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Speaker 1: If we get a bipartisan vote here, Democrats are going

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to say that this bill was all about ending Trump

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crypto corruption, whether you believe that or not. And so

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it's a political game Washington. It's all about politics. It's bitter,

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but I still think that there is enough motivated offices

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Republican and Democrats who want to get this done, who

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are willing to push through on the ethics side, hopefully

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so the substance can prevent.

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Speaker 2: This episode is brought to you by FORTASX. Guys, Let's

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ways to put those assets to work. And folks, I

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You've got to check out FORDX. Go to FORDESX, dot

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fi slash x slash Thinking Crypto link will be in

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the description. Hey, folks, welcome into the Thinking Crypto podcast.

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Speaker 3: I'm Tony Edward and I'm Amanda wick Croft.

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Speaker 2: And joining us is Cody Carbone, who is the CEO

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of the Digital Chamber. Cody, great to see you.

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Speaker 4: Great to see you, Tony, Amanda, always glad to be here. Cody.

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Speaker 2: I don't know what to say. The clarityac Ethics and

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all the dialogue in the debate that's happening. It's kind

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of tiring me out, but I think it's good time

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for us to be talking because there is potentially a

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vote that may be happening next week, the week of

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August third. Let's start with the ethics issue. What's the

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latest there.

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Speaker 1: So there was new ethics language from a bipartisan ethics

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agreement from Senator Tom Tillis and Senator Reuben Diego and

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some other Democratic centers that was sent to the White

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House just yesterday. Now we don't know how the White

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House is going to respond to this. Ultimately, the ethics

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language is about the president. You could say it's about

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all federal government officials, but it's about the president, and

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Democrats are looking to take the president to task. They

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trying to get to a yes on this bill, have

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to sell to their base that they did everything they

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can and to stop the president from profiting off digital assets.

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So the ethics language, while it's not publicly out there,

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we know that it does include some of the things

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Democrats have been asking for since the initial text came

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out two weeks ago.

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Speaker 4: They want state attorneys general to have a role here.

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They don't feel.

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Speaker 1: Comfortable with just President Trump's own US Attorney General being

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the sole law enforcement mechanism, so they want that. They

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want the President to divest all of the money he's

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made on crypto. So ultimately it'll come down to what

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the White House thinks, how they respond. Is the President

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comfortable signing onto this ethics deal? If that's yes, and

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hopefully we know very soon now that they've had almost

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twenty four hours to look over it, and probably will

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look over it through the weekend.

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Speaker 4: I feel very comfortable about this bill moving forward.

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Speaker 1: Because this bill has become solely about ethics, which is unfortunate.

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It's a six hundred and sixteen page bill, a bill

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that will be a landmark passage of statute that will

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create a foundational framework for regulation, allow the US to lead,

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but it's all become about politics and ethics. So hopefully

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we understand where the White House is, if they're going

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to sign on to it, if they have more feedback

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for it, that will dictate where this bill moves forward

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over the next week and into the fall as well.

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Speaker 3: Did people you know, including yourself and your organization, anticipate

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this to some degree that the Democrats would do this

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double down on Trump and his profit and you know,

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kind of straying away from the actual agenda.

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Speaker 4: That clarity is, yes, that's what it's become. Again.

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Speaker 1: Unfortunately, there have been twelve Democrats who have been working

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in earnest with Republicans throughout this entire process, and all

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of those negotiations leading up to this point were on substance.

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It was creating a stronger banking title, stronger agg title,

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making sure that Democrats really did have their concerns address

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on the substance of the bill. It's no longer about

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that anymore. And I think that if let's say there

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was ethics was not a part of this, and there

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was no concern about the president and his dealings with

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digital assets, that this bill would have passed a long

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time ago because the substance is agreed upon. Yes, there

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are some still, like some issues on DeFi and BRCA,

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but overwhelmingly this bill is agreed upon and it is bipartisan.

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There is a lot of language in the revised text

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that is directly from Democratic offices. But again, when they're

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going to have to take this vote, what they worry

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about now going into a midterm election is how they're

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going to sell this to their base, and we heard

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just this morning that they are passing around polls to

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show that Democrats don't like crypto.

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Speaker 4: Voting Democrats don't like crypto.

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Speaker 1: They said that crypto is more unpopular than data centers

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or big oil, and that's what they're passing around to

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their base right now. So it's not about substance anymore.

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We need to get it back there and hopefully we

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can get this done and we can start to really

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regulate this industry. But it's about politics, and ultimately for

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President Trump, he's sitting there knowing, Hey, I would like

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to win here. I want the US to be the

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crypto capital world. I want to sign this bill, but

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I'm going to have to take some lumps here because

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no matter what, if we get a bipartisan vote here,

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Democrats are going to say that this bill was all

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about ending Trump crypto corruption, whether you believe that or not.

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And so it's a political game. Washington's all about politics.

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It's bitter, but I still think that there is enough

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motivated offices Republican and Democrats, who want to get this done,

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who are willing to push through on the ethics side.

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Speaker 4: Hopefully, so the substance can prevail.

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Speaker 2: There have been a lot of Republican voices who've shown

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their support, and we know is the large majority on

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the Republican side. But who are the let's say, top

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ten Democrats. It's a tough question if you can list

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off some names at the top of your head, but

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who are the top Democrats who will likely show their

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support for this bill?

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Speaker 1: Well again and all hinges on ethics, but Senator Kirsten

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Jellibrand has been the leader here. She has been the

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one who, before it was cool, has been getting on

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the Lumbus Jillibrand bills of the previous Congress, has been

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pushing for a regulatory framework here. You've got other Senate

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Democrats on the Banking Committee, Ruben Diego Angela, also Brooks,

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Senator Warnock, Senator Asoff, Senator Andy Kim. Even on the

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AG side, you've got Senator Booker who who's been pushing

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for this. So there are and I would look to

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for everyone listening here if you want to know where

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a lot of the Democrats are, and who do you

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think the gettable Democrats are, which is important, look to

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the vote of the Genius Act. There were eighteen Democrats

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who voted yes on that bill. That's how we're looking

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at it, is that they're interested in passing digital asset

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rules of the road. Even Minority Leader Schumer has been

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interested in getting this done. Senator Ron Wyden is one

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of the ones who didn't vote for the Genius Act,

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but has introduced with Senator Cynthia Lummis the BRCA Blockchain

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Regulatory Certainty Act as a standalone. Wants to get this

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BUIL done. Senator Rosen from Nevada wants to get this

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bill done and said, if you have an ethics deal,

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we'll get this bill done. So there is a handful

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who are willing to support clear market structure rules if

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you get ethics. And that's why I think if you

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get an ethics deal done here over the weekend into

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early next week, while we might not have time to

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at least to pass the bill fully through the Senate,

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we could begin the process, get some procedural votes, and

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I'll feel very good that they can pass this once

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they get back and SIPT.

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Speaker 3: I'm surprised to learn Senator Lummis recently said that Senator

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Holly Republican is resistant on signing clarity and I don't

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think he signed Genius either. Do you understand his positioning

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and why that is?

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Speaker 1: Both him and Senator Paul did not support the Genius Act.

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They have taken a position very similar to Senator Elizabeth

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Warren that is just anti big tech, and they have

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grouped in digital assets with big tech that there needs

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to be hands off when it comes to big tech.

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Speaker 4: We don't need more rules of the road on big tech.

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They don't like it.

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Speaker 1: They think it is corruption, they think it is bad

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influence on the American people. So Holly has never been

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interested in engaging with this industry. Paul's the same way.

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So when you're doing a vote count at home, you

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have fifty three Republicans, you need sixty votes. That's at

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least two Republicans that are likely to know Mitch McConnell.

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We don't know where he is, so we don't know

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if he's voting yes or no or voting at all.

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So really you need to get all other fifty Republicans.

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That means then you have to get ten, at least

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ten Democrats. Again, go back to Genius. You've got eighteen Democrats,

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so you're looking to get at least ten of those

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eighteen and probably twelve thirteen fourteen to feel comfortable.

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Speaker 2: Now. In addition to ethics, we see the banks are

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still drumming up noise about the stable coin yield issued

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despite a compromise that was made in the Senate Banking Committee.

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Do you foresee that also being a challenge or they

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just trying to get as much as they can.

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Speaker 4: I wish they would stop. They're relentless.

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Speaker 1: It's funny that I think they could have had a

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lot of their issues resolved if they were paying attention

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when we passed the Genius Act, or paid attention when

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we passed the Clarity Act out of the House a

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year ago. But they didn't realize what stable coins were

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until just a few months ago, which is somewhat shocking

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because supposedly they are completely detrimental to their entire business model.

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I feel confident that the yield language and the agreement

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between Senators Tillis and also Books also Brooks, the bipartisan

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agreement will remain steady and will hold strongly. There is

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not a lot of interest in relitigating this now. Where

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the banking lobby has been pretty effective is talking to

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both Republicans and Democrats who are off the Banking Committee

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who have not spent a lot of time with the

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TI also Brooks amended language. But you know, to me,

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I don't understand the bank's play here. If you try

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to tank this bill, then there are no prohibitions on

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stable coin yield. The only way to get any limits

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on stable coin yield and rewards is to pass this

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bill with the amended language. There's not enough support for

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blanket prohibitions on yield when it comes to transactions and activities.

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I don't know where they're going to be successful. I

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know they want to amend the Attelis Alsobrooks language.

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Speaker 4: I don't think there's enough appetite for it.

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Speaker 1: They had again, plenty of windows and opportunities to negotiate

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and to make their stance hurt over the last few

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years and failed to do so. And now they're trying

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to do something at the eleventh hour. And again they're

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effective lobbyists, they're great advocates. They've been doing it for

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over one hundred years. They don't know what it's like

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to feel to lose. And hopefully the bipartisan agreement that

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Tillis and also Brooks have reached will remain strong and

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I'm confident in that.

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Speaker 3: Speaking of institutions and lobbying, you know, Jamie Diamond's been

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very quiet. Has JP Morgan's position changed behind the scenes?

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Are they lobbying privately instead of publicly?

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Speaker 2: Now?

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Speaker 3: What's going on there?

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Speaker 1: I think he only likes to talk when he calls

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crypto executives' assholes. So I'm waiting for the next interview

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there for him to do.

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Speaker 2: So.

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Speaker 4: It's fascinating to me. You know.

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Speaker 1: You even hear the American Bankers Association come out recently.

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I believe its a CNBC interview where they said, hey,

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there's a lot to like in Clarity, and that's because

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the banks need the Clarity Active pass. Not only for

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the stable coin yield prohibitions, which again they want, but

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there's a whole title in the Banking section on Permissible

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Activities for banks. Here will would allow them for the

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first time to interact with permissionless blockchains, which creates like

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clear custody standards, asset segregation standards. They banks need this

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bill to pass for them to really flourish in the

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digital asset markets. The banks have an opportunity to truly

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compete and have institutions be the leader in the digital

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asset markets if this bill passes, so I'm not surprised

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to hear some of the banks like AJP Morgan start

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to be more quiet as this is getting towards the

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finish line, because while they might rail against digital assets

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sometimes in some venues, they're all trying to compete here,

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and so looking at what they're really saying at face value,

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they are trying to hold off the crypto industry as

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much as possible so they can catch up. And so

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if this bill stalls a little bit longer, they can

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catch up more and more because they are building. I've

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always been fascinated. While JP Morgan and Jamie Diamond publicly

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have said like bitcoins a scam, cryptos a scam, we

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don't need it, they have been the largest employer of

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blockchain developers in the entire world because they know this

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is where the this is where the markets are going.

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People are demanding faster, cheaper opportunities. So all what Genius

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did overnight in the payment space, that's what the market

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structure bill Clarity will do for every other financial asset,

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provide cheaper alternatives within twenty four hours of signing. The

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banks will compete here they want this bill. I wish

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they would just say so publicly.

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Speaker 2: So, Cody. The ideal scenario, the White House agrees to

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the ethics language, the banking complete, the bank's complaining about

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the same coin yield issue not such a big item. Monday,

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everybody agrees on the current draft of that bill. When

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could the vote happen on Tuesday? Wednesday? And let's say

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passes a Senate. Do we have enough time for it

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to go to the House to pass.

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Speaker 4: The House won't. We won't have enough time for it

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to go to the House. The House is already out

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of session.

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Speaker 1: So this is becoming a I've changed my expectations of

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what success is over the next week, and thank god

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it's only a week.

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Speaker 4: We need to begin.

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Speaker 1: The process, as you like outline, Tony. We need to

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start to have some of the procedural votes. I think

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for all the people who are unfamiliar with the legislative process,

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they probably just think, all right, there's one vote in

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the Senate that's a pass, and then there's one vote

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that has this past. No, there's a motion to proceed

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vote that needs to happen. It needs to get on

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the Senate calendar first. Then there's a cloture vote, which

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is what needs sixty They need a cloture vote, which

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is a motion to end debate on the bill. There's

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going to be amendments, so there's some timelocks here. You

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need at least like thirty hours of debate before you

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can go to end debate. So there's a lot of

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steps that need to happen before you get the final passage.

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What everyone is looking for now, because we're running out

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of time and there's still some other priorities for the

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Senate to take on next week before they leave for

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a month, is can we get the bill on the

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Senate calendar? Can we begin debate on this bill? And

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can we get a cloture vote? Can we see where

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the senators are? Can we get sixty votes there to

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end debate? Can we then t ourselves up where the

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first week they're back in September, all they need is

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just that one passage vote. Then all the House needs

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is that one passage vote and it can move very

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very quickly to the President's desk. If we can get

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some procedural votes next week that show where senators are,

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that can get us to at least sixty sixty five

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where we feel really comfortable that this bill is moving

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immediately when they're back in September.

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Speaker 4: That is success.

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Speaker 1: Right now, we're not going to get the bill likely

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to pass the full Senate and just don't have enough time.

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As I mentioned, the House has already gone, so it's

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not going to pass the House anyway until September when

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they get back. So can we set ourselves up where

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we make it as easy as possible for us in September.

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Speaker 4: To do that? We need to get the ethics steal, and.

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Speaker 1: That's a lot of pressure on the White House, who

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has already given a lot here and it's the first

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time that a president is going to self impose some

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limits on his activity. That was what was offered initially.

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Democrats didn't like that. So can we get that ethics steal?

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And can we start the procedural process? Majority Leader thun

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has committed he wants us to that process. You've heard

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Senator Lamas say, we have to start that process for me,

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no matter what success or failure, and we're pushing for success.

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You have to begin voting next week on some of

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these procedural votes, because if you do not begin voting

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next week, you likely lose all chance that this bill

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is going to move forward in the fall.

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Speaker 4: September.

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Speaker 1: There you got only three weeks and they're gone again

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the entire month of October, and then it's the election

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and then it's lamed up. So if you don't begin

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voting right now before the election heats up in earnest,

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then why are Democrats motivated to get this done. You

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have to hold them accountable. You have to get a

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vote on the record. You have to show some of

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the political fundraising arms out there and muscle out there

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where people are, and you have to begin this process.

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We need that no matter what. Next week, and if

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we were talking a week from today and we didn't

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begin that process, I would say this bill likely doesn't

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have a chance to move forward this year.

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Speaker 2: Quick follow up, because there's talks of potentially the August

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recess being canceled where they would stay hont. I don't

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know that's a possibility that might happen.

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Speaker 4: I would be shocked.

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Speaker 1: There is nothing that a US cenator likes more than

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going home, and especially in an election year, it doesn't

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make sense for both the Republicans and Democrats, who need

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their candidates to go be in the state campaigning to

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keep them here in Washington. I know that the President

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wants to get some of his legislative priorities done. I

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would love if they stayed a little bit longer to

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get this done so we don't have to worry about

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this into the fall. But it all comes down to

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the electoral map, and the most important thing is not clarity.

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It's not the same Act, it's not Russia sanctions, it's

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not even funding the government. The most important thing to

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both parties here is winning the majority in November. And

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the only way they can do that is the Democratic

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candidates have to be home in Ohio and Michigan running

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their seats. The same thing with the Republican candidates. The

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cumbents need to be home and all of these states

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running for their seats to make sure that they keep

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the majority. So I would be shocked if the recess

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was canceled.

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Speaker 4: It's good. It's a good it's good theater. Though, yeah

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like it right now. People like to threaten it a lot.

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Speaker 3: Well, does does President Trump in his legal right? Can

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he impose that? Should he wish sue? Or is that

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not legal?

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Speaker 4: I so that's a good question. I don't know for sure.

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Speaker 1: I would be surprised if there wasn't some separation of

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powers concerns there, Like, I don't think president can the

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president can dictate what Congress does. I could be completely

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wrong right now. I mean, the vice president is technically

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the president of the Senate, so maybe there is some

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wiggle room there. I just don't know enough about that.

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Speaker 3: Okay, I want to pivot to your your decision to

387
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sue the state of Illinois. Could you give an overview

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of the state's digital tax bill Illinois.

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Speaker 4: Yeah.

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Speaker 1: So, Illinois, in the darkness of night, without any stakeholder engagement,

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and within hours of breaking for the year and ending

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their legislative session, decided to pass and enact a taxation

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on digital asset transaction activity, a zero point two percent tax,

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which may sound like not a lot to people, but

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it is completely discriminatory. This tax doesn't apply to any

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other financial instrument. It is just targeting digital asset activity

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in the state. There's no reason for it except because

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you want to curb and limit digital asset activity in

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the state. We thought it was prejudicial towards the industry.

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It was discriminatory, that is against the Illinois State Constitution

401
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of imposing attacks of that nature. So we want to

402
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stop it, and so what we're seeking right now is

403
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an injunction to at least stop it as the courts

404
00:20:48,039 --> 00:20:50,519
continue to look at it before the tax goes into

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effect in January. We are encouraging all other associations or

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impacted institutions in the state of Illinois to work with

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us and join our suit. We've already had a ton

408
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of interests from both Illinois institutions from large federal organizations

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in joining our suits. So very confident that we will

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get the resolution that we want and we will get

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this injunction.

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Speaker 4: But we can't.

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Speaker 1: Allow states to unfairly target one specific industry. You might

414
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not like crypto, but it's here to stay and every

415
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person in Illinois who wants to trade should have the

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right to do so without feeling like they are getting

417
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hit with a penalty. And that's exactly what the Illinois

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government decided to impose on crypto.

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Speaker 3: No, just to follow up question quickly, I know you

420
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mentioned this is a way to curb the industry from

421
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innovating in that particular state, and there's prejudice, but to

422
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your point, it's you know, somewhat in the eyes of

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many a small tax percentage. Is this also a way

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you think that the state is seeing a loophole to

425
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kind of profit as well?

426
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Speaker 4: Absolutely, it is.

427
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Speaker 1: It's all about revenue for them, because I think they

428
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are thinking that all right, it's you know, zero point

429
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two percent tax, which does add up anytime I'm moving

430
00:22:09,359 --> 00:22:11,920
my crypto, if I'm moving my you know, for my

431
00:22:11,960 --> 00:22:14,599
self custody while back to coinbase, I'm getting tax and

432
00:22:14,640 --> 00:22:16,640
that could add up. If you're talking about B to

433
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B payments millions billions of dollars. The state wants a

434
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cut of it, and they're probably thinking, well, no one's really.

435
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Speaker 4: Going to leave the state because of this.

436
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Speaker 1: It's got it's becoming a trend to leave states now

437
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in America because of unfair tax treatment. And we have

438
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already heard from a lot of businesses who are considering

439
00:22:37,680 --> 00:22:40,839
leaving the state of Illinois because of this. It does

440
00:22:40,880 --> 00:22:44,480
not make sense when you could drive over from Illinois

441
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into Indiana, go all the way up in Michigan and

442
00:22:46,839 --> 00:22:49,720
you could save potentially millions of dollars if you're a

443
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business in the digital asset space, just because of this tax.

444
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So yes, I understand like that there's a revenue component here,

445
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and states usually have a lot of leeway and finding

446
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ways to build revenue. It seems to be unfair in

447
00:23:03,079 --> 00:23:05,279
the way that they are imposing this and unfair on

448
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one specific industry.

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Speaker 2: That's what we're trying to stop, you know, Cody, I

450
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had googled a governor's name and I put Elizabeth Warren

451
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next to it at and I saw there's some deep

452
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connections there, campaigning together some anti crypto opponents or going

453
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against crypto folks who are pro crypto. So it seems

454
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like this idea may have been seated by Elizabeth Warren.

455
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Speaker 4: I wouldn't be surprised.

456
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Speaker 1: I have no evidence to back it up, but I

457
00:23:33,559 --> 00:23:35,039
really like that you went there and I saw you

458
00:23:35,039 --> 00:23:36,359
tweet that out when this happened.

459
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Speaker 4: You know, there is this group of.

460
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Speaker 1: A group of the progressive wing of the Democratic Party

461
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who view crypto as a threat. It is a threat

462
00:23:50,160 --> 00:23:53,799
to there ethos that more government is good and crypto

463
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being born out of this libertarian movement, you know, removing intermediaries,

464
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removing you know, regulated control and putting more power in

465
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people's hands to transact directly with one another. That scares

466
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the hell out of people like JB. Pritzker, the governor

467
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of Illinois out of Elizabeth Warren, and they view that

468
00:24:13,039 --> 00:24:18,519
the only solution in stopping that empowerment of people is

469
00:24:18,599 --> 00:24:22,400
putting more government control and eradicating this industry. And that's

470
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what we're fighting against. And this tax, and you know

471
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this might sound dramatic, but this tax to me is

472
00:24:27,839 --> 00:24:30,599
illustrative of that where it's like, we don't like you,

473
00:24:30,960 --> 00:24:33,480
we want to get rid of you, and we're going

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to punish you if you continue to engage in this industry.

475
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It's the same thing where Warren runs on an anti

476
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crypto army that's not going away anytime soon. She is

477
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continuing to be loud about that. Pritzker is doing the

478
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same thing and joining the anti crypto army by saying,

479
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I want to put hurt on anyone who's going to

480
00:24:51,119 --> 00:24:52,000
be in the crypto space.

481
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Speaker 3: Are you seeing other states looking to do this follow

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suit after Illinois coming out publicly.

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Speaker 1: I haven't seen an right now. I think probably other

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states are going to watch what happens in the courts

485
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right now. How does the court respond to our lawsuit?

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How big does our lawsuit get in terms of again,

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more interested parties potentially coming on very very soon. But

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I wouldn't be surprised as other states who have governors

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and governments that are very similar to the most progressive

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wing of the Democratic Party, if they start to impose

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as well. There is this group as political group that

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just really hates this industry, and for me, I don't

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understand that. I don't think the democratic holders of crypto

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feel that way. We ran a poll last October that

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showed that a majority of US crypto in investors actually

496
00:25:49,079 --> 00:25:54,640
lean liberal, that actually vote Democratic, and they are being

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alienated from some of their representatives. So I don't know

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why that this technology has become so partisan for some

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of these people, why it scares them so much. I've

500
00:26:04,279 --> 00:26:06,319
got my theory I laid out on like just their

501
00:26:06,359 --> 00:26:09,240
ethos and how this offends them. But we need to

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get to a point where crypto is completely nonpartisan, the

503
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technology is completely non partisan, where it doesn't matter if

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you're a democratic or a democratic government or Republican government.

505
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You want to find ways to embrace this technology because

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it's empowering your citizens and empowering your businesses, and they're

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using it for cheaper, more competitive, more efficient alternatives. That's

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the goal that's what we're fighting for every day. So

509
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hopefully no other state copies this and replicates this and

510
00:26:33,960 --> 00:26:36,599
they see this as a fool's errand by Illinois, and

511
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Illinois is laughed at about this, but we'll see TBD.

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Speaker 2: Well, Cody, thank you guys for fighting a good fight

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and you know we got your back.

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Speaker 4: And ready to support.

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Speaker 1: And again, like I will make the public plea if

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you are a business in Illinois or you have any

517
00:26:54,480 --> 00:26:56,480
business in the state of Illinois and you want to

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00:26:56,559 --> 00:27:00,440
join our lawsuit, reach out to us directly. You can

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00:27:00,480 --> 00:27:03,279
email info at Digital Chamber dot org or you know,

520
00:27:03,319 --> 00:27:05,599
email me directly reach out to us. We want as

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00:27:05,640 --> 00:27:08,000
many parties that are impacted by us as possible to

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join our suit.

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Speaker 3: Thank you, Gody. It until next time.

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Speaker 4: Yeah, thanks guys,