WEBVTT

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<v Speaker 1>There's so much news happening from the agencies all the

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<v Speaker 1>time now, and that is something that people have been

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<v Speaker 1>waiting for since before I even joined the industry. And

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<v Speaker 1>I think a lot of us have seen Solana, bitcoin eth.

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<v Speaker 1>We all understood those to be digital commodities, but it's

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<v Speaker 1>very different for the SEC and the CFTC to both

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<v Speaker 1>come out and say that.

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<v Speaker 2>This episode is brought to you by bitgo, the trusted

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<v Speaker 2>Bitco is one of the first federally chartered digital asset

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<v Speaker 2>infrastructure companies, offering regulated, insured custody and a platform built

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<v Speaker 2>for institutions but accessible to for thinking players across the space.

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<v Speaker 2>building the future of finance, bitco gives you all the

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<v Speaker 2>at scale. So learn more at bitgo dot com and

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<v Speaker 2>see why the biggest players in crypto trust Bitgo. Hey everyone,

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<v Speaker 2>welcome into the Thinking Crypto Podcast. I'm your host Tony

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<v Speaker 2>Edward and joining me today is Patrick Wilson, who's the

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<v Speaker 2>General counsel at the Solana Policy Institute, which is a

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<v Speaker 2>nonpartisan nonprofit focused on educating policymakers on decentralized networks like Solana. Patrick,

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<v Speaker 2>great to have you.

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<v Speaker 1>It's great to be here. Thanks so much. Love your show.

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<v Speaker 2>Thank you, and I'm excited to dive into the details

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<v Speaker 2>around crypto legislation and regulations, taxes and much more. Because

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<v Speaker 2>there's so much happening Patrick, it's like drinking from the fire.

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<v Speaker 1>Yeah, there's a lot going on right now. So I

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<v Speaker 1>don't know. We have forty five minutes today. Hopefully we

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<v Speaker 1>can cover everything we need to.

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<v Speaker 2>We may have to do around two, but we'll see

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<v Speaker 2>how much we can get to today. Sounds great, So Patrick,

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<v Speaker 2>let's start with your background. Tell us about where you

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<v Speaker 2>grew up, how'd you get into the legal industry and

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<v Speaker 2>things like that.

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<v Speaker 1>So, actually born and raised in Georgia, as you can

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<v Speaker 1>probably tell from my thick southern accent. I was born

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<v Speaker 1>and raised and went to school down there, and then

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<v Speaker 1>took the opportunity to move up to New York for

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<v Speaker 1>law school. Not in the city, I was upstate, and

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<v Speaker 1>after a clerking for a judge down in Florida, made

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<v Speaker 1>my way back up and started working at law firms,

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<v Speaker 1>though sort of the big law firm life in New

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<v Speaker 1>York City that so many of US lawyers do. I

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<v Speaker 1>was working on primarily litigation at first, and then focus

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<v Speaker 1>more on regulatory investigations and white collar criminal defense, and

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<v Speaker 1>that I did until about twenty twenty. My first role

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<v Speaker 1>and move into crypto was a coinbase in twenty twenty one,

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<v Speaker 1>the height of the Gensler era, so there was a

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<v Speaker 1>lot of work to do. My regulatory investigations background really

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<v Speaker 1>came in handy there, and then moved from there to

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<v Speaker 1>another startup and then finally at uniswap Labs was prior

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<v Speaker 1>to SPI, so I worked on litigation investigations there as well,

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<v Speaker 1>trying to help to defend the industry and defy from

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<v Speaker 1>what was looming from the prior SEC as well in

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<v Speaker 1>class actions.

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<v Speaker 2>What a time to come into the market when you

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<v Speaker 2>had the SEC attacking literally attacking the industry in some

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<v Speaker 2>ways unlawful at some points. Was that unlike anything you've

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<v Speaker 2>seen before.

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<v Speaker 1>Ye. I think the experience i'd had in law firm

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<v Speaker 1>life really helped to prepare me for the stress and

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<v Speaker 1>hours that would be involved in dealing with all of

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<v Speaker 1>the investigations and litigation that was coming toward Coinbase in

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<v Speaker 1>particular at the time, and then seeing just what's happening

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<v Speaker 1>in the broader industry. So I think it was good training,

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<v Speaker 1>but nothing necessarily prepares you for being right there at

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<v Speaker 1>the time and being in the tornado itself. So it

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<v Speaker 1>was really it was really great experience, and I had

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<v Speaker 1>a great team there at Coinbase that I worked with

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<v Speaker 1>as well in all those issues.

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<v Speaker 2>So what was your journey like in learning about blockchain tech?

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<v Speaker 2>Because obviously it's brand new, you know, everyone goes through

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<v Speaker 2>the journey of trying to figure out what is this,

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<v Speaker 2>how does it work? And you know, obviously you're a

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<v Speaker 2>legal expert, but the technology is so rapidly different. What

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<v Speaker 2>was that journey like to learning all that?

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<v Speaker 1>Yeah, my real first introduction. You may have probably heard

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<v Speaker 1>something like this from other lawyers in the past, but

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<v Speaker 1>the law firms were not necessarily quick to embrace crypto,

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<v Speaker 1>and there was a real aversion for at least some

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<v Speaker 1>time because of the headlines and everything that was happening

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<v Speaker 1>in the twenty tens that they didn't really want to

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<v Speaker 1>touch crypto clients so much. So I didn't have a

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<v Speaker 1>lot of exposure until there was another associate in my

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<v Speaker 1>group whose brother was actually working on a crypto project,

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<v Speaker 1>and she hosted a lunch and learn really to try

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<v Speaker 1>and explain a little bit about the technology and what

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<v Speaker 1>her brother was working on. And I found that fascinating.

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<v Speaker 1>And the thought about how that can really blend into

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<v Speaker 1>democratizing finance and you know, leading to where we are today,

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<v Speaker 1>with where we're headed in the future of finance, with

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<v Speaker 1>with potential on chain securities and derivatives trading like that

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<v Speaker 1>was just fascinating to me. And I've been very lucky

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<v Speaker 1>to have had along my way at these companies engineers

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<v Speaker 1>and folks in product who will really sit down and

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<v Speaker 1>explain the tech in depth and there it's so valuable

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<v Speaker 1>to have experts sit there, draw you pictures, really explain

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<v Speaker 1>how everything, how everything works, because that's also valuable for

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<v Speaker 1>you to be able to communicate with regulators how things

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<v Speaker 1>work and you may have heard this, but let's time

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<v Speaker 1>let's dispel this rumor and show you what's actually going

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<v Speaker 1>in on the inside.

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<v Speaker 2>So Patrick, I think needless to say, we are in

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<v Speaker 2>better days, right, things have completely changed things through folks

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<v Speaker 2>like yourself and others. You know, what are your thoughts

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<v Speaker 2>on how the regulatory environment, just even the approach of

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<v Speaker 2>the SEC, would you know, cher Paul Adkins, and even

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<v Speaker 2>the CFTC as well.

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<v Speaker 1>It feels like a different world. And we joke sometimes

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<v Speaker 1>that when we walk into the SEC, if we were

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<v Speaker 1>there two years ago, we would have left with a

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<v Speaker 1>subpoena and and today we're leaving with constructive dialogue and

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<v Speaker 1>real duouts for things that we can do and contribute

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<v Speaker 1>to make to make the industry better and to make

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<v Speaker 1>more clear rules of the road for folks to be

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<v Speaker 1>able to develop. And I think that is that difference

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<v Speaker 1>cannot be understated. The openness and willingness for the agencies

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<v Speaker 1>to engage, the push from the administration and members of

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<v Speaker 1>Congress to really make sure that crypto can come back

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<v Speaker 1>to the US and that it's useful to everyday Americans

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<v Speaker 1>and people who want to transact, people who want to invest.

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<v Speaker 1>It should all be available to them. And this is

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<v Speaker 1>really really an amazing situation that we're seeing now where

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<v Speaker 1>all of the powers that be are really really working

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<v Speaker 1>together to make sure that could happen.

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<v Speaker 2>So tell us a bit about what the SPI, the

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<v Speaker 2>Salona Policy Institute Day's doing to educate these regulators and

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<v Speaker 2>working with them to help find the right rules of

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<v Speaker 2>the road and guard bills to put in place. And

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<v Speaker 2>by the way, congrats on the one year anniversary of

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<v Speaker 2>the SBI.

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<v Speaker 1>Yeah, so I was not there from day one, but

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<v Speaker 1>I will applaud Miller white House Lavine our CEO. He

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<v Speaker 1>was the one who really founded it, got it off

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<v Speaker 1>the ground, and he employee number one, just celebrated his

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<v Speaker 1>one year anniversary along with SPI. So really excited about that.

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<v Speaker 1>And what SBI is really working to do is to,

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<v Speaker 1>as you mentioned, help the lawmakers and policy makers regulators

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<v Speaker 1>really understand how decentralized networks like Solana can be the

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<v Speaker 1>future of finance and the home of on chain finance

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<v Speaker 1>and internet capital markets. And the way we do that.

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<v Speaker 1>We have a really terrific gr lead on our team

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<v Speaker 1>in Colin He is on the hill constantly meeting with

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<v Speaker 1>lawmakers and their staff to help to educate them about

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<v Speaker 1>issues that are important, whether it's with market structure, whether

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<v Speaker 1>it's with tax which may be a subject of discussion today,

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<v Speaker 1>making sure they really understand our position and really understand

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<v Speaker 1>the implications of what may happen if we don't get

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<v Speaker 1>certain fixes in certain ways. And on the other side,

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<v Speaker 1>we also work with regulators, whether it's through meetings or

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<v Speaker 1>letters that we write, comment letters to questions that they

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<v Speaker 1>send out, or potential rule makings. We like to make

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<v Speaker 1>sure that we're engaging proactively with them on issues that

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<v Speaker 1>may matter to the Salona ecosystem as well. And third,

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<v Speaker 1>I would be remiss if I didn't say we're also

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<v Speaker 1>active in providing supportive briefing and litigation as well, because

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<v Speaker 1>there is we are in a different world, but there

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<v Speaker 1>is still private litigation that's happening out there, and that

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<v Speaker 1>is one other way where we're able to help influence

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<v Speaker 1>the discussion with additional sort of briefing and things like that.

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<v Speaker 1>So it's really a multi tiered approach.

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<v Speaker 2>Pardon the interruption. Hi, I'm Tony. I'm the host of

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<v Speaker 2>the Thinking Crypto podcast. I wanted to ask you if

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<v Speaker 2>you can please support the podcast by hitting the like

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<v Speaker 2>button subscribing. If you haven't as yet, you can leave

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<v Speaker 2>a comment below as well. And if you're listening on

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<v Speaker 2>a podcast platform such as Spotify, Apple or wherever you

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<v Speaker 2>get your podcasts, please be sure to follow and hit

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<v Speaker 2>the five star rating. I'll let you get back to

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<v Speaker 2>the content. Thank you so much. Yeah, that's really great,

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<v Speaker 2>and so it's so much needed. Right, we still have

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<v Speaker 2>work to do, even though we're not in the gainswered

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<v Speaker 2>era anymore. There's still a lot of rulemaking it needs

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<v Speaker 2>to be done and making sure the regulators get it right,

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<v Speaker 2>get the balance right, because there's folks who are still

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<v Speaker 2>fighting stable coin yeld de five. We'll talk a bit

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<v Speaker 2>about that.

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<v Speaker 1>We thought we were done with it, but you know,

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<v Speaker 1>what's dead is alive again.

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<v Speaker 2>Yeah for sure. Now you brought up tax right, and

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<v Speaker 2>I think it's important to have this conversation because there's

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<v Speaker 2>still a lot of ambiguity here as it relates to taxes,

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<v Speaker 2>and I believe it's one of the pillars that once

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<v Speaker 2>we figure it out, it will help boost adoption of

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<v Speaker 2>blockchain networks and crypto assets. So tell us where we're

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<v Speaker 2>at as far as legislation and guidance in getting that

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<v Speaker 2>No Center Lumus and some folks that put out guidance,

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<v Speaker 2>but it's not law yet.

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<v Speaker 1>Yeah, And I think you really hit the nail on

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<v Speaker 1>the head there with tax and the complexities around tax

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<v Speaker 1>and crypto for just ordinary transactions being a real gating

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<v Speaker 1>issue to folks adopting crypto at a larger scale. If

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<v Speaker 1>you think I think about tax in general, it's never

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<v Speaker 1>something that people are excited to talk about or deal with.

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<v Speaker 1>It's not like we're celebrating February or April fifteenth every

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<v Speaker 1>time it comes around each year. And so when you

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<v Speaker 1>mix something that's already an unpleasant experience with the complexities

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<v Speaker 1>of just transacting in crypto and how many taxable events

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<v Speaker 1>may be associated with just one swap or one purchase,

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<v Speaker 1>it starts to really make sense why that needs to

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<v Speaker 1>be solved in order for some people to feel more

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<v Speaker 1>comfortable transacting yptos, staking their assets, whatever the case may be.

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<v Speaker 1>And at SPI we are we are looking forward and

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<v Speaker 1>are huge proponents of potential bipartisan legislation that may fix

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<v Speaker 1>some of those big pain points, which we'll probably get

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<v Speaker 1>into and a little bit more detail. One of them

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<v Speaker 1>largely around staking and how we can make that much

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<v Speaker 1>easier for individuals in the US to help to secure

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<v Speaker 1>proof of steak networks and also deminimous exemptions so small

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<v Speaker 1>personal transactions don't turn into big headaches come tax day.

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<v Speaker 2>Yeah, that's such a great point because myself, I personally steak.

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<v Speaker 2>I have a salon. I'm staking eth as well, and

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<v Speaker 2>it earned those rewards. I'm not cashing it out because

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<v Speaker 2>I believe in crypto long term. It's just you know,

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<v Speaker 2>piling up and pooling in my account. But I want

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<v Speaker 2>to I don't want to be taxed on that because

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<v Speaker 2>I'm not spending it, I'm not using it. I wish

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<v Speaker 2>there was guidance around that, and you know, I often have.

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<v Speaker 2>We were talking about the recording conversations with my account

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<v Speaker 2>and he's like, I don't know what to do with this.

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<v Speaker 1>Yeah, exactly. It's a real it's a real point, and

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<v Speaker 1>we should be promoting policies that allow everyday Americans to

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<v Speaker 1>stake their assets in a way that makes sense. So

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<v Speaker 1>when you think about, you know, what is we're staking

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<v Speaker 1>in order to secure a network, and a byproduct of

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<v Speaker 1>that are newly generated tokens, things that have are programmatically

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<v Speaker 1>created from software. And the way that that's tax now

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<v Speaker 1>is actually the IRS will say it's taxed upon receipt,

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<v Speaker 1>which is a word that's doing a lot of work there,

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<v Speaker 1>But it basically means once you have control over it,

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<v Speaker 1>and you know you say you stake on Solana, that

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<v Speaker 1>means you know, those those newly created tokens happen. Those

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<v Speaker 1>events happen every two or three days on ethereum, I

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<v Speaker 1>think it's like every six and a half minutes. And

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<v Speaker 1>under that current guidance, that means you have hundreds thousands

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<v Speaker 1>of transactions that you have to keep track of as

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<v Speaker 1>a taxpayer every single year, and you have to know

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<v Speaker 1>what was the fair market value of the asset at

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<v Speaker 1>the time, like how much of it did I get?

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<v Speaker 1>And if you ever want to use that, you're going

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<v Speaker 1>to have to track the cost of every single one

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<v Speaker 1>of those teeny tiny amounts toward whatever however you dispose

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<v Speaker 1>of the asset. So it is an administrability nightmare in

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<v Speaker 1>its current form.

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<v Speaker 2>Is there any of this that is being addressed in

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<v Speaker 2>the Clarity Act or is it it's completely separate.

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<v Speaker 1>So this is not that tax legislation is really moving

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<v Speaker 1>on a different track than the Clarity Act, and that

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<v Speaker 1>makes sense. The Clarity Act is already a very all encompassing,

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<v Speaker 1>complicated bill, and I think appending tax reform to that

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<v Speaker 1>would probably be just introduce an additional level of difficulty

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<v Speaker 1>and complexity. But it is the people in Congress, and

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<v Speaker 1>there's members of their staff work incredibly hard, and it

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<v Speaker 1>is something that now I've been able to see firsthand

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<v Speaker 1>in a way that I didn't necessarily in my prior roles.

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<v Speaker 1>They have hundreds of issues that are on their plates

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<v Speaker 1>at any given time, but they devote so much time

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<v Speaker 1>and effort to meeting with folks like SPI, folks at

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<v Speaker 1>the Bigcoin Policy Institute, Coin Center, everyone who's working on

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<v Speaker 1>trying to promote sensible tax policy. And and kudos to

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<v Speaker 1>them because I don't know how they have the hours

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<v Speaker 1>in the day to be able to do all of this,

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<v Speaker 1>but they are really really looking at this, you know,

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<v Speaker 1>on a separate track, even in light of all the

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<v Speaker 1>other work that they're doing.

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<v Speaker 2>So do you believe that once the Clarity Act is

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<v Speaker 2>in place, the next you know thing that we need

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<v Speaker 2>to tackle is taxes, that that would be maybe the

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<v Speaker 2>major issue.

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<v Speaker 1>After at I think that that taxes is the next

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<v Speaker 1>big issue that people will realize because of that, that

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<v Speaker 1>gating and adoption issue. But there it actually there are

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<v Speaker 1>things that can be done right now on the the

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<v Speaker 1>on the agency level that don't even necessarily require a

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<v Speaker 1>legislative fix. And so one example of that when we

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<v Speaker 1>were just talking about staking. The reason that those newly

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<v Speaker 1>created tokens are taxed in the way that they are

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<v Speaker 1>is because there is a piece of IRS guidance that

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<v Speaker 1>was introduced in twenty twenty three that says as much.

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<v Speaker 1>But it's IRS guidance. It's not a rule, it's not

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<v Speaker 1>a statute, And so with the stroke of a pen,

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<v Speaker 1>the right folks that the IRS could really really sort

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<v Speaker 1>of ease the burden for everyday Americans when it comes

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<v Speaker 1>to the at least the newly created tokens that arise

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<v Speaker 1>from staking. And so, yes, legislation and that is a

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<v Speaker 1>huge focus to make sure we get that done, but

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<v Speaker 1>there are even interim steps because legislation is hard, legislation

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<v Speaker 1>is a long process. There are other things that can

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<v Speaker 1>be done to give taxpayers a little bit of relief

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<v Speaker 1>in the meantime.

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<v Speaker 2>Is the crux of the issue with the RUS that

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<v Speaker 2>they're classifying it as property versus currency. And I know

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<v Speaker 2>there is many moving parts here, but is that the

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<v Speaker 2>foundational issue?

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<v Speaker 1>Yeah? So that is Ever since the IRS came out

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<v Speaker 1>with a pretty long statement about this in twenty fourteen,

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<v Speaker 1>that has been the baseline, that crypto is taxed as property.

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<v Speaker 1>And as we know, there are a lot of different

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<v Speaker 1>uses for crypto. It can be used as a means

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<v Speaker 1>for payment, it can be used as an investment. And

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<v Speaker 1>it's not necessarily the case that every one of those

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<v Speaker 1>rules that's aligned with how property is treated from a

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<v Speaker 1>tax standpoint makes a ton of sense when you're looking

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<v Speaker 1>at crypto. And if you just think about sort of

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<v Speaker 1>an easy example that can teach you, it can take

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<v Speaker 1>us through how difficult it is. If I just if

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<v Speaker 1>I'm programmatically purchasing one Soul token every month, so I'm

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<v Speaker 1>a long term investor, I want sold January first, by one,

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<v Speaker 1>February second, buy one. Maybe I want to buy something

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<v Speaker 1>on February fifth and swap some of that SOUL for

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<v Speaker 1>USDC so I can make a purchase. The number of

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<v Speaker 1>taxable events that just have but right there, from something

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<v Speaker 1>simple is is so complex And then when you add

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<v Speaker 1>on there are gas fees that you are going to

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<v Speaker 1>have to pay where you where you have to recognize

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<v Speaker 1>a gain or a loss on fractions of a cent. Potentially,

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<v Speaker 1>it just it just becomes, as we said, an administrability

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<v Speaker 1>nightmare and goes back to that point of if I'm

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<v Speaker 1>just an average an average consumer who wants to use

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<v Speaker 1>my USDC or my bitcoin to buy, you know, coffee

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<v Speaker 1>or something at a shop, probably just going to use

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<v Speaker 1>my car if I'm going to hit you know, eight

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<v Speaker 1>taxable events in the course of that.

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<v Speaker 2>Yeah, there's so much friction there, and you mentioned like

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<v Speaker 2>a barrier to adoption because, uh, there's a lot of

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<v Speaker 2>folks who are long term crypto holders, but they may

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<v Speaker 2>want to spend a few satoshi's here if you soul tokens,

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<v Speaker 2>whatever it may be. They want to buy something, but

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<v Speaker 2>they can't their roadblocks so they can't there's a big

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<v Speaker 2>utilization that's blocked or they can't access with their assets.

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<v Speaker 1>Yeah, they either they they can't or they just don't.

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<v Speaker 1>They don't want to figure out how it's how they

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<v Speaker 1>can do it. And that really is our goal if

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<v Speaker 1>we are if we are going to to really realize

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<v Speaker 1>the full potential of this technology. People need to be

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<v Speaker 1>comfortable using it and transacting in it and investing and staking,

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<v Speaker 1>and we just aren't aren't quite there yet, but but

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<v Speaker 1>we can be in We're all working in that direction.

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<v Speaker 2>So Patrick, if you're running the IRIS, what would be

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<v Speaker 2>your solutions, the ideal solution you know that you would implement.

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<v Speaker 1>So I think for staking in particular, let's take take

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<v Speaker 1>that first. You know, it doesn't it doesn't make sense

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<v Speaker 1>that a newly created asset, like a newly minted token

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<v Speaker 1>that arises from staking, is treated as income once that is,

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<v Speaker 1>once that sort of hits your wallet. That is different

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<v Speaker 1>from how the IRIS treats all other newly created property

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<v Speaker 1>under the Internal Revenue Code. So if you think, you

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<v Speaker 1>know you're a farmer and you're on on the farm

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<v Speaker 1>in one of your you know, one of your animals

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<v Speaker 1>gives birth, the IRS doesn't come up behind you and say, hey,

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<v Speaker 1>that's five hundred dollars right there. If you're going through

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<v Speaker 1>you're a minor, and you real physical minor, not bitcoin minor.

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<v Speaker 1>But the same concepts for all this apply to bitcoin

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<v Speaker 1>mining as well. You pick something out of the ground. Again,

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<v Speaker 1>no one is there it to tax you on what

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<v Speaker 1>you have chosen. It is taxed when it is sold.

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<v Speaker 1>And so the most logical fix is to just treat

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<v Speaker 1>newly created staking rewards like you treat all other newly

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<v Speaker 1>created assets. And that means that they're taxed once they

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<v Speaker 1>are sold. And that is the point at which it

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<v Speaker 1>means that you would owe tax potentially on what that is.

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<v Speaker 1>But it makes a lot more sense than the current

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<v Speaker 1>the current environment, and you can also align that with

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<v Speaker 1>how your soul or whatever it is you're holding on

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<v Speaker 1>to is treated. So it's a capital asset subject to

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<v Speaker 1>potential capital gains or losses if you're holding it long term.

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<v Speaker 1>Why should that be different for new created tokens from staking?

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<v Speaker 1>They should theyre the same asset being used in a

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<v Speaker 1>similar way by the taxpayer. They should be treated the same.

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<v Speaker 1>And so that I think is the fix in my mind,

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<v Speaker 1>or at least part of the fix in my mind,

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<v Speaker 1>for the newly created tokens that arise from staking.

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<v Speaker 2>And when it comes to spending, you know, do you

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<v Speaker 2>think that the threshold should be anything below a thousand

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00:21:22.240 --> 00:21:25.880
<v Speaker 2>bucks non taxable event, but above a thousand maybe there's

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<v Speaker 2>a taxable event.

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00:21:27.079 --> 00:21:29.160
<v Speaker 1>Yeah, I think you're getting to what there's been a

402
00:21:29.240 --> 00:21:33.400
<v Speaker 1>lot of discussion about recently, which is called the deminimous exemption,

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00:21:33.599 --> 00:21:37.319
<v Speaker 1>And for everyone who doesn't speak Latin, that just means that,

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00:21:37.599 --> 00:21:40.640
<v Speaker 1>you know, it's a small transaction carve out from having

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<v Speaker 1>to claim taxable gains and taxable losses. And again, I

406
00:21:45.519 --> 00:21:49.359
<v Speaker 1>just kind of think of this as small transactions shouldn't

407
00:21:49.559 --> 00:21:52.480
<v Speaker 1>turn into a big headache for you come tax time.

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00:21:53.039 --> 00:21:57.160
<v Speaker 1>And we do see that there is currently no exemption

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00:21:57.359 --> 00:21:59.759
<v Speaker 1>like that in crypto. So that's why when we were

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00:21:59.759 --> 00:22:02.519
<v Speaker 1>talking about those gas fees. You do have to pay

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<v Speaker 1>a gain or loss on whatever however you're disposing of that.

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<v Speaker 1>And there are examples of how this applies in other

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<v Speaker 1>context and works just fine. For example, are going to

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<v Speaker 1>a foreign country and you convert some of your US

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00:22:19.400 --> 00:22:21.799
<v Speaker 1>dollars to a foreign currency. You come back, you got

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00:22:21.799 --> 00:22:24.440
<v Speaker 1>some leftover trade back in for US dollars. The RS

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00:22:24.480 --> 00:22:27.759
<v Speaker 1>doesn't come after you for a fractional gain or loss

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<v Speaker 1>depending on changes in currency fluctuation. And we think that

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<v Speaker 1>same concept can be easily applied to crypto as well.

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<v Speaker 1>And I think the things we want to keep in

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<v Speaker 1>mind there too, are that a stable coin only solution

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<v Speaker 1>for that kind of exemption doesn't get us all of

423
00:22:46.519 --> 00:22:50.480
<v Speaker 1>the way there, because the economic reality, as you mentioned earlier,

424
00:22:50.519 --> 00:22:53.720
<v Speaker 1>is people can use other assets to make purchases as well,

425
00:22:54.079 --> 00:22:57.279
<v Speaker 1>and we do want to make sure the tiniest transactions

426
00:22:57.319 --> 00:23:00.279
<v Speaker 1>like gas fees are something that's covered like that. So

427
00:23:00.519 --> 00:23:05.119
<v Speaker 1>there's a lot of discussion about what levels of exemptions

428
00:23:05.200 --> 00:23:09.279
<v Speaker 1>may apply for some personal purchases, and I think we

429
00:23:09.400 --> 00:23:11.920
<v Speaker 1>keep those core principles in mind that it should be

430
00:23:11.920 --> 00:23:14.240
<v Speaker 1>sort of asset agnostic and make sure that it covers

431
00:23:14.440 --> 00:23:16.880
<v Speaker 1>personal purchases and gas fees.

432
00:23:17.519 --> 00:23:21.440
<v Speaker 2>Yeah, that absolutely makes sense and a rookie question here.

433
00:23:22.240 --> 00:23:26.279
<v Speaker 2>So let's say I'm on coinbase, I have some solanam

434
00:23:26.519 --> 00:23:28.279
<v Speaker 2>and I want to make a purchase. There's a merchant

435
00:23:28.279 --> 00:23:32.160
<v Speaker 2>that accepts that salanum, and that's kind of the general

436
00:23:32.319 --> 00:23:35.880
<v Speaker 2>transactions that could take place today or tomorrow. But what

437
00:23:36.160 --> 00:23:39.319
<v Speaker 2>DeFi becomes more prominent and I'm not going through a

438
00:23:39.359 --> 00:23:42.559
<v Speaker 2>centralized exchange where maybe the reporting and stuff, but I'm

439
00:23:42.559 --> 00:23:46.440
<v Speaker 2>going through a DeFi protocol. Does the same rule apply

440
00:23:46.599 --> 00:23:48.680
<v Speaker 2>or would we need different rules for DeFi?

441
00:23:49.200 --> 00:23:50.920
<v Speaker 1>Yeah? I think a lot of a lot of the

442
00:23:50.960 --> 00:23:55.039
<v Speaker 1>work and it's currently that way today is on taxpayers

443
00:23:55.079 --> 00:23:58.400
<v Speaker 1>to understand and put together what their obligations are. I

444
00:23:58.440 --> 00:24:02.759
<v Speaker 1>do think there is a recognition in Congress that DeFi

445
00:24:03.119 --> 00:24:07.359
<v Speaker 1>is different and presents presents sort of distinct use cases.

446
00:24:07.680 --> 00:24:12.319
<v Speaker 1>We saw the best example of that with congressional action

447
00:24:12.440 --> 00:24:16.839
<v Speaker 1>from last year when Congress worked to overturn an IRS

448
00:24:16.960 --> 00:24:19.799
<v Speaker 1>rule that was passed back in twenty twenty four. I

449
00:24:19.839 --> 00:24:22.319
<v Speaker 1>think it was like December thirtieth, twenty twenty four. It

450
00:24:22.359 --> 00:24:25.119
<v Speaker 1>was really on their way out the door this thing

451
00:24:25.160 --> 00:24:28.599
<v Speaker 1>called the DeFi Broker Rule, and the DeFi broker rule

452
00:24:28.640 --> 00:24:31.880
<v Speaker 1>basically said, hey, if you're a DeFi front end, then

453
00:24:32.359 --> 00:24:36.559
<v Speaker 1>you are going to be required to provide information about

454
00:24:36.640 --> 00:24:40.359
<v Speaker 1>transactions using your front end to the IRS. But what

455
00:24:40.400 --> 00:24:42.960
<v Speaker 1>does that mean. It means someone's name, it means someone's

456
00:24:43.000 --> 00:24:45.519
<v Speaker 1>Social Security number, it means their address, and all sorts

457
00:24:45.519 --> 00:24:49.640
<v Speaker 1>of information that DeFi front ends are not particularly well

458
00:24:49.759 --> 00:24:52.960
<v Speaker 1>situated to be collecting, and honestly, I don't think want

459
00:24:53.039 --> 00:24:56.160
<v Speaker 1>to collect that information in the first place. And to

460
00:24:56.200 --> 00:25:00.319
<v Speaker 1>their credit, when the new Congress came in in beginning

461
00:25:00.359 --> 00:25:03.839
<v Speaker 1>of last year, they recognize the problem on a bipartisan

462
00:25:03.880 --> 00:25:10.039
<v Speaker 1>basis and moved really fairly quickly legislation through that nullified

463
00:25:10.160 --> 00:25:13.880
<v Speaker 1>that rule, and a byproduct of that is that it

464
00:25:13.920 --> 00:25:16.759
<v Speaker 1>can't really come back into place unless Congress is the

465
00:25:16.759 --> 00:25:18.920
<v Speaker 1>one that does that. So I think there is that

466
00:25:18.960 --> 00:25:23.720
<v Speaker 1>real recognition that whatever the irs and whatever tax rules

467
00:25:23.720 --> 00:25:26.559
<v Speaker 1>are are in place needs to match what the capability

468
00:25:26.640 --> 00:25:27.920
<v Speaker 1>is of the technology.

469
00:25:28.839 --> 00:25:32.240
<v Speaker 2>Yeah, and I look, I understand the regulators are going

470
00:25:32.279 --> 00:25:34.440
<v Speaker 2>to have a tough time. This technology is moving at

471
00:25:34.440 --> 00:25:37.359
<v Speaker 2>a rapid pace. There's so many moving parts and components.

472
00:25:37.400 --> 00:25:40.640
<v Speaker 2>But I hope you know, with the help of the

473
00:25:40.680 --> 00:25:43.839
<v Speaker 2>Salona Policy Institute, they take the time to get educated

474
00:25:43.839 --> 00:25:47.039
<v Speaker 2>and understand all the complexities here and find the right balance.

475
00:25:47.359 --> 00:25:48.559
<v Speaker 2>I think balance is important.

476
00:25:48.640 --> 00:25:51.400
<v Speaker 1>Yeah, it's all about balance, and we are it is

477
00:25:51.720 --> 00:25:54.960
<v Speaker 1>very encouraging people want to talk about tax right now

478
00:25:55.039 --> 00:25:57.880
<v Speaker 1>in addition to all of the other issues that touch

479
00:25:57.920 --> 00:26:02.160
<v Speaker 1>on crypto and blockchain technology. As I mentioned before, the

480
00:26:02.599 --> 00:26:06.720
<v Speaker 1>staffers of the congressional and on the regulatory level are

481
00:26:06.759 --> 00:26:10.000
<v Speaker 1>engaged and they are interested in learning about this and

482
00:26:10.039 --> 00:26:12.640
<v Speaker 1>making sure we come to solutions that make sense.

483
00:26:14.000 --> 00:26:16.640
<v Speaker 2>Now, we talked a good amount about kind of the

484
00:26:16.720 --> 00:26:20.519
<v Speaker 2>retail perspective in how you know the taxes will fit

485
00:26:20.599 --> 00:26:24.160
<v Speaker 2>into that. Our institutions also asking you guys for guidance.

486
00:26:24.240 --> 00:26:26.799
<v Speaker 2>He like digital astic treasury companies, we're putting crypto in

487
00:26:26.880 --> 00:26:28.920
<v Speaker 2>our balance sheet, we may want to do things with

488
00:26:29.000 --> 00:26:31.839
<v Speaker 2>DeFi or whatever it may be. Are they also kind

489
00:26:31.839 --> 00:26:33.640
<v Speaker 2>of like, hey, what's going on? Scratching their heads?

490
00:26:33.880 --> 00:26:37.319
<v Speaker 1>I think that they're in a better situation to understand

491
00:26:37.359 --> 00:26:40.799
<v Speaker 1>their obligations than sort of the everyday users who are

492
00:26:40.839 --> 00:26:45.160
<v Speaker 1>concerned with, you know, with logging all of their transactions

493
00:26:45.200 --> 00:26:48.279
<v Speaker 1>and understanding every staking event and what that may mean

494
00:26:48.319 --> 00:26:52.000
<v Speaker 1>for them. I do think that it is obviously as

495
00:26:52.079 --> 00:26:55.400
<v Speaker 1>institutions are adopting more and more, they are seeking the

496
00:26:55.400 --> 00:26:57.839
<v Speaker 1>same kind of clarity for their use of the technology

497
00:26:58.240 --> 00:27:01.279
<v Speaker 1>as everyone else is generally in the industry, And so

498
00:27:01.799 --> 00:27:04.119
<v Speaker 1>I do think, you know, there are there are certainly

499
00:27:04.160 --> 00:27:08.720
<v Speaker 1>ways where in the Clarity Act and other regulations where

500
00:27:09.079 --> 00:27:13.839
<v Speaker 1>institutions are getting more comfortable with touching crypto, whether it's

501
00:27:13.880 --> 00:27:17.680
<v Speaker 1>through no action letters or seeing certain sections of clarity

502
00:27:18.039 --> 00:27:21.000
<v Speaker 1>where it would give them additional guidance and comfort on

503
00:27:21.119 --> 00:27:23.079
<v Speaker 1>using it. But I do think we're all we're all

504
00:27:23.079 --> 00:27:24.799
<v Speaker 1>marching in the same direction where we want to make

505
00:27:24.839 --> 00:27:29.799
<v Speaker 1>it easier for both institutions and individuals to adopt this technology.

506
00:27:30.599 --> 00:27:32.319
<v Speaker 2>And I want to make sure I hit on this

507
00:27:32.839 --> 00:27:34.920
<v Speaker 2>because and I think you may have alluded to it earlier,

508
00:27:35.079 --> 00:27:37.839
<v Speaker 2>the Parody Act that's in the House. There's a draft.

509
00:27:37.880 --> 00:27:41.000
<v Speaker 2>I believe that's a crypto tax reform. What can you

510
00:27:41.000 --> 00:27:41.680
<v Speaker 2>tell us about that?

511
00:27:42.039 --> 00:27:44.440
<v Speaker 1>Yeah, first off, I have to say the Parity Act

512
00:27:44.559 --> 00:27:49.559
<v Speaker 1>is it y not ody parody, And just to just

513
00:27:49.599 --> 00:27:51.640
<v Speaker 1>to clear that up, to make sure there's no misconception

514
00:27:51.799 --> 00:27:55.880
<v Speaker 1>it is. I think has one of the best names

515
00:27:55.920 --> 00:27:59.640
<v Speaker 1>and acronyms for any bill because all crypto tax is

516
00:27:59.640 --> 00:28:02.480
<v Speaker 1>not looking for special treatment when it comes to taxation.

517
00:28:02.960 --> 00:28:05.559
<v Speaker 1>We are looking for that parody to be on par

518
00:28:05.720 --> 00:28:11.200
<v Speaker 1>with similar uses for similar assets and similar circumstances. And

519
00:28:11.519 --> 00:28:14.759
<v Speaker 1>again we are this is a bipartisan discussion draft and

520
00:28:14.799 --> 00:28:18.400
<v Speaker 1>we are hugely supportive of putting forth and moving through

521
00:28:18.480 --> 00:28:24.119
<v Speaker 1>like bipartisan legislation, and really are grateful to both Representatives Miller,

522
00:28:24.200 --> 00:28:26.680
<v Speaker 1>Representative Horsford and all of their staff who are continuing

523
00:28:26.720 --> 00:28:29.599
<v Speaker 1>to meet with all of us here our feedback on

524
00:28:29.640 --> 00:28:32.640
<v Speaker 1>the legislation. It's not just SPI, you know, they're listening

525
00:28:32.640 --> 00:28:35.240
<v Speaker 1>to everyone out there and they're really working to make

526
00:28:35.279 --> 00:28:38.599
<v Speaker 1>sure they get something that works. And we're super grateful

527
00:28:38.640 --> 00:28:41.039
<v Speaker 1>for that starting point.

528
00:28:41.440 --> 00:28:43.759
<v Speaker 2>That's really great, and the House has had an excellent

529
00:28:43.799 --> 00:28:45.759
<v Speaker 2>track record when it comes to legislation that you were

530
00:28:45.759 --> 00:28:48.279
<v Speaker 2>able to get FIT twenty one, of course, the Genius

531
00:28:48.319 --> 00:28:50.519
<v Speaker 2>Act and all those things before it eventually went to

532
00:28:50.559 --> 00:28:55.559
<v Speaker 2>the Senate. So that's really great, and I'm happy to

533
00:28:55.599 --> 00:28:58.160
<v Speaker 2>hear that the House is again is the ball rolling

534
00:28:58.240 --> 00:29:00.960
<v Speaker 2>here and if history piece as it did with the

535
00:29:00.960 --> 00:29:03.319
<v Speaker 2>FIT twenty one and the other bills, maybe this can

536
00:29:03.359 --> 00:29:05.359
<v Speaker 2>make its way to the Senate theater this year.

537
00:29:05.480 --> 00:29:08.359
<v Speaker 1>Knock on wood, Yeah, knocking wood. There's a lot to do,

538
00:29:08.440 --> 00:29:11.200
<v Speaker 1>but as we mentioned earlier, they know there are they

539
00:29:11.200 --> 00:29:14.480
<v Speaker 1>can do many things at once, and I don't know

540
00:29:14.759 --> 00:29:17.400
<v Speaker 1>how they do it, but they managed to. They work

541
00:29:17.559 --> 00:29:20.079
<v Speaker 1>very very hard, and we are hoping that we can

542
00:29:20.119 --> 00:29:23.480
<v Speaker 1>get there and get some sort of workable, workable tax

543
00:29:23.559 --> 00:29:25.799
<v Speaker 1>legislation in place really as fast as.

544
00:29:25.680 --> 00:29:30.319
<v Speaker 2>Possible now, something that's been happening lately a good thing.

545
00:29:30.759 --> 00:29:33.079
<v Speaker 2>While the Clarity Act, you know, it's making its way

546
00:29:33.079 --> 00:29:35.880
<v Speaker 2>through the Senate, the SEC and the CFTC have been

547
00:29:36.000 --> 00:29:39.599
<v Speaker 2>putting out guidance. Can the Treasury also do that while

548
00:29:39.720 --> 00:29:42.200
<v Speaker 2>bills like this are being sorted out, can they give

549
00:29:42.279 --> 00:29:45.680
<v Speaker 2>some sort of relief, so to speak, or temporary guidance

550
00:29:45.720 --> 00:29:46.960
<v Speaker 2>to the industry.

551
00:29:47.079 --> 00:29:48.839
<v Speaker 1>I think one of the things that we mentioned or

552
00:29:48.880 --> 00:29:52.319
<v Speaker 1>we were talking through earlier is that guidance that's around staking.

553
00:29:52.759 --> 00:29:56.160
<v Speaker 1>There is some guidance that that Treasury is able to

554
00:29:56.200 --> 00:30:00.319
<v Speaker 1>put through that that would create some sort of relief

555
00:30:00.559 --> 00:30:03.279
<v Speaker 1>for taxpayers. But the important thing to remember is that

556
00:30:04.400 --> 00:30:06.799
<v Speaker 1>we want something durable. We want to make sure that

557
00:30:06.839 --> 00:30:10.759
<v Speaker 1>we're not setting ourselves up for reversal of really really

558
00:30:10.799 --> 00:30:14.960
<v Speaker 1>positive and forward moving policies in the space that regulators

559
00:30:14.960 --> 00:30:18.960
<v Speaker 1>have enacted. So that's the importance of additional legislation, and

560
00:30:19.000 --> 00:30:23.839
<v Speaker 1>that's why everyone are pleased to see all of all

561
00:30:23.880 --> 00:30:26.480
<v Speaker 1>of the progress that's been made from all of these agencies.

562
00:30:26.720 --> 00:30:31.400
<v Speaker 1>But that's the importance of durable legislation. It's very hard

563
00:30:31.480 --> 00:30:34.480
<v Speaker 1>to walk back legislation. So that's why our focus really

564
00:30:34.559 --> 00:30:35.000
<v Speaker 1>is on that.

565
00:30:35.519 --> 00:30:38.000
<v Speaker 2>Yeah, it's a great point. And I know I'm taking

566
00:30:38.000 --> 00:30:40.160
<v Speaker 2>shots of Gary Gains here, but he was just on

567
00:30:40.200 --> 00:30:42.359
<v Speaker 2>Bloomberg I believe, I don't know this week or last week,

568
00:30:42.400 --> 00:30:44.200
<v Speaker 2>and I'm like, wait a minute, what's he still doing

569
00:30:44.240 --> 00:30:47.240
<v Speaker 2>around talking about crypto And it's like another administration can

570
00:30:47.279 --> 00:30:49.400
<v Speaker 2>come in and if we don't have the legislation in

571
00:30:49.440 --> 00:30:51.400
<v Speaker 2>play state, they well they could roll it back.

572
00:30:51.599 --> 00:30:54.000
<v Speaker 1>Yeah, and it is also important to think about the

573
00:30:54.480 --> 00:30:57.759
<v Speaker 1>legislation is not it. Rules are also are also a

574
00:30:57.839 --> 00:31:00.960
<v Speaker 1>durable way to get to get to move things forward.

575
00:31:01.000 --> 00:31:04.720
<v Speaker 1>And I think we were all incredibly excited you mentioned

576
00:31:05.000 --> 00:31:07.160
<v Speaker 1>former chair Genzler. I think we're all very excited to

577
00:31:07.200 --> 00:31:10.039
<v Speaker 1>see the token taxonomy that came out of the from

578
00:31:10.079 --> 00:31:13.480
<v Speaker 1>the SEC and CFTC jointly. Was it last week or

579
00:31:13.480 --> 00:31:15.640
<v Speaker 1>the week before. There's just so much there's so much

580
00:31:15.680 --> 00:31:18.839
<v Speaker 1>news happening from the agencies all the time now, and

581
00:31:20.319 --> 00:31:22.640
<v Speaker 1>that is something that people have been waiting for since

582
00:31:22.839 --> 00:31:25.880
<v Speaker 1>before I even joined the industry. And I think a

583
00:31:25.880 --> 00:31:30.440
<v Speaker 1>lot of us have seen you know, Solana, bitcoin eth

584
00:31:30.799 --> 00:31:34.720
<v Speaker 1>We all understood those to be digital commodities, but it's

585
00:31:34.839 --> 00:31:38.880
<v Speaker 1>very different for the SEC and the CFTC to both

586
00:31:38.920 --> 00:31:41.599
<v Speaker 1>come out and say that. And I don't think we

587
00:31:41.640 --> 00:31:45.400
<v Speaker 1>can understate the importance of that, and also the other

588
00:31:45.480 --> 00:31:48.680
<v Speaker 1>things that were in that document. It wasn't just token taxonomy.

589
00:31:48.720 --> 00:31:51.359
<v Speaker 1>There was also a really interesting part at the end

590
00:31:51.839 --> 00:31:55.759
<v Speaker 1>that was describing how staking is not a securities offering, right,

591
00:31:55.920 --> 00:31:59.079
<v Speaker 1>and that's hugely important. Still people have sort of put

592
00:31:59.119 --> 00:32:01.839
<v Speaker 1>that out of their mind because the SEC dropped their cases,

593
00:32:01.880 --> 00:32:05.039
<v Speaker 1>but there are still states that are going after companies

594
00:32:05.119 --> 00:32:08.839
<v Speaker 1>like Coinbase for offering staking services. And this guidance is

595
00:32:09.279 --> 00:32:15.200
<v Speaker 1>super clear, has a reasoned explanation for why something like staking,

596
00:32:15.240 --> 00:32:18.000
<v Speaker 1>even when you add ancillary services on top of it,

597
00:32:18.039 --> 00:32:20.359
<v Speaker 1>is not a security is offering. And I just I

598
00:32:20.359 --> 00:32:23.440
<v Speaker 1>couldn't applaud more of the work jointly of the SEC

599
00:32:23.480 --> 00:32:25.640
<v Speaker 1>and the CFTC on that and so many other things

600
00:32:25.640 --> 00:32:26.559
<v Speaker 1>that they've been working on.

601
00:32:26.880 --> 00:32:29.640
<v Speaker 2>Yeah, incredible guidance. I mean I read through it and

602
00:32:29.839 --> 00:32:33.839
<v Speaker 2>then the four categories for tokens and it's a breath

603
00:32:33.839 --> 00:32:35.720
<v Speaker 2>of pressure. It's something we've been waiting for for a

604
00:32:35.799 --> 00:32:40.000
<v Speaker 2>long time. Yeah. And I remember having early conversations with

605
00:32:40.160 --> 00:32:44.359
<v Speaker 2>SEC Commissioner Has the person, you know, she was advocating

606
00:32:44.440 --> 00:32:46.039
<v Speaker 2>and like, hey, we got to get this out and

607
00:32:46.480 --> 00:32:48.640
<v Speaker 2>the SEC could have done it, but of course, you know,

608
00:32:48.799 --> 00:32:52.319
<v Speaker 2>previous administration we're roadblocking that. But it's just like, wow,

609
00:32:52.440 --> 00:32:53.440
<v Speaker 2>finally we got it.

610
00:32:53.599 --> 00:32:56.279
<v Speaker 1>Yeah, it is great, it is. It is so promising

611
00:32:56.319 --> 00:32:58.240
<v Speaker 1>to see that and not only you know, I think

612
00:32:58.240 --> 00:33:01.839
<v Speaker 1>on the same day Cherak and delivers a speech focused

613
00:33:01.880 --> 00:33:05.960
<v Speaker 1>on potential fundraising pathways in the future, and I don't

614
00:33:06.000 --> 00:33:07.720
<v Speaker 1>know how they how they have time to do all

615
00:33:07.720 --> 00:33:11.240
<v Speaker 1>of this work. It's it's really a ton happening over

616
00:33:11.279 --> 00:33:14.839
<v Speaker 1>there at the SEC and the the some sort of

617
00:33:14.839 --> 00:33:19.319
<v Speaker 1>clarity from the SEC about how token projects can raise

618
00:33:19.359 --> 00:33:22.599
<v Speaker 1>funds or how products can use use tokens to raise

619
00:33:22.599 --> 00:33:25.799
<v Speaker 1>funds is another thing that's that's long overdue and can

620
00:33:25.839 --> 00:33:30.319
<v Speaker 1>really unlock the ability of developers and younger companies to

621
00:33:30.359 --> 00:33:33.000
<v Speaker 1>have access to capital that they never did before. It's

622
00:33:33.279 --> 00:33:35.559
<v Speaker 1>a lot of promising things coming out of there, for sure.

623
00:33:36.799 --> 00:33:40.359
<v Speaker 2>Another rookie question because I don't understand the complexities of

624
00:33:40.400 --> 00:33:42.839
<v Speaker 2>all of it. But so the SEC put out this guidance,

625
00:33:42.880 --> 00:33:46.200
<v Speaker 2>which is great. The Clarity Act itself hasn't passed been

626
00:33:46.240 --> 00:33:49.400
<v Speaker 2>passing the Senate yet. Is the goal eventually to move

627
00:33:49.400 --> 00:33:52.720
<v Speaker 2>what the SEC put together into the Claritiac or it

628
00:33:52.720 --> 00:33:55.319
<v Speaker 2>doesn't necessarily have to do it as long as I

629
00:33:55.319 --> 00:34:00.000
<v Speaker 2>don't know. The Claritiac is the macro overarching uh nail

630
00:34:00.359 --> 00:34:02.400
<v Speaker 2>that's holding it all down. I don't know how does

631
00:34:02.440 --> 00:34:02.799
<v Speaker 2>that work?

632
00:34:02.880 --> 00:34:04.839
<v Speaker 1>Yeah, I think cher Atkins did a really great job

633
00:34:04.839 --> 00:34:08.440
<v Speaker 1>at describing how this is this is sort of lowercase

634
00:34:08.480 --> 00:34:13.159
<v Speaker 1>C clarity and the bridge to clarity capital capital C

635
00:34:13.880 --> 00:34:17.039
<v Speaker 1>in market structure and what just sort of zooming out

636
00:34:17.039 --> 00:34:20.000
<v Speaker 1>the framework of how the legislation fits in. Like the

637
00:34:20.079 --> 00:34:24.400
<v Speaker 1>legislation is always going to be broader, it's always you know,

638
00:34:24.440 --> 00:34:26.679
<v Speaker 1>sort of the framework of what's supposed to happen. And

639
00:34:26.719 --> 00:34:30.360
<v Speaker 1>then they delegate quite often rule making to each of

640
00:34:30.360 --> 00:34:33.280
<v Speaker 1>the agencies. And so this is an example of you know,

641
00:34:33.559 --> 00:34:36.400
<v Speaker 1>it's a it's guidance right now, but it is something

642
00:34:36.480 --> 00:34:39.159
<v Speaker 1>that could be turned into a more formal and a

643
00:34:39.159 --> 00:34:42.199
<v Speaker 1>more durable rule from the SEC. I don't know that,

644
00:34:42.639 --> 00:34:44.199
<v Speaker 1>I don't I don't know that the Senate is going

645
00:34:44.280 --> 00:34:48.159
<v Speaker 1>to import wholesale like a document that this law is

646
00:34:48.199 --> 00:34:50.639
<v Speaker 1>this long into a clarity Act, but they certainly will.

647
00:34:50.679 --> 00:34:54.719
<v Speaker 1>They provide the principles, and then the agencies themselves right

648
00:34:54.760 --> 00:34:57.840
<v Speaker 1>sort of the implementing rules and regulations, and that may

649
00:34:57.840 --> 00:35:00.159
<v Speaker 1>be something that we would see in the future.

650
00:35:00.280 --> 00:35:03.119
<v Speaker 2>Interesting, So they kind of maybe just reference that document,

651
00:35:03.199 --> 00:35:05.840
<v Speaker 2>not to put the entire medium potatoes of it in there,

652
00:35:05.880 --> 00:35:08.920
<v Speaker 2>just saying what's outline in this guidance in the SEC

653
00:35:09.199 --> 00:35:09.960
<v Speaker 2>et cetera, et cetera.

654
00:35:10.119 --> 00:35:12.039
<v Speaker 1>Yeah, and they Yeah, the Clarity Act does a great

655
00:35:12.119 --> 00:35:15.880
<v Speaker 1>job and explain sort of what what the differences and

656
00:35:15.920 --> 00:35:19.400
<v Speaker 1>the jurisdiction are with the CFTC and the SEC, and

657
00:35:19.400 --> 00:35:21.559
<v Speaker 1>and when tokens may have to make disclosures. And that's

658
00:35:21.599 --> 00:35:24.800
<v Speaker 1>absolutely something they can do is say, Okay, the SEC

659
00:35:25.280 --> 00:35:29.280
<v Speaker 1>has authority now or should make rules to further, you know,

660
00:35:29.440 --> 00:35:33.960
<v Speaker 1>to further clarify token taxonomy of securities and commodities. And

661
00:35:34.000 --> 00:35:36.280
<v Speaker 1>I think that's you know, that's this guidance is a

662
00:35:36.280 --> 00:35:38.880
<v Speaker 1>great start. The SEC has asked for and is welcoming

663
00:35:38.920 --> 00:35:40.639
<v Speaker 1>comments on those, and I think they are going to

664
00:35:40.679 --> 00:35:43.119
<v Speaker 1>be you know, everyone's super pleased with where it is,

665
00:35:43.119 --> 00:35:47.159
<v Speaker 1>but there may be upon further reflection, maybe comments that

666
00:35:47.199 --> 00:35:50.000
<v Speaker 1>folks make that makes it even better in the future.

667
00:35:50.840 --> 00:35:54.039
<v Speaker 2>So Patrick, we're recording this on March twenty six. March

668
00:35:54.079 --> 00:35:56.920
<v Speaker 2>twenty six, and the folks that in Congress had a

669
00:35:56.960 --> 00:36:00.400
<v Speaker 2>hearing on tokenization and there's a huge tokenization and raise

670
00:36:00.440 --> 00:36:03.119
<v Speaker 2>happen with all they tradfy Wall Street firms getting on

671
00:36:03.119 --> 00:36:05.800
<v Speaker 2>board looking to go twenty four to seven. Part of

672
00:36:05.840 --> 00:36:09.480
<v Speaker 2>the SEC guidance. One of the elements that we just

673
00:36:09.480 --> 00:36:13.039
<v Speaker 2>alluded to was that tokenized securities will remain as securities.

674
00:36:13.239 --> 00:36:15.199
<v Speaker 2>Does that change anything on the tax front.

675
00:36:15.039 --> 00:36:17.960
<v Speaker 1>Or is just the status quo? I think, look, look,

676
00:36:18.119 --> 00:36:22.079
<v Speaker 1>seeing how far we have come on the issues of tokenization.

677
00:36:22.199 --> 00:36:24.039
<v Speaker 1>The fact that there is a hearing in front of

678
00:36:24.079 --> 00:36:29.440
<v Speaker 1>the House Financial Services Commission on tokenization is huge. Again,

679
00:36:29.679 --> 00:36:32.719
<v Speaker 1>cannot understate the progress that's been made there. And I

680
00:36:32.800 --> 00:36:35.599
<v Speaker 1>think what you're talking about also highlights one of the

681
00:36:35.760 --> 00:36:39.599
<v Speaker 1>one of the issues that's that's present with tax regardless

682
00:36:39.639 --> 00:36:43.360
<v Speaker 1>of whether you are dealing with a security or a commodity,

683
00:36:43.400 --> 00:36:46.719
<v Speaker 1>and that's that deminimus exemption for gas fees. Because however

684
00:36:46.719 --> 00:36:51.320
<v Speaker 1>you're treating securities from the tax perspective as the underlying instrument,

685
00:36:51.400 --> 00:36:54.559
<v Speaker 1>and how securities are already taxed, there is still that

686
00:36:54.679 --> 00:36:57.679
<v Speaker 1>additional issue with that gas fee that's not going to

687
00:36:57.719 --> 00:37:02.039
<v Speaker 1>be solved in any way by you know, rightfully saying

688
00:37:02.079 --> 00:37:03.960
<v Speaker 1>that a security is a security if some sort of

689
00:37:04.039 --> 00:37:07.880
<v Speaker 1>action is happening on chain, there's more than just that security.

690
00:37:08.000 --> 00:37:10.599
<v Speaker 1>There is that you know, that additional gas fee that

691
00:37:10.679 --> 00:37:12.719
<v Speaker 1>goes along with it that we need to be concerned about.

692
00:37:13.159 --> 00:37:14.679
<v Speaker 1>Ah So, see, that's a good thing.

693
00:37:14.679 --> 00:37:16.159
<v Speaker 2>I ask you that question because I didn't think of

694
00:37:16.199 --> 00:37:22.840
<v Speaker 2>that the gas v component in tokenize assets, it's always complicated. Y. Yeah,

695
00:37:23.039 --> 00:37:26.239
<v Speaker 2>that's great, great insight. So we have a lot to

696
00:37:26.280 --> 00:37:29.760
<v Speaker 2>figure out. And I'm sure these institutions that are tokenizing

697
00:37:30.079 --> 00:37:32.920
<v Speaker 2>they don't want those answers like what, you know, what

698
00:37:33.280 --> 00:37:35.199
<v Speaker 2>are we liable for? Or you know as far as

699
00:37:35.199 --> 00:37:36.159
<v Speaker 2>taxes and things like that.

700
00:37:36.320 --> 00:37:40.320
<v Speaker 1>Yeah, exactly, everyone everyone is. Everyone wants clarity. Everyone wants

701
00:37:40.360 --> 00:37:43.000
<v Speaker 1>to understand what their rights and their obligations are with

702
00:37:43.079 --> 00:37:46.159
<v Speaker 1>respect to using and transacting in these assets. And that's

703
00:37:46.639 --> 00:37:49.000
<v Speaker 1>that's again, as we discussed earlier, keeps coming back to

704
00:37:49.039 --> 00:37:51.920
<v Speaker 1>how can we make this easier for folks to adopt crypto?

705
00:37:52.000 --> 00:37:53.920
<v Speaker 1>Can we make it easier for people to want to

706
00:37:53.920 --> 00:37:56.360
<v Speaker 1>build in the United States? And this is a critical issue.

707
00:37:57.639 --> 00:37:59.760
<v Speaker 2>Something else on the tax one that I've been thinking

708
00:37:59.800 --> 00:38:05.840
<v Speaker 2>of with assets running on chain, blockchains that are globally distributed, right,

709
00:38:05.880 --> 00:38:08.960
<v Speaker 2>it's not a US market, it is a global market.

710
00:38:09.400 --> 00:38:14.400
<v Speaker 2>What happens if I'm doing things outside the country not illegal,

711
00:38:14.559 --> 00:38:17.519
<v Speaker 2>but just I travel. You kind of gave the currency

712
00:38:17.559 --> 00:38:21.800
<v Speaker 2>example earlier and buying and selling outside coming back in

713
00:38:22.280 --> 00:38:24.559
<v Speaker 2>and then there may be other laws that are rules

714
00:38:24.599 --> 00:38:27.760
<v Speaker 2>around this. But it is also is that also taking

715
00:38:27.800 --> 00:38:29.280
<v Speaker 2>into consideration for taxes.

716
00:38:29.519 --> 00:38:32.800
<v Speaker 1>It's a really great question, and one of the key

717
00:38:32.960 --> 00:38:36.800
<v Speaker 1>fixes I think that we should be focusing on is

718
00:38:37.039 --> 00:38:40.000
<v Speaker 1>exactly what you're talking about, the sourcing of whatever the

719
00:38:40.000 --> 00:38:43.760
<v Speaker 1>tax obligation is. Because I think the most common sense view,

720
00:38:43.800 --> 00:38:47.000
<v Speaker 1>and the one that makes no sense to me, is

721
00:38:47.039 --> 00:38:50.679
<v Speaker 1>that me, as the taxpayer, that obligation is source to me.

722
00:38:50.840 --> 00:38:54.519
<v Speaker 1>Where am I not? Where is the technology that I'm using?

723
00:38:55.280 --> 00:38:57.320
<v Speaker 1>Because the last thing that I want to do is

724
00:38:57.639 --> 00:39:01.039
<v Speaker 1>for using a project or end that may be based

725
00:39:01.039 --> 00:39:02.599
<v Speaker 1>somewhere out of the US, Like I don't want to

726
00:39:02.679 --> 00:39:07.800
<v Speaker 1>end up paying tax and some foreign jurisdiction. So I

727
00:39:07.840 --> 00:39:10.840
<v Speaker 1>think that the sourcing issue, being sort of focused on

728
00:39:10.960 --> 00:39:14.039
<v Speaker 1>the taxpayer is what is sort of the most common

729
00:39:14.079 --> 00:39:17.400
<v Speaker 1>sense solution to one of those one of those difficult situations.

730
00:39:17.719 --> 00:39:21.320
<v Speaker 2>Yeah, because I think of, Okay, the example of using myself.

731
00:39:21.400 --> 00:39:23.280
<v Speaker 2>I have crypto acids. I want to spend some soul,

732
00:39:23.400 --> 00:39:27.519
<v Speaker 2>right tokens, But I went down to Brazil to go

733
00:39:27.559 --> 00:39:29.840
<v Speaker 2>hang out whatever, right, and I'm like, Hey, this merchant

734
00:39:29.880 --> 00:39:33.400
<v Speaker 2>accepts soul and griven crypto acids. What if I transact there,

735
00:39:33.599 --> 00:39:36.559
<v Speaker 2>I might have tax implications in the US. You know

736
00:39:36.639 --> 00:39:39.840
<v Speaker 2>that situation. That event took place in Brazil.

737
00:39:40.199 --> 00:39:42.360
<v Speaker 1>Yeah, and when you look at the analog of what

738
00:39:42.480 --> 00:39:45.239
<v Speaker 1>happens just as a traveler with cash, and how the

739
00:39:45.800 --> 00:39:50.719
<v Speaker 1>law doesn't really concern itself with those sort of trivial transactions,

740
00:39:51.039 --> 00:39:54.440
<v Speaker 1>the same principle makes sense to apply to crypto, it doesn't.

741
00:39:54.519 --> 00:39:56.639
<v Speaker 1>You know, you don't want to be burdened by having

742
00:39:56.639 --> 00:39:58.760
<v Speaker 1>to report that to the IRS, But at the same time,

743
00:39:58.800 --> 00:40:00.719
<v Speaker 1>the IRS doesn't want to be burned. And by having

744
00:40:00.719 --> 00:40:03.880
<v Speaker 1>you report every single one of those individual transactions for

745
00:40:04.079 --> 00:40:06.440
<v Speaker 1>a cup of coffee or something like that, they get enough.

746
00:40:06.639 --> 00:40:09.679
<v Speaker 1>They get enough reporting already and they don't necessarily need

747
00:40:10.119 --> 00:40:12.079
<v Speaker 1>something like that. And that's the whole basis of thinking

748
00:40:12.079 --> 00:40:15.920
<v Speaker 1>about the deminimus exemption. And as we see in other

749
00:40:15.960 --> 00:40:18.400
<v Speaker 1>parts of the law, there's already a workable system that

750
00:40:18.400 --> 00:40:21.599
<v Speaker 1>would prevent sort of absurd results like you just described.

751
00:40:21.920 --> 00:40:24.320
<v Speaker 2>Yeah, I just imagine that it will be a nightmare

752
00:40:24.679 --> 00:40:27.280
<v Speaker 2>on both the IRIS front end user.

753
00:40:27.239 --> 00:40:29.840
<v Speaker 1>Not one I want to deal with, Yeah.

754
00:40:29.119 --> 00:40:31.760
<v Speaker 2>For sure. So we got to get the guidance as

755
00:40:31.840 --> 00:40:35.480
<v Speaker 2>much needed. So I think everybody that's listening and watching

756
00:40:35.599 --> 00:40:37.480
<v Speaker 2>you got to call up your representatives. Once we get

757
00:40:37.480 --> 00:40:39.920
<v Speaker 2>the clarityag done and tell them Okay, now we talk

758
00:40:39.960 --> 00:40:40.679
<v Speaker 2>about taxes.

759
00:40:40.880 --> 00:40:42.519
<v Speaker 1>Yeah. I think that's a great idea. I think it

760
00:40:42.599 --> 00:40:46.199
<v Speaker 1>is always that we and others in the industry who

761
00:40:46.280 --> 00:40:50.679
<v Speaker 1>are advocating for these positions, we're in there all the time,

762
00:40:50.800 --> 00:40:52.840
<v Speaker 1>but they also want to know that this matters to

763
00:40:52.880 --> 00:40:54.679
<v Speaker 1>the people who live in their districts, the people who

764
00:40:54.760 --> 00:40:57.960
<v Speaker 1>live in their states. And it does, and so I

765
00:40:58.000 --> 00:41:00.840
<v Speaker 1>think it's really helpful. There have been other including I

766
00:41:00.840 --> 00:41:03.599
<v Speaker 1>think Stand with Crypto very recently put out sort of

767
00:41:03.599 --> 00:41:06.880
<v Speaker 1>a call to action about developer protections and other things

768
00:41:06.880 --> 00:41:11.639
<v Speaker 1>that really calls on individuals who are interested to reach

769
00:41:11.679 --> 00:41:14.239
<v Speaker 1>out to their representatives and make sure that their voice

770
00:41:14.280 --> 00:41:17.679
<v Speaker 1>is heard, because that that matters a lot to these folks.

771
00:41:17.760 --> 00:41:19.880
<v Speaker 1>They want to know that the voters who put them

772
00:41:19.880 --> 00:41:22.280
<v Speaker 1>in place, or even those who disagree with them, they

773
00:41:22.280 --> 00:41:24.000
<v Speaker 1>want to know what's on their mind and what's important

774
00:41:24.000 --> 00:41:28.000
<v Speaker 1>to them. So I echo that totally. And there's got

775
00:41:28.000 --> 00:41:30.360
<v Speaker 1>to be there's got to be support and vocal support

776
00:41:30.440 --> 00:41:32.159
<v Speaker 1>for being making sure we're moving this forward in the

777
00:41:32.239 --> 00:41:33.440
<v Speaker 1>right direction. Yeah.

778
00:41:33.480 --> 00:41:37.239
<v Speaker 2>Absolutely, let's talk stable coins. Stable coin market is heating up.

779
00:41:37.320 --> 00:41:39.800
<v Speaker 2>I recently interviewed the folks at Western UNI who are

780
00:41:39.800 --> 00:41:43.000
<v Speaker 2>building their stable coin on Salana, so the stable coin

781
00:41:43.079 --> 00:41:46.559
<v Speaker 2>races on after the Genius Act pass I love earning

782
00:41:46.760 --> 00:41:49.880
<v Speaker 2>rewards stable coin rewards on platforms like coinbased and uphold

783
00:41:49.880 --> 00:41:53.800
<v Speaker 2>and others, but the banks don't like that. Patrick, what

784
00:41:53.840 --> 00:41:54.840
<v Speaker 2>do you think this is about?

785
00:41:54.880 --> 00:41:55.079
<v Speaker 1>You know?

786
00:41:55.280 --> 00:41:58.159
<v Speaker 2>Is it incumbents simply saying, hey, we don't like the disruption,

787
00:41:58.280 --> 00:41:59.559
<v Speaker 2>or we want to slow us down so we can

788
00:41:59.639 --> 00:42:00.920
<v Speaker 2>catch up, that type of thing.

789
00:42:01.440 --> 00:42:05.199
<v Speaker 1>Yeah, there's been so much focus obviously on the yield

790
00:42:05.280 --> 00:42:08.679
<v Speaker 1>debate recently, and we saw what was it end of

791
00:42:08.760 --> 00:42:11.440
<v Speaker 1>last week. I think at this point where there was

792
00:42:11.440 --> 00:42:14.880
<v Speaker 1>an agreement at least in principle reached by the primary

793
00:42:15.079 --> 00:42:19.760
<v Speaker 1>Senate negotiators with the White House. And I don't think anyone,

794
00:42:19.800 --> 00:42:22.599
<v Speaker 1>at least certainly we have not seen whatever the text

795
00:42:22.639 --> 00:42:26.039
<v Speaker 1>of that compromise may be, and I think everyone is

796
00:42:26.159 --> 00:42:30.440
<v Speaker 1>very eagerly awaiting to see what that might actually say.

797
00:42:30.800 --> 00:42:34.079
<v Speaker 1>I do think it is important, and we're always supportive

798
00:42:34.159 --> 00:42:37.679
<v Speaker 1>for individuals to be able to do more with their money.

799
00:42:37.760 --> 00:42:42.719
<v Speaker 1>The trade associations and Crypto have written plenty of letters

800
00:42:42.800 --> 00:42:46.280
<v Speaker 1>and made their cases known, and we've signed on to

801
00:42:46.360 --> 00:42:49.320
<v Speaker 1>that too, because people should have a choice with what

802
00:42:49.360 --> 00:42:51.800
<v Speaker 1>they want to do with their money. And I think

803
00:42:51.880 --> 00:42:55.119
<v Speaker 1>this is like, this is subject to a negotiation. All

804
00:42:55.920 --> 00:42:59.559
<v Speaker 1>all legislation is a negotiation, and it takes this long

805
00:42:59.639 --> 00:43:02.800
<v Speaker 1>and it this hard because it does produce those durable

806
00:43:02.800 --> 00:43:08.239
<v Speaker 1>results in the end, and whatever the sausage making process is,

807
00:43:08.599 --> 00:43:11.159
<v Speaker 1>something will come out on the other side. And you

808
00:43:11.559 --> 00:43:15.119
<v Speaker 1>are you know, we are intently watching. It's this debate,

809
00:43:15.119 --> 00:43:18.360
<v Speaker 1>but it's not It's not it for clarity right now.

810
00:43:18.400 --> 00:43:21.440
<v Speaker 1>There are other things that are still being actively discussed

811
00:43:21.440 --> 00:43:24.320
<v Speaker 1>and Amando to an La from the DeFi Education Fund

812
00:43:24.519 --> 00:43:29.880
<v Speaker 1>was on recently talking about the DeFi developer protections, the

813
00:43:30.280 --> 00:43:33.400
<v Speaker 1>what's called Title three issues that touch on DeFi and

814
00:43:33.519 --> 00:43:37.639
<v Speaker 1>those are hugely important, and continued conversations around making sure

815
00:43:37.679 --> 00:43:39.760
<v Speaker 1>those stay in the bill in the way that they are.

816
00:43:41.119 --> 00:43:44.559
<v Speaker 1>Disclosures are always are always up a hot topic as well,

817
00:43:44.599 --> 00:43:48.159
<v Speaker 1>what's in them? Who can make them? And then something

818
00:43:48.159 --> 00:43:51.400
<v Speaker 1>called Section five oh five is something that is is

819
00:43:51.400 --> 00:43:53.679
<v Speaker 1>close to my heart and maybe gets a little bit

820
00:43:53.760 --> 00:43:57.199
<v Speaker 1>less airtime. And then in the overall discussion of clarity,

821
00:43:57.239 --> 00:44:00.280
<v Speaker 1>but it's it's the section that touches on the trading

822
00:44:00.320 --> 00:44:02.800
<v Speaker 1>of tokenized financial instruments so those things that we were

823
00:44:02.840 --> 00:44:06.960
<v Speaker 1>just just talking through, and there's a real concern and

824
00:44:07.039 --> 00:44:09.320
<v Speaker 1>fear from some of us in the industry that as

825
00:44:09.400 --> 00:44:13.119
<v Speaker 1>that was written, it could severely limit the ability of

826
00:44:13.159 --> 00:44:17.039
<v Speaker 1>the CFTC and of the SEC to grant relief that

827
00:44:17.079 --> 00:44:20.679
<v Speaker 1>may be appropriate from the existing rules and regulations for

828
00:44:20.880 --> 00:44:23.679
<v Speaker 1>trading of on chain security. So that's something that I

829
00:44:23.679 --> 00:44:26.280
<v Speaker 1>think people are a little less familiar with. Yield gets

830
00:44:26.280 --> 00:44:28.079
<v Speaker 1>a lot of airtime, but we want to make sure

831
00:44:28.079 --> 00:44:30.159
<v Speaker 1>that gets in the right spot too for any final bill.

832
00:44:30.360 --> 00:44:32.559
<v Speaker 2>Oh absolutely, And that's a great point. It's much more

833
00:44:32.599 --> 00:44:34.280
<v Speaker 2>than yield. Is there a deep guide component and the

834
00:44:34.320 --> 00:44:38.920
<v Speaker 2>other stuff you mentioned. So I'm so I think like

835
00:44:38.960 --> 00:44:42.360
<v Speaker 2>everybody else, chomping at the bit Toole's see what are

836
00:44:42.360 --> 00:44:43.920
<v Speaker 2>the details of that compromise.

837
00:44:44.119 --> 00:44:46.199
<v Speaker 1>Yeah, we're all waiting. So if you get it first,

838
00:44:46.199 --> 00:44:47.840
<v Speaker 1>you got to send it our way. Yeah.

839
00:44:47.920 --> 00:44:50.440
<v Speaker 2>Maybe by the time this ears we may have the details,

840
00:44:50.480 --> 00:44:52.840
<v Speaker 2>but you know, we'll have to go through it a

841
00:44:52.880 --> 00:44:55.079
<v Speaker 2>fine tooth code, make sure it's good, it's balanced.

842
00:44:55.159 --> 00:44:57.800
<v Speaker 1>It's probably a difficult. I mean, it's so hard for

843
00:44:57.840 --> 00:45:01.280
<v Speaker 1>you doing podcasting because the new can change so quickly

844
00:45:01.320 --> 00:45:04.360
<v Speaker 1>as everything's moving. But we're absolutely looking forward to seeing

845
00:45:04.360 --> 00:45:04.880
<v Speaker 1>what that is.

846
00:45:05.360 --> 00:45:07.239
<v Speaker 2>Oh, for sure, as long as we're making progress that

847
00:45:07.679 --> 00:45:10.360
<v Speaker 2>you know, we'll find the right rules and regulation and

848
00:45:10.519 --> 00:45:13.760
<v Speaker 2>finding that balance. That's all I care about. The seat

849
00:45:13.840 --> 00:45:16.800
<v Speaker 2>is technology get adopted and you know, change people's lives,

850
00:45:16.880 --> 00:45:19.360
<v Speaker 2>and not even so much here in the United States,

851
00:45:19.400 --> 00:45:21.280
<v Speaker 2>but across the globe people who don't have access the

852
00:45:21.320 --> 00:45:26.000
<v Speaker 2>finance and banking and this could present an opportunity for

853
00:45:26.039 --> 00:45:27.800
<v Speaker 2>them to generate wealth and much more.

854
00:45:28.159 --> 00:45:31.840
<v Speaker 1>Yeah, the transformative nature of the technology is really what

855
00:45:32.119 --> 00:45:34.519
<v Speaker 1>drew me in in the first place. And you're saying

856
00:45:34.639 --> 00:45:38.519
<v Speaker 1>exactly the things that resonate with me and why I

857
00:45:38.599 --> 00:45:42.880
<v Speaker 1>do this job. I think particularly the democratization of finance

858
00:45:42.880 --> 00:45:46.440
<v Speaker 1>when it comes to on chain finance and tokenization of

859
00:45:46.679 --> 00:45:50.000
<v Speaker 1>whether it's securities or derivatives or other real world assets

860
00:45:50.039 --> 00:45:54.039
<v Speaker 1>financial instruments, that is such huge potential and it's great

861
00:45:54.039 --> 00:45:57.239
<v Speaker 1>to see the focus on that right now, whether it's

862
00:45:57.280 --> 00:46:00.480
<v Speaker 1>with the House or with the SEC working through what

863
00:46:00.519 --> 00:46:03.480
<v Speaker 1>an innovation exemption might look like to allow that. It

864
00:46:03.639 --> 00:46:07.000
<v Speaker 1>is so promising right now, and it's a really exciting

865
00:46:07.039 --> 00:46:08.559
<v Speaker 1>time to be to be in the industry.

866
00:46:09.000 --> 00:46:12.679
<v Speaker 2>So, Patrick, I assume your roadmap is continuing your efforts

867
00:46:12.679 --> 00:46:16.480
<v Speaker 2>of educating the lawmakers and the folks in Congress and

868
00:46:16.599 --> 00:46:19.000
<v Speaker 2>much more to make sure they get this right. Or

869
00:46:19.079 --> 00:46:20.599
<v Speaker 2>is there anything else you guys are working on do

870
00:46:20.639 --> 00:46:21.320
<v Speaker 2>you want to highlight?

871
00:46:21.599 --> 00:46:25.199
<v Speaker 1>Yeah, that's absolutely the overall thrust of all this. And

872
00:46:25.239 --> 00:46:27.519
<v Speaker 1>I will like one other piece of news that I

873
00:46:27.559 --> 00:46:30.920
<v Speaker 1>just want to highlight from this week actually broken at

874
00:46:31.000 --> 00:46:34.159
<v Speaker 1>DOS when our President Kristen Smith was on stage with

875
00:46:34.440 --> 00:46:38.000
<v Speaker 1>Cheer Selig from the CFTC. Is another opportunity for us

876
00:46:38.039 --> 00:46:40.960
<v Speaker 1>and others in the industry to engage with the CFTC

877
00:46:41.039 --> 00:46:44.559
<v Speaker 1>through their Innovation task Force that they're putting together. You know,

878
00:46:44.639 --> 00:46:48.559
<v Speaker 1>seeing the huge success of the SEC's Crypto Task Force,

879
00:46:48.719 --> 00:46:51.440
<v Speaker 1>I think it makes sense to import that same sort

880
00:46:51.440 --> 00:46:55.000
<v Speaker 1>of idea over to the CFTC and really give the

881
00:46:55.039 --> 00:46:58.400
<v Speaker 1>same sort of public square where people can come in

882
00:46:58.599 --> 00:47:04.639
<v Speaker 1>transparently submit they're written materials, get meetings with them. It is.

883
00:47:04.920 --> 00:47:07.000
<v Speaker 1>It was a great model at the SEC, and we're

884
00:47:07.039 --> 00:47:09.760
<v Speaker 1>super excited to see that from the CFTC and really

885
00:47:09.800 --> 00:47:12.320
<v Speaker 1>be able to engage with them. And it's led by

886
00:47:13.320 --> 00:47:16.920
<v Speaker 1>an individual Michael Pasilokwa, who's on one of the advisors

887
00:47:16.920 --> 00:47:21.639
<v Speaker 1>to Cheer Sea leg and he is brilliant and skill capable,

888
00:47:21.679 --> 00:47:23.840
<v Speaker 1>and I can't wait to see what his leadership will

889
00:47:23.880 --> 00:47:24.840
<v Speaker 1>be on that task force.

890
00:47:25.400 --> 00:47:26.400
<v Speaker 2>It's exciting times.

891
00:47:26.599 --> 00:47:28.280
<v Speaker 1>Yeah, a new day for sure, truly.

892
00:47:28.559 --> 00:47:31.679
<v Speaker 2>Yeah, Patrick, I got some wrap up questions here for you. First,

893
00:47:31.760 --> 00:47:33.800
<v Speaker 2>if you could create your own metaverse, what would the

894
00:47:33.800 --> 00:47:34.239
<v Speaker 2>theme be?

895
00:47:36.159 --> 00:47:42.000
<v Speaker 1>My understanding is that the metaverse is closing down recently. Okay,

896
00:47:42.039 --> 00:47:43.880
<v Speaker 1>all right, so I can't dodge that one then, But

897
00:47:43.960 --> 00:47:47.079
<v Speaker 1>I think mine. Mine would just be the most relaxing

898
00:47:47.119 --> 00:47:50.039
<v Speaker 1>place that I can be to escape. Maybe one room

899
00:47:50.559 --> 00:47:53.719
<v Speaker 1>with a beach and another room that's the polar opposite of,

900
00:47:53.880 --> 00:47:55.800
<v Speaker 1>you know, sort of a cabin on a mountain with

901
00:47:55.920 --> 00:47:58.920
<v Speaker 1>snow falling and a fireplace. I just wanted to go

902
00:47:59.000 --> 00:48:02.000
<v Speaker 1>somewhere where I can, you know, really really sit down

903
00:48:02.079 --> 00:48:03.360
<v Speaker 1>and relax and escape.

904
00:48:03.880 --> 00:48:07.239
<v Speaker 2>I think we're so early, and Facebook and Zuckerberg, they

905
00:48:07.280 --> 00:48:09.280
<v Speaker 2>tried to throw a lot of money out, but too early.

906
00:48:09.719 --> 00:48:11.639
<v Speaker 2>It's too early, Bud. We'll get there and event you

907
00:48:11.679 --> 00:48:16.159
<v Speaker 2>don't build what you're looking for rapid fire questions.

908
00:48:15.880 --> 00:48:20.960
<v Speaker 1>Favorite food favorite food? I think carrot cake, cream, cheese, frosting.

909
00:48:21.360 --> 00:48:24.639
<v Speaker 2>A favorite musician or band.

910
00:48:24.920 --> 00:48:27.199
<v Speaker 1>After I saw the Aras tours Taylor Swift, so I'm

911
00:48:27.199 --> 00:48:27.800
<v Speaker 1>going to go with that.

912
00:48:29.000 --> 00:48:32.079
<v Speaker 2>Well, I can probably name a lot of Taylor Shoft songs,

913
00:48:32.159 --> 00:48:35.639
<v Speaker 2>not because I'm a fan, but my daughter, she loves

914
00:48:35.639 --> 00:48:37.519
<v Speaker 2>Taylor Swift non stop playing it.

915
00:48:37.719 --> 00:48:39.840
<v Speaker 1>I was not on the side until I went to

916
00:48:39.880 --> 00:48:44.599
<v Speaker 1>that concert. And honestly, we're talking about transformative technology. Transformative concert, yeah,

917
00:48:44.639 --> 00:48:45.119
<v Speaker 1>for sure.

918
00:48:45.239 --> 00:48:47.480
<v Speaker 2>And she's her own economy by yourself exactly.

919
00:48:47.599 --> 00:48:48.239
<v Speaker 1>It's been insane.

920
00:48:49.320 --> 00:48:50.199
<v Speaker 2>Favorite movie.

921
00:48:50.679 --> 00:48:55.920
<v Speaker 1>Favorite movie I think right now, I'd say Pans Labyrinth.

922
00:48:56.119 --> 00:48:59.119
<v Speaker 1>Ever since Frankenstein have been on a Giermo del Toro kick,

923
00:48:59.199 --> 00:49:01.440
<v Speaker 1>so those are always it's always great to watch. I

924
00:49:01.440 --> 00:49:02.039
<v Speaker 1>have not seen it.

925
00:49:02.039 --> 00:49:02.920
<v Speaker 2>I'll have to check that out.

926
00:49:03.000 --> 00:49:03.480
<v Speaker 1>That's great.

927
00:49:03.960 --> 00:49:04.599
<v Speaker 2>Favorite book.

928
00:49:05.360 --> 00:49:06.480
<v Speaker 1>Their eyes were watching God.

929
00:49:07.199 --> 00:49:08.880
<v Speaker 2>And when you're not working, what are you doing for fun?

930
00:49:09.360 --> 00:49:12.199
<v Speaker 1>I do a lot of exploring. I'm in the West

931
00:49:12.280 --> 00:49:15.360
<v Speaker 1>Village of Manhattan. There's always new restaurants, new places to explore,

932
00:49:15.519 --> 00:49:18.480
<v Speaker 1>and also have expanded into the Hudson Valley as well.

933
00:49:18.480 --> 00:49:21.039
<v Speaker 1>There's a lot of really great places. Whether it's the

934
00:49:21.440 --> 00:49:23.599
<v Speaker 1>distilleries they have up there, are restaurants. I just love

935
00:49:23.960 --> 00:49:26.159
<v Speaker 1>to get out there and try new things. Awesome.

936
00:49:26.320 --> 00:49:28.039
<v Speaker 2>Well, Patrick, I'm sure we're going to have to do

937
00:49:28.119 --> 00:49:31.280
<v Speaker 2>round two because it's not. It is a lot happening

938
00:49:31.280 --> 00:49:33.599
<v Speaker 2>in DC, and by the time, maybe two months from now,

939
00:49:33.679 --> 00:49:36.320
<v Speaker 2>things are going to be very different, and you know,

940
00:49:36.400 --> 00:49:37.800
<v Speaker 2>we'll have to have you back on. But thank you

941
00:49:37.840 --> 00:49:38.679
<v Speaker 2>so much for joining me.

942
00:49:38.719 --> 00:49:40.519
<v Speaker 1>Thanks so much for having me. I really appreciate it.

943
00:49:40.719 --> 00:49:43.280
<v Speaker 2>Thank you so much for tuning in. Please hit the

944
00:49:43.360 --> 00:49:45.760
<v Speaker 2>like button, subscribe if you haven't as yet. If you're

945
00:49:45.760 --> 00:49:48.800
<v Speaker 2>listening on a podcast platform such as Spotify or Apple,

946
00:49:49.000 --> 00:49:51.719
<v Speaker 2>please follow and leave a five star rating. Thank you

947
00:49:51.800 --> 00:49:52.199
<v Speaker 2>so much.