Santi Announces He's Building A Crypto Bank | Roundup

Transcript

[Music] this episode is brought to you by velora velora is a self-custody mobile first wallet and the easiest way to send swap collect and purchase digital Goods on the cello blockchain download the app and start exploring today at valoraapp.com forward slash Empire alright everyone after uh two week three week Hiatus I'm I'm back I'm pumped to be back so I missed you guys and Sante I missed you man how you been I'm doing great you know it sounds like it was great honeymoon so welcome back sir a whole lot of love it was lovely it was a good time nice not too shabby you uh you grew a beard while I was gone looking I mean you've always had a beard but like this is a bear Market it's getting a little longer huh yeah you know just

sort of feeling it I have thought about this I've thought about shaving it all together but I've had it since my second year at JPMorgan as an analyst and I was writing the elevator with Jamie Diamond because it was like using the floor above us oh and he would look at me and be like why are you like you're supposed to shave every day and I just did it because I I wasn't into that following like I was wearing a student hi I'm gonna be rebellious look I had enough private Equity Fund so I felt like you know I was like I know it's like when you're a senior in high school you already know which call you're gonna go to you know so ever since then it's just sort of been my way of I don't know I feel I like it but I'm either going to grow it a lot and

then just shave it all and just go which reminds me you know it's funny I have some I think people in those very cookie cutter jobs like to Rebel in these small funny ways like they'll be like um a bunch of friends who work in you know banking or not I guess not PE a couple hedge funds and stuff and they're like yes yesterday I should have should have seen the socks I wore yeah a little bit of chocolate cake at lunch oh my God you you Rebel you you really lost in our crypto libertarian Valley's uh Express via beer whatever you know makes me sleep better at night folks uh Jason reminds me uh I don't think you've ever shaved your head though the bull market comes back no what was the D there was no deal here you said

that you were going to be in solidarity with coinbase Brian Armstrong this is what Mike said Mike we got to get Mike on the Pod because I believe that you said you're gonna go bald so I'm still waiting for that if you go ball I'll shape my beard let's put it that way this is a much worse deal for me that's a horrible I don't I don't welcome to negotiation 101 sir well I nailed it there nailed it yeah I know we'll consider maybe if Brian here I'll maybe if Brian comes on the Pod I'll uh I'll shave my head there's there's my deal of friends listening to this there you go a lot to talk about this week yeah um I think it was Ryan Sean Adams tweeted I think it was Ryan he tweeted out uh for for crypto OG's which Market

is uh which which bear Market is worse this bear Market or the last bear market and I thought it was a maybe we could talk about that because I'm definitely I think for I think I remain like incredibly excited by things that are going on right now but now that I've been back for a couple days like I've definitely noticed a lot of apathy and a lot of like you know I I had a friend who's been in crypto for like four years and he's like I'm kind of questioning why I'm doing this and I think like we just reached that stage of the bear Market um and I'd like to hear what you think about Ryan's questions so maybe I'll just ask it directly here like uh you've seen a bunch of bear markets is this bear Market worse than the last bear

Market his question was is it darker is it darker yeah and I think it's an interesting Nuance I think it is darker it makes it seem darker because the magnitude of the scans are larger FDX huge Tara huge like the sheer number of people in the magnet like the loss is greater and so it feels darker but in no way shape or forms it worse like not even like it's in it's not even comparable in the pain that you felt and the uncertainty that you felt like in 2011 or 12 there was existential risk you didn't know if this was going to work and it was like largely Bitcoin back then felt fragile I'll feel like really

like you're putting your your savings there it's like I'm not even I I put my bonus there from JP Morgan I said I'm not I'm gonna lose this but I'm comfortable with that there's a great involve quote that says investing in seed and Venture you're you should be prepared to lose it all and I sort of ascribed to that back then so there was a lot of existential risk back then there's huge wild swings from Bitcoin going for like it went to that mad Ox like mount gox my God that was huge there was no infrastructure um so no I don't think it was worse and then and then the Ico boom like yeah there was a lot of pain a lot of projects like did some dumb stuff like holding Youth and their treasury depleted um

and then you're sort of left wondering okay this is a money-raising machine are we ever going to do anything with that but today like first of all I don't think we're in a bear market like we've rallied 80 from the bottom and yeah people are having mental breakdowns on Twitter I mean this is just a state of the the like people are just conditioned in a way where not only in crypto but just in traditional markets the holding period is dramatically reduced young investors have zero patience and you could look at that both ways you could say it makes it really tough for projects that have a token for nft communities because if you're not delivering meaning if price is not going up you're like people just gonna believe and the second the the second like I

guess the alternative view to that is that's presents incredible opportunities for people that are patient because you know I don't think we it's nearly as bad I think there's a lot of excitement to your point like you're building a media company there's a huge opportunity in building the Bloomberg of crypto and you guys are doing that there's a huge opportunity in actually I think crypto really rewards people and is rewarding them now if you continue to keep your head down and build and you're patient you don't do dumb stuff like and position your portfolio or whatever to be patient we're not in a we're not we haven't seen pain like when we hit a thousand bucks you remember we're having these discussions like three months ago I said I think I think the bottom here is like you know eighth at a thousand or

slightly below that we started to see some real pain like like anything but eighth below 800 there was like a huge amount of like mkr uh loans it would have to be refinanced or liquidated but we're nowhere near there and do you so okay I I tend to agree with that but I want to get I want to talk about um like this kind of little mini bear Market rally that we've had but I I actually tend to really agree with you I think the it really comes down to in the last bear Market there was an existential crisis of is this gonna work or not and now it's just like like how long is this Gonna Last um and then you know I remember this

conversation I've shared this before but I'll share it again like I remember Mike and I having beers in 2019 late at the office one day I think we're trying to sell tickets to some conference and starting conferencing yeah uh yeah it was like we were behind on ticket sales for an event and we were like just ripping out LinkedIn messages trying to get people to come to this event yeah and uh we're like damn like if this thing doesn't work like what are we gonna do and I think one of us was like I think Mike might have said like oh it'd be fun to work at Netflix or something like that and um I think that actually just really some and like today I don't think Mike or I could ever imagine not working in crypto and I think that really kind of sums up like

the the difference back then was nobody knew if this stuff was going to work and I think a lot of folks were like are we ever coming out like are we ever coming out of this is there gonna be a light at the end of the tunnel and now it's like I know there's a light at the end of the tunnel I just have no idea what it's going to be I have my own predictions on when on when this thing will turn around but uh there's no question in my mind that this will turn around and that's the biggest difference yeah you know I definitely agree with that it is difficult because when you're investing Founders and as a community I think we tend to over promise and in some ways under deliver depending on the snapshot of time were you looking at have we made

the progress that we promised and there's always that Gap right a large in large last cycle was this infrastructure Gap because we promised you know we would decentralize everything under the Sun but there's no infrastructure to support scalability right cryptokitties congested the network and that really marked the like the top of the cycle and here we are now because you could have you could have had this exact same discussion back then and said we're done like you know even something is like we're literally putting pictures of cats on the blockchain which happened in the internet too by the way in the 90s like people were like two and not in the early days and fast forward now and like nfcs were all the rage and they're real and brands are excited and they're the cookies of web3 and they're going to be explosive we know that I mean there already are

being explosive like this idea of digital property and so two different Cycles now nfts really occur in the day in many ways huge onboarding mechanism and funnel people are excited about that and it's just a I I use it as an example to conceptualize this these moments where you know we tend to over promise under deliver but you just have to be patient like gaming is going to be is coming I mean you you at least now you've come such a long way in the infrastructure side of things that you the question now is more does this really matter is there a real use case here people are still going to play traditional games why would they come to web 3 games and some people some Skeptics rightfully so are saying none of this really matters

and I think incredibly you can point to many examples might get a great tweet and I tweeted about this last week because people are opinionated now about the things that they either like or don't like on chain and are commenting on real substance and activity that wasn't the case in Prior Cycles and so the question really is how big is this going to get and I think a lot of us here I was having this great discussion this week with the founder of blur we we met in person and I was telling him hey how do you see the nft market how big does blur get and he's like he said I'm not as excited about real world assets but I do think that nfts are going to be explosive like it we're just tip of the iceberg and a lot of it

is collectibles and I sort of like really like his thinking um that this word of like uh you know we tend to like visualize how Crypt is going to fit in our current life but I think a lot of the use cases we it's hard to imagine but it was hard to like this is the case with every sort of technology and so yeah we just have to be patient but you know let me ask you a question like a lot of the team I have noticed a lot of teams now like a noticeably uptick in team shutting down and even it's not just like investors in the community that are losing interest but it's really like that whole subset of like a third of Founders that are not really in it for the long term are leaving and and so that's that's the

hardest thing to to see to be honest but otherwise yeah I think I think well they're just a lot more I think what happened so I'm seeing the same thing like there are just so many companies shutting down right now like really quietly shutting down so we have um let me look in our candidate we use this tool called Ashby for like uh I don't know tracking candidates I think we've had like 5 000 applicants to block works in the past uh in the past 30 days um and the you know the fundraise definitely helped uh Drive some attention there but I think yeah I think we've had somewhere between like let's call it five to six thousand applicants roughly um and there's a lot of data there right so you can start to actually see who's applying and for the first time in the

market you're seeing a lot of founders of like sub 10 person companies applying and like publicly like their companies are still working but what that tells me is like they raised 18 months ago they can't raise now they're maybe looking to apply for our VP of research role or our director of product role so they're and then also like you can start to get some interesting insights into what companies maybe aren't going where it's not going so great in the series C Series D companies with you know with like 50 applicants from from this one specific company I'm like ah seems like things are not going so well over there right now but yeah uh and then like just the to close out this conversation on the bear Market the from uh emotional side I think we just talked about that but like if you just look at the numbers the 20

each bear Market is less bad than the last one in terms of like the drawdown right 2011 we pulled back 94 2015 we pulled back 87 2019 which is by the way is a huge difference it's a huge yeah yeah with a huge difference yeah um because a relationship is not linear right yeah exactly exactly exactly so it always changes by like uh so it was 94 then 87 2019 was 84 or 85 drawdown uh and then this whole Market or this bear Market I think we've drawn down I don't think we've drawn down 80 I think 78 or 79 yeah for eth uh yeah it's roughly there I think

so anyways you're drawing down like a lot it's a massive drawing 61 and Bitcoin is a bit less I believe I'm just checking it now so but if you look like total market cap of this 61. both Bitcoin and ethereum are down it's dampened drug drawdown um and it was I tend to agree with you on that let's uh you hadn't there's another tweet I wanted to talk about which is um you tweeted out that you're thinking about building something uh and you uh there are a couple options you said I have a growing desire to build something in crypto but beyond investing my own capital and education through the Empire podcast I have a few ideas I thought it'd be fun to open source it you said Media Company fund with outside LPS and crypto friendly bank and crypto friendly it was

interesting to see the results uh 2 000 people voted uh seven percent voted for Media Company seven percent said that you should launch a fund and 77 said you should build a crypto friendly bank so before we talk about the crypto friendly bank I actually would love to just get your like what's going on in your mind right now like you want to get back to building something like tell me about how you're feeling about things right now well I want to preface all this by saying I don't think I'm a good Builder I think I'm a better investor but investing could but I have a few ideas largely inspired but a lot of the false starts that we've had in the last cycle uh and a lot of Ashes you know there's fallen giants you know and so in large part is you know probably this is like the worst

time like you you can ask someone and say I want to build a bank given everything that's going on people think you're crazy like every small bank is like collapsing right it's really hard specifically we want to do crypto stuff like your signatures down silvergate's down you know and then and then you know traditional like huge Banks right but I actually think like I look at that and I get inspired because I think that this is perhaps the best moment in time to do that um but even before that like I love parify because I wanted to just spend more time in working Founders and managing fund is you know it's great like the relationship that I have been is you know I think it was a great run but I just wanted to spend most or all of my time investing and not so much

like doing everything else that involves like being at a fund with outside investors and now this podcast is my one of my main focus because I think the the goal is to you know have open discussions and you know educate people without bias or you know as much by less bias as possible I think we've done good work here but there's more to do right there's a lot of stuff that we can do and so I've over over the years worked with a few people that I really like and I would love to assemble a great team to I think I'm out even before the survey I was like leaning towards a bank and it was nice to see that uh

and so yeah I I think that's where am I going to be involved in day to day no I have no business in running back there are smarter more competent people to do that but if I can assemble the team and help start it and guide it with everything that I've lived through over the years in crypto and observed I come from church of Finance background then I think I think it would help the space like I I was just I've been more and more thinking of someone's going to pick up the ashes and rebuild something that actually works like if if you think that blockfi was a terrible business you're absolutely wrong it's a great business terribly managed so swap of the team so it's it's almost like that idea so so tell me about this Andre are you

thinking a b2c bank like a blockbuster is a b2c bank a b to B bank would be like a CR uh everything back everything like servicing individuals that want it on board and off off board you know crypto but also institutions I think what is it you know I'm mindful of timing and I think this is a huge like Herculean effort it might not work um but I think going through the process will be worthwhile to understand really like also get close to you know Regulators especially in Europe I think

it happens in Europe I'm based in Europe and I've got no you know how banks operate here whether it's in the UK France or Switzerland I think it's Switzerland but um you know history historically has been crypto friendly but Mika I think opens up a good possibility to maybe do it outside of Switzerland and the European Union or in the UK which is also kind of move forward and yeah you know I think there are a few companies out there that already do it you know revolutes also trying to you know spin up their own kind of bank and and service crypto so there's ongoing efforts but um yeah I don't know hmm how serious are you about this pretty serious yeah like I've been in ongoing

discussions for the last like three months nice I think this is I I initially had as you recall an insurance an idea to do an insurance company right rarely though yields are terrible and for that reason it just doesn't work but I think if you have a good banking platform it then allows you to do so many other things so you would go so let's walk through the thread strategy a little bit so you would not run this you might be like the chairman of the hell one of the founders you would hire a CEO who really understood banking would you hire them from crypto or from traditional Capital Market stuff you know I I think it the the team looks like the top hires are a great banking executive you know I.E that actually doesn't have a maturity mismatch you know I think the folks at block five no

disrespect but had no business and didn't understand risk you need to be really good in the mismatch like is what gets every single Bank the Silicon Valley guys at some point lost it because they had this asset liability mismatch so hire someone from JP Morgan I think like someone like uh what's her name uh not Mary Meeker but uh yeah what's her uh good luck life Masters for instance she was running digital asset yeah yeah and she was like she was a huge inspiration yeah because she she there's a great book called uh Fool's fool's gold and she was like credit defaults she's smart like she knows how Banks work so something like that like an executive from um from

JPMorgan or a big Bank well Jamie Diamond doesn't run for president of the United States maybe go talk to him someone like that plus also someone in the regulatory policy side to really understands crypto you know someone like Rebecca for instance um and then like uh and then on the operation side this guy's a get banking are you subtly like recruiting Rebecca through publicly mentioning her name to try to get her we've been super close like we were close you know since the Abbey days and even before then uh but no no uh no no uh I'm I'm excited about it nice as I said when do you think you will uh we'll we'll raise because this is obviously a bit you need a lot of capital to go do this

no I mean not like a ton you need okay you need some Capital so you have 10 million bucks ten okay so you need 10 million would you put this up yourself or would you raise it externally of the partner yeah and then maybe raise a bit Yeah but uh I think the key here is getting a license and part of getting the licenses having a good team well part or or you could take the other strategy you could actually do the FTX strategy which is uh maybe I shouldn't say the F5 strategy but you can buy the licenses yeah there's some really cheap there's some really publicly traded yeah a lot of these like some of these licenses you can buy in distress like they're in receivership issue is you

don't want to get that bad rep I want a clean slate yeah and make a splash because I've hired the top executives and a serious team crypto deserves a good bank and a serious team like I want JP Morgan quality I come from JP Morgan I'm biased there but you know high quality talented individuals and maybe they have interest in crypto personally and so they they see this as it is worthwhile to have and dominate the market and we could start in Europe or the UK and then go from there like I'm optimistic because the banking license timing-wise sequence it sort of takes why would you start in Europe when most of the crypto companies today are in are in the US

I just think uh I think the the regulatory environment is friendlier here yeah yeah and I'm based here like Switzerland is it's just I think a place where my head goes but I'm open like I'm exploring all avenues uh probably like Dubai for instance like but like I just feel that a top quality Bank needs to either be based in Europe or the US agree wholeheartedly yeah I agree um all right sir we'll have to uh you have to keep crypto because I'll close this out if anyone is interested please reach out I'd love to I'm into sort of that phase where I'm talking to everyone and anyone about it there are ongoing efforts and whatnot um so yeah nice

good stuff sir um that's exciting one next by the way I like it I like it I think it so you um is there anyone else are you gonna do this with the co-founder are you gonna probably yeah yeah definitely definitely like I'm not good at a million things that are required to execute here to the best why do you think you're not a good Builder oh I've tried it before you don't like it or you don't think you're like I don't have the patience for it I have too many ideas and I love investing because I I want to do many things and I would rather Empower someone with capital and some guidance than like getting my hands like really wow that's so funny that you say that I feel like I'm not a great investor

because I don't have the patience for it I'm like no man because with building you can go do so many things like you can have a thought one day and then you can go you can go see it out in the world the next day yeah like I I it has helped me like I try to build this company with a few folks of validator running validators oh pre-lighto days right oh we should be right actually yeah by the way yeah because someone tweeted like uh Mike was like this is a great investment like but no I just sort of realized like I don't I love investing I just I just love it I like thinking about where things are going to go and and having my hand like the being in a position a platform where you can see me what other teams and collecting that

information I think have a good person where the state the industry is but yeah like the running that company was like I was thinking about Lido before Lido existed and so when I saw it I knew the guys that were running it they were crushing it they would always crush it they would win every single game of stake competition for Cosmos it would ran the best validators yeah and so when they were raising I'm like take all my money and so perify ended up being the first or second largest investor in Lido in the seed round and everyone was passing on it people were like critical of is their Merit in having a like uh a cluster of validators and you have to believe proof of stake was going to happen and ethereum was like still in that process was that uh

was that lamichuk or whatever uh yeah yeah those guys P2P like they they know what they're doing ballora is the ultimate wallet for exploring the cello ecosystem you can easily access over 50 different crypto assets and 30 different dapps for swapping sending and growing your crypto all from your mobile phone their global app is localized in over 13 different languages and over a hundred different countries giving you the crypto Explorer access to a simple and easy way to send payments purchase digital goods and access a suite of decentralized financial services Flora provides One-Stop access to more than 36 daps including daps like Plastics the global plastic recovery Network this

week Plastics launched a new nft collection with FC Barcelona which will support the collection of 1 million kilos of plastic over the next three years super cool download the velora app start exploring the new collection on Plastics today at veloraapp.com forward slash Empire let's talk later then so there's um basically there's flood happening with Lido I'd say right now the Lido situation to kind of summarize it is that there's um there's a total of 19 million eth staked on ethereum six million of that eth is staked on Lido so the the the math right there for you for you all is 36 of all staked eth is staked with Lido um some more data points more than 32

percent of all validators are using Lido currently lydo is the number one protocol in eth with eight with tvl of more than 13 billion that is more than twice the tvl the second largest project which is not rockable Norwich maker maker oh sorry yeah I thought you were just talking about yeah yeah yeah uh that is um uh it's close to all uh I think it's six percent of all the eth in existence is uh inside of Lido right now um Lido turned on the withdrawals I think it's two or three weeks ago had basically no effect on tvl uh over the past month lytos TV all grew by 11 um so basically like I mean Lido's just dominating right now and I think the the

bud or the pushback on Lido is that 36 of all steak to eat is held by one entity um and if you look at maybe what folks in the Solana ecosystem or in other ecosystems are are saying the pushback here would be that um you know this kind of centralizes eth um and that like this this is just net negative for the system I would push back on it but I'm curious I mean you've been involved with Lido since I would encourage people to go listen to a conversation I believe we had Constantine here even before when I started officially didn't we have him talk about Solana like there was an episode on Solana that we did and Constantine was actually an early investor in Solana as well and so we had him on here at Empire believe and

it was him and me talking about Solana no well maybe the tldr is I think there is a risk of course that if anything were to go wrong in light of smart contracts and now I'll add ethos are no longer accessible or there's a bug or whatever it's problematic but people should be aware that there are a number of entity validators within the Lido ecosystem that constantly get reviewed and it's not like just one you know party that is validating there are a number of people in that Lido ecosystem

that do it is my understanding and has been for a while I believe but um so so yeah I I just want to point that out right I mean that there is a risk of course and there's always smart contract risk but um there's a lot of Lindy of course now um in in how they manage their operations and how you know they they sort of the committee itself uh um manages like reviews which validators get inducted into this kind of like Federation of sorts a good second was always going to be a winner take all game and yeah winner take most winner take most yeah I mean

look it's a fluid market right A lot of people are looking at the rates that you can get on some of these barriers like in staking derivatives and then you easily move around and so now that the Market's a bit more fluid now withdrawals are enabled then I think it uh naturally there may be some more um I guess movement and that ratio May fluctuate over time but um um the the reason I brought up the Solana kind of point is I think when you're thinking about blockchains generally speaking I think it's natural tendency for these systems to Cluster and and have some concentration and you know because the argument for Solana has always been well it's really

hard to kind of run a value like the Computing costs are much higher than ethereum like in ethereum anyone with a Raspberry Pi can like run a node but no one really does right in practice no one kind of very few people do that and so it's just important to remember like yeah of course you want to push decentralization and in a perfect world you would want to have that number go down but um the question is if it's going to happen it's happening already I mean six percent is I would say it's like not ideal but it's not also huge right it's not like 50 yeah well I think there are two important things to think about here too one is um what's the alternative the alternative is if you look at the top uh staking folks it was uh the centralized exchanges like Kraken and

binance and now coin you know now coinbase is coming up there so would you rather have all of this capital and eth inside of Lido or would you rather have it inside of the centralized exchanges for me I'd rather have it inside of fly though and then the other thing um that I think you have to consider so if you believe that the the end state for liquid staking is a winner winner take all or winner take most market then uh you kind of have to think about like well are you fine with that and if you're not or are you not fine with that and if you're not fine with it then how do you you're basically you're basically asking Lido to self-limit the amount of the amount of market share that they have which sends the message that if you get too much market share ethereum is

gonna like ethereum and the ethereum community are going to go against you which I actually think has a really negative uh repercussion of disincentivizing Builders to build really big and successful companies uh and like value-added projects on top of ethereum um yeah so my pushback for my my advice for people who are like don't like Lido getting all this market shares like free market go build a better product Plato's got the best product right now there was a poll that uh I mean for this discussion it's kind of ongoing and important like deeds and support is going to be covering it pretty well there's a poll that um talked about what you just said like Lido poll which people would lie to vote of course is it

should lie to like self-limit and they overwhelming you know majority said no like 9.81 said no no of course you know these are people that have Lido so yeah they're biased obviously it's kind of a but still you know uh there's a concept called like veric Victory which is if you're a lighter holder like at what point do you push it I think the you might look at that if you're a lighter holder and say you want to make sure that this is the dominant player and of course um it's like but then if there comes a point where it you don't want it maybe right now it's fairly low and you say it could go to 12 yeah why not but if after a certain limit I think even as a lighter holder you say wait

for the go to the ecosystem you kind of don't want it to go up above a certain range but I don't think any pushback yeah if there's any pushback on Lido I actually think people are focusing on the wrong thing here if you had to push back on Lido I don't think it's about their market share and about Monopoly because I think that liquid staking will always like that market is like I said gonna Gonna Be A Winner take most Market it's um I haven't looked in a couple of months at the number of um a number of addresses that control the protocol but like last time I checked I think it was around like 50 or 60 and like that number should probably increase um so that would maybe if I had if I'm

trying to pick uh a problematic thing here yeah um let's move on yeah okay um let's talk Anna mocha so and by the way this is I think the most important thing if you're going to listen to one thing of this episode I think it says so Ryan weeks at the Block reported that um let me just read this story so Anna mocha this is the title Anna mocha chair says turbulence of last two years to blame for delayed 2020 accounts this was kind of like seemed like a nothing Burger story no one re-shared the story really um but let me read some of the the

highlights here anna mocha Brands was given an extension until the end of q1 this year for publishing audited 2020 accounts but it is yet to do so uh chairman yatsu said the impact of events in 2021 and 2022 are to blame for the delays are partly to blame for the delays animoka has yet to produce a long delayed set of accounts for 2020. um uh uh they have been given an extension to file an audit their audited financial report for 2020 which was originally due to Australian Regulators by the end of 2022 the ones listed firm negotiated a later filing date pushing the deadline to the end of the first quarter of this year with uh with subsequent accounts to be filed later in

2023 a spokesperson at animoka did not expect to miss the deadlines they said a spokesperson said at the time that Anna mocha did not expect to miss the deadlines but they did in fact miss the deadlines um but two months after the revised date the accounts are yet to appear this could be a total nothing Burger of a story and could be but like we are too deep into the bear market and have had too many of these kind of things that like my when I see something like this my Spidey senses start going off um and we've just I think like you know there are a lot of conversations about

like when you see something uh a lot of times in the bull market people would see kind of like weird things like this and wouldn't say anything and I now feel like it is my responsibility and your responsibility and uh to to call out things like this I'm very hopeful this is a total nothing burger and they're just slammed but I know what it takes to do an audit the sorry even if you're slammed you do not miss your audit for was it two three years no two years it's mid-2023 my friend the 2020 audit is not done come on it was losing my mind yeah yeah I think there's an interesting before I give my thoughts here and by the way we're paying a lot

of attention to this um and we will be reporting on it and if someone from anamoco wants to come forward and explain the situation we would love to do that so there's an interesting statement from the believe it's uh yatsu the chairman says that the issue here why purportedly they're delayed is um they are that quote unquote let's say we made an investment in 2022. in 2020 and it had an impact in 2021 or 2022 they want to reflect the that impact in the 2020 accounts and that's basically what's causing quite a bit of these delays right

so in my I read that and I need to validate and confirm this by looking at the financial statements but my intuition is that it's related to how they hold their Investments and how they account for those so for context right animoka is a huge holding company they've made I mean God they've made every investment Under the Sun on gaming and I'm you know so they they have their hands on a lot of Investments hundreds probably um and so anytime and this brings me back to my days when a Purify like when when you're marking a position you have to at some point right if you make an investment um you typically carry at a cost right

if it's Venture and then it takes time and if they raise around or they have a liquid token but it's locked and you have to somehow account for that in the balance sheet sorry in the financial statements um as a holding company kind of you're reporting like you know the value of your bulk and I think that that's the discrepancy here and that's why they've delayed now the question becomes well what kind of policy have and how have they marked their positions over time um to your point around FTX this is a huge problem right some people are a bit more aggressive than others and how they mark their positions and so well that was the whole thing

that started to unravel them as they marked these positions super low float like FTX got a lot into trouble because they were marking their serum position and borrowing against that which is a in a liquid position and two it's very low float and price Discovery is You could argue that's not the real price of the project right A lot of these crypto projects raise money or have a token and there's like less than 10 percent of the circulating supply of the total Supply circulating sorry and so the the valuation of that project like is not in the billions it's like if you try

to sell your position right now like you will not get that price and a big indicator of that is secondary Market activity the price in the secondary Market is a far more realistic barometer of the value of that position and if you look at the secondary Market historically over the years like over the last six seven years the discounts on these illiquid positions tend to be at least 30 40 50 even up to 90 80 percent right if you're holding like a a liquid bag of a gaming project all right you're not marking that a price of token right now say they have a ton of axi yeah maybe they invest in taxi and actually has a token price you're going coin Gecko and you see the

price you're not in your books you should not be multiplying the price of that no no with your position which is locked and you can't sell today and even if it was not locked there's like different discounts that I think of in my brain one is a liquidity discount um the other one is sort of like you know illiquidity meaning it's a lot like you can't practically sell it it's not freely traded the other ones of course are more structural which is you know you you can't sell the position like marketable marketability if you're a huge holder good luck trying to offload that book like tiger for instance is offloading a bunch of their tokens when they do that everything's Unchained

you could see that and prices go down 20 30 like after huge unlocks sometimes depends on the secondary Market activity but um again it's um it's worth focusing on because you know animal is a big player in the space what did they they used to be public they're no longer public right they got the listed by the Australian Securities yeah yeah um just yeah just putting up the red flag on this one um to make it on it is like uh take a lot of work but it's a pretty simple thing if your books are in order um well you said something yeah you said

something really interesting which is bull markets tend to um abscond these things like you know I mean in Raging Bull Market if you're valuing your book at you know none of this kind of really matters right you don't get margin called right you can meet your whatever but as soon as prices go down Good Luck Good Luck you know there's a huge unraveling uh I hate that that would be the case but it's not looking good and and I sort of have a few questions like where are the investors in animoka like if I'm an event I'm not but if I were an investor in animoco you know I'm like who's calling the chairman who's on the board and who's

saying hey guys like what's up like who's in the supervisory committee who's in the financial committee like is there is there like this is crazy sometimes yeah I mean look mind you this happened and Ron like bad accounting policies I've like taken down so many companies um and like even though even though large auditing firms have stepped you know after FTX I think like even before that a few odd large auditing firms have said look we're not gonna audit crypto companies matter policy um but still I think you know there are firms doing audits out there and if you're a holding

company it's fairly straightforward of that like you know I mean like there's some nuance and reporting that needs to be done in like footnotes and whatnot but it's not rocket science oh foreign yeah I think we'll talk more about it next week once we look at the financial statements I mean I don't know if the financial statements are public I like I don't wanna yeah I wanna look into it they're not um okay well if someone from Anna mocha wants to come and talk about this stuff would love to um okay I want to raise fund but it is alarming it's concerning yeah yeah it's pretty concerning let's talk about the

SEC um if you guys remember uh the SEC a year ago the the doj and the SEC charged this former coinbase product manager with insider trading his name is ishan wahi um they charged ishan and two others uh said that they made more than a million bucks trading on Insider information um uh specifically like based on confidential information about future listings uh that that this PM got from being a PM at coinbase uh there's actually a pretty interesting thing that just kind of went under the radar here the SEC just entered a proposed settlement in their case against ishan uh the the former coinbase PM um I'm not sure what this so and like the full story here is that he pleaded

guilty to the doj charges and settles but strongly contested uh the SEC charges uh Paradigm also paired on the fund also filed a brief supporting eshan's defense against the SEC arguing that the tokens could not be deemed Securities even if they were initially sold in Securities transactions and um yeah it looks like the SEC just entered this proposed settlement I think it's a pretty big deal here actually I think it's a complete surrender on the sec's behalf I think it kind of shows the weakness and the sec's like big theories about secondary market trading of uh crypto and I think it's a pretty decent uh and meaningful development for the industry this is probably me talking my book and being

biased because I don't think that personally think that the SEC should be involved in all of this but um yeah I don't know doj got a guilty plea but the SEC completely folded when they were they got hit with this pretty like intense pushback on their claims that tokens trading on secondary markets for Securities um and yeah I'm curious if you agree with me that this is that big of a deal or if you're just like yeah this is a nothing burger no I think it's very important and I think it's a part of a broader Trend here of you know it's nice to see um some of these cases where there is pushback you go to court and you get a better interpretation and as opposed to immediately kind of folding and settling and I think

um so it's it's encouraging to see that and I've always said this you know I have faith in when we talk about the us or being against you know crypto I don't think it's the case I think I still have faith in the court system and the proper interpretation of these things and so yeah I think that the key the key as you said is this idea that like you know tokens trading a secondary market around Securities and I think coinbase really got behind that Paradigm got behind that and it's good to see that for sure yeah yeah um we'll see I mean I this could just be them as well like the optimistic views that the SEC realized their case is weak and they gave up the the other view is that like this was just drawing a bunch of resources and they need to free up

research for further uh chairman against her uh has come out requesting for more budget um and oh you don't say yeah yeah um by the way as an aside that we're talking about Budget on the debt ceiling resolution that got passed the I it would be interesting to see the budget of the SEC if it went up or or not or stayed the same because they did a number of cuts not like super material but there was a cut and I'm curious what the budget of the SEC looks like over the next coming kind of years hmm But maybe we can talk about that next week yeah I don't I don't know what it is but yeah I don't know why there was just it just popped in my head as we talked about are they you know because

he claims they're fairly understaffed yeah yeah well they did pull back the remember the IRS got approval to hire like 140 000 new people or something like that part of the debt ceiling negotiation was pulling some of that back I see got it got it or there are a couple interesting things that got caught clawed back like one of them was um uh there were a couple things axios did a good article on it um what else man I think that's kind of it for this week um yeah um don't send your money to uh ben.eath or any of these other like random addresses you know if you want to spend your money guys there's a lot of

Charities and research institutions out there like constantly reminded of like just do that like you know I'm not here to say how you should spend your money and you've hard and you pay you know worked hard for it and whatnot so yeah yeah it is amusing to see for sure yeah it is awesome man what are you doing this weekend any any books by the way or um series um oh you know what I want to talk about this there was a poly Market uh poll on who uh so I've watched succession finally finished it yesterday and I was shocked at the result and this will not be a spoiler alert but poly Market ran a uh um a market I guess

on who the next CEO of successions can be and the it was like when I looked at the poll I couldn't believe it and it ended up being right just uh it's fascinating prediction markets and like the sort of clustering of uh wisdom of the crowds if you will can work in some instances it's pretty interesting to see that so anyways I watched succession pretty cool pretty entertaining nice um there's a Conor McGregor documentary out there that came out also interesting um you know those those I have a recommendation uh Obama has this new show on Netflix called working it's just four episodes basically he goes to three American workplaces one is the Pierre Hotel in New York the other is um this

like home healthcare place and the other is a uh uh self-driving car startup the one that acquired Uber's self-driving car unit and he basically in each episode looks at one part of the like the totem pole of the workplace so like the first episode is about like the lowest people quote unquote the next is like the mid people the third is like the upper class of the companies and that's that's as far as I am I haven't got to the fourth but I'm assuming the fourth episode's like the CEO or something or the the chair yeah pretty interesting uh series looking at um I think it's interesting because I'm also uh just about to start this book called poverty by Matthew Desmond um I wrote this book that was really

good called evicted a couple years ago and uh I don't know just kind of examines how is uh being poor in the US is very different than being poor in a bunch of other rich countries um and have two friends that really uh respect who who highly recommended it kind of like the hillbilly eulogy which was game popularity a few years back yeah yeah guys like being poor in America is not being poor in like the Democratic Republic of Congo yeah uh maybe that's not the right not real not not really that but but that was also a good book that was a good book uh speaking of like uh I think uh around this idea of poverty there's a great YouTube um it was a great book but like the

world is not as bad as it seems I think Hans rosling who passed away but he has a great YouTube I think it was a TED Talk that's on YouTube find it it's really good whenever you lose faith in humanity in the world and whatnot like go look at that because I think the media 24 7 News cycle tends to portray the world in a far far worse situation because there's huge problems in the world but it's really interesting when you apply actual data and statistics and look at how far we've come less conflict you know mortality rates poverty like statistically speaking we are in a way better place yeah than we were like 50 100 200 years ago so that's not to say that we can't do better as Humanity as humans but nonetheless we'll end it on a cheerful

note you know go out and have some some fun this weekend um yeah you know it's nice to see that and you know permissionless is coming up so excited about that right I'll make the plug you know you see this exactly you always plug this now and plug in I love it I'm excited about it I'm excited to go to Austin and hang out with uh crypto peeps nice all right sir be well enjoy the weekend thank you thanks for listening everyone and we'll see you on uh Tuesday for another episode awesome thanks everyone foreign [Music]