Host 2 (Possibly Colin or Michael) (4:30)

Yeah, bitcoin price go up and miners eventually will be able to buy back their megawatts from the greedy, greedy AI companies. Let's go into the news. Colin. I think the first one we got to do, this is a developing story, this is a last minute edition that we had and it is quantum related. I'm sorry, the quantum stories will continue until, until the morale improves, until we

Host 1 (Possibly Michael or Colin) (5:02)

move towards a solution or not.

Host 2 (Possibly Colin or Michael) (5:06)

Look, okay, this is a press release from Project 11. We had Project 11 CEO on the show couple times over the past few weeks. Alex Prune we also had him speak at our conference up next in New York. We had a lot of institutions or Coinbase, Anchorage, blackrock talk about quantum and we had various researchers who are working on quantum solutions. Well, anyway, the big question looming over the ecosystem and is kind of like the main wedge issue right now is are quantum computers real? How real are they? How much are they actually a risk? Well, this press release says that there has been material advancement in demonstrating that a quantum computer can is getting closer to cracking Bitcoin's elliptic curb cryptography. I will refrain from adding any more qualifiers and we're just going to read the tweets and the takes because this is a developing story and I really don't want to piss off everybody because this is a dense topic. From the press Release from Project 11 Quote researcher breaks 15 bit ECC key on publicly accessible quantum hardware with a 512x jump from previous public demonstration. Here's the press release on Quantum Insider. This researcher, one Giancarlo Leli, was awarded a One Bitcoin prize, which is the prize that Project 11 put up for the Q Day prize for breaking a 15 bit elliptic curve key on a publicly accessible quantum computer. Quote From Alex Pruden, CEO of Project 11. Quote the resource requirements for this type of attack keep dropping and the barrier to running it in practice is dropping with them. The winning submission came from an independent researcher working on cloud accessible hardware. No national lab, not a private chip. This shows tangible progress as possible and highlights the urgency to migrate to post quantum cryptography rather sooner rather than later for context as a 15 bit key. And last fall we had a researcher do the same on a six bit key. Basically the number that we need to get to is 256. But there's a catch and this is where the critics come in and I want, how do I want, you know, I'm just going to read these. So this is from Alex B of ark. Alex is Bitcoin OG Alex B Says quote these guys are complete scammers. A net negative for anyone trying to elevate the quantum space into a serious industry. It takes a minute to inspect the details of this, of this experiment and realize it's a complete joke. I'll push back. It takes more than a minute. But point notwithstanding, here's another point. Here's another tweet from James Ob, Bitcoin core contributor. Quote, how are you guys so credulous? Like every other application of shores to date, this is classical pre computation involved that encodes the solution to the problem in the Quantum circuit itself. This is probably going to be one of those really, really deep esoteric issues that's difficult for people to understand. This, this concept of pre computation and does this delegitimize or not the, these advancements? So going to leave it there because this is a very new developing story and I don't want to get over my skis on covering it. Colin, let's go to the next one.

Host 1 (Possibly Michael or Colin) (8:43)

I, I actually, I'm sorry, I'm gonna latch onto this for just one more second because just a few things to highlight here. I think that the idea of the pre computations being this kind of shortcut, that's going to be like a, at least from what I see from the arguments, that's like a dividing line in the sand between whether or not people think this is credible or not. It's like if you think that that disqualifies it, you're going to say, how can you be, you know, for, to quote James, how can you be so credulous? And then on the other side of it, I guess the argument is like, that's kind of irrelevant and you're nitpicking because we can prove that you can do this. The other thing that I just find really fascinating about this is if I understand this correctly, this guy rented a quantum computing power from IBM on their cloud platform. And so, Mike, I'm not asking you this, Charlie. This is a rhetorical question. What does that actually look like? What is that cloud platform capable of? You know, we're told that we're so far away from like a functioning quantum computer, but you can go on to IBM and you can rent out quantum computing power. I don't know how powerful it is. Obviously I'm not a computing researcher. I haven't used it. But that kind of blows my mind that you can go to a US company and say, I would like to tinker with a quantum computer. Let me use your cloud platform for it. That's pretty incredible. And I think it speaks to what Project 11 is saying about the computational costs and the resource costs for something like this dropping. Now we can argue whether or not it has dropped enough to serve as a credible threat, or at least to build the foundation for a credible threat in the immediate future. But to me at least that's pretty amazing that this independent researcher could just go to IBM and then run this test.

Host 2 (Possibly Colin or Michael) (10:27)

Yeah, this was also news to me. More on this as I spend time llming and sidebarring with experts.

Host 1 (Possibly Michael or Colin) (10:38)

Hopefully we'll have someone on next week at Bitcoin Vegas live to talk about this. That's the game plan right now. So if you are interested in this topic, we're hoping to either get maybe one of the Project 11 guys back on or someone else who can speak to this intelligently so that we can really make sense of what's going on. Because as Charlie said, this dropped this morning and it's one of those things that you can either have alarm bells going off or you can kind of just hand wave it, depending on your level of technical proficiency.

Host 2 (Possibly Colin or Michael) (11:05)

But yeah. Oh man. Yeah, this is a doozy to cover. Like I, unfortunately, I spent the past 10 years trying to understand Bitcoin and I should have been trying to understand physics. And. Yeah, so enough on that. I want to move on to the next one because this quantum topic, the more we talk about it, the more likely is we're going to say something wrong and have to roll it back. Let's go on.

Host 1 (Possibly Michael or Colin) (11:31)

We'll go into the, we'll go into the, as I like to say, the

Host 2 (Possibly Colin or Michael) (11:34)

page six, the real news, meaning the

Host 1 (Possibly Michael or Colin) (11:37)

real news, the real fake news. Trump to host bash for crypto investors tied to his coin sales. You got to love it when the mainstream media runs with a headline on anything related to crypto because they always just throw all of the loaded words out. Even the word bash here for party. Right. It implies people are being bludgeoned, their portfolios are bloodied and they're immiserated because they decided to invest in Trump Coin, which is your fault if you did that. But Trump is holding another gala for the crypto community, more specifically for folks who invested in his Trump meme coin. This is slated to happen on April 25 at Mar a Lago for quote, scores of purchasers of his crypto meme coin. Trump that has enriched him while in office. The move is fueling renewed criticisms from top Democrats and ethics watchdogs that he's using the presidency for financial gains in a break with ethical norms. Yes, I'm not going to defend Trump here, but if we want you scamming and grifting while in office, do it the normal way and pilfer the public coffers. Don't, don't, you know, launch a meme coin and try to get the private sector fleeced, do everyone a favor and then dip your hand in the communal honey pot where all of the taxpayers money goes to. That's what, that's what we like to see from our politicians. Not this meme coin grifting. Right? This to me though, is one of the more interesting, one of the more interesting headlines with regards to Trump's foray into bitcoin and crypto. We've been covering that a lot on the pod recently. Not because we are looking seeking it out, but it's just been in the news. If you've been watching the stream this week, you know, we covered Justin sun suing the World Liberty Financial. I don't know what you call it. Company platform. I mean it's like, you know, it's, it's a decentralized platform, but it's one of the most centralized things in.

Host 2 (Possibly Colin or Michael) (13:37)

It's a decentralized platform with an address you can send, you know, jury summons to.

Host 1 (Possibly Michael or Colin) (13:43)

Yeah, exactly. So Justin's son is suing World Liberty Financial. It has the project, or rather the Trumps have distanced themselves from the project at this point. But early on they were listed Trump and his sons as advisors to the project Ambassadors, I believe was the wording that they used. And so anyone who's been paying attention knows that the Trump and his family have a number of, of side hustles within crypto right now. Eric Trump obviously serves on the C suite of American Bitcoin, a subsidiary of Hut 8 and a Bitcoin miner. But Trump is still leaning into the Meme coin stuff, even as Meme coins are tremendously down. We'll pull up the chart here in a second. But Trump's. This is another Trump linked entity, Fight Fight Fight llc. Gotta hand it to the guy. I mean the marketing is just on point, man. You know, love him or hate him, he knows how to sell stuff.

Host 2 (Possibly Colin or Michael) (14:41)

Yeah, this is for anyone not aware fights the, the words Trump yelled in that famous photo where right after, right

Host 1 (Possibly Michael or Colin) (14:50)

after the Butler, Pennsylvania assassination. Yeah, but the event is being branded as, quote, the most exclusive crypto and business conference in the world, end quote. And promising a luncheon with Trump as its keynote speaker. According to the Meme Coins official website and social media account to boost sales of Trump. Fight. Fight Fight. I'm quoting directly from, from the Guardian here. Announced last month that the 25 April event is only open to the top 297 coin purchasers. And the top 29 investors will be invited to a special reception with Trump. Now I did have a question about this. Are they just tracking wallet balances? Because when they say the 297 top coin purchasers, my next question was can you just buy coins directly from like Fight Fight Fight llc or how are they tracking who actually has the most purchases? I guess they're just looking at wallets

Host 2 (Possibly Colin or Michael) (15:40)

That's a good question. Like this is in meme coin and really crypto world, you, you buy these on the open market typically, and then you take your wallet address and there's some kind of like form and like verification, some kind of like wallet connect equivalent to verify that you've got your, you know, the sufficient number of coins. I do wonder like what I'm actually, I'd love to see the breakdown because if we look back at like it's, it's costed money to get dinner with Trump. Like it costs like something like 100k a quarter million to be at, you know, a luncheon with Trump, quarter million to sit at the table with Trump or something like that. I'm kind of curious, is it cheaper to be in the top 250 to 300 holders of, of the Trump coin than it is to just buy it outright? Because that would be an interesting angle.

Host 1 (Possibly Michael or Colin) (16:39)

I would have to imagine that it's probably more expensive to be one of the top holders of this. Maybe not now.

Host 2 (Possibly Colin or Michael) (16:47)

Well, Obviously like top 10 accounts are going to be, you know, millions of dollars. But what about account number 297? Is that a $50,000 Trump account? In which case kind of got a good deal.

Host 1 (Possibly Michael or Colin) (17:01)

So got, got a discount on meeting with Orange Man.

Host 2 (Possibly Colin or Michael) (17:05)

Yeah, yeah.

Host 1 (Possibly Michael or Colin) (17:06)

And so I was curious about that and a little bit of digging. Fight, fight, fight. Loc led by the one Bill Zanker, a Trump ally. They, they, they own 80% of the tokens. There's like a three year unlock schedule. But the rest of them, to your point, Charlie, you're supposed to buy them off of something like radium or a Solana Dex, as far as I can tell, you can't just. Because if you did that, that would constitute a security offering, I would imagine. You know, like that's part of the reason why the Trump meme coin could exist to begin with is because it was billed as a joke. And then it was, there was no like ipo, right, or ico. Excuse me, there was no token sale. But all of this being said, this obviously is yet another chapter in what is becoming, I would say a kind of sordid text for Trump's crypto forays the public perception of this, I would say, especially now. I mean most people don't really know this is going on, but if you ask the average person with, you know, the war in Iran maybe wrapping up, maybe not, but still causing a lot of damage globally with gas prices, et cetera, and a lot of damage in the region, you probably look at this and think, why is he wasting his time on this? But that's another point, is that he actually might not be. The Guardian article did say they're promising all of these at this gala. They're promising all these dinner with Trump. You might keynote. The article says that he might not even attend. According to the website, if Trump can't attend, quoting directly here, the event may be rescheduled or those who qualified for the gathering will receive, quote, a limited edition Trump NFT in lieu thereof another limited.

Host 2 (Possibly Colin or Michael) (18:40)

Another nft.

Host 1 (Possibly Michael or Colin) (18:42)

Okay, so OG Block Space enjoyers may remember a Bitcoin season two episode that we did way back when. Trump actually, or some entity, you know, who knows how these deals work. These guys, you know, approach Trump and say, hey, we're going to put your name on something and you're going to make a lot of money. Because I like that, you know, maybe that's how it goes. But there was a Trump ordinal launch back in October of 2024, and then I think in 2022 or 2023 there was the Trump NFT trading card release. So Trump has been doing crypto stuff for a lot longer than most people realize.

Host 2 (Possibly Colin or Michael) (19:17)

And I guess he's an OG by now.

Host 1 (Possibly Michael or Colin) (19:20)

He is an og. And I guess you could say in some ways it's, it's paying, it's paying dividends or at least he keeps coming back dividends.

Host 2 (Possibly Colin or Michael) (19:30)

I mean, Forbes, Forbes in the article or actually, I'm sorry, yeah, it was Forbes of the Guardian recently, as of last January, said and did a whole like, audit basically. And the Trumps as a family have managed to either increase their net worth or pull out something to the tune of about $3 billion from their crypto ventures, which is crazy.

Host 1 (Possibly Michael or Colin) (19:55)

And it really puts Trump's Bitcoin 2024 speech into perspective where anyone who is in that room may remember the way that he closed after a 45 minute rambling sesh, right where it just went everywhere. And there was no central thesis to the speech. He goes, have fun with your bitcoins and your crypto and anything else you're playing with. I mean, this whole thing is a game to him and it's right. And he's. And the more you realize that, number one, the entire bitcoin and crypto sector has not only been, at the best, been ignored and the worst, been maligned by most of the institutions that underpin our society, including the government, where, you know, under the Biden administration, you know, maybe not to Trump's credit, but to speak to the counterfactual, the industry was on life support. You know, with choke point 2.0 startups couldn't get banking relationships established. Companies were getting kicked out of their banks. It was very, a very perilous time. So Trump recognized that opportunity. All you had to do is say we're not going to make what you're doing illegal. And then everything else on top of that was just gravy to jump on the gravy train. Right. But that being said, gravy for the Trumps, but you know, not really for anyone else. Let's take a look at how Trump coins doing. It is down 76% over the last year to $3 $2.92.

Host 2 (Possibly Colin or Michael) (21:25)

That would be, that would have outperformed the market though.

Host 1 (Possibly Michael or Colin) (21:29)

So technically and it's saying on all time it's up 142%. It, it's saying that's from when were

Host 2 (Possibly Colin or Michael) (21:38)

you on coin market cap. That's also when the it get like it gets listed or coin or connected to coin market.

Host 1 (Possibly Michael or Colin) (21:43)

Well but that's what I was wondering. Did it launch at a buck 20 because it on the. It soared to as high as $45 in January.

Host 2 (Possibly Colin or Michael) (21:53)

Real ones know, real ones know that you spin up the Solana contract address and then there's a various, there's a range of dexes that you can go to to start buying it. And very early on it was actually connected into the Moonshot app, a Solana based like read like very, very normie friendly retail trading application. And so that's probably when the price was officially logged by these third party aggregators like CoinMarketCap. So technically it really launches at like zero or near zero, but certainly.

Host 1 (Possibly Michael or Colin) (22:34)

Right. Obviously most people did not get it at the launch price. If we look at the Melania Mean coin too, this is just even WOR. It's down 94% all time to 11 to about 12 cents. And all of this, you know, the Guardian obviously has a field day with this talking about how people have lost a bunch of money. A few stats here on actual Trump meme. Coin adoption, if we can call it that. I don't know, can we call it adoption? Is this what mass adoption looks like? A forensics analysis commissioned by the New York Times to take it with a grain of salt. Sorry, I'm doing that too. Concluded that 813,294 wallets lost a combined 2 billion by trading the coin while the president's company and partners profited about 100 million from trading fees. That makes sense to Me that they, they probably did make out. I mean, 100 million seems pretty high. Seems pretty high for trading. I don't know what. And I also don't know what they mean by trading.

Host 2 (Possibly Colin or Michael) (23:31)

Yeah.

Host 1 (Possibly Michael or Colin) (23:32)

What do they mean by trading fees for this?

Host 2 (Possibly Colin or Michael) (23:35)

That's something I actually don't know. I mean, depending on the contract, depending on who owns it and the platform you launch it on, sometimes the trading fees can go to the contract deployer. But again, talking out of my ass a little bit there, that may be what they're referring to. There's also providing liquidity to these dexes. So you basically post up a pool of the token, perhaps, and you get yield on demand of that liquidity for these trading platforms could be related to those.

Host 1 (Possibly Michael or Colin) (24:10)

All of these exciting defi innovations. The President of the United States can launch a Meme Coin and now we have smart contracts to where they can siphon transaction fees from the trading of that Meme Coin. This, look, it's.

Host 2 (Possibly Colin or Michael) (24:22)

It's permissionless capital formation and it's also permissionless capital destruction.

Host 1 (Possibly Michael or Colin) (24:27)

So, yeah, that's a good way to put it. One last note on this before we move to our interview here. Charlie, I just had to highlight this from the Guardian because I thought this was really funny. Quote. Still, key Democrats, watchdogs and scholars say that Trump's aggressive promotions of Trump under of Trump Coin underscore his transaction style of governing, which has benefited his own bank account, obviously, and been a boon to the crypto industry. Okay, I just, I really want to highlight that point for a second. Can I get a little bit of this boon, please? Yeah.

Host 2 (Possibly Colin or Michael) (25:00)

Where's the boon? Where's the boon?

Host 1 (Possibly Michael or Colin) (25:02)

We are. We are below the. We are. We are below where we were after election night. Okay, I get it. We were at like 60k, 70k right, on election night, and then we surged to 100k over the next few days after the election in 2024. But we're really below the. We're below the Trump pump at this point. So you can maybe make an argument. You can maybe make an argument, and I actually think you can make a strong argument here that the new administration and the new Congress has been much more favorable towards bitcoin and crypto and has made structural changes that have made this industry more, how should we say, protected against overreach from the government. That being said, I would not say that Trump's business dealings in crypto have been a net benefit for the industry. That, to me, is just an absurd claim. It's like you're trying to look, if

Host 2 (Possibly Colin or Michael) (25:52)

one man, you know, if one man or one royal family can single handedly extract and subjugate the entire crypto industry, then I don't think we're doing very well. I will accept thank you for kicking fewer bitcoin and crypto companies out of banks and thank you for perhaps letting the foot off the gas of like making of, of like abusing basically the financial rails and bureau bureaucracy. But this does break, this does bring in a great existential question. Do you care about number go up or do you care about like adoption? So we'll see. Why not both?

Host 1 (Possibly Michael or Colin) (26:40)

Why not both? Sometimes they're not the same thing though. Sometimes you do get the adoption and it's the president selling a meme coin and then everyone thinks that you're in a fake industry again. We spent years running away from this perception. I would like to stay away from it, but we'll leave that there.

Host 2 (Possibly Colin or Michael) (26:55)

All right, before we go to our interview with Michael of Onramp, let's hear from our sponsor, CleanSpark.

Host 1 (Possibly Michael or Colin) (27:03)

We are CleanSpark, America's Bitcoin miner. A publicly traded company with the largest operating hash rate powered entirely by self operated infrastructure across four states. This is our proof of work. We are setting the standard for what's next. Learn more about the intersection of energy and Bitcoin at CleanSpark. Alrighty. And with that, we will bring on our first guest for today, Michael Tanguma, CEO of On Ramp. How are you doing, Michael? Welcome to the show. Thanks for joining.

Michael Tanguma (27:43)

I'm doing great. Thanks for having me on. I was listening backstage at the last segment and, you know, couldn't help but want to chime in and I think it ties into this conversation as well because I think life's really gray. It's not black or white. And you, you get the positive catalyst and then you get the grift that comes alongside it. And it was always going to be the case.

Host 1 (Possibly Michael or Colin) (28:02)

I think that's good perspective to remember and got to go a little hardball on the orange man sometimes because it is, it is kind of ridiculous. That being said, as someone who has worked in bitcoin for like my entire professional career, it is nice to see someone who isn't openly hostile, obviously towards the industry. I mean, that's a net benefit. But anyway, Trump dominates the headlines everywhere else. We're not going to give him any more airtime here. Michael, thank you again so much for joining. So y' all just launched on Ramp Finance. Can you give our listeners a rundown of this product and why y' all decided to launch it. How it fits into the kind of, how should we say, blooming ecosystem of bitcoin financial apps.

Michael Tanguma (28:48)

Yeah, 100%. And yeah, I'm. I'm pretty agnostic. I would probably lean negative or bearish on the whole Trump situation, how it turned out. But I do think it ties directly into this because a little bit about. So my background, I've been building infrastructure in the bitcoin space for close to a decade now. I was at Unchained from the ground up building that and always had this vision to bring in dollars in tradfi kind of user experiences. We had landed this deal back in 21 with visa to enable individuals to be able to spend out of like a vault that you had and be able be basically be able to access US dollar financial services and credit lines. And it ultimately all blew up because FTX, 2022 Celsius and then all the banks that were even near wanting to get involved in there and the primary issuer, the card issuance, all of it just completely fell apart. And so fast forward later that year I found it on ramp really this notion of if we're going to fast forward, this is pre ETFs and we're going to have all the trillions of dollars come in into institutional capital allocations, they're not going to come into hardware devices like full stop. It's where we would love for it to happen, self custody, but that's just not rational. From capital allocation that we had a real big problem because if they're not going into treasures, ledgers and cold cards, they're going into coinbase. And so that's really what onramp's principles founded were upon is multi institution custody. It's this unique balance where the client retains legal control. No legal entity or custodian has full unilateral control to move or lose the assets. And I share that with you because it was always baked into our vision that we would love and it makes sense. If you're going to cross the chasm in Bitcoin, you naturally need a park financial services that resemble somebody's need day to day to spend, earn rewards, all the things associated that we all have bank accounts for. But pre administration that was impossible. You just couldn't do that. The banks wouldn't get close to it. The occ, fdic. And so that's really where this catalyst comes in. Anchoring back to the previous segment that this new administration is going to bring in Grift and a lot of Ponzi's and a lot of assets are going to be lost. But then it's also going to allow for companies that are doing things the right way to build principal businesses around Bitcoin and then the need for day to day, whether it's so on ramp finance is this version of our bridge into the regular world where all of our existing clients get access to up to 5% rewards on their cash, 1 1/2% on card spends IRAs, access to our terminal lowest cost bitcoin brokerage. But what we realize is there's a lot of people that don't have any material allocations yet. We're not ready for on ramp and multi institution custody, but they just need a better unified brokerage to be able to park their dollars, get access to bitcoin and then now even spot gold exposure where you can take delivery of all of that, including the bitcoin. So that's in its essence what on ramp finances the core idea is like to be the money platform of the future. I think that in the next 10 years we're going to start to see the separation between the poly markets and these speculative fintech firms that are putting everyone out on the risk curve. And we're going to go back to where sound principles go and people accumulating stacking dollars based on their job or however they're making their income and then they're going to migrate that over as inflation ramps up. They'll still get treated like a first class citizen and get those dollars in rewards on it, but then they'll be able to migrate over to bitcoin or gold as they choose.

Host 2 (Possibly Colin or Michael) (32:08)

I'll jump in. You brought up multi institution which is kind of one of the, the core talking points and things onramp is building towards. And underneath we have one of a simple bitcoin concept of a multisig beyond just the technical implementation of a multisig. How is multi institution different than the world of counterparties and custodians across not just bitcoin and crypto but pretty much all financial assets in the United States right now?

Michael Tanguma (32:41)

Yeah, I love the question. It's a, it's a law. Because I truly believe that the difference between Bitcoin and gold is the fact that multisig, it's native to the protocol, it's not a smart contract. So everyone that's hearing about all this crypto stuff that's happening or like Bybit's the best example, they're proprietary smart contracts built on top. Bitcoin is an only native cryptocurrency and then obviously only other asset where you can embed governance at the asset layer. I fundamentally think that that's the difference. If Bitcoin is to be a global reserve asset, that that'll have to be utilized. Because when you go back and underwrite Bitcoin you have to look at where gold sat and gold failed because it ultimately centralized and you didn't have the transparency and ended up with too many claims on the underlying. So the difference between multi institution and then regular multi sig is it's still multisig. You're just taking out the ability for any custodian to move or lose the assets because they only have an equal weighting of the governance. So it can be a 2 of 3, 3 of 5. I fully expect that ETFs will be in these like 305s with like Schwab and Fidelity and Morgan Stanley and on sitting there or just orchestrating. And then same thing with, you know, we had a BPI report for the US Strategic Bitcoin Reserve and then we're also in the RFI for the Texas Strategic Bitcoin Reserve in the sense of sovereigns will ultimately leverage something like this because it makes zero sense if you're the state of Texas to go send your assets to, to San Francisco and Coinbase. Right. But also you don't have to become a custody expert. You can have a bank in the, in Texas that's holding one of those custodial keys. You could have two other custodians. And so we really see this as like the next evolution. The reality is that it won't really hit a crescendo like zeitgeist in this space until we see one of those other deleveraging moments. Because that's the thing that everyone forgets is that when liquidity comes in and the price rises, we get so excited. But risk gets inserted too, meaning there's digital risk, there's physical risk, there's liquidity, meaning rehypothecation insolvencies. And then that's when people, when the tide goes out, everyone starts to look for transparent fault tolerant solutions. I experienced this firsthand in 22 when FTX, Celsius and BlockFi happened. And so my expectations are we'll see this again. We'll probably have a few years to go and we'll have a couple of little like side bumps. But that's really where I think the market will appreciate kind of why you don't want a counterparty to move or lose the asset.

Host 1 (Possibly Michael or Colin) (35:10)

So Michael, one more question. On the mechanics for this, because I do. I don't want to beat a horse here, but it is very interesting. So I'm using on ramp. Do I get to choose which institution I'm using for custody? And then the keys are split between some of those partner institutions. And a second part question. How did you convince all these different custodians and institutions to be a part of this solution? Seems like it might be hard to get them all to work together, right?

Michael Tanguma (35:40)

It is. I mean honestly, when I look at what's a long term moat outside of like taste and looking where the market's going, is the technology like the best example? Hopefully this lands. Cause I'm starting to use. This is like think about your pristine steakhouse like that you can cook a steak like some. A lot of people can't actually cook a steak, but you can, you can go buy the steak and do it. But wealthy people and people with real capital, they a like to go out and they want that full experience from soup to nuts. So think about like multisig is kind of like the steak in the sense that anybody can do it. It's very hard to like generate and build a business around open source infrastructure. What Onramp does is effectively seamlessly make it available where anybody can sign up and what used to take us two to eight weeks in onboarding collaborative custody. Everyone here is prob. Probably at least 50 of the audience has probably signed up with a CASA, the Unchained, where you get shipped these devices, you get your seed words, you get your hardware devices, you have dongles, you have all this churn. And it's great service. I like it. I think that it's a, a natural evolution of self custody, but the reality is a lot of people, as the price rises, they get older, they get families, they start to feel that pain and burden and so they start to migrate some of those assets over. And then the real angle for us is if you think about the other 99.9% of people, they don't want anything to do with that. I like to think about we're still in the hobbyist phase of building computers in the 70s and then eventually you start to ship the computer. That's what I think about on ramp, you click a button, you get access. And so but to your point, the reason why nobody's done this yet and we've been alive for three or out for three years is because you have to credibly go to some of the largest institutions in the world and say not only can you build this, scale it. But the hardest part is this right here, selling it. And we had years of experience onboarding thousands of people, billions of dollars. Cam Stroh, who's one of the first people hired at Unchained, came over with me when we founded the business is that we can deeply get into the souls of the pain of what somebody involves in self custody. Because we've been there. We felt all of that. I felt it personally, traveling overseas, having collaborative custody. And what used to be the best of both worlds ended up being the worst of both worlds because my wife's coming in and having some somebody paint the house, and I'm like, holy crap, I have a piece of cryptographic material in that house. What happens if they find it? And then if you do it right, you have no access to any of it. So if you need to get out of town, you think about, you're in the UAE and they're, you're getting bombed and you're traveling.

Host 1 (Possibly Michael or Colin) (37:59)

Do you go back home?

Michael Tanguma (38:00)

It's just all this complexity. And I really believe it's the subtext to why this asset class is still super nascent. Because people don't want to think about this, and they also don't want to trust a single custodian. And so we work with some of the largest, you know, holders. Like, we have thousands of BTC clients. We have folks that work and lead Fidelity Digital Assets that are our clients. Because ultimately, I look at it as you go through the progression of owning bitcoin, you naturally end up at this end state where you don't want your family to be at risk for a trade, but you also know that you can't lose the asset with a single custodian.

Host 2 (Possibly Colin or Michael) (38:34)

So you just dropped a newsletter. If I'm correct, it looks like kind of an inaugural newsletter for a series. And you kick off the kind of point you make with a quote from, I believe, J.P. morgan. You say J.P. morgan said it in 1912, quote under oath to the United States Congress. Gold is money. Everything else is credit. Can you give me the TLDR on your point here and the arc you take this newsletter on?

Michael Tanguma (39:07)

Yeah. So I think that this is the biggest missing point around the asymmetry with bitcoin and gold. There's a core idea that gold is money and everything else is credit and derivative.

Host 2 (Possibly Colin or Michael) (39:21)

So you're.

Michael Tanguma (39:21)

You're taking risk on everything else. And I think this is the biggest thing missed. And you guys have been around long enough, so you probably feel the pain of this 20, 21, maybe 22 to 25 cycles. Really missing the point of like they're speculating, they're going into amplified credit products and they're investing, they're not savings. This is the thing bitcoin sold for is it gave you the savings in the profile of gold as outside money with the asymmetry of every other investment you could ever want. Private credit venture, private equity, stock market, because it's in its monetization phase. The problem is that people aren't assessing or allocating that right size. So the point of this article broke it with bitcoin and gold or credit, everything or bitcoin, gold or money. Everything else is credit. It's to start to articulate that once you come to that conclusion, it's the natural thing to park larger and larger amounts of capital there. The problem comes back to the custody aspect because if you guys remember going down the rabbit hole, it wasn't until you anchored those keys to the physical world and realized that they don't go and plug themselves in and send them somewhere else that you can really park all your wealth in there. And that's when what the rest of the world is still tied into. They know bitcoin's interesting, but they can't wrap their heads around it's asymmetry, it's outside money. And the last thing I'll say is that in this precarious time we live in, everything has counterparty risk. And I think that's the thing that doesn't get weighed enough in the bitcoin. Like everyone that's not appropriately allocated is that there's asymmetry usually gets thought of to the upside. And so everyone's like, oh, I don't need to get rich. I whatever. It's like, no, no, you don't understand that. You also are protecting yourself from the downside because where are you else are you parking that capital, whether it's in a bank, whether it's in a private credit fund, private equity amplified bitcoin, it's not a risk of 10% losses, a risk of 100% of your principal loss. And so I think that where we go to in a world is understanding gold and bitcoin or money and everything else is credit. And then we can rebuild how you invest, but not until like that's widely understood.

Host 1 (Possibly Michael or Colin) (41:19)

Michael, thank you so much for joining man. Really appreciate it and looking forward to seeing how on ramp evolves. Quick moment to shill. Where can people find more about on ramp and the work you all are doing?

Michael Tanguma (41:31)

Yeah. Onramp bitcoin.com I appreciate that. And we actually have Genesis 210. So you have 210 people. We've at least had half already signed up. Gets you locked in the highest rewards gradually and suddenly booked. Signed by Parker Lewis. Welcome. Swag. A bunch of other things that are associated. So if you to want to check it out and there's no cost associated to sign up.

Host 1 (Possibly Michael or Colin) (41:50)

Awesome. Thank you very much, man.

Michael Tanguma (41:54)

Cheers. Have a good weekend.

Host 1 (Possibly Michael or Colin) (41:55)

You too. Alrighty. And we have Taylor Monahan up next. But first a quick word from our sponsor, Luxor. This episode is brought to you by Luxor Commander. Bitcoin miner management software built for enterprise operations. Commander gives you real time fleet monitoring, bulk remote commands across your fleet and intelligent miner. This is an automated profitability engine that runs every five minutes and automatically adjusts your power settings to live hash rate markets via Luxor and energy markets. Ercot back tests show over 10 more profitability versus binary mining. Commander Pro is a hundred dollars per megawatt or a 55 basis point pool fee adder roughly half the cost of competitors and there's a 60 day free trial. So try it and if you like it, you can buy it. Get started at Luxor Tech forward slash commander and with that we will bring on Taylor Monahan is going to be talking about everyone running around with their hair on fire after what has kind of just one of the most consequential hacks in defy history. Taylor, welcome back to the show. How you doing?

Host 2 (Possibly Colin or Michael) (43:02)

Welcome back.

Taylor Monahan (43:03)

Oh, I'm so good. So good. Like yeah, yeah, like I have a totally normal sleep cycle. Nothing's on fire. I'm definitely not yelling at anyone. Like I'm just chilling happy.

Host 2 (Possibly Colin or Michael) (43:18)

Taylor, I feel like this is like your week because you've been talking about these. You've been like the point person on North Korea. Is this the biggest week in this big narrative so far?

Taylor Monahan (43:33)

I think so. And I think it also like it we weren't entirely sort of like done with drift, so to speak. It's like we, we came out of drift and then just like as we were starting to be like okay, we've got our hands around that we can prepare for the laundering layer zero kelp down situation happened. And so that was like, I think made it an even worse situation. Usually we get a minute.

Host 1 (Possibly Michael or Colin) (44:00)

Right. So a little bit of context here. We had Taylor on in January to talk about the epidemic of telegram hacks that have been going on. The Lazarus Group, North Korean hacking syndicate has spun up this incredibly complex social engineering attack where they pretend to be a colleague. You Know, they get someone's telegram, they send you a message, you, you have a chat, you have a chat history with these folks. So it's not like an impersonator telegram, it's the actual telegram hop on a zoom call. There's a video feed of the person and they try to get you to download malware. And they seem to be going on a run here because then we had, as you just mentioned there, and we covered on the pod a while back, the Drift hack, which was another incredibly complex social engineering attack where these, this hacking syndicate acted like a client with Drift, set up proprietary software to trade on Drift and then use that software to infiltrate Drift.

Taylor Monahan (44:55)

Now we have met them, they went to conferences.

Host 1 (Possibly Michael or Colin) (44:58)

Yeah, like the sophistication is wild. And I wonder if that speaks to some of the fallout we're seeing with the Kelp Dao hack too. And that leads to my next question here, Taylor. As far as you can see from your, you know, 30, 000 foot view, what have been the most detrimental side effects and secondary effects of this Kelp Dao hack?

Taylor Monahan (45:20)

So I think that obviously this was a huge eye opener for a lot of teams in this space. I think there are some people who are perhaps should be more scared and hardening their systems that aren't like other bridges. And basically anyone who is, let's say like reconciling on chain and off chain data, especially via like RPCs. Because like, I don't know, there's just. Yeah. So one angle is that. Let's just stop there. Okay. So like one angle is like, how do we prevent this from happening again? What is DPRK doing here? How did they like you know, leap ahead and how do we make sure this doesn't happen again? Obviously another one is just risk management with these lending protocols. In this case, AAVE users were affected and not even necessarily the AAVE users who were, let's say being complete degenerates and looping around and around around. Because what happened was that when the hackers took the. It's called rse. It's a wrapped asset. It's a wrapped ETH asset. That's like earning yield. When they took that out, basically the only place they could get liquidity was via the lending markets. And so what they did is they basically lent all the RSE and pulled out wrapped ETH or eth, and that's what sort of gave them the native base asset. As a result, obviously any of these protocols who were just like suddenly flooded with this asset that had just been illegitimately minted is now dealing with some bad debt. So that's like the second layer of fallout, obviously, like the hard bad debt. But then also how did this happen in the first place? Right. Like how AAVE is not. They're pretty good in terms of like considering the risks. There's a lot of people around aave, a lot of entities whose job it is to consider the risk. How did this sort of like this asset get into AAVE without having like really hard security and then obviously. Well, yeah, let's just.

Host 1 (Possibly Michael or Colin) (47:38)

Sorry, can I just cut in with. So you're basically saying like AAVE should have been monitoring this better and never let those assets be deposited in the first place. Is that.

Taylor Monahan (47:45)

Not necessarily. Not necessarily. Are they for other assets? Right. It's like the fact that the assets themselves, the token contracts themselves have upgrade functionality, have admin functionality. This is not a secret. So before AAVE usually like include something they. They go through and they harden the security. So for example, like putting circuit breakers on the amount that can be minted, making sure it's behind a multi sig, making sure that any admin changes require a time lock. And it seems like RSE just sort of. Because it wasn't the token contract itself where that functionality laid. It was like the layer 0 bridge, which turns out can also. Yeah. Can also be exploited via a one of one key in this case. It seems like that just. Yeah, it just slipped by and so obviously, I mean obviously like AAVE is doing a lot. The whole ecosystem is doing a lot. Anyone else who's relying on layer zero, like systems and code and services and whatever, the whole. The whole thing, they're all hardening. Layer 0 has taken steps as well. So it's a huge effort just to again, prevention and then mitigation and remediation.

Host 2 (Possibly Colin or Michael) (49:05)

Taylor, you. You mentioned the term circuit breakers. I see a lot of folks in Defi talking about that this week for obvious reasons. But it's interesting because I saw Andre Kronch kind of the godfather of Deep Modern Defi Urine Urine founder. He's been talking about like implementing some circuit breakers. I saw the bankless guys even tacitly endorsing like a lot more human discretion into circuit breakers. Does. Is this kind of an existential moment in Defi? Are you seeing like a vibes pivot for. I would say True Believers or maybe Defi looking a little bit more like conventional markets.

Taylor Monahan (49:56)

So I would definitely agree there's a vibe shift. I would not say that this is actually like that existential. It's a I mean, it's a massive hack. And obviously the fallout, and we're still dealing with the fallout, right? Like, how these markets are gonna, like, be unkinked or whatever they're calling it, and, you know, people made as whole as possible. Like, that's still being worked out in terms of, like, is this fully existential? Technically, no. However, we are seeing a vibe shift. And I think the vibe shift is less to do with, like, the existential threat and more just people are just fed up with a whole bunch of decentralized protocols, right? Pretending that they can't take action, pretending that they don't have these controls, pretending that they can't be better. I think people are just really, really fed up with that. And they're saying, you know what? Look, if. If you're not going to be fully decentralized and fully perfect and there's going to be humans in the mix and there's going to be things mitigating the risk, then let's do that. But let's do that on both ends. Let's not just let that be something that Lazarus exploits us for. And I'm very supportive of this vibe shift. I'm also very supportive of, like, actual permissionless, decentralized, not human systems. But I think that lying about what we have built and what the current state is is not productive, and we've been doing it for too long.

Host 1 (Possibly Michael or Colin) (51:26)

Well, on that note, Taylor, maybe this is a good place to end. Unless Charlie has a closing question kind of adding to that. It does kind of seem like a crossing the Rubicon moment where people are saying, oh, crap, this was really bad. Not only is the hacked ecosystem in trouble here, but there are these downstream effects where the stolen funds are then being deposited in these other DeFi platforms, and it's causing problems with the incentives there as well. I'm just curious what can be done to solve this, if at all. Building on your last answer is the answer for these DeFi programs to just drop the charade and be like, hey, guys, here are the internal measures we're going to take if this happens again. Here's how we are going to harden our systems. But the North Koreans and the Lazarus group seem to be going on a kind of generational run here with regards to crypto hacks. How can we actually address these issues? What can realistically be done to stop this?

Taylor Monahan (52:22)

Yeah, so I think a lot of people, you know, if they follow me on Twitter, and especially, like, the more bitcoin OG crowd is probably, like, thinks I'm some, like, boot Licking Fed thing, right, because of what I say. But actually, like, my perspective is that by being honest with the current state of things and taking action where we can and really getting creative on the things we have to stop hacks, to stop Lazarus, to just be honest about the current reality, I think that that actually moves us and will move us closer to a more robust, a more decentralized, a more permissionless system over time. So in my opinion, that's the first step. I think we've been LARPing and pretending that nobody can do anything. There's no controls, there's no humans. It's just this code that runs autonomously. And that's frankly not true, as Lazarus continues to prove again and again. The way that I look at this is I consider when these protocols take action to stop Lazarus as a win win because one, you're actually disincentivizing the harm and the theft. And obviously in the case when it's dprk, literally North Korea and their nuke funding operations. But it's also like, okay, let's put these, these centralized points that we've been lying about for years. Let's put them front and center, right? Is this something that we need in terms of the evolution of the protocol, in terms of safety, in terms of whatever? If the answer is no, if there's no benefit to having that beyond like your own personal incentives or laziness, then I would say that those, those should be removed. Right? If there's no benefit to these things, they should be removed or they should be hardened so that they can't be used to steal funds from people in the future. But I don't. Yeah, but right now, again, we've just been like pretending everything is decentralized. And in reality there's a lot of AWS servers, there's a lot of one on one keys, there's a lot of humans in the mix. And so my hope is that we can like, yeah, basically harden the system, acknowledge what's happening, use that to do good, to prevent and mitigate and recover for victims that are harmed, but at the same time harden against future hacks. Because if we continue operating like this, Lazarus will continue hacking us. Like, no ifs, ands, or buts about that.

Host 2 (Possibly Colin or Michael) (54:52)

So the whole story this past year has been that the hacks get bigger, they get more insidious, they get more clever. I'll put you on the spot, Taylor. Sometimes we ask people to give like a bitcoin price prediction. I want to invite you to give a prediction about level and scale. Of hacks over this coming year, my intuition says they just get bigger. Do you have a prediction for ballpark aggregate amount of money hacked? Do you have a prediction for biggest hack event? I'm curious because you follow the trajectory of this, where do you think it peaks?

Taylor Monahan (55:30)

I honestly, I think that this hack should have been a billion dollar hack. I think that something happened that caused them to pull the plug. They only had the one of one. They only had the layer 0 nodes. They didn't even have the layer 0 core. Knowing Lazarus, and especially this Lazarus, which is a group known as Trader Trader, they, they could have spent a couple more weeks and gotten more access and that would have given them access to a much bigger protocol and a much bigger payday. Again, I'm not sure exactly why they decided to cut and run with. It was planned to be 3,380 million. They got 280 million and then they were rugged for another 70 million, so they got about 210. But yeah, I think that this quite easily could have been a billion dollar hack. And given that it's only April, it would not surprise me if we did see another billion dollar plus hack from Lazarus in 2026.

Host 1 (Possibly Michael or Colin) (56:28)

Hold on.

Host 2 (Possibly Colin or Michael) (56:29)

A lot of nukes.

Taylor Monahan (56:31)

A lot of fucking nukes. We have got to stop this.

Michael Tanguma (56:34)

Like

Host 1 (Possibly Michael or Colin) (56:37)

Taylor, thank you. Thank you for your please. And for your bringing awareness to this situation. Can you give folks a shout out? We'll tell them where they can find you on Twitter and whatnot.

Taylor Monahan (56:47)

Yeah, yeah. So my Twitter is Tayvan O T a Y V a N o and then an underscore on the end. And then if you have an emergency, the Seal911 bot is the place to go. It's a telegram bot. You can find it on my Twitter as well though. But yeah, if you're like getting hacked right this very second, seal is definitely the place to go. And myself and my colleagues will answer you and try to mitigate the loss further.

Host 1 (Possibly Michael or Colin) (57:11)

Thank you for that, that shout out for the help for hacking stuff. That's really good work, Taylor. Thank you so much. Have a great weekend. Appreciate you joining us.

Taylor Monahan (57:20)

You too, guys. Take care.

Host 1 (Possibly Michael or Colin) (57:21)

She's been a wealth of knowledge on this and a bunch of other exploits.

Host 2 (Possibly Colin or Michael) (57:25)

Absolutely. Been on the ball for months.

Host 1 (Possibly Michael or Colin) (57:27)

Highly recommend y' all follow her if you want to keep track and abreast of some of these situations that are seeming to get worse. All right, for our next story. Got a few more for y' all today. Tether. Speaking of freezing things.

Host 2 (Possibly Colin or Michael) (57:42)

Speaking of freezing.

Host 1 (Possibly Michael or Colin) (57:43)

Speaking of freezing and meddling in Quote unquote decentralized systems. Tether has frozen 344 million in USDT on Tron at the behest of US authorities. It's coming at you all from block space. Stablecoin giant tether froze two wallets containing some 344 million in USDT tied to illicit activity. According to a company statement released Thursday. Tether said it works with more than 340 law enforcement agencies across 65 countries. A few more stats to add to this because there's not much past the headline. This was on the Tron network as I understand it, but Tether, the company has cooperated with law enforcement across 340 agencies in 65 countries for 2300 cases globally. It's quite a lot. This cooperation has led to freezing of more than 40 or $4.4 billion in assets to date, including over 2.1 billion tied to U.S. authorities. That's coming direct from Tether's blog post on the freezer. This is interesting for a number of reasons. First of all, and just to get the irony out of the way, the reason why I thought this was interesting to highlight as this one Jeremy BTC reminds us on Twitter, this is happening on the Tron blockchain. And the same Justin Sun, I'm quoting directly from Jeremy, whose blockchain processes the largest shares of USDT in existence, is publicly fighting against a centralized freeze in a Trump backed project. Alleged centralized freeze. Actually don't know if Justin Sun's Laura Liberty Financial was frozen. He's claiming 4 billion tokens were. Yeah, but this is a little bit pot calling the kettle black here.

Host 2 (Possibly Colin or Michael) (59:31)

Right?

Host 1 (Possibly Michael or Colin) (59:31)

And we alluded to this. Absolutely. You know, 100. This is a little bit of the crap coin. Calling the crap coin a crap coin. And it just goes to show that, you know, principles of decentralized finance be damned. At the end of the day when the rubber meets the road, if, if law enforcement officers are asking you to freeze something, you're coming like Tether, you might do it. Also, everyone wants to stop disaster if they can. And so obviously I'm not saying that it's good that World Liberty Financial froze Justin Sun's money. I don't know why they froze it. I don't even know if they froze it. This is all according to Justin Sun's lawsuit, but at the end of the day this is something that all of these actors do, depending on the context. Now one last thing to note here and I'll toss it to you, Charlie, for second takes, we covered Circle refusing to freeze Some funds tied to the Drift hack a while back a few weeks ago, and our producer was saying, you know, on the one hand, people are looking at this and saying, well, Circle is not doing this, but Tether is. But part of Circle's argument for why they won't do it is they won't freeze without a court order. They want to have. They want to have freezers somehow exist within the bounds of what is legally permissible within their operating country, the United States. So just to kind of steel man the case against this, you could make the argument that it would be better for some of these things to go through a legal process. Now, to steel man that steel man, or to steel man against that steel man, that can take months or years, and it won't actually remunerate anyone or solve the problems of funds being stolen. But I just think this is worth highlighting because we're starting to see two completely different courses of action between the two largest stablecoin issuers in crypto for how they respond to illicit activity, hacks and threats, and how they are working with law enforcement to ensure that that doesn't happen on their platform. One last thing. No idea what the illicit activity was here for Tether. They do not. They don't explain. It's just, you know, we were told we were approached by law enforcement. We were said, bad things are happening with these coins, and we don't want bad things happening with our coins.

Host 2 (Possibly Colin or Michael) (61:36)

So, Yeah, I mean, 344 million, and it's conspicuously not specified what that was. I'm really curious, Tether, in Tether's press release, they say, we do. We have long followed OFAC guidelines. And Tether founder Paolo, Paolo Paladino, however you say it, I think I mixed his name up with the bass player for the John Mayer Trio. Anyway, Paolo said, quote, USDT is not a safe haven for illicit activity. Oh, Paolo Arduino.

Taylor Monahan (62:11)

So

Host 2 (Possibly Colin or Michael) (62:15)

this is. It's. It's pretty interesting. I think that it's very ironic. I made a tweet. I'll. I'll show my tweet here. Here is Tether's Twitter. And at the top of their Twitter, in the banner, you have the Tether catchphrase, unstoppable together. And then the latest tweet at the time of me screenshotting this was, quote, tether supports freeze of more than 344 million USDT in coordination with OFAC and US law enforcement. It's absolutely stoppable. You know, we can debate whether that's okay or not. It does not seem unstoppable to me. I'll also comment that I hadn't seen the Tethers unstoppable together like catchphrase logo. As you can see here. It's actually very ingenious because they bold the for the U and the N of unstoppable and bolded T and the other of together. So it says untether. Pretty clever. I think if you have billions and billions of dollars in net profit every year, you can buy some very, very good branding. That said for I think, I don't know if you said that brings Tether's total freezed amount up to 4.4 billion in assets to date, of which 2.1 billion are tied to U.S. authority. So the U.S. absolutely at the forefront of asking Tether to freeze. Oh my last take was who is dumb enough to keep 344 million in tether? Like you, you have that much money, you absolutely know they're going to freeze it. Maybe that doesn't represent the lion's share of your portfolio, but if it does, what in the world are you doing using Tether? Yeah, use Bitcoin.

Host 1 (Possibly Michael or Colin) (64:08)

They probably felt like they were laundering the funds well enough. I would imagine that a lot of this kind of comes down to poor OPSEC or poor processes. For some of these criminals who think that they are actually doing things under the radar when they're really not, 344 million is a lot. So it's really curious as to what that's tied to. But we'll leave that segment where it is and a quick ad read before our closing segment on prediction markets. This episode of Blockspace Live is brought to you by Lygos. Hedge funds are reeling. Asset managers and lenders are in the throws of the 10-10-25 liquidation events. But with Lygos you always know that your Bitcoin is safe. Counterparty risk is rampant. So it's more important than ever to understand who actually controls your Bitcoin. And with Lygos, that is always yourself. Don't be the next FTX or Celsius victim. With Lygos you can use Bitcoin native smart contracts to always self custody the Bitcoin that you are lending out through the platform. And you always know that it's there because Lygos makes it super easy to verify. They are our preferred Bitcoin backed lender and we recommend you check out their services with them. You always know where your Bitcoin is. Hold your keys. There's no wrapping, bridging or rehypothecation and you can get competitive rates as low as 10% APR. Go to Lygos Finance to learn more. All right, Charlie. I gotta say, I was not expecting to see insider trading from the cream of the crop of US Special Forces on the docket for the news roundup today. But that is where we're at. This is coming at y' all from CoinDesk. US arrests Army Green Beret for $400,000 Polymarket bets on Venezuela raid that he was in. Master Sergeant, get ready for this. Name Gannon, Ken Van Dyke seal his bets about the raid on Venezuela that led to Nicolas Maduro's arrest. So Master Sergeant Gannon here, I just this nominal determinism, I guess it's just it strikes once again.

Host 2 (Possibly Colin or Michael) (66:23)

He was like, major, major, major.

Host 1 (Possibly Michael or Colin) (66:28)

So this guy was in the raid that nabbed Maduro in January. And according to this indictment by the doj, quote, the defendant allegedly violated the trust placed in him by the United States government by classified information about a sensitive military operation to place bets on the timing and outcome of that very operation, all to turn a profit. U.S. attorney Jay Clayton said in a statement. That is clear insider trading and is illegal under federal law. So apparently Mr. Van Dyke here, Mr. Gannon Van Dyke allegedly created a poly market account on Dec. 26, 2025, day after Christmas. Placed 13 bets over the next week through Jan. 2 on contracts anticipating whether U.S. forces would land in Venezuela, remove Maduro, invade Venezuela and similar con contracts. So ultimately, he ended up netting $400,000 from $33,000 in bets as a result of this. And again, he was a part of the raid, which is amazing. And this is kind of. There are two really interesting competing timelines here for two of the members of this raid. There was the pilot who was awarded the Medal of Honor. Amazing segment during the State of the Union, when he came out with his wife, he was on a walker because he got shot. This dude got shot multiple times. Still landed the the craft, waited for the extraction team to bring Maduro out and then flew them out. Absolutely incredible. So you got that guy and then you got the dude profiting on insider trading on the raid itself. But what was interesting about this. Two more notes on this before I toss it to you, Charlie. Polymarket posted on Twitter, quote, when we identify a user trading on classified government information, we refer the matter to the DOJ and cooperated with their investigation. Anyone who's paid attention to polymarket and Kalshi will see these instances of certain markets flipping the odds on a dime from yes to no or no to yes on a certain topic. And you'll see a few accounts bidding up on that outcome. And obviously, it's. People have looked at these instances and said, there's clear insider trading going on on the platform. This guy's not the only one doing it, by the way. There was Another story in CoinDesk recently about Kalshi kind of sicking some insider traders on their own platform. But to pull up liberal rag. Tennessee HAULER SHOUT out Tennessee, there's this amazing exchange between Trump about this insider trading, which I, I want to point this out. It.

Host 2 (Possibly Colin or Michael) (69:03)

This is the best. This is the best clip of the week.

Host 1 (Possibly Michael or Colin) (69:05)

Like, yeah, it is. But I want to point one thing out, though. It is. It is his DOJ prosecuting these people. Like, this isn't like, you know what I mean? Like, this is Trump's DOJ going after Sergeant Gannon. The reporter basically asks him, don't you think it's a shame that people within some of these, you know, within the US Government are insider trading on some of these events? And here's what Trump has to say.

Host 2 (Possibly Colin or Michael) (69:28)

The whole,

Host 1 (Possibly Michael or Colin) (69:31)

the whole world, unfortunately, has become somewhat of a casino. And he says he doesn't like it. Of course, the Trump meme coin might indicate otherwise. Charlie second takes on this.

Host 2 (Possibly Colin or Michael) (69:45)

Obviously, Trump has been reading Nick Land because. And he's an accelerationist and believes in a cybernetic feedback loop of markets and future capitalism itself is artificial intelligence. I'm just, I'm quoting basically what a lot of people who, like, have been theorizing about the, the emergence of prediction markets are thinking right now. This goes back to the 50s and 60s, folks talking about the world of betting on everything. And here you have the most powerful, important person in the world enshrining this catchphrase into public discourse. The world is a casino. So absolutely fascinating. While that Trump actually does get it, I don't know if it's distilled down to the other members of the executive branch who are kind of, you know, have an inconsistent approach to how we as a nation interact with these. You know, it has been a public secret that these markets are driven by insiders. For the first time ever, if you have knowledge which you could not monetize previously, now you have a very easy way to make money off of it. There's incredible asymmetric returns, and a lot of folks are saying that it'd be great if we could have prediction markets, but without insiders. Look, I understand, I feel you, that it's very unfair and asymmetric, but I would Argue prediction markets are not useful without insiders. The whole point of them is to review, reveal information in the market that is known. So I do think it's almost like antithetical to prediction markets to try to prevent insider trading, because that's the whole point. Now maybe I shouldn't be saying this on live, but this is kind of the reality of this permissionless future. If you ascribe to that view, that's, I think a pretty logical conclusion of that, that you are permissionlessly able to communicate things, you know, with the capital they have.

Host 1 (Possibly Michael or Colin) (72:07)

So I think that's a really good point. This idea that without the insiders or prediction markets, at least maybe not from an betting on them, but in terms of their utility for forecasting events or divining events in real time, that actually hurts that if you keep them out because that's the whole thing that makes it useful for actually.

Host 2 (Possibly Colin or Michael) (72:26)

The usefulness. Yeah, yeah, the usefulness declines with maybe

Host 1 (Possibly Michael or Colin) (72:32)

a little, maybe a little fairer. But yeah, like you said, not as useful for figuring out what's actually happening in the world. And as you said, of course Trump gets it. You know, Trump is a high roller. He, he made his money in real estate, not totally averse to taking risk. And he says the people want to gamble, let them gamble. And in fact, that is the topic of our closing story for today, which is this has gone somewhat underreported. Thirteen states currently have legislation or, sorry, excuse me, have lawsuits out against prediction market platforms. This is the latest one to hit the wire from coindesk here, quote, Wisconsin joins prediction market fight suing Kalshi, Coinbase, Polymarket, Robhood and Crypto.com. they're going after the entire family here. They're going after the whole gaggle of prediction markets. And they're not alone. There have been a number of lawsuits filed over the last year or so against prediction markets on the state level. And here are the names that I have and that I know of so far. Arizona, Illinois, Connecticut, New Jersey, Nevada, Maryland, Michigan, New York, Tennessee, Ohio, Montana, Massachusetts, now Wisconsin. So 13 in total, 12 before today. And the two, I think most salient cases come to us from New Jersey. For the New Jersey one, New Jersey's gaming commission challenged Couchy's sporting event contract. A federal court granted Kalshee a preliminary injunction. And on April 6, 2026, the third court ruled 2 to 1 that states cannot stop Kalshi from operating, finding federal law likely preempts state regulation. This was the first big appellate court level win for the prediction markets. And on the other side of things, you have Arizona, which is kind of the counter case here in terms of the detrimental side of this. On March 17, 2026, Arizona filed a 20 count criminal information against Kalshee LLC alleging that Kalshee operated an illegal gambling business without a license and engaged in, quote, election wagering, end quote, vote. The charges include four counts of election wagering and 16 counts of betting and wagering, including bets on professional sporting events. The federal government subsequently sued Arizona to block enforcement. Now, the whole crux of this is whether or not these prediction markets should be considered to be regulated under CFTC jurisdiction for providing financial derivatives or swaps, basically, or whether or not they function as sports betting sites. So I'm not going to go through each state, but each state basically has some variation of an argument saying, look, this is indistinguishable from sports betting. The Wisconsin one for instance, says you, you put a 54 cent bet on, you know, the Ravens winning the super bowl or something. To use an example. That's not a current market. That basically represents a 54 chance that they will win. This is indistinguishable from a sports betting market as well. Whereas the prediction markets themselves are saying, actually, hang on, Congress gave the, gave CFTC exclusive jurisdiction over transactions on these contract markets. So there's no room for state level regulation of sporting events for these things because they're not sporting event contracts, they are financial contracts. So the whole thing boils down to whether or not the courts are going to rule these as financial contracts versus sports betting and gambling contracts. I think eventually one of these will probably go up to the Supreme Court. Not legal advice, not a lawyer, but I would imagine that's where one of these eventually ends up. And if they do, it'll be kind of funny because there's a little bit of an ironic twist here. And then I'll leave it here, Charlie, for you with closing thoughts. In 2018, the Supreme Court ruled 7 to 2 that that states prohibiting sports betting was unconstitutional or a federal law that had prohibited states from authorizing sports betting since 1992 was unconstitutional. The Court held that this law violated the anti commandeering doctrine of the 10th Amendment, which prohibits Congress from dictating that what states and governments may or may not do. Justice Alito wrote, quote, congress cannot regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own, end quote. The irony here is that Murphy was a case in which new. This was, the case was called Murphy versus the ncaa. This was A case in which New Jersey was fighting the federal government to gain the right to allow sports betting. Now they are suing the federal government or sorry, now they are suing. Yeah, they're fighting the federal government to stop prediction markets which are federally regulated. So it's kind of an inversion of the original court case and problem that got sports betting permitted state by state in the first place. So this is really interesting, everyone's role clutching here. Obviously the sports betting apps don't want prediction markets encroaching on their turf in places like Nevada. You know, they don't want any sort of gambling, they don't like gambling online because that takes people out of the casinos. All in all, this is going to be probably an incredibly messy state by state fight. I would expect again this to get elevated to the Supreme Court for some clarity on this issue, but I think this is something, this is percolating and I think we've definitely not seen the end of it. It's going to be a big theme for the next year or so as we really work out what is the legal basis for these prediction markets? Because a lot of gray area, a lot of new ground being trodden.

Host 2 (Possibly Colin or Michael) (78:03)

What was the case? Murphy versus New Jersey.

Host 1 (Possibly Michael or Colin) (78:06)

Murphy versus ncaa.

Host 2 (Possibly Colin or Michael) (78:08)

Okay, Murphy versus ncaa. Well, hopefully we get a, a second Murphy's Law out of this which states anything that can be bet on will be bet on. Mic drop Moment. Thank you everyone for listening to Block Space Live coming at you Monday, Wednesday, Friday at noon Eastern. Like and subscribe, head to our website BlockSpace Media for more Block Space content, newsletter, podcast and articles about Bitcoin, AI and emerging tech. Thank you all so much. See you all on Monday.