius Act. It's legal. You may as well give it a try. Speaking of give it a try, Barry Silbert is back on Grayscale. All right?

David Hoffman:
[47:03] Back giving it a try.

Ryan Sean Adams:
[47:05] So Barry Silbert, if you don't remember, was the chairman, I believe, of grayscale i think he stepped away um in the i call it fiasco of the right grayscale bitcoin trust breakdown and all of the things that happened there my god that seems like a distant memory yeah that.

David Hoffman:
[47:22] Was an era ago

Ryan Sean Adams:
[47:23] But he's coming back so i am honored to rejoin the grayscale board at a defining moment for both the company and the broader digital asset ecosystem there's word here that this is maybe um setting up for an ipo um grayscale type ipo which i could totally see that.

David Hoffman:
[47:39] Checks out to me yeah that definitely checks

Ryan Sean Adams:
[47:41] Out barry silbert's back yeah.

David Hoffman:
[47:43] Welcome welcome back barry silbert so this is a headline out of the block this week china warns world coin style iris data collection for crypto poses national security threat now i thought this was the juxtaposition here i thought was pretty interesting when china says something is a national security threat. I'm like, nice.

Ryan Sean Adams:
[48:03] That's like, oh, I should look into that. Yeah.

David Hoffman:
[48:06] I'm like, oh, that sounds pretty cool. That sounds pretty sick, actually. Yeah. Specifically. And so the headline says WorldCoin style Iris data collection. There's only one company doing Iris data collection out there. And honestly, it's not really data collection. So I- They create a hash of your iris, which, yes, is data, but they don't collect and store pictures of your iris. That's the whole WorldCoin thesis.

Ryan Sean Adams:
[48:33] It's privacy-preserving.

David Hoffman:
[48:34] It's privacy-preserving. They take a picture of your iris, they make a hash of it, they throw away the picture, and then they just have the hash. They don't actually collect the data because that's not what WorldCoin wants. They just want the hash. And so, actually, I think either China's getting—somebody's getting this wrong. China, I think, is getting this wrong. They claim that the data could be exploited for espionage. You know, biometric data once leaked can't be changed.

Ryan Sean Adams:
[48:55] National security risk, right?

David Hoffman:
[48:56] National security risk, right. Privacy risk. The ministry mentioned past incidents where leaked biometric data was used by foreign intelligence for spying and hacking not related to WorldCoin. Probably something like 21andMe, the actual DNA company, which does collect data. There are no bans yet. Officials just recommended being careful and sharing biometric data and understanding how it will be used, stored, and handled. I will tell you how WorldCoin uses, stores, and handled your data like I just did. They take a picture of your iris, they throw it away and they make a hash of it. And anytime you need to restore access to your world, they just verify, they compare the hash. And so in terms of privacy, I think it's very beneficial. The reason why I'm like on this is because we just had Alex on the episode and he talked about his whole, you know, he wants world to be like an Internet native citizenship. And then and then the juxtaposition when China says that this is a threat to national security. I'm like, yeah. This is... Yeah, because we're trying to make like a self-sovereign citizenship on the internet. Yeah, that does butt up against authoritarian states like China.

Ryan Sean Adams:
[50:00] It's like the CCP taking a principled stance against data collection, right? Are you really going to do that? No, like data collection. Like, no, we don't do that. And you just sort of, you wonder, it's just because it's data collection that they can't control. And they're fine if the government does it, right? They're fine if a tech company that they can control and get access to does it. But if it's something that's hashed, if it's something that they can't control, maybe that's why they're against it. I think that's the take you're linking here.

David Hoffman:
[50:28] That's right. Yeah. National security threat doesn't mean a threat towards individual sovereignty and freedom. That's specifically just from the perspective of the state.

Ryan Sean Adams:
[50:38] Yeah. I think that's what it is. I think that's what's actually going on. Although, if you just read a headline for this and you run this by an army and you're like, wait, WorldCoin's doing what? But it still feels dystopian. I mean, they're taking pictures of my eyes, unless you kind of know the details. It's just like, that's a narrative bar that WorldCoin's, I think, going to have to get over. Speaking of that, David, Bar's Coinbase ad was barred and banned from the UK. I don't know if you saw this. Maybe we'll play the full ad in the moment of Zen.

David Hoffman:
[51:10] We will disappear to the ad and we will leave you with an ad from Coinbase because it's a good ad. It's pretty entertaining. It's an entertaining piece of advertisement.

Ryan Sean Adams:
[51:18] All right, so you guys will hear it to the end of the episode. You'll hear the full ad, I guess, even if you live in the UK.

David Hoffman:
[51:24] You kind of need to watch it because it is a dance and skit thing. It's a song, so you'll hear it too, but visually it's nice to watch.

Ryan Sean Adams:
[51:31] Basically, to describe it, the ad is titled Everything is Fine, and it shows people in the UK, leaky ceilings, empty supermarkets, sky-high prices, and they're all singing the song Everything is Fine, basically implying like, oh, the financial system, Things aren't going well. You know, I feel inflation when I pay for things and somebody's not telling me something. So this UK regulators actually banned it. They said it was too political on the ground.

David Hoffman:
[51:58] It's talking shit. It's talking shit about the UK.

Ryan Sean Adams:
[52:02] It's like it's a commercial, guys. And basically misleading impression, lack of warning, irresponsible anti-system framing.

David Hoffman:
[52:10] It's definitely insulting the nation state apparatus.

Ryan Sean Adams:
[52:14] And you can't do that in the UK?

David Hoffman:
[52:16] You can't do that? Apparently not. Apparently not.

Ryan Sean Adams:
[52:19] I mean, Coinbase would say that the ad was not baseless because 44% of all adults in the UK are living in financially vulnerable conditions here. But it did not have FCA approval. So that's apparently a three-letter agency in the UK that can give things approval or not before they're aired on public broadcast. There was some debate about this. So some of the people in Parliament, UK Chancellor George Osborne said, the UK has been left behind the cryptocurrency boom and is danger of missing a second wave of demand. We're doing things like we're banning this. And so all this caused Brian Armstrong to make a statement. Needing to update the system and improve society is not a political statement on either party in the UK. It's not specific to the UK. It's a statement about how the traditional finance system is not working for many people and how crypto represents a way to improve that. we welcome the attacks and any other attempts to censor this message as it just helps it spread.

David Hoffman:
[53:11] There you go case in point because of all the rabbling now we're going to show you the ad because it's pretty funny

Ryan Sean Adams:
[53:17] Gotta let you know of course crypto is risky so is all finance you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot.

David Hoffman:
[53:30] We ain't got no troubles no reason to complain Cause she ain't great old Britain, we just love it when it rains

Music:
[53:36] Music