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<v Speaker 1>Hey, folks, we are recording at Chainlink's smart Con event

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<v Speaker 1>and joining me is Adam Mainhardt, who is the head

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<v Speaker 1>of public policy at Chainlink.

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<v Speaker 2>Adam, great to have you. Thanks for having me.

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<v Speaker 1>Adam, excited to chat with you. You have a very

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<v Speaker 1>interesting background. You could be considered a crypto og because

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<v Speaker 1>you worked in Tradify, you worked at different crypto companies

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<v Speaker 1>and so forth.

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<v Speaker 2>Tell us a bit about that. Yep.

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<v Speaker 3>Sure, I started off really in government. I worked at

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<v Speaker 3>the Federal Reserve. Then I went to Capitol Hill for

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<v Speaker 3>the majority of my career. I spent seventeen years on

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<v Speaker 3>Capitol Hill, Wow, working for a member, a member who's

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<v Speaker 3>senior on the Financial Services Committee, so deep in financial

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<v Speaker 3>services policy, which now has jurisdiction over a crypto digital assets.

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<v Speaker 2>Yep.

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<v Speaker 3>From there, I actually went to City Group, where I

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<v Speaker 3>worked in government affairs and policy there. And that was

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<v Speaker 3>right around at the time that the PWG report on

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<v Speaker 3>stable coins came out. Sure, crypto was starting to become

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<v Speaker 3>a little bit more widespread, and being in a big

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<v Speaker 3>bank at that time was very interesting. There was you

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<v Speaker 3>might say, some reluctant to engage on a issue area

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<v Speaker 3>that was not quite yet mainstream. Obviously a lot has

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<v Speaker 3>changed for sure. From City, I went to Stellar Development

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<v Speaker 3>Foundation Layer one. While I was there with some colleagues

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<v Speaker 3>in the Layer one space, started a Layer one coalition

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<v Speaker 3>of about fifteen Layer ones where we really engage collectively

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<v Speaker 3>on policy issues in DC from the Layer one infrastructure perspective.

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<v Speaker 3>And then moved to FS Factor where I stood up

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<v Speaker 3>a crypto policy practice with a lot of major players

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<v Speaker 3>in the space. And then more recently about six months ago,

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<v Speaker 3>joined Chainlink Labs as they're head of policy, really standing

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<v Speaker 3>up their government engagement.

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<v Speaker 2>Side of things. So it's been fun.

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<v Speaker 3>I've loved crypto every minute of it.

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<v Speaker 1>Yeah, I mean you've seen different facets of crypto, and

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<v Speaker 1>you know, even being at City, it's amazing now cities

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<v Speaker 1>embracing crypto, just recently partnering a coinbase, looking to launch

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<v Speaker 1>custody and things like that.

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<v Speaker 2>Yep.

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<v Speaker 3>I think the journey of a lot of Jesives, the

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<v Speaker 3>largest banks has been one of probably opposition to reluctance

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<v Speaker 3>to now embracing it. So I think we've seen that

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<v Speaker 3>that that process play out. I think at the beginning

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<v Speaker 3>you saw this really across Wall Street that hey, we

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<v Speaker 3>don't really want to touch this. But as the industry

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<v Speaker 3>has matured, as I think we're starting to see a

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<v Speaker 3>regulatory framework emerge, I think there's growing comfort and I

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<v Speaker 3>think now if you look at if you read the

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<v Speaker 3>Tea Leaves, crypto is going to be part of the

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<v Speaker 3>financial services market, echo ecosystem for the you know, for

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<v Speaker 3>for the foreseeable future.

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<v Speaker 1>And chain Link is playing a big part of that.

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<v Speaker 1>I'm amazed at the adoption chain Link is getting, not

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<v Speaker 1>only from trad five, but native crypto firms and competing

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<v Speaker 1>blockchains which need chain link services.

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<v Speaker 2>No exactly.

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<v Speaker 3>Chain Link really has positioned themselves at the center of

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<v Speaker 3>a lot of what's happening in distributed ledger technology. They're

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<v Speaker 3>really becoming the connective tissue for really any institution that

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<v Speaker 3>wants to connect with the blockchain, they want to do

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<v Speaker 3>so in a compliant manner. They want to do so

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<v Speaker 3>in a way that allows them to interoperate with other systems,

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<v Speaker 3>and they also want to be able to bring critical

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<v Speaker 3>off chain data onto the blockchain. So you put these

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<v Speaker 3>things together and you really end up with a full

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<v Speaker 3>stack of technology that's really enabling anyone. It could be

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<v Speaker 3>Web three, it could be someone like AVE the world's

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<v Speaker 3>largest DeFi protocol to someone like a DTCC JP Morgan

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<v Speaker 3>that have similar needs to want to access blockchain, but

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<v Speaker 3>in a way that's structured and makes sense from a

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<v Speaker 3>regulatory perspective. So chain Link is really well positioned I

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<v Speaker 3>think for the foreseeable future.

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<v Speaker 1>Yeah, I mean it's incredible technology Surgey and the team

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<v Speaker 1>have built, and I gues say, I'm blown away that

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<v Speaker 1>these these different facets, which sometimes can seem like they're

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<v Speaker 1>competing with each other, all integrating with chain Link they do.

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<v Speaker 3>I mean, there is a lot of vision from Sergey

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<v Speaker 3>and the folks that created this technology to really understand

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<v Speaker 3>the needs of blockchain technology and how it would work,

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<v Speaker 3>and really the need for verifiable data that is critical

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<v Speaker 3>for the operation of this whole ecosystem, for smart contracts

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<v Speaker 3>to work, you know smart it's called smart Cohn the reference.

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<v Speaker 2>Are at.

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<v Speaker 3>Chain Link has basically made themselves almost indispensable for all

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<v Speaker 3>of this infrastructure to really operate.

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<v Speaker 1>So absolutely, now, Adam, we still got a lot of

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<v Speaker 1>work to do in DC, which you're very well versed,

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<v Speaker 1>and we know the government shut down, but once it

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<v Speaker 1>opens back up, we're hoping to get the Clarity Act

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<v Speaker 1>passed through the Senate. Tell us about what you're seeing there,

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<v Speaker 1>what are some work chain link and the team has

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<v Speaker 1>been doing to advocate okay for Crypto.

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<v Speaker 3>You know, an interesting thing about the shutdown is while

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<v Speaker 3>the executive agencies are shut down, we and we do

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<v Speaker 3>know essential workers are still working travel TSA, air traffic controllers.

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<v Speaker 3>Congress is open. Congress is open, they are not They're

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<v Speaker 3>not off. So in many regards, the shutdown has actually

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<v Speaker 3>enhanced some of the work on key legislation. So we've

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<v Speaker 3>seen a lot of critical meetings occur with regard to

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<v Speaker 3>the Senate version of these past Clarity Act. Yeah, there

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<v Speaker 3>have been key meetings. Within the last couple of weeks.

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<v Speaker 3>The Senate Democrats hosted ten plus CEOs and executives. Sergey attended.

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<v Speaker 3>The Republicans did the same. So I'd say during the

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<v Speaker 3>shutdown there have been a lot of critical discussions. I

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<v Speaker 3>think there's some optimism now about the process being able

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<v Speaker 3>to move forward before the end of the year. Do

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<v Speaker 3>we get to the point where there's a bill going

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<v Speaker 3>to the President's desk?

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<v Speaker 2>I don't think so.

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<v Speaker 3>Okay, but I think we're going to see progress, So

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<v Speaker 3>that's the hope. But you know, I will say a

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<v Speaker 3>lot of key meetings are occurring during the shutdown on

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<v Speaker 3>the hill, So progress is happening.

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<v Speaker 1>That's good to know it because from the outside, you know,

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<v Speaker 1>you think nothing is happening, but glad to hear certain

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<v Speaker 1>factions of it is.

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<v Speaker 3>We're still working, definitely, definitely, and I think, you know,

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<v Speaker 3>hopefully the shutdown ends somewhat soon.

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<v Speaker 2>And when it does, I think.

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<v Speaker 3>That will open up some other areas of engagement, sure,

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<v Speaker 3>Treasury for instance, things like that they can actually help

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<v Speaker 3>move the process forward even more.

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<v Speaker 1>Oh absolutely, So are you thinking and this is we're

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<v Speaker 1>all guessing here, but maybe Q one is when it

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<v Speaker 1>goes to President Trump's desk?

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<v Speaker 3>Yep, I could see uh spring next year being a

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<v Speaker 3>realistic timeframe to maybe get a bill to the President's desk. Sure,

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<v Speaker 3>I think there will be meaningful progress towards the end

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<v Speaker 3>of this year. Does that mean a bill gets through

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<v Speaker 3>the Senate? I don't know, Maybe through committee?

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<v Speaker 2>Sure?

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<v Speaker 3>And you know, I would say the legislative process is nonlinear,

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<v Speaker 3>it's at best complicated.

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<v Speaker 2>Sure, so.

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<v Speaker 3>This thing could potentially hit another hard spot. That doesn't

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<v Speaker 3>mean it's ever dead, right, So oftentimes sometimes you do

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<v Speaker 3>have to have these critical points where maybe things stop

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<v Speaker 3>working and that actually causes people to come back to

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<v Speaker 3>the table in a more meaningful way. So, you know,

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<v Speaker 3>I'd look for a lot of ups and downs in

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<v Speaker 3>this process. We see it with every sort of policy issue.

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<v Speaker 3>There's a degree of brinksmanship involved psychology.

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<v Speaker 2>So I think we'll see more of that.

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<v Speaker 1>It's it's hot, a sausage is made, as it would say, right,

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<v Speaker 1>it's ugly, but you know, this is how government works.

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<v Speaker 2>Yep.

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<v Speaker 3>And one thing I'll add to that, I think overhanging

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<v Speaker 3>a lot of this was the last Biden administration, what

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<v Speaker 3>we saw out of the SEC. Yes, so I think

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<v Speaker 3>to industry and you know, you really always overvalue the

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<v Speaker 3>present versus what maybe could happen in the future. Sure, so,

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<v Speaker 3>could we see another Gary Gensler at the SEC? Could

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<v Speaker 3>we see another democratic administration? So I think that's in

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<v Speaker 3>the back of everyone's head. Like, so if you get

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<v Speaker 3>market structure that can put some rules around all of

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<v Speaker 3>this to potentially mitigate some of that.

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<v Speaker 2>So I think that's I think that's what we're all

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<v Speaker 2>wrestling with.

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<v Speaker 1>Oh absolutely, And boy, I can't wait for this bill

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<v Speaker 1>to be passed Adam to see the innovation and the

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<v Speaker 1>economic boom that's going to come out of this industry.

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<v Speaker 1>What are you anticipating posts this bill being passed.

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<v Speaker 3>I think we're going to see a lot of For me,

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<v Speaker 3>it's really an increase in asset tokenization and increase in

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<v Speaker 3>tradfy engagement. I think we're going to see more entities

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<v Speaker 3>enter the space who perhaps have been on the fringes.

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<v Speaker 2>Sure.

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<v Speaker 3>I also think we may be at the point where

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<v Speaker 3>we start to see an inflection point for consumer adoption. Really,

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<v Speaker 3>a lot of the people that use crypto today, at

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<v Speaker 3>least regularly, are people who have a technology background. They've

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<v Speaker 3>been in the space for a long time. They can

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<v Speaker 3>handle the UAC, that's right. So I think getting it

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<v Speaker 3>to more mainstream consumers to do so, I think what

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<v Speaker 3>you really need is a regulatory framework to make them comfortable.

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<v Speaker 3>So I think I think that could be a really

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<v Speaker 3>big outcome of all of this.

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<v Speaker 2>Yeah, because I think.

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<v Speaker 1>About the applications and the things I do on a

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<v Speaker 1>daily basis, whether it's YouTubers or podcasts or whatever app right, yeah,

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<v Speaker 1>health app, whatever it is, I'm waiting for when blockchain

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<v Speaker 1>could be integrating to that and it creates new features

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<v Speaker 1>and new benefits and things like that.

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<v Speaker 3>And I think, uh, I think that UX is something

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<v Speaker 3>I don't think we talk about a lot.

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<v Speaker 2>Yeah, I think we.

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<v Speaker 3>I think the more you have these regulatory guardrails, more

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<v Speaker 3>people will use it. Perhaps the features the ease of

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<v Speaker 3>use will get better. They're looking at technology. So if

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<v Speaker 3>you lose your seed phrase, yeah, your key. So there's

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<v Speaker 3>this key recovery type technology. There's other areas that can

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<v Speaker 3>maybe lessen the uh A version of more mainstream consumers

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<v Speaker 3>to say, wait, I could look at this as a

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<v Speaker 3>payments platform. Maybe I want to invest directly here. Maybe

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<v Speaker 3>I want to try DeFi. So I think a lot

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<v Speaker 3>of that could be unlocked here.

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<v Speaker 1>Is DeFi included in the market structure Bible or is

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<v Speaker 1>its own separate thing.

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<v Speaker 3>It's been exempted from the House past version they exempt

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<v Speaker 3>They largely exempt DeFi in the Senate. One of the

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<v Speaker 3>main issues that they're trying to reconcile is how much

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<v Speaker 3>will they regulate or include DeFi. Most of all of

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<v Speaker 3>us in the industry would just prefer hands off, let

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<v Speaker 3>the technology grow in a way that allows for its

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<v Speaker 3>evolution without the constraints of regulation. I think there's a

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<v Speaker 3>big education gap in terms of understanding of what DeFi

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<v Speaker 3>is and isn't. I think people have an idea of

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<v Speaker 3>what they think DeFi is, and it usually ends with

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<v Speaker 3>North Korea, and you know that. You know, when people

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<v Speaker 3>hear that, they're like, we need to regulate this. The

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<v Speaker 3>reality is is that that's not really what DeFi is, right,

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<v Speaker 3>we need to really ring fences to allow the technology

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<v Speaker 3>to evolve at this point.

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<v Speaker 2>So that's the hope. That's the hope.

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<v Speaker 1>Yeah, well said, and hopefully they can get it right.

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<v Speaker 1>I know it's complicated. I know, I can't imagine being

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<v Speaker 1>a lawmaker policymaker, remember of Congress. Then you're just like, whoa,

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<v Speaker 1>this technology is like, yeah, moving so fast, it's so

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<v Speaker 1>different from anything that we've seen over the past fifty

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<v Speaker 1>years or whatever it may be, or more than that.

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<v Speaker 3>Well, definitely, I mean even people in the industry who

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<v Speaker 3>have technological backgrounds, you know, understanding what DeFi is and

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<v Speaker 3>isn't through a policy lens is really complicated. Ideas of

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<v Speaker 3>control of custody, of how pools work, who can enter

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<v Speaker 3>the pool. These are both complex technological questions, they're complex

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<v Speaker 3>legal questions. Government agencies haven't thought of it in this

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<v Speaker 3>context before, So a lot of it's new and a

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<v Speaker 3>lot of it's, frankly, intellectually a steep learning curve to understand.

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<v Speaker 3>Even if like if you know computer science, great, but

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<v Speaker 3>understanding the policy and legal overlay that's a different that's different.

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<v Speaker 3>So whole is it's really tricky.

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<v Speaker 1>Yeah, I don't be the regulators in that front and

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<v Speaker 1>what they the work they have to do.

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<v Speaker 2>It's just so.

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<v Speaker 1>Do you think maybe DeFi comes years later as we

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<v Speaker 1>continue to fine tune to legislation and so forth.

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<v Speaker 2>I think so.

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<v Speaker 3>I think you know, what they did in Europe under

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<v Speaker 3>MIKA was they pretty much punted on DeFi. They left

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<v Speaker 3>it out. They chose not to put anything in it

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<v Speaker 3>in Mica. So it's kind of was put aside. Sure,

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<v Speaker 3>And I think that's really what we're looking at in

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<v Speaker 3>the US. I think that's the sensible approach, is to

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<v Speaker 3>make sure you don't really constrain the technology at the beginning.

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<v Speaker 3>If you did this with the Internet in the early

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<v Speaker 3>to mid nineties, you could have constrained the growth of

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<v Speaker 3>the Internet, and I had a lot of the promising

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<v Speaker 3>uses we see.

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<v Speaker 2>Of it now.

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<v Speaker 3>I think DeFi is at that point. It's a foundational technology.

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<v Speaker 3>It's not well understood. Let's take a beat, let's continue

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<v Speaker 3>to monitor it, and I think get to it at

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<v Speaker 3>a later point. I think that's the sensible tact. Sure,

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<v Speaker 3>we're seeing other jurisdictions look at that approach, so I

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<v Speaker 3>would hope that's where.

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<v Speaker 2>We end up.

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<v Speaker 1>Are you hearing anything new about bitcoin strategic reserve or

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<v Speaker 1>the digital acid stockpile?

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<v Speaker 2>Yep.

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<v Speaker 3>So we know Treasury is in the process of thinking

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<v Speaker 3>about this, about how to stand it up. I think

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<v Speaker 3>with the shutdown a lot of those plans have been

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<v Speaker 3>have been put on hold. One thing I will note

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<v Speaker 3>is that states. Three states have passed strategic reserves Texas, Arizona,

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<v Speaker 3>and New Hampshire, and they're all in varying degrees of

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<v Speaker 3>thinking through through how this would work from a custody perspective,

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<v Speaker 3>a taxpayer transparency perspective. So I think this may be

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<v Speaker 3>an area. You know, the cliche is like states are

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<v Speaker 3>the laboratory of democracy. This could be an area where

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<v Speaker 3>the states do provide some initial work in the area

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<v Speaker 3>that maybe Treasury can draw on. So the short answer

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<v Speaker 3>on the federal level is I have no news on

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<v Speaker 3>that front. I know they're thinking about how to do it.

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<v Speaker 3>Shutdown has delayed, but I think we're starting to see states.

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<v Speaker 3>Uh three states who who've passed laws signed by their

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<v Speaker 3>governors are now moving those along.

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<v Speaker 2>So that's exciting.

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<v Speaker 1>So maybe that's the better way because from the ground up, right,

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<v Speaker 1>the states can pivot and move versus the federal government.

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<v Speaker 1>It's like a tanker ship trying you're trying to you

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<v Speaker 1>can't move it like a cruise ship. Totally totally vote,

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<v Speaker 1>I should say, right, and uh, I mean that it

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<v Speaker 1>has a lot more eyes on it in a different way.

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<v Speaker 1>So I think thinking through the structure of this, the transparency,

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<v Speaker 1>the rules for holding it, the rules for custoding it,

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<v Speaker 1>when do you sell, all of these are complicated decisions

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<v Speaker 1>that will require a good amount of transparency so people

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<v Speaker 1>have an understanding of what's going on here. After all,

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<v Speaker 1>these are taxpayer funds when it comes down to it.

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<v Speaker 1>So I wonder this has been floated around potentially tariff

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<v Speaker 1>revenue being used to fund some of these things.

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<v Speaker 3>Yeah, I mean there's been a lot of discussion about

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<v Speaker 3>tariff revenue being used for a lot of different purposes.

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<v Speaker 3>I think I think the one of the key questions

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<v Speaker 3>is will governments and states have wrestled with this in

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<v Speaker 3>the legislation, be allowed to just hold on to the

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<v Speaker 3>crypto assets that they have seized as part of law enforcement,

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<v Speaker 3>or take taxpayer funds and make open open market purchases

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<v Speaker 3>of additional assets. So I think that's a critical distinction.

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<v Speaker 3>I think what we think is going to happen in

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<v Speaker 3>the US here is really the former.

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<v Speaker 2>But I think it's open.

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<v Speaker 3>I mean, using taxpayer funds to acquire new assets is

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<v Speaker 3>very different than just taking seized assets that were part

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<v Speaker 3>of a criminal action, right and saying, look, look we've

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<v Speaker 3>already seized them, they're in the government custody. Yeah, let's

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<v Speaker 3>just not sell them because we think we can make

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<v Speaker 3>more money by holding.

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<v Speaker 2>Them rather than selling them.

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<v Speaker 3>So those are questions I think we're gonna have to

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<v Speaker 3>wrestle with.

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<v Speaker 1>Yeah, well, I hope the government can get all this

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<v Speaker 1>result by Q one six.

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<v Speaker 2>That'd be really great.

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<v Speaker 1>That'd be awesome, Adam, Thank you for taking the time,

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<v Speaker 1>Thank you for having me.

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<v Speaker 2>Really enjoyed it.

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