 Hey everybody, welcome to the Wednesday livestream. We have a ton of stuff to go over. So let's just jump right in. Before we get into the main story, which is the SEC going after the Ethereum Foundation and pretty much on a warpath to label to security. I just got this information. This is from my buddy Tom Crown. I just hit 100K subscribers. Congratulations, Tom. It looks like Jerome Powell came out and said some pretty positive things. And of course it's gonna be higher for longer, but no rate cuts. However, the market responds by the non hawkishness and the very dovishness that was Jerome Powell, apparently on his speech today. And it looks like we've hit an all-time high for the S&P 500. So it must have been fantastic news. So that's my report as much as that is going on as far as the macro events. And of course for the crypto market, pretty much flat right now. In the last hour, we're down 0.5%. Let's actually just refresh it. Maybe it's caught up. Hey, look at that, 1.8%. Pretty good, 2.4. See, 10 minutes makes a huge difference in the crypto market and it's not just the lows or the highs, everything in between. BNB in last hour, 2.7, 6.5, 2.8, blah, blah, blah, right? So a lot of things going on, fantastic. Everybody's happy for the moments right now. Let's jump into the big story. Big story is this. And I didn't really pay too much attention to this this morning because I saw this came out and I was like, here comes the SEC doing the same things they're doing again. SEC delays making decision on the Ethereum ETFs. Shocker, they're gonna wait till May. And in that point, they're still not going to approve it probably. So that came out and I'm like, meh, yawn. But then this came out and I found this interesting and I saw the first version, this is from finance. Actually, the original was from Fortune. And Ethereum Foundation faces an inquiry from a government, a government. And that was it. There was an inquiry from a government entity and that was all. But in the last hour or so, it's changed to the SEC. And it talks about how after the publication of this particular article, Fortune reported the SEC seeks to classify ETH as a security. So before anybody flips out, just remember this. Some people trade securities all day long. They're called stocks. They're on Robinhood, their equity. Matter of fact, coincidentally, Robinhood also has cryptos. So it's just the process of getting to say, well, this is security, this is not a security. And the other process, of course, is allowing to see what exactly Gary Gensel and the SEC actually wants because they're not playing by the same rules that they play with with everybody else. It's kind of like they're dragging their feet and go, yeah, come in and we'll talk about it. And then we'll sue the pants off you. Hold on one sec. Gotta open up this green screen. What's the mirror in? Okay, not fair. So this is all we got. And we'll go, we'll do a little deep dive with a couple of people in the know. So after the publication of this article, Fortune reported the SEC seeking to classify ETH as a security. The financial regulator has sent investigative subpoenas to US companies in the past several weeks. I did not know that according to the reporting. The Ethereum Foundation did not return a request for a comment, well, no kidding, which makes a lot of sense because I wouldn't want to talk about it if I'm under investigation by the SEC either. That's just pretty much how it is. But in a further development, this is from Eleanor Tarrant. You can follow her on X, great, good reporter. She's from Fox Business. According to a person that a company received a recent subpoena request, the SEC is probed with a Swiss-based Ethereum Foundation. Remember, they're looking into the foundation, but we all know what that is. That's just code for we're gonna classify you as a security as much as we can. This began shortly after the blockchains shift to a new governance model known as proof of stake in September of 2022, which is quite interesting. And this was the article itself. Links in the description. It's behind a paywall. So if you have a subscription to that, you can check that out. But this was a little refresher. And I liked Crypto-T over an X. She's got a good channel, does a lot of good information, mostly Bitcoin heavy, but on this one, she says, she's Ethereum focused on this piece. This was from, she retweeted this on 2022 and kind of catches everybody up. Because even me, even us in this space, I kind of forget the different nuances and details. So check this out. Again, this is on November 13th. And remember back then, FTX was collapsing and then we had Elizabeth Warren come out and say, all of Crypto's awful. FTX collapsed, but a fire under regulatory persents. Senators are calling for the SEC to enforce regulations. Ethereum's switching to proof of stake had already put a huge target on its back. I remember when people said that, I was like, I don't think that's really true, but apparently it is. And they said they were making assumptions that the Ethereum actually did pass the Howie test. Of course, as a VC, you want to not pass the Howie test because you do not want it to be a security investment. Of course, there were four prongs of this, investment of money and a common enterprise. You don't people working together. Expectations of profits. You do something, I'll make some money to ride from efforts of others. And that could be the marketing department, that could be CFO of the CEO. Usually if you have a CEO, it's kind of a little skeptical. And if you pass, you're considered a security. And there was a nice little, I'm gonna play this video, it's a minute long. It pretty much breaks down the whole thing that's going through there. I want you to listen to this. This is actually pretty entertaining. And it kind of takes you as like a timeline of exactly what's happening here, what Gary thinks. And it overlays with some little bit of alphas. Just take a listen to this. This describes some crypto as securities. Which ones do you think of as securities? It's pretty clear in the Supreme Court has actually spoken about this many times. If somebody is raising money, selling a token. Start the Ether presale in a couple of weeks. So the Ether presale will be an opportunity for anyone to purchase Ether. For Ether is the internal currency inside of the Ethereum system, sort of like the XRP and rebel. And the buyer is anticipating profits. What we're hoping is, is that sort of similar to what happened with Mastercoin. If that slice is something like 20%, and then the value of Ether goes up by five, then we basically have the entire initial VTC that we got all over again. Based on the efforts of that group. About 100 people that are working on Ethereum right now. Myself leading the protocol design. We also have branding teams. We have marketing teams. That fits into something that's a security. Partially in order to better flesh out the business plan. Partially in order to better. All right, then it kind of devolves. Look, I'm not here to pile onto Ethereum. I love Ethereum, I like it. I mean, it's kind of slow in some regards, but I own it and I believe that it could do quite well. So of course, when we take a look at these things and just in its little cubicle of the information that we actually have, we can say, well, that makes sense. It's totally a security. However, I'll remind you, I'm not a lawyer. And I'm definitely not a securities lawyer. I don't know how many securities lawyers are actually watching this video right now, but if you're here, chime in. But that's not for us to decide. That's for the courts to decide. And it's not even for the SEC to decide. It's actually based on Congress and what they say and the rules and regulations put forth. Now, if they think it is, then they have to bring it to the courts and say, this is actually what it is. And of course, Ethereum Foundation can say, no, that's not true. Ripple said the exact same thing. And guess what happened with Ripple? Beat the pants off the SEC. So there's that piece. And then also, I'm not gonna play this one. I think you guys know this one. Pretty much Gary says the exact same thing. He's like, look, this is a security. Okay. But he said that about everything except for Bitcoin. And again, you re-erase that fact, but then T makes a good point. She goes, you know, people try to say Ethereum is a commodity, but I don't think the SEC will let that happen. The CFTC, they believe that it's actually a commodity and they want to have it under their jurisdiction. But the SEC is like, they're fighting for this power struggle and that's just how it is. And C says, you know, I love Ethan and so on and so forth. So there's that piece and I can understand, but then this was put out by a friend of the show, Guy over at Coin Bureau. And he says, he goes, look, if the rumors about the SEC has moved against ETH were true, which we know that they are now, then this exchange last year makes a lot of sense. They had always planned to do this. This is about three minutes. I haven't watched this yet. So let's see what's going on here. Yeah. Most popular are digital assets and powers of Ethereum blockchain. Back in 2018, then SEC corporation finance director Bill Hinman stated that he believed Ether was not a security. Last month, CFTC chair, Benham, expressed his view that Ether is a commodity. The state attorney general of New York asserted in a court filing last month that Ether is a security. Clearly an asset cannot be both a commodity and a security, do you agree? Actually, all securities are commodity under the Commodity and Exchange Act. It's that we are excluded commodities, but I would agree that a security cannot be also an excluded commodity and an included commodity. I'm sorry, chair, just to talk about the Commodity and Exchange Act more precisely. Okay, so do you recognize how would you categorize Ether then? I think that the general sweep of what Congress did, not just in the 30s, but as amended years. I'm asking you, you're sitting in your chair now to make an assessment under the laws as exists, is Ether a commodity or a security? Without speaking to any one. I know you've repeatedly said you're not gonna speak to one except you've spoken to one, Bitcoin. So I'm asking you to speak to a second one, the second largest market cap here. And speaking to the tokens, there's 10 to 12,000. If there's a group of entrepreneurs in the middle. I'm asking about one. The public is anticipating a profit based on the. I'm asking a specific question, chair Gensler. I said this in private. This should be no shock to you. I'm asking this question. Is Ether a commodity or security? And again, it depends on the facts and the law and if there's a group of individuals in the middle. I'm asking about the facts and the law sitting in your seat and the judgment you are making. And so, Mr. Chair, I think you would not want me to pre-judge because I'm also. But you have pre-judged on this. You've taken 50 enforcement actions. We're finding out as we go, as you file suit, as people get Wells notices on what is the security in your view, in your agency's view. I'm asking you a very simple question about the second largest digital asset. What is your view? And my view is if there's a group of individuals in the middle that the public is. All right, so let me just ask a second question. Do you think it serves the market for an object to be viewed by the commodities regulator as a commodity and the securities regulator to be viewed as a security? Do you think that provides safety and soundness for the product? Do you think it provides consumer protection? Do you think it serves the value of innovation? I think no should be a very simple answer for you here. I think that uncertainty is bad. Is it not? And I think that Congress has said that there's one agency, the Securities and Exchange Commission, under this committee. You won't answer my question and you're the head of that agency. So give me a break, come on. I'm answering it in the generic because... Oh, okay, this is boring. So anyhow, that's pretty much where it went back and forth. And of course, Gary's going to say what he believed it to be true, but in all honesty, no one really can say right now, well, this is a security, that's not a security. Again, that'll be for the courts to define because as we've gone through this whole process, I believe a lot of the experts would come on and say, Ripple's definitely a security. Didn't end up working like that. And then lastly, just to bring a little bit of highlights here, this is from Tony from Thinking Crypto. And he says, this is a storm brewing for Ethereum. Let's recap some important facts. Bill Hinman with Jake Layton's approval gave his speeches that ETH was not a security. However, he had major conflicts of interest because the law firm he was getting paid for as part of the Ethereum Alliance. And Powell oversight was able to get emails and communication showing him and was warned by SEC ethics office about these conflicts and Powell is currently suing the SEC to get access to more docs. Ethereum has switched from proof of word to proof of stake, which changed the thesis. Gary Enzo refused the state of Ethereum as a security. We just saw that. Gary will most likely take the Ethereum ETF situation to the courts, potentially. Recently, CAC chair, Rustin Benman, spoke before Congress hiding the difference in view of the CFTC versus SEC on Ethereum being a commodity versus security, believes it actually is a commodity. SEC and Gary Gensler approved Promethium's license, which is one of those centralized exchanges that's pretty much back with the SEC to custody ETH as a security. In my interview with Aaron Kaplan, these last securities, new reports are coming out from Fortune Governors investigating the Ethereum Foundation and the SEC is looking to classify ETH as security. If it does, and I saw this many multiple, multiple times, I said, look, the only way to beat a bully is to punch them in the mouth. You're not gonna get it by just placating them and just, you know, bowing down to them. You gotta actually take the fight to them. I said this a year ago, I said, look, everybody should band together and sue the SEC and have them get a judgment and move forward, right? That's why I was so happy with Ripple and they kind of were back in the corner. They actually had to do it and they get a great job. We owe them, I think, a little bit of a least but thank you for doing all these things. So I see that what's happening, I see that it's just gonna keep happening. I mean, just yesterday, we talked about a case that the SEC was involved in where essentially they lied under oath and they're gonna have sanctions placed against them because of the lies that they talked about and pretty much manipulate the court. And this is something that's far-reaching and it's like these things happen and Gary's like, well, whatever, let's just keep doing what we're doing and off we go. The only way this could stop is if Gary's removed. That's really what it comes down to because I don't care if these have to go through and say this is not as secure as the commodity, just give us guidance, tell us what it is. Tell us how to come into the office to fill out the paperwork to move forward. That's it, that's all we're asking for. Anyhow, let me know what you think about that in the comment section. Let's talk about some good stuff such as, well, actually let me put the right screen up, that'd probably be good, avalanche. So Avax, which is another one of my holdings and of course in the show you have to know if I talk about it, I probably own it. Alipay, taps avalanche for a web three powered voucher program. And if you don't know Alipay, it's ginormous. It's 1.3 billion users worldwide. That's an amazing feat. So Alipay didn't tap XYZ token, didn't go to mean coins, didn't go to this or that. Avalanche, so that's, I'm gonna guess they did their own due diligence, but here's what they did. So the proof of concept or the POC will allow brands like Alipay Plus stores the test web three solutions, including how they can help merchants foster new forms of interaction with the users, helping to retain them and generate new revenue streams. Avalanche highlighted the program is still on the first phase of its POC or proof of concept stage. But just so everybody knows, Avalanche has been building its ecosystem in 2094, parting with big stuff. On February 20th, they partnered with, I didn't know this, Sports Illustrated's ticketing arm, SI Tickets. Then on March 11th, Avalanche partnered up with the role-playing game Maple Story, which will expand into an Avalanche Center, which I hear is a very big Maple Story, offering content generation opportunities to users. And of course, if you're into the gaming web three aspect, you know how big Avalanche is going to be and how much they've actually put forward. So again, this is positive news. I like to see things moving in the right direction. And then on top of that, there's another story I liked. DC Coffee Chain debuts crypto payments with Coinbase. Cause there's always like a little joke about Bitcoin. Well, you can't use it for to buy coffee. Well, that's true. You got a point. I guess you use lightning, but I don't know how well the adoption's going. Well, now they're going to be able to do that with a stablecoin, at least that's something. And when I read this, I was like, wait a second, are you talking about USDC on Ethereum? Good luck with that. And I did a little test and I'll show you how this all worked out. So this is the story I'll get to the test. Compass Coffee, veteran owned coffee brand with 16 store in DC, partnering with Coinbase to offer customers the option to pay for this morning brew with USDC. And I read this, I'm like, who's going to do that? Why would they do that? Why would you go through all the trouble of doing USDC, use Ethereum layer one and actually pay for it and then have these ridiculous fees? It makes no sense. Well, here's why. On Wednesday, customers who pay with USDC at the half street location will get 90% off their orders, which hopefully that does well, as well as a NFT that can be used to redeem for a free coffee with Coinbase and the Compass logo. So I'm like, that's pretty cool. But it made me think about, again, about, well, this is great, you know, World World use case, but I've used USDC on Ethereum Rails as far as layer one and I paid through the nose. So I'm like, how's this going to work? Here's how it's going to work. So if you go to on your Coinbase account, I don't know what exchange you have. I don't know what's offered all the exchanges. I have no idea. I'm stuck in America. I'm not stuck in America. I love America. I just that it has, sometimes doesn't have the greatest of exchanges but Coinbase is all right. So I did this and I said, okay, I want to send USDC. I bought USDC. This is on Ethereum layer one solution. I want to send it somewhere. So let's say I want to send it to this coffee shop. And you know that right now when you do that and you click on the send button right there in the middle, right by receive send, it's going to ask you, okay, how do you want to send this? And what Rails do you want to send it on? Do you want to use Ethereum? That's cool. You can do that, but it's going to be 10 bucks. You can want to use base, it's free. And I would assume, I would assume, I'm just guessing that they probably set up the coffee shop with the layer two solution, which is base. You can also use Arbitrum, Avalanche, Noble, Optimism, Polygon, you can use Salon, everything else. So when I did it, there's a little thing that'll come up that said, hey, if you're going to send USDC, because I picked Salon is for the heck of it. And if you do that and you transfer over to it today, there's no fees. Well, I was like 0.001 or something crazy like that. So you can do that and that's great. And on this channel, we've talked a lot about DEXs, how you think DEXs are going to be great and new best thing. And of course, that's where if you want to get like the true DGEN stuff, you can do that. However, when you go to like a Uniswap and you want to, I don't know, send some USDC, there's no option like that that I found. I could be wrong, correct me in the comment section, but it's going to cost you like seven, eight bucks. And then also on my favorite cold storage wallet, which would be Tangem, I tried the same thing and the fee was eight bucks. So I'm like, I'll be damned. Coinbase is doing the right thing by having these ridiculously low fees. So I just thought it was interesting. And if you have the option to use L2s, and that doesn't work every time, right? If you're trying to get into memes or meme coins and stuff like that, and you can do that on Coinbase, but it doesn't offer all the different rails that you can have. So people will say, well, just use L2s. It's not offered over all the time. So it's only offered on certain cryptos in certain situations like USDC makes a lot of sense. And yeah, let me just name it that in the comment section. And this actually would lead me to one of my last points. We did a deep dive into Minutes Network. This was, this is on Dan DGEN channel, which is where we go at like the more risky stuff. And one of the things that we talked about with people with this question was when you're doing, and it says here, the Ethereum layer for the payments, like how do they do that? And it's the same thing as far as like with Coinbase, they just do a bunch of batching. So even if you use Ethereum on Coinbase, if you just do one, it's pretty pricey. What if you have like 10,000 people moving things on the Ethereum layer one and they can batch it? It's like super cheap for them to do. And that's what they did right there. So just a little follow-up to that piece. But as a reminder, because I don't want to get people too much hopium, is that, you know, that coffee shop talked about, okay, you can do this and you pay with this and do NFTs. Almost on the same day, the NFT program from Polygon Labs has been discontinued at Starbucks. So maybe it takes a smaller brand to do it. I don't know. But Polygon apparently paid $4 million to host the Starbucks failed foray in the crypto. So they use it like it was a loyalty program, NFT based. And it would have worked pretty well. Polygon is side-chain, ZK rollup. Not for sure if it's, they want to classify it as an L2. Maybe I think, I always heard the side-chain people would correct me and said, no, no, it's an L2 with the ZK rollup. Okay, fine. But with this part, they shut the whole program down. They're like, yeah, we spent $4 million, didn't really get anything out of it. Maybe they got some data, that's about it. So not everything's gonna work in crypto and digital assets and just have to accept that, that's just a normal thing. It's just like every business that's out there. And like, here's a prime example. Apple, just a couple of weeks ago, shut down its electric car project. I don't know if you guys knew this, but Apple, the trillion dollar Apple company was really trying very hard to break into the EV market. For a decade, and they still couldn't do it. So I know everybody's excited about certain projects and this and that, but just know that in just like all businesses, not every single one makes it. And just you have no farther to look than the Apple and say, hmm, so when you're deciding on what to invest into, I can give you investment advice, but just remember, yeah, not all these things are actually gonna work. And that's where it goes. Anyhow, I want you to think about that in the comments section. Here's the Dan DGen. And then also lastly, this is a funny one. So we also did a deep dive into this, it was a project called XBorg. I linked that in the description underneath here. And just as a follow up, they're going the last chance to buy XBorg at a discount before it launches on public exchanges is in the next 24 to 48 hours. 8,000 people registered, token supply is 5%, dynamics already 100 million, 15% unlikely TGE, KYC, yes. And I brought this up because I just think it's a travesty. If you're in the United States because of the guy we just talked about in the very beginning, trying to label Ethereum as a security, you can't get into this free sale. Anyhow, but if you are outside the United States, not those 19 countries, you can either put 1,000 with a 5% discount, you can do an Xcode, which it tells you to 5,000 with a 10% discount. Xcodes will be distributed to our close partners or a Prometheus chess plate NFT, which you can acquire on Magic Eden, which we'll be talking and doing an education series with them, which is an NFT marketplace coming up in the next couple of weeks. But the reason why I brought this up is because they actually gave me a bunch of codes. And if you go and there's a link in the description, here's all the export codes if you want to get into that pre-sale and you were outside of the United States, just something to do, something to look at. And just so you know, they've already got almost 9,000 wallets and that was interest. And if you're looking to see what that actually is, it's pretty much a DID on web three. It's a web player ID protocol. There's a link in the description for the actual deep dive video. And that's it for today. And then lastly, lastly, if you are in the San Juan area in the next hour and a half, I'll be doing a quick meetup over at the San Juan smokehouse. Links in the description, hour, well, hours or hours, but the location is Plaza del Mercado in Santorce. Here's the address. I'll be there, talk crypto, all that good stuff. And again, you can find that link in the description. That's it for today, a little bit long. Sorry about that. That's it for this piece. So if you liked today's video, give it a thumbs up because the subscribing I'm gonna talk about is time sensitive.