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On The Chain - Blockchain and Cryptocurrency News + Opinion
Brad Garlinghouse Grills Congress | Web3 Hearing Turns Into Political Circus
01:01:19
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- [00:01]
Chip
Everyone, welcome to on the Chain. Hope everyone's doing really well tonight. Where's Jeff? I don't know where Jeff is. Jeff is not here. Just want to let everybody know he's actually on special assignment. He may pop in, though. You never know. Brad Garlinghouse took the hot seat and Senate things got a little bit heated fast. And also Ripple CEO didn't hold back. Called for the lack of clarity in the US Digital asset policy. And then senators kind of clap back with some of their own fiery words of their own. So we'll unpack the full Senate hearing from Wall street to Web 3 was the title of it. The explosive lawsuit filed by John Deaton against Linqtu's original founder and CEO. Some other big updates from Ripple, including a new stablecoin now on Transact, which is live, and crypto Congress, lawsuits and memes. Let's go ahead and dive in. Let's go foreign. Let's go. Welcome to on the Chain. Welcome to on the Chain. Everybody drop where you're coming in from. Want to see where you guys are heading in from today. So funny. They change something all the time on this software. They go like, we change this to make it easier. And it's like we have all these. All these visuals now look exactly the same. So before they were labeled, now the labels cut off. So almost couldn't even get to the show open. I'm like, what happened to the damn show open? That was a little bit tricky. But hope everyone's doing really well. Welcome, everybody. We got a lot to unpack tonight. I wish Jeff was here, but he is not. He may pop in, although he said he probably couldn't make it tonight, which happens sometimes. And it's a loaded show and a lot to do. But I think what I think we first want to do is start Pennsylvania in the house. Morning, Yeti crew. Yeah, it's morning time. 10 something over there in Australia. 10, 10, 18, I believe it is. You got Ed is in here as usual. Got Rod Hale again. James L. Good to see everybody popping in. Rafi, good to see you. Oh, you know what? Thank you for reminding me on the yeti thing. Let me see. Just doesn't pop in. I don't know if I'm going to give it away because again, I don't have access to the main page, so it's a good chance we won't give it away. You can't give it away every time. So there you have it. I don't know where the pages to for the giveaway. Had the Same issue last time, and it happens. Oh, good. I'm glad to see it look better on your tv. Well, that's good. You can't beat that. It's always a good thing, never necessarily a bad thing. But there's a couple different things that happened today. So Garlinghouse, we're going to see a lot of him today because he was also on cnbc. So let's, I think we'll probably start off with that. Then we'll go into the Senate hearing. And the Senate hearing, I was fortunate enough to watch a good portion of it, although I can see it all. It was, it was a couple hours, two plus hours long. It was interesting in the sense that it was nothing that we didn't expect. The Democrats are still anti crypto and they want to basically choke innovation in the US and the Republicans, surprise, are for crypto and they want to push both of those forward. And we saw that the Democrats brought in their own ringer, this really grumpy, nutty duty guy. We have a clip by Kennedy, who had a chance to grill him, but he was just like ornery and he was just yelling and everything. And he was like the ringer for the Democrats, you know, and they asked him a question because Warren Pocahontas got on there. She's like, well, please tell me. And he was like, trump's bad, Trump's evil, Trump's making money, Trump and crypto, he'll become wealthier than he ever has. You know, just, it was just, it devolved from there. And so they didn't ask any of the other witnesses. They asked the ringer witness who's from Harvard, you know, another, you know, whack job. And we'll, you'll see that a little bit coming up a little bit later. So you'll see some of that. Yeah, a total whack job. That was, that was the best. It was an absolute S show for sure. It was an ass show. So we'll get into it, but first I want to start by putting on Garlinghouse on cnbc talking about the BNY partnership. Let's listen in here first and then we'll want to hear your comments and I'll make a couple comments myself. Here we go.
- [04:20]
Brad Garlinghouse
Ripple announcing just moments ago that it's partnering with BNY for BNY to be its primary custodian for its state stablecoin. Joining us first on cnbc, Ripple CEO Brad Garlinghouse. It's a nice shot, Brad. It suits you well. You're looking very, very even presidential. Almost welcome thank you.
- [04:43]
Senator
It's good to be here. Good to be back on squawk box.
- [04:47]
Brad Garlinghouse
You need a custodian.
- [04:49]
Chip
How do you like that? How do you like that? He's saying, oh you even look presidential. Because if, you know, Garlinghouse was in a hearing. So I really don't. That's probably a real shot. Sometimes they put these green screens back there, but that actually may be a. Looks like it might be on the top of a building or something or out the window, but you can see the Capitol building in the background. He was in Washington and he was at the hearing today. So good shot that, that is absolutely legit.
- [05:14]
Brad Garlinghouse
So let's listen back for your stablecoin. Why bny?
- [05:20]
Senator
Well look, I think as the crypto industry has emerged from kind of the last administration where the industry was being attacked, working with the most trusted, the most, you know, well regulated and even the best capitalized partners is a way to continue to build trust in this system and stablecoins at their core, by their nature it's you know, a dollar backed with a dollar in deposits being why Mellon has, you know, for a very long time been amongst the most trusted partners out there for as a custody bank. So we're really pleased. I think it's indicative of the shift of tide where we've had headwinds for this industry are now becoming tailwinds. I think we're going to see a lot of growth.
- [06:00]
Brad Garlinghouse
I mean all the way back to that, that duel I think. Right, that bank of New York, I think.
- [06:05]
Chip
Yeah.
- [06:06]
Brad Garlinghouse
Alexander Hamilton. It goes back ways, doesn't it?
- [06:09]
Senator
That goes way back. I didn't put a number out there because I wasn't sure how many, how many years it's been. But the BNY Mellon, we feel very lucky to be partnered with them and we think again building trust for the whole industry and having RL USD, our stablecoin which just past half a billion dollars in market cap, we launched only about six months ago. So we're really pleased with that trend line and feel like this will continue to build that trust.
- [06:32]
Brad Garlinghouse
It's small compared to some of your competitors though at this point. How does that factor into how you approach the whole stablecoin industry?
- [06:43]
Senator
So the stablecoin industry is about $250 billion today. You know, many people think it'll be between 1 and 2 trillion in a handful of years. The growth behind it has been profound. We joined the market kind of late partly because we were using stablecoins in our payment flows for our institutional customers. As you probably Know Ripple at its core.
- [07:04]
Chip
So I like this right here because if you think about it, you know, because he's saying, well you're kind of late to the game there. Brad Garlinghouse. I can be so late. Well, Garlinghouse went on record and actually said that 20% of all of USDC was a circle was basically minted by them. So they were using in their payment flows obviously for a long time. And it was a natural progression for them to say like hey maybe we should just come out and roll out our own, you know, our own stable coin. Which makes an awful lot of sense but it's a good, it's a good answer there. Appreciate that from, from Brad. Let's go. Let's listen to more.
- [07:38]
Senator
Has been a payments company and solving a cross border payments problem. We use stablecoins, we use XRP where it makes sense and stablecoins. When we were using that we were a big part of activity for us. We were minting a lot and we thought we can participate in this market given our institutional background, given the fact we've leaned into compliance, been very regulated. We have over 60 global licenses to participate in these markets. So we feel like the growth ahead will serve us well as we continue to serve that institutional client.
- [08:11]
Brad Garlinghouse
This doesn't. You still need. You still want a banking license, right? Even though you have this deal with. With bny?
- [08:17]
Senator
Well, yes is the short answer. We don't. We have pursued and requested application to apply for an OCC license as well as a Fed master account. We think that the key here for crypto and the kind of decentralized finance as many people call it, Ripple has been building bridges between traditional finance and decentralized finance. The world isn't going to be taken over by crypto. Instead we think about how do we take the best of what crypto brings in facilitating faster, cheaper transactions and bring it to traditional finance. That's been at the heart of what Ripple has been focused on from the beginning. This is a step towards that and certainly getting an OCC license. For those that have said that the crypto world wants to be unregulated, whatever the opposite is true. You know, I'm here in Washington in part as you referenced. There's a Senate Banking Committee hearing today. We are advocating as an industry to be regulated and those that like Ripple who have stepped forward and said we want to get an OCC license in addition to the licenses we have with the New York Department of Financial Services, it only continues to augment that very robust, very compliance. First trusted partner so that we can continue to use these technologies to benefit consumers and businesses alike.
- [09:28]
Chip
That was pretty much the whole entire interview. But good to see Garlinghouse making a lot of, a lot of appearances. Not only on, not only was he on, you know, squawk box, but he was also in the Senate hearing. And Mike also says it was 2 minutes, 2 hours and 15 minutes before the first question. That's the Garlinghouse. It wasn't that long anyway. But again, a lot of the Democrats went right to their ringer, the, we'll call them the whack job. So he. Ornery dude, right? So he was. He got a lot of the questions and what I do have, I couldn't find the actual video. I was able to locate. Gosh, where is it? I will find it here. Let me see. And again, I don't know if it's going to play properly so we can give it a shot. I'm going to try to share the audio, but I don't know if it's going to share 100%. So let's see. Let me go ahead and share this here. Wrong one. I'm going to go ahead and share this. And again, remember I'm on a different browser so it may not necessarily work work. So I'm going to do share the screen and I don't know if I can share it with the audio or not. Don't actually think I can. Unfortunately. Yeah, I don't think it will share the audio. I don't think there's any way to do it here. I think Jeff was doing that last time. I can share it, but I don't think audio is going to. You're going to hear audio. Let tell me if you hear audio. I hear the audio. Do you guys hear any audio? I don't know if you guys do. Probably not. Okay, so this was the actual. This was the stream itself. Unfortunately it's not the actual. Yeah, no, no audio. Let me try one other thing. Let me see if this works. We'll try it. Unfortunately, Firefox is a crappy ass browser. Never been a fan of it, but it's the only browser that works right now. Because they did determine there was an issue with the updates on both the Chrome and whatever the. Whatever the hell Microsoft's browser is called. Flex. What's it called? It's called something odd. I don't actually know what it is. No, it wants you to sign in. This is just a nightmare. It's just. Can't do anything quick anymore. It's always A song, a dance, Always some problem man. Hang on a second, let me go ahead and sign into this because I really wanted to play it but who knows if you're going to be able to see it or not see. Yeah, everything's a. Everything's a problem. Let's see. Yeah, yeah, it's not going to work. Nevermind. Yeah, so forget about it. I gotta sign into 50 damn things. No, this we're not. This is not happening today. But anyway, there was, there was another. There was one question that was asked of Garlinghouse and it was a kind of a throwaway question. It wasn't a lot really to it, it was a very short question. It was Senator Hagerty that actually gave him the question. But unfortunately everybody. A million people posted Brad's opening statement which we will look into. But nobody had the heart or even the foresight to do it. I would have had I not known, but I couldn't find it anywhere. If somebody posted it that would have been a good thing. But I don't believe anybody posted it. But there are 4, 000 versions of the full Garling house. Yep. There's not one person that had the chance to post it. Nope. Apparently nobody cared about the question or maybe they fell asleep, I don't know. But anyway goes on. So what we'll do now is I want to take a little bit a look at. Yeah, the problem is you got all these browsers. How many times do I have to sign in? 4,000 times to try to sign in. It's just, it's an. It's annoying as hell these. I mean for a browser I don't need to sign in anywhere. It's insanely ridiculous. So what I'll do is I'll go. Let's just cut to Garlic House's opening statement and it was a really good one. I think this was really well prepared I thought because you only have five minutes and you don't want to go over the five minutes. I think he did it in about four minutes and 40 seconds, something like that. But again, you know, when you're trying to get it in, you're trying to pace yourself, you're in front of the cameras, you're in front of the banking. But you know, it's like there's a lot going on. You know, you're on television, you know every word's going to be scrutinized. So it's a little bit of pressure as you're sitting there and saying it. So I wanted to play this. Let's go ahead and Commodore 64 good, we can borrow that. No, you don't, you don't. I think you don't understand. It's the browser. Anytime you move to a brand new browser, you got to put all your credentials in 50 damn times. And I couldn't even play it on X because I had to sign into X and that's what I'm talking about. And then even if I sign in, doesn't necessarily even mean that I'm going to be able to do it. And when you're trying to do the show and sign in and do 50 things, it's not going to play well. So that's why abandoned that effort. So here is. I will look in the background here while we're watching this. But go ahead and let's listen to this. Want to hear your thoughts but here's Brad Garlinghouse, his opening statement at the Senate Banking Committee hearing today.
- [14:36]
Brad Garlinghouse
My name is Brad garlinghouse. I'm the CEO of Ripple. Ripple has approximately 900 employees across our 15 offices worldwide. We were founded more than a decade ago with a mission to enable the Internet of value. A world where money moves like information does. Today, we build software products that power cross border payments, stablecoins and digital custody. Ripple helps financial institutions reduce friction, excuse me, unlock efficiencies and serve their customers better. These are not abstract concepts. We work every day with banks that rely on our technology to deliver real results in the global economy. Ripple leverages the XRP ledger, a decentralized battle tested open source blockchain as well as its native digital asset XRP to facilitate payments. XRP is built to enable fast, low cost and highly scalable transactions. From the start, Ripple made the deliberate choice to work with policymakers and regulators, not around them. We have taken a compliance first approach operating with over 60 payment service, crypto and money transmitter licenses domestically and globally. With regard to the topic of this hearing, we believe smart legislation should be based on several core principles. Consumers need protection from fraud and scams. Markets need proper oversight. Bad actors need to be kept in check and innovation must thrive. A constructive and workable framework for digital assets and stablecoins that achieves these goals will expand access to financial markets, create jobs, strengthen the economy and put the US on the path to being a global blockchain and crypto leader. For the last decade, the legal and regulatory uncertainty surrounding crypto has prohibited meaningful progress in the US At Ripple, we certainly saw firsthand how the lack of clear rules of the road can be weaponized to target good actors in turn. The technology jobs and tax dollars that go with it are pushed offshore, reducing regulatory oversight and putting consumers at higher risk. This has severely harmed American businesses, investors and of most concerned consumers. Ripple was the tip of the spear for this regulation by enforcement campaign and was subject to an enforcement action. In 2020, we were the first leading US company to be sued by the SEC. We and many others understood that a loss here would be a death knell for the industry. Fortunately, after four years of a hard fought legal battle, we prevailed. The court ruled in our favor on everything that mattered, including finding that the token XRP is not in and of itself a security. Our victory cleared the path for other market participants to fight back. Despite these headwinds, Ripple still prioritizes education and engagement with policymakers and regulators globally. For companies to have the confidence to continue doing business in the United States, Congress should focus on passing principled and smart legislation with these critical goals in mind. First, set clear jurisdictional boundaries for our main financial regulators. Second, establish pathways for companies to build in the US without sacrificing investor or consumer protections and third, ensure that the US can be a global leader in crypto by taking full advantage of the benefits of and efficiencies brought by digital assets and blockchain technologies. The US Possesses the world's deepest capital markets, the most advanced technical talent, and a spirit of innovation that has powered our nation since its founding. There is no reason we should not be the undisputed leader in digital assets and blockchain. Over 55 million Americans participate in the crypto economy today, equating to over a $3.3 trillion market cap. A smart regulatory framework for crypto market structure is essential to realize that future and is overdue. Speaking on behalf of the crypto industry, I urge you to prioritize the passage of market structure legislation for digital assets through this committee and the full Senate to provide the rules and regulations needed to ensure that the US Becomes the crypto capital of the world once market structure legislation for digital assets becomes law in the United States. This will catalyze a new era of US Competitiveness and unlock efficiencies in financial transactions, dramatically helping consumers and businesses alike. Ripple hopes to see this become a reality and we look forward to working with you to help make this happen. I look forward to your questions.
- [19:22]
Chip
Does look forward to the questions and unfortunately he only got one they got one question and I after I signed in and it gave a password and then used an authorization app to sign into X on a different browser I do have the audio so I want to see. Guys, if you hear the audio, I'm going to attempt to share the screen. Let me know if you do in fact hear some audio. Let's see if I can do this correctly. Let's do this. And let me know if your audio. It's possible you may not still hear it, but let's try. There we go. Let me know. I'm playing it right now. And let me know if you do hear audio. So I don't know if you hear it. Let me know. I have to. There's a 15 second delay here and I will find out if in fact you do hear it. So what's going on? Jackie, how you doing? Jackie's here. He still don't hear any audio. Great. This is a complete browser and needs to be destroyed. Like, how is it? Let me take an unofficial poll. Does anybody use Firefox? Is there a reason Firefox is still a thing? Please let me know if you. If there's anybody out there. The only reason I'm using it's because the only one that will work with the streaming software until they fix the bug. But who in the hell uses Firefox? As I didn't even know it was still around. I just knew it was one of the ones that they said might work. Does anybody use it? Hell no. Nobody uses it. Nobody uses it. Nobody uses it. Everyone hates it. But they're saying no to sound. It's just garbage. Yeah, it's. And it's. And it's. Every time I share the screen, I got to go through three damn prompts. It's a really bad browser and yeah, pretty bad. So it's like you can share the screen, but you can't even share. You can't even share the audio. Which is really bizarre to me. Like, you can't share audio. There's nothing that allows you to share the audio. Which is really weird indeed. Man, I do not know what in the hell. I don't know. I don't know what's. But anyway, anyway, it was the question. It was just simple question. It was nothing. It was nothing in depth. It was nothing great. But I did want to play it. And if you guys find the link out there, let me know if you found somebody that actually posted it. 4, 000 people posted what we already watched, but not one person thought like, huh, I wonder if people would actually want to see Brad Garlinghouse answering one damn question. Because I think there was only one. Again, I didn't get to see it all, but I think there was only one question. And if there was more because I, I put in there and I just couldn't find. I couldn't find it. So if you guys, if anyone finds it, please send it to me and we'll take a look at it sometimes during the broadcast and I'll ask you guys to, to send it to me. Yeah, he did roast the FCC when he said we were sued by the SC and we prevailed. That was awesome when he talked about that. Yeah, it was 20 years ago and it's. And it actually operates like 20 years ago. Just garbage, absolute garbage. But I can't be too disappointed because otherwise I wouldn't be able to stream because I got a problem with two other browsers that I might possibly use and the native Safari, which runs on a Mac, doesn't even work with the streaming software, so go figure. So there's not a lot of options out there, so you have to take what you can get. Okay, so there are two questions basically, but it was the same question. Got it. Yeah. And it wasn't anything earth shattering. I actually thought what he said in the open and the fact that he was given four, five minutes was actually really well done. Like he covered a lot of ground in those five minutes and it was just under five minutes. And it was interesting during the hearing because a lot of the centers went over and Tim Scott, who was kind of like running point on it was kind of cool. He was like. And after he'd be like, well, you were like 30 seconds over. Are you like two minutes over? Like he wasn't being a, a stickler for time. If there was a good, some good things going on. He did it for both Republicans and Democrats. But you know, most of the time people did keep. When the time. They have timers they can see when they're over time. It's not like they don't know, but sometimes, you know, you need a little bit extra time to flesh it out. And that's kind of what happened there. So you did find it. Mike, Mike, Mike, you found it. Let's see. Can you, can you. Unfortunately, the way this works is I can't get it on this browser because. Yeah, that's great. It looks like you did send it to me. So it's. It looks like it's on Garling House's. Yeah, unfortunately you got to DM that to me. I DM to me on X. Send it to me. Send it to me as a dm because. Is this it here? Okay, I do see it. Yep. I was able to find my this, okay, this is the, this is, this is the one that I was looking to play. Thank you for that. Mike, Mike, Mike, I appreciate that. I'm gonna go ahead and I'll play this in one second here. Let me just do a little bit of a download. But what did you guys think of the hearing? What did you think about what Garlinghouse said? Do you think it was on point? Do you think he's landing some good points there? Talking about the sec, kind of growing the sec, but really talking about the fact that Ripple was one of the few really blockchain companies that was actually saying that we need to be regulated. They were the ones that were compliant. I mean, there's a lot of that going on. It wasn't as if he was saying, like, oh, we hate everything going on in Washington now. They've been begging for crypto legislation for like the last six, seven years. So it was nothing new. But I'm just curious what you, what you guys thought as far as, you know, how he, how he performed, because I thought he did a pretty damn good job. Not easy to get up there and, and, you know, in front of Congress, especially when they ask you a question. But thank you for the, thank you for that video. Let's play it now. Let me go ahead and queue it up here. But let's see. Let's go to. Here it is. So this is, this was the question that Hagerty asked them. And again, I don't remember the question was. But you'll see the response here.
- [25:14]
Brad Garlinghouse
Here's Garlinghouse depending upon an SEC and CFTC to work together assumes good faith, appointed officials in doing that. What we have seen previously is the SEC actually sowed confusion in the marketplace. They took contradictory positions under Chairman Gensler. They took actually contradictory positions in different court cases, which actually created more confusion. And so you had federal judges saying things like the SEC was being arbitrary and capricious in their application of the law. You had federal judges saying that they were not following a, quote, faithful allegiance to the law. And so my concern in depending upon a unelected appointee to make those decisions is that it assumes a good faith actor. And I think what we saw in this most recent SEC was just a war against the industry at large without a consistent application of that law.
- [26:10]
Chip
Yeah, very good. He brought up the. He brought up that. Weren't he brought up during the SEC case when they were not faithful to the law being capricious? He brought that whole thing up. And it's good to, it's good to voice that, because this is what basically he wants to convey and back up his statement. The fact that the SEC itself was out of line and the judge even said so. And he brought up the two points along those couple years that. That ran where they're being capricious. And also we're not faithful allegiance to the law. So it doesn't make any sense if you just, you. You get on there and you. You talk about the fact that this case was set against us and they were going after crypto. But this is what the judges said. The judges even called out the SEC for. For their lack of standards. So it wasn't as if it was just like this one thing. And that's what I really liked about. About Garlinghouse. He's very succinct. He was very prepared, and I thought he did an amazing job. That's very difficult to do. You see a lot of people go before Congress. The other one that I thought did very well was the. And I'll get his name. He was the former. I want to say was this former CFTC chair. He was amazing, though. He knew the law, he knew crypto. He was absolutely phenomenal. Timothy Massad was the. Was the. Was the ringer for the Democrats. He's a fellow, research fellow and director of Digital Assets Policy Project, the Musamar Ramnami center for Business and Government at the Kennedy School of Government at Harvard University. And was he a former CFTC chairman? Oh, no, I'm sorry. Massa was a different Messiah was the good guy. Painer was the ringer. Dude. Painter was the. He's from the Minnesota Law School, former associate counselor, president and chief White House ethics lawyer. Yeah, it was Richard Painter that was the one. Messiah was great. So he was answering stuff left and right. The other. The other couple people that were there, he had Jonathan Levin there, who was from Chain Analysis, the CEO. Yeah. Dan Robinson, he was a general partner of Paradigm. And then you also had the honorable Summer Merson here. So she's the CEO of Blockchain Association. So that was. That kind of. Was everybody that sort of rounded it out. And I wanted to. So I want to play this little bit of a file here that's coming. Let's see. This one is. Do I not have it? Wow. Maybe I don't have it. Well, that happens. Here we go. Here it is right here. But this was Senator Kennedy. He was talking to Richard Painter. This is the guy that the Democrats wanted to bring in and only asked him questions because. Yeah, they're kind of. They're like the set of questions. But don't you think that crypto is bad? Especially because President Trump's family owns so much crypto and they've got a blockchain mining operation. Don't you think so, you know, nod, nod, wink, wink. This is the kind of like questions they were asked. And then of course, Painter gets up there and this is him here. But you're going to see Senator Kennedy his, his exchange with Richard Painter. Am I saying that right? Yeah, Richard Painter. Boy, he painted him a. Painted him up and down. But here we go. And I just thought this was brilliant. After I watch. After we watch this, I'll tell you why I thought this was a brilliant exchange.
- [29:33]
Senator Kennedy
You're saying Senator Gbrand is a crook.
- [29:37]
Chip
No.
- [29:37]
Senator Kennedy
And I do not think all politicians are crooks. And why did you call her a crook? I did not call her a crook. Now, Senator, you need to focus on this bill. You're doing this again. You did it the last hearing. You in stable corn regulation $217,000.
- [29:58]
Chip
This is so funny how. This is so funny how Kennedy just keeps this guy gets so, so irritated so quickly. And if you don't know who Gillibrand is, Jilla Brand is, who co authored the. One of the very first pro crypto Senate bills with, with Senator. Senator almost said hummus. Senator Lummis the. And. And Jilla Brown was instrumental in that as being a Democrat. So he's basically saying, well, you were calling Gillibrand a crook. And this gets even more heated. This is like, this is probably the best thing that happened today aside from Brad Garlinghouse, but this was good crypto donations. You tweeted that.
- [30:34]
Senator Kennedy
Yes, I do. Then you said, the crypto industry is buying Congress and the White House.
- [30:40]
Chip
This won't end well.
- [30:43]
Senator Kennedy
Why do you think the crypto industry.
- [30:45]
Chip
Is buying Senator Gillibrand?
- [30:47]
Senator Kennedy
I said, look at the campaign contributions from this industry. You think they bought them? I said, look at the campaign contributions do you think they bought. You need to focus on this bill instead of trying to distort my Twitter. One of my colleagues, what a Marxist in Chicago said about what evidence do you have?
- [31:06]
Chip
No sense.
- [31:07]
Senator Kennedy
I said, there are massive amount of campaign contributions coming into this Congress from the crypto industry. Senator Gillibrand, I do not want you to have to apologize for passing legislation.
- [31:22]
Chip
For. This is so great. The bear is upset. He keeps poking the bear and he's got like a stick. He's got like a blowtorch. He's got like a fire shot. He's got a nail gun. He just keeps hitting him with this because he wants to know, you know, if, if, if he's going to apologize. So here we go.
- [31:39]
Senator Kennedy
Are distorting what I said just like you did in the last hearing. You're wasting everybody's time, Senator. You're a whack job, Senator. You are wastingly.
- [31:49]
Chip
I think we are next level. I think we middle school center senators and not only just call them a whack job, you call them a next level whack job. And that's like a couple, that's like a couple levels above a whack job. Whack jobs is a crazy person. But this guy's a next level wag job. He's a whole new kind of whack job. But this never got old. I mean I could watch this all day. I think I've watched it three or four times because he just now what's brilliant about this? Let me just talk a little about like what my, my thought was, okay, so you've got the plant, you've got the ringer for the Democrats, right? This guy Richard Painter. He's going to be doing his thing, bloviating. They're getting him to give the set of questions. You know, he already knows the questions, remember like Warren probably already prepped them, but he knows the questions are coming and all his job is just to agree with them. So now this is brilliant because he comes in there and he's like, you were calling my colleague a Democrat a crook. Do you want to apologize? He's basically discrediting this man by associating the fact what he was calling all politicians crooks. But more specifically Senator Gillibrand who had authored, co authored with Senator Lummis one of the first Senate authored pro crypto bills. And by saying you called my colleague the Democrat crook. Do you want to apologize to her? He asked us multiple times, you want to apologize? I thought it was brilliant because in a weird way he kind of discredits her and, or discredits him by calling him out. And then he doesn't apologize or say yeah, I didn't mean it that way. But he just keeps going. And then he calls him a next level job and then it goes into a sort of a, it gets real heated. I, I love this exchange though. I think this one was, was absolutely fabulous. Let's listen to that last part again. This is just too good not to hear.
- [33:35]
Senator Kennedy
Again I said there is massive.
- [33:38]
Chip
And how ordinary is this guy? I don't know if he's sitting like this, you know, he's like his shoulders are all hunched up. He's very uncomfortable. He's very nervous. He gets, you know, you're wasting her. Is this middle school? I'm like, who cares? You're the next level.
- [33:55]
Senator Kennedy
Campaign contributions coming into this Congress from the crypto industry. Senator Gillibrand, I do not want you to have to apologize for passing legislation. You are distorting what I said just like you did in the last hearing. You're wasting everybody's time. Senator. You're a whack job. Senator. You are amazingly.
- [34:19]
Chip
I think we are next level. I think we are middle school.
- [34:24]
Senator Kennedy
Senator.
- [34:24]
Chip
Senators. And witness. Thank you.
- [34:27]
Senator Kennedy
I think you still apologize. Senator. I think. Senator, you're wasting our time. This is not middle school.
- [34:32]
Chip
Thank you for your participation. Do you think. I wonder if I can find it. But there's another clip where he was talking to another senator and he was like, you know, you can't even say something in a hearing without being called a whack job. So, like, like this was later in the hearing. It really. It really affected him. So you could just see that, you know, he was kind of like, really miffed by that. And, you know, I love the. I love the whole sort of angle by. By, you know, Kennedy, because Kennedy the whole time is just trying to get him off his, you know, off his position. And he did it last time. I remember the last hearing was. But they brought him in again and he totally just frazzled this dude, man. He. He. He just took him for a. For a ride. He went a little bit. A little bit nuts. So I really like that. Let's see. I'm gonna try to find this other clip because I'm trying. There was a great clip that somebody posted. Where was it? My gosh, I wish I could find this. Oh, here it is. I think this is it. Yeah. Yeah, this is it. Some. For some reason, the. The audio, though, is, Is. Is sped up. I know Dark Horse had posted this, and I. And I thought to myself, like, why is. When he pulls these posts, why are they always sped up? I thought maybe I had it on 2x, but I didn't. So. So we'll have to hear it with the. With the audio sped up. And I'll just title this clip Whack Job. So let's go ahead and pull this one up here and see what's going on. Let's go ahead and pull it up. Here we go. And this. And the funny thing is this is so much easier when Jeff's here because while he's talking, I can do stuff while he, while I'm talking, He can do stuff and, and so on and so forth. It becomes a lot easier. But let's see, where's that. Here it is right here. So this clip right here is him complaining about it to Senator Warnock, who's another. He's another whack job from, from Georgia. He's a senator from Georgia. Democrat, quickly, yes or no. So do you believe that the President having an outsized role in so many digital asset offerings will lead to fair and innovative markets?
- [36:35]
Senator Kennedy
I think no. It will lead to a lack of confidence in our regulatory system. Just as like this Congress. Everyone's receiving campaign contributions from the crypto industry voting on this bill. And then if a witness comes here and disagrees with you, you call them a whack job. I mean, this is embarrassing. It's like this Congress. Everyone's receiving campaign contributions from the crypto industry voting on this bill. And then if a witness comes here and disagrees with you, you call them a whack job. I mean, this is embarrassing what's going on in this town.
- [36:56]
Chip
I, I agree that the President Trump's crypto corruption, you call him a whack job. This is hilarious, man. He got, he was apparently frazzled by that whole chain of events. He did not take lightly to that whatsoever. My God, he was a little bit, A little bit thrown off by that whole entire thing. But I was, that was the. Some of the biggest things that kind of came out of today. Not a lot, not a lot happened. But I think what, I think the best testimony came from Brad Garlinghouse talking about the crypto industry needs regulation. The fact that Ripple the company has been, you know, they have been transparent and open, trying to be as compliant as possible, but didn't know the rules of the road. So in order to know the rules of the road, you have to be able to come from a position of where you, you kind of know, you can't be like, regulation by enforcement. Like, oh, come on in, you didn't register. Okay, we'll bring in and we'll deal with you. So this right here is what Garlinghouse basically posted after the fact. He said, thank you, Senator Tim Scott. Of course, Tim Scott was basically running the, you know, the hearing today and the entire Senate Banking Committee for hosting its first hearing on comprehensive crypto market structure legislation today. And in a refreshing chance, changed from the rhetoric of the Gensler years. Dig, dig, dig, dig, dig. He had to get that in. He also got that in on his testimony. But I love it because you gotta, you have to let people know where we were and where we are now, where we've been with regulation, by enforcement, with Gensler, who we all could just, you know, easily forget if stuff. He wasn't a biggest pain in everyone's ass, but he's making the good contrast there. In a refreshing change from the rhetoric of the Gensler years, every senator affirmed that crypto technology is here to stay and it does deserve rules of the road. Now I will say that what those rules are, it sounds to me like the Democrats, if they're making the rules and they're going to be the rule makers, they want to basically put their thumb on crypto. I think the Republicans are a little bit more pro innovation. They kind of want to maybe know, put some rules in. Kennedy did speak on his opener before he asked the question and he did. He, his concern was will the, will the House and the Senate, will Congress get it wrong? He acknowledged the fact that it was a very moving technology and that a lot of Congress just didn't know and their staffs didn't know and he didn't. He was worried that they couldn't get educated quickly enough to be able to create the right regulation, which I think is heavily the reason why they're leaning on people from the crypto industry. And when you hear someone like a Brad Garlinghouse say, yeah, we wanted, we wanted crypto. And also too you had the other Gentleman, the former CFTC's chair today who was really good. I wish if you guys haven't seen that, I'd recommend you going back there. The guy was sharp, very, very, very quick. They threw like, they try to throw these gotcha questions at him. He was having none of it. He was like, no, that's not it. No, it's not this at all. It's this, this and this. But they tried, especially the Dems, try to throw them off a little bit. Brad Garlinghouse went on to say that the legislative process is really simple, but we're past the starting line. And that's in itself the major step that gives me hope that the US can make up for lost ground. And there it was right there. This is Timothy Massad right there. He was fantastic. He sat right next to Garlinghouse and he got a bunch of questions as well. But he was really, you know, one of the things they tried to get him on was like, well, one of the, one of the Democrat senators said, well, you said when you were with the cftc, well what did you do? Did you try to work with the sec. He said, of course, when I was there, that's exactly what we tried to do. But it was said during this hearing that what they don't want is the whole idea of classifying as a security is the wrong way to go. A digital asset. He said, everyone knows bitcoin's a commodity. And the fact is, is that digital assets, most of them are. And of course, the Democrat senators focused on what? Well, of course they focused on the whole idea of, like, we don't like meme coins. We're worried about rug pulls, and we're worried about illicit drug deals and. And. And money laundering. I'm like, look, man, it would take hundreds of years for crypto to catch up with what the past has already been with the fiat currency. But you could say that about anything. I thought everybody was pretty metered. You could have kind of gone in the attack saying, well, because this guy Massab basically said, well, almost everything's above board. He goes, it's all kyc aml. The fact is, is that, you know. Yeah, are there ways to bypass that? There are, but you can also. One of the things, the key pieces I thought they missed was most of the time when there's illicit stuff going on and they know who that those people are, they can trace the payments. You can't trace. You can't trace fiat currency. I mean, unless the bills, you know, remember those old movies, like, all right, give them the $2 million marked bills, and they give them, and they're like, they're all marked. They don't know they're marked, and they go to spend them and they get busted. Right. It's kind of like that. It's kind of. You can trace the different points, you know, and find out where that crypto's final destination is. There's ways to find that out, right? In fiat currency, there's no way to find that out. When you dump a pallet of a couple billion dollars over to Iran, you don't know where that money ends up. Who knows where that money ends up? There's no way to trace it. So I thought that that was a missed opportunity because they're always. Well, the illicit drugs, it's bad. Bad people use it, but what percentage of that? And he also made the point that Mossad basically said that, hey, there's a lot of stuff that goes on. Most of it is that happens on, you know, regulated exchanges. But above board, the fact that they are regulated in the fact that they are registered and that they use kyl. Okay. Know your customer AML antimoney laundering sort of rules. And he said yeah, there are people that use, you know, decentralized exchanges. Dex is out there but very few. And how many real people actually go ahead and use them. And even with that that's starting, they're starting to tighten up. And if you notice some of the exchanges, foreign exchanges which you didn't there was no, you know, KYC AML at all. But now you're starting to see that more and more of that's cropping up and a lot of things are more traceable. So there's a lot of that too. So let's go into here. Kennedy is awesome, says thank you for the sharing that that link earlier. Appreciate that. One of my favorite centers. He's fantastic. He's always, he's always entertaining. He always has ways to position it. Because drug dealers don't use cash. Oh no, never. They never do. They never do. Thanks for reposting the stream. Appreciate that. Always like that when you guys reposted if you're watching over there on X Chain said when the question was asked I'm not sure what that means. My drug dealer only accepts H. Oh forward thinking, forward thinking Chain answer question very well. Who's. Who's chain Chain answer the question very low. I'm not sure Mike who you're referring to there and do not know but I thought that was really good. Let's see what else do we get into here? So let's get in a little bit to what's going on with this. Elliot Terra posted this that attorney John Deaton filed securities fraud class action suit against Link 2 founder and ex CEO William William Sarris on behalf of thousands of retail investors. Now just preface this doesn't have anything to do with the bankruptcy. This is against the old CEO that was bounced out of the company and the one that was presented with his attorney saying hey this is securities fraud and this and that all kinds of stuff. And he was like play on. Everything's cool. The suit alleges that SARS orchestrated a multi year scheme using undisclosed markups as high as 60%, misleading exemptions and unlicensed sales tactics to shell shares. And private companies like Ripple uphold Kraken via special purpose vehicles on Linkto's platform. And per the filing Saris ignored the internal legal memos in 23 and 24 warning the offer is violated multiple SEC and FINRA rules including act as an unregistered broker dealer and running unregistered investment companies. Deaton says the action targets Sarah's personally not subject to bankruptcy protections. He also vowed that any recovery from liability insurance or settlement will go to try to help make innocent investors whole. So once again, John Deaton playing a very important part, another role pro bono to basically help investors. Once again that looks like they got the short stick. A lot of looks like. I mean again, a lot of this is alleged. This suit alleges, I want to be very clear, it's alleged until it's proven in the court. Everyone's innocent until proven guilty. But there's a lot of stuff that's very questionable, especially the markups and especially what's required by the sec, what you're allowed to mark stuff up as. But in this case here, there's just a lot of interesting business going on. So I don't really know what that all, you know, entails and looks like, but it was a lot. And another news transaction is here. Let's put this up here. Transact, another stable coin joins the family. Ripple USD is now live on Transact. So you can see that US Ripple USD is kind of going a lot of different places and now it's on Transact. Read more about our USD on Transact and our latest feature. And so there it is right there. So you get to pay right now with Euros you can pay with everything. You can pay your Visa. So it's multiple sort of ways and then you can get your RL USD. So there you go guys. Another, you know, another exchange is basically carrying it. There you have it. Coin Telegraph wrote up, wrote up, did a write up on it also too. Market cap hits 500 million. It feels like just not too long ago, maybe a couple weeks ago was only at 300 million. So it does seem to be gaining a lot of traction here for sure. Let me just go here and click off of that. So now it's available on 64 markets on Transact. The supported jurisdictions include key markets including the US UK European Union Integration has been in the works for about three months to ensure regulatory alignment across markets. Look at that beautiful graphic. Look at that. So there you have it. Decentralized exchanges on the left right here. The funny thing is you don't even have the. I did not see in this graphic. I do. Interesting. I don't see the XRPL that's also has one. It has the first decentralized exchange. Here's your centralized exchanges, here's your wallets and across the top we've got gaming and NFT. So you have a C5 over here and our real world assets over there, nice little graphic there. In addition to supporting 450 native crypto services like Metamask, Trust Wallet, Ledger, Coinbase Wallet, Uniswap and Flex Phantom Transact will also enable a wide range of payment methods for all. USD Gangler said that it can be purchased using the full range of fiat payment methods we support. I personally love Apple Pay it if you're on, if you're on Android I would probably imagine you like Google Pay because it's just one button. You put your, you know, whatever your credentials or your face scan and it's done. It already knows your address, knows all that stuff. I love purchasing. I'm like if they don't have Apple Pay, no one wants to web with their credit card and like oh God dude. This arduous process of putting it in there where if it's already registered with the Apple payer, Google Pay just pick whatever payment you want, whether it's a credit card or whatever it's attached to. You can pay that way of course. Visa, MasterCard great too. Sometimes you're on desktop, you save it, you can just, you can populate it as well. But SEPA in the U. EU which is pretty much standard and then wire transfers in the US There's a lot of it. Fiat off ramp support is, is pending. So that's remains to be seen for the future we'll basically see how that, how that pans out. So interesting stuff happening of course. Yeah, it won't be in a yeti drawing today because I can't get to the list. I have to tell Jeff next time give me the list so I can think. I, I need to know which ones I can give away. So that's part of the issue. YETI BOGO sale today Buy one get one free no, it's not, we're not having a YETI sale today. They were not. It's not happening man. Not happening. What else do we have here? Okay, somebody asked a question here. Okay, so, so some more on the John Deaton one. This guy Rob Lowe said, John, John Deaton's taking the right track and looking to engage with the creditors committee. We'll have real power on the bankruptcy process. John says, yeah, Rob is correct. We'll have a real say in what happens in the bankruptcy. Freedom asked the question, John, do I have to file anything with you or your office to join the lawsuit? John Deaton chimed in and basically said no you don't. The answer to the question is no. And anything I do includes all link to customers regardless of where you Live, you live outside of the US Then you're also included in anything related to link to private lawsuits, bankruptcy proceedings, et cetera. That's cool. Now, if you guys remember, and I think where that question is kind of coming from, if you remember, in the last little boondoggle that happened with the sec, you actually had to sign something, right? So I know there were like close to 3,000 affidavits that were given that was presented in court. And then on the flip side of that, there was 70, a little over 70,000 people that basically signed something. In this case, John is representing. It's a little bit different of a scenario, not taking it to a court. He's the one filing the, the petition here. So the lawsuit against the original CEO and he's the one that's going to be running points on it and he's basically representing any all of link to Holder. So it's somewhat universal. And let's just transition a little bit over to some geopolitical stuff before we get out of here. Nine minutes. But I wanted to talk about this, laugh at this because Trump just put a 50 tariff on the digital sensor state of Lula. Lula's the, the president there of Lula's Brazil, specifically citing its censorship orders and insane fines against US social media companies for allowing free speech. This is free speech diplomacy and defense of digital trade in one. Bravo. So that's a pretty hefty tariff for Brazil. 50%. It's gonna, it's probably gonna be crushing for any exports coming into the US for sure. So that's a pretty big one. Yeah, that's a, that's a rough one right there. And we have this one. Somebody posted this. I don't know if anybody lives out close to Los Angeles. I know we have people from California, but maybe you can verify this because I, I've been seeing this and I don't know the reason why, but people are asserting that. Yeah, I'm going to turn this, I'm going to turn the, the guys on the 110 in Los Angeles. Here he is, he's on the 110. He says this is 8:00am Monday morning. Well, maybe it's after the holiday. So maybe a lot of people took off like a long weekend, right? They took Friday off, they took Monday up. I don't know. But he's saying how many legals were really in Los Angeles, California. This is the 101 freeway, one of the busiest freeways in LA. And it's just outside of Los Angeles heading into LA at 8am on a work day. Then Stephen Miller chimed in and said, what if the entire time the key to fixing our city was enforcing our immigration laws? I don't know. I don't know why. I mean, if any. If you got. I've been to LA too many times. I used to. When I had my company, I used to have an office out there in Burbank. And every time I went from LAX to the office, it was insanely, insanely busy. The matter if it was midnight. The matter if it was 8:00am, the matter was 5:00am it was nonstop with busy all the time. So I don't know if that's true. I don't know really where that's coming from. I know that. You know, who knows? I mean, it was a holiday week. Who really knows that that Chad says, hey, Brazil, negotiations start. Mao start now. There you go. And there's another question to Brad that we missed. Here's the YouTube link, but I have to go in two minutes in. Thank you for that. Let's see. Who is that? That was the other. Let me see if I can. Let me see if I can get to this real quick. I know you gotta. I know you gotta bounce. I don't know. But thank you, Mike, for. For bringing that up, because I would like to see the other question if it's indeed possible. Let me. Let me do this and let me. Come on. It's not letting me do it, but it's not. There we go. Okay. That's on YouTube. So, yeah, this one I had. Unfortunately, I can't show the screen. I have to actually be able to download it. But I did have that one, unfortunately, because it can't share the screen. But thanks for pulling anyway. I was unable to do that. Two hours and 11 minutes in. Yeah, I had it queued up, but we couldn't share the screen. And because we couldn't share the screen, you guys couldn't hear it. So, I mean, we could share the screens. You guys can hear the sound. So again, has a lot to do with this browser. Let's see, what else do we have here? Let me see what else we have from the video file here. I think that's. Man, I don't know. Let me see. No, T. Played that. Somebody put up this Garling House parody video. Hope we don't get slapped for this. I'm going to put it in the smaller window here, but here it is right here.
- [55:10]
Brad Garlinghouse
Good morning, Chair Scott, ranking member Warren, and members of the committee, thank you for the opportunity to appear before you today. My name is Brad Garlinghouse and I'm.
- [55:19]
Chip
The CEO of Ripple.
- [55:20]
Brad Garlinghouse
Ripple has approximately 900 employees across our 15 offices worldwide. We were founded more than a decade ago with a mission to enable the Internet of value, a world where money moves like information does. Today, we build software products that power cross border payments, stablecoins and digital custody. Ripple helps financial institutions reduce friction, unlock efficiencies and serve the customers better. These are not abstract concepts. We work every day with banks that rely on our technology to deliver real results in the global economy.
- [55:59]
Chip
Anyway, I thought that was kind of, kind of fun. XR posted that. Those guys make phenomenal, awesome videos all the time. And then here's some other stuff too. We heard so much in the run up about the tariffs. The tariffs are going to cause massive inflation. The tariffs are going to cost high prices. Well, it turns out none of that was true. Surprise.
- [56:17]
Trump
I'm not just would disagree with the premise of your question in the following sense that there are a lot of economists, Harvard trained economist Steve Myron, the CEA chair who put out the report today, who understood all along that the tariff story that it's going to cause inflation is not true. And to be fair, I've been on Fox and other national networks all the way since January 20th explaining why the tariffs are not going to cause inflation. And now it's in the data that they're not causing inflation. In fact, import prices are going down. So inflation right now is lower than it's been by every measure in more than four years. And tariff revenue is through the roof. And so things are working that way. And then let's talk about the economics of why. First they're working that way because the foreign people who've been dumping property products into our countries forever, into our country forever and ever, have been doing that regardless of other conditions because they're creating jobs, say in China by selling stuff to the US and so, and President Trump's intuition is we could put a tariff on them and they'll just eat the cost. And that's what we're seeing. But the second thing that we're seeing is so why is it the prices are even going down for imported goods? It's because President Trump has highlighted how important it is for all of us to believe in an America first and foremost agenda. And America first means that if you buy American, if you buy American products, that you're helping yourself by getting a better product, but you're also helping American communities for the people who make those products. And so I think that the Demand for imported goods has gone down because the President has convinced people of the benefits of buying American.
- [57:45]
Chip
There you have it, another win for Trump. He saw, he's been talking about this for years. Everybody's been bitching for years. It's going to bring, they think, by the end of the year, 800 a billion dollars, close to a trillion dollars. And next year should do a trillion dollars because a lot of the big. A lot of the big producers that will bring the highest tariffs and aren't even in place yet. I don't know how much is coming in from Brazil, but a 50 tariff, I don't know, it seems pretty good. I don't know what's going to happen for that. I don't know what the fallout's going to be, but I don't know how much, you know, someone. I'll have to look up what those actual goods are. But anyway, it looks like we're actually going to get out of here in time. And Jeff and I will be back on Saturday morning. Guys, we will be doing a Yeti giveaway. It. We would definitely would do that. Mike. Mike. Bike says I can't take anymore. All this winning's driving me crazy. Whoever Trump said you might get tired of winning. I don't know about you guys, I'm not tired yet, but I'm enjoying the hell out of it. I will tell you that. It is actually good to see. I almost think that, you know, Trump codified 20. I was going to read them off, but again, you guys can read them on your own. But basically 20 campaign promises were codified in the latest big, beautiful bill. And I'm like, we're six months in and that got through a record speed. And now they're making this massive push for crypto legislation. I'm like, you know, we all know how it takes Congress forever. So they were talking about two weeks trying to get a vote on the floor. I'm like, that would be amazing. I mean, it's probably gonna be three weeks now because this. They have the week off because of the holiday. They're back in session next week, I believe, so at least the houses. And that's the way it's gonna go. So there we go. Running solo. Great. I made a couple trips. I was sometimes hard when you're trying to look for stuff, you can't find it. But thank you for that, Chad. I really appreciate that. Thanks for the freewheeling it tonight. I did the best, so usually I'm way more prepared. Was a little bit. A little bit off. Kilter tonight. I don't necessarily like when that happens, but thank you and good night. Yeah. Thank you. Appreciate it, Cash. Appreciate you guys coming in here. The faithful that comes in all the time and always contributes to the show, whether it's finding links to stories or clarifying something that Jeff and I might have said incorrectly, which happens from time to time. I'm not gonna lie. That definitely Rug pull sub day. There you go. There you go. Rug pull subday. So we. It was. It was exciting breaking it down. It's great to see. I always think that we're in a good shape for crypto, and I think for once we are positioning ourselves to really have even more winning when. When all season does take off. But whoever thought bitcoin would hit 50 grand, let alone 100, let over 110k? I think big things are in store for a lot of altcoins, and I think a lot of people are going to be shocking all. And, you know, the funny thing is most people get in when it starts hitting four and five dollars, be like, oh, this sounds so cheap compared to bitcoin. Oh, my gosh, I can buy five for 25. I mean, that's amazing, right? They'll think it's amazing. But we knew. We knew before that. So I give us the reach right around here. Pat yourself on the back because you guys are early and early. The early winners can always, always feel good about it. But sometimes you don't know how long that early lasts. Sometimes it lasts way too long. But I will see you guys on the next one. Chip O. See you guys soon. Are you down with otc?
- [61:07]
Senator Kennedy
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- [61:10]
Chip
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