Blockspace: AI & Bitcoin

Episode: Kraken IPO CANCELED & Vanity Fair Hates Us
Date: March 18, 2026
Hosts: Charlie Spears & Colin Harper
Guests: Francis Corvino (Lygos), Adam Reed (Ledn), Tom Massero (Cathedra)

Episode Overview

In this packed episode of Blockspace, Charlie and Colin deep-dive into a whirlwind of recent crypto headlines and industry drama. They discuss Kraken's decision to shelve its IPO due to less-than-optimal market conditions, dissect a Vanity Fair article targeting prominent crypto personalities, and analyze new SEC guidance purportedly bringing long-awaited clarity to token offerings. The show also features expert commentary on the Blockfills bankruptcy fallout, an exclusive look at innovation in the bitcoin lending space, and the latest developments in mining infrastructure and AI compute. The episode closes with an update on the Bitrefill/Lazarus Group hack.

Key Topics & Discussion Points

1. Market Update and Macro Environment

[01:59 – 03:16]

• Bitcoin Market Volatility:

  • Bitcoin dropped 3.4% after flirting with $76,000 earlier in the week.
  • Global economic uncertainty driven by conflict in Iran and oil prices nearing $100/barrel.
  • Despite the drop, bitcoin still holds above $70k.
  • Colin: “I think some people were cautiously bullish here. Market looks somewhat good, but you never know... we could have a liquidity crunch and this could go back down to 60 in a minute.” [02:36]

• Oil Market Impact:

  • Charlie: “Oil’s where all the money’s being made right now. Oil just almost kissed $100 yesterday.” [02:49]

2. Kraken Shelves Its IPO

[03:16 – 11:53]

• IPO Postponed: Market conditions not favorable; registration was originally filed during the 2025 crypto bull run.

  • Colin: “If this was really not true, they probably would have pushed back against it.” [05:18]

• Kraken’s Momentum:

  • First crypto company to receive a “skinny” Fed master account—access to payment rails but no interest on deposits.
  • 2025 was a hot year for crypto IPOs: $14.6 billion raised vs $310 million in 2024.

• Sector Comparison:

  • Circle’s stock up 30% since summer IPO.
  • Charlie: “We do have in the market currently like these IPOs continuing to perform pretty well.” [08:52]

• Look to Clarity Act:

  • Rumors and lobbying around stablecoin treatment in new legislation.
  • Colin: “Are there actual legitimate benefits in the Clarity act that are being carved out right now for stablecoins?” [09:39]

3. Blockfills Bankruptcy Breakdown

[12:12 – 25:07]
Guest: Francis Corvino, Lygos

Bankruptcy Details

• $145 million in unsecured claims with only $30 million in collateral.

• Reported $61 billion in trading volume (2025) and 2000+ institutional clients.

• Origins of insolvency trace back to 2022, compounded by bad mining loans and exposure to Babel Finance (now tied up in Singapore bankruptcy).

  • Francis: “This was a hole that’s been burning at the bottom of their book... not a new thing.” [13:41]
  • Colin: “It’s interesting to see if the $4 million was the thing that set this off—how little you need to get the dominoes falling.” [15:04]

Legacy Crisis

• Lingering effects of 2022 bear market, uncollateralized lending, derivatives mishaps, and mining overexposure.

  • Francis: “It’s more like someone is no longer willing to play along with this... that’s when you start to trigger... chapter 11 bankruptcy.” [16:49]

• No Major Contagion (so far):

  • Larger creditors (e.g., SBI, Nexo) have faced “worse in the past.” [17:53]

• On Long-Tail Risks:

  • Many companies still patching holes from 2022; rising bitcoin can increase the fiat value of liabilities.
  • Francis: “If BTC liability is now 75k and there’s significant appreciation... that’s also appreciation in the value of your liability.” [19:24]

• Continued Messiness:

  • Legal tangles, unresolved claims stuck in bankruptcy courts, “incestuous mess of lending.”
  • Colin: “The hangover as these companies restructure and try to settle those debts can still be felt today, four years later.” [24:07]

Notable Quote

• Francis: “They’ve essentially touched every single one of the hot pans in the kitchen. And at this point... the hand is burning off and you can only keep it behind your back until someone smells something for so long.” [24:21]

4. SEC’s (Upcoming) Crypto Clarity

[26:01 – 34:15]

• SEC Chairman Paul Atkins’ Speech:

  • Announces imminent “token taxonomy” and investment contract interpretation; regulatory clarity after a decade of “guidance by enforcement.”

    • Atkins (via Colin): “The SEC's persistent failure to provide clarity on this question is over. As we speak, the Commission is implementing a token taxonomy and investment contract interpretation.” [26:39]

• Three Pillars of New Framework:

  • Startup Exemption: Four-year registration holiday to raise up to $5 million.

  • Fundraising Exemption: For larger projects, up to $75 million annually with disclosures.

  • Graduated Security Status: Clear path for crypto assets to “exit security status” once teams have relinquished managerial control.

    • Colin: “This is very similar to the argument for Ethereum post facto… here is a clear exit strategy for you.” [29:30]

• Carve-Outs:

  • Digital commodities (e.g., BTC), collectibles (NFTs), “digital tools,” and payment stablecoins under the Genius Act are explicitly non-securities.

• Unanswered Questions:

  • Will exemptions apply to non-accredited investors?
  • Colin: “If they do open it to unaccredited investors, that is a pretty liberal stance... actually a lot of people are really bad at managing their money and they’ll probably lose it.” [34:15]

5. Vanity Fair’s Crypto “Hit Piece”

[34:33 – 47:34]

• Article Overview:

  • Vanity Fair’s feature, “Crypto’s True believers demand to be taken seriously,” profiles big names (Novogratz, Meltem Demirors, Cathie Wood, OpenSea founder) in a way that feels, to insiders, laced with subtle mockery.

    • Colin: “Most people in crypto are used to the media dragging them. This though, is a special type of dragging because it’s dressed up as being positive.” [36:41]
    • Charlie: “If you’re in the know, it feels like a mean girls play where they lined you up thinking that you’re going to get to be in a lauding piece... but then it reads all underhanded.” [36:41]

• Notable Quotes from Article:

  • Meltem Demirors: “Technology without belief, technology without spirituality is nothing. What we were building was a religious movement.” [38:52]
  • “She is layered in diamond crosses and wearing a black sweatsuit with her firm slogan ‘believe in something’ bedazzled across the ass.” [44:36]
  • “They’re all pussies,” says Meltem Demirors... of her panicked peers. [44:36]
  • “You never become the main character. Everybody knows who I am, but nobody really knows why.” [40:11]
  • “Unlike Jesus’s followers who doubted his resurrection, crypto’s true disciples aren’t losing faith.” [45:33]

• Photo Critique (Twitter Analysis):

  • Photos deliberately shot from unflattering angles—intentionally “minimizing,” “looking down” (e.g., Cathie Wood “scrunched up” on a bellhop cart).
  • Charlie: “He looks like the villain from Eastern Promises…” (on Novogratz’s menacing pose) [43:51]
  • Outside observers see it as lambasting; some on crypto Twitter/Bluesky see it as lauding.

• Meta-take:

  • The mainstream media “is not your friend”—insinuating crypto insiders should be wary of press intent.

6. Bitcoin Lending Market Innovation

[47:44 – 60:53]
Guest: Adam Reed, CEO of Ledn

• Current Lending Landscape:

  • Despite price swings, loans remain stable—used in both up and down markets.

  • 2022’s pain is informing smarter client questions, improved product transparency (e.g., Ledn’s proof of reserves).

    • Adam: “Clients are more educated and smarter… they don’t want to see that happen again. So that forces companies like Ledn to bring a better product to market.” [50:31]

• Isolated Fallout:

  • Blockfills blowup hasn’t triggered broader contagion; earlier catastrophic cross-lending “loop” is essentially culled from lending markets.

• Innovation Highlight:

  • Bitcoin-Backed Asset-Backed Securities (ABS):
    • $188M securitization, rated by S&P, opens up new institutional liquidity (pension funds, reinsurers, hedge funds).
    • Adam: “Jefferies was the lead underwriter...they’ve never seen as much interest as they saw in this ABS bitcoin structure in their entire career.” [53:19]
    • Aimed at deepening market, driving down rates, and ultimately expanding the pie for both retail and institutional borrowers.

• Fixed Rate Advantage:

  • Most DeFi loans are variable; Ledn offers fixed rates for borrowers, enhancing stability and predictability.
  • Adam: “Everything we do is to give clients that peace of mind, the proof of reserves to tell us clients what you’re doing with their bitcoin and the fact it’s a fixed rate product.” [58:18]

7. Cathedra + Sphere 3D Merger: Expanding Mining & Compute

[62:29 – 70:45]
Guest: Tom Massero, Director of Strategy, Cathedra

• Merger Details:

  • Relationship started with Sphere as a Cathedra hosting client, evolved into a full merger.

  • Synergies: Cathedra brings power infrastructure, Sphere brings hardware inventory and capital markets exposure.

    • Tom: “We build, develop sites — mostly here in TVA. We very much focus on cheap, reliable power at scale… They bring a lot of new machines as well as capital markets.” [64:02]

• 100MW+ Expansion Targeted:

  • Driven in part by AI/HPC compute demand, not just bitcoin mining.

  • Shift from mega-miners to “distributed side of things”—adapting to lower hash price, hash rate stagnation, and competitive ASIC markets.

    • Tom: “I honestly think there’ll be a renaissance when it comes to a lot of bitcoin mining in a couple of years. This is very cyclical right now.” [70:20]

8. Bitrefill Hit by Lazarus Group Telegram Hack

[70:49 – 73:32]

• Hack Details:

  • Bitrefill discloses compromise via Telegram-based social engineering by North Korea’s Lazarus Group.

  • An employee’s laptop was hacked, allowing access to customer data (emails, crypto addresses, IPs).

    • Charlie: “This is the most sophisticated phishing and hacking attempt that I’ve ever seen in crypto.” [73:32]

• Security Reminder:

  • Always verify identity through multiple channels when solicited for a Zoom or file download via Telegram.

Notable Quotes & Memorable Moments

• On Vanity Fair article:
  “If you’re in the know, it feels like a mean girls play…” – Charlie [36:41]
  “She is layered in diamond crosses and wearing a black sweatsuit with her firm slogan ‘believe in something’ bedazzled across the ass.” [44:36]

• On Blockfills:
  “They’ve essentially touched every single one of the hot pans in the kitchen… you can only keep it behind your back until someone smells something for so long.” – Francis [24:21]

• On SEC Guidance:
  “This is very similar to the argument for Ethereum post facto… here is a clear exit strategy for you.” – Colin [29:30]

• On Lending Innovation:
  “Jefferies was the lead underwriter...they’ve never seen as much interest as they saw in this ABS bitcoin structure in their entire career.” – Adam [53:19]

• On Mining’s AI Merge:
  “I honestly think there’ll be a renaissance when it comes to a lot of bitcoin mining in a couple of years. This is very cyclical right now.” – Tom [70:20]

Timestamps for Key Segments

• Market / Kraken IPO: 01:59–11:53
• Blockfills Bankruptcy: 12:12–25:07
• SEC Token Guidance: 26:01–34:15
• Vanity Fair Article Breakdown: 34:33–47:34
• Bitcoin Lending (Ledn/ABS): 47:44–60:53
• Cathedra + Sphere 3D Merger: 62:29–70:45
• Bitrefill Hack / Security: 70:49–73:32

Closing Thoughts

This episode exemplifies the multi-dimensional, fast-moving nature of the Bitcoin and crypto landscape in 2026, highlighting both its creative innovation (lending, AI compute) and its perennial challenges (media perception, hack risks, the aftershocks of past busts). Listeners are reminded to remain vigilant—regulatory winds and media narratives are always shifting, and the next big crypto story is always around the corner.