True Anon Truth Feed - Episode 275: Planet Money
Aired: 2023-03-13
Duration: 01:43:39


=== Sounding Nerdier Than Usual (03:42) ===

[00:00:00]  Hello, beautiful.
[00:00:01]  I was wondering if you were going to do it.
[00:00:04]  If I was going to do what?
[00:00:06]  What happened to you?
[00:00:08]  Things have not been going well for me lately.
[00:00:12]  First of all, the activity in El Salvador has brought a lot of human rights organizations.
[00:00:18]  I gotta say, you're sounding a little nerdier than usual.
[00:00:21]  Let me try it again.
[00:00:21]  No, no, I'm liking this angle for him.
[00:00:24]  Daddy just have been humbled by recent events.
[00:00:28]  And you know, I've been thinking a lot, maybe the world doesn't revolve around money.
[00:00:33]  It revolves around coins.
[00:00:37]  The penny, beautiful copper, bronze, like a Grecian woman on a highland lesbos.
[00:00:44]  The nickel, shiny silver, like a robot from the future.
[00:00:49]  A gay butler.
[00:00:52]  C3PL.
[00:00:54]  The dime.
[00:00:55]  Skinny, small, like Emily Ratodowski.
[00:01:01]  And the quarter, representing the whale, the big holder.
[00:01:06]  If you come to my home, you will find more quarters than the...
[00:01:10]  What?
[00:01:11]  What about the Sacagawea dollar?
[00:01:13]  Sacagawa?
[00:01:14]  I haven't gotten to a dollar yet.
[00:01:15]  Sacagawea.
[00:01:17]  Beautiful.
[00:01:18]  Remember how many you would get at the BART?
[00:01:20]  Are you free?
[00:01:21]  Oh, I love getting the Sacagawea dollar.
[00:01:23]  Are you kidding me?
[00:01:25]  It's like so annoying.
[00:01:26]  You get like 10 of those.
[00:01:28]  I know.
[00:01:28]  I look.
[00:01:29]  I've never put a 20 in a BART dispenser in 2007.
[00:01:33]  Anything y'all don't know about me?
[00:01:35]  I don't care a wallet.
[00:01:36]  I don't carry a bag.
[00:01:37]  I don't care a little zip-up thing, whatever.
[00:01:40]  I carry a large brown sack tied with a string onto the side of my pants that is just filled with coins.
[00:01:49]  It has a dollar sign on the side of the center.
[00:01:51]  The dollar side.
[00:01:52]  And I go in and I'm like, I want to die at Dr. Pepper.
[00:01:55]  And I go into the store and I go, and I just like stick my fucking scary movie two-ass claw hand in there.
[00:02:02]  And I pull one of those motherfuckers out.
[00:02:04]  And I've got a giant thumb.
[00:02:07]  That's something a lot of people don't know about me.
[00:02:08]  I have a thumb the size of a, honestly, of a foot.
[00:02:12]  And I just flick that motherfucker right into the ground.
[00:02:14]  The Saxewea?
[00:02:14]  Sacagawea, yeah.
[00:02:16]  Give me that diet, Dr. Pepper.
[00:02:18]  love you I was doing a personality mail with Coindexter Oh, my God.
[00:02:48]  I love that he, like, it was sounding like he was very sad.
[00:02:51]  He miracles.
[00:02:52]  Yeah, he was definitely sounding more like an AI guy than, you know.
[00:02:58]  Yeah.
[00:02:59]  He was still doubling down on the crypto industry.
[00:03:05]  Hey, Liz.
[00:03:06]  Hey.
[00:03:06]  What's your name?
[00:03:07]  Oh, me?
[00:03:09]  Hi, Liz.
[00:03:10]  I'm Brace.
[00:03:12]  We are, of course, joined by our producer, Young Chomsky, and this is Drew and On Health.
[00:03:17]  Hello, everyone.
[00:03:17]  Hello.
[00:03:18]  We are busting into the blockchain.
[00:03:21]  Busting makes me feel good.
[00:03:23]  Like we're Ocean's 11.
[00:03:25]  It's been a minute.
[00:03:26]  It's been one of the longest minutes of all, Liz.
[00:03:29]  It's been since whenever we did our last crypto episode.
[00:03:32]  Yeah, I think it's been a while.
[00:03:33]  Uh-huh.
[00:03:34]  Actually, I literally don't know how long it's been.
[00:03:35]  Now, we are recording this on Friday.
[00:03:39]  And on Ketamine.
[00:03:40]  I'll say it.
[00:03:41]  We're on Ketamine right now.

=== Big Baller Brand Madness (03:50) ===

[00:03:43]  No, Friday.
[00:03:44]  And breaking news hit just hours before we set up recording, which really was hours ago.
[00:03:52]  This is kind of a long episode.
[00:03:53]  This is a long motherfucker.
[00:03:55]  You can tell by the numbers at the bottom.
[00:03:56]  Yeah.
[00:03:57]  But it's a fun one.
[00:03:59]  And Silicon Valley Bank, Kaput.
[00:04:03]  Uh-huh.
[00:04:03]  Over.
[00:04:04]  Done.
[00:04:04]  Buh-bye.
[00:04:05]  Annihilated.
[00:04:07]  The California regulators took it over.
[00:04:10]  They're like, there needs to be a little more sage in here.
[00:04:15]  And so, yeah, we talk a little bit about that because it just happened.
[00:04:19]  We got to.
[00:04:19]  We got to address the break.
[00:04:20]  We talked about it.
[00:04:21]  We have so many motherfuckers in this episode.
[00:04:24]  We have a crazy cast of characters in this motherfucker.
[00:04:26]  Did you see a cast of characters in this crypto crapisode?
[00:04:30]  I was trying to do like an alt.
[00:04:31]  Crapisode?
[00:04:32]  You just called it a crap episode?
[00:04:34]  It's a crepisode.
[00:04:35]  Liz is calling this shit crap episode.
[00:04:38]  episode listen we've got a trying to do like a Kardashian kind of thing We got a real journalist.
[00:04:43]  It's so crazy.
[00:04:45]  She named all her kids Kay.
[00:04:46]  That's just racist.
[00:04:47]  I'm just saying.
[00:04:48]  Not of you of her.
[00:04:50]  It's crazy.
[00:04:51]  That's crazy.
[00:04:52]  Yeah.
[00:04:52]  What if I named all my kids B?
[00:04:53]  I don't like when people say. Balthazar Belden.
[00:04:56]  I don't like when people do like weird shit like thinking of their family as like a brood.
[00:05:02]  That's so weird.
[00:05:03]  That's a red flag.
[00:05:04]  You're on your own.
[00:05:04]  You come out.
[00:05:06]  You are yanked out like a fucking alien from aliens, from my beautiful, one of my beautiful sister wives.
[00:05:13]  You're on your own.
[00:05:14]  You got to scurry throughout the Nostromo.
[00:05:16]  Just get a normal name.
[00:05:17]  Yeah.
[00:05:18]  Name of normal.
[00:05:19]  Eric.
[00:05:20]  How about that one?
[00:05:20]  That's a real normal name.
[00:05:22]  How about that one?
[00:05:23]  Botswana fucking Samantha.
[00:05:26]  Those are Brace.
[00:05:28]  These are names.
[00:05:29]  Dude, Botswana Belden would go crazy.
[00:05:31]  Botswana Balthazar.
[00:05:32]  Botswana Balthazar Belden would fucking go.
[00:05:36]  Psycho is a name.
[00:05:37]  Is that a boy or a girl?
[00:05:38]  It doesn't matter.
[00:05:39]  Just name your baby Brace.
[00:05:42]  Name your baby Big Baller brand.
[00:05:43]  Big Baller Brand Belden?
[00:05:45]  Yeah.
[00:05:46]  Big Baller Brand Belden.
[00:05:47]  What about Brandon Belden?
[00:05:48]  What having a Big Baller brand?
[00:05:50]  Who the fuck is Big Baller Brand?
[00:05:52]  Are you kidding me?
[00:05:53]  Are you kidding me?
[00:05:54]  Is that like Echo?
[00:05:56]  Big Baller brand?
[00:05:57]  No.
[00:05:58]  Is that a guy or a brand?
[00:06:00]  Dude, I wear, you know, my clothing tastes.
[00:06:03]  Oh, my God.
[00:06:04]  It's Lonzo Ball's dad's brand.
[00:06:06]  Lonzo Balls?
[00:06:09]  Do you know about this?
[00:06:11]  Okay.
[00:06:11]  Are you kidding?
[00:06:12]  You're fucking telling me there's a guy named Lonzo Balls, Liz.
[00:06:16]  No, Ball, singular.
[00:06:18]  Ball?
[00:06:18]  Are you a new one?
[00:06:19]  You only got one?
[00:06:21]  And LaMello.
[00:06:22]  LaMelo Ball.
[00:06:24]  Are they, what is this?
[00:06:25]  La Ball Brothers.
[00:06:27]  You're fucking with me.
[00:06:28]  You're fucking with me.
[00:06:29]  Are you kidding?
[00:06:30]  I'm not.
[00:06:30]  I'm genuinely not kidding.
[00:06:32]  Wait, you don't know.
[00:06:33]  Lonzo and what's the other one?
[00:06:34]  LaMelo.
[00:06:35]  Lamello Ball.
[00:06:37]  I'm sorry.
[00:06:38]  And LiAngelo.
[00:06:39]  L'Angelo Ball.
[00:06:41]  That's one's more normal.
[00:06:42]  And the dad's LeVar.
[00:06:44]  Oh, ball?
[00:06:46]  Yes.
[00:06:47]  What do they do?
[00:06:47]  What's their job?
[00:06:49]  They ball, they play basketball?
[00:06:51]  Yeah.
[00:06:51]  They're brothers.
[00:06:52]  And this big baller brand.
[00:06:54]  I feel like you're gaslighting me right now.
[00:06:57]  Now, let's get to the end of the day.
[00:06:59]  We need a sponsorship.
[00:07:13]  Oh, let me drink water in the microphone really loud.
[00:07:19]  Boy, I just did a run on the bank, and boy, are my legs tired.
[00:07:25]  That's bad.
[00:07:26]  Welcome, welcome, welcome to the runner's corner.
[00:07:32]  Jacob Silverman.

=== Bad Vibes in Banking (12:58) ===

[00:07:34]  Now, listen, for those of you who don't know, Jake has been on the podcast before, freelance journalist, host of the pornographically titled podcast, The Naked Emperor, a four-episode podcast about SBF and FTX on CBC.
[00:07:53]  And unfortunately, the subject of a scandal known as Silvergate, named after the man himself.
[00:08:00]  Jacob, welcome to the show.
[00:08:02]  How are you doing?
[00:08:03]  I'm here to answer all crimes and accusations addressed towards me.
[00:08:06]  Thanks for having me.
[00:08:07]  Thanks for coming.
[00:08:08]  It's so funny because we had scheduled this in advance.
[00:08:13]  And we were like, oh, this is going to be great.
[00:08:15]  You have a new series.
[00:08:16]  We haven't checked in on what's going on with the case against Sam Bigman Freed.
[00:08:21]  There's all this new stuff coming about FTX.
[00:08:23]  There's just so much to wade into that mess and talk about.
[00:08:27]  And you have this new series coming out.
[00:08:28]  Perfect.
[00:08:29]  And then lo and behold, the night before our recording, one of the largest banks in Silicon Valley, literally Silicon Valley Bank, has now gone under.
[00:08:38]  Completely collapsed.
[00:08:40]  Taken over by California regulators like just a couple hours ago.
[00:08:45]  Yeah, the mood on VC Twitter is sad and dim.
[00:08:51]  Yeah, those guys, I gotta tell you, I still don't, listen, I know I'm not like the Mr. Money guy, right?
[00:08:57]  I think you're Mr. Money.
[00:08:59]  Yeah, thank you.
[00:09:00]  But I'm more into crypto stuff.
[00:09:03]  Yeah.
[00:09:03]  Just in terms of my finances.
[00:09:05]  But the VCs seem like they're losing their shit over this.
[00:09:10]  So what happened?
[00:09:11]  Just tell me a little bit about it.
[00:09:12]  So it's funny.
[00:09:13]  So Brace is actually, Brace and his aunt had dinner at my house last night, which was very nice.
[00:09:16]  Very delicious, by the way.
[00:09:17]  Lizzie, excellent cook.
[00:09:18]  Thank you very much.
[00:09:19]  I appreciate that.
[00:09:20]  And I had been in like hostess mode, which is my favorite mode to be in, pretty much all afternoon and evening.
[00:09:28]  And so I had not logged on, as we like to say.
[00:09:32]  And I opened up my phone and I was like, oh my God, you guys, like one of the biggest banks in Silicon Valley is like completely collapsing.
[00:09:41]  They're saying there's a huge bank run.
[00:09:42]  Like, is it going to go under?
[00:09:44]  And it did today.
[00:09:46]  It went under.
[00:09:47]  Like, what exactly, it seems like how this has something to do with what we were planning on talking about today, which is FTX and Silvergate.
[00:09:57]  Yeah, it's hard to say exactly beyond, at least so far beyond, you know, there was a general bank run in the old-fashioned sense.
[00:10:05]  A couple days ago, there was a headline going around that Founders Fund, good old Peter Thiels.
[00:10:09]  Love the guy.
[00:10:10]  By the way, shouts for the podcast.
[00:10:12]  Yeah, thank you very much for your kind contributions.
[00:10:15]  I mean, this studio is looking pretty good.
[00:10:17]  Yeah, you like all these katamites we have?
[00:10:19]  Is that what that is?
[00:10:20]  Yeah, well, you know.
[00:10:23]  Yeah, Founders Fund was telling its portfolio companies, you know, people invest in, take your money out of this bank.
[00:10:29]  And of course that got out like immediately.
[00:10:33]  And so there was this bank run over the last couple of days and the bank had to sell some of its, it bought these bonds at low interest rates and then had to sell them all of a sudden because they didn't think they would have to.
[00:10:42]  And they lost, I think, a couple billion dollars in the process.
[00:10:45]  And, you know, they don't necessarily have all their deposits covered.
[00:10:48]  So here we are.
[00:10:49]  Like within a couple days, it just completely crumbles.
[00:10:52]  Yeah.
[00:10:53]  Yeah, they couldn't meet, they couldn't meet customer demands, basically.
[00:10:56]  They didn't have the money.
[00:10:58]  So as somebody who does, because to me, a bank is the guy I give money to.
[00:11:01]  And it's there.
[00:11:02]  And I take it out with the debit card, right?
[00:11:05]  I keep a lot of cash, as you guys know.
[00:11:07]  I'll give my address to Patreon.
[00:11:09]  Yeah, your only cash or Bitcoin.
[00:11:11]  Huge cash guy.
[00:11:12]  I love fiat.
[00:11:13]  But this is a bank that's like, you didn't like, it's not like you kept your savings account there.
[00:11:19]  It's like a bank that like a lot of startups kept their money.
[00:11:23]  That's right.
[00:11:23]  Yeah.
[00:11:23]  A lot of, I believe it was started in the early 80s and they lent to a lot of startups.
[00:11:28]  And you have big-time entrepreneurs on Twitter saying like, my company wouldn't exist without this bank.
[00:11:34]  And then some of those companies I'd be like, fine.
[00:11:37]  Okay.
[00:11:37]  Yeah.
[00:11:38]  Well, excellent.
[00:11:38]  But, you know, it was the sort of home bank for Silicon Valley funding all these companies.
[00:11:43]  Also, I think some executives, when they would take out personal loans, you know, I don't know if Elon ever dealt with this bank, but the sort of Elon Musk style thing, like taking out money to live against like your stocks or whatever.
[00:11:55]  You know, they dealt with the high rollers of Silicon Valley and their startups.
[00:11:58]  So I think it's both like materially very important, but also kind of personal for some of these guys.
[00:12:03]  Yeah.
[00:12:03]  And, you know, I mean, a lot of, like you're saying, a lot of companies bank there.
[00:12:07]  And the big issue now is that a lot of companies had deposits there over 250K, which means anything, of course, over 250K is not FDIC insured.
[00:12:21]  So a lot of companies are unsure if they can make payroll.
[00:12:25]  And so there's a big move where people are trying to, I mean, there's been statements from a lot of tech CEOs basically saying, listen, we're moving everything over to, it's got, it's always, you know, it, you love them.
[00:12:36]  JP Morgan Chase.
[00:12:37]  Yeah.
[00:12:38]  Daddy's here to make everything right.
[00:12:40]  Jamie Diamond's about to get his cat's getting much fatter.
[00:12:44]  At least call JP Morgan Chase Jewish Paper Chase.
[00:12:48]  Okay, stop it.
[00:12:48]  Okay.
[00:12:49]  But I will say, yeah, the big fishies shall be eating the little fishies very soon is my one prediction.
[00:12:56]  But you know, a lot of people are worried that all these companies that were banking with Silicon Valley Bank, it's such a simple name that I feel like I'm going to keep emphasizing.
[00:13:05]  It does sound tripping over it.
[00:13:06]  It's just made up or something.
[00:13:07]  Yeah.
[00:13:09]  That they can't make payroll, which means more tech layoffs.
[00:13:13]  And it's funny because some of this happened because of the big crash that's already been happening in tech, right?
[00:13:19]  It's put a lot of stress on a lot of companies trying to shore up capital, trying to shore up cash.
[00:13:24]  You know, these things have a kind of cascading or like snowball kind of effect.
[00:13:28]  Yeah, right.
[00:13:31]  And a lot of that stems from a lot of the underlying collapse from the crypto market.
[00:13:38]  Yeah, I think one thing that we're starting to realize is that we always knew there'd be some contagion in crypto, as they call it, like other companies collapsing because they all owed each other.
[00:13:47]  Everyone owe, you know, Alameda owed everyone, everyone owed Alameda.
[00:13:50]  But now it's sort of creeping out, I guess, into other parts of banking or like sort of tech banking.
[00:13:56]  You had Silvergate collapse recently, and that was like the crypto bank pretty much.
[00:14:02]  And then, you know, I think it's a way also of learning that like there may be other kinds of exposure to these crypto companies, like from their investors or from like third order stuff.
[00:14:13]  I mean, we were talking about all these regional banks in California are getting hit so hard.
[00:14:18]  Their stock prices are getting hit because everyone's a freak.
[00:14:20]  First Republic.
[00:14:21]  Doesn't know.
[00:14:22]  Yeah, First Republic, like the classic San Francisco bank logo.
[00:14:26]  Yeah.
[00:14:26]  Right.
[00:14:27]  Yeah.
[00:14:28]  They're, you know, their stocks, you know, it's like 30, 40% down.
[00:14:33]  And you're going to see regional banks starting to really get nervous because I think a lot of people are wondering, like, oh, is everyone just undercapitalized?
[00:14:42]  Yeah.
[00:14:42]  Which is not a good thing.
[00:14:44]  No, you don't want those feelings out there.
[00:14:47]  Bad vibes in the banking industry.
[00:14:50]  I mean, look, we don't even have that many fucking banks left in this country, right?
[00:14:53]  08 wiped out so many of them.
[00:14:55]  And that's what I'm saying.
[00:14:56]  Like JP Morgan is about to get really, really, really fucking big, which is really scary.
[00:15:01]  This is the 16th largest bank.
[00:15:06]  People outside of tech barely knew it.
[00:15:08]  Yeah, yeah, yeah.
[00:15:09]  And then I think there obviously could be more.
[00:15:11]  I mean, especially particular to crypto.
[00:15:14]  I mean, Circle, which manages USDC, which is one of the biggest stable coins, they have a lot of their money at Silicon Valley Bank.
[00:15:22]  They had money at Silvergate, which is now done.
[00:15:25]  And they have money at Silicon Valley Bank, and they have money at Signature, which is also struggling.
[00:15:30]  And someone posted this on Twitter that in one of their forward-looking statements or whatever, Circle said, we have money above the FDIC insurance threshold at some of our banks.
[00:15:42]  So you could have someone like Circle or one of these other crypto companies have more than 250 grand in account in accounts, maybe a lot more.
[00:15:50]  And who knows when they're getting that back, if at all.
[00:15:53]  So this could, so from what I'm understanding there, this could have like what you're saying, a cascading effect.
[00:15:57]  It's like this, another company has all their money in Silicon Valley Bank or a lot of money in there.
[00:16:02]  They can't get it out for who knows how long, if they ever can.
[00:16:06]  And then they have to default.
[00:16:08]  Would that be the word I use?
[00:16:09]  They would have to just shut down.
[00:16:11]  No, but like if they owe someone, it's just like their fault.
[00:16:13]  Yeah, oh, yeah.
[00:16:14]  Yeah.
[00:16:15]  So let me ask you this.
[00:16:17]  But also, I mean, look, companies that have their payroll there and they can't meet payroll, that means layoffs.
[00:16:22]  Like today and Monday are going to be massive layoffs in Silicon Valley if companies can't fucking pay people.
[00:16:29]  I just got a text.
[00:16:30]  I've been let go from Juicero.
[00:16:33]  You can't stop talking about Juicer.
[00:16:34]  Juicero.
[00:16:34]  Because I think my idea is, I was telling, I don't know, Jacob, I might hear you weigh on this.
[00:16:38]  I feel like Juicero would hit right now.
[00:16:40]  They put out Juicero now?
[00:16:42]  It's an actual physical product.
[00:16:43]  We haven't had many of those in Silverov.
[00:16:46]  Let me ask you guys this, though.
[00:16:48]  What is Silvergate?
[00:16:51]  Silvergate was a bank, was until recently, a bank in, I believe, the San Diego area.
[00:16:57]  And they catered to crypto companies.
[00:17:00]  I mean, they were mostly about working with crypto companies.
[00:17:03]  They had something called the Silvergate Exchange Network, which was sort of their own private.
[00:17:08]  Okay, that sounds like an MLM.
[00:17:09]  Yeah, it's sort of like the circle where everyone shared money.
[00:17:14]  It was their own kind of settlement system and their own private blockchain where their client companies, which at one point was practically everyone in crypto, like 1,600 companies, could pass, could do deals with each other and settle transactions without ever really, I think, entering the mainstream banking system or going outside of Silvergate, really.
[00:17:34]  You know, I think there's some things yet to be learned about how that operated, but that was one of the main attractions for crypto companies.
[00:17:41]  Like, because you could do this and pass money back and forth or make deals with other companies, which they were doing all the time.
[00:17:49]  And it wouldn't be as noticeable, I think, as if you were going through mainstream banking or moving money on the blockchain.
[00:17:55]  I talked to one hedge fund guy, and he was like, he was sort of trying to figure out what happened at FTX.
[00:18:00]  And he's like, that was his theory, which is that if you're moving a lot of money around, especially potentially illegally, you can either do it through regular banks, in which case there'll be reports filed and stuff like that.
[00:18:13]  Or you could do it on the blockchain, which is somewhat public.
[00:18:17]  In which case, also reports will be filed.
[00:18:19]  Yeah, people will be looking at you at least.
[00:18:21]  Or you can do it in something like this.
[00:18:23]  The Silvergate Exchange Network signature here in New York has something similar, which is kind of like almost a bank within the bank, it seems like, or a marketplace within the bank.
[00:18:33]  I think that it's funny because I was just thinking about this: that during the 08 crash, one of the big takeaways was, oh, there's a massive shadow banking system, right?
[00:18:44]  That was one of the things that everyone was always talking about, where they're like, oh, all of this stuff was happening, but we didn't really, no one really had access to it.
[00:18:52]  No one really understood how all of this was working.
[00:18:55]  And in this moment, it seems like there's a lot more shadow institutions that were kind of, we still don't know exist, but like, or like, we don't know yet how deep and wide all this, the kind of like shadow money moving systems are.
[00:19:13]  And like, even in the crypto world, which is also already a, it's like already a shadow system, there's like a second or third like shadow, right?
[00:19:21]  All these different shadow entities that these guys use in order to like prop up these companies that have real risk into like the real banking system.
[00:19:32]  Yeah, and real exposure.
[00:19:33]  And anytime, obviously, someone in crypto says like, oh, it's all on the blockchain.
[00:19:36]  It's publicly accessible or whatever, that's bullshit.
[00:19:40]  Yeah.
[00:19:40]  Because like, first of all, there are many blockchains, many wallets, companies are moving around crypto all the time.
[00:19:46]  Like people can track some of this stuff, but you can't necessarily track everything or know who's on the other end of a wallet, things like that.
[00:19:51]  Like, you know, for Binance, for example, they've been moving a lot of huge volumes of crypto around in recent months, like billions of dollars worth, and they have excuses for all of it, but it certainly looks weird.
[00:20:02]  So, yeah, I think what we're starting to see is also how many institutions, or not even institutions, like entities perform bank-like functions with none of the protections, often a lot of illegality, you know, often in like the Seychelles or something like that.
[00:20:17]  Or even at Silvergate, like we now know that one of the main things that FTX did was they just set up some accounts there under Alameda, and then they just never bothered really to have FTX accounts.
[00:20:28]  They set up an account under a fictional company called North Dimension, which is North Dimension?

=== Strange Crypto Movements (14:48) ===

[00:20:33]  That's a great thing.
[00:20:34]  That's really good.
[00:20:35]  It sounds kind of like, you know, like an 80s production company.
[00:20:38]  That sounds like a great fleece.
[00:20:40]  Yes, yes.
[00:20:41]  I might be wearing that today.
[00:20:42]  I love North Dimension.
[00:20:43]  And they had a website for it where it was like a fake electronics retailer.
[00:20:47]  That was so weird.
[00:20:48]  I mean, that's so scary.
[00:20:49]  The address was like in Berkeley.
[00:20:51]  I tried to figure that out, actually, because they're just like not that far from my own apartment, actually.
[00:20:57]  And it's like, he was here.
[00:20:58]  And it's at another building where like other Berkeley-related entities seem to have offices.
[00:21:03]  I contacted the building where they were listed their offices.
[00:21:06]  I never got anything.
[00:21:08]  Wait, okay.
[00:21:09]  I need to go back to it.
[00:21:10]  Now that we're kind of like talking about FTX, let's back up because we haven't actually gone through and talked about FTX or SBF or anything that's been going on since our episode on it, which is really when the big explosion happened.
[00:21:25]  Right.
[00:21:25]  Back in like, what, end of October, early November?
[00:21:28]  Yeah, the balance sheet that was November 2nd.
[00:21:32]  Yeah, there we go.
[00:21:33]  The company collapsed a few days later and the whole thing with CZ about to buy the company and then he didn't.
[00:21:39]  What a, I love the guy.
[00:21:41]  He's a shark.
[00:21:42]  It was a pretty sort of like cagey, aggressive move.
[00:21:46]  Yeah, you could tell.
[00:21:46]  Oh, I'm going to stab you in the ribs and now I'm pulling up tonight.
[00:21:49]  Sam was pissed.
[00:21:50]  So let's back up.
[00:21:51]  Sure, sure.
[00:21:51]  So for our listeners who don't listen to all of our episodes, first of all.
[00:21:56]  I hate you.
[00:21:58]  Fuck you.
[00:21:59]  Second of all, listen up, jokers.
[00:22:01]  Yeah, we got a real guy.
[00:22:02]  We got some spleening to do.
[00:22:04]  So what is FTX?
[00:22:06]  Who is Sam making for you?
[00:22:07]  It's about to get pedantic.
[00:22:08]  Get ready.
[00:22:08]  Let's do it.
[00:22:09]  So yeah, I have this podcast that I'm doing for it's starting on March 13th, four episodes about basically FTX and sort of a history of it as much as we could in four episodes.
[00:22:21]  And how did this whole thing happen?
[00:22:22]  How did this sort of awkward guy who was falsely painted as this genius accumulate this huge crypto empire in like three years and then it all went under?
[00:22:31]  Yeah.
[00:22:31]  Well, mine hasn't gone under yet, but I'm rooting for you long term.
[00:22:36]  Yeah.
[00:22:36]  I'm bullish.
[00:22:38]  So, you know, there are a lot of people in crypto who maybe had questions about FTX, but really it was the leading, one of the leading companies.
[00:22:47]  Sam was the face of crypto in like North America.
[00:22:50]  Such a crazy face.
[00:22:52]  Also, if you're going to have a face of crypto, I don't think that should be the first thing.
[00:22:55]  He's a two.
[00:22:56]  He's a living two.
[00:22:57]  I'm sorry.
[00:22:58]  It's crazy.
[00:22:59]  Man is on a 20-point scale.
[00:23:00]  Sorry, go on.
[00:23:02]  I'll leave that kind of commentary to you guys.
[00:23:04]  That's why I'm here.
[00:23:05]  Yeah, yeah, yeah.
[00:23:06]  Of course, of course.
[00:23:07]  But, you know, and they were involved in everything that every other crypto company was involved in, just at a bigger scale.
[00:23:14]  And some people said, oh, they're way too into shit coins.
[00:23:16]  But who wasn't?
[00:23:18]  So there weren't necessarily direct red flags.
[00:23:21]  There were things like all of crypto is a red flag or they're the biggest business partner of Tether.
[00:23:27]  That I'd say was a red flag.
[00:23:29]  And that's something we could talk about.
[00:23:30]  But before November of 2022, there was this feeling like, okay, crypto is collapsing at least somewhat.
[00:23:38]  All these companies are going bankrupt, like Celsius 3AC, Doquan with Terra.
[00:23:45]  But somehow FTX was still standing and had money to bail people out and to sort of pick survivors.
[00:23:50]  There were all these JP Morgan comparisons and stuff.
[00:23:54]  Yeah, he was, FTX was supposed to be the like legit version of crypto.
[00:23:59]  Yeah, they were going to make it safe for the masses.
[00:24:01]  Even like big, yeah, big financial press, you know, they were basically like Bloomberg, famous.
[00:24:05]  You know, they were like, oh, we know crypto is kind of scammy, but FTX, we swear this is like the real deal.
[00:24:11]  Yeah, fame.
[00:24:12]  I mean, that's like from, again, like, I'm not a big, I mean, a good friend of mine is really big into crypto, but I'm not.
[00:24:20]  I knew who FTX was because it's like, oh, this is like they're gentrifying crypto.
[00:24:24]  Yeah.
[00:24:24]  You know?
[00:24:24]  Totally.
[00:24:25]  And, you know, he was obviously manipulating the political process quite openly.
[00:24:29]  Yes.
[00:24:29]  There's no secret about that.
[00:24:30]  I mean, you had regulators posting selfies with him.
[00:24:33]  Actually, you know what you should say, your friend should say sometime?
[00:24:37]  When I talk to people in crypto and you ask them about like their Bitcoin, no one ever wants to say like when exactly they got in or how much they have, but like, oh, I had a lot, but I lost it in a boating accident.
[00:24:49]  I don't know why, but I've heard that from like Michael Saylor said that in a video, and I've heard that from other people too.
[00:24:54]  I don't understand what that means.
[00:24:56]  I think it means like, oh, I can't account for it or something.
[00:24:59]  They seem to think it's so funny when they say it.
[00:25:01]  There's a video of Michael Saylor saying it.
[00:25:03]  There's a video.
[00:25:05]  Michael Saylor still have limbs.
[00:25:07]  Like you think that they would all be broken.
[00:25:09]  How is a guy named Michael Saylor talking about a boating accident?
[00:25:13]  What the hell does this guy think he's fooling?
[00:25:15]  That's their little their little quip that they think is funny.
[00:25:18]  Oh, you can't find my crypto.
[00:25:19]  Is he still liquid?
[00:25:20]  Is he still around talking?
[00:25:21]  He's still around, but like he's being sued for tax evasion by Washington, D.C.
[00:25:26]  Yeah, there you go.
[00:25:28]  You got to think that he owes all kinds of people.
[00:25:31]  There used to be all these accounts on Twitter where they were like tracking when he was getting margin called.
[00:25:38]  And there would be like, it was back before Elon killed all the Twitter API calls, but there would be people just like, oop, alert, Sailor getting margin called.
[00:25:48]  Oop, alert.
[00:25:48]  It was very funny.
[00:25:49]  Anyway, okay, FTX.
[00:25:50]  Okay, so this balance sheet gets released in Coindesk on, which is an industry publication, probably the best of the industry publications on November 2nd.
[00:26:01]  It basically shows like Alameda, which is supposed to be Sam's hedge fund that he owns but doesn't really pay attention to.
[00:26:08]  It's in a different part of the manse.
[00:26:10]  Yeah, it's like he lives with these people, but yeah, he claims there's a separation or a firewall.
[00:26:16]  The Chinese wall.
[00:26:17]  Yeah, exactly.
[00:26:18]  And basically what the balance sheet shows is like this company doesn't have much real money and it's a lot of shit coins and a lot that they've overvalued.
[00:26:27]  And also a lot of it was just FTX's own token, which was FTT.
[00:26:31]  That's how I've always understood it.
[00:26:33]  Right.
[00:26:34]  FTX was printing.
[00:26:37]  I'm doing heavy quotation marks around that.
[00:26:39]  Printing their own money and being like, look how much money we have that we made.
[00:26:45]  That's essentially right.
[00:26:46]  And they were using it for major deals, too.
[00:26:49]  And kind of marking it up over its trading value.
[00:26:54]  And I mean, it was already worth less than they thought it was because if you try to sell that stuff, no one wants it.
[00:26:59]  I think the craziest thing about FTX is that it's the most vulgar version of someone explaining Bitcoin to someone who's just never even heard of it.
[00:27:09]  And it's like the most critical, like vulgar version of this like, oh, it's just printing something fake and then selling it and someone buy that's literally what FTX was doing.
[00:27:19]  This has been since we started ever covering crypto.
[00:27:22]  Every time, because I'm like, I don't know this stuff.
[00:27:24]  I don't understand this stuff.
[00:27:26]  This has to be more complicated than I think.
[00:27:28]  And then, because I'm like, this can't be just guys making up money and then other people pretending it's real.
[00:27:33]  But that's what it is.
[00:27:34]  And I don't understand it because everyone seems older than me and have more money than me, but it seems fake to me.
[00:27:41]  It's like if you found a continent where everyone could do magic, that doesn't make any sense at analysis.
[00:27:46]  That continues.
[00:27:46]  That would be crazy.
[00:27:48]  Yeah.
[00:27:48]  The Bahamas.
[00:27:49]  See if it's one of the greatest continents of the world.
[00:27:53]  But no, that's the thing with crypto.
[00:27:55]  It's like you always think, am I crazy or stupid or something?
[00:27:58]  Is this as stupid as I think it is?
[00:28:00]  And it's usually dumber than you think it is.
[00:28:02]  Yeah, I mean, I know we've pointed to this before.
[00:28:04]  I mean, you pointed it to it in your podcast too.
[00:28:06]  So you had SBF literally on Bloomberg's show with Matt Levine and Joe Wiesenthal literally explaining his own operation as you have a like empty black box and you just say what it's worth and people believe you and you put money into it and it just I mean it was just absurd.
[00:28:26]  It was crazy.
[00:28:27]  Yeah.
[00:28:28]  Speaking of red flags, I mean that was something where people were like, okay.
[00:28:32]  It was like, you know, the oh my God, he admit it meme.
[00:28:34]  Stinky.
[00:28:36]  Yeah.
[00:28:36]  Yes.
[00:28:37]  Like, okay, so that shows, of course, that people on the inside industry are very cognizant of what they're doing and what kind of like economic operations they're undertaking.
[00:28:45]  But he still somehow thinks he can kind of BS his way through it and make it seem like, I mean, even that interview, he talks about, well, there might be more benefits down the road.
[00:28:53]  And that's what we're hearing a lot about from crypto people over the last couple of years with like NFTs and stuff like that.
[00:28:58]  Like, it's not useful now, but you're going to get a lot of benefits later.
[00:29:01]  You want to get a lot of money.
[00:29:02]  You don't want to do Counter-Strike skins for Nike Air Force Maxis.
[00:29:05]  I mean, that could be huge.
[00:29:06]  Yeah, it'd be crazy.
[00:29:07]  Yeah.
[00:29:08]  So then the bottom falls out.
[00:29:11]  Yeah.
[00:29:11]  So when people really realize, okay, Sam Bankman Free and his crypto empire doesn't have a lot of real money, or at least the Alameda side, which was supposed to be separate.
[00:29:20]  We quickly find out that's not the case.
[00:29:22]  But what happens is, so Enter CZ, the CEO of Binance, the biggest exchange in the world, no real headquarters.
[00:29:30]  He lives mostly in Dubai.
[00:29:32]  Shady, incredible character himself.
[00:29:33]  Yeah, so this is another thing I don't understand.
[00:29:36]  For my whole life, I've believed that if you have a business, you generally have a place where that takes place.
[00:29:41]  Yeah.
[00:29:42]  Binance has no headquarters, like there's no office of Binance.
[00:29:46]  There are offices where people work.
[00:29:48]  In Hong Kong, right?
[00:29:49]  Well, in a few places.
[00:29:50]  For a while, they weren't saying, and like you could find stuff like, oh, if you look at Glassdoor, it seemed that they had an like from the reviews, it seems like, oh, they have an office in Malaysia.
[00:30:00]  But the things that I found out for sure, I've tried to deal with their comms a lot, like their comms guy who's pretty active on Twitter too.
[00:30:09]  And he finally says, okay, we have a hub in Paris and a hub in the UAE, which they're now acknowledging as hubs.
[00:30:16]  They now acknowledge that CZ lives a lot of the time in Abu Dhabi.
[00:30:22]  And they claim they're going to have some sort of headquarters or where they're actually domiciled as a company will be made clear.
[00:30:29]  They've said Cayman Islands, but like the thing with Binance is it's a lot like, I mean, FTX we knew where it was based, but there are a lot of similarities.
[00:30:37]  Like there are these webs of company or networks of companies, and you don't know how many there are.
[00:30:42]  There are weird people who are put as the directors or beneficial owners on some of these Binance ones.
[00:30:48]  CZ actually wrote a blog post after I got into it with his comms guy on the internet because there's this woman named Guan Ying Chen who works for Binance.
[00:30:58]  And she's become sort of this bogeyman for people who are critical of Binance.
[00:31:02]  There are people suing Binance and stuff like that, customers.
[00:31:06]  And people wondered, who is this person?
[00:31:09]  Because I started looking her up.
[00:31:10]  She is the sole director of some important Binance subsidiaries, like a company in Malta, a company in Ireland.
[00:31:18]  Great.
[00:31:18]  Two great places.
[00:31:20]  There's a third one in Switzerland.
[00:31:22]  All my shit's registered out of Malta.
[00:31:24]  And so like this woman, no one knows who she is.
[00:31:27]  And CZ tries, CZ's whole thing is like, we're not a Chinese company.
[00:31:31]  We're not affiliated with the CCP or anything like that.
[00:31:34]  He's of Chinese heritage, but a Canadian citizen.
[00:31:37]  He never comes to North America.
[00:31:39]  He didn't come to Canada when his dad died.
[00:31:43]  His comms guy claims he comes to the U.S. kind of in secret, not for public events.
[00:31:48]  Interesting.
[00:31:49]  That's the first I've heard of that.
[00:31:51]  But he lives a certain life of someone who's kind of avoiding certain jurisdictions, it seems like.
[00:31:58]  And then there's this woman, Guan Ying-Chen, who's basically the director of all these companies that we know are important parts of the Binance system.
[00:32:06]  That like they're European operations.
[00:32:08]  She basically owns them.
[00:32:10]  And so I started asking, I think this was over the summer.
[00:32:14]  And at first I got kind of scolded because supposedly I was putting some person in danger.
[00:32:21]  They claim that when they left China, Binance was kicked out of China along with a lot of other crypto companies.
[00:32:28]  Respect.
[00:32:28]  Yeah, why not?
[00:32:29]  And that they all became enemies of the state, and this woman had to leave her family behind and blah, blah, blah.
[00:32:36]  I'm being flippant, but there's sort of reason to be because the story doesn't quite add up.
[00:32:41]  And then CZ writes this blog post directed towards me, basically, though he doesn't name me.
[00:32:47]  He called me a former Washington Post reporter or whatever.
[00:32:50]  Is that true?
[00:32:50]  I've written for them, but I've never worked for them.
[00:32:52]  Okay, I almost ended this.
[00:32:53]  I know, I know, yeah.
[00:32:56]  Okay, deep breath.
[00:32:58]  And it becomes this whole thing about how asking questions about the company or about him or this woman is racist because he wants to do this thing where we're not a Chinese company.
[00:33:08]  But really, it's like, no, who is this person?
[00:33:11]  And so what they say is this was an early employee of the company and they needed someone, a Chinese citizen, to put her name on legal documents.
[00:33:21]  Makes no sense because her name is on corporate registrations in Europe.
[00:33:24]  Yeah.
[00:33:25]  So, and it makes no sense for a number of reasons.
[00:33:27]  Why couldn't you find a Chinese lawyer?
[00:33:28]  They have lawyers in China.
[00:33:30]  Yeah, yeah, yeah.
[00:33:30]  Like with someone like that.
[00:33:31]  But they're telling is she's a back office administrator who was a very early employee.
[00:33:36]  So she's not.
[00:33:36]  She's something.
[00:33:37]  Recently, the same guy, Patrick Hillman, their comms guy, said on Twitter to me in public that she was a co-founder.
[00:33:44]  And I had never heard that before.
[00:33:46]  So I said she was.
[00:33:46]  A-founder?
[00:33:47]  She said CZ?
[00:33:48]  Yeah.
[00:33:49]  CZ and the other woman whose name is Yeehe.
[00:33:53]  But I was like, oh, I just upgrade her to co-founder.
[00:33:55]  I should get a cut of that.
[00:33:57]  Yeah, yeah, yeah.
[00:33:57]  You should get a portion of her salary.
[00:33:59]  So, you know, there are all these weird things going on about who owns Binance, who's running it.
[00:34:03]  The China connections, people can ask about them, but you can set that all aside and just look at all the other stuff.
[00:34:09]  And like, CZ is being investigated all over the world.
[00:34:12]  So is the company.
[00:34:14]  Just today, actually, Binance U.S., which is supposed to be separate, which is not.
[00:34:21]  It's interesting because I've heard that before.
[00:34:23]  Yeah, right.
[00:34:24]  Just like FTX operates.
[00:34:25]  Same thing.
[00:34:26]  They are supposed to take over another bankrupt crypto company called Voyager.
[00:34:29]  And just today, the U.S. attorney for the Southern District of New York who's prosecuting SBF, Damian Williams, he appealed that.
[00:34:37]  He doesn't want Binance U.S. to be able to absorb Voyager.
[00:34:40]  So U.S. authorities are definitely looking at Binance.
[00:34:43]  I don't know if they'll have the political will to bring something to the table.
[00:34:49]  So anyway, so we have that lurking in the background, I guess.
[00:34:52]  I'm sorry, that was a long tangent.
[00:34:53]  Oh, good, baby.
[00:34:54]  But then, you know, in the next few days, Binance is like, okay, maybe we'll bail you out.
[00:34:59]  Talking about FTX.
[00:35:00]  Binance says maybe they'll bail out FTX.
[00:35:02]  Right, right.
[00:35:03]  Sorry, excuse me.
[00:35:04]  And this all also originates from Binance and FTX are sort of linked from the beginning.
[00:35:11]  Yeah.
[00:35:13]  FTX got early investment from Binance.
[00:35:15]  And at one point, they basically wanted to go separate ways for various legal and shady reasons.

=== Binance And FTX Entanglements (08:25) ===

[00:35:21]  And so FTX said, okay, we're going to buy out your share, but we're going to do it with the tokens that we print and the tokens that you print.
[00:35:30]  So they paid something like $1.6 billion.
[00:35:33]  It's not even paying, right?
[00:35:34]  Right.
[00:35:35]  It's just using monopoly money.
[00:35:37]  Exactly.
[00:35:38]  It's like, okay, I'm going to give you my monopoly money and you're going to give me your monopoly money.
[00:35:42]  Yeah.
[00:35:42]  So.
[00:35:43]  But how can like any kind of legal acquisition, like, how could that go through?
[00:35:49]  I don't know how it could actually be sort of legal in some sense, but unless you, unless you.
[00:35:55]  Speaking in a 20th century, for example, unless the value of those tokens is sort of seen as the actual value and not just a notional number on paper.
[00:36:05]  You know what I mean?
[00:36:06]  Like that those digital assets really do have the value you claim they do.
[00:36:08]  So they use a mix of BUSD, the Binance stablecoin, I believe.
[00:36:14]  I think it was BUSD, and then FTT.
[00:36:18]  And so what happens is that's like giving your future rival or enemy the means to destroy you, actually.
[00:36:25]  Because if I give you all this token of mine or say like, you know, it's like if China decided to dump U.S. debt or something like that.
[00:36:33]  Like it would hurt China, but they would take us the hell down.
[00:36:37]  It's sort of a similar idea.
[00:36:38]  So CZ says, I don't like what I see here.
[00:36:41]  I'm going to sell all my FTT tokens.
[00:36:42]  This is all within a few days in early November.
[00:36:45]  And of course, the price plummets and that starts a bank run FTX.
[00:36:49]  And that's when CZ says, oh, well, maybe I'll buy you guys on the cheap and rescue you.
[00:36:54]  And at that point, it seemed like Sam was quite desperate and was like, okay, great.
[00:37:01]  It seemed like he was ready to make that deal happen.
[00:37:03]  Yeah, yeah.
[00:37:04]  Anything to get anyone to not look under the hood of FTX, basically.
[00:37:09]  Yeah, I think you're totally right because that's a good point.
[00:37:11]  Because right now we knew that things were wrong there, but we didn't know like $8 billion have been shifted from FTX to Alameda.
[00:37:18]  Yeah, yeah, we didn't know the full extent.
[00:37:19]  Yeah.
[00:37:20]  So, and if you kind of think that crypto is a cartel or that people have a lot of dirt on each other or at least mutual interests, then it might have been in CZ's interest to just snap up FTX and keep the plate spinning.
[00:37:35]  Yeah.
[00:37:36]  But he took, supposedly he took a look at, and yeah, and Sam was desperate.
[00:37:40]  I mean, there was an interesting line from Sam who can be, you know, sort of an arrogant nerd in his own way on Twitter or talk shit towards people in the past.
[00:37:47]  He said to CZ on Twitter, he's like, he didn't name him, but he said something like, to a certain rival, you won.
[00:37:52]  Yeah.
[00:37:52]  Yeah, I remember that.
[00:37:53]  Like, he took the knee.
[00:37:54]  Yeah.
[00:37:55]  And then a day or two later, CZ says, actually, we looked at the books.
[00:37:59]  It's too bad here.
[00:38:00]  We can't rescue this company.
[00:38:02]  And that just, that was like the death.
[00:38:03]  That was it.
[00:38:04]  That was so mean.
[00:38:05]  It was brutal.
[00:38:06]  I mean, like, I thought that was pretty sad.
[00:38:09]  I mean, not to like, I mean, I get it, though.
[00:38:12]  Can you imagine if Binance had absorbed that shit show?
[00:38:16]  It would have, yeah, probably.
[00:38:17]  I don't know if he could have kept the plates going.
[00:38:21]  And Binance kind of wants to be overseas.
[00:38:23]  Like, they have the Binance US, but like, there's a reason why that's their Potemkin operation here.
[00:38:28]  I mean, you may have heard of something called the Tai Chi document, which Forbes's report on and other places, Reuters, but it was first broken by Forbes.
[00:38:36]  So a couple years ago, a consultant to Binance presented them with a presentation.
[00:38:45]  It was called something like the Tai Chi strategy or the Tai Chi document.
[00:38:49]  And so that's what they called it, not me.
[00:38:53]  And it was basically kind of like, well, you set up a front in different countries of, you know, you'll have a Binance US and it'll look like, hey, this is our regulated entity in the US, but it's really just kind of like a placeholder or fig leaf to like have a presence, look like you're following the law.
[00:39:07]  Most of the action is offshore on global Binance.
[00:39:11]  And meanwhile, you also encourage customers in those countries to use VPNs and to actually trade on the mothership.
[00:39:17]  FTX, if you really look at it, it was a lot like that.
[00:39:19]  But with Binance, this was like a document that people have seen that was presented.
[00:39:24]  Supposedly it was approved.
[00:39:25]  Binance denies it, but there's a lot of leaked communications surrounding it.
[00:39:30]  I'm sorry, obviously this is the structured.
[00:39:33]  And to be clear, like on the global exchanges, they would want people doing that because they can get away with a lot of insane leverage.
[00:39:41]  Yes.
[00:39:41]  I mean, they can play around with just insane, insane margins in ways that you just can't in the U.S. or in other countries where it's heavily regulated for the safety of customers.
[00:39:50]  Totally.
[00:39:51]  Because that's how they're fucking stealing people's money.
[00:39:53]  Absolutely.
[00:39:53]  I mean, one of the main ways is, yeah, get people to gamble.
[00:39:56]  I mean, it's all gambling and then give them 100x margin or leverage.
[00:40:00]  And like suddenly, and you know, if things go up 1%, they're great.
[00:40:04]  If it goes down 1%, everything's gone.
[00:40:06]  Yeah, this is the thing.
[00:40:07]  I know, listen, you're a journalist, you're a man of integrity.
[00:40:10]  You can't just cast aspersions and stuff.
[00:40:12]  But I'm a guy who's known a lot of liars and a lot of people who are essentially criminal at heart and indeed.
[00:40:19]  These guys are just both.
[00:40:21]  They're just doing a scam.
[00:40:22]  Obviously, they approved this document.
[00:40:25]  All these stuff.
[00:40:25]  FTX works the same way.
[00:40:26]  Yeah, FTX.
[00:40:27]  I was going to say, FTX is completely set up or was set up the exact same way.
[00:40:31]  Yeah, ostensibly separate, but really very entangled.
[00:40:34]  And now we're seeing there was money moving back and forth.
[00:40:37]  Sam Bankman-Fried claims that FTX US was solvent.
[00:40:40]  I mean, the new leadership at FTX says that's not true.
[00:40:43]  Yeah.
[00:40:44]  Which who I'm more inclined to believe.
[00:40:45]  But yeah, it's very similar.
[00:40:48]  I mean, one of my favorite little mysteries, I guess, or little anecdotes from all this is like Binance US went through something like three CEOs in six or nine months.
[00:40:58]  One of them was this woman named Catherine Cooley, who worked, I believe, for Ripple before that.
[00:41:03]  And so she was like a big crypto industry figure.
[00:41:05]  Everyone knew who she was, got hired to be the CEO of the new Binance US when it launched.
[00:41:11]  She lasted a few months.
[00:41:13]  She literally has not been heard from since.
[00:41:16]  No public statements, no social media posts, nothing.
[00:41:19]  So people are like, people are like, is she dead?
[00:41:22]  Yeah.
[00:41:23]  Holy shit.
[00:41:24]  Iced her?
[00:41:25]  My honest opinion, and this is not like I can't confirm this, but my guess would be that she's cooperating as a witness because there have been some references to her in some of these articles in Reuters, the Wall Street Journal that make it seem like she's cooperating with the government.
[00:41:40]  There were some articles in the crypto press, like, Where did she go?
[00:41:43]  Yeah, where friends of hers claimed she was still around, but like, this is unusual and weird.
[00:41:48]  And then they went through two other CEOs, including like this guy, Brian Brooks, who worked for the Trump administration, like people who you think would maybe be down with some of this stuff.
[00:41:56]  And those people weren't.
[00:41:57]  And then finally, like, two of the top executives now at Binance US, or at least Binance US, and I think one of their global guys, they got these two brothers from Uber to like help run the show.
[00:42:07]  Two brothers from the beginning.
[00:42:09]  Like, keep it in the family and get like from a cutthroat company.
[00:42:13]  And like, so just the fact that Binance US doesn't seem like a real-going concern and went through like major leadership, one of whom has disappeared, makes you ask a lot of questions.
[00:42:23]  Yeah.
[00:42:23]  So Sam has been rested.
[00:42:37]  Yeah.
[00:42:37]  So Sam got arrested about a month after the company collapsed, which, from my understanding, is actually kind of quick as these things go.
[00:42:45]  Well, it seemed like his compatriots really turned on him real fast.
[00:42:50]  Big time.
[00:42:51]  Yeah.
[00:42:51]  So now we have several of the main executives who were all his buddies.
[00:42:55]  You know, most of these people are 30 years old or younger.
[00:42:58]  One thing I do hate, though, is like when people say they were just kids.
[00:43:02]  Like, no, like Sam was an adult man handling billions of adults.
[00:43:05]  What the thing among young people now is they love saying that your brain isn't fully developed until you're 25.
[00:43:10]  And so my thing is, my brain was fully developed at like seven.
[00:43:13]  So these people, I was, they let me drive then.
[00:43:16]  I just didn't.
[00:43:17]  My grandpa learned to drive at the bottom of the business.
[00:43:18]  Your head was so big for so long.
[00:43:20]  My what?
[00:43:20]  That's why your head was so big for so long.
[00:43:22]  Exactly.
[00:43:22]  Yeah.
[00:43:22]  Well, Yakoob and all that, too.
[00:43:24]  But yes.
[00:43:25]  But so, like, they, but yeah, they're not children.
[00:43:27]  They're 30 years old.
[00:43:28]  Totally.
[00:43:28]  And these people like worked, like Sam and some of his friends came from Jane Street, which is a major trading firm.
[00:43:34]  Like, I've heard that people at Jane Street don't really like them, but you know, like these are not dummies, and these people know laws and rules, and they have lawyers and stuff like that.
[00:43:45]  I think there's a question about some of those lawyers.

=== Poker Chips in Crypto Casino (08:24) ===

[00:43:47]  Like one guy who we don't really get to in the podcast, but who people should look into is Dan Friedberg.
[00:43:53]  Dan Friedberg was a top lawyer at FTX.
[00:43:55]  I forget his exact title.
[00:43:56]  He worked on sort of policy and regulatory stuff.
[00:44:00]  Dan Friedberg was with, along with a guy named Stuart Hogner, they were the main lawyers and compliance officers at a company called Ultimate Bet.
[00:44:09]  And Ultimate Bet was a poker company.
[00:44:11]  Yeah, and they had a god mode where they stole tens of millions of dollars from like pro-poker players and all these people.
[00:44:17]  And like you could, their insiders could look at the cards of other players.
[00:44:21]  So there's recordings on the internet about this.
[00:44:23]  And like, this is a confirmed thing that happened up in Canada.
[00:44:27]  And when all the poker sites were shut down in the mid-2000s, a lot of those people went to crypto.
[00:44:33]  Yeah.
[00:44:34]  Similar ideas about money and they're all structured the same way, too.
[00:44:38]  It's very similar.
[00:44:39]  All the exchanges are, it's all the same.
[00:44:41]  Some people also point out that like, I mean, I'm not a programmer, but I've seen what they're referring to.
[00:44:47]  In some of the early Bitcoin code, there was a poker room.
[00:44:50]  Yeah, that would not surprise me.
[00:44:52]  So like there was poker code for a room to play poker in the original Bitcoin or early Bitcoin code.
[00:44:57]  So there are all these connections there.
[00:44:59]  So these guys helped cover up a fraud, basically.
[00:45:02]  What happens a few years later, Stuart Hoganer becomes the chief lawyer for Tether, where he still is.
[00:45:09]  And Dan Friedberg becomes the head of compliance and top lawyer for FTX, which then becomes Tether's largest customer.
[00:45:18]  So, okay, let's talk about Tether for a second.
[00:45:20]  For our listeners who aren't familiar, let's get the elevator pitch for Tether.
[00:45:26]  I'll really try to get it.
[00:45:28]  Yeah, yeah, yeah.
[00:45:28]  And we can get into the relationship between FTX and Tether, which is the case.
[00:45:31]  Tether is basically the poker chips of the casino.
[00:45:35]  I think Gary Gensler said that.
[00:45:36]  A lot of people said that.
[00:45:38]  And they're a stable coin, meaning they're supposed to always be worth $1 and backed by one real dollar in the bank.
[00:45:47]  There's one real dollar-like entity in the casino.
[00:45:49]  Yeah, and that's obviously the big question.
[00:45:52]  But you can say like this.
[00:45:52]  No, one real dollar in the bank.
[00:45:55]  I promise.
[00:45:55]  I promise.
[00:45:56]  One real dollar in the bank.
[00:45:58]  In that bank.
[00:45:59]  Yeah.
[00:46:00]  One dollar-shaped entity.
[00:46:02]  Yeah.
[00:46:02]  And a bank-shaped entity.
[00:46:04]  Or equivalent liquid assets.
[00:46:06]  Yeah.
[00:46:07]  So, you know, to buy crypto, you can go on exchanges and often connect your bank account or use a credit card or something like that.
[00:46:13]  But it's a lot easier to kind of use crypto to buy crypto or to stay within the system so you don't have to touch a real bank or have a taxable event by selling crypto.
[00:46:23]  So what people will do is they'll often buy stable coins.
[00:46:26]  They'll buy tethers or like, I'll buy $500 worth of tethers, 500 tethers.
[00:46:30]  And then I'll use that to go buy $500 worth of some crypto.
[00:46:35]  And there are other things you can do with them, like you can use them for DeFi and all these other things.
[00:46:40]  But really, it's just sort of like the poker chips.
[00:46:43]  And the issue with them is that they've been the sketchiest company you can imagine since their inception with our friend Brock Pierce.
[00:46:51]  And man, you really should get that look down.
[00:46:59]  Yeah, yeah, it's rough.
[00:46:59]  I heard it.
[00:47:00]  I heard you say that.
[00:47:03]  Yeah, Tether has been found to be lying about its backing and perhaps be violating banking laws.
[00:47:09]  I mean, they settled with the New York AG and with the CFTC.
[00:47:12]  They paid millions in fines.
[00:47:14]  From the point of view of the crypto industry, this is just the cost of doing business.
[00:47:17]  But they're also banned from doing business in the state of New York.
[00:47:20]  Recently, it was reported that a lot of their assets are overseen by Cantor Fitzgerald, the financial firm that a lot of people die in 9-11, and they sort of grew back.
[00:47:31]  But they're based in New York, so I do wonder if they're actually violating the law again.
[00:47:36]  But for a long time, Tether was the one who everyone assumed would go down, and that would cause the cascade that destroyed crypto.
[00:47:44]  I would include myself in that.
[00:47:46]  Yeah, I thought so too.
[00:47:48]  You know, look, Tether broke its peg a couple times.
[00:47:50]  Yes.
[00:47:51]  And every single time, everyone was like, here it comes, here we go.
[00:47:55]  And then it was able to kind of, you know, through sheer magic of the market, you know, kind of come back to the peg and sort of stabilize itself with quite large printings.
[00:48:06]  We'll see.
[00:48:06]  Yeah, I mean, what will happen is periodically there's this account called Whale Alert that says when there's a big movement of crypto, and so you'll have some alert that says Tether printed a billion dollars worth of Tether, which is so much money.
[00:48:19]  And then they're, and they're like, oh, we're sending it to Tron, which is run by Justin's son.
[00:48:23]  Tron is real?
[00:48:27]  I hope so because this company is called Tron, but it's like my favorite shady crypto company.
[00:48:31]  Justin's son, I know about this guy.
[00:48:33]  He's a guy so illegal that he lives in Panama now.
[00:48:38]  He lives in Grenada.
[00:48:39]  Ganada, Grenada, Grenada, Grenada, Grenada.
[00:48:41]  Where we invaded different.
[00:48:42]  Well, we also invaded Panama, but that's true.
[00:48:45]  We did invade Grenada, which is, by the way, that is an insane story.
[00:48:48]  He's a diplomat for the, yeah, I was gonna say, he's literally in the government, how they have fallen since Maurice Bishop.
[00:48:54]  But there's a great article that I recommend to a lot of people.
[00:48:59]  I forget the name of the author, but it's on The Verge, The Verge website.
[00:49:02]  It's called like The Many Escapes of Justin Sun.
[00:49:04]  Yes, I've read that really.
[00:49:05]  It's really good because it just shows you how he's fled jurisdiction to jurisdiction, and now he's in the Caribbean and he calls himself His Excellency.
[00:49:13]  I think he's hilarious.
[00:49:14]  I mean, I think it's either in that piece or another one where it's like all of these guys are on the run.
[00:49:20]  They all are in one form or another.
[00:49:22]  They're just country hopping.
[00:49:23]  Brock Pierce is the same thing.
[00:49:24]  He's like constantly going from country to country.
[00:49:28]  I mean, clearly, CZ is like whatever he's doing.
[00:49:30]  Yeah, or even Sam.
[00:49:32]  They started, well, first, like he was trading a little bit in Berkeley, then they go to Hong Kong, I think, and then they go into the Caribbean.
[00:49:37]  I think at one point they were maybe registered in Antigua, but they were in the Bahamas.
[00:49:43]  Yeah.
[00:49:44]  So they're always like jurisdiction shopping or doing like sort of jurisdictional arbitrage or just outright running from the law.
[00:49:52]  I guess my thing is, and again, I'm coming at this as an outsider, right?
[00:49:57]  If I was going to get involved in some kind of financial investment opportunities, right?
[00:50:03]  If every founder of all the companies in the thing that I'm involved in are constantly having to move to various islands due to the fact that they're doing crimes, that would give me pause.
[00:50:17]  Yeah.
[00:50:18]  Am I insane?
[00:50:19]  Like, it's like this is a movie.
[00:50:20]  I've never kept building islands in the Gulf is just so they can start creating more and more jurisdictions for these guys.
[00:50:28]  Islands in the South, the South China Sea.
[00:50:30]  They should feel rented as a big problem.
[00:50:32]  That's why we have to, you know, take over, we have to invade and go to war with China so we get their islands.
[00:50:38]  Oh, yeah, the sand islands, yeah.
[00:50:40]  So that's, you know, mischief-reflexive fill-on game.
[00:50:43]  Yeah, so good enough for me to go to war.
[00:50:45]  All right, Justin's son.
[00:50:47]  He's all over the place.
[00:50:47]  He's kind of the last man standing in some ways, besides, of course, CZ and some of these others, but like he still seems to be doing whatever he wants.
[00:50:53]  And he's Tron's main business partner.
[00:50:55]  I mean, sorry, he is Tron.
[00:50:56]  He's Tether's main business partner.
[00:50:59]  He supposedly was trying to get a rescue package together for FTX, which is ridiculous.
[00:51:04]  I mean, it's like the Harlem Globetrotters bailing out the Knicks or something.
[00:51:08]  I don't know.
[00:51:09]  It's just by the way, I would love to see.
[00:51:11]  Although the Knicks are doing very well, could be fun.
[00:51:12]  Also, I will say the Harlem Globetrotter is the only basketball game team I've ever seen play a game.
[00:51:16]  You should go see a Knicks.
[00:51:18]  The Knicks are great right now.
[00:51:19]  They're super fun.
[00:51:21]  You got to go to Madison's.
[00:51:21]  Globetrotters, I'm not really.
[00:51:23]  You got to go to Madison Square.
[00:51:24]  I'll go there performing.
[00:51:26]  Here we go.
[00:51:27]  You guys will do a show there.
[00:51:28]  No, I have some acoustic ballads.
[00:51:31]  Oh, nice.
[00:51:32]  So, okay, Tron is like, we're going to bail out FTX.
[00:51:35]  And that, of course, fails.
[00:51:37]  And then CZ doesn't come through.
[00:51:40]  And then basically on, I believe the morning of, I think it was November 11th at 4:30 in the morning, according to Sam, under severe pressure from everyone around him, which he now regrets, he signs the bankruptcy filing for FTX for over 130 companies, which everyone's like, why do you have 130 companies?
[00:51:59]  Yeah, they're all fake shell companies.
[00:52:01]  Yep.
[00:52:01]  And then this guy, John J. Ray III, who's sort of like out of big law central casting.
[00:52:10]  Yeah.
[00:52:10]  Totally.

=== Pitching Video Games to Investors (05:04) ===

[00:52:11]  Yeah, he really is.
[00:52:11]  He's ridiculous.
[00:52:13]  He mismanaged the Enron.
[00:52:15]  Yeah, he was the cleanup artist kind of who came in after Enron and Nortel, which we mentioned on the podcast too, because I believe they're Canadian companies.
[00:52:22]  Got to keep it local.
[00:52:23]  Of course.
[00:52:24]  And he comes in and is like, this is the worst shit I've ever seen.
[00:52:28]  Yeah, I mean, it was a fake company run by 30-year-old drug addicts.
[00:52:33]  Possibly.
[00:52:35]  I mean, just like no list of employees, no risk management, which even Sam acknowledges there was no risk management department.
[00:52:42]  You know, basic facts about how much money they had or where and all this stuff, like no one seemed to know.
[00:52:49]  And yeah, I think that's why also, frankly, it didn't last very long.
[00:52:53]  Like, I'm going to write a piece, I think, about kind of FTX as like a business, as a fraud.
[00:52:59]  Bernie Madoff was really good at being a criminal.
[00:53:02]  Yeah.
[00:53:03]  It went on for decades.
[00:53:04]  He kept that thing going for decades.
[00:53:05]  Like, Sam, I think, was very good, allegedly, at bringing in all this money and sort of spinning this thing up, but he could not keep it going.
[00:53:14]  Which I want to talk about for a second because I find him to be one of the least charismatic people I've ever heard in my life.
[00:53:19]  And yet, perhaps it says more about the crypto space and the kind of what journalists and big financial people were working with out there.
[00:53:28]  Maybe that's the best they got.
[00:53:30]  But I got to say, listening to him talk, first of all, the inside of my ear just starts to kind of like twist into itself because he's so annoying.
[00:53:40]  But as a woman.
[00:53:42]  I just, no, he's so dirty looking.
[00:53:45]  What if he was funny?
[00:53:48]  But here's my thing.
[00:53:49]  How did he actually perpetuate this?
[00:53:52]  Because, like you say, he's not good at being a criminal.
[00:53:55]  He seems very dumb.
[00:53:56]  He's clearly hopped up on like intense and fancy.
[00:54:00]  He's shaking like a leaf.
[00:54:01]  Yeah, like all the time.
[00:54:03]  He doesn't seem to know like basic accounting or even like he can't cover up the fake accounting because he doesn't actually know any accounting principles.
[00:54:12]  And yet he has Steph Curry and which I hate to mention and Tom Brady in commercials like shelling his like fake company at the Super Bowl.
[00:54:24]  Yeah.
[00:54:25]  So it's weird.
[00:54:26]  It is that like Silicon Valley anti-charisma where they meet like a nerdy white guy and they think, oh, you're a genius for reasons I don't fully understand.
[00:54:35]  It's kind of like the Zuckerberg treatment.
[00:54:38]  You know, there was this hilariously over-the-top article written for Sequoia, like sponsored content kind of thing.
[00:54:44]  Yeah.
[00:54:45]  A lot of people saw.
[00:54:46]  You can find it on the internet archive.
[00:54:47]  But like.
[00:54:48]  Yeah, they took that thing.
[00:54:49]  They got an arrest.
[00:54:50]  I'm sorry.
[00:54:50]  I hate to interrupt.
[00:54:51]  I don't want to.
[00:54:53]  Sequoia Capital.
[00:54:54]  If you work there, there should be checkpoints in every street in New York, in California.
[00:55:01]  And if you have that, you are just taken to a place that is just like absent.
[00:55:06]  That's how I feel like any street.
[00:55:08]  I see these young kids on the train sometime and they have their little Jane Street tote bag and I like so bad want to like little Liz noise.
[00:55:15]  Like I should get your bones if you work for Sequoia.
[00:55:18]  Like I should just give those a few.
[00:55:20]  That's crazy.
[00:55:20]  Because I've never seen a person who represented himself as an employee for Sequoia who has approached even an ounce of being a regular human being.
[00:55:29]  They are fucked up dogs.
[00:55:31]  So sorry.
[00:55:32]  Except without the big dicks that dogs have.
[00:55:35]  No disrespect.
[00:55:36]  No disrespect to the dogs.
[00:55:38]  To the dogs.
[00:55:39]  Yeah.
[00:55:39]  So, you know, there was this ridiculous article where when he was pitching Sequoia, he was playing video games, which he did in other meetings.
[00:55:45]  And they knew.
[00:55:46]  And they thought, like, oh, this guy's so cool.
[00:55:48]  What a genius.
[00:55:49]  He could game while pitching us.
[00:55:51]  Like, that just.
[00:55:52]  Bro, what?
[00:55:53]  Why is that good?
[00:55:54]  And like, they thought he was going to be the first trillionaire, they said in the article.
[00:55:57]  Just stuff that I don't.
[00:55:59]  There must be something in the air or in the water or in those rooms that they pipe in.
[00:56:04]  How the mighty have fallen.
[00:56:05]  You know, you see the like culture of Wall Street criminality from Wolf of Wall Street, and you're like, damn, so cool.
[00:56:11]  Leo, what a badass.
[00:56:13]  Margo Robbie, hot as hell.
[00:56:15]  I do find her annoying.
[00:56:16]  Although, however, clearly lying about her age, which I do think, I do think is a woman's right.
[00:56:21]  Yeah, I do too, but I do find her to be annoying.
[00:56:25]  Look, I sort of see the bad movie that you did.
[00:56:29]  I think she's fine.
[00:56:31]  She needs to get out of the contract with Chanel.
[00:56:33]  It's not doing her.
[00:56:34]  She needs a guy.
[00:56:35]  Anyway.
[00:56:37]  Then you see, you know, fast forward, whatever it is, 30, 40 years.
[00:56:42]  I don't know the math on that.
[00:56:43]  And it's like, what the hell?
[00:56:46]  Yeah.
[00:56:46]  Nerds took over.
[00:56:47]  This guy, he's doing a drug I never heard of.
[00:56:49]  He's putting it on his arm, his little patch.
[00:56:52]  You know, when he was calling to court in the Bahamas, we interviewed a journalist from Coindesk who was, I think, the only non-Bahamian journalist there for his initial arraignment.
[00:57:02]  And this has been reported, but she was talking about this.
[00:57:04]  He was in court in the Bahamas and he says, I need to take my medicine or something like that.
[00:57:10]  And the judge says, okay.
[00:57:12]  He's like, I need to take my shirt off.
[00:57:14]  And so he leaves the room.

=== Online Collateral and Joking Risks (07:58) ===

[00:57:15]  That's kind of wolf the Wall Street too.
[00:57:17]  He leaves the room, puts on one of his patches, apparently, and he had been shaking like a leaf, as you said before then.
[00:57:24]  He comes back in a few minutes later, he's totally calm.
[00:57:28]  And he's got like a chiseled jawline.
[00:57:30]  So you've met.
[00:57:31]  You've met.
[00:57:32]  Once.
[00:57:32]  Sam.
[00:57:32]  Yeah.
[00:57:33]  I met Sam once over the summer.
[00:57:35]  Worked on a book with Ben McKenzie that's coming out, and we interviewed him for that.
[00:57:39]  And I've talked to him online.
[00:57:41]  We talked about this in the podcast a bit.
[00:57:43]  He DM'd me some.
[00:57:44]  I wouldn't say I had a, like, you know, it was source like or journalist source relationship.
[00:57:50]  I never, he, but he was kind of just DMing.
[00:57:55]  I think he just liked to talk to people.
[00:57:57]  Well, he was up all night.
[00:57:58]  Up all night on drugs and online and a crypto guy.
[00:58:01]  Of course he's in the DM.
[00:58:03]  Yeah.
[00:58:03]  And one thing that someone said to me, this guy caught him at the Financial Times, who we talked to also is a great journalist.
[00:58:09]  So, yeah, all these guys, you know, they're online all the time.
[00:58:12]  They're producing content all the time.
[00:58:14]  Not a good mix.
[00:58:15]  Yeah.
[00:58:16]  And I think Sam just sort of liked to reach out to a lot of people and kind of keep tabs on people.
[00:58:21]  But his main thing with me seemed to be trying to convince me that Tether wasn't a scam.
[00:58:26]  Bro.
[00:58:27]  And he would often point to this Financial Times article about Tether that goes into the background of Giancarlo DeVocini, the guy who basically runs it.
[00:58:35]  We've talked about him before.
[00:58:36]  The plastic surgeon.
[00:58:37]  Yeah, yeah.
[00:58:38]  And he would basically just say things to me like, they're messy, but they're not a scam.
[00:58:43]  Well, they have a real link.
[00:58:44]  I mean, Tether and FTX, too.
[00:58:46]  I mean, they were using, they have like some pretty close ties.
[00:58:49]  Yeah, Alameda, over the course of its lifespan, bought something like $36 billion worth of tethers.
[00:58:55]  I'm sorry.
[00:58:56]  That's so much money.
[00:58:58]  It's incredible.
[00:58:59]  I don't understand.
[00:59:01]  Where does the money go?
[00:59:03]  Yeah.
[00:59:03]  But stuff saying money.
[00:59:05]  Okay.
[00:59:05]  Well, it's not money.
[00:59:07]  It's only money when it's realized.
[00:59:09]  Yeah.
[00:59:09]  Yeah, you're true.
[00:59:10]  And it's not.
[00:59:11]  It's fake.
[00:59:12]  It's fine.
[00:59:12]  They keep all my money in cash.
[00:59:13]  It's funny.
[00:59:14]  Yeah.
[00:59:15]  And that's one of those questions of like, you know, there's a lot we already know from the filings and from, you know, Caroline Ellison, Nishad Singh, and all these other people pleading guilty and all the other people who are going to plead guilty.
[00:59:25]  I mean, even Dan Freeberg, that guy I mentioned earlier, claims he wants to cooperate.
[00:59:31]  But there's still these open questions like, yeah, they probably didn't give 36 billion US dollars to Tether even over a long period, but like they probably got some tethers for free or discounted and then maybe paid them back later.
[00:59:43]  I mean, who knows what was going on?
[00:59:44]  But there's a real question of like, at least how did those $36 billion worth of tethers, and again, all these are fake numbers, but kind of pass through Alameda.
[00:59:53]  And where did they go?
[00:59:54]  And what happened to a lot of that stuff?
[00:59:56]  Well, one of the other, I mean, we were kind of joking about it before, but one of the big questions about Tether is like, what actually is backing it, right?
[01:00:03]  I mean, we were joking that it's backed by, you know, a dollar-like thing.
[01:00:07]  But that's because it says it has a basket, whatever that means, of various securities and assets and, you know, maybe like, I don't know what, like T-bills or whatever.
[01:00:21]  Now they say it's a lot of T-bills.
[01:00:23]  Which maybe it was.
[01:00:23]  I mean, they've had a lot of buyers of T-bills recently, but and like big whale buyers.
[01:00:29]  But, you know, and maybe they were able to actually clean out a lot of the junk that they were holding and kind of convert it to treasuries.
[01:00:38]  I mean, some people do wonder that.
[01:00:39]  And like, it's a legitimate question.
[01:00:41]  Like, did they have all this bad commercial paper and stuff?
[01:00:44]  And then they were able to turn it sort of into better assets.
[01:00:46]  But over the past year or so, as this kind of like fire cells happened.
[01:00:50]  But I mean, because that's the whole thing.
[01:00:52]  It's like it could also be that they're holding FTT or they were holding.
[01:00:57]  That was a big question when FTX was crashing.
[01:01:00]  Everyone was like, well, how much of Tether is backed by FTT?
[01:01:04]  That's a good question too.
[01:01:05]  Yeah.
[01:01:05]  Like if they were going to give Tether anything for Tethers, I mean, it would either probably be dollars or their own token.
[01:01:11]  Yeah.
[01:01:12]  And so to be, I mean, because that's the thing, right?
[01:01:14]  If they're, if they're quote unquote buying that much Tether, like we're saying, they're not paying cash.
[01:01:20]  Like cash is not being exchanged.
[01:01:22]  It's all funny money.
[01:01:23]  Yeah.
[01:01:24]  Right.
[01:01:24]  And so like, but people, like regular people who go and trade stuff on crypto exchanges are buying tethers with real money.
[01:01:33]  Yes.
[01:01:34]  And Alameda wasn't.
[01:01:35]  Yes.
[01:01:36]  That's who's so the real money is entering the system mostly a couple ways.
[01:01:39]  Like the venture capital money that Sam raised, which is something like $2 billion from Sequoia and whoever else.
[01:01:45]  And then, but really, a lot of the real dollars coming into the system, which they need a constant stream of because this is basically a highly distributed Ponzi scheme, is coming from customers, from the people who believe Seth Curry or the other sales pitch.
[01:01:58]  And they're like, okay, I'll go on FTX and gamble a thousand bucks.
[01:02:01]  That's where the real money comes from.
[01:02:03]  And that's what the industry kind of started running out of, I think, over last year.
[01:02:07]  Yeah.
[01:02:08]  And you can look, retail volume in crypto peaked in May 2021, I believe.
[01:02:13]  And people are leaving the casinos.
[01:02:16]  And so that contributed to a lot of this collapse last year.
[01:02:19]  It's like who had real money left?
[01:02:21]  It was either gone or stolen or wherever else.
[01:02:24]  Well, it was for the past couple years, too.
[01:02:26]  You had big whale players that were really like moving.
[01:02:32]  Run in Frasia.
[01:02:34]  No, no, but like, I mean, like, hedge funds playing around with crazy, crazy buys.
[01:02:39]  And, you know, that was really like, you know, all these people, you know, getting a lot of retail sucked into pump and dumb schemes, right, over the course of like the past couple years.
[01:02:49]  But you had a lot of institutional money coming in just for playing around and making quick, you know, I don't know, quick arbitrage or on whatever shitcoins are out there still.
[01:02:59]  And then as, you know, the Fed started tightening and trying to get rid of all of the junk in the market, which, by the way, still going, still got plenty to go.
[01:03:10]  It's going to be real fun on the way down.
[01:03:13]  You know, you see all of this like liquidity kind of starting to dry up.
[01:03:17]  And a lot of people, like, and a lot of these like shit companies are just left being like, fuck, we actually don't have anything.
[01:03:25]  Like, the fucking, you know, like the floor is like falling out from under them.
[01:03:30]  Yeah.
[01:03:31]  And, you know, a lot of these loans had like no collateral or undercollateralized.
[01:03:35]  Like the three AC guys, Three Arrows Capital, I mean, these were the most shit talking, like, sovereign citizen, right-winger guys who were based out of Singapore.
[01:03:44]  They were jerks, too, on Twitter.
[01:03:46]  And I do think their post-collapse makeover is funny.
[01:03:50]  Is one of them still missing?
[01:03:52]  No, they both, so they both came back online right after Samba.
[01:03:56]  Yeah, I remember that.
[01:03:57]  As did Doequan at one point, I think.
[01:03:58]  Oh, yeah.
[01:03:59]  Shout out to Doe Quan.
[01:04:00]  Shout out.
[01:04:01]  Heavy true and on shout out to Doe.
[01:04:04]  Because that's crazy.
[01:04:05]  He's named after money.
[01:04:08]  So, yeah, those guys had a loan, I think, of over a billion dollars from Grayscale, I believe, which is in deep trouble as an American firm.
[01:04:16]  I don't even know what the fuck that is.
[01:04:17]  It just sounds like a scam.
[01:04:18]  Yeah, right.
[01:04:19]  Grayscale?
[01:04:20]  And that was a billion-dollar loan with no collateral, as far as I know.
[01:04:23]  Like, it was crazy.
[01:04:25]  And so the three AC guys lost like two or three billion dollars of other people's money, disappeared.
[01:04:29]  People told me that they thought those guys were dead.
[01:04:32]  But obviously that didn't happen.
[01:04:35]  I mean, also, like, when you're dealing with like a lot of money in sort of offshore jurisdictions or in authoritarian countries, like, I don't know.
[01:04:44]  One thing I tell people, like, you are potentially putting yourself in danger or taking some dirty money.
[01:04:49]  Someone's going to shove a gun so hard in your mouth that it cracks out your front teeth.
[01:04:53]  Yeah, I mean, this whole thing is one big criminal network for money laundering.
[01:04:56]  Like, what the fuck do you think you're involved in?
[01:04:59]  Exactly.
[01:05:00]  And that's what I say to people, like, even just in a general sense, like, imagine you have a company, it's set up offshore, there are almost no laws around it.
[01:05:07]  You give them a money printer, who do you think is going to show up?
[01:05:10]  Criminals and intelligence agencies, probably.
[01:05:13]  Yeah, absolutely.

=== Why Solana Attracts Criminals (15:11) ===

[01:05:14]  Like, that's and child pornographers.
[01:05:16]  Well, them too.
[01:05:17]  Yeah, and there's definitely that happening.
[01:05:18]  And there's a lot of overlap between those three ideas.
[01:05:20]  Yeah, I mean, some of these guys have, you know, Vitalik Buterin has said things about how he thinks that child pornography is sort of a victimless crime to just possess it, I believe.
[01:05:32]  I don't want to hear from you.
[01:05:33]  You have to look at those tweets.
[01:05:35]  You don't have to look at the tweets.
[01:05:36]  You have to take one look at the man's face.
[01:05:38]  I'm sorry.
[01:05:38]  But there are a lot of what's written there.
[01:05:40]  Let's just say there are a lot of opinions about child porn and the age of consent in the world.
[01:05:44]  We were just talking about this last night.
[01:05:46]  We weren't talking about that.
[01:05:46]  What?
[01:05:47]  With my aunt?
[01:05:48]  No, we were talking about the scary weirdness that happens in the northern European countries.
[01:05:54]  Everyone always talks about, they always point to like the French.
[01:05:57]  Crazy, you know what?
[01:05:58]  I'm with you.
[01:05:59]  But you know who you really should be talking about?
[01:06:01]  The Belgians.
[01:06:02]  The Belgians.
[01:06:02]  The Belgians and the Danish and the Spanish.
[01:06:04]  Yeah, there's a lot of terrible, weird things happening.
[01:06:06]  Yeah, well, my thing is with this is like, listen, I know a lot of guys, right?
[01:06:10]  I know a lot of guys who have some sometimes unorthodox opinions, right?
[01:06:13]  Never once in my 33 years on this spinning rock that we call Earth has any of my friends been like, dude, I don't know, man, like 14 is nothing.
[01:06:25]  But these guys are on Twitter saying this shit all the time.
[01:06:28]  Because they think it's like a logic debate or something.
[01:06:30]  Yeah.
[01:06:31]  You know, and some of them come out of this world where like, oh, anything can be sort of debated like this.
[01:06:35]  And we're just debating the merits of XYZ.
[01:06:38]  It's like, oh my God, simple.
[01:06:40]  So that's the culture needs to like, that needs to implode.
[01:06:43]  Yeah.
[01:06:44]  And like entertaining, risky ideas.
[01:06:47]  That was also Sam's whole thing.
[01:06:49]  Yeah.
[01:06:49]  I mean, that was the whole, I mean, even effective altruism, which look, I know a lot of people clowned on that recent.
[01:06:55]  I think it was Nathan Heller did that piece in the news.
[01:06:59]  I admit I haven't seen it yet.
[01:07:00]  I know what you're talking about.
[01:07:02]  You know, a lot of people clowned on it for probably good reason.
[01:07:05]  Although there were some interesting lines in it, just like little takeaways.
[01:07:09]  And one of them was talking about how much effective altruism infected almost every department and every way of thinking within the humanities, within like everywhere at these like big schools.
[01:07:22]  You know, really, I think he was at Harvard that he was talking to these kids.
[01:07:25]  Gotta go to Harvard.
[01:07:27]  You gotta go to Harvard, bro.
[01:07:28]  If you're thinking of going to college and listening to this, Harvard.
[01:07:32]  No, look, I don't like it, but it is where, unfortunately, the future leaders of the world are groomed.
[01:07:37]  Chinese.
[01:07:38]  Yeah.
[01:07:40]  I mean, the story supposedly is, just in line with what you're talking about, that Sam was interested in animal welfare and he was a student at MIT.
[01:07:48]  And one day he has lunch with Will McCaskill, who's like the beating heart of effective altruism.
[01:07:53]  Not for long.
[01:07:54]  Yeah, and Will says, Will McCaskill says, like, why don't you make a lot of money and then give it away to good causes?
[01:08:00]  And that's the epiphany.
[01:08:02]  How fucking dumb do you have to be for that line to be the thing that like makes your brain I can make a bunch of money and then give it away?
[01:08:11]  Motherfucker, look up Rockefeller.
[01:08:13]  I do some of the least effective altruism in New York City.
[01:08:15]  I give I'm giving crack to people.
[01:08:18]  I'm giving housing vouchers that are fake to people.
[01:08:21]  It's incredible.
[01:08:22]  And to me, that's what I exist on this earth to do.
[01:08:25]  But that whole kind of mentality, like that whole like, if we just account for every single thing, it's funny.
[01:08:32]  He can do accounting in this realm, but not for his own country.
[01:08:35]  Well, that's the funny thing.
[01:08:36]  That's the funny thing about effective altruism in a way is like you think it maybe would preach some kind of almost like caution or conservative line of thinking.
[01:08:46]  But instead, it's super embracing of risk, which is a constant throughout crypto.
[01:08:51]  It's like these people are so risk tolerant or just don't even understand what's risky.
[01:08:56]  And so they think there's so much upside to what they're doing that sort of embracing like runaway risk is okay.
[01:09:05]  There are these clips of Caroline Ellison, the former CEO of Alameda, who supposedly helped get them into this mess.
[01:09:10]  And she's basically talking about like, well, if your choice is between like double or nothing or basically saying you should do double or nothing bets on something over and over again because your lower bound is known and that is you lose all your money.
[01:09:24]  Your upper bound is infinite.
[01:09:26]  Well it's like, yeah, if like this is like spark notes for like game theory 101 freshman level.
[01:09:32]  You're saying that's actually like more, that's literally like I took one class of game theory and I, this is what I took.
[01:09:38]  She is sitting on a futon when she gives that interview.
[01:09:41]  It's very colorful.
[01:09:42]  This lady is like, listen, if I lose all the money, then I have no money.
[01:09:46]  But if I double my money, perhaps I can do that again.
[01:09:49]  Like this is the insights.
[01:09:52]  This is what they're teaching kids to do so.
[01:09:54]  It's crazy because sometimes I'm like, man, I don't understand how these things work.
[01:09:57]  But to me, that's literally what I do at casinos.
[01:10:00]  I go in there, I lose some money, and then I have a little bit of money left, and I put it all on one big bet that I've literally every time I've done that, I've lost.
[01:10:08]  Yeah.
[01:10:09]  And I think because they will rationalize almost anything, and part of the effective altruism thing is like, oh, we're looking towards the far future.
[01:10:18]  So we're thinking about all of humanity that is to come.
[01:10:20]  Not the people living right now necessarily, but the trillions of future humans.
[01:10:25]  So we need to make big risks on their behalf or really secure the future against AI a generation or 100 years from now and not helping people right here, right now, because the big risks are for the trillions of future humans.
[01:10:39]  Right, which means that you can also then absorb more risk.
[01:10:42]  You can take more risk on yourself because you're taking such a long view that what are these losses?
[01:10:47]  Now they're small, they're petty.
[01:10:48]  It doesn't matter, right?
[01:10:50]  And they take that for everything.
[01:10:52]  I mean, it's funny because I think one of the big like sticking points that we always talked about in our episodes on Robinhood, our episodes on Tether, our episodes on everything, is counterparty risk and how all of these like companies, and now it seems like this fucking Silicon Valley Bank, right?
[01:11:09]  It's like they're finding out every single one of them is like, fuck, what is my exposure?
[01:11:14]  What is my counterparty risk?
[01:11:16]  How do I actually like though?
[01:11:19]  It's so funny to me because Bitcoin, like, you know, this sounds like such a catchline, right?
[01:11:23]  It's like Bitcoin solves this.
[01:11:25]  The whole idea was that you have this ledger that shows everything.
[01:11:29]  And so you could always know what your risk was, right?
[01:11:32]  Because it's all out there.
[01:11:34]  And yet none of this, nobody knows, all these shady people, they don't know anything.
[01:11:38]  That's true.
[01:11:38]  And it's all fake.
[01:11:39]  Yeah.
[01:11:40]  But the problem, the scary thing is, is that there are like very real financial entities that are like tacked into this, right?
[01:11:48]  Yeah.
[01:11:48]  So on the podcast, we interviewed Kevin O'Leary from Shark Tank.
[01:11:53]  So sick.
[01:11:54]  One of the best skinheads in America, bro.
[01:11:59]  He's, you know, from Shark Tank.
[01:12:02]  He's Canadian.
[01:12:02]  He ran for leader of the Conservative Party up there once.
[01:12:05]  I love Mr. Wonderful.
[01:12:07]  Yeah, Mr. Wonderful.
[01:12:08]  Apparently they had a show called Dragon's Den, which was the pre-Shark Tank.
[01:12:12]  Apparently, all right, journalists.
[01:12:13]  Yeah, they had a show called Dragon's Den.
[01:12:15]  Excuse me, excuse me.
[01:12:16]  I should have been watching.
[01:12:17]  I wouldn't even do.
[01:12:19]  And so, but what he told us was we asked him a lot of questions about like due diligence.
[01:12:24]  What did you do?
[01:12:26]  Because you do a lot of investments.
[01:12:27]  You have all these companies of your own.
[01:12:29]  What exactly did you do to look into FTX before you accepted $18 million worth of crypto in cash to endorse them?
[01:12:40]  And he claimed at times he did due diligence, but then when you really get down to it, he told us, well, I trusted Bain and I trusted Tiger Global and I trusted these other companies.
[01:12:51]  Wait, that's literally not due diligence.
[01:12:52]  That's just being like, these guys say it's good.
[01:12:54]  Yeah.
[01:12:54]  So like, but what he'll also tell you is that it was the hottest ticket in town and like everyone was throwing their money at Sam.
[01:13:00]  And one thing that FTX was doing was like, okay, here's what we're going to tell you about our company.
[01:13:06]  You can invest at this amount if you want.
[01:13:08]  You have 24 hours.
[01:13:09]  I mean, like sometimes it would be a really quick turnaround.
[01:13:12]  Like you were either able to get in now or not at all.
[01:13:15]  And that caused, I guess, a degree.
[01:13:18]  I don't think this is an excuse by any means, but it's like there was investor FOMO kind of where they're all just like, oh, I'm chasing the next big thing.
[01:13:25]  These other guys are in it.
[01:13:26]  I'm going to throw down.
[01:13:27]  Well, we also have to say, too, I mean, the post-COVID market bonanza was insane.
[01:13:34]  And there was this feeling of after the market crash in, what was it, March 2020?
[01:13:40]  Yeah.
[01:13:41]  Like, was it March?
[01:13:43]  February, March 2020, when the market crashed, when it was starting to then pick back up and, you know, good old Trimpy turned on this.
[01:13:50]  The money spigot and it was just like go.
[01:13:54]  Everyone was like, this is the last, this is like the last hurrah before the end game or whatever right.
[01:14:02]  And so there was this, like it felt like there was this moment where everyone was sort of like, all in all in all in, go before like, the bottom comes out.
[01:14:11]  You know what I mean?
[01:14:12]  And and you had these funds like uh Andreessen, Horowitz or Paradigm, who had raised crazy head on that motherfucker.
[01:14:18]  Also, shout out to Andreessen for supporting this podcast.
[01:14:21]  Oh Mark, oh yeah Mark yeah yeah, I really would like to.
[01:14:26]  I found out earlier today, Bajalis.
[01:14:28]  Who's this motherfucker?
[01:14:29]  Oh yeah Balaji, he blocked me too.
[01:14:34]  He blocked you, he blocked me.
[01:14:35]  I was trying to look.
[01:14:36]  He said that this is why we can't trust the banks.
[01:14:38]  Bitcoin solves this.
[01:14:40]  I was like yeah, but I was like I never even said anything to this motherfucker.
[01:14:44]  I never heard.
[01:14:45]  I know this guy sucks.
[01:14:46]  I've heard of him in that context, but I don't know who he like.
[01:14:49]  I'm not like in that world.
[01:14:51]  He's just like crypto network cities, like sort of trying to present himself as like a VC philosopher guy, but I would love to see what that guy he's just a right-winger balls.
[01:15:00]  Look like um, they're probably crazy.
[01:15:04]  But you you yeah, you had all the cheap money coming in and then you had these VC funds with like billion dollar funds just to pour into crypto companies, which meant, like one thing that I think people should know actually is, like you know, in previous cycles, like venture capital has a lot of problems with it, but they're trying to build real companies basically, or like at least they think like we're gonna put money into a company and like in five or ten years they'll be, it'll cash out.
[01:15:29]  Well, there was the like classic, like Uber model yes right, which was like okay, what we're gonna do is we're gonna pour as much money as we can into this dumb startup idea which is then, through um, maneuvering of regulations and then also regulatory capture, will secure a monopoly right and then everyone will be so annoyed that they have to just use it forever.
[01:15:51]  Yeah correct, and this was like the kind of like Uber or the Amazon model that we all know and love, which was already problematic and horrible to begin with.
[01:16:00]  It didn't really work for UBER?
[01:16:01]  No, it still doesn't make any money.
[01:16:03]  Yeah, oh yeah, and it's some pretty awful people who are sort of pushing this and the kinds Of economics that produces and it's complete and total like corporate regulatory capture.
[01:16:11]  Absolutely.
[01:16:12]  It's criminal.
[01:16:13]  And then the VCs, it was like crypto came along, and the VCs were like, nah, that's taking too long on returns.
[01:16:20]  Yeah.
[01:16:21]  We can't even bank on, you know, on monopolization anymore.
[01:16:25]  Clearly, we're not even getting anything from Uber.
[01:16:27]  What if we just built casinos?
[01:16:29]  Yeah.
[01:16:30]  And what if they just bought the tokens directly, too?
[01:16:32]  So like what you have is, I mean, there are lockup periods and stuff, like with stock options for some of the stuff.
[01:16:37]  But what we have is if you invested in Solana, the company, you could get Solana tokens on the cheap, which Sam Bankman Freed did.
[01:16:46]  Right.
[01:16:47]  And you get them at like pennies on the dollar, or at least at an initial really small valuation.
[01:16:51]  And then after some lockup period or maybe none, after the market opens, the ICO happens, you dump on retail.
[01:17:00]  You sell for 10 or 100 or 1,000 times what you paid to a retail investor.
[01:17:04]  And ICOs go crazy.
[01:17:06]  So then you've cashed out your VC investment in months instead of like years.
[01:17:11]  So what you do to let me, let me hit you with this.
[01:17:15]  So I'm a VC, right?
[01:17:17]  Always.
[01:17:18]  I've got a lot of opinions on modern men and women for some reason also that I share on Twitter.
[01:17:22]  I don't know why they do that because that is the least I would never take advice from somebody in that position.
[01:17:30]  But anyways, I invest in this coin company, right?
[01:17:34]  Solana.
[01:17:35]  They give me a bunch of money for less money, right?
[01:17:38]  So I like buy their coins for very little money for cheap because I invested.
[01:17:42]  Yeah, maybe instead of getting equity in the company, or you might get both, but you might, instead of getting equity, you might get tokens or like, or they would call the tokens a form of equity.
[01:17:50]  So I gave them, yeah, and so then, and then I have those tokens.
[01:17:52]  And so then when that coin goes public, I sell those tokens for a bunch of money on the initial run on Solana.
[01:17:59]  Exactly.
[01:17:59]  Especially that initial run.
[01:18:01]  Legal in the world?
[01:18:03]  Do you do that, Lee?
[01:18:04]  Well, that's the question.
[01:18:05]  That seems like something that would be.
[01:18:07]  There's this computer scientist, Nicholas Weaver, who's on Twitter a lot.
[01:18:10]  He hates crypto and is very sort of annoyed by it.
[01:18:13]  And he says that A16Z's business model is securities fraud.
[01:18:17]  Because if you think these things are unlicensed securities, which they basically all are, because they're all the same, and they all pass the Howey test and all this stuff, like, yeah, it's this.
[01:18:28]  Keep it pushing.
[01:18:28]  Keep it pushing.
[01:18:29]  I'm going to keep going.
[01:18:30]  We're going to forget that one.
[01:18:32]  But, you know, these are basically unregulated securities or things treated like that.
[01:18:36]  So yeah, if you invest in Solana, maybe you'll get the tokens at 8 cents each.
[01:18:40]  Maybe it'll ICO at $8 or more.
[01:18:45]  And then Solana ran up to $230, $230.
[01:18:49]  It was one of the best altcoins, as they called it, for a while.
[01:18:52]  And everyone thought Solana was the future of crypto.
[01:18:54]  I mean, and everything else.
[01:18:57]  I mean, I talked to people who worked for Solana who like believed it.
[01:19:00]  Wait, sorry, you're saying this in the past tense.
[01:19:03]  It still exists.
[01:19:04]  Solana still exists.
[01:19:05]  Not $230 if Solana.
[01:19:07]  I think it's like in the 20s, maybe.
[01:19:09]  20,000s.
[01:19:10]  No, it's like 20 bucks per year.
[01:19:12]  Oh, okay.
[01:19:12]  Okay, yeah, yeah, that seems hard.
[01:19:15]  But, you know, they were one of the most kind of acclaimed crypto companies, even though, frankly, I don't know what they were building when they all talked about building.
[01:19:24]  None of them.
[01:19:25]  None of them are building anything.
[01:19:26]  I'm sorry.
[01:19:27]  This is insane to me that people still say this is an excuse.
[01:19:31]  Every fucking crypto company that just exists to print fake money to sell to people and then rip them off always says they're fucking building so oh, this is going to revolutionize the healthcare market.
[01:19:40]  This is going to change everything.
[01:19:42]  The chain will fix it.
[01:19:43]  You are a fucking moron if you fall for this.
[01:19:46]  They're not building anything.
[01:19:47]  They're scamming you.
[01:19:49]  It's like, this is.
[01:19:50]  All these guys know that.
[01:19:51]  That's the thing that bothers me.
[01:19:52]  Okay.
[01:19:53]  They know that.
[01:19:54]  But yeah, the VCs, all these companies, all these fucking hedgies, they know.
[01:19:58]  It's all bullshit.
[01:19:59]  It's just how do we move money to like, how can we basically arbitrage a ton of fucking money through all of these different like fake investment companies, basically?
[01:20:09]  So how can we move all this around and like skim a little bit off the top, which when you're dealing in billions of dollars is a shit ton of premiums.
[01:20:16]  Yes.
[01:20:17]  And then exit and get out of here and do it over and over and over again.
[01:20:20]  I mean, it's like one big fucking shell game.
[01:20:22]  How is this legal at all, though?
[01:20:24]  That's just a lot of people.

=== Shilling Scams and SEC (15:41) ===

[01:20:25]  Well, it's not.
[01:20:25]  But the real, this is the thing is that not enforced.
[01:20:28]  The SEC needs to get a fucking pair.
[01:20:31]  Do they have a SWAT team?
[01:20:32]  I know FDA is a SWAT team.
[01:20:34]  I mean, this is the whole thing where it's like, you don't, I mean, I get mad.
[01:20:37]  I kind of do fall in line with Stoller on this, who says, like, we don't need more regulations.
[01:20:43]  Like what you're saying.
[01:20:44]  We don't need, like, Elizabeth Warren and all these people get out there.
[01:20:46]  We need to regulate crypto.
[01:20:47]  We need to, I'm Lynn Warren.
[01:20:49]  I'm Native American.
[01:20:51]  You can tell because of my cheekbones.
[01:20:52]  That seems genuine.
[01:20:53]  I haven't forgotten about that.
[01:20:54]  That's crazy she said that, by the way.
[01:20:56]  My cheekbones?
[01:20:58]  It's so crazy.
[01:20:59]  Imagine if I was like, you can tell I'm Native American because of my cheekbone.
[01:21:02]  People, you're racist.
[01:21:03]  Yeah, we would not have a podcast anymore.
[01:21:05]  Well, we would.
[01:21:06]  You'd not be on it.
[01:21:07]  I would not be on it.
[01:21:08]  No.
[01:21:09]  But anyways, you know, she's like, we need to.
[01:21:11]  It's like, bitch, no, we don't.
[01:21:12]  Whoa.
[01:21:13]  We just need, why don't we just enforce the laws that already exist?
[01:21:16]  Yeah.
[01:21:17]  And I've talked to that.
[01:21:18]  It's a gun point.
[01:21:18]  Sorry.
[01:21:19]  Well, some of them might be one day.
[01:21:20]  I mean, I've talked to regulators and people on Capitol Hill, and some of them do say that.
[01:21:25]  Like, the stuff is on the books if you want to do this.
[01:21:29]  It takes political will and all that kind of stuff.
[01:21:31]  And now there's more of that.
[01:21:34]  But they also have cut the SEC.
[01:21:36]  I mean, the SEC is like, what, like, two guys?
[01:21:38]  They cut some of the budget, I think.
[01:21:39]  And part of the problem was also Sam and everyone else was trying to steer all of this to the CFTC, which has a fraction of the budget and was much more friendly.
[01:21:47]  And wasn't the lady from Alameda's dad in charge of it at some point?
[01:21:52]  That, oh, Caroline Ellison's dad.
[01:21:55]  I think he was at the CFTC at one point.
[01:21:57]  And then, like, they're used to dealing with pork futures, and the man is quite pig-like.
[01:22:01]  Yes.
[01:22:02]  And they hired people from the CFTC.
[01:22:04]  They hired people from the Ag Committee, which oversees the CFTC.
[01:22:08]  Like, they did everything to.
[01:22:09]  Well, that's where he was smart, I got to say.
[01:22:12]  That's really what you're a criminal.
[01:22:16]  Yeah, I mean, he understood, like, he's like, oh, I can't, I don't know how to run a company.
[01:22:21]  I don't know shit about crypto.
[01:22:22]  What I do know is being a criminal.
[01:22:25]  And that means paying the guys.
[01:22:27]  Yeah.
[01:22:27]  You just got to pay the guys.
[01:22:28]  I'll be real with you.
[01:22:29]  That is actually literally a good management tactic, right?
[01:22:33]  Like, you don't know how to do it.
[01:22:34]  You hire people to do it.
[01:22:36]  But, I mean, yeah.
[01:22:37]  So his whole, I mean, he pissed off a lot of crypto people doing that too.
[01:22:40]  Yeah.
[01:22:41]  Some people didn't like it, especially like the DeFi people who decentralize finance.
[01:22:45]  Like some people didn't really like the role that Sam was taking.
[01:22:48]  I think some sort of swallowed it and accepted like, well, maybe this will turn out better for crypto in the end.
[01:22:52]  Yeah.
[01:22:53]  But then, you know, once Sam went down, that's when like the thieves really started turning on each other or choose your metaphor, circular firing squad, whatever.
[01:23:01]  Like the Omer to was broken.
[01:23:02]  Yeah.
[01:23:03]  And people started saying, that's actually one of my favorites.
[01:23:05]  Like, cause that's when people really started shit talking or like the three AC guys came back and started like posting text messages and stuff.
[01:23:12]  Right.
[01:23:12]  Well, that's where we also found out.
[01:23:13]  I mean, it was in what Sam's own testimony or, you know, his slated testimony that he was supposed to give in front of Congress where we found out about these group chats that Sam, CZ, who else was in?
[01:23:29]  There was this guy.
[01:23:31]  It's always going down in the business.
[01:23:32]  His name Halley, I believe was his name.
[01:23:34]  And he's worked for FTX and Tether or Bitfinex.
[01:23:37]  He's worked for Cooler.
[01:23:38]  It's true and on rule.
[01:23:39]  I'm telling you, the world is run on group chats.
[01:23:43]  Here's another little true and on rule.
[01:23:45]  As a man, this is maybe being a little red.
[01:23:47]  This is my most red pill opinion.
[01:23:50]  You should not be in a group chat.
[01:23:51]  I'm telling you.
[01:23:52]  I'm a no group chat.
[01:23:53]  I'm in a group chat with you two, and that's it.
[01:23:55]  So much shit happens in group chats.
[01:23:57]  And I don't want any part of it.
[01:23:59]  I think it's gauche to be in a group chat.
[01:24:01]  One-on-one.
[01:24:03]  Maybe call three.
[01:24:04]  Anyways, they're all in a group chat, all these Bitcoin guys.
[01:24:07]  So what was it called too?
[01:24:09]  It was called exchange coordination.
[01:24:13]  Bro.
[01:24:13]  Like the group, it seemed to be like a Ricocharged in the title.
[01:24:17]  It was ridiculous.
[01:24:18]  So yeah, a couple years ago, when I started covering crypto, a couple people would tell me this, like, look, this is a small industry.
[01:24:25]  It's run by a small number of men and they all talk to each other and there are group chats.
[01:24:30]  And I was like, okay, maybe.
[01:24:32]  There was this at a graveyard in Vienna.
[01:24:35]  Yeah, but the third man told me this in shadow.
[01:24:39]  And I thought, okay, maybe.
[01:24:40]  But it's the kind of thing you can't really just like from a, you know, from journalists with all your lofty rules, you got to prove it or whatever.
[01:24:47]  And then it's like, I don't know how I'm going to find this out.
[01:24:49]  Two years later, Sam Bankman Freedz like submits his testimony with screenshots and like, which is just amazing.
[01:24:55]  My main thought was like, that was him screwing.
[01:24:58]  Very Lisa Vanderpump style.
[01:24:59]  Shout out to the people who get that reference.
[01:25:01]  I hear it's a good show.
[01:25:03]  But like just printing out screenshots.
[01:25:06]  If the government sees that, that's like an instant subpoena for the people in the group chat.
[01:25:10]  Why would you immediately like, so I think that was Sam throwing everyone else under the bus or being incredibly stupid?
[01:25:15]  I don't know.
[01:25:16]  But like, all those people are going to immediately have subpoenas sent to them.
[01:25:21]  Well, I will say, I mean, it does seem like DOJ, not even just with SBF and FTX.
[01:25:29]  I was like, flip the last letter when I'm saying this.
[01:25:32]  Yeah, yeah, yeah.
[01:25:33]  One after the other.
[01:25:34]  But, I mean, there's, you know, and he got charged on, there was another round of charges, too, he got hit with, right?
[01:25:39]  Yeah, so it started with eight charges, and then there was a super seeding indictment where they had four more.
[01:25:44]  You got a super seeding indictment.
[01:25:46]  You never want to get hit with a super seeding indictment.
[01:25:48]  You get someone who's like, actually, hold up, hold up.
[01:25:51]  We got a couple more.
[01:25:52]  Download a patch.
[01:25:53]  Yeah, yeah, yeah.
[01:25:53]  One sec, one sec.
[01:25:54]  Yeah, but then I saw that even today, it was like something I was reading today, and, you know, correct me if I'm wrong, that the DOJ was now suggesting that Ethereum was a security in one of their lawsuits against, it was like, it's not K-Dunk.
[01:26:11]  I can't remember what.
[01:26:13]  Sounds like one of the things that we're doing.
[01:26:13]  Is it the Yuga Labs one?
[01:26:15]  Oh, yes.
[01:26:16]  The Ape one.
[01:26:17]  Maybe it was in Yuga Labs.
[01:26:18]  I don't know.
[01:26:18]  There's always a lot of people.
[01:26:18]  There's going to be Ripple lawsuit, too.
[01:26:20]  Yuga Labs is getting sued?
[01:26:22]  I saw that Ethereum.
[01:26:24]  Ethereum was taking a beating because there was suggestions that they were going to start trying to regulate it as a security, which is going to throw the whole thing.
[01:26:33]  I mean, then the whole thing collapses once it's been recognized.
[01:26:36]  And you just declare these things securities, like you have to then enforce the law, but like companies have to abide by the law in theory.
[01:26:44]  And like, some of this stuff will take care of itself if you say like, well, we have these laws on the books, they apply.
[01:26:51]  And that's the one thing I don't get is like, why would you call Ethereum a security and not all the others?
[01:26:55]  I mean, Bitcoin, because of this sort of weird competition between regulators, Bitcoin was declared a commodity like eight years ago or something like that.
[01:27:04]  And now it's overseen by the CFTC, which is why everyone wants the CFTC to regulate them because they're easier to deal with and have less money.
[01:27:12]  But they're all securities.
[01:27:14]  They should schedule Bitcoin like fentanyl.
[01:27:16]  That's what they should do.
[01:27:18]  They should schedule all of these cryptos like they were drugs or something.
[01:27:22]  And so like the shit coins, it's like, you know, it's like, actually, all of them should be scheduled one narconyx.
[01:27:28]  And they should be Trump style punishable by death for selling them.
[01:27:31]  And available in patch form.
[01:27:34]  Yes.
[01:27:34]  There you go.
[01:27:35]  There you go.
[01:27:45]  Well, we got to wrap up here, Jacob.
[01:27:47]  I have a theoretical, a big question, though, to end this on.
[01:27:52]  What is the future of this shit?
[01:27:55]  That's a good question.
[01:27:56]  And can I bet on it?
[01:27:57]  Yes, you can.
[01:27:59]  I mean, there's a website where you can bet.
[01:28:00]  I forget what it's called.
[01:28:01]  I don't want to chill some random website, but there are sites where you can bet on market events.
[01:28:05]  People were betting on whether Silvergate Bank or Silver Silicon Valley Bank would collapse today.
[01:28:09]  Everyone needs to stop gambling right now.
[01:28:11]  You need to stop the game.
[01:28:11]  Just chill the fuck out.
[01:28:16]  I think everyone needs to just chill.
[01:28:18]  So what I just chill.
[01:28:19]  I think the future of consumer crypto, at least in the near term, I think it's dead.
[01:28:24]  I mean, people don't want to admit that, but like Sam and FTX were the face of it, as we said, and like the main mover and shaker here in the U.S.
[01:28:32]  And like there are people in the industry who just say like, oh, we'll have another bull run in two years.
[01:28:36]  We've done this before, blah, blah, blah.
[01:28:38]  Two years.
[01:28:40]  Read the room, people.
[01:28:41]  There's such a divide between what the industry thinks and what everyday normal people think.
[01:28:47]  People are disillusioned.
[01:28:48]  They lost their money or they see it as a scam or they see that like the main figure associated with crypto is going on trial for major crimes.
[01:28:56]  And also that the crimes he was charged with are just like wire fraud, like violating banking laws.
[01:29:02]  These people aren't committing crazy crypto crimes necessarily.
[01:29:05]  They're doing like basic financial crimes.
[01:29:07]  Well, and a lot of retail got like really fucked in the last year too.
[01:29:11]  Like small guy.
[01:29:12]  I was reading this thing.
[01:29:13]  Like black people got really fucked over by the crypto crash too.
[01:29:15]  Like in particular.
[01:29:17]  A lot of people of color and sort of marginalized communities have been marketed crypto as like, well, you were redlined by the banks for years.
[01:29:22]  Like now you should get Bitcoin in the market.
[01:29:24]  By the way, Spike Lee.
[01:29:25]  He did it.
[01:29:26]  He was one of those motherfuckers who was part of this too.
[01:29:29]  Old money is not going to pick us up.
[01:29:31]  It pushes us down.
[01:29:32]  Exploits systematic oppressions.
[01:29:36]  I'll make you out just by new money.
[01:29:38]  New money is positive.
[01:29:40]  And like, also, I got to be right.
[01:29:42]  It reminds me of the banks during 08.
[01:29:43]  Larry David, too.
[01:29:45]  People like give Larry David, like, oh, look, you know, like, kind of make fun of his role of being like, you know, not into crypto and the thing.
[01:29:51]  But that was just written into the market.
[01:29:52]  It was written on the fucking script he did, dumbass.
[01:29:55]  Like I was saying, it's FTX.
[01:29:57]  It's a safe and easy way to get into crypto.
[01:29:59]  Yeah, I don't think so.
[01:30:01]  And I'm never wrong about this stuff.
[01:30:03]  How stupid.
[01:30:03]  He was literally, yeah, anyways, but I, so I'm like dumb.
[01:30:07]  Like, I'm like, well, my thing is there was a bunch of crypto ads in the Super Bowl, right?
[01:30:11]  That one year, 2021.
[01:30:13]  And then the next year there were none.
[01:30:15]  This year there were zero.
[01:30:15]  And so like that, by my metric, I don't think it's doing very well.
[01:30:18]  Yeah.
[01:30:18]  And like people just, it's not going to scale to the thing that they think it will.
[01:30:22]  Yeah.
[01:30:22]  Like maybe if they had more mods expectations for it, but this is not the money of the future.
[01:30:27]  It's not going to like flip the dollar or something like that or even become competitive with it.
[01:30:30]  Like people don't want it.
[01:30:32]  It doesn't provide legitimate use cases beyond mostly illegal ones.
[01:30:37]  So I just, I think the dream, it should be dead in some way, but there's still money kind of coming in through some VC funds that raised money in their last round.
[01:30:46]  But, you know, and some of it's now going into AI, which we have to look forward to.
[01:30:49]  All those guys became AI guys.
[01:30:51]  Yeah, they all did.
[01:30:52]  The environment, just the financial environment is so fucking different than it was just a year ago, let alone two, three, four years ago.
[01:31:01]  Like retail does not have extra cash to put into any of this, like they got it, like inflation took care of that.
[01:31:08]  You know what I mean.
[01:31:09]  Like there's not, like there's that meme, or like there was that like viral tweet that's now become a meme.
[01:31:14]  That's so good.
[01:31:15]  Where it's like oh the you know that face when you like realize your whole personality was based on zero percent interest rates, whatever it was.
[01:31:23]  But it's like true right, it's like in this, like increase.
[01:31:26]  I mean they're the Fed's just going to keep raising right, more pain coming.
[01:31:30]  And in that kind of financial environment these companies do not have the ability to just like pour cash into, into all of this like yeah, you know nonsense and all of this like froth and so it goes away.
[01:31:45]  And then, without retail kind of giving a little bit of legitimacy cover to these exchanges, then the hedge funds and the whales, they can't pour the money that they were, you know, into this because they don't.
[01:31:59]  You know there's not enough movement to cover when they're making those big.
[01:32:04]  You know they don't have.
[01:32:04]  They don't have the liquidity to kind of make these big moves and get the premiums they were before.
[01:32:09]  And so it's like what is even the use case.
[01:32:11]  It all kind of falls out, but then that you know, as again we saw today, that causes massive ripple effects into the real economy, which a lot of people have said oh, there's no contagion, there's no risk, because they're like, oh, JP Morgan's well capitalized, no shit, JP Morgan's well capitalized, it's the biggest bank in the world and it's about to get much, much bigger, right?
[01:32:30]  But like, that's not true of now, Silicon Valley's biggest bank.
[01:32:35]  Yeah, like what the?
[01:32:37]  Yeah, I think there'd be some more surprises.
[01:32:39]  Like it's a small thing, we don't have to get too deep into it, but like all the crypto miners, they're all going bankrupt.
[01:32:44]  Like they're big companies.
[01:32:47]  Yeah, you know, their pickaxes are blunted.
[01:32:49]  You know they were like their little panhandles.
[01:32:51]  They were forming these huge companies and taking on a lot of debt and in some cases, they were holding on to their bitcoin and not selling.
[01:32:58]  So now bitcoin's worth less.
[01:33:00]  They have, or worth less.
[01:33:01]  They have so much debt.
[01:33:02]  Yeah, they can't pay their debt.
[01:33:04]  They should have learned from the shale industry.
[01:33:07]  How'd they get out of it?
[01:33:08]  Well, not well, I mean.
[01:33:09]  All well, fracking is back up.
[01:33:11]  But i'm saying, you know, a lot of people poured a lot of money into fracking infrastructure.
[01:33:14]  You know, I just remember seeing all those pictures because I know it was hard for gamers for a little while.
[01:33:18]  Yes, I felt that a little bit yeah, because they were buying up all the new graphics things.
[01:33:23]  Yeah, I wrote a piece about that for Slate.
[01:33:25]  Um like, why can't you get a video card and and and now finally, at least the gamers have been liberating yeah, the game.
[01:33:30]  But I saw all these pictures of all these bitcoin mining operations who, like split, oftentimes in a big hurry, because there were just like Gpus everywhere.
[01:33:38]  Yeah, they'd leave equipment behind it, behind which i'm like that seems like a bad sign, like I don't know a lot about this stuff, but I could see Cyberpunk Novel or something.
[01:33:48]  You know what I mean.
[01:33:48]  Yeah, like you'll just like RTX3080.
[01:33:53]  That's a nice video card.
[01:33:55]  That was the one that I read that article you wrote.
[01:33:58]  Yes.
[01:33:59]  Yeah.
[01:33:59]  And I sent it to my dad with like, this is actually not what I want to do.
[01:34:02]  This is like, to me, this is like really cruel to Bitcoin people.
[01:34:05]  I try to be like really like I just I to me like the world is just about love Jacob Brace.
[01:34:18]  Do you have anything that you would like to shill?
[01:34:20]  I know that you were.
[01:34:21]  Did you say shill?
[01:34:22]  Yeah.
[01:34:23]  Well, I say shill.
[01:34:24]  I'm shameless.
[01:34:24]  Let me finish.
[01:34:25]  Let me finish the sentence.
[01:34:26]  I know that you were pretty integral to the launch of Chiba Token earlier this year.
[01:34:32]  And I know that was like your thing, like, hey, like, this is, I'm actually going to do this different than everybody else.
[01:34:36]  Like, this is not a rug pull.
[01:34:38]  This is not a scam.
[01:34:39]  You build a really beautiful Discord community.
[01:34:42]  It really is about the community.
[01:34:43]  It's about the, because that's the thing to me.
[01:34:46]  It's not about the money.
[01:34:47]  Or the tech.
[01:34:48]  Or the tech.
[01:34:49]  It's the community.
[01:34:50]  It's the wonderful 18 plus people that I've met on Discord and have formed relationships with, have formed bonds with.
[01:34:58]  And I know that you were pretty, you know, that you launched your coin.
[01:35:01]  I know that you're now independently, well, let me just say the man lives in Malta, okay?
[01:35:07]  And Monaco.
[01:35:09]  But has that changed you?
[01:35:10]  Has success changed you in the crypto?
[01:35:13]  That's my first question.
[01:35:14]  Also, the second question is, where do you get your ideas?
[01:35:18]  No, do you have anything?
[01:35:19]  Do you have anything else?
[01:35:20]  I mean, I'm going to shill this shit for you in a second.
[01:35:22]  You can shill it too, I guess, because you'll probably do it, but why don't you just shill it?
[01:35:25]  All right.
[01:35:25]  Well, I have this podcast, four episodes about FTX.
[01:35:29]  Maybe they'll bring me back for some bonus ones, please.
[01:35:32]  But launches Monday, March 13th, weekly.
[01:35:35]  I'm going to be writing again in various publications about FTX and all this stuff, crypto.
[01:35:40]  You can find me on Twitter, Silverman Jacob with all the other sinners.
[01:35:45]  But that's really what I've got going on right now.
[01:35:47]  Are you going to cover the trial?
[01:35:48]  I'd love to, actually.
[01:35:49]  So Sam is supposed to go on trial October 3rd.
[01:35:52]  He might change his plea, but I don't know if he will at this point.
[01:35:55]  I think they need to put his face up there and really make a bigger thing.
[01:36:00]  So if someone wants me to cover it, though.
[01:36:02]  No, you know what I mean.
[01:36:03]  I think that they want to, you know, they don't want to plea this out.
[01:36:06]  They want to.

=== Sean McElwey And FTX (03:48) ===

[01:36:07]  Yeah.
[01:36:07]  I mean, I think the government does kind of want to make an example of this guy.
[01:36:10]  Like, he made fools of a lot of people and maybe got some politicians in trouble.
[01:36:14]  And look what he did to Sean McElwey.
[01:36:16]  Yeah, I was about, holy shit, how did we not cover this?
[01:36:19]  I'm sorry.
[01:36:20]  We're out of 10 minutes on the podcast.
[01:36:22]  Don't give me that look.
[01:36:23]  Sean McKelwey.
[01:36:25]  Sean McKelwey.
[01:36:28]  Ha ha.
[01:36:29]  Where is he?
[01:36:31]  He's DaQuan.
[01:36:32]  He's with me.
[01:36:33]  He's underground, I think.
[01:36:34]  He's gone.
[01:36:36]  He's in Antigua, baby.
[01:36:37]  He's in Bahama.
[01:36:38]  He's in Granada.
[01:36:39]  He's in all these places.
[01:36:41]  Sean McKelwey is, he's like, have you ever maybe taken ashes of a loved one and thrown them in the wind?
[01:36:47]  Because that's what he, first of all, he got stabbed in the back.
[01:36:50]  Second of all, he's innocent.
[01:36:52]  Third of all, I want to ask a question here.
[01:36:55]  So, Sam Babried, it turns out, I feel like we talked about this on the podcast a little bit, but I will never tire of talking about Sam Babe McFreed.
[01:37:02]  Excuse me, Sean McKelwey.
[01:37:04]  How could I forget?
[01:37:05]  Similar look.
[01:37:08]  And anyways, it seems like he was involved in setting up these crypto councils for people.
[01:37:15]  Oh, that's right.
[01:37:15]  And Richie Torres had one.
[01:37:16]  Richie Torres, I believe, had one.
[01:37:18]  And that young, like, Gen Z, the youngest congressman.
[01:37:22]  Yeah, that young dude had one.
[01:37:24]  And like, it was filled with like insane scumbag people, like MAGA people.
[01:37:29]  And this is like a Gen Z, like, like, you know, like progressive guy, which by the way, progressing towards what?
[01:37:35]  They can never answer that.
[01:37:37]  But like, it's, I'm so excited right now.
[01:37:41]  I can't even finish.
[01:37:43]  Is Sean McKelvey going to go to prison for the rest of his life?
[01:37:46]  I mean, I think people affiliated with Dave for Progress or him or people who were involved in the whole political operation are in trouble.
[01:37:53]  You ever think they're in trouble?
[01:37:54]  I think people could be charged with crimes.
[01:37:56]  Like they broke campaign finance laws allegedly.
[01:37:58]  Yeah, it's like hard.
[01:37:59]  And like Nishad Singh, who pleaded guilty last week or two weeks ago, he is CC1, as they call him, in the latest indictment.
[01:38:10]  He was part of this whole operation.
[01:38:12]  He pleaded guilty.
[01:38:13]  So he was one of their straw donors.
[01:38:16]  He gave millions.
[01:38:17]  And there's a quote in that latest indictment, like someone anonymous who could be Sean McElwey or one of these other people saying, you're going to have to do a bunch of woke transactional shit.
[01:38:26]  Oh, yeah.
[01:38:26]  I saw that.
[01:38:27]  And that sounds kind of like Sean McElwey.
[01:38:30]  And the person who was being said to was Nishad Singh, who just pled guilty.
[01:38:34]  So like, that's the thing.
[01:38:35]  Like, this is not over.
[01:38:37]  Damien Williams, the U.S. attorney here, is pretty aggressive.
[01:38:40]  And he's like, he's like, we're not.
[01:38:41]  There's some articles about it.
[01:38:42]  Yeah, I have something coming out in a few weeks.
[01:38:44]  You know, he's a pretty typical Democrat in a lot of ways, like, really connected.
[01:38:48]  He clerked for Merrick Garland and stuff like that.
[01:38:50]  And he's just ready, I think, now to do these indictments and throw the hammer down.
[01:38:55]  So I think there'll be more.
[01:38:57]  It'd be really weird.
[01:38:57]  It'd be really weird if someone whose happy hour I've been to, I did go that happy hour once is indicted.
[01:39:03]  That's because he'll tell you, this guy goes to court, my funky ass.
[01:39:07]  We're covering that trial.
[01:39:08]  Front row every day, shirtless like a motherfucker.
[01:39:12]  Patches of emphatic SPF trial.
[01:39:16]  But we cover the Sean McKelvey trial.
[01:39:18]  I will literally, dude, I will literally commit a crime at Turn State's witness so that I can testify up in that bitch.
[01:39:25]  I will, Sean McKelwey is the coolest.
[01:39:28]  These stone.
[01:39:29]  Everyone always talks about, oh, all these people that like, you know, progressive or 2016 turned out to be fucking freaks.
[01:39:35]  Like, you know how like Occupy people mostly turned out to be just psychopaths, right?
[01:39:39]  Like all the people from that.
[01:39:41]  I'm telling you, Sean McKelwey is a god to people who supported Bernie in 2016.
[01:39:46]  He is fucking baller.
[01:39:47]  Who's that other freak?
[01:39:49]  The, you know what I'm talking about?
[01:39:50]  The fucking guy with the curly hair?
[01:39:52]  David Shore.
[01:39:52]  David Shore.
[01:39:53]  Oh, yeah.
[01:39:54]  Brother.
[01:39:54]  He might also be involved in this.

=== Wesley Leslie's Trial Chronicles (03:43) ===

[01:39:55]  I know you're.
[01:39:57]  Listen, Jacob, don't listen to this part.
[01:39:59]  Because Jacob's not involved in this part.
[01:40:00]  He's a serious journey.
[01:40:01]  I know you're involved in this, dude.
[01:40:03]  I can smell a rat.
[01:40:05]  And I got to tell you, keep rocking, brother.
[01:40:09]  All right.
[01:40:10]  That has been the show.
[01:40:12]  Jacob, so he does not endorse anything that we've said.
[01:40:16]  That is true, but it was a lot of fun.
[01:40:17]  He's an independent journalist, freelance journalist.
[01:40:21]  You can check him out at the Silverman Jacob.
[01:40:24]  Yeah, I got reversed.
[01:40:25]  You have a sub stack too?
[01:40:26]  I do.
[01:40:27]  I never really used it much, but now I'm going to use it to just kind of keep in touch with people.
[01:40:31]  I'm not doing the pay for my sub stack thing yet.
[01:40:33]  Okay, but you should do that once you subscribe.
[01:40:35]  I might one day.
[01:40:36]  Yeah.
[01:40:37]  Honestly, I'm trying to figure out what's next.
[01:40:38]  If you want to hire me, let's do that too.
[01:40:40]  Okay, yeah, yeah, yeah.
[01:40:41]  Well, we should have.
[01:40:41]  Well, listen, we are having our initial Jacob offering right now.
[01:40:45]  There you go.
[01:40:46]  There you go.
[01:40:47]  Get in early.
[01:40:48]  It has been an absolute pleasure.
[01:40:51]  This is one of the most fun I've ever done.
[01:40:53]  Thanks so much.
[01:40:53]  And I love you.
[01:40:56]  It's mutual, man.
[01:40:58]  All right, ladies and gentlemen.
[01:41:09]  You can't...
[01:41:10]  It's like, you don't want the same initials, and you can't have a rhyme.
[01:41:14]  They don't know that we're recording this immediately after you record the intro.
[01:41:18]  So they don't know.
[01:41:19]  I know that you don't know an hour and 40 minutes.
[01:41:21]  But it's like Wesley and Leslie.
[01:41:23]  Wesley and Leslie?
[01:41:24]  From Sex and City.
[01:41:25]  You cannot.
[01:41:26]  Oh, I've seen every episode.
[01:41:27]  You can't have a rhyme.
[01:41:28]  I've seen every episode.
[01:41:29]  Oh, yeah, who's Wesley and Leslie?
[01:41:30]  They're two twin sisters who are also lesbians, but not with each other.
[01:41:34]  No.
[01:41:35]  Okay, they're a brother and a sister.
[01:41:37]  No.
[01:41:37]  They're dating.
[01:41:39]  They're married.
[01:41:39]  Well, they're divorced.
[01:41:41]  Oh, well, that should.
[01:41:42]  And Wesley is Charlotte's brother.
[01:41:45]  Wesley?
[01:41:45]  Yeah, Wesley and Leslie.
[01:41:46]  Come on.
[01:41:47]  Don't be naming your kid Wesley.
[01:41:49]  Wesley Crusher.
[01:41:50]  Wesley Crusher?
[01:41:51]  That's kind of tight.
[01:41:52]  Who's that?
[01:41:53]  From Star Trek TNG?
[01:41:55]  Oh.
[01:41:55]  I never got into that.
[01:41:56]  Never got into Star Trek.
[01:41:57]  Felt a little like they were just stuck on that thing, the ship.
[01:42:01]  You know?
[01:42:02]  Yeah.
[01:42:03]  Go down to the planet, asshole.
[01:42:06]  Anyways, go down to the planet, asshole.
[01:42:09]  We really have been recording for hours.
[01:42:10]  We've been recording for hours.
[01:42:11]  Let's go for a couple hours more.
[01:42:13]  I'm about to go to another podcast.
[01:42:15]  I do have grievances.
[01:42:17]  Let me tell you about some grievances.
[01:42:19]  Let me tell you what happened on the train on the way here.
[01:42:21]  No, we don't need to talk about that.
[01:42:22]  Okay, well, let me just say that that was not okay what that woman said to me.
[01:42:27]  And I just feel.
[01:42:29]  I told you, don't provoke.
[01:42:30]  I didn't provoke her.
[01:42:32]  You did.
[01:42:32]  You provoked her with your eyes.
[01:42:34]  I did provoke her with my eyes.
[01:42:36]  You were staring at her.
[01:42:37]  Not in a horny way.
[01:42:38]  It was not in a horny way.
[01:42:39]  She starts anger.
[01:42:40]  In my words.
[01:42:41]  Well, after you provoked her.
[01:42:42]  Yeah, and then she was being passive-aggressive.
[01:42:44]  I'm just saying, don't.
[01:42:45]  I don't think she was being passive-aggressive.
[01:42:46]  She was being passive-aggressive.
[01:42:48]  I know, I know, I know, I know.
[01:42:50]  Yeah, she did not like you.
[01:42:51]  Yeah, but I liked her.
[01:42:53]  But not, this makes it sound like I was sexually harassing a woman on a train.
[01:42:56]  This is not the case.
[01:42:57]  No, no, she was just talking very loudly.
[01:42:58]  She was talking very loudly, and I made it.
[01:43:01]  You huffed and puffed in her direction, and she caught wind of what you were trying to do.
[01:43:07]  And I told her, I was like, listen, I will light you on fire right here on this car.
[01:43:10]  No, you didn't.
[01:43:11]  I tried to get him to calm down.
[01:43:13]  Yeah, I was heated.
[01:43:17]  I'm going to take my shirt off.
[01:43:18]  Please don't.
[01:43:19]  I'm Liz.
[01:43:19]  My name is Balthazar Roberto Beldain.
[01:43:27]  We are, of course, joined by our producer, Young Chomsky Ball.
[01:43:31]  And the podcast is called Liz, I forget what is this freaking called.
[01:43:35]  It's called True Anonymous.
[01:43:37]  And we'll see you next time.
[01:43:38]  Bye-bye.