 The SEC has been hostile to crypto ever since well really under Clayton and now of course under Gensler. That hostility is nothing new. So it's not entirely surprising that they're going after cracking and staking. I would say the intensification is evident from the SEC in terms of oversight. I believe that they feel emboldened that they have more of a political mandate now to go after crypto post 2022 and the FTX collapse. So I think the same undercurrent trends are driving the SEC's action and the action of the Fed, FDIC, OCC, which is feeling politically emboldened due to a lot of people are sympathetic with attempts to ring funds through crypto space in the US after the collapses of last year and also Congress being deadlocked. That's an important thing that I think people are not talking about is the prospects for legislation here of any sort are very minimal going forward for the next two years. I don't think we'll see anything pertaining to crypto actually believe it or not, even though the house is somewhat favorable. So the agencies realize nothing's going to come out of Congress, nothing's going to be done that way. They're going to be stymied. Let's say the Biden administration had a crypto package, they wanted to push it, they wouldn't be able to do that with the house. So now a lot of folks in the executive branch are saying to themselves while it's on us to regulate, effectively legislate through regulation. And that is absolutely what we're seeing at the SEC. They are interpreting their mandate in a very broad way. As is the Fed, the Fed is now growing their mandate. There's a little, there's some wonkish details in the January 27 chain of events, which I mean are probably worth digging into. But yeah, I think that's what we're seeing really is this understanding in Washington now, Congress is deadlocked. Okay, it's on us, the regulator's to do something. Can I ask, with something like FTX, clearly, kind of the crypto winter kind of sets the stage for more regulation because you have a lot of people who are probably going either grousing to their congressman or there's a sense like, okay, we lost this huge percentage of whatever we had invested in crypto for whatever reason. And we're kind of pissed about that. This happened after the tech bubble burst. There's new stock markets of the housing bubble burst. There's new regulations with FTX really puts gas on all of that. Can I ask you, is there something the crypto community should have been doing to kind of unmask or expose or pull, get people to stop putting money into FTX ahead of time? Or is there anything like that? Is there, you know, if broadly speaking crypto is going to be something that is independent of government and independent of regulation, not independent of risk, but like, is there something that people in the crypto space should have or could have been doing more of to unmask, like to squeeze out the SBFs of the world before they get to a point where they really threaten everybody who's acting, you know, in a positive way? Absolutely. Without a doubt, there's three things specifically. One is the investors need to be better with their diligence. Today a lawsuit dropped against Sequoia and Paradigm, the lead investors in that FTX deal, alleging that they failed in their diligence. And in fact, they sort of endorsed FTX and caused people to trust it wrongly. I'm sympathetic to that, frankly. I'm a VC. We didn't invest in FTX because they were an offshore brokerage. We looked at the early rounds. I have those pitch decks because they were an offshore brokerage and we thought there was no way they could come on shore legally. They had the FTT token, which we thought was an unregistered security, which would cause them problems down the road. And they had Alameda trading on the exchange. I was looking back at my old email trail from LPs, why didn't you invest in FTX? You got the look. What are you doing? You missed this huge deal. We told them exactly that. There's no way an exchange in the U.S. would be able to have a proprietary trading firm owned by the same entity trading exclusively on the exchange. That would not be allowed. And I guess it's worth hammering home the fact that FTX was exposed at a moment when a company that was thinking about buying it said, eh, you know what, we're not going to do this because we don't trust it. On some profound level, the market worked to expose a bad company. What do you think happened there? Because there's presumably some pretty smart people at Sequoia and these other big investors. Why did they miss what you were seeing pretty clearly? Different approach to risk tolerance and also the deal dynamics. In 2021, remember, hottest time venture capital history. I'm sure the deal was moving extremely fast. This was the fastest growing company in the industry and the hottest industry on earth for venture dollars. So the power would have been totally on the side of the founders and not on the side of the VC. So I'm sure they understood they needed to do less diligence. This will come out in the court of law eventually, what happened in order to win the deal. And they thought that that was a worthwhile trade off. I mean, it wasn't just FTX where this was the mindset among VCs. It was very common back then. You mentioned that. Well, I'm sorry, could you also, you had said there were three things that the crypto world could be doing. And just to get back to this, one of them was doing due diligence, like investors doing due diligence. Do you remember the other two? Yeah. So just to summarize the first thing, VCs aren't just VCs. Their stakeholders aren't just their LPs. Their stakeholders are everyone. And when you're investing in these exchanges that have hundreds of millions of clients globally, your stakeholders, everyone that uses crypto, because if you fail, you will bring the regulatory hammer down, which is what is happening now. So VCs need to understand that. Two, proof of reserves. It's a very obvious thing. If there had been a proof of reserves in place, which is basically a procedure whereby an exchange or custodian demonstrates that they have reserves, and then they compare those to their client liabilities and they show they match. That's cryptographically provable. It's technically very doable. Quite a few exchanges do it already. If FTX had done that, obviously they wouldn't have been able to commit fraud. If proof of reserves had been normalized throughout the industry, FTX wouldn't have been able to do it, assuming they were in this parallel universe they were doing fraud. And they would have been sticking out like a sore thumb. So if that was normalized throughout the industry, these insolvencies, FTX, Mt. Gox, Quedriga, they would be really evident. So that is a very simple thing. I'm pushing very hard for it. You'll actually see legislation. Texas introduced a bill asking for it. I think that'll pass. That will become part of the self-regulatory framework that is used in the industry. And it's a very positive thing. Unfortunately, we're too late now. And the only reason it's got so much uptake is because of FTX. The third thing is just building better decentralized exchanges such that we don't have a reliance on centralized exchanges. That's also happening. So the technological trends here are very self-regulatory, as far as I can tell. Hey, thanks for watching that excerpt from our live conversation with SEC Commissioner Hester Purse and crypto investor and writer Nick Carter about the government's escalating crackdown on cryptocurrency exchanges like Kraken and the broader DeFi economy. Join me and Nicholas be here every Thursday at 1pm Eastern for more conversations like this and subscribe to Reasons YouTube channel for notifications whenever our videos go live. Thanks for watching.