Unchained Podcast Episode 989 Summary

"DEX in the City: How Even TradFi Wants to Pass the Crypto Market Structure Bill"

Host: Laura Shin | Guests/Panelists: KK, Jesse, V
Date: December 24, 2025

Episode Overview

This holiday edition features a lively roundtable discussion with three legal and policy experts – KK, Jesse, and V – all women deeply embedded in crypto law, regulation, and advocacy. The central theme is the convergence of traditional finance (TradFi) and crypto, with a particular focus on the momentum behind the US Crypto Market Structure Bill (Clarity Act) and the blurring lines between crypto-native firms and mainstream financial institutions. The episode weaves through policy history, regulatory progress, reflections on the maturing crypto landscape, and spotlights both industry optimism and persisting challenges.

Key Discussion Points & Insights

1. Crypto’s Evolution: From Subculture to Systemic Integration

• The "Crypto is Dead" Narrative (03:00–09:09):

  • Dougie DeLuca's viral article posits that the isolated, crypto-only world is fading as mainstream adoption and integration accelerate.
  • KK draws a parallel to the early days of "Internet stocks" – over time, distinctions fade and everything becomes just "stocks."
  • Key crypto innovations worth preserving: permissionless access, global liquidity, 24/7 markets, composability, and user-owned data.

• Echoes from Internet History (05:12–09:09):

  • Jesse notes crypto is "learning lessons of prior tech" and compares the early techno-libertarian Internet phase to crypto's roots, referencing John Perry Barlow and the EFF.
  • Ultimately, as the Internet became economic infrastructure, regulatory adaptation was inevitable – a process now repeating with crypto.

2. Integrating with TradFi and Policy Adaptation

• Shift in Policy & Market Landscape (09:09–13:53):

  • V observes a marked increase in non-crypto or hybrid fintech firms seeking membership in crypto associations, reflecting broader market adoption.
  • Institutions that previously avoided DeFi are now actively seeking open, permissionless exposure, not just closed systems.
  • V: "What’s happening now is... as this technology integrates more into payments and fintech and financial markets, crypto itself is starting to adapt to the real world." (10:03)

• Convergence and Three Participant Categories (13:53–15:25):

  • KK identifies three groups: pure crypto natives (degenerates/"degenerates"), TradFi experimenting with crypto, and "crypto-native hybrids" (e.g., Robinhood, BlackRock).
  • TRADFI's growing crypto involvement is underscored by the outsized profits from products like BlackRock’s Bitcoin ETF.

• The Reality of Compliance and Scaling (15:25–17:48):

  • Jesse discusses how compliance measures (KYC, risk management, Chainalysis) are adopted not only out of legal fear but as prerequisites to scale and access "real money."
  • Jesse: "KYC doesn’t have to be some top-down movement... it’s been inching in sideways...when founders realize that they can’t scale...without it." (15:25)

• Moving Past “Permanent Opposition” (18:24–20:51):

  • V argues the sector must evolve beyond viewing itself as anti-regulation: mainstream adoption requires safeguards, even as some aspects (protocol layer) remain open and permissionless.

3. Policy Deep Dive: US Market Structure Legislation

• Crypto’s Generational Bridge (21:09–21:35):

  • The panel humorously notes “Elder Millennials” can uniquely translate between old-guard policymakers and young crypto builders.

• Status Update: US Crypto Market Structure Bill (Clarity Act) (24:00–28:50):

  • V gives a comprehensive update: urgency to act before Senator Lummis retires; intra-Democrat variances on priorities (esp. on DeFi, illicit finance); and high engagement from TradFi (SIFMA, banks).
  • The bill’s DeFi exemption is expected to be "extremely narrow," and this will be a contentious negotiation.
  • The markup session, where revisions and debates happen, is anticipated for mid-January, but delays are possible.

  V (on legislative urgency):
  "Senator Cynthia Lummis... is retiring next year. I think it’s creating real urgency... to get a market structure bill done while she’s still in office." (24:00)

  V (on DeFi exemption):
  "There will remain a DeFi exemption in the bill, but it’s going to be extremely narrow... and will likely be one of the most contested areas." (26:30)

• TradFi Now Advocates, Not Opponents (28:50–30:40):

  • KK highlights that major TradFi groups like SIFMA are not trying to kill the bill but are supporting it – a sea change from years past.

  KK: "What’s really interesting... is crypto’s at the table. TradFi is at the table. TradFi is NOT trying to kill this bill…a lot of TradFi industries are supporting the bill." (28:50)

• Democratic Engagement & Lingering Stigmas (30:40–33:14):

  • Jesse underscores that Democrats have specific sticking points: illicit finance, token classification, and ethics (public officials enriching themselves via crypto).
  • The "crypto is shady" narrative persists outside industry circles.

  Jesse: "For a long time...people outside this echo chamber...see [crypto] as corrupt. Until you find those people and talk to them, you don’t realize how prolific that narrative is." (32:40)

4. Regulatory Revolving Door & Policy Impact

• Leadership Changes at CFTC and SEC (34:33–41:55):

  • The appointment of a crypto-savvy CFTC chair (Mike Selig) and movement of others (Caroline Pham to Moonpay) reflect increasing cross-pollination between public and private sector.
  • Panelists broadly support this "revolving door," provided strong ethics rules are in place.

  Jesse: "I left [the DOJ] because I believed in the tech and wanted to be building...If you don’t have that cross-pollination you don’t get good policy." (37:41)

• Ethics: Maintaining Credibility (41:55–45:03):

  • V and Jesse compare government rules that restrict former regulators’ private-sector activities post-government.
  • Discussion covers why rules are stricter for financial market regulators, and the importance of these to combat perceptions of regulatory capture.

  V: "We do need to get rid of that ethics rule that bans government employees from holding any crypto if they want to work on crypto matters." (41:55)

5. Crypto Optimism and Real-World Impact

• Spotlighting Positive Crypto Use Cases (45:03–46:54):

  • Dubai now allows charities to accept crypto donations – a tangible, systemic use case.
  • KK advocates gifting crypto to family as a way to “walk the walk” of mainstream adoption.

• Reflections & Closing Thoughts (47:00–49:14):

  • The panel expresses gratitude for the crypto community and underscores the importance of diversity (especially women) in crypto.
  • Jesse and V both share hopeful notes for industry progress in 2026, with a tongue-in-cheek call for better mainstream media coverage.

Notable Quotes by Topic & Timestamp

Crypto Convergence & Maturation

• V: "As this technology integrates more into payments and fintech and financial markets, crypto itself is starting to adapt to the real world." (10:03)
• KK: "BlackRock... their single most profitable product line is the Bitcoin ETFs. I mean, just think about this. This is BlackRock, okay?" (14:46)

TradFi’s New Role in Crypto Legislation

• KK: "TradFi is not trying to kill this bill. In fact, a lot of TradFi industries are supporting the bill." (28:50)

Regulation & Policy Integration

• Jesse: "KYC doesn’t have to be some top-down movement...it’s been inching in sideways and largely through that middle group you identified, KK." (15:25)

Ethics & Public Perception

• Jesse: "Public officials shouldn’t be able to abuse their offices to enrich themselves with crypto. Right? The same concept that should apply to traditional markets." (31:38)
• KK: "We do have more work to do in educating all legislators, regulators...about how this technology can frankly improve the lives of everyday Americans." (34:36)

Important Timestamps (by Segment)

• 00:00–05:12 – Introduction, tangles in crypto, viral article summary ("Crypto is Dead")
• 05:12–09:09 – Historical context: lessons from Internet regulation; early libertarian ethos
• 09:09–13:53 – Institutional adoption; policy implications; integration shift
• 13:53–20:51 – KYC, compliance, the end of pure “caveat emptor” in crypto
• 21:09–24:00 – Generational bridge; setup for market structure bill update
• 24:00–28:50 – Detailed breakdown: Clarity Act status, legislative dynamics, urgent timeline
• 28:50–33:14 – TradFi’s role; ethics as a legislative issue; battling negative perceptions
• 34:33–41:08 – Regulatory personnel changes; revolving door ethics, its regulation
• 41:08–45:03 – Agency-specific rules; comparison of SEC/DOJ ethics frameworks
• 45:03–47:00 – Crypto good news: Dubai’s charity crypto integration
• 47:00–49:14 – Reflections, gratitude, hopes for 2026, holiday sign-off

Memorable Moments & Lighthearted Exchanges

• KK’s Santa hat and festive "it’s fine" sweater – "The lights are tangled, but we are going to be fine." (01:53)
• Discussion of "elder millennial" status and outreach between generations in policy debates. (21:09)
• KK’s quip on gifting Bitcoin for Christmas: “What is going to pay for their college? Is it going to be Ford stock or is it going to be Bitcoin?” (46:54)
• Panel solidarity and thanks: “I am so thankful for all of the boss women in crypto and the men who are listening and watching.” (49:14)

Conclusion

This episode captures a pivotal phase in the crypto industry: a move from purist, oppositional stances towards pragmatic, policy-driven integration with the legacy financial system and government. TradFi’s embrace, the urgency for legal clarity, and increased cross-sector dialogue are collectively maturing the sector—though the road ahead is shaped by the intricacies of law, politics, and public sentiment.

The panel’s tone is optimistic and collegial, balancing candid takes on challenges with celebration of real-world crypto impacts and community solidarity.