 I'm Zach Weissmuller with Reason here with my colleague, Nick Gillespie, and as well as our special guest, Jesse Powell, the co-founder and current CEO and soon-to-be-chair of Kraken, one of the world's largest cryptocurrency exchanges. It's a real pleasure to have the opportunity to speak with someone in your position with your institutional knowledge about all this. So first of all, thank you very much for joining us today, Jesse. Thanks for having me. I wish there was better circumstances. I thought he was talking to me, but okay. Well, Anger, this is not, I mean, it's not the worst of circumstances, right? It's pretty bad. No, no, no, $10 billion hole. No, no, no, that's second to made off. Yeah, yeah. So what we're talking about here is the meltdown and bankruptcy of FTX under the stewardship of its founder, Sam Bankman Freed. And I just want to lay out some of the key facts at the top here before we dig deeper. FTX, which if you're not familiar with the crypto economy, you can kind of think of them as a bank that holds cryptocurrency deposits and also offers kind of interest-bearing products. And they loaned about 10 percent, sorry, $10 billion of those customer deposits, which is more than half of their total deposits out to its sister company, the hedge fund called Alameda Research, which is run by Bankman Freed's apparent ex-girlfriend, Caroline Ellison. And then as crypto dipped and a number of Alameda's big bets failed to pay off. And it became apparent that it was using huge amounts of its own in-house cryptocurrency as loan collateral. The entire house of cards kind of collapsed and the sort of bank run ensued and FTX had to pause withdrawals, declare bankruptcy. The future of Sam Bankman Freed is certainly an interesting question, but perhaps even more important to us here is the future of the crypto economy itself and its relationship with the regulatory state. So to kick it off, I want to just talk first a little bit about the personality and the media image of Bankman Freed or SPF, as he's popularly known, before we get into some of those media issues about crypto and regulation and even the talk of a potential introduction of things like a central bank digital currency. I think a way to get into that is to look a bit at the contrast in how someone like SPF was portrayed in the media versus say someone like you, Jesse Powell. There was a Forbes article from October this year that looked at some of the internal office politics of Kraken, and this is what they had to say about Jesse Powell. They said Powell's anti-woke views on things like gun rights and maternity leave were a problem unlike Sam Bankman Freed, who's positioned himself as a media darling ever defiant Powell 42 had become a liability. So could you talk, Jesse, a little bit about the person, the personality and kind of the media phenomenon of Sam Bankman Freed from your perspective? Sure. Well, who knows how much of it is real because he's come out and said that basically he just said whatever needed to be said to earn the most favor with whoever he was interacting with. And, you know, he says that basically he disagrees with all the woke stuff and, you know, he was just saying what they wanted to hear. But with the public, with the media, with Washington DC and regulators, he held himself out to be this effective altruist, this was kid billionaire who was going to give it all the way to charity. He wasn't doing it for profits or for himself. I mean, he actually did say he was doing it for profits. He had no interest in cryptocurrency or Bitcoin or, you know, what that could do for humanity. He was just here strictly to make money in order to give it away to somebody else later. And he gave a lot of it away to politicians in Washington over himself alone. I think it was like 40 million dollars, 10 million dollars to Biden alone and across this whole group and the companies and everything. I mean, it was I think 250 million dollars thing in that range. So from from my perspective and everyone else, I think we believe that Sam was was a deep, you know, hardcore Democrat who was fully in bed with the DC apparatus and, you know, his family has ties back to the regulators of some some relationships there, like through MIT and through their jobs. So the families are also, you know, big Democrat boosters. So he was certainly playing that role of being the guy who's going to, you know, be the media darling, tell them what they want to hear, appeal to the sensibilities of whoever's writing the piece. You know, he had been he was slated to speak on a panel for the New York Times, kind of a lunch coming up, you know, Zelensky and like yelling and, you know, a bunch of big shots. So it's kind of interesting how effective that strategy actually was and how deep he was able to get and how much really positive coverage he was able to get from the media, who is especially in publications like the New York Times, who historically just trash anything related to tech. You know, I mean, as you might have seen with the story about about me and Kraken, I mean, they were they were taking the word of a few former disgruntled employees to write this like soap opera gossip piece out Kraken. And, you know, when Sam obviously has stolen ten billion dollars from from maybe a million people and completely ruin their lives, they write this puff piece, which is just like, oh, whips. Like I kind of like, you know, didn't really like keep track of the numbers. And I just like accidentally lost ten billion dollars. Sorry, guys. Yeah. Can I ask a kind of general question? Do you think investors or, you know, crypto users or, you know, just customers of any, you know, kind of company? Should you should your radar immediately go up when a company is being fronted by somebody who seems to be, you know, the wet dream of the media or something? You know, a lot of people are comparing him to Elizabeth Holmes of Theranos. And it's kind of looking back at that. You know, and I mean, I'm happy to say reason was kind of, you know, a little bit on, you know, a little bit ahead of the curve on that. But like when you see somebody who is checking off every box that you want and running a company that is going to revolutionize things like, that's the time to say, I really got to start doing due diligence. Yeah, I think so. I mean, Red Flags went off for me. It was it was like this character is like too good to be true, you know, for for the media. And, you know, so many players in this space are just extremely authentic. People are in this for the value of crypto and what crypto can do for the world. And there's there's this general kind of libertarian bent to like the movement. So to see a guy like Sam come out and just go so hard in that direction, which is really bizarre for the space. I mean, you basically never see that to get so much traction. That strategy was a surprise, I think, to everyone. It's also quite interesting to see kind of behind the curtain. Now we've seen a few glimpses as to how authentic or inauthentic this this really was. And I want to give our viewers a sense of kind of the image that he was putting out there. There's this video that I'm going to pull up in a second that kind of explains Sam Bankman Fried's effective altruism. He was known for being a big proponent of this movement called the Effective Altruism Movement. And this is kind of how he was generally portrayed because he believes in the concept of earn to give, which means his goal as a human is to make as much money as possible just to give it away, earn to give. And that's exactly what he's doing. So let's say that you have a hundred dollars and you want to figure out what you can do with it to help the world. Earning to give is thinking about which causes which charity saved the most lives per dollar. This hundred dollars can go as far as it possibly can to help the world. Last year, this 29 year old guy donated 50 million dollars. Next year, he is planning to donate 500 million dollars a year. And next decade, he will probably give away more than 10 billion dollars. And then, you know, there is this interesting text exchange that was revealed by a box reporter where, you know, she asks him, you know, you were really good at talking about ethics for someone who kind of saw it all as a game with winners and losers. And then he goes, yeah, ha, ha, I had to be. It's what reputations are made of, to some extent. I get I feel bad for those who get fucked by it by this dumb game. We woke Westerners play where we say all the right shibboleth, so everyone likes us. What is your reaction, Nick, to kind of this disconnect between the image and the reality that has been revealed and kind of like what the underlying ethical structure, how that may have affected how this all played out. Well, you know, I want to go back to something Jesse touched on just a minute ago. You know, when he said that SBF was not particularly interested in crypto or Bitcoin or this technology and its possibilities for human freedom. I'm in between sessions at the Atlas Network, which is a group that facilitates think tanks in the developing world, especially in an authoritarian places. And they talk a lot about how Bitcoin is, you know, is a technology of freedom. And it's, you know, it's disturbing to me that a guy would say, you know, like I, you know, I just want to get rich and I could be, you know, I could be selling my pillow. But that was taken. So now I'm going to try and, you know, and use crypto to get there to do what I say. And I guess, you know, P.T. Barnum, who was, you know, was known as the greatest showman on earth and whatnot. We wrote a piece of published piece like in 2000 or 2003 about how he helped invent business ethics because he realized early on he could promote a show saying like you're going to see something spectacular, but not deliver. And people know it's a fake and you can get their money once, you know, and then that's it, or you can actually deliver what you promise. And then you, you know, you build a business and a relationship with people. And Jesse, I guess, to bring it to the crypto moment, you know, I mean, part of what's great about Bitcoin in particular, but other crypto currencies is that kind of what you see is what you get. Like there's, you know, it comes close to being a not bullshit world. Like it's not fiat currency, reputation matters. But in the end, it's like is the transaction in the ledger or something. So like, I mean, could you just maybe respond to that and then also talk about how does crypto, you know, you know, make, make people more free? How, why is it a good thing in the world in and of itself, apart from, you know, it's going to get slagged now because SBF was a was a fake. Yeah. And I think it's really important to draw that distinction between SBF, the fraud he committed and cryptocurrency, right? Bernie Madoff's scam is not an indictment of the stock market or Wall Street or equities in general. And I really hope that everyone sees that what Sam did was just standard run of the mill fraud. It just so happens that he happened to defraud cryptocurrency users, unfortunately. And, you know, I think the reaction in Washington, they're looking for any reason to clamp down on cryptocurrency. It's going to be to say, well, this, this obviously needs more rules. When, when that's not really the case. In fact, if it had less rules, more people might actually use it. Might not have been using a service like FTX where they got screwed. But to your point about transparency, you know, you write everything on the blockchain is, is there forever. Anyone can track back what happened and surely, you know, Twitter investigators, crypto sleuths have already kind of put a lot of these pieces together through the data available just on the blockchain. And it goes back to the beginning of of time for each particular chain. So, you know, you might have seen there have been a few cases where law enforcement, the FBI, IRS have found people that committed a hack like three years, five years back, just through, you know, they eventually slip up some at some point in the future. They use that Bitcoin with some KYC vendor or something like that. And they're able to track it all the way back to to where they actually stole the funds. So yeah, it's full transparent. So the good, good stuff it does for the world, you know, it's, it's a rail of last resort for people who are left out of the banking system. And that's about two billion people today who just don't have access to the normal financial services that we all have access to in the developed world. And, you know, we're just going to have like stumbling over access to financial services here in the U.S. So it's sometimes hard to to understand that. We had a conversation with someone in the Treasury Department in the U.S. who said, why would anyone use Bitcoin? Because my credit card works just fine. And, you know, I think that just shows like a fundamental lack of understanding about the rest of the world and the amount of financial privilege and access that we have here. And, you know, what Bitcoin provides, you know, it's kind of bizarre that we have this post office as sort of a rail of last resort for sending physical mail around. But you can't really live these days without a new banking system. And there's no there's no public guarantee, government guarantee to be able to have a bank account. The banks can just shut you off if they want to. And, you know, it's extremely hard to have a business without a bank account. So, you know, I don't know if you're familiar with Operation Choke Point, but basically this whole thing to basically ban through the abuse of the banking system businesses, which are totally legal, you know, like the sale of weapons or guns or pornography or, you know, marijuana to basically have the banks shut these businesses down just as basically like a business decision rather than making it about the law. And then just basically, you know, in fact, though, like kind of ban those businesses through the banking system without actually having to make new laws. So Bitcoin is, you know, a refuge for those people. It's that rail of last resort that they can go to when the banking system shuts them out. And, you know, the banking system might shut up for a number of reasons, you know, maybe they're just born in a place where they don't have a birth certificate, a social security number, whatever it takes to get KYC and pass that bar to KYC is know your customer laws. Right? Yeah, exactly. So like you don't have, you know, a government ID, you can't get one. You know, banks want you to make a minimum deposit. So it's a cost to actually open the account. There may be a cost to maintain the account. So it could just be cost prohibitive for some people to maintain a bank account. So there's those basic gates to like actually getting an account. But then there are like, you know, other reasons why you might not want to rely on the banks in a time of emergency and something we saw in Ukraine was people trying to flee the country and the ATMs are out of cash. And so what do you do? Bank, the branches closed, the ATMs are out of cash. You're trying to get out of the country. You're screwed. You know, you're going to have like hitchhike. Before we move into the Morse besieged about FTX and the coming regulatory, likely regulatory onslaught, let's dilate a little bit over the, you know, the public image of SBF, you know, part of the, you know, the press is going to be drawn in and the politicians to the salacious parts of this, you know, that he's in a polyamory, you know, a bunch of people living a club med lifestyle all like screwing and taking drugs together. I assume that's everyday life for you and everybody else who's involved in any kind of cryptocurrency is, you know, do you worry about that kind of, you know, you know, like fixation on, on business people's personal lives, particularly if it seems to confirm some higher calling or something. There's also this issue I'll just throw in there that this tweet I'm showing from an account called autism capital, which is really brought forward some interesting scoops. But one is that it looks like SBF was probably on this Parkinson's medication that he was using as a kind of new tropic like brain enhancement. So that's another wrinkle in here is the kind of role of stimulants or other new tropics in like driving increasingly risky behavior. But yeah, to Nick's question, what do you think about, I guess, like the kind of crypto culture question hanging over this? Well, he's probably getting laid more than most guys in crypto. But you know, and he's doing it without going to the gym very much, you know, so I guess more power to him like every, uh, yeah, free hash, you know, extra hash, he could have an extra 10 pounds. So I think we lost your audio there for a second. Oh, how is it now? You're back. He's back. Yeah. Um, you know, I don't, I don't know much about his lifestyle. You know, like I, uh, I lived in San Francisco for seven years. So I've, I've heard it all in terms of like, you know, personal relationship dynamics that, uh, people want to have. Um, I think it's clear from a bunch of interviews that he's done, you know, he's, he's on something constantly jittering. And, uh, he kind of like rambles on. So, um, you know, who knows what, I mean, the reports are basically that, you know, he was living in this 10 bedroom apartment. It's like, you know, orgy's going on drugs used all the time. Um, it's, it's just like, that's the future libertarians want, right? I mean, if, if, uh, we could do that all day every day, I don't have to worry about anything else. That would be great. Uh, so, you know, I, I don't know. You know, it's, it's, you know, what's, what's true, at least from my perspective, you know, I don't know, you know, I'm sure it wasn't, I wasn't totally, you know, uh, as sensational as it's made out to be, you know, the guys got to run a business at some point. But, um, you know, it certainly sounds like they didn't have much of a structure there. Uh, they didn't have much process, much, uh, much for controls. Uh, they certainly weren't auditing anything or reconciling their books. Um, it doesn't sound like they had very much experience leadership in the company and, uh, you know, it kind of sounds just like a bunch of kids got together and, uh, you know, instead of building this out of the garage or building it out of, you know, luxury rent houses in the Bahamas. And, um, it's just low in my mind that, uh, these VCs that threw hundreds of millions of dollars into this did not do any dillets, apparently. Yeah. Can I ask also just, I mean, because you're, you're a hardcore capitalist and, you know, in the very best sense of the word, do you worry that this type of, you know, now it's getting conflated though, you know, like we love SPF because he's not a capitalist. He's not making money because he likes making money. He's doing it so he can help everybody. And now the script is flipping and it's going to become like, oh, well, this is what ultra rich capitalists and innovators do. They defraud people. They live these cyberrhythmic lifestyles. So we got to, we really got to lock it down. Not just the technology, but also the whole thing. I mean, this, I, you know, friends of mine who are Jewish always talk about how like anytime, you know, when Harvey Weinstein was arrested, they were like, God, this isn't good for the Jews in a way with crypto. It's kind of like, this isn't good for the capitalists. Right. Yeah. I think this is one guy, you know, just like Weinstein was one guy and made off as one guy. Um, certainly most people in crypto that I meet are super. Awesome people who just want what's good for the world and they're very ideologically driven, fortunately, not by, you know, some kind of like a crazy version of utilitarianism, but, um, you know, most people want, want good things. You know, they got into the space to, to change the world and really to help people and to push crypto forward. They're not here first and foremost to make money. You know, I think Sam saw cryptos and as a means to an end and most people in the space see crypto as the end goal of delivering that. That's what we need to deliver to humanity. So, um, yeah, his, his idea certainly were, I think, in conflict with the rest of the industry that the point that you're bringing up earlier about kind of the roots of cryptocurrency and this idea of creating more of a parallel economy that is less reliant on centralized institutions and banks. And you mentioned a number of examples. Another one that comes to my mind that I did a short documentary on was the Canadian truckers situation. And, uh, you know, they got totally cut off their, their fundraising efforts got totally cut off. And however you personally feel about the politics of the Canadian truckers, it was interesting because what I covered was a Bitcoin based fundraiser that had some problems, but essentially it was the only currency that was able to get through at the end of the day. And it came down to a guy just handing out paper wallets for people to load onto their phones. Um, so that is kind of the roots of crypto, but SBF clearly was trying to push things into a much more regulated, regulated space. And that, in a way, was the beginning of his downfall. I want to bring up this coin desk article, which really kind of started to break open the problems, um, which showed that, you know, a lot of their assets were held in this coin that they themselves issued. Um, and, uh, there's another big play. Uh, this is just a tweet of him saying that they don't invest client assets in anything else. Clearly now, no, that is a lie. Um, the CEO of, uh, Binance, which is really the kind of heavy weight in this industry, um, had come in, uh, and obviously a rival to FTX, but also came in and initially it offered to buy them up or, and kind of offered a, an off ramp for them when he looked into the finances, he saw the problems and started tweeting about it. Um, and that kind of initiated the bank run. Um, one of the tweets that he made was very interesting. I have highlighted here, uh, we won't support people who lobby against other industry players behind their backs. Um, so it seemed that what, uh, bankman freeds, and I'm curious if you agree with this, what his agenda here was, was to create what they call a regulatory moat, um, around themselves where they kind of become the one, uh, regulated entity and it sort of elbows out the competition. Uh, and this angered his rival and, and that ended up being a problem for him. Um, there's been talk about the SEC head, uh, Gensler, um, and, uh, how he kind of failed to act and was maybe on the same page as SPF and sort of, sort of creating this new regulated space. Um, this is from a fortune article, uh, according to Washington insiders, the reason behind SBF's decision this summer to obtain control over BlockFi, which is also now freezing all of its customers assets, was to benefit from the troubled crypto lenders recent settlements with the SEC basically extending the amnesty BlockFi had received to FTX. So from your vantage point, as someone who runs a, uh, an exchange that I assume is subject to some regulations, what do you think about the approach that he was taking to these regulatory issues? Yeah. I mean, it's very problematic because, um, held himself out as a representative for, for all of crypto for the whole industry. And, um, at the same time was looked just very self interested. And, um, what he was trying to do was, was basically offer a trade to Washington, uh, through legislation to basically sacrifice some ground that I think belongs to the world in DeFi and, uh, you know, trade that for, uh, you know, bigger moat for himself, his own centralized business. So, you know, he was saying, all right, you guys can, um, we'll give you, we'll KYC all the wallets, you know, if you want to use Bitcoin, you got to get to a seed in exchange for that. Um, I can trade derivatives in the United States, for example. Um, so he's doing stuff like that. And, um, that really rubbed people the wrong way when they found out about it because, you know, we obviously feel like DeFi is not his to trade away. And, you know, if anything, we should be giving up the freedoms of these centralized venues, which have just been the problem all along, uh, which is why the re the reason for Bitcoin existing in the first place, and we should be giving up those freedoms to get more freedom, uh, for DeFi for, for the crypto native platforms. Uh, so, you know, from the perspective of, of other people in the industry, he was doing the complete opposite of, of somebody with good intentions, you know, or with, you know, uh, moral philosophy would actually do. So, um, yeah, we're, we're all very upset when we found out what he was doing. Uh, just to give a perspective there on DeFi, uh, decentralized finance, you know, uh, FTX was big, but the, the, the size of DeFi at this point is, is way bigger than, you know, he, he represents just a slice of that. This is a graph showing, you know, at one point over 120 billion locked into DeFi projects, now a little bit less than 80 billion. So, huge emerging industry. Uh, but Nick, did you have any, uh, questions about, you know, DeFi or, yeah. Well, one of the questions, Jesse, is how, how do industries, you know, particularly emergent industries, um, kind of get, you know, block the regular, I mean, I, I'm sorry to, um, falling over my own words here, but you know, I mean, he was seeking to capture the regulators for his own advantage. It's an emerging technology, and I'm thinking back, you know, maybe 10 years, a little bit more, uh, when Uber, uh, you know, Uber in like the DC area, you know, they, they, you know, they were permissionless innovation in San Francisco in New York, and they shut up in DC and Northern Virginia. And then when they reached a certain point, they were like, Hey, you know what, they went to the legislature in Virginia and said, you know, we agree with you. We gotta, you know, we should have rules and we should have all of these kinds of, uh, setups to make sure that our drivers are safe and the customers are safe, et cetera. And it was just a way to lock themselves into the market. Um, that is always going to happen, uh, particularly in emerging industries like crypto or, or DeFi or whatever. How do you guard against that? Um, because this is, you know, one of the problems, right? Is that like, you know, at a certain point, um, you know, as a businessman, it makes sense to go to the government and say, Hey, let's talk terms of surrender or a negotiated settlement. Um, you know, how, how do you keep away from that kind of thing? Because it ends up, you know, that company or the industry might do well, the government does well, but then the customers are kind of hung out to drive. Yeah, it's a really tough problem, especially in financial services because there's so much law there and there's already, uh, you know, all the incumbent players who have their votes, who've captured, uh, the political apparatus, uh, through all the money that they make through the laws and monopolies that they've obtained through doing that. Uh, so it's super difficult. I mean, Skype faced a similar problem, uh, when they launched fighting with the telcos and existing laws and, and, um, you know, they were being treated with the same rules as a, as a telephone company when really they weren't there. You know, whatever IP company, uh, and they had just very different architecture and a million reasons why they should not be treated like a telco. Uh, but, you know, the telcos, they're saying, yeah, you guys should be treated like a telco because of course they're scared. They don't, they don't want Skype to eat their lunch. And so, um, you know, sometimes you have just bad laws in place that, that have not predicted the future and a new technology emerges and, and the laws need to be changed. And, um, that's where we're at with a lot of the regulation that, um, captures crypto right now is that these laws are 80, 100 years old, you know, they're, they're contemplating orange groves and, you know, traditional commodities, uh, never imagined the internet, much less Bitcoin or cryptocurrency. So we, we really need change at the legislature. The regulators are out there just looking to put notches on their belt. And so, you know, they, they see something and they, they go after it and it doesn't really matter to them if, if that's good public policy or not, you know, or if they're crushing an industry that's very important to, to their country. Um, so for us as an industry, you know, we've got a lobbying team at Kraken. Um, we've got guys in DC full time. Many of the other players in the industry do as well. We have, uh, several, um, industry associations, uh, so we have like blockchain association. There's, um, coin center, which is a great think tank that looks out for the space. Um, there are many, uh, industry groups that are, are working behind the scenes in DC to try to educate, uh, politicians and make sure that bad law does not get, uh, get through and that good law does get written. Um, but it's a constant battle, you know, as you say, there's, there's, uh, the side that would love to be crypto destroyed because it's bad for their business, just like Skype was bad for the telcos. And, um, and then there's a side of crypto, the people that, um, you know, are trying to defend this new technology because of all the great good it's going to do for humanity. I mean, imagine if voice over IP were banned and we all had to keep using telcos to, to, well, none of this would be happening, right? Exactly. So I'm, I'm, I'm curious, Jesse, about this initiative that, uh, I know Kraken signed on two years ago. This was back in 2013. Uh, it was kind of an effort to self-regulate among some of the big players in the industry, the digital assets transfer agency, I believe it was called. Um, what do, what role do things like that play in this conversation of the ability of industry to kind of kind of try to set best practices without the government coming in? Um, or is that just kind of like temporarily trying to keep them at bay, uh, until the inevitable clampdown happens? Um, good question. So we tried to, to launch a self-regulatory organization in, and I think it was 2014 or 2013 and called data, the digital asset transfer authority. And, um, we were hoping to develop something kind of like a FINRA, you know, which is basically like a non-government agency, but, um, that works with government that has some authority from the government to actually enforce, um, what it's doing. So, you know, we, we launched it. Um, there was some interest, uh, a few players got involved, but, um, you know, because, because we existed to basically put controls on the industry. A lot of people just said, well, that sounds like putting myself at a competitive disadvantage to join that. So unless you can get everybody in there, then, you know, why would I be the first or the next to go in there? You know, I'm kind of going to wait, I would like to be the last one to go in there, if ever. So, um, you know, we had this problem where, where the members were, were disadvantaged basically versus their competitors who were able to be more fast and loose with their business and, and not adhere to the same kind of constraints. And, um, we tried to get some support from the government, you know, and actually this, this works pretty well in Japan. We have a self-regulatory organization there, um, that we helped found and were a member of, and, um, that actually has some teeth, you know, that the government, um, leans on that to, to basically vet other players in the industry and identify, you know, potential enforcement issues and things like that. So, um, it actually has some power and, and you have to be a part of that group, uh, to be licensed in Japan. So, um, very different, uh, from the, from the U.S. here. And I think something like that could work, but it really needs. So your audio dropped out. Oh, yeah, looks like you're muted. Yeah, you're back. You said it could work like that here, but it would need something additional. Yeah, we would just need the government support to do it. You know, it just has to have some kind of real authority to implement the consequences. So is that, uh, and that would be more like, uh, you know, kind of like an underwriters, underwriters laboratory or ASTM, which sets standards as opposed to like the movie writing system, which doesn't really matter anymore. But you know, the MPAA ratings were put in place because the government said, if you don't do this, we're going to regulate. Um, but you know, do you, do you think it would be possible to, you know, develop industry wide self-practice, you know, best practices that are then kind of publicized and enforced? Yeah, I think it's good to do that. You know, we, um, unfortunately we have companies all over the world and, uh, you know, what would be a disaster is to have like a different regime for every country where, you know, we have like just different rules, significantly different rules everywhere. So it would be nice to have kind of uniform, uh, rules. However, um, you know, they could get it wrong as well. You know, I mean, we wouldn't want rules that exist in Japan in the States and we wouldn't want New York's rules in California. Um, because, you know, Japan is extremely conservative. Uh, we have to get pre-approval to, to launch support for our new token and they might take six months to, to think about it and to approve it. And, um, you know, that doesn't really allow us to be competitive in the market with other players outside who, you know, maybe they can, they can support a token whenever they feel like it. We've got six months. So, um, you know, first and foremost, I think you don't want to put the good actors at a competitive disadvantage. And, um, you know, second, I think if you, if you are going to enforce these kinds of rules, you have to do it universally. Basically, you can't let the bad guys keep getting away with it because then it's just a slap in the face to the good guys, you know, who, I mean, basically you're buying protection. You should be anyway, you know, and that's a problem. It was a problem that TX as well and why, how they were able to be successful is they went offshore. Um, we're doing stuff illegally, basically stuff that crack and coinbase Gemini could never get away with because we've been around for so long, we're so heavily supervised that, uh, you know, coinbase has the SEC for permission to, to do this, like three or four percent yield product in the United States. And the SEC said, no, meanwhile, FTX is doing the same thing offshore for like 10 percent yields and, um, and getting away with it. So, you know, basically what the SEC has said is, um, you know, if you're onshore, if you're in our backyard, we're going to shut you down your target. If you're offshore, well, you know, you're kind of hard to go after. So you do it, do whatever you want. I mean, you know, they would say officially, yeah, that's illegal, but unofficially, they're just kind of a hassle to go after. So like, you know, we can't really stop them. And in the long run, is there any substitute for, you know, kind of individual responsibility might be the wrong word, but, you know, individual responsibility and kind of literacy about what you're investing in or where you're putting your money, because it seems like no matter what whatever regulatory regime, whatever best practices you come up with, there's always going to be bad actors. And, you know, it seems also that crypto at this stage is, you know, most people's understanding of it is zero and even people who are aware of it, it's, you know, we're in the real early stages of it. But ultimately, you got to be saying to people, like, don't put money into things that you don't understand or that you can't afford to lose, etc. And that, you know, that kind of caveat mentor mindset, which is not the greatest world to live in, but it might be the only one where you can really make sure that you're not going to get screwed. And I'll just add on to that. It's also pretty clear that what SPF did was illegal. I mean, it was fraud regardless of whatever kind of preemptive regulations you put on something, you know, taking so telling someone that their money is an account, but you're actually using it to leverage your other company. That is fraud and you don't really need complicated financial regulations to prosecute fraud. So what really does this tell us about the need for more regulation of crypto or can it be brought down more to the kind of individual caveat mentor level? Yeah, certainly an aspect of doing your own research, you know, I think that it's hard to expect everyone to actually do that research. I mean, even for the stock market, right? People are investing in stocks that they really they haven't done the fundamental research or not sitting in on the annual calls or, you know, the quarterly reports or anything like that. They're just basically like, Oh, do I like Apple? Cool. I'll buy some Apple stock. Like they don't know what the balance sheet looks like or anything like that. So I think that's always going to be a thing. You know, I think a lot of the problems with fdx came from this kind of like confidence game around it and their ability to like build all this status, you know, part of the reason why you would you would invest in Apple is because they've been around for a long time. They have all this status, you know, they're well regarded among your friends and in the media. And, you know, fdx also managed to build this like this extremely high status thanks to the mainstream media, puffing them up constantly. And thanks to the donations that they've been giving and you know, this the whole persona, you know, I think just played very well with the media. So that's a problem is just that kind of facade that they were allowed to create like without completely without any kind of like critical judgment or analysis from the mainstream media that was giving them all this like fluffy coverage from from venture capital, you know, and you see those when you see a name like Sequoia on a company, and they've written a nine figure check, you think, oh, they must have looked into this, they must have done some diligence or not just blindly writing nine figure checks to people. But turns out they actually did just blindly write check. And I think in doing so, you know, they put their name on something and people looked at that and they thought, oh, that's a stamp of approval. That's, you know, some kind of seal of authenticity. So I can trust this company. And yeah, I mean, it what raises a lot of eyebrows now with this portrait that has emerged and the kind of, yes, the fluffy coverage is there. We now know, I mean, that he was a large donor, political donor, specifically to the Democratic Party, he gave to some Republicans as well. But this chart here on the left shows that he's the number six political donor at the federal level for 21 22, the number two to the Democratic Party behind George Soros gave about 38.7 million dollars. So how does that factor into this equation? What do you think he was up to here with this kind of massive campaign of political donations going into the midterms? I think he was looking for political favor with with the regulators. I think he knew that he was in trouble and doing a lot of shady stuff. And I think he had a lot of liability out there. I'm sure he was facing some heat from OFAC and from the SEC and, you know, probably from many other regulators over the way that he had operated his business. And, you know, I'm sure he was kind of trying to buy his way out of trouble. And, you know, I think these donations also play very well with with the mainstream media. And so, you know, I think it was all part of a marketing campaign in a facade that he put on, you know, it's, you know, this is sort of a combination of Madoff and Theranos together because, you know, he was just like Theranos, he was able to attract all of these well respected people who had, you know, unimpeachable reputations, get those people around him to devouch for him. And, you know, I think by making all these political contributions, you know, he sort of bought that kind of status. He was on stage with Tony Blair and Bill Clinton at his conference. So, you know, I think by surrounding himself with all these people and making all these donations, it's all just, you know, this, the status play to show that he's, you know, the super virtuous guy and, you know, he's aligned with the current administration and, you know, maybe it would be politically unfavorable to prosecute him for some of the things that he's doing, you know, or at least, at least, you know, if you're the SEC, maybe he's not going to be at the top of your list. You know, a couple of days ago in a tweet thread about this, which I recommend everybody check out at JessPow on Twitter, you're pleased as an industry we have to recognize the signs, believe people when they show, tell us who they are the first time, shame them and shut them out. If we don't, they'll take us down with them when they inevitably destroy themselves. Don't trust verify. Are there other players in the crypto world that you want to call out right now that are that are bad actors? You know, it's very hard to know what's going on behind the scenes at these companies. You know, I think something that people can look at it. And there are, you know, there were many red flags with FTX, but, you know, I don't think any of the other CEOs are sort of like as egregiously trying to buy political favor like that, or, you know, appeal to mainstream media. But things are, you know, like, do they have a token? And does that token do anything? Does it have a reason to exist? Or is it just to inflate their own balance sheet? Do you have a reason to believe that they're engaged in a ton of lending activity? You know, a lot of these guys that have blown up recently were taking out huge loans. They were hugely leveraged. And what they were using for collateral is other tokens with basically zero liquidity, you know, and like this FTT token that FTX had was was their own token and really very illiquid. And they were taking out client loans basically against that. So, you know, what else to look for? I think longevity in the space is something that people can look at. You know, Kraken's 11 years old, Coinbase, I think is also 10 or 11 years old. There are a bunch of companies that have been around, you know, and I think if you've survived this long, if you've survived over a decade in the space, probably doing something right. FTX emerged in 2019. So they hadn't been really through a bear market cycle. You know, they hadn't had to deal with a credit crunch yet. So I think looking at those companies that have been around longer, probably safer. You also again, this will try and put this in the show notes or the page, but you also say US lawmakers and regulators have some accountability to you drove this business offshore because you refuse to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongly focuses on convenient, unsure, good actors, you know, clearly, you know, the crypto industry is going to be making a lot of visits to Washington or being called on the carpet, that type of stuff. Are there who are the people in Congress that kind of get crypto, you know, and are not going to be wowed by somebody who's giving them money or is talking about effective altruism, but is actually explaining the potential of this technology to increase human flourishing. I mean, who are there? Do you have allies in Congress that that are worth kind of reaching out to or knowing who they are? Yeah, there are quite a few actually in and they're increasing in number. You know, Emma is is a great advocate for crypto to me Lummis. Yeah, to me, he's gone though, right? I mean, he's on his way out. You got John Fetterman instead. I suspect he's either Fetterman or Oz, right? I don't think either of them, you know, are going to be pro crypto, right? Probably not. So you're right. We have a we have a lot of work to do in Washington. Yeah, you know, I'm going to be beating the drum that like there's nothing to do with crypto. I don't think Wall Street got taken to Congress, you know, after after made off, you know, to try to defend the stock exchanges. So but yeah, the perspective is there that this is somehow crypto's problem. You know, I think we really just need to keep beating on that that these are two separate things. Another aspect of this that has generated some level of discussion is that FTX sent set up in exchange or set up a helps Ukraine set up a website that allowed people to send money to basically support the war efforts to send crypto directly to Ukraine. There's been some implications. I don't think there's any hard evidence of this that it's, you know, some sort of like money laundering operation or something. On the other hand, you know, it could just be, you know, something to help a cause that SBF believed in and it seems to have generated quite a bit of funds for them. Do you have any thoughts on the do either of you have any thoughts, I guess, on the Ukraine connection? You know, you mentioned Ukraine earlier in the context of Bitcoin allowed Ukrainian refugees to get out and take their money with them in a way that basically no other financial tool could be a hardware wallets. But now we're getting into the realm where crypto is actually allowing people to fund a war effort. Yeah, I don't know much about this. You know, Kraken actually get money to our Ukrainian clients directly. We gave them back their fees that they had paid and we gave them actually the fees from our Russian clients. So revenue that was generated from Russia went to our Ukrainian clients and people received like over a thousand dollars per person. So, you know, we felt like we should fund the individual clients that have been well to us, not put money in the government's coffers. You know, I mean, these people are trying to just get out of the country and live. So we went that route. Yeah, I've heard these rumors as well that that they were that that basically they were facilitating the transfer of money to the Ukrainian government and that the Ukrainian government was sending money back to them somehow that, you know, that there was some conspiracy to like spend the Democrats. There's no verification there. Like there's we see that they were that they set up a route for money to go to the Bank of Ukraine. But the thing that's missing there is the money coming back. And there's not really an obvious reason why that would be necessary. But yeah, that's just kind of floating out there. But one last couple things before we get to some audience questions, you know, Edward Snowden and a few other people have raised this prospect of kind of the imminent introduction of what are known as CBDCs, Central Bank Digital Currencies, which would be a kind of government generated version of cryptocurrency, programmable government money is is how some people might put it. This this tweet that he's referring to talks about an experimental digital dollar pilot that is being done in conjunction with some of the big banks and the New York Fed just to be perfectly clear, it looks like that idea was being kind of in the works before this all happened. But, you know, the pilot is proceeding a pace. What do you think about this CBDC question? Is it something we should be worried about or something that should be welcomed? On the one hand, it could be the gateway for a lot of people to get into true crypto. You know, if the government says, you know, you can get your tax refund or you can get your EBT or you can get a kind of airdrop payment that they want to make and kind of relief payments. If you can get that through a CBDC, I mean, the government shockingly has a very hard time giving money to people. And I mean, even during COVID, they had a hard time collecting it and they were the IRS was backlogged. So, you know, I think on the one hand, the government needs a more efficient way of collecting and paying out to people. On the other hand, be a total dystopian nightmare and all of money, you know, if this is mandated, they have to use this. And, you know, I'm sure they'd be looking to kill cash right after they roll this out. Then, you no longer have any finance privacy at all. You know, maybe it's not hard to see, you know, another step after this, which is, you know, some kind of China like Sesame System where you have basically a social credit score and, you know, they can just from the top in Washington press a button and turn off all of your money or your ability to spend your money based on your political beliefs or the way, you know, what you're saying on Twitter or whatever, you know, it's just it's a really ridiculous amount of power to give them. And so if it's just one option, you know, as an alternative to cash that you can use voluntarily, I think that's great. You know, many people would use that, especially, especially the unbanked if the government is saying this is going to go a rail of last resort or digital dollars. Everyone can use this. It's just like a Bitcoin wallet installed on your phone and, you know, your address is your social security number or something like that. You know, it's like, you know, that could be nice. But to to mandate it to, you know, I think that is like full dystopia. And I think the government really should have no business in money. I think we need a separation of money in state. And, you know, I think if if allowed to to compete, I think Bitcoin will win in the end. Can I ask just real quickly to follow up on that, you know, from from a kind of libertarian perspective, the fear always tends to be the government is going to muscle it and take over an industry and do something like central bank digital currency. When we look at the Internet, you know, which obviously has longer roots, but coming online as a mass medium, you know, mostly through the web in the nineties, you know, it kind of turns out at least in the US that it's not the government that is really regulating things in the ways that make people upset. It's large corporations that, you know, mostly one massive market share because they had a good product and expanded it, you know, whether it's meta now or, you know, Facebook and Twitter and like major places. Do you worry about that in the crypto space or do you think it's actually different so that it's not going to be, you know, Binance, you guys, Coinbase? Like will it always be more open or do we need to, you know, I mean, obviously be worried about central bank digital currencies, but also about, you know, whatever becomes the GM, Ford and Chrysler of crypto. Yeah, we do certainly need to be worried about the big deal companies, Kraken included. I mean, I mean, you shouldn't trust us just because we say so. I think that, you know, I think in your tweet storm, you said, don't trust verify. Absolutely. And, you know, please don't leave all of your life savings on Kraken, spread it around and mix it up, leave only what you act of trading with. And a great thing about crypto is you can do self custody. But yeah, in the long run, you know, I think we'll see more players like FTX who come into the space because they just want to make money and they're going to try to build them out. But, you know, I think more of the threat is probably coming from the legacy system who who wants to shut Bitcoin out or wants to do Bitcoin in a way that works for their business. And, you know, should should rightfully be concerned about DeFi and, you know, being disintermediated from the future financial world. I want to we're going to turn to the audience questions in a second. I want to ask one more question because you mentioned self custody. And this has been the kind of mantra of a lot of what are people called the Bitcoin maximalist. They're mantras like, you know, not your keys, not your coins. Kind of one of the highest profile people along these lines, Michael Saylor, whose micro strategies has, you know, a lot of money in Bitcoin. And what he says here in this interview with Fox Business is, you know, crypto may have been the problem, but Bitcoin is still the solution. It means you don't have to trust the FTX's of the world. I'm a big believer because I believe that all the crypto in this case may have been the problem with the coin solution and may have made a million Bitcoin maximalists with this crash. So what do you make of the Bitcoin maximalist case? I mean, on one hand, as someone who runs an exchange, I'm sure you don't want people to have no money on exchanges, but does do people like Saylor have a point that people need to just realize that self custody, you know, having total control and not relying on intermediaries is the kind of safest, most secure option. Yeah. First of all, crypto is not the problem here, right? Like cash is not the problem when a bank gets robbed. The problem is the bank robbers. But, you know, Bitcoin offers self custody. Every other cryptocurrency offers self custody. I do think that that is one solution. You know, I think people were just kind of overly trusting of FTX for many of the reasons that we talked about earlier. But the future, I do feel like there is this on-chain world where people do take custody of the majority of their funds and you know, they have they have full control and they don't rely on a middleman to say yes or no to every transaction that they make, you know, and I mean, as we saw in Canada, you mentioned the truckers. There are innocent people caught up in that in those account freezes, you know, guys just were, you know, selling coffee in the vicinity of the protest, had their businesses shut down because of, you know, the government's action and, you know, they take an executive order to do that basically like, you know, a wartime power to freeze bank accounts without any due process. And so even if you think you're a legitimate person, you're never going to get in trouble, you might just be walking through the wrong protest at some point and have your bank account shut off without notice. And then what are you going to do? You don't have any money to hire a lawyer now because your bank accounts gone. So, you know, Bitcoin is an insurance policy for everyone. Self custody is an insurance policy. It's something you can have when they come to take everything else. And I asked, can you make a quick case for you are an intermediary, right? And, you know, capitalism, you know, on the one hand, it allows people to be individual. But I mean, it's the greatest mediation system in the world where, like, you have no idea who you're dealing with, but somehow what you need shows up at a price you might be willing to pay. What I agree with you, you know, about self custody and that will be, I was just talking with somebody today about that, you know, and this is kind of like, it seems impossibly hard for most people. It's like when the first cars came out, like how the fuck do you work all these gears now we're used to it. But make make a brief case for the intermediary for the role that Kraken plays and other exchanges in, you know, in this brave new world of defy. Yes. So we see ourselves as a bridge from from the legacy world to the new world of of crypto. You know, most people coming in with fiat currencies to buy crypto currency, you know, they're not starting out having earned cryptocurrency at their job or something like that. However, some companies do, you know, Kraken pays people with cryptocurrency if they want to do that. So most people are coming in with all else. I'll point out, you know, we're published by a nonprofit and we accept Bitcoin for tax deductible donations. So all right. Awesome. Do you accept NFT donations? You know, we sold that we auctioned off an NFT last year, which I believe is trading at less than for what it was purchased. But we love the person who purchased it. So we certainly will be. Yes. Cool. So, you know, for us, yeah, we're that bridge, right? Like most people, the vast majority of people in the world don't have crypto yet. They have some form of national currency. And so they need a place, you know, just like a currency exchange basically, you know, when you're traveling to another country or at the airport, you got to get the local money. And if you want to get into crypto, you want to trade NFTs or you just want to invest in Bitcoin. You need that kind of currency changer that can bridge the legacy banking system, the traditional money to the new world and give you, you know, do that swap for you get you into crypto. But once you have your crypto, you know, if you've bought it on Kraken, you can withdraw it into your own self custody. And then you're off to whatever you want in the world of DeFi over control your keys. You can make trades with other people without any middleman involved. It's purely done atomically on chain, fully transparent. So we highly recommend people do that, you know, after after they have their coins, if you're comfortable, if you trust yourself enough, take your coins off and carry on your journey into crypto without needing that trust of a centralized exchange. Can I ask just to follow up on the NFT question, you know, there is a court case coming up of insider trading related to NFTs that were sold on open sea. And again, this seems to be wrapped up in this coming desire to demonize crypto. And again, that seems to be there was a guy who had advanced notice of what was going to be listed on the front of open sea. So he would buy, you know, an NFT that he knew was going to be up there because it was going to be worth more. Is that another case of where, you know, there's going to be a rush to demonize what is seems to be and who knows in this particular case or even with SPF, but, you know, kind of a legacy version of fraud or criminality, just getting rolled into, oh, you know, but it's worse when it's, you know, when it's an NFT, it's worse if it's, you know, insider trading is worse if it's in crypto rather than in a stock or bond or something. Yeah, I mean, we're we're certainly going to see more of that just as you know, well, to your point about this SEC case, I think it's going to be very interesting to see whether this is actually insider trading. I think it's that NFT was probably not a security, you know, just having advanced information as an employee. You know, I think I think they alleged that the crime was actually against the company against their employer. It wasn't actually, you know, the traditional kind of form of insider trading, but it'll be very interesting to see how that case plays out. But you're right that, you know, every time we have a new technology emerge, criminals go to that to start doing what what they've always been doing just in the new format. You know, they've they use a telephone to scam people, and then they use the internet to scam people. And now they're using cryptocurrency to scam people. Or, you know, I mean, in the case of OpenSea, could have been anything, you know, they could have been selling Pokemon cards. So it's just so happens that, you know, cryptocurrency is a new thing that now people are touching and interacting with. And scammers are just going to do what scammers do. And, you know, scam whoever they can scam, it just really has nothing to do with cryptocurrency. But yeah, I think we'll just see, see more of that scammers get more familiar with the technology. There's an audience question here that I think goes to that issue. We were just talking about a minute ago about self custody, going, you know, on and off ramps, getting people introduced to crypto. And it comes from Liberty DIY, who says government trolls the on and off ramps with KYC. And KYC is short for know your customer. It's a regulation that requires pretty much any financial entity to verify the identity of their customers. And in terms of financial privacy, that presents obvious problems. If people do want to use these coins for to transact in private and not have every transaction linked back to them, there's ways around that. There's mixers. The government has started going after some of those methods. What is your opinion about KYC? Is it something that you think is should legitimately is legitimate or could be looked at and reformed in some way? I think it's a huge, it's a huge burden. And I'm skeptical that it achieves the stated goal, which is to to basically prevent crime by knowing who everyone is. You know, hackers and scammers are able to get fake identity information, or they'll pay people to set up fake accounts for them. So or there's steel accounts from people that they hack. So I think that it doesn't really stop the most sophisticated criminals. And it puts a huge burden, a huge amount of overhead on the whole industry. And in everyone in the world, you know, like I said earlier, there are a lot of people that can't pass that bar. They don't have the information, the ability to really prove their identity. So it leaves a lot of people out. And it creates these massive treasure troves of personal information for people to hack. And it's just happened over and over. And I mean, even the government gets hacked in those tons of of personal information. And, you know, with crypto, because everything is on the blockchain and it's there forever, the crypto exchange gets hacked. And you get a list of all the addresses match up to all of the users. And you get those real identities within anyone can can see for for all time, you know, unless like you said, you use a service like a mixer, which are coming under attack. You might have a complete view into someone's total financial history for what they've been doing with cryptocurrency. So that's pretty scary. I think that they're huge risks with doing KYC and creating this treasure trove. And I don't think it actually prevents real crime. I mean, as we've seen, these banks have gotten massive $100 million billion to fine for their lack of like doing it properly. And so I think it's a it's a huge problem and it's keeping a lot of people out. And I don't think it's really achieving the goal. What would what case would you make for the notion of financial privacy because a lot of people and I think you're going to increasingly hear this as if if cryptocurrency continues to grow in popularity and especially privacy related coins or tools that only bad people who have only use case for cash and Bitcoin and crypto is criminal activity. Like you hear this a lot. So is there a legitimate case in your mind, Jesse, for financial privacy? Yeah, I think so. You know, I mean, if everyone would love to have more information about everyone that they interact with. But you know, I think it it possibly creates a system where people are not allowed to speak, they're not allowed to fund things that are important to them because of the political blowback, you know, imagine you're going for a job. And I can just look up and see everything you've ever bought in life. You know, it's already bad enough that I can look at your Instagram account. And some people forget that going to apply for a job. But imagine just having a complete view into your financial history, right? Like, I mean, you would always have to be paranoid that, you know, you bought something that disagreed with whoever's interviewing you in between businesses, right? Like a lot of the transactions that we make on our competitors know where we're sending our money around. That would be awful, right? That would that would expose a lot of confidential, strategic information about what we're doing. We don't want people necessarily know who our business partners are. So I mean, there are a million reasons to have financial privacy. You just don't want the whole world knowing what you're doing, even if you're a good actor, you know, it's not that something you're doing something is illegal, but I feel like financial privacy should be a basic human right. Just like, you shouldn't be forced to, like, disclose your passwords or, you know, what's in your head. And, you know, I think the attacks on these mixers are highly problematic because mixing is not inherently wrong or even illegal. You know, what's what's illegal is laundering the proceeds of crime, basically. And if you're not laundering the proceeds of crime, if you're just trying to achieve financial privacy with your own legitimately earned money, there's nothing illegal about that. No, you know, and as you were talking, I was thinking, too, you know, it's a weird conversations act that we're having more and more. But it's like this is a country that was founded on anonymous political speech. And you know, and the Supreme Court has said that money is speech. And like I know people who have, you know, when you try to, you know, make political change, like you are going to incur enemies and kind of like free speech and anonymous speech, you know, this is one of the ways that a free society and an open society works. And again, I think you're right, Jesse, you know, it's one thing if the government has, you know, a search warrant and they're, you know, they're investigating a crime and they present through a legal structure where there's due process and everything. OK, we want this particular piece of information that is a radically different alternative than saying, no, the default is we see everything you do. Because then you get into a situation, you know, you give me the data and I'll show you the crime. It's it's not good. Yeah. And also the enforcement mechanism for going after these mixers is it's a huge problem, too, just because there's people. I did a documentary that we can put in the show notes on this about an interview with some of the coin center guys about the tornado cash issue, which is tornado cash is a mixer that is used on on Ethereum and it was sanctioned because a group connected with North Korea was apparently using it to facilitate weapons purchases. So you can see that's a legitimate national security issue. But at the same time by sanctioning everything that went through there, basically any coin that touched that then can taint an entire network of coins and it's it's a huge mess. So they got to figure out a better way to kind of target those kind of sanctions, I think. There was another interesting question here for Jesse from Tron. What do you think of the XRP lawsuit with the SEC? Will it provide more clarity for crypto law in the US? And you could explain you know, what he's talking about there. Unfortunately, I don't think it's going to give us more clarity. I think it might keep the SEC at bay for a little while. I think what we really need for clarity, though, is new legislation because the regulators are still working off of these old laws that are many decades old. And I think we just need new we just need laws that contemplate from the beginning how Bitcoin should should be related. Can I ask a question which it's related, but it's not exactly Jesse, what is it like to be building the future of, you know, kind of of like the money economy and things like that? Because, you know, this is something I'm older than you guys. So like I remember reading, you know, this kind of stuff in 80s cyberpunk fiction and stuff like that. But it is here and you are doing it. And like we're talking to you because of a really bad situation. You know, that is probably going to result in some bad stuff. But I mean, it must be pretty fucking cool to be doing what you're doing. You know, is it or is it really just the pain in the ass? It's super cool. It's also extremely exhausting. You know, like stuff like this, you know, I don't like hanging out in Washington, D.C. But, you know, I'm surely going to have to go out and now explain the situation. So, you know, they're constantly fires to put out. They're constantly attacks coming at cryptocurrency. I feel like the mission is extremely important for the world and for humanity. And I think to finally get this completely permissionless, completely non-custodial money that isn't controlled by any government, you know, no gatekeepers. I think this is just a huge leap forward for humanity in the way that the Internet was a huge leap forward. And, you know, I think it's hugely democratizing. You know, I mean, what the Internet did for information cryptocurrency will do for money. And I just can unlock all kinds of, you know, economic growth and human flourishing, you know, that we haven't even imagined. So that is all super exciting. You know, the mission is what keeps me going. And I think that's why a lot of people are here in this space. And, you know, so if you come to work in space, if that kind of stuff interests you, it's just very exciting. You know, a lot of people it's both their work and their hobby and life passion. And so, yeah, it's it's super exciting and fun. It's sometimes very difficult. And, you know, we got to we got to do things we don't like, like, you know, put on a suit. But yeah, mostly fun. So I'm going to go down if you work in reason, you don't have to wear a suit. I'm just saying. I'm going to go to this last audience question and then kind of get your final thoughts here. First, there's a couple of Jesse fans in the comments cracking OG proof of reserves supports privacy coins, no exchange token, etc. LFG, Jesse Gigachad, Jesse Chad. There's a question. There was one. Oh, here, this was the last question I wanted to bring up. Matthew Istrin, what steps does cracking put into place to prevent something like this from happening to them? I mean, I don't think the exact thing that's going to happen to FTX is going to happen to cracking because you don't have that kind of arrangement going on. But I mean, other players in the crypto industry have been touched by the FTX scandal because of, you know, intermingling their business with them. So what I guess kind of business lessons have you taken away from this? Well, certainly, I mean, we knew this before we've been around for so long, we've seen everything. But, you know, certainly be careful with who you trust your money with. I think that's number one. I mean, even for crypto businesses, you know, we always tell people not your keys, not your coins, you know, meaning if you don't actually sell custody, you know, you're trusting someone else to do custody for you and they could screw it up. So obviously, don't keep more than you can afford to lose with another venue. You know, FTX is doing a lot of crazy stuff. It's clear they basically had no structure to their business. Certainly not what you would expect of a regulated financial services company. You know, their whole team, we were talking to some of the same investors at the same time, you know, and the investors are so impressed FTX was doing with like 50 people, what Kraken was doing with like 3,000 people. And I was like, well, are they really doing everything that we're doing? Or, you know, is this whole thing just like a facade? And, you know, it turns out like a security team is over 100 people, right? So like, how could FTX with 50 people in the whole company be doing as much for security as we're doing? And it turns out, I mean, they're basically doing nothing, right? Like there was basically nothing under the water. This was just like all surface level stuff. And the whole thing was run by like a few people who had very little business experience. If you look at Kraken's leadership team, it's all fairly seasoned people who've worked at other reputable places. You know, obviously that doesn't mean there's nothing, you know, nefarious going on. But, you know, I think when you look at something, you know, I think a lot of people look to FTX trading venue, you know, they just, it was a good place to trade. They didn't think so much about whether it was Fort Knox, you know, like where they are going to be a good place to put their life savings. And I think all the signs said that this is not Fort Knox. This is a very like shallow kind of operation that's, you know, very like doesn't have much for infrastructure or for, you know, support teams and things like that. So, you know, I think just look out for the signs. You can only do so much with like 50 people, you know, you're you're not going to have huge, huge accounting system that is doing, you know, real time reconciliations. And, you know, it sounds like these guys didn't do reconciliations for three years. Which is not surprising. So let's say I look at the team, look out for the professionalism. I think the team size actually does matter, even though, you know, in Silicon Valley, you know, you can get a lot done with with very few people. But I think when you're building a Fort Knox, maybe not so much. That's a good kind of final warning to issue to the consumers. I think to wrap up, I'd just like to ask you, you know, the the name of the stream is FTX Meltdown in the future of crypto. So when you look forward to the future of crypto, you know, the prospects for it, especially after all, we've been talking about here. What do you see? Like what's your forecast over the next, you know, two to five years? Yeah, I hope we come out of this bear market in the next two years. We've got another Bitcoin having coming up. That's usually a catalyst to launch us out of the bear market. I hope that we do get some not just regulatory clarity, but good regulation good legislation. You know, I think there's there's a right way and wrong way to do it. And I think the way New York did it, for example, it was very bad. I think they've shut up, you know, prevented their their residents from huge amounts of potential gains over the years by shutting them out of a lot of opportunity. So I hope that we get some good legislation in or maybe we just remove some legislation. That's a problem. You know, I think the industry is going to going to move past this and we'll remember this. And I think people will be more careful in the future. I'm hoping we onboard the next billion users by five years from now. And, you know, beyond that, I'm looking forward to a global Bitcoin standard for the world and everybody getting paid and doing everything in Bitcoin and will only need fiat currencies to pay our taxes, maybe maybe not even. Here's to that. Thank you so much, Jesse. That was a wonderful educational conversation. So thank you for joining us. Thanks, Nick. And thank you all for watching. We will see you next week.