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- [00:00]
A
Good morning everybody. Welcome to Crypto Town hall every other day here on X 10:15am Eastern Standard Time. Dave is hosting some panels at a conference at the New York Stock Exchange today. I think he's actually going to be traveling, traveling for the next couple weeks. So you are all stuck with me. And it appears to be three guests and the ghosts of Mario, of course. I don't think that it's worthy of our time anymore to spend endless hours talking about oil or the Straits of Hormuz or geopolitics or things that much more equipped people are probably more qualified to unpack than us. We can give the brief updates on it. Obviously the United States is double stamping the triple stamp on the blockades and blockade into blockades and good times had by all. But, but otherwise I think the only real topic here is World Liberty Financial drama because this is Crypto Town hall and I don't think there's anything more crypto than what is happening there because I think it's indicative of a lot of the issues that people have with our industry that we have amongst ourselves the own goals that we continue to kick every time it seems like we're making some progress with governments and regulators. And so I think we should start and maybe even end there with a conversation about what's happening with World Liberty Financial. Luke, I just got your message. You're invited up or you can request. I know you wanted to talk about it and you're in the audience if you're listening, Luke. But otherwise, here's the very quick and dirty summary. World Liberty Financial was launched to accredited investors. Actually it was done, quote unquote, the right way for those who don't remember it. And effectively the Trumps and the Witkoffs and everybody were on the website. They were promising that this was to save the debanked and a new world of finance because they had been debanked by the big banks and well, now 80% of investor tokens are still locked up and there hasn't been a vote on how those come out. Justin sun effectively saying, hey, I got debanked. They had a backdoor in the back of the contract that allowed them to freeze all of his assets. Sounds a lot like the banks. And more importantly that World Liberty Financial has moved a ton of tokens over to Dolomite, which is a platform owned and started by a advisor to World Liberty Financial that is a lending borrowing platform and they've basically used all the World WLFI World Liberty Financial token which they created themselves and have deposited it there at a extremely basically draining the liquidity pools entirely to the point of 93% utilization and have extracted 150ish, depending on how you look, million in stablecoins and nobody knows if those will get paid back. What does that mean? Means anyone else who has money there can't get it out, will never be able to get it out. And who knows? I read something today which I can't completely vet but if they were to try to liquidate the entire world Liberty financial position there, I think the deepest liquidity pool has like $2.8 million in ETH or something. So it would get basically $2.8 million for 300 million. So then of course now nobody's on the website anymore. So that's the situation. I'm sure because I said Trump's name in a negative light, I'll be getting the TDS comments. But that's actually what's happening and I think you have a pattern with Trump, Melania, NFTs and all of this that clearly, you know, maybe the intention wasn't to pump your bags endlessly. Jamie, go ahead.
- [03:40]
B
Yeah, so we had a Carlo on a space yesterday. We kind of went over this. Exactly. And I think it's kind of, it's interesting. Like I think the theme of the weekend was the rug pulling and the credibility of, of people with these kind of things. So you know, the, the whole point, I think the fairness of memes in that they're not illegal. You can, you could, you, you know, launch them. You can, you know, as a founder, you can, you know, take your portions fairly or unfairly. That, that's certainly a choice you can make affect your, you know, ability to do things later on. This wasn't one of those like the Trump token. Like I, I, it's funny, I was thinking about it, I, I woke up from a nap. I remember the Trump coin launched. I remember seeing a Mario NFL post saying that maybe Trump's account had been hacked. So I went back to sleep w found out that it was real. I bought the Trump coin and then I sold it and, and then made a little bit of money. That's it. People that held it keeping on, they lost a lot of their money because it, it went down obviously. Right. This is a different thing. Like this is, you know, you know, Carl and I were kind of like, is this more kind of like the FTX kind of idea? Well, kinda, because I mean if it's your token that you launch and then you use that to back it for other, for collateral, for Other things that. Where it gets kind of dicey. Right.
- [05:10]
A
And that's what FBX did.
- [05:13]
B
Yeah. And then now your family's involved in it. And now. But the biggest problem, you know that I think. I think the difference between memes and this was the part you just brought up earlier.
- [05:24]
C
You.
- [05:24]
B
You locked people out, you didn't allow them to.
- [05:27]
A
Accredited investors. There's nothing meme about this. The whole pitch was that they were doing it, quote, unquote, you know, the right way. These people have rights in theory, as token holders. They invested properly, SEC regulated. Very different than a MEM coin.
- [05:42]
B
Yeah, 100%. But just the idea of not allowing people to be able to liquidate themselves before a period of time and then in the meantime, you're doing it behind before them. That. That to me is the most. The worst part about this. You know, there's no point.
- [05:58]
D
Yeah.
- [05:58]
A
And we did dig. Dig into it a bit more deeper, I guess on the show last week. But yeah, I mean, we didn't have the Justin sun part back then, which I guess we could take it too further. Luke, I know you wanted to jump up. Feel free to jump in, man.
- [06:16]
C
Yeah. Hey, Scott, thanks for having me, buddy.
- [06:17]
A
Hey, buddy.
- [06:18]
C
It's been a little while. Good to hear your voice. Yeah. Look, I was following this from the start and I remember going onto the WLF website, thinking, what's going on here? And read their gold paper. Not the white paper, but the gold paper, which was probably all of four pages long, and said nothing except for we're changing the face of DeFi. Looked into a little bit more and saw that this was really a governance token, but they're only selling 20% of their supply, holding on to 70, 80 or so. So anyone who bought it was governing nothing. Obviously, even if they sold all 20% to one holder, they would only have 20% of the votes. They'd have no power in actually doing anything whatsoever. And I thought, this is interesting. Obviously, with the Trump name behind it, a lot of people gave it some credence and credit, for what it's worth. So I had a bit of a look into the founders behind it, Zach Falkman and Chase Harrow. And I just checked again then to make sure that it was still there. And it is. You can go and find Zach Falkman's Facebook page, which is public, and post back in 2019 where he's literally shilling drop shipping. Like these guys used to sell Chinese hair extensions via Amazon and Alipay Alibaba drop shipping. And then they were Doing masterclasses in LA on how to do this. And the track record is sketchy at best. These boys have got a bit of a history of, I mean, just frankly grifting. Let's just call it what it is. Now, this is a bit of a. A rumor, but I heard that they met Trump on a golf course, got in his ear. They're obviously very persuasive, charismatic guys. Got in his ear and managed to convince them to set up this WFI and get the Trump name behind it, where the trumps were getting 75% of proceeds and Zach and Chase were getting 25%. And then using that name and a very poorly written light paper, which I believe the whole sort of. The product behind it is actually a fork of one of their original aave.
- [08:22]
A
I think I thought that was like an AAVE fork or something, but I could be wrong.
- [08:25]
C
DOE Finance. So back in.
- [08:28]
A
That's right. Which was itself a scam, right?
- [08:30]
C
That's right. I was exploring through a flash, right. So they went, they went quiet, the TVL dropped down to a couple of grand. Some. Some investor tried to sue them and. And then I think it was like six weeks later, they actually announced World Liberty Finance. Same code, new name with. With Trump behind it, which it just, I mean, the signals that it sends. And then obviously, you know, talking about the meme coin just before, just before the inauguration, launching that and then Melania afterwards, like it's just this cluster of opportunism, which, I mean, sure, grab the money while you can, but I mean, these guys are really motivated in sort of poor ways. The thing that gets me, and I can say this because I heard from the horse's mouth personally, because I have some connections to obviously some top market cap projects. And I was getting approached by representatives from WLF saying, can you put us in touch? Because we want to do a token swap. The whole idea being, you give us $10 million of your token, we'll give you $10 million of WLF and do a swap less a fee, like a broker fee, 10, 20% or whatever it was. That's what they were essentially doing, was taking their totally worthless shitcoin and swapping it for stuff that had actual liquidity, real followers, potentially real utility and real value, and actually building a treasury. It was a pretty smart move, if you look at it, to turn what they had, which was pretty terrible, and actually acquire all these other tokens which did have value. But they ended up getting called out from that. I think Movement Labs got. Got embroiled in it, the room has sort of got out and people realized what was going on so they put a stop to it.
- [10:14]
A
Yeah, I have a question. Yeah, sorry, you can finish if you had more. Just.
- [10:19]
C
No, no, no.
- [10:21]
A
And this is not specifically just to you. I remember actually in the early days of World Liberty Financial, they were building a significant crypto treasury, right? They kind of were riding the treasury narrative. There were all these tweets over and over again. We just bought X amount of eth, X amount of bitcoin. Right. I looked on Arkham and so I obviously I'm not competent enough to know if that's every single wallet, but it effectively shows that now like 99% of their holdings are the remainder of World Liberty Financial. They don't own any eth. They had like rounding error positions in Solana and a whole bunch of other things like sub $100,000. So I guess the question is at what point did. I'm sure we can look at it through the wallets but clearly they at some point dumped or maybe utilized on Dolomite, all of those positions that they were accumulating and very publicly saying, hey, we believe in this stuff, we're buying. Does anybody have any more information on that by any chance? So that's what confused me. I thought they had this big treasury and they don't.
- [11:25]
C
Well, they raised quite a bit of money from what I remember. I think it was something to the tune of 100 million. And they were around a two and a half to $3 billion valuation at one point. And you may recall I actually ran a KOL campaign for them which ended up being an absolute disaster. And everyone had to get refunds.
- [11:41]
A
They didn't pay anyone. I heard that they like that they were offering like people, you know, like it was, you know, a hundred thousand dollars or something worth of tokens vesting every year. And then they ghosted everybody who promoted them. But I mean, listen, I DJed. I DJed once for Donald Trump at a golf course. Never got paid. So I'm not surprised.
- [12:01]
C
No, it wasn't quite like that. Like it was a legitimate like very normal OTC campaign for KOLs which often, you know, they happen frequently where they were all these kols were offered a 50% discount where I think it was four month vesting terms but that was when they were at about A$10. The problem was that the price just started going backwards and backwards. And so the strike price have to kept getting renegotiated and ended up, you know, the original strike price was what, 50 cents versus a dollar $1 10. Wherever it was, it kept going down so many times that everyone ended up just getting refunded. So no one was out of pocket. No one moving labs at least did the right thing and gave everyone their money back. And it was just a failed effort, failed campaign. But that was at the same time they were trying to get an etf, which they were accused of paying for. And obviously everyone has to pay for that. But yeah, they're embroiled in their own little situation there. And I guess they got sucked into the whole WLF orbit as well. And that deal was publicized also, which wasn't good for them.
- [13:03]
A
The anti crypto army is going to come back so hard in November. It's going to be comical. That's the part I look at this and I'm like, everybody's being distracted by all of these articles about Brian Armstrong versus Jamie Dimon and the banking industry versus crypto and stablecoin yield. And at the end of the day, is there literally any way a Clarity act or any legislation could pass that does not have the ethics clause that they haven't even debated yet? I mean, this is like all of the ammo you could possibly ever need to make sure that crypto is Persona non grata for the remaining next couple years? It's crazy to me, it's like I said at the beginning, just so many own goals.
- [13:46]
C
Correct. And exactly what the industry did not need. You know, I think anyone listening here and people that have been in it for as long as you and I have are firm believers in the underlying technology of blockchain is a game changer. There's no ch, there's no doubt about it. And while, you know, you can argue that most utility tokens have zero utility and it's all just a speculative casino, there is some real paradigm shifting technology in the space. And the problem is we just get tarnished with this brush because of actors like this, these bad actors in the space that are in it for the cash, doing nothing but trying to line their own pockets and, and drag us down reputationally with it all.
- [14:25]
B
Hey Scott, I just sent you through your dm, just a breakdown. That question you asked about the holdings in the treasury, just in case you want to take a look at it. And it looks like there is some there, but it definitely looks definitely different than advertised, but there's definitely some things there.
- [14:43]
E
Yeah.
- [14:43]
A
Gauravia. Thank you. Jamie Gauravi. Had your hand up.
- [14:47]
F
I, I, obviously this is, this is a very clean plot and everybody has their point frame Points framed. And I simply, for the sake of entertainment of this conversation, I want to point towards a perspective that if, if not useful, might be entertaining. I saw this, this post, um, from CoinDesk last month that gives a report on the holdings of FTX and the investments of FTX that are now valued probably, you know, 90 times of the initial investments, obviously of those investments, and is able to cover, if not all, then at least a large portion of all the liabilities of ftx. And so if I repeat, this is just for entertainment sake and this is purely speculative, but being a market maker, it's my job and I've been a loudspeaker about dat's and how these things are, are framed and how smart player will play it. Regardless, to mention I spent some time with Trump, the Wilfy Trump. So the thought is if all of this liquidation and all of this encashment is a smart move to create as much cash as you can when everything's dead and nobody believes in crypto and just make smart investments and hold things for a bit of a time and then crypto comes back in whatever, 2028, 2029 and you beat everybody like FTX, obviously, passively. Does anyone have thoughts around that? Because these are not scammers. I mean, yes, sketchy profiles and whatnot, but these are pretty credible people and, and the least they would do is scam people off a few hundred million dollars. And yes, Trump meme coin was an absolute money grab. But hey, I mean, why not if you.
- [16:54]
A
Right, but they made the money on the fees, not on the token. Right. I think that's the interesting part. I kind of, you know, alluded to this earlier, but I think people bought all of this stuff because they thought that, you know, the most powerful man in the world would pump their bags because he would have a shared incentive to see the value go up. But actually they just wanted the fees. Right. So everything going down and selling it actually was maximum extraction, if that's what happened. And they made billions without ever having to have a single one of the assets that they owned going up, which I think is just a very interesting.
- [17:28]
F
I mean, yeah. And then, I mean just think about it for a second with a, with a clean mind. I mean they can, they can use all this money. Everything is down to shade. And obviously the father, the President has all his plans, you know, now bombing the ships that would pay tolls to straight or moves. And you can, you can simply see the intent. It's to bring the world economy down in one way or the other or at least the the markets down. And so somebody in their position in the same house has their ten fingers and their head dipped in the crypto world. Why wouldn't you want to make all the cash now when you know that there's a fall imminent or even a bigger fall imminent in the coming days and then keep that cash ready to swipe the floor off. Just a theory. Obviously just a theory.
- [18:20]
A
Amita.
- [18:24]
D
Hey, Scott. Hey everybody. Yeah, so put it in a quick grok search on how much World Liberty Financial raised. And it I don't know if this is accurate, but it says 550 million to 590 million as of March 2025. I mean, this is just a staggering amount of money for a defi protocol with no proven ip. So I mean, it's really wild to see. I agree with your sentiment, Scott. And it feels like there was this idea as Trump was getting into office and all the campaigning around crypto, that crypto was this economic opportunity, but then everything surrounding it made it just cheapened the whole ecosystem as a get rich quick scheme that was easy money for everybody. And the meme coin launches and World Liberty Financial, what it actually did is it stopped the easy money train in the entire market and it's been that way for the entire administration. Now, I think that the ecosystem, the market needed to mature regardless, but it clearly put a stop to the seriousness of capital flowing in and has only led to mass value extraction. Now, I think one of the things that I've been seeing a lot is that the ties of World Liberty Financial to the Trump family is going to ultimately lead to a bailout, that they're not going to let this thing blow up. They're not going to let it go down in burning flames. There's too much risk here. But it's actually the removal of the Trump family, the removal of the association. There's no about page, everyone. This is really concerning. It's really concerning because you can remove an about page all day. We all know how this got here. We all know how it was structured. It's pretty Damn clear that 75% of the net proceeds from token sales went to a Trump family affiliated entity. This is bad, guys. And look, I think the risk here is that it's already associated with this. But if they step in and bail this out, because who knows where 550 million, when that is going to create an even more entrenched association. So I think that this thing is really just cracking down the middle. I don't know how it all Shakes out, but I think everyone has a right to be. To be spooked.
- [21:27]
E
David, I like the idea of a bailout, but my only question is, with whose money? The Trump family. And Trump Sr. Has a very successful record of going bankrupt. He'd done it six times. He's done it with casinos, he's done it with airlines and in other businesses. He's been found to be a fraud with Trump College or Trump University, I think he called it. So where is this money going to come from? I mean, there is no safety net under World Liberty Financial, and I'm sure that the holders of World Liberty Financial tokens may very well end up marching on Mar a Lago and burning the fucking place to the ground.
- [22:21]
A
Here's the thing, David, I guess the question. Sorry, I didn't mean to interrupt, but it opens more questions, which is if they took the 150 million, some say 80, 90, where is that money? Because they could just pay back the loan and then there'd be no question here. Right?
- [22:36]
E
Yeah.
- [22:38]
A
They're saying it was the mechanics of creating high yields for their holders. Which to me, like saying that out loud is.
- [22:44]
E
Yeah, I mean, I, I haven't, I haven't reviewed the loan agreement itself, and I don't know if anybody has a copy of it.
- [22:51]
A
Well, I'm just saying, yeah, in theory they have to pay it back, but I don't know. You know, people default on loans and like you said, you go bankrupt. So, like, the question is if they're solvent, they should. Like right now, if, if I was them and I had taken the money out for some reason, for business purposes, something, I would just pay off the loan and get the pool back to a level where people would shut up. Right, yeah.
- [23:12]
E
No, I mean, I hear what you're saying. I just, I haven't, I don't know what's in the loan covenants. You know, to the extent that you have a privileged person involved in this, you know, the covenants might be very lax. So, yeah, it's an aspiration that there be a bailout, but the track record's
- [23:32]
C
not encouraging, David, and to your point, and sorry, Scott, I don't even know
- [23:36]
A
how to stand up.
- [23:37]
C
I'm not really experienced at these experts.
- [23:39]
A
No, you can always jump, David.
- [23:42]
C
You kind of nailed it in terms of the history and the record of Trump, and he's an interesting polarizing figure. But we're in a post truth world right now where people are getting away with everything you could possibly imagine. And there seems to be just an absolute Lack of accountability. That's what I'd like to see more of.
- [24:01]
E
But, but Luke, to your point, hasn't Trump himself been someone who's sort of shepherdessed into this post truth era? Absolutely.
- [24:14]
A
You have sort of the poster child
- [24:15]
E
for, for post truth fake news.
- [24:17]
A
There's your 4D chess, David. Right. I always claim they're playing 1D checkers, but if you want to do 40 chess, you can just say that they destabilize truth over enough years so they can do whatever they want.
- [24:29]
E
Hey, they've got the money, they're happy, and, you know, next thing they'll leave the planet because everybody else is going to want to kill them.
- [24:38]
C
All the things that are happening, there are so many distractions. We have so many things happening at the same time simultaneously, that it's hard to focus on any one thing. And I think this will just get buried. It'll pop up for a brief minute.
- [24:52]
A
Aliens took the treasury. The aliens.
- [24:55]
C
Correct.
- [24:56]
E
I would say one thing is that Trump is known with respect to trying to manage the news cycle about flooding the zone. And it's been something he did back in his first administration and what we're seeing now. I mean, obviously, yes, you create a lot of distractions and no one's really paying attention to what's going on behind the scenes.
- [25:17]
A
Carlo, good morning.
- [25:20]
G
Good morning, Scott. Well, yeah, this kind of carries over from the narrative that was pretty persistent in the last market cycle. Every time we see something like this go down, whether it was FTT or Terra Luna, you'd get the response. This is why we can't have nice things. And one of the interesting observations, from my perspective, we talked about it Friday, the fact that this does give a narrative to the Elizabeth Warren wing that crypto is bad, and it just reinforces that narrative on the eve of passage of the single most important piece of legislation to give market structure for crypto. So the timing of this could not have been worse. And it was an absolutely avoidable move. So I don't understand the judgment, but one of the things that stood out to me is, you know, there's this guy in the space, Peter Guernas, and he's put out, yeah, a very, very scathing commentaries on this thing. And I made an observation in the most recent one he put out. I've been a criminal defense lawyer for nearly 30 years and I've seen a lot of victims come forward and make victim impact statements in financial crimes and in all other manner of crimes. And I think that this is largely, It's a Fictitious victim narrative from this person. But in the 30 years that I've been hearing them, this is one of the most compelling I've ever read. Because we can dispute or disagree on the facts about how it all unwound, but it makes a very scathing case for just what impact this had on people who believed in this platform and who believed in this Liberty Financial thing. And I think what we may end up seeing in this is World Liberty may just end up having its GameStop moment here because the degens in the space are not happy and they know how to, how to respond to something like this. And they could really take down this token if it gets to that point of a, of a, of a consumer revolt. And I just don't understand the optics of this. I don't understand the judgment this close to the midterms, this close to the most important piece of crypto legislation we've ever had to drop. Something like this makes utterly no sense to me.
- [27:56]
A
It makes perfect sense. They don't care about any of that. They just want to make money.
- [28:01]
G
I mean, Occam's razor, you know.
- [28:03]
A
Yeah, I meant to say the simplest conclusion is like that all of the narrative, and I'm not saying this Trump, Trump specific, whatever, but like the pro crypto narrative won the election obviously.
- [28:16]
F
Right.
- [28:16]
A
I think nobody here disputes that it was the, you know, fawning of the crypto lobby, which I fully support because we had to be done. You know, obviously couldn't beat Gary Gensler for four more years. But Trump realized there was an opportunity to get a ton of money from this industry. And we know that any politician non exclusive to Trump, you know, panders to the biggest money that in an election, I mean, that's how it's built. Right. And so being quote unquote pro crypto was the best thing that could possibly happen for them politically. And they had the other side, which they can make a ton of money on it while still being quote unquote, pro crypto from the White House. But do you really think they care if the Clarity act passes? I don't.
- [29:02]
G
I, I'm beginning to think they don't because this is just, I think they're
- [29:05]
A
all just narratives that allow this to keep going. Yeah, well, I don't think you, like you're, you know, you're. I think we're thinking in terms of 3D chess, like why at this time, time and how could this happen and the legislation's coming. The simplest answer is that this is just when it's coming to A head as they've extracted maximum value. Coincidence.
- [29:24]
B
Right.
- [29:26]
G
I, I, I can't see how you spin this any other way. I've looked at the responses from the team and you know, we talked about it Friday.
- [29:34]
A
They didn't even call a lawyer. It's unbelievable.
- [29:36]
G
Yeah, but it, it's, it's even, it's worse than that because it's just, you know, putting fud in the first sentence and, and, and, and just trying to suggest that this is all going to work out really gives that FTX vibe. And for people who have been here and have seen it all, we see right through this.
- [29:59]
B
Was that me, Scott?
- [30:02]
A
Yeah, go ahead.
- [30:03]
B
Okay. Yeah, yeah. Well, I, I, I don't know. Carlo and I were speaking about this yesterday on Spaces, and I think it was just an interesting discussion. Like, and I kind of paused because I wasn't sure if Carlo was going to mention it. But, you know, like, he mentioned that the Genius act, although it's been approved, it doesn't start until January 18th to 2027. So there's a gap there. It also, you know, kind of highlights maybe some of the issues that's holding up with the Clarity act because of something like this, that they're in the background. Like, look at what's happening. Like, we have to address this when, when the Trump is doing things like this that you, you mentioned earlier that, you know that the, you know, the welfi, like it was a traditional finance, it went through the proper channels. Right? So it's like it's a different animal than just crypto and traffi. Like there's legal and ethical lines. You can do things legally and there can still be some ethical ways that, that may not be best for people. And then the balance, I mean, look
- [31:03]
A
at, look at Bernie Madoff. I mean, like, look at Bernie Mad. Right. I mean, it's not like this is unique to crypto. People have been scammed or found ways to extract money legally for ages. Right. I'm not saying made off was legal, but they're doing it through the, yeah, 100%.
- [31:18]
B
And then the balance to, to what you're alluding to is, you know, before you had Pelosi grifting her way, now you have Trump Griffing his way. I think the, the overall end, you know, of the discussion is they're both sides are, are doing the same thing. You're extracting from the people and it doesn't matter who your favorite actor is that you want to extract from them to start looking at if us versus them and really putting into context that we have to start protecting us versus them because that's their ultimate goal.
- [31:50]
A
I see Luke's hand up. We had a bunch up and they disappeared.
- [31:53]
C
So that's got, I got a question for you actually, just to reframe this a little bit because this is just another iteration of the typical scam action that we see in this space. And, and yeah, of course we've seen it in Tradfire and we continue to see it and we see it in politics. We see it everywhere. There are grifters, there are opportunists, there are people that have zero moral compass. But this particular industry seems to attract it at a exponentially greater rate just because of the way that it's structured and set up. I'm curious if there's a path out of this, if there's a way that we can rebrand the industry. What it would take in order to do that, we're going to see.
- [32:33]
A
Yeah, we need to call it AI. It's going to be great. Just call it AI.
- [32:38]
C
Yeah, well, AI is going to be scamming. AI is going to be scamming all of us. Right. You know, it's, it's, it's going to happen as well. But I, I, you know, I, we're all firm believers in the underlying tech. And you know, TCP IP didn't disappear because of email fraud. The Internet didn't end because of dot com fraud. The technology will persist, but we've got to get through this phase. And I think, you know, over time regulation will come in and tighten things up. But still we have this, this path to travel. And I just wonder what it will take in order for people outside the industry to take it seriously. Because it's these things that just keep setting us back. It's these things where you talk to people that are non crypto native or, and they're just, all they hear about is the scammy side of it. It's like every other, you know, even in the real world, when people are being scammed, it ends up being.
- [33:27]
A
Well, Luke, I think the flip side is that like with Bitcoin and certain assets, I mean you do have the largest institutions on the planet as cheerleaders out there. Right. We're talking about one side, but then you do have the like Larry Fink at blackrock side and that's going to persist and I think continue to outweigh it. But I think that crypto, like the non bitcoin, maybe non institutional side of it, which is the part we were all here for in the first place isn't a lot.
- [33:55]
C
Well, we need that real consolidation, don't we? And I think we even spoke about this last cycle when we had this bullshit proliferation of ICOs and these tokens were just launching and launching and raising money and they had zero purpose. In the same way the dot com boom, we had all these companies launching with a dot com address and no business model behind them and they all disappeared. And then out of the ashes came same with AI. Yeah, exactly. We had the same thing there as well. But we, we still need to see that consolidation. And I, and I think that we're starting to get a little smarter. But I still feel like the number one use case of crypto is speculation. And until we sort of move past that and see the application of the technology in real ways beyond stablecoins, beyond sort of resetting the swift payment rails globally, we really need to see that user experience change. Like one thing that just drives me nuts. I'm working in CASU and iwa as you know, Scott, and the user experience, it's so hard to get people normies on board, say hey guys, we've got private credit 16% but trying to get them in the user experience is terrible. There's so many little battles we still need to fight to normalize this industry.
- [35:02]
A
Grav, I think you had your hand up but disappeared but
- [35:07]
F
yeah, I forgot
- [35:11]
A
but welcome to my.
- [35:12]
F
I mean, yes, but you have a setup that, that could write and maybe prompt. I mean, congratulations on the new office I studio. Never got a chance to do that. And so please add this prompter in front of you that keeps a note of everything going on on live spaces. Keeps, you know, making notes and, and suggesting you smart information about what to speak. I can build it for you and we can tokenize it and sell the token to accredited investors. That is what I was talking about. I don't say a thing, Scott. Sorry, I just recalled my topic. So is it Carlo or. Yeah, I think Carlo said that the, the Trump involved in Wilfy has a, has an amazing track record of going bankrupt. And so I'm not American, clearly. Do you think Carlo or whoever made this, this case, these guys are will. Will absolutely not respect an institutional fundraising or. Oh yeah, it was David. Yeah. David, yeah. So straight question to you. Do you think these guys would just like straight away cut a scam out of an institutional offering? A brand that they wore as the crown jewel of their crypto endeavor and everything that was associated to that? And while it's super easy, I mean, forget 550. Even if they were to redeploy all the cash that they've taken out, I mean recently or in between, maybe a couple of hundred million dollars, wouldn't that like think of it from a dad perspective. Digital asset treasury, which you know, basically no, Digital asset Treasury right now is doing amazing and they all need money and they all wonder if they would have done the right thing selling everything they had up until six months ago and then buy everything six months later from now. Do you think this, this, this thesis doesn't stand a chance and these guys would like simply choose to go bankrupt and lose their reputation in one more industry?
- [37:25]
A
They don't.
- [37:26]
E
If, if past is prologue, I think the answer is yes. So, you know, wish I could say different, but I think that I don't know. The tiger's stripes don't change.
- [37:41]
A
Yeah. David, I mean wouldn't we assume they took. Yeah. I mean when they took the loan. The loans, I mean it's not like they don't under. Understand the mechanics of the very platform that is their own on how the loans work. I mean if you extract all of the current value of World Liberty Financial in USDC and move it to Coinbase prime, it would seem that you actually have a plan.
- [38:05]
E
It. Well, who knows what the plan is except to maybe line their pockets again. I just go back.
- [38:12]
A
No, that's what I'm saying. I don't think you're concerned about the optics of going bankrupt. I think you're forcing an effective bankruptcy.
- [38:18]
E
I mean look, you know, given the way the litigation works. Yeah. The lawyers are going to get their cut and this will remain locked up in the courts for years.
- [38:32]
A
Good times.
- [38:36]
E
Yeah.
- [38:37]
D
I think to your question, Gorav, it's like it looks like the flight is already taking place and that's where it gets really sketchy because with the amount of money that they have, why would you take such a hedge position on a loan that is so visible and so asymmetric to blowing up? It just looks like it, it's just pure liquidity extraction with not a lot to back it up. And then you start to disassociate the people. I mean we've been here before, right.
- [39:14]
E
Like.
- [39:15]
D
But I do think that it's more than just just another bankruptcy in lawyers. I, I mean I think that this, to your original point, Scott, this is going to get the ire of everyone who's been up against this industry and this could lead if it does go belly up. Right. And like who knows if there will
- [39:38]
A
be a Bailout by who?
- [39:39]
D
Quietly, publicly, who knows? But ultimately, if it does go belly up, it's going to be a poster child for Trump family.
- [39:49]
A
Yeah. As I think about this though, like, I don't understand the bailout narrative there. It's not like they were in trouble as a business or insolvent. They literally went and took the load. It's not. There's like, usually when you get bailed out, it's because you made a mistake or there's a hole in the balance sheet or something. Like, there's no argument that they purposely took these actions. Right. So I don't think that maybe there's a bailout, I don't know. But it feels like they just take all the money. The token trends to zero over time. They never pay back the loan. Oops, sorry. And life goes on. They get civilly sued in some way, shape or form. It locks up forever. Nobody wins. We don't even know how much retail money is in those pools. Right. We just know that they're able to somehow withdraw a lot of stable coins. There had to be at least that much. I just don't think that. I think that this is intentional. That's all I'm saying. Like, I'm not saying there's a grant plan or anything. It's just free money.
- [40:48]
G
Maybe they're just shaking out the paper hands. That's right.
- [40:59]
C
Is this line backed by stable coins or is it backed by their own token?
- [41:03]
A
No, it's backed by their own token, but they were still able to withdraw like 150 million in stable coins. You know, like actual money. Yeah.
- [41:13]
C
Real money.
- [41:14]
A
Yeah. Good times. They're unstable coin, so we don't even need to talk about that. Right. I wonder what the fees are. Do we know what the it was? I saw it somewhere. But they also earn a disproportionately high amount of fees from USD1 versus other stablecoin issuers. Good times. G. You have.
- [41:35]
F
And I just have. I have a bit of a rant. I've. I've gone through what, three BE cycles since 2015. In the beginning of the journey. Why does this one sound and looks and feels so hard? Man, this is so bloody hard. And it shouldn't be, you know, everybody in finance who has been, you know, my coach, a mentor or somebody that I've, you know, exchanged notes with and they always told, you know, as you grow into this industry, you'd like, mature and you'd have your plans and, and whatnot, and it'll only become easier to go through Tough times. This one is not a paper handshake. It is like, it is a human shake. It's the biggest passive layoff of practically everybody who participated in the industry as a builder or as a contributor. Like, there's so many people leaving and then this just never ends.
- [42:34]
A
Yeah, I mean it's, and not saying it's the same, but it's funny that like we seemingly every cycle have some like great hero that collapses. Like people forget. I think that sbf, not only was he like ended up being the biggest fraud of the cycle, but he was the guy on Capitol Hill that everyone was looking to, to like bring crypto into the mainstream and to give us credibility. You know, the pain of FTX wasn't only what actually happened with ftx. It was that the very person who was testifying on Capitol Hill and taking pictures with politicians and making the donations was the one behind it. And this echoes of that. Right? Although even on a much bigger scale, the pro crypto president and his pro crypto family are the very ones that are committing the acts behind the scenes that will likely hurt the industry down the road.
- [43:25]
F
So we short American BTC now.
- [43:28]
A
I think you're short. I mean, I've seen, Listen, I would never give financial advice, I would never do it. But there's a lot of people. Carla, I think you sent me a tweet at some point, right, that someone said if you want to get them back to Short World Liberty Financial until it gets liquidated. Right. But I don't think that works because they have the dollars, but they got the dollars out.
- [43:43]
G
It's like the G. Yeah, it's, it's, it's a, it's a run back of the GameStop movement if it gets enough traction. I mean, yeah, that's, that's a plausible response.
- [43:54]
E
Gross.
- [43:54]
F
For some reason, the market maker in me, I don't know if it's the market maker or the stupid bullish investor keeps thinking of why shouldn't this go belly up? I mean for all the good cases where we've had a few portfolio companies of 2017, 18 that were nothing in comparison to the multi billion dollar raises of EOs, Tezos and so on. I can't name them, but my portfolio is pretty, pretty public. Were able to become the 10 billion coins of 2021, 2022, all because of certain strategies which were obviously not as aggressive and scammy looking like these, but basically, you know, trying to make all the cash possible from here, there and wherever, keep it for when something large fails, buy Your own token and then keep building so that when the time is right, you go belly up. And that doesn't even cost much because your supply is like entirely out. Paper hands are out. So it's just a stupid, ultra bullish investor in me, or I don't know, the market maker in me that keeps thinking about that theory.
- [45:14]
C
Can someone answer a question for me? USD 1 market cap 4 billion. WLF raised 550 million and they're taking out a $75 million loan. What's the motivation here? Enlighten me.
- [45:31]
F
Which motivation are we talking about?
- [45:33]
A
Is it just circular borrowing? Take out my own money? Yeah, I mean that's an extraction machine. It's a washing machine of funds that always end up back in the same.
- [45:47]
C
This is my point. There's. There's no way of hiding from that, really. You can't escape that fact that this is so blatantly obvious. And, and it's all on chain accountability, right?
- [45:58]
G
And it's all on chain. And when you lose the midterms and, and Elizabeth Warren gets the gavel again, this is going to prompt hearings and oversight and this is just all going to be a net bad for the sector. Oh, and just a friendly reminder, we're supposed to have a markup on the Clarity act and the people have yet to see what the hell's in it. They have still at least.
- [46:22]
A
What day is that by the way? We don't know yet.
- [46:23]
D
Right.
- [46:23]
G
I think it's supposed to be. Yeah, I think it's supposed to be maybe Wednesday or Thursday. And we've still yet to see what this revised backdoor compromise on stablecoin yield is, which is, frankly, at this point, man, there's so much lack of trust in our institutions and this just continues to feed that same narrative. The consumer gets fucked every way. And it's just another example.
- [46:48]
A
Yeah, totally agree, gentlemen. I need to cut it just a bit early. For those who don't know, I'm launching a new show on Yahoo. Finance, which at the moment I think will be the only mainstream media daily crypto show in existence and launches on 4 20. Because of course it launches on fucking 4 20. But this week we're running dress rehearsals and tests. So I have to somehow maintain doing my morning show and crypto town hall and then take 45 minutes to pretend that I'm actually prepping and not completely just winging it every day. So I'm gonna go take that 45 minutes now to get ready for that dry run and we will be back on Wednesday. Here at 10:15am Eastern.
- [47:33]
F
What will you talk about this?
- [47:35]
A
You guys are my. My goal is every morning to use crypto town hall and my guests to think of smart things to say that I can steal and then say at noon. It's going to work great.
- [47:47]
F
We're all so net negative man on this industry. What are you going to represent in a crypto show?
- [47:53]
A
I don't know, but I have to, you know, it's. I have to balance my, you know, the negativity with obviously the fact that, yeah, there's 200. 200 Bitcoin payments.
- [48:05]
F
Bitcoin.
- [48:06]
E
It's just a big contrarian buy signal.
- [48:09]
A
That's right. That's exactly right. So everything is a buy signal. I just say, you know, at the end of the day, you can always.
- [48:16]
C
Congrats with that, Scott.
- [48:17]
A
Yeah, thank you. So we'll have a. We'll have 200 million monthly viewers on Yahoo, which is like three times bigger than the second in CNBC. Listening to me rant about the Trumps. It's great. It's gonna go perfect for our industry. So I guess I gotta be careful there. All right, guys, thank you very much. We'll see you on Wednesday.
- [48:34]
B
Good luck, Scott.
- [48:37]
A
Thanks, guys.
- [48:37]
D
Bye.