35 Burst results for "Co Ceos"
HASHR8
A highlight from Iris Energys AI Play W/ Dan Roberts
"Welcome back to The Mining Pod. On today's show we're joined by Dan Roberts, Co -CEO of Iris Energy. This is a nuts and bolts episode where we talk about the finances of Iris. We also delve into its S21 purchase and its recent movement into AI and HPC. Did you know that you can make more money by merge mining other networks? Check out MakeMoreMoneyMining .com for information on BIPs 300 and 301, a proposal to bring more revenue to Bitcoin miners through sidechains and merge mining called DriveChains. Increase mining revenues and learn more about participating in Bitcoin governance by visiting MakeMoreMoneyMining .com. Are you a miner who wants to activate Bitcoin improvements? Check out Activation .watch. See what Bitcoin improvements the Bitcoin community, developers, and miners are considering and show support by signaling from one of many BIPs up for consideration. Activation .watch. Is your mining operation happening ready? Take control of your own future with the right energy strategy. Lincoin Energy Training Platform is a tool used by miners to design, monitor, and seamlessly orchestrate sophisticated energy strategies within electricity markets such as ERCOT, New York, and PJM. Avoid penalties, participate in demand response programs, and capture hundreds of thousands of dollars per megawatt per year by deploying the right block and index strategy. Secure your competitive edge at Lincoin .com.
Unchained
A highlight from SBF Trial, Day 16: In Final Cross Examination, SBF Gets Caught Again by His Own Words
"The paperback version of my book, The Cryptopians, is out now. It contains a new afterword covering recent developments in crypto since 2021, when the book went to press. Plus, this version names the person I suspect to be the DAO hacker. In case you never got to read the book in hardback, or, like me, you like to read paperbacks or bedtime reading, order today. Check our newsletter and the show notes for the link, or just search for it at any of your favorite bookstores. It's The Cryptopians — idealism, greed, lies, and the making of the first big cryptocurrency craze. Thanks for reading. Hey everyone, Laura here. Welcome to the Unchained Recap for Day 16 of the SBF trial. Thanks for tuning in. The government wrapped up its cross -examination of former FTX CEO Sam Bankman -Fried on Tuesday with Assistant U .S. Attorney Danielle Sassoon shooting more rapid -fire strings of questions at SBF that underscored the incredulity of some of his claims, plus a mic -dropping set of final questions that seemed to indicate the defendant's knowledge of his guilt. In her cross -examination, Sassoon interrogated the defendant's relationship with Bahamian officials, his efforts to determine who would have spent the $8 billion of missing FTX customer funds, his concern — or lack thereof — about the fiat ad account, and his infamous Nov. 7 tweets telling customers' assets were fine, which he deleted the next day. The defense followed with a redirect examination aimed at recreating reasonable doubt that the 31 -year -old former FTX and Alameda research CEO did not defraud or conspire to defraud customers, investors, and lenders. It used the time to give Bankman -Fried space to further expound on his answers in the cross -examination Monday. The prosecution started its cross -examination by asking Bankman -Fried about whether he cultivated a close relationship with Bahamian officials. For instance, she asked whether SBF recalled proposing to the Bahamas Prime Minister Philip Davis that FTX pay off the country's national debt of roughly $11 .6 billion. SBF said, quote, I don't remember that. Sassoon also asked SBF about having a conversation with Davis' son about a job in NFTs and giving Davis and his wife, quote, floor -side seats at FTX Arena to see the Miami Heat. She brought up a screenshot of a Signal group chat named Project Chinchilla Chatter, where SBF had joked that former co -CEO of FTX Digital Markets Ryan Salem was a member of the Bahamas government. She also mentioned a private dinner and played a video from the Crypto Bahamas conference. Davis was in attendance at both, alongside guests like former US President Bill Clinton, former UK Prime Minister Tony Blair, singer Katy Perry, and actor Orlando Bloom. Then she pulled up an email from November 9, 2022, between the defendant and Bahamas Attorney General Ryan Pinder. By that point, FTX had halted withdrawals. And yet, in the email, Bankman Fried wrote to Pinder, quote, we have segregated funds for all Bahamian customers on FTX, and we would be more than happy to open up withdrawals for all Bahamian customers on FTX. Bankman Fried admitted that FTX was reopened temporarily solely for Bahamian customers. When Sassoon asked him about what she called Alameda spending the FTX customer fiat deposits from the North Dimension bank account owned by Alameda, Bankman Fried said he did not learn until September -October 2022 that FTX customer fiat deposits in the North Dimension account had been, quote, used. Under the quick questioning from Sassoon, SBF admitted that it was, quote, permissible for Alameda to borrow and use fiat deposits, and yet that he didn't tell his employees not to spend FTX customer deposits, didn't set up measures to segregate FTX customer funds from Alameda's funds, didn't tell Alameda employees to keep FTX customer money in the North Dimension bank account for the benefit of FTX customers, and yet made representations before Congress about the safeguarding of FTX customer assets. Bankman Fried claimed that in September -October 2022, he learned that $8 billion of customer money had been spent. When Sassoon asked him what information he learned about who had spent it, he said, quote, I don't remember knowing anything about particular employees. She rejoined her, so it's your testimony that while you were CEO of Alameda, by the way, I think she meant FTX, some unknown people spent $8 billion without your knowledge? Then she asked him, you didn't call in your deputies and employees and say who spent $8 billion? He said he asked Ellison how it happened. Sassoon asked whether he had fired anyone for spending $8 billion of FTX customer deposits. He responded, no. She responded, and so, just to be clear, it's your testimony that while you were Alameda CEO, your employees were spending millions and then billions of customer funds without you knowing it? SPF denied that it was his testimony. During the defense's redirect, Cohen asked Bankman Fried why he had denied to Sassoon that he had spent the $8 billion. SPF first stated how he didn't think, quote, there was a clear, simple pointer decision where a particular person or group decided to spend the money. Moreover, he, quote, wasn't particularly interested in trying to dole out blame for it. That wasn't my priority. It was generally something I deprioritized as later, and I tried to focus as much as I could on what stuff has happened, what's the best thing we can do going forward. Similar to the earlier line of questioning about whether or not Bankman Fried had tried to identify who had spent $8 billion of FTX customer money, Sassoon showed multiple times that SPF's actions don't quite match his story. For instance, he described simply overhearing about the fiat ad account from FTX co -founder Gary Wang and director of engineering Nishad Singh just after Ellison had feared that Alameda might have gone bankrupt. Earlier, he had testified that at this point, SPF learned that Alameda's liabilities to FTX were $10 billion, not $2 billion as he thought. In this section of the transcript, Danielle Sassoon says, and you didn't say, hey guys, what's this fiat ad account that had an $8 billion bug that almost made Alameda bankrupt? SPF replied, when I heard it, I didn't have all that context, but I did ask what the fiat ad account that was an account was referring to. Question, and you were told, weren't you, that it had to do with Alameda's liabilities to FTX for customer funds, right? Answer, not at that time. I was told they were busy and I should stop asking questions because it was distracting. Sassoon asked, so it's your testimony that your supervisees told you to stop asking questions? In the overflow room, people laughed. Sassoon aimed at Bankman -Fried's credibility, highlighting tweets that, from the government's point of view, demonstrated how the defendant misrepresented FTX's financial status to customers. She focused on several tweets SPF posted on November 7, which were deleted the day after, once it became known that FTX did not have the full amount of assets to process customer withdrawals. Bankman -Fried said that before FTX went bankrupt, but as customers were rapidly withdrawing from the exchange, he was writing tweets because, among other things, he wanted to reassure customers and have them leave their funds on the exchange instead of withdrawing. Referring to the statement in the November 7th tweet, quote, FTX has enough to cover all client holdings, Sassoon said, quote, your tweet doesn't say that Alameda has enough to cover all client holdings, does it? He agreed. She reminded him that in previous testimony, he said that when he wrote this tweet, he was referring to the fact that Alameda had more in assets than liabilities. He said he wouldn't put it that way, but then she asked, quote, on November 7th, FTX itself, if you disregarded Alameda's assets, did not have enough to cover all client holdings. He disagreed. Bankman -Fried admitted that even if he and Alameda had liquidated its assets, for example, by either selling their investments in Robinhood and recalling their money from Modulo, the amount was still less than needed to cover FTX's obligation to its customers. And Sassoon asked him if these assets were investments. He said yes. Then she said, quote, you tweeted, didn't you, that we don't invest client assets? He said, that is correct. For the final line of questioning for the cross -examination, Sassoon created a mic drop moment that indicates SPF knew who the four co -conspirators were even before all four were publicly known. Sassoon began by asking, quote, Mr. Bankman -Fried, you would agree that you, Caroline, Gary, and Nashan were the ones involved in the decisions to spend FTX customer money by Alameda, right? He said no. Then she asked if he had learned in December that Caroline and Gary had pleaded guilty. He said yes. When asked if he knew that they were both cooperating with the government, he said he wasn't sure, but, quote, I may have. Then she pointed out that in January, he would have learned that Singh had also pleaded guilty. He said January or February. She asked if, in December, when he'd heard about the guilty pleas of Caroline and Gary, he'd been surprised not to learn anything about Nashad. He agreed. She responded, because Nashad was the fourth person involved in your scheme to use FTX customer money, right? He said nope. She pulled up the same Google doc written on December 25, 2022, in which, in Monday's testimony, Sassoon had shown he'd been wondering if he could get the Robin Hood shares transferred to himself. However, this time, she focused on a different section of the document, labeled Nashad. Question, do you see it says Nashad? Answer, I do. Question, and A says, quote, lots of the complaints, et cetera, filed at this point make claims like the three co -conspirators in a way that doesn't really seem to leave much room for them adding on a fourth. They don't seem to be keeping a seat warm for him as a defendant. Do you see that? Answer, I do see that. Question, B, also there's no plea deal, no nothing, yet. Do you see that? Answer, I do see that. And quote, C, what does this mean? One, he got immunity. Two, they aren't bothering with him. Three, they'll just have a separate parallel set of complaints for him once they get past whatever the blocker is. Four, something else? You wrote that Mr. Bankman -Friede, correct? Answer, I think so. After the defense's redirect, the judge and both teams of lawyers had a charging conference to revise the jury's instructions. On Wednesday, the defense and prosecution will give their closing statements, then the jury deliberates. The end is in sight. We'll see you next time.
The Breakdown
A highlight from SBF Gets Absolutely Buried in Cross-Examination
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Tuesday, October 31st. Happy Halloween. Today, we are talking about Sam Bankman -Fried on cross -examination. Before we get into that, however, if you are enjoying The Breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Hello everyone. First, let me say before we get into more SPF, a big happy 15th birthday to the Bitcoin whitepaper. Crazy to think that that was 15 years ago, a decade and a half of Bitcoin. Here is to many, many more. All right, well, we are firmly down in the muck with SPF and if yesterday's show was all about Friday's prepared testimony and direct examination, and specifically how Sam contradicted the previous testimony of Caroline, Gary, and Nishad, Monday's testimony and today's show is all about the cross -examination. Just to level set a little bit for how that went, here's how Laura Shin described it. Hey everyone. We just got out of the courthouse and I think it's pretty fair to say that at this moment it just feels like it's over for Sam Pinkman -Fried. Honestly, if before lunch it felt like we were witnessing a murder, then afterward we were witnessing somebody just stab a dead body over and over and over and over and over again. Basically, Danielle Sassoon again trotted out multiple statements that Sam Pinkman -Fried made and multiple statements where he contradicted those statements, you know, was often evasive. She just caught him in so many things. Alright, so let's dig into this. Technically yesterday began with the end of the direct examination. There were a few things covered. One was this hedging defense that somehow everything would have been fine if Caroline Ellison had just hedged, like Sam told her to. SPF said that he had numerous conversations about hedging with the then CEO of Alameda, saying that he had directed Caroline to hedge once in late June or early July, and then following up throughout September. Sam told the court that Alameda's net asset value had already fallen from $40 billion to $10 billion, and that he was, quote, worried that Alameda might become insolvent. Sam discussed Caroline's teary -eyed response, where she agreed that Alameda should have hedged and that maybe they shouldn't have had so many venture investments. He said that she had offered to step down as CEO, but that he wasn't trying to push her out, and that his, quote, biggest concern was that if Alameda remained unhedged that it might go bankrupt. And so I thought that the focus should be on urgently putting on the hedges that would protect against that. Sam explained that Alameda had put on hedges in September, but they weren't as large as he would have wanted. Thus, he directed Caroline to increase the hedges. I will take a pause here and note two things. First of all, on the one hand, Sam has tried to testify that he didn't know what was going on at Alameda and didn't have any control. And yet here, he's talking about how many times he has directed the CEO to take a very specific action. It kind of feels like one of those you can't have it both ways and either you were the de facto CEO or you weren't kind of situations. Second, and something that I'm sure will come up with the jury, hedging in Alameda's performance doesn't have any real bearing on whether or not Sam committed fraud by knowingly using FTX customer funds for his hedge fund slash financial playground. It is a distraction and really has more to do with what might have happened if we had never found out. Now, speaking of what Sam did or didn't know, he also tried to suggest that he didn't really have any idea what was going on until October. He claimed that in October 2022, he had been given direct access to the FTX database, which was previously only accessible by developers. He said that he used this access to build a full view of Alameda's accounts. During that investigation, Sam claims that he learned about the hidden accounts including Se -Yoon 88, which has been sometimes referred to as our Korean friend during reporting. That account was used to wall off Alameda's liabilities to FTX in an account that didn't accrue interest. Now again, this contradicts everything that we've heard from every other witness, but alas, that's what Sam testified. The defense moved on to the final week of FTX, beginning with the release of the Alameda balance sheet in a Coindesk article. Sam acknowledged that he discussed Caroline sending a tweet which would refute the claims. That tweet said, quote, Now again, another revealing part of this testimony, and remember, this is direct examination. This is Sam being questioned by his own lawyers. Is Sam seeming to think that any entity that he was connected to could just move assets freely back and forth between them? He's literally explaining here that a holding company, a shell corporation created entirely to hold Sam's equity in FTX, counted as an asset for Alameda. While Sam seems to think that that's a good defense, to me, it kind of just makes the point clear that he never saw any barriers or differentiation between any project that he was the head of, or any entity that he had ownership over. In other words, if Sam thought he could just move assets from the shell company Paperbird onto the Alameda balance sheet to shore it up to external eyes, is the jury really supposed to believe that he wouldn't do the same thing with FTX customer deposits? Now when it comes to the final days and hours of FTX, Sam basically reinforced over and over that he believed that they had enough resources to take care of everything and that it was all CZ's fault for triggering a loss of confidence and, as he wanted to characterize it, a run on the bank. He also tried to sow doubt when it came to Nishad Singh, as Sam recalled Nishad messaging him about trading his personal account to clear his debts. There were over $500 million in loans for investments and donations that had been papered in Nishad's name, along with $80 million for personal expenditure. Sam said that Nishad was quote, actively suicidal at the time and was being overseen by a therapist. The two of them discussed Sam taking the blame, with Nishad concerned that FTX employees would think it was all his fault. Sam wrote, At this stage, the testimony broke down into a long objection about whether Sam could testify to telling Nishad that he didn't think they did anything wrong. The evidence was ultimately disallowed. The testimony concluded with a discussion of the 11th hour plans to raise funds. Sam spoke to his attempts to raise funds from Apollo Global Management. He detailed his discussion with FTX General Counsel Kan Sun, but told a very different version of the story. Sam claimed quote, That said, Sam claimed to believe there were additional buckets of assets held within FTX which would cover Alameda's borrowing. Primarily, he seemed to be referring to using assets that customers had staked on the exchange to backfill Alameda's shortfall. Sam said, Now, of course, Sun's testimony had been very clear that he told Sam that the size of those buckets was dwarfed by the size of Alameda's borrowing. From there, we got into the cross -examination. Today's episode is brought to you by Kraken. For far too long, the whole financial system has been standing still, too slow, only on for certain hours, overly designed for some types of people, but not for others. Crypto, at its best, represents progress. It asks the question, what if? It invites people in instead of leaving them out. It's on 24 -7, 365, and moves at the speed of real life. Not everyone believes it, we've got our fair share of detractors, but that's the way it always is when you're building something new. Kraken is a crypto company that has been through the highs and lows of the industry, facing forwards towards progress throughout. And now they're inviting us to see what crypto can be. Learn more at Kraken .com slash the breakdown. Disclaimer, not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to U .S. and U .S. territory customers by Payword Ventures Inc., PVI, DBA, Kraken. The cross was led by Assistant U .S. Attorney Danielle Sassoon, and she began the prosecution's cross -examination by establishing that Sam held majority ownership over both FTX and Sam was involved in Alameda's trading by 2022. He responded, depends on how you define trading. He added that, I would say I was not involved for the most part. I would not say I was not involved in any way at all. Now of course, the line of questioning was designed to trap Sam in a lie, which would be a running theme throughout the cross -examination. Sassoon presented evidence that Sam had told Caroline and Sam Tribuco, then co -CEOs for Alameda, to purchase OXI and MAPS tokens. Sam had written to them, guessing we should top longer one to two million of each over the next day or two. Sam rejected this position, claiming this was not a direction to trade. From there, however, Sassoon did get Sam to admit that he had directed Alameda to buy Japanese government bonds and place hedges, which Sam agreed was a form of trading. Sassoon then moved on to Sam's press tour. Sam agreed that he had tried to speak truthfully and precisely about the collapse of FTX. The vast bulk of Sam's answers were simply responding yes or no to the prosecutor. His lawyers had no doubt warned him to keep his answers brief to avoid a repeat of last Thursday's disastrous cross -examination. That was of course when Sam had testified without the jury present and continuously gave lengthy answers which provided additional fuel to the prosecution. Sam agreed that he had tried to be careful about what he said in public and had even cleared some of his comments with his public relations team. It was at this stage that Sam's recollection began to fail him and he became unable to recall what he said during various interviews, which would again be another theme of the cross -examination. Specifically, Sassoon turned to a Twitter Spaces held during Sam's media tour and asked Sam whether he had said that he was not involved with Alameda's trading and had not been for years at that point. Sassoon proposed to play a recording of the Twitter Spaces for the court to hear and to aid with Sam's suddenly faulty memory. The defense objected, claiming that the two sides had previously had a gentlemanly agreement to share exhibits to be used in cross -examination the night before. Sassoon said that the defense had not asked for these exhibits and there was nothing in court rules preventing her from playing the recording. The tape was played with Sam of course stating that he was not involved with Alameda's trading. Sassoon offered another exhibit showing that Sam had made public statements that he had stepped away from involvement in Alameda's trading due to conflicts of interest. In an article published by the Financial Times last December, Sam had said that this was quote, related to his role as guardian of customer assets. Sam of course could not recall making these statements. Sassoon moved on to statements about how Sam had pitched FTX. Sam acknowledged that he had promoted FTX to investors on the basis that its automated liquidation protocol set it apart from other exchanges. Sassoon questioned Sam about statements he made to Congress, describing FTX as a safe crypto exchange. Sam acknowledged general statements of that nature but said he could not recall specifically. After establishing that Sam communicated with potential customers using his Twitter account, Sassoon asked Sam if he made representations about how customer assets would be treated on FTX. Sam agreed with the premise but again couldn't recall specifics. She asked whether Sam had promoted FTX as a safe exchange. He responded that this might have been the case with FTX US but he wasn't sure about FTX International. When asked whether he acted like he cared about consumer protection, Sam responded, I think I did care about them, yes. Coming to the point, Sassoon asked Sam whether he made public statements that FTX was a safe platform. He responded, I remember things around specific parts of the FTX platform that were related to that. I don't remember a general statement to that effect. I am not sure there wasn't one. Of course, the prosecution had an exhibit to clarify Sam's memory. They presented a tweet from August 2021 which stated, As always, our users' funds and safety comes first. Putting an even finer point on the issue, Sassoon presented a tweet from October 2022 in which Sam had described the crypto ethos as economic freedom, the freedom to own your own assets. Sassoon managed to get Sam to acknowledge that when he made that tweet, he knew Alameda was carrying an $8 billion liability to FTX. Now what you see here is the pattern of what the prosecutor was trying to do. She's trying to catch Sam in lies that are relevant in the specifics but also relevant in the fact that he's just lying. Prosecution moved on to Sam's testimony in front of Congress. Sam admitted that he had filed a document which laid out FTX's key principles for ensuring investor protections on digital asset platforms. This document included numerous opinions on how to protect crypto customers including the avoidance of conflicts of interest. Sam acknowledged that conflicts of interest are a quote potential problem. Sassoon turned to Sam's public support for regulation. She alleged that it was simply a marketing ploy and not an earnestly held position for Sam which he disagreed with. Sassoon put it to Sam that quote, Sam responded, To which of course the prosecution presented a text message conversation between Sam and Vox's Kelsey Piper which had occurred in early November. Kelsey had asked Sam whether his pro -regulation stance was just for PR reasons. Sam was made to read his response to the courtroom. Yeah, just PR. Fuck regulators. Now Sassoon noted that Sam had testified under oath before Congress that FTX's risk management program required customers to pledge collateral on the platform itself rather than holding collateral off platform. Sam agreed that he had given roughly that testimony. The prosecution presented an exhibit of Sam's congressional testimony which sparked a humorous misunderstanding. The defense said that they had no objection to the exhibit as long as it wasn't being presented for its truth but merely as evidence that Sam had said it. Sassoon, a little perplexed, noted that it was Sam's own statements. When asked by the judge how she was offering the document, Sassoon responded, Sassoon presented Sam with a marketing deck published by FTX which described how poorly futures exchanges are designed. The document stated that rival exchanges had quote, lost hundreds of millions of dollars of customer funds to clawbacks. When asked to read a bullet point on how FTX was solving those issues, Sam obstinately responded, This gets to another point that many who are in the courtroom reported, that Sam was acting throughout this testimony fairly petulantly. Whether that endears him to the jury or not I guess remains to be seen. Sam was asked a series of questions which required him to confirm that customers were not allowed to use outside collateral to trade on FTX. For example, he acknowledged that a customer could not pledge their house as collateral. Seeming as though she had sprung the trap, Sassoon asked if there were any customers aside from Alameda who were allowed to pledge outside collateral not held on FTX. Sam responded, He said that a firm called CryptoLotus had been allowed to do this and that FTX had considered allowing Three Arrows Capital to use outside collateral as well. This unexpected answer seemed to throw Sassoon off her tempo. She asked follow -up questions about how large CryptoLotus' account was and whether this special privilege was disclosed to the public. The prosecution was then handed a note from an FBI agent seated in the front row who had previously given testimony. Regaining her bearing, Sassoon asked whether Sam was friends with the head of CryptoLotus. He responded that he was not. However, finding the right question, Sassoon asked whether Sam had a personal relationship with anyone at CryptoLotus. Sam responded that he had been friends with a more junior employee at the firm. Now, this line of questioning was essentially the only weak point in the cross -examination where Sam ever so briefly had gained the upper hand. However, Sam still brought home the point, getting Sam to admit that Alameda and CryptoLotus stood alone as the only firms allowed to pledge collateral, not custody with FTX. Turning to Sam's public statements about Alameda special privileges, Sam had a vague recollection of stating that Alameda played by the same rules as other customers but denied saying they had no special privileges. He said that, When asked if he said that Alameda and FTX operated separately, Sam responded that Contrary to that, however, the prosecution presented an exhibit in which Sam stated that Sassoon put to Sam that this statement was general and not limited just to frontrunning. Sam responded, Now, if you're scratching your head, basically the point here is that Sam is trying to argue that every time he said that Alameda was just like everyone else, he was only referring to frontrunning and that Alameda didn't have special access to CFTX users' trades. From there, there were a couple instances of the prosecution trying to catch Sam in low -stakes evasion. For example, he was asked whether he flew to the Super Bowl on a private plane. Sam responded that he couldn't remember. Sassoon quipped, Sam responded, Now, one of the more revealing parts of the testimony, which gets back to what I was saying before about how Sam just treated everything and every entity he owned as all part of one big conglomerate, Sassoon began to ask questions about more specific spending from Alameda. She asked about a tranche of Robinhood shares purchased by Sam using 546 million borrowed from Alameda. The loans were originated in May 2022. Sassoon established that shortly after the purchase, Sam transferred the shares into a holding company owned by Sam and other FTX executives. After a bit of back and forth about the corporate structure of various entities involved in the deal, Sassoon landed the punch. She presented an affidavit showing that Sam had tried to transfer the Robinhood shares from the FTX state into his own name. Sassoon asked, that at that moment, FTX customers could not withdraw funds. Sam answered that he was, Towards the end of the long day, Sassoon moved back to June of 2022, when Alameda paid back loans from external lenders. She asked if Sam knew this would put FTX at risk, which he refused to admit. Trying again, she asked whether Sam knew there was, Again, Sam avoided responding, saying that he, Sassoon asked whether this meant that Sam knew there was some risk. He responded that, Seeing her opening, Sassoon moved in for the kill. She asked, Sam said, I don't think that's what happened, and I'm also not saying that's not margin trading. An exasperated judge demanded that Sam answer the question. When asked if his testimony was that paying back lenders was a margin trade, Sam said, In response to further questioning on whether repaying loans was a margin trade, Sam offered the response, Now, this was broadly how the cross -examination went across the grueling hearing. Sassoon would often pin Sam down to a position, and then present evidence of seemingly contradictory prior statements. In other lines of questioning, Sam would say that he couldn't recall pivotal tweets and interviews throughout the rise and fall of FTX, and Sassoon would then put those words in front of Sam and have him read them back for the jury, or play back interview segments which showed Sam as fleeting the world, given what we now know. Now when it comes to how he appeared, Sam seemed evasive at times. Throughout the cross -examination, he answered that he wasn't sure or couldn't recall nearly times. 150 Most catastrophically for his case, Sam also appeared to be misleading. He was caught over and over and over again in contradictory statements on both large and small topics. The prosecution was able to put direct evidence to him regarding misleading public statements, and he failed to come up with a single convincing explanation. In other words, the cross -examination appeared to go about as poorly as it possibly could have for Sam, which of course was largely in line with the predictions offered by legal commentators throughout the case. Basically, every lawyer that has spoken to the idea of Sam giving testimony has repeated the traditional wisdom that a defense attorney should never allow their client to take the witness stand and open themselves up to cross -examination. With this dissection of Sam's narrative, we got a practical demonstration of why that legal advice is always given. Sam was constantly bristling at the questioning. Multiple reporters who are familiar with Sam's character noted that in the past, Sam would often snap during this kind of tough questioning. During Twitter spaces or hostile interviews, he would often belittle anyone who questioned his motives or his actions. With that response unavailable to him, Sam was obviously simmering with rage at points but had to keep a lid on it. The question, of course, will be whether or not the jury got the same impression of Sam as the scores of crypto reporters who packed the courtroom, each of whom are far more likely at this point with Sam's nature than they care to be. The prosecution was not done with Sam by the end of the day. They expected to take another couple of hours this morning to cement the theory of the case they presented in the opening arguments. That FTX was an empire built on Sam's lies. That Sam had lied to counterparties, to banks, to investors, and to customers. And that through their cross -examination, they were going to put Sam's lies front and center for the jury to see. Teddy Schleifer, a reporter at Puck News, summed it up this way. I feel like the big thing that Sassoon has really gone at is this idea of truth. That Sam is lying. All morning it's been, here's an interview you gave to a reporter. Here's something you said to Congress. Here's something you said on Twitter, to customers. It really makes me think back to the opening statement. How they're really going to make him out to be a liar. What's more, Teddy continued. Sam has not mounted a credible defense to date. The entire defense case is basically Sam. If you're a juror and you're trying to sit there asking what is the reason I have to vote to acquit, I don't know what you're looking at. You're basically believing that this character is more credible than the preponderance of documentary evidence and Caroline, Nishad, and Gary. I don't think Sam has given that juror a reason to acquit. Now Carly Riley, the host of Overpriced JPEGs, put it a little bit more bluntly. She said, incredibly semantic and pedantic for sure, but also like an asshole. One person said to me, So friends, that is the wrap of yesterday's testimony. I'm sure we will do a little conclusion tomorrow on the end of the cross -examination. From there, we will be on to the final witnesses for the defense, closing arguments, and then jury deliberations. But for now, we will wrap there, and I will say, until tomorrow, be safe and take care of each other.
What Bitcoin Did
A highlight from The Economics of AI & Bitcoin Mining with Daniel Roberts
"If you want to keep pushing more renewables onto the grid in the absence of a price signal, in the absence of underlying demand, there's only one group that pays for that. It's the taxpayer. Hello there. Happy Monday. I hope you're all doing well. Right. If you didn't see it, Danny and I announced a cheat code last week. Our conference is going to be held in Bedford next year, April 12th and 13th. We're doing things a little bit differently. We're doing one day a conference, but the second day where you're all hungover, we're going to be doing football. We're going to take you all down to Macmillan Park to watch Real Bedford to see our cheat code in action. And do you know what? With our ladies' team top of the league, they've won every game. The men's team, they can go top of the league if they win tomorrow, actually, on my birthday. And with Bitcoin looking strong and a halving in place in April, it looks like it might be some special event. So hopefully we'll see some of you there. If you want to get a ticket, please head over to cheatcode .co .uk. Anyway, welcome to the What Bitcoin Did podcast, which is brought to you by the legends at Iris Energy, the largest NASDAQ listed Bitcoin miner using 100 % renewable energy. I'm your host, Peter McCormack. And today I've actually got Iris Energy co -CEO, Dan Roberts, on the show. Now first met Dan earlier this year in Canada. Me and Danny went out to meet the guys. We were discussing them becoming a sponsor. And we were really intrigued by their takes on mining. We really liked the company's approach. Their values matched ours. And I've got to know Dan pretty well over the last year. And I love listening to him talk about mining, especially the stuff recently where he's been talking about AI as well. We had a good conversation about this when we were in Australia. And I said to Dan, come on, you need to come on the show. You need to tell the listeners about what you're up to and your takes on mining. Now, Dan is the co -CEO of Will, and they've been building Iris with a long -term plan in mind. And it shows with every decision they're making. So in this episode, we get into co -integration of Bitcoin mining with AI Compute. The economics of mining and the halving and how Bitcoin is helping the grid. So if you've got any questions about this or anything else, please do get in touch. My email address is hello at whatbitcoindid .com.
CoinDesk Podcast Network
A highlight from UNCHAINED: Why These Lawyers Say It's Over for SBF--But His Only Hail Mary Is to Testify
"Now look, I think that the evidence here is overwhelming. I don't think there's actually a risk of a reversal, but when you ... Part of trying a good case when you're the government or a defense, but more especially when you're at your advantage and not get ahead of your skis and take risks you don't need to take. Hi everyone, welcome to Unchained, your no -hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago and as a senior editor at Plorbs was the first mainstream media reporter to cover cryptocurrency full -time. This is the October 16th, 2023 episode of Unchained. The game has changed. The Google Cloud Oracle built for Layer 0 is now securing every Layer 0 message by default. Their custom end -to -end solution sets itself up to bring its world -class security to Web 3 and establish itself as the HTTPS within Layer 0 messaging. Visit Layer0 .network to learn more. DeFi just got way easier with Vaultcraft, Popcorn's no -code DeFi toolkit for building, deploying, and monetizing automated yield strategies. From institutional service providers to DeFi degens, anyone can use Vaultcraft to supercharge their crypto with custom cross -chain yield strategies. Learn more on vaultcraft .io. Buy, trade, and spend crypto on the crypto .com app. New users can enjoy zero credit card fees on crypto purchases in the first seven days. Download the crypto .com app and get $25 with the code LAURA. Link in the description. Today's topic is the second week in the criminal trial against Sam Pinkman -Fried, here to discuss our Sam Ensor, partner at Cahill Gordon & Rydell, and Greg Strong, partner at DLX Law. Welcome, Sam and Greg. Thanks for having us, Laura. Yeah, thanks very much, Laura. So we've now had two weeks in the criminal trial for Sam Pinkman -Fried. This week was a doozy because two of the government's biggest witnesses testified. I've seen people tweeting things like, for instance, that it's just over for Sam. But I was curious, from the lawyer's perspective, what do you think is the state of the trial at this point? I think that it is probably, it certainly is not going well for SPF. In particular, this week was the week of Carolyn Ellison, his former girlfriend, co -CEO and eventually CEO of Alameda Research. Her testimony was devastating on several accounts, not just because of the information she provided about various aspects of the fraud, but documentary corroboration. There was a lot of documentary corroboration of what she was saying, contemporaneous documents where, for example, she's noting concerns to SPF and he is remarking on the concerns, proving that he knew about them and that those concerns were contrary to what was being told to the public, that is to investors, to lenders and to customers. So, very, very bad. But it's always too soon to tell. There's more weeks to come. Anything can happen and there's probably going to be a defense case. So I think, you know, it's as the judge tells the jury, keep an open mind. Don't talk or deliberate until you've heard all the evidence.
Unchained
A highlight from SBF Trial, Day 7: In SBF Trial, Did the Defense Lose Its Opportunity With the Star Witness?
"Hi everyone, Laura here. Thanks for tuning in to the Unchained Recap for Day 7 of the criminal trial of Sam Binkman -Fried. The cross -examination of the prosecution's star witness, Caroline Ellison, concluded Thursday without the defense seeming to land any punches. A few times, Sam Binkman -Fried's legal team reverted back to its habit from last week of asking questions that simply repeated already information produced without making any new points about them. This, among other things, led to frequent, tense sidebars between the defense and the prosecution. And while the jury couldn't hear what was said, the heated interactions were on full display. Still, shocking new facts came to light, such as that around the time that Alameda had… borrowed $14 billion of FTX customer money, Sam Binkman -Fried told Ellison he wanted to And after the cross -examination ended, the testimony of the next witness got FUD and YOLO into the court transcript. The defense team's initial inquiry Thursday morning touched upon a number of topics, though it wasn't always clear where the line of questioning was going, or what points they wanted the jury or other observers to take away. For instance, defense attorney Mark Cohen asked questions about various Alameda accounts on FTX, eliciting information such as the ballpark number of sub -accounts Alameda had, but didn't seem to draw a conclusion. Early on, Cohen was able to score a few points for his defendant. He mentioned an early incident in which a large percentage of Alameda employees left the firm before Ellison arrived. Although SPF had hidden the fact of the mass departure from her initially, the defense, after a long discussion between the lawyers with the judge in the sidebar, got her to say she ultimately concluded SPF had been right in this dispute. Under his questioning, she also admitted that when she was co -CEO and CEO, Binkman -Fried was not only absent for long periods of time from Alameda, but also didn't make day -to -day decisions for the trading firm. Other subjects Cohen touched on were how Binkman -Fried's ambition was greater than hers, though she said SPF encouraged her to be more ambitious, differences in their fashion style, the contrast between his approach to the media and hers, the fact that she was more conservative when it came to business than Binkman -Fried, etc. For instance, she said that she did not support plans to start FTX. However, at this point, Cohen presented Ellison with two documents establishing that they were the types of documents that she would regularly produce in her line of work. With the third document, she didn't say it was part of her regular practice. With Ellison objecting to each question, or even rephrasing of the question, until finally, lawyers had to back and forth over which laws allowed or didn't allow this document to be used as evidence. Ultimately, they went again to the sidebar, and testimony for the day had barely begun. At the sidebar, Cohen argued that he wanted to use the document to rebut that Ellison was just taking instructions from SPF, and instead showed that she really ran Alameda. But based on the grounds of this not being a document that Ellison regularly updated, the prosecution's objections were sustained. In further cross -examination, Ellison said she and Tribuco became co -CEOs of Alameda in 2021, handling the trading firm's day -to -day operations. Although it seemed Cohen wanted to portray them as the decision -makers, she said that although Ellison and Tribuco provided input into the firm's trading strategies, Binkman -Fried was the ultimate decision -maker. By the end of 2021, Tribuco had stopped coming into Alameda's offices. Ellison said she and Binkman -Fried had conversations about replacing Tribuco with Ben Shia, Alameda's head of trading, but Ellison didn't think it made sense. The defense then asked a series of questions about her duties, potentially laying the groundwork to promote the theory later that she was in charge, for instance showing that she handled accounting, balance sheets, and, for a period, lender relationships. Ellison, in her testimony, said she had considered resigning from Alameda at various points, including in the summer and fall of 2022, shortly before Alameda imploded. She said when SPF found out, he, quote, told me that I couldn't, that I was too important to keep at Alameda, and he thought I needed to stay at Alameda. Ellison didn't resign because, at the time, she trusted the defendant's opinion and didn't want the firm's to collapse. Then, a string of repetitive questions ensued. Cohen asked Ellison about Alameda's relationship with its third -party lenders, her compensation, and her romance with the defendant. At this point, the prosecution objected, saying, Your Honor, we've now had several minutes of simply repeating the direct examination. When Cohen resumed, he asked her a few questions about how their breakup affected her ability to communicate with SPF at work. He then asked about the days post -bankruptcy when she had retreated to her parents' house and the FBI came. She acknowledged that the FBI seized a computer from her boyfriend, who had also worked at FTX and or Alameda, as well as a computer belonging to her mother. At this point, a string of questions about her cooperation agreement ensued, which was confusing because these typically come at the end of the cross -examination, and the schedule wasn't even halfway through the morning. This prompted Judge Lewis Kaplan to say, Mr. Cohen, I'm not rushing you, but in almost 30 years, most cross -examinations of cooperators I have seen have ended with what you just did. Cohen responded he thought he would mix it up. Another confusing line of questioning almost seemed to imply that Ellison hadn't really committed securities fraud, as if the defense were concerned she had incorrectly pleaded guilty to one of her charges. Again, it wasn't clear where this was going for the defense. Raising questions about Ellison's leadership, the defense asked about how the collapse of Paraluna in May 2022 impacted the trading firm. Ellison said Alameda lost roughly $100 million in USD, concluding that, quote, it had been a bad idea, a mistake at the time, to own USD.
Unchained
A highlight from SBF Trial, Day 6: Caroline Ellison Recalls 'The Worst Week of My Life
"Hi everyone, it's Laura here for the Unchained Recap of the SPF trial for Wednesday, October 11th. In Caroline Ellison's second day on the witness stand in the criminal trial against Sam Bankman -Fried, her responses to prosecutors revealed that, in 2022, as the crypto markets crashed and lenders began recalling Alameda's loans, Bankman -Fried continued to make illiquid investments. As the situation grew worse, she, Bankman -Fried, and their alleged co -conspirators Gary Wang and Nishat Singh secretly resorted to ever more desperate Hail Marys, allegedly directed by SPF. In recounting the dramatic week of FTX's downfall, Ellison shed tears, sniffled, and reached for a tissue in front of the jury, composed of eight women and four men, making today the most emotional day in the trial so far. It was also the most dramatic, with references to bribing Chinese government officials, creating accounts using the IDs of Thai prostitutes, and an attempt to raise money by selling FTX shares to a Saudi prince. Plus, she shared insight into SPF's carefully curated public image, and how virtues like not stealing or lying were allegedly a moral gray area for him. Ellison began her testimony about the events in May 2022, and how the collapse of Tara Luna marked the start of an overall downturn in the crypto markets that significantly decreased the value of Alameda's assets. By June 2022, third -party lenders were asking the prop trading shop to pay back their loans. Most of Alameda's loans were open -term, which meant lenders could recall their money back at any moment. The prosecution showed Telegram group chats that included Ellison, Bankman -Fried, other Alameda employees, and lenders about Alameda's multi -billion dollar loans. For example, CryptoLenderGenesis reached out to Ellison in mid -June, asking Alameda to return $400 million of its open -term loans with them. Alameda's inability to pay back its loans in full, according to her calculations, and the size of these loans, put Ellison's mind in a, quote, constant state of dread. Ellison testified that SPF directed her to repay the loans, which meant using Alameda's $65 billion line of credit that drew on FTX customer deposits. Quote, I knew that we would have to take the money from our FTX line of credit, and I knew that that was money that could be called at any time. And every day, I mean, I was worrying about the possibility of customer withdrawals from FTX and the possibility of this getting out and what would happen to people that would be hurt by that, she said. Prosecutors showed more telegram messages between Genesis Head of Lending Matthew Balenzweig and Ellison, where Balenzweig was asking for balance sheet updates that included the value of Alameda's current assets based on current prices. Feeling stressed, Ellison said she wanted to reassure Genesis while not letting the lender know about Alameda's and FTX's internal crisis. Ellison prepared an internal balance argument that she felt exposed how risky Alameda's position was, since it showed that the firm had borrowed $9 .9 billion from FTX customers and given $4 .6 billion in loans to top FTX executives. While this balance sheet had a positive net asset value, Alameda's total assets were greater than all of its liabilities, it was artificially inflated by the inclusion of FTT tokens that would never be able to be sold at the price they were marked as, since selling Alameda's total holding of FTT would cause its price to drop significantly. Moreover, Ellison noted the balance sheet highlighted how much of Alameda's assets were in illiquid investments. Ellison calculated at the time that Alameda had borrowed $13 .25 billion from FTX customers. This number was labeled in the original balance sheet as, quote, FTX borrows, because Ellison wanted to describe what the number actually represented without blatantly calling it, quote, FTX customer money. Quote, SBF always directed us to be careful about what we put in writing and not put things in writing that might get us in legal trouble, she explained. Since she and Banquin Freed agreed this original balance sheet could not be shared with anyone like Genesis, Ellison said she crafted seven different versions of this balance sheet at Banquin Freed's request. Quote, I understood him to be directing me to come up with ways to conceal the things in our balance sheet that we both thought looked bad, she said. The one SBF chose, her seventh alternative, was sent to Genesis. It did not have a line item named FTX borrows. According to Ellison, she hid Alameda's debt to FTX customers to make Alameda look less risky by netting some numbers in order to keep Alameda's net asset value the same while decreasing the size of Alameda's liabilities. Shortly after receiving Alameda's balance sheet, Genesis asked for its money back again. BalanceWide asked Alameda over Telegram to repay $500 million of its loans in mid -June 2022. Ellison admitted in court that she considered her balance sheet manipulations to be dishonest because they falsely stated Alameda's assets and liabilities, making the trading firm look safer than it was. The firm was able to repay some of its lenders in June 2022. Over the next few months, Ellison periodically updated Alameda's balance sheet, and each time she saw FTX borrows increase. In September, they jumped by roughly $4 billion, and by October, FTX borrows stood at nearly $14 billion. Ellison said that Alameda was using the additional FTX customer deposits to continue investing, trading, and repaying loans. Ellison testified that Alameda's internal balance sheet, the one that accurately depicted Alameda's assets and liabilities, showed her that Alameda had incurred a ton of risk and borrowed a large amount of money. In a conversation with Sam, they discussed solutions such as how to reduce risk and how to get more cash. He proposed two ideas that he logged in a Google document. To sell a couple billion dollars worth of Bitcoin if its price were to surpass $20 ,000, and to sell FTX equity to raise capital. Ellison mentioned how Bankman Fried was actively trying to sell shares of FTX to investors, primarily Mohammed bin Salman, Saudi Arabia's crown prince. By selling shares and receiving money, Alameda could theoretically repay the money they borrowed from FTX. The prosecution dove into conversations between Ellison and Bankman Fried that revolved around the ethics of lying and stealing. Ellison testified that Bankman Fried's moral framework was based on utilitarianism, and that he thought, quote, the only moral rule that mattered was doing whatever would maximize utility, so essentially trying to create the greatest good for the greatest number of people or beings. Ellison said Bankman Fried, quote, didn't think rules like don't lie or don't steal fit into that framework. Ellison noted that Bankman Fried's moral compass had made her more willing to steal. Quote, when I started working at Alameda, I don't think I could have believed you if you told me that a few years later I would be sending false balance sheets to our lenders or taking customer money, but over time it was something that I became more comfortable with when I was working there, she said. Ellison also testified that Bankman Fried urged employees to use messaging platform Signal and set the message to auto -delete after seven days. According to Ellison, a large part of Alameda and FTX's culture was a general weariness about putting anything sensitive in writing because of potential legal trouble. The prosecution showed a screenshot of Ellison and Bankman Fried's signal chat, where all the messages had auto -deleted. U .S. prosecutors asked whether Ellison and Bankman Fried used coded language to talk about possible criminal activity. Ellison said yes, bringing up Alameda's role in allegedly bribing Chinese government officials before June 2022. Alameda had trading accounts on two Chinese exchanges, OKEx and Huobi. In 2021, the exchanges froze Alameda's trading accounts because the Chinese government was conducting a money laundering investigation into someone who had previously traded on Alameda. As a result, Alameda couldn't withdraw its funds, which stood at roughly $1 billion. To get their funds off these exchanges, Alameda tried several routes. One effort involved the creation of OKEx trading accounts using the IDs of people she said she had been told were Thai prostitutes. "...we tried to basically have our main account lose money and have those other accounts make money," Ellison said. Alameda would "...do very imbalanced trades between the two accounts so those other accounts would be able to make money and withdraw it. However, this method was unsuccessful." David Ma, a Chinese employee with connections in China, allegedly proposed that Alameda get the accounts unfrozen by sending about $150 million to a few addresses. Alameda followed Ma's plan, but Handy Yang, a former Alameda trader whose father was a Chinese government official, vehemently opposed it. In a chat with Ellison and Bankman -Fried, former FTX Co CEO Sam Tribuco joked about their Chinese bribe, saying, "...did Handy's father immediately turn us in or something?" Additionally, in a document detailing Alameda's state in November 2021, Ellison included a section focused on the large gains and losses Alameda had in the year. The middle of the list said, "...negative $150 million from the thing," which, according to Ellison, referred to Alameda's payments to get their Chinese accounts unlocked. Ellison said she had labeled these payments the thing because, "...I didn't want to put it in writing that we had paid what I believed were bribes to get these accounts unlocked." Ellison also testified that in August 2022, when having a conversation with SPF about Alameda's balance sheet, Bankman -Fried said the trading firm should have hedged earlier and that Ellison was at fault for Alameda's financial footing. Ellison said Wednesday that Bankman -Fried blamed her for being in a situation where Alameda borrowed $10 billion from FTX while not having the assets to repay the debt. Ellison said she began crying and had trouble continuing the conversation. Despite saying she could have done things differently like hedging earlier, Ellison still believed Bankman -Fried was responsible. For Ellison, SPF's decision to borrow billions of dollars in open -term loans and deploy them in illiquid investments was the, quote, "...fundamental reason for Alameda's predicament." Ellison also testified about how SPF tried to cultivate a certain public perception. For instance, she said, quote, "...he said he thought his hair had been very valuable. He said ever since Jane Street, he thought he had gotten higher bonuses because of his hair and that it was an important part of FTX's narrative and image. Also, upon moving to the Bahamas, they were originally assigned luxury cars, but they switched to a Toyota Corolla for him and a Honda Civic for her because, she said, he said he thought it was, quote, "...better for his image." Although she rarely spoke to the press, she did speak to a Bloomberg reporter for an article about which Bankman -Fried was concerned. It raised questions about the closeness between FTX and Alameda. Describing what, quote, "...conflicts of interest could mean in the context of FTX," Ellison said, quote, "...what I mean is that, because Sam owned both FTX and Alameda, he had a reason not to treat all of the traders on FTX equally. I think allowing Alameda to borrow billions of dollars from FTX customers was not in the best interest of FTX or its customers, but it was important to keeping Alameda alive." Around the time Bloomberg published its piece in mid -September 2022, Ellison met with Singh and Wang about potentially shutting down Alameda. Showing notes that Ellison took pre -meeting, the prosecution pointed to a list of problems she had identified. The final one was, "...true up funds? Ellison said it referred to the money Alameda owed to FTX, and that she had chosen that phrasing because, quote, "...I wanted to refer to the concept, but not write down anything very explicit along the lines of, you know, return customer money that Alameda took. Because of my general practice, as directed by Sam, of not writing problematic things down explicitly." In early 2022, Ellison testified, Alameda invested hundreds of millions of dollars in crypto hedge fund Modulo Capital at Bankman -Friede's direction. Then on June 24, 2022, he sent a message on Slack to Ellison saying, quote, "...50 million dollars to Modulo Capital LP we should send via Signet," and then gave an address. Ellison specified that the date of this message was, quote, "...a week after Alameda had used billions of dollars of FTX customer funds to repay our loans." The prosecution pulled up a spreadsheet of individual loans that Alameda made and called out a loan on September 20, 2022 by Alameda of $100 million, and that represented another investment into Modulo. The FTX empire's downfall began with the leaking of one of the external versions of Alameda's balance sheet to CoinDesk on November 2, 2022. Ellison revealed that she had decided not to comment for the article because, quote, "...I was hoping at the time the news would just blow over." However, a few days later, as customers began to withdraw assets at a fast rate, she testified that Bankman -Fried told her to liquidate Alameda's positions and send the money to FTX, which she said was their general practice at times of customer withdrawals. Although Ellison had testified earlier in the day about SPF's policies around auto deletion, the government was able to display one signal group conversation between Singh, Bankman -Fried, and Ellison. She testified that around this time, quote, "...everyone else in the company was starting to preserve their messages." Singh wrote, quote, "...lots of withdrawals quickly up, negative $1 .25 billion in the last day, negative $230 million in the last three hours, negative $120 million in the last hour." Ellison responded with a frowny face, and explained, quote, "...I was terrified. This is what I had been worried about for the past several months, and it was finally happening. I thought that, at this point, everything about FTX and Alameda was going to come out." SPF's response to Nishad's text was, oof. In the same chat, Ellison mentioned that Salem had asked her if FTX could meet all withdrawals. She asked the others what to say. Ellison explained that even though she knew FTX could not meet all withdrawals, she asked because, quote, "...that was the fact that we had tried to conceal in the past, and I was wondering whether I should continue trying to conceal it or just start being honest with people about it once it was becoming evident." SPF responded, quote, "...maybe something like, we can meet a ton, though it's already getting large. IDK." Ellison said SPF created yet another group chat on Signal with her and a few others about the fact that public concern over Alameda's balance sheet was growing. Eventually, in the chat, they decided that Ellison should tweet. She said that Bankman Free didn't want to be the one to tweet since he didn't want to be associated with Alameda because of the conflicts of interest concern mentioned in the Bloomberg article. Ellison said that even though she did tweet, she didn't want to do it, quote, "...because I knew that the purpose of such a tweet would be to try to mislead people and give them false assurance." Then the prosecution showed the tweets she sent, which began, quote, "...that specific balance sheet is for a subset of our corporate entities. We have greater than $10 billion of assets that aren't reflected there." However, the prosecution then brought up a Google Doc where she and others had collaborated on what to say in this tweet. The top suggestion was by Bankman Fried, which had all the basic points of Ellison's tweet but was written in a list format, such as a few notes, colon, a, another greater than $10 billion in assets not on that balance sheet, b, obviously we have hedges. For those of you familiar with SPF's tweets, you know what style I'm talking about. Ellison said that the group all agreed that it looked like his writing style, so she said she rewrote it in her style before tweeting. A similar discussion in a different signal chat occurred before she replied to Binance CEO Changpeng Zhao, who had tweeted that he planned to sell Binance's FTT holdings. SPF approved her message, saying, quote, "...I think the point is just to counter the PR slash narrative here." Although the price of FTT went up initially on her tweet, it started to go down, and she said that Alameda needed to buy a lot of FTT to keep the price up. She estimated that Alameda had spent in the tens of millions of dollars, or perhaps a hundred million or more dollars, on buying FTT, but that if they hadn't done that, then the money would have been used to process FTX customer withdrawals. Around this time, SPF started a chat with 11 people who included Ellison, SPF, Singh, Wang, and SPF's father, Joe Bankman, amongst others. On November 7th, SPF texted a message that listed a number of assets that started with 1 $300 million BTC, and listed other assets, and then concluded, "...so that's roughly $1 billion to $2 billion left?" SPF added another table of assets that Alameda and FTX could access on a week's timescale, which totaled $3 .9 billion, but Ellison estimated it would still not have been enough since she Alameda calculated owed FTX $8 .1 billion. Next, the government pulled up a screenshot of a chat between Ellison and Bankman -Fried, and began with her replying to an earlier comment of her own, which said, "...if things got a lot worse, I don't think I am going to handle it well." On Monday, November 7th, she had replied to that text, saying, "...this was such a bad prediction. This is the best mood I've been in in like a year, tbh." SPF responded, "...wow, uh, congrats? Because shit's exciting?" Ellison responded, "...I just think I had an increasing dread of this day that was weighing on me for a long time, and now that it's actually happening, it just feels great to get it over with one way or another." The prosecutor asked Ellison why she had written that she was in the best mood she'd been in for a year. Quote, "...to be clear, that was overall the worst week of my life," said Ellison. "...I had a lot of mood swings during that week and a lot of different feelings, but one of the feelings I had was an overwhelming feeling of relief. Because, as I said, this had been something that I had been dreading for so long, for the past several months," she said, starting to cry. "...it's something that had been in my mind every day, worrying about what would happen when the truth finally came out, and I felt a sense of relief that I didn't have to lie anymore, that I could start taking responsibility and being honest about what I had done, even though I obviously felt indescribably bad about all of the people that were harmed and the people that lost their money, the employees that lost their jobs, people that trusted us that we had betrayed." By the end of her comment, she was audibly sniffling, and later she grabbed a tissue out of the tissue box on the witness stand. The prosecutor brought up later messages in small group chat, in which SPF had linked to a Google Doc that began, quote, "...potential to -dos." Top of the list was, quote, "...reach out to Brigger, Dustin, Silver Lake, Sequoia, and Apollo when they wake up." Ellison identified these all as investors or potential investors in FTX, who she said SPF wanted to try to get cash from by selling some equity. The document also showed that FTX only had one -third of remaining client assets, $4 billion of the $12 billion in customer assets that were supposed to be on the exchange. At this point, the prosecution brought up SPF's infamously deleted tweets sent on that exact day, such as the ones saying, quote, "...FTX has enough to cover all client holdings." It also noted that Bankman -Fried retweeted a tweet by Moon Overlord on Twitter, which said, quote, "...can't wait for my FTX airdrop for not moving any of my funds." Next, Ellison asked if she could process loan repayments since lenders were, quote, "...freaking out and calling their loans in," even though if she did, she would be paying them back with customer funds again. SPF responded, quote, "...can certainly do it for all the smaller ones." As Ellison pointed out, this meant, quote, that there was less money available for FTX customers. Finally, prior to the Alameda All Staff meeting on November 9th, SPF also had a hand in comments Ellison was preparing to make to her staff. After she proposed talking about how Alameda would wind down, and it would be appreciated if any staff members stayed to try to repay lenders, SPF added, quote, "...and maybe about there being a future of some sort for those who are excited." Ellison revealed numerous details about her personal relationship with SPF, such as the fact that they wrote each other Google Docs in order to discuss their thoughts on their relationship and their feelings. Ellison characterized her feelings as, quote, "...being unhappy with our relationship," and said she shared concerns with him about their personal and professional relationships affecting each other, and in particular, how the personal one affected her at work. She said that if Bankman -Fried gave her negative feedback, quote, "...it made me feel like sort of an unequal partner in our relationship." Perhaps aspects of that unequal relationship came up earlier when, shortly after the lunch break, the prosecution asked for a sidebar discussion with her, the defense lawyer, and the judge. In a transcript, prosecutor Danielle Sassoon said, quote, "...the defendant has laughed, visibly shaken his head, and scoffed. It's possible it's having a visible effect on her, especially given the history of this relationship, the prior attempts to intimidate her, the power dynamic, their romantic relationship." We'll see if this dynamic continues Thursday, when SPF's lawyers resume their cross -examination of Ellison. Final quick notes. The judge finally decided that the anthropic investment could not be brought up in court. When he did so, he gave a colorful analogy. Quote, "...the crime charged is that he took the money, and what he did with it afterward doesn't matter. This is like saying that if I break into the Federal Reserve Bank, make off with a million bucks, spend it all on Powerball tickets, and happen to win, it was okay." However, he left the door open for the defense to make an argument about the nature of venture investing. Unchained will be back tomorrow with more updates from the courtroom. I expect it to be another dramatic day since Ellison is the prosecution's star witness and this will be the cross -examination. Thanks for tuning in.
The Breakdown
A highlight from Crypto Industry Faces Terrorist Financing Accusations
"Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, October 11th, and today we are talking about, well, a lot of stuff. But before we get into all of it, if you are enjoying The Breakdown, please go subscribe to it, give it a rating, give it a review, or, if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Hello, friends, welcome back to another weird day. Indeed, I think that for the next little while, at least during Sam's trial and with all of this chaos happening around the world, it's likely that the show will be a little bit more choppy than normal. In other words, I think that we'll frequently need smaller update segments versus shows that are just about one big topic. Today, I think our main focus will be around how fast the crypto -enabled Hamas narrative has spread, but we are going to start off with a little SPF trial update first. There is some serious bombshell testimony going on right now, and so today I'm only going to do a few of the kickoff highlights. Later this week, we'll do a more full analysis. So, Tuesday's hearing saw the conclusion of Gary Wang's cross -examination, as well as the introduction of the prosecution's star witness, former Alameda Research CEO, and former Sam Bankman -freed shackmate, Carolyn Ellison. Now, Carolyn's testimony yesterday focused on how Alameda had defrauded lenders. She explained the firm had padded their balance sheet with Loxilana, FTX's exchange token FTT, and numerous other SAM coins created by SPF to, quote, make Alameda look less risky than it was. Carolyn noted that FTT was added to the balance sheet specifically to obtain loans from Genesis, a move which she thought was misleading. Carolyn said that she specifically raised issues with Sam around the quote unquote loans from customers in 2020, and when she said she was concerned that they would show up in an audit, Sam dismissed this, saying, the auditors won't be looking at that. Carolyn also discussed Sam's oversight of Alameda, which is, of course, a key question. His defense is trying to argue, as Sam did when he was still free, that he didn't really keep track of anything going on at Alameda, and so to the extent that they were doing bad things, that wasn't really on him. Alas, what Caroline reported is that when she was appointed Co -CEO, nothing much really changed. She said she didn't feel qualified, and that, quote, I checked everything with Sam. He was the person I reported to. He could fire me. Now, if you've been watching the Twitters, you've probably noticed that Caroline also divulged some personal conversations between the on -again, off -again couple. One of the most re -shared was that Sam believed he had a 5 % chance of becoming the president of the United States someday. She also explained Sam's view of risk, saying that he believed, quote, it was OK if it had a positive expected value. He said that he was willing to take large coin flips. He talked about being willing to flip a coin and destroy the world as long as a win would make it twice as good. Now, we will get into, as I said, full analysis a little bit later on, but I think a fairly accurate summation of what we've heard so far came from Jacob Silverman, who wrote, Seems like SPF was about pursuing money at almost any cost, an obsessive pursuit of capital accumulation. He told his people to find money wherever they could, taking on billions in risky loans. He said he wanted infinite money to somehow save the world. Now, speaking of Sam's quest for money, an interesting substory that is shaping up is around Anthropic and SPF's $500 million investment in the hot AI Foundation model company. The relevance is that recently it has been reported is that the company is out raising at a $20 to $30 billion valuation, which would make those $500 million worth of shares actually worth more like $3 .5 to $4 billion. That goes a significant way in filling the remaining hole for FTX customers, and so of course Sam's lawyers are interested in having that conversation in court. Indeed, after Tuesday's hearing concluded, Sam's lawyers renewed their motion requesting permission to introduce evidence about FTX's investment in Anthropic AI. They had earlier claimed that the jury should be allowed to hear that the $500 million venture investment was looking likely to pay off in a big way and could help make creditors whole. Now, the DOJ argued that this was ridiculous, that it was totally irrelevant to the crime, and that it shouldn't be allowed. This time around, the defense team narrowed their request and specifically asked to introduce Anthropic in relation to Caroline's testimony. The defense sought to ask Caroline about the quote portfolio nature of venture capital investing and the idea that venture firms see most of their returns from a small number of successful bets within a broader portfolio. They said that the appreciation of Anthropic was relevant to Caroline's testimony quote concerning expected value analysis. The defense tied this point back to the prosecution's opening statement, which claimed that Alameda and Sam's investments were risky and losing money. The defense views the Anthropic evidence as relevant to rebutting those claims. Now, summing up what basically everyone was thinking, crypto trader Kyle Gibson wrote, I can't believe this is the strategy. Bro, the terms of service said nothing about using funds for VC investments. The terms of service also said nothing about funds for proprietary trading. It's just so far from a defense, and I think the judge will see this for what it is. Now I can only presume that what Kyle means is exactly what I think, which is that this is not about an intellectual appeal. Intellectually, jurors are going to know, no matter what the defense says, that if the crime you're being charged with is stealing money, there's no difference ultimately if the thing that you invested in with the stolen money was enough, that after you got caught, people got their money back. However emotionally, there is of course a difference. Given that my base case is that Sam's entire defense is just muddy the waters enough to get one or two jury members to have questions, it fits right in line with that. Anyway, the stuff coming out of Caroline's testimony today at the time of this recording is much, much crazier. So whether we end up doing that tomorrow or later in the week, get ready because it is a doozy. But for that, let's shift over to the discussion of crypto's role in the Hamas attacks. And now a word from our sponsor. Today's episode of The Breakdown is brought to you by Kraken. Kraken Pro gives advanced traders a customizable all -in -one interface for trading and buying about 200, depending on your region, crypto assets, stablecoins, and fiat currencies. In addition to deep liquidity, world -class security, and a dedicated mobile interface, Kraken Pro also has some of the best -in -class support, with average support resolution time less than five minutes this year. Go to kraken .com slash The Breakdown to get started. Disclaimer not investment advice. Crypto trading involves risk of loss. Cryptocurrency services are provided to U .S. and U .S. territory customers by Payword Ventures, Inc., PBI, DBA, Kraken.
The Breakdown
A highlight from A Leading Candidate for Next Speaker of the House is One of Crypto's Biggest Allies in D.C.
"Welcome back to The Breakdown with me and LW. It's a daily podcast on macro, Bitcoin and the big picture power shifts remaking our world. What's going on, guys? It is Wednesday, October 4th, and today we're discussing so many interesting political stories. Broader political US machinations that have some interesting implications for the crypto industry. Before we get into that, however, if you are enjoying The Breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Hello, friends. Happy hump day. Now, I mentioned yesterday that I wasn't going to do full SPF trial updates every day. My current plan, although it's, of course, always subject to change, is effectively to save up every few days for really important stuff and give you the full rundown. Now, that said, I will try to give you the very highest highlights if there's anything super important. And really, the only big notable detail yesterday was around witnesses. In addition to the FTX leaders that we know had cut deals with the Justice Department and who were planning on testifying against Sam, including Gary Nashad and Caroline, it appears as though former COO Constance Wang, and probably most notably to the crypto community, former Alameda Co CEO Sam Tribuco, are also planning on testifying. Given that that other Sam has not been heard from, effectively since he went off on his boat in the summer of 2022, that one certainly got some tongues wagging. Now, that said, when it comes to the crypto industry and its actual future, the much more interesting story was drama in Congress. I'm excited to dig into that. But before we do, I'm also thrilled to announce that the breakdown today is welcoming a new sponsor. That sponsor is Kraken. Now, Kraken is a company I've known forever. Their founder and former CEO Jesse Powell is one of the true OGs of the space. And I've just known tons of super high integrity people who have ended up working with Kraken. And I think that that comes out in a lot of different ways, including them being super early, for example, to proof of reserves. I'm really excited to have Kraken on board as a sponsor, and so you will be hearing from them over the course of the show and in future shows as well. But let's talk congressional drama and what it means for crypto. TLDR, House Republicans have plunged into disarray as the fallout from last week's narrowly averted government shutdown plays out. Specifically, House Speaker Kevin McCarthy has been ousted from his position after Matt Gaetz filed a motion to vacate, calling for a vote to remove the speaker. Now, this outcome always had some chance of being in the cards. McCarthy was elected speaker in January after a torturous, modern record 15 rounds of voting. McCarthy made a range of concessions and deals with various GOP factions in order to gather enough support to be elected speaker. Among them was a rule change that would allow any single House member to call for a vote to remove him at any time. Gaetz, who was one of the primary agitators pushing for a government shutdown last week, unsurprisingly pulled that trigger on Monday evening. The last straw seemed to be the revelation of a secret deal between McCarthy and the Biden White House to ensure ongoing Ukraine funding. On Tuesday, the House voted 216 to 210 in favor of McCarthy's removal. Several conservative Republicans joined with Democrats to support the motion. This is the first time in US history that the Speaker of the House has been removed by a vote. Indeed, even calling for a vote is extraordinarily rare, with the last one taking place over 100 years ago in 1910. Now, of course, there will be plenty of places where you can go discuss and hear about what it represents in terms of the state of American politics and the deepening divides within the Republican Party, but that's not really what matters in the context of this show. What matters is that shortly after the vote concluded, Republican Chairman of the House Financial Services Committee Patrick McHenry assumed the Speaker's role and graveled the chamber into recess. McHenry will now serve as the interim Speaker until a vote can be held next Wednesday. So the first part of the story is, of course, that Patrick McHenry, as you will well know from listening to this show, is one of the most pro -crypto congressmen we have. As leader of the House Financial Services Committee, he has worked very hard to push a number of different bills, including the stablecoin bill, through. And so the fact that we now have an ally sitting in that vaunted position should be a powerful thing, right? Well, practically speaking, the House will be held out of session until that vote next Wednesday, meaning that McHenry will not have an opportunity to advance a legislative agenda. Getting back then to who might end up as the Speaker, Gates and the rest of the House Freedom Caucus don't have anywhere near enough votes to advance their own candidate, but they are numerous enough to act as a veto for other potential speakers. McCarthy, for his part, has said he does not intend to put his name forward for consideration in next week's vote. And so, among a long list of potential candidates as a replacement, support appears to be coalescing around two options. First is House Majority Leader Steve Scalise. Scalise is currently finishing up treatment for blood cancer, but enjoys broad respect from both the establishment and radical wings of the Republican Party. The other leading candidate is House Majority Whip Tom Emmer. Emmer is, of course, known to the crypto space as a fierce advocate of sensible crypto regulation. He has advanced numerous bills on clarity for token issuers and resisting the creation of a CBDC. Now, Gates, for his part, has spoken kindly of both frontrunners. On Monday night, he said, I think the world of Steve Scalise. I think he'd make a phenomenal speaker. At the same time, Gates noted that unclear resolution to medical issues make it difficult to know whether Scalise will be an appropriate choice. On Tuesday night, he said something very similar about Emmer and ended the day with a shortlist of six candidates he would be willing to support, including both Emmer and Scalise. Now, if Emmer succeeds in gathering the votes to become the next House Speaker, he has an opportunity to push forward a crypto legislative agenda prior to next year's election. There are currently two bills which have been ratified by a committee and stand ready to be voted on in the House. One bill provides regulatory clarity for stablecoins, while the other establishes a regulatory framework for the crypto industry more broadly, including a division of power between the SEC and the CFTC. Neither bill is expected at this stage to have the votes to get past the Democrat -controlled Senate to become law. But that said, there have been some recent rumblings that Senate Banking Committee Chairman Sherrod Brown could be open to a deal with McHenry. Specifically, he might be willing to support crypto legislation in exchange for McHenry's support in passing cannabis banking reform. Now, we are still a long way from Emmer being placed in charge of the House agenda. There's no telling how long it could take to elect a Speaker. The last time around, this process took the better part of a week to resolve. And since then, the fractures within the Republican Party appear to have become more entrenched. Then after that, once a Speaker is elected, crypto ally or not, the number one consideration will be putting in place long -term government funding. The stopgap funding measures which were passed last weekend will run out in mid -November. The House Freedom Caucus has grown increasingly clear in their calls to reform the way congressional appropriations operate. Since 1990, the U .S. government no longer puts forward formal budgets with individual financing bills. Instead, the government is funded using omnibus legislation which deals with the entire annual spending in one gigantic bill. Gates called for a major reform of this system and a return to fiscal conservatism on Tuesday night in front of Congress. Gates said, You know what I think paralyzes us? Continuing to govern by continuing resolution in omnibus. You know what I think throws this institution into chaos? Marching us towards the dollar not being the global reserve currency anymore. Real chaos is when the American people have to go through the austerity that is coming if we continue to have $2 trillion annual deficits. Now, Democrats, for their part, appeared content to allow the chaos to play out. Ahead of voting with the House Freedom Caucus to remove McCarthy as Speaker, House Democrat leader Hakeem Jeffries said that the chamber has plunged unprecedented into dysfunction. So, bringing it back around to the crypto industry, I think there are a couple things to note. One, even if we get Emmer, his hands are somewhat going to be tied by the legislative body that he inherits and all of the challenges that it represents. As you've probably heard over and over from me, my base case is that we effectively limp over the line of the next election cycle without really getting much done in legislation of any form between now and then. Could this re -galvanize people and lead to some better outcomes? It's totally possible, but for those who are looking for the sunny side for crypto, it's probably very measured in terms of potentially nudging these few bills that have some amount of momentum forward rather than some big radical overhaul. Still, of course, if you're going to choose between a crypto ally as the Speaker of the House and not a crypto ally, it's pretty clear who we want. Now, for the second half of our show, we are going to stay in government land, but before we do that, a quick note from today's sponsor, Kraken. Kraken Pro is an incredible resource for advanced and professional traders. The all -in -one experience allows advanced traders to switch seamlessly between spot trading and other advanced products with a UI that is highly customizable to your unique trading style. With institutional -grade performance, Kraken Pro is Kraken's most powerful platform ever. Go to pro .kraken .com to get started. Thanks again to Kraken for supporting the breakdown. Alright, so as I mentioned, the other big story is that the SEC has been denied an early chance to appeal the Ripple case. On Tuesday, the judge refused to grant the SEC certification to pursue an interlocutory appeal. An interlocutory appeal is when a party is allowed to appeal a partial decision in an overall lawsuit before the case has been fully decided. The SEC had sought to appeal two parts of the decision from the Ripple case prior to a full trial on the question of whether Ripple executives had aided and abetted securities laws violations. Those two parts of the proposed appeal were that sales of Ripple tokens to retail investors through an exchange, known as programmatic sales, as well as the distribution of tokens to contractors and staff, both constituted unregistered securities transactions. The judge said that the SEC had failed to meet the legal standard required to bring an interlocutory appeal. Specifically, they wrote in their order that the SEC is not arguing that the court applied the law incorrectly. Instead, the SEC argued that the judge incorrectly applied factual analysis of the Howey test to the specific set of circumstances in the case. Digging in, the judge clarified their original decision. They wrote that they had not ruled that sales of tokens through an exchange can never produce a reasonable expectation of profits based on the efforts of others in order to satisfy the Howey test. Instead, the judge's decision was that the specific set of facts presented in the Ripple case did not satisfy the Howey test. As an extension of that logic, the judge also rejected the idea that the Ripple case has significant precedential value for other token cases. They stated that that would misconstrue the court's ruling. The order clarified that The court held that based on the totality of the circumstances in this case, including an examination of the facts, circumstances, and economic realities of the transactions, Ripple's programmatic sales could not lead investors to reasonably expect profits from Ripple's efforts. The judge explained that their analysis was based on a multitude of factors and did not turn on the fact that Ripple's offers and sales were on crypto asset trading platforms. They even referred specifically to an order made in the Terraform Labs lawsuit as well as the Library case and stated that the decisions were not in conflict because they deal with entirely separate sets of facts. Peels are only allowed to deal with a dispute on the state of the law rather than a disagreement on how the law has been applied in a particular case. In rejecting the SEC's argument that there was a substantial disagreement about the state of the law, the judge wrote that To simplify it down, the judge appears to be saying that there is no dispute that the Howey test is the correct legal theory to apply in the Ripple case, nor is there any dispute about the judge's understanding of the Howey test. The only disagreement the judge could find on the SEC's application was in how this judge applied the Howey test to the specific facts of the case. The judge ruled that this was not a disagreement subject to appeal. So what are the takeaways of this ruling? Well, one, the decision seems to severely restrict the SEC's ability to appeal the Ripple decision whatsoever. If the regulator wants to bring an appeal, they will need to find new grounds and argue that the judge got the law wrong rather than simply made a decision that they disagreed with. More broadly, this order seemed like an implicit criticism of the SEC's strategy of regulation by enforcement. If each token case relies on a separate set of facts and is of limited precedential value, the theory that the SEC can simply win a handful of cases and apply those precedents broadly across the entire industry appears much more shaky than it previously might have. Finally, the judge in the Ripple case appears to have given a lot of thought on how to make their decision unable to be appealed. This order did not give the impression that the judge was looking to make decisions that would need ratification in an appellate court. Instead, it appears that the original Ripple decision was written in such a way to make it resistant to appeals. They seem to have thought through the arguments that might be made to force an appeal and worked around them in advance. In terms of what's next, the judge set a trial date in April to deal with the remaining issues in the case, and the SEC will be able to make another attempt at an appeal once that trial winds up. Now, a lot of folks in the industry were, of course, very excited about this. Brad Garlinghouse, the CEO at Ripple, said, just that XRP in this case wasn't one, and that even though some XRP acquirers purchased it for speculation, the SEC didn't prove it was tied to the efforts of Ripple. Now, on the flip side, although the judge's decision was fairly firm, some crypto lawyers did caution against celebrating too early. Gabriel Shapiro, the general counsel at Delphi Labs, said, don't get too excited about the denial of SEC's interlocutory appeal in Ripple. It doesn't mean the SEC lost its appeal. It means that if the SEC wants to appeal, it has to appeal everything at once after the trial. Still, some useful clarification of Judge Torres's opinion. Consensus lawyer Bill Hughes, however, thought the decision was a more significant blow to the SEC, tweeting, SEC served another L in the Ripple case. Crypto has been calling BS on this making it up as you go approach. Good to see at least one court also taking note. So, friends, overall, a fairly exciting day in crypto land. We got a demonstration of how U .S. politics, as disconnected as it might seem from crypto, actually has an impact on how the industry might grow and develop in this country. And we got yet further evidence that when it comes to the rule of law and protecting this industry's right to, you know, be an industry, the courts are, at least at this time, our best backstop. In any case, that is where we will wrap for today. Excited to share more evolutions with you as they come. Thanks one more time to Kraken for sponsoring the breakdown. And until tomorrow, be safe and take care of each other. Peace.
The Breakdown
A highlight from The Sam Bankman-Fried Trial Begins - Everything You Need to Know
"Welcome back to The Breakdown with me and LW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. What's going on guys? It is Tuesday, October 3rd. The SBF trial has begun. This is all the background that you need to know. Of course, before we get into all of that. If you are enjoying The Breakdown, please go subscribe to it, give it a rating, give it a review. Or if you want to dive deeper into the conversation, come join us on The Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Hello Breakers. As you can imagine, this is a fairly weird time for me. A year ago at this time, I was deep in the midst of planning FTX's second Super Bowl ad. And yet a month later, I had resigned, the company had declared bankruptcy, and the world had discovered a rotten core of fraud around Sam and his closest consigliaries. Now, I did a very long episode about the experience of the week of the collapse from the inside last November 14th. It was called Sam Bankman Fraud to give you a sense of how I felt about it. Since then, I've been covering the FTX bankruptcy and Sam's legal battles as I would any other crypto story. In other words, just part of the necessary cleanup of the last cycle, but ultimately something that is hopefully for the past and not for the future. When it comes to the trial, I've spent a long time deciding about how to approach it. The reality is, for the next five or six weeks or however long this takes, this is going to drown out a lot of other things that are happening in the space. I have to imagine that most products will choose not to launch during this time for fear of being outshined because everyone is just laser focused on this. The question then of course is how much time to give it. Is there a risk of over focusing on it? You bet. It's going to have lots of drama. But does it need to be covered? I think that the answer is also ultimately yes. This is something that has to get concluded for the industry to fully move on. It is in many ways an exorcism that just has to be done. And on top of that, I think that this trial and everything that surrounds it will have some impact in shaping how much the external world sees the crypto space as itself inherently fraudulent versus Sam as specifically fraudulent. So how is the breakdown going to cover this? Well, I talked to a lot of you listeners and the general request mirrored my own thoughts, which is to every few days do an update, sometimes with a guest discussion. This won't be then an everyday thing. At least there won't be some big feature every day. But you will get all the salient details as they come up. And with that in mind, I thought it would be valuable to try to create a bit of a definitive primer, something that if you haven't been paying attention at all, if you were barely watching last year, you could pick up and listen to and feel pretty well prepared to get into what you're going to see over the coming weeks. What that means is that today we're going to go over the charges, the rough timeline of events, the key witnesses, what we expect from the defense, the latest procedural news and info from the bankruptcy and the trial schedule. I don't think we'll have time to get into people's very strong feelings about Michael Lewis's book that just came out, but I imagine that that will be on the docket for later this week as well. However, where we begin is with the charges of which Sam faces seven. Those include two charges of wire fraud, two charges of conspiracy to commit wire fraud, as well as charges of securities fraud, commodities fraud and money laundering. More generally, Sam is accused of fraudulently dealing with customer funds in a multitude of ways. The most damning allegation, and the one prosecutors will likely focus on establishing, is that Sam knowingly diverted customer funds to FTX -affiliated hedge fund Alameda Research. Alameda, of course, served as the primary market maker on FTX. Now, FTX is widely understood not to have been able to obtain bank accounts, and so in many cases used accounts held by Alameda Research to receive funds from customers. The thing that prosecutors will seek to demonstrate is that Alameda not only held customer funds, but that it racked up billions of dollars in debt to FTX, which it could not repay. Evidence has been put forward that Alameda did not have the same risk controls as other entities when it traded on FTX, and that the lack of limits allowed Alameda to continue to operate while carrying a large negative cash balance. To put a fine point on it, the prosecution will allege that this large negative cash balance represented improperly using customer funds to trade and lose on the exchange. Now of course, Alameda had a significant balance sheet of assets held against this negative cash balance, but these assets were crypto tokens largely created by Sam and FTX. They were far too illiquid to realize it anywhere close to their full book value. The SEC summarized the allegations in their separate lawsuit by stating that Sam, Put more simply by Bloomberg's Matt Levine in an article published yesterday, It was pretty much entirely because Alameda had lost it. Now the key to proving these allegations will be establishing that Sam was aware of this financial artifice being run using Alameda. Fraud isn't fraud if it was caused by a mistake or an oversight. Prosecutors will need to show that Sam was either aware of the fraud or willfully blind to it. As the judge put it during a hearing last week, Now let's move on to the timeline of events. Much of the DOJ's case will center around the fateful final weeks as the FTX empire came crashing down. The beginning of the end came on November 2nd when Coindesk's Ian Allison published an expose on the Alameda balance sheet. There had been some rumors of trouble at Alameda prior to that, but with a partial copy of the balance sheet, this piece of reporting blew the lid off the situation. TLDR, what the balance sheet showed was that a huge portion of Alameda's holdings, the were pretty illiquid tokens and in particular, the native exchange token of FTX, FTT. Now in terms of a huge portion of their assets being in FTT, there were also a bunch of other Sam coins from DeFi projects that barely got off the ground, which in some cases had Alameda representing up to 95 % of the overall token supply. According to the Financial Times, just $900 million in assets on this balance sheet could be easily sold. The next major event was the very public sparring between Binance CEO CZ and Sam. Binance had been an early investor in FTX, but at that time had been bought out of their stake for $2 .1 billion. That repurchase, a theoretically pretty good return on an $80 million investment, had been paid out in a mix of stablecoins and FTT tokens. On the Sunday following the Coindesk article, CZ tweeted that quote, Due to recent revelations that have come to light, we have decided to liquidate any remaining FTT on our books. He said the firm would attempt to do so in a way that quote, minimizes market impact over the next few months. But of course, when you have CZ, the single biggest player in the industry, saying dump FTT and run for the hills, guess what happened next? Within the hour, Carolyn Ellison absolutely pissed gasoline all over the situation. She had taken over as sole Alameda CEO just a couple months prior and tweeted to CZ quote, If you're looking to minimize the market impact of your FTT sales, Alameda will happily buy it all from you today at $22. The market immediately plunged, with FTT's price being very visibly defended against Throughout the week before, FTT had traded around $25 and a market cap of $3 billion. By Tuesday night, with Alameda's traders and balance sheet exhausted, the token settled at $5 and FTX closed withdrawals. Now like I said, I gave my account of being on the inside. And while Tuesday when FTX closed withdrawals was clearly a final moment in the coffin for many of us inside, for me when it was clear that something very nefarious had gone on was on Monday, when I started getting hit up by other friends outside of FTX in the industry who were asking if I had heard anything about an FTX emergency fundraising round. Now of course, as an exchange that was supposed to be fully backed and given Sam's recent statements to the team that we had around $2 billion in cash and liquid assets thanks to trading revenue as well as recent fundraising, the only way in the world that we would need an emergency fundraising round was if Sam had been using FTX customer funds for purposes other than sitting on FTX's books waiting for those customers to reclaim those funds. Anyway, in the middle of that week after withdrawals were closed, there was also a weird sham sale announced to Binance, which they very quickly backed out of. And by Friday, with most FTX staffers having already fled the Bahamas, Sam finally capitulated to bankruptcy. Now to this day, Sam claims that he was forced by external lawyers to place the FTX empire into bankruptcy and appears to continue to be holding onto the idea that the exchange could have raised an emergency fundraising round to make customers whole. For most people, that might be where the event ended, but not so much for Sam. What followed was a bizarre string of press interviews, an incredibly disjointed Twitter thread, and basically an odd media tour that attempted to paint Sam as a wayward and naive CEO in over his head rather than a perpetrator of criminal fraud. This tour was capped off by a live broadcast interview with Andrew Ross Sorkin of the New York Times on November 30th. During that sprawling interview, Sam claimed that he, quote, didn't ever try to commit fraud on anyone. Authorities disagreed, and on December 12th, Sam was arrested in the Bahamas at the request of the US government. Although initially defiant, Sam ultimately agreed to be extradited to face charges and was released on bail. Once again, for any normal person, that might be the end of the story until we get to trial, but not for Sam. Although he was confined to his parents' house in California, Sam managed to continuously test the boundaries of his bail conditions. February, Sam was hauled before the judge on allegations that he had used encrypted messaging apps to contact the General Counsel of FTX US as well as using a VPN, which Sam claimed was just to watch NFL games. To the former General Counsel of FTX US, Sam had reached out to see if it was possible to, quote, have a constructive relationship, use each other as resources when possible, or at least vet things with each other. The DOJ characterized this communication as an attempt to taint a potential witness. At that point, the judge decided not to revoke Sam's bail, but instead expressly forbid Sam from using encrypted messaging apps and VPNs. And yet, in July, Sam stepped over the line once again by leaking the private journal of Carolyn Ellison to the New York Times. The judge agreed that providing this material to journalists was, at best, an attempt to embarrass Ellison, if not a brazen attempt to intimidate her and discredit her in the public eye. During the course of that hearing, it was uncovered that Sam had held more than 1 ,000 phone calls with journalists, including over 100 with the New York Times reporter who published the story. And thus, by early August, Sam had his bail revoked and was locked up at the Brooklyn Metropolitan Detention Center to await his trial. Since then, it's basically just been a never -ending set of appeals to try to get Sam out of jail, but alas, jail is where he remains. Next up, let's talk witnesses. What became clear quite fast was that there was a cohort of around four people, including Sam, that seemed to know about the extra special privileges that Alameda enjoyed and the fact that for all intents and purposes, customer funds on FTX were just used as a slush fund for their hedge fund traders. And it turns out that while Sam was still in the air being extradited from the Bahamas, multiple FTX executives were revealed to be collaborating witnesses. Of those, Carolyn Ellison is the one likely to get the most attention. As well as being the CEO of Alameda, Ellison was also Sam's former girlfriend. The couple split prior to the collapse of FTX and there will no doubt be extensive cross -examination which questions Ellison's motives in giving evidence against Sam. Although Ellison was only at the helm of Alameda for a little over two months, recent reporting describes her as essentially in charge of the trading firm for much longer, at least as much as anyone could be in charge of the firm relative to Sam himself. Nominally, Ellison and Sam Trabuco, another Sam in this story, had been appointed co -CEOs of the firm in October of 2021 when SPF stepped away from the role. However, Trabuco had recently been described as almost entirely checked out at that point, leaving Ellison in charge of day -to -day operations. Ellison is expected to give evidence regarding the inner workings of FTX and has acknowledged that she knew about the hole in Alameda's balance sheet prior to the collapse of the exchange. Nishad Singh and Gary Wang are the other two executives known to be cooperating with prosecutors. Singh acted as engineering director while Wang was the exchange's CTO and co -founder. These two basically built all of FTX from the ground up, so anything going on with the codebase is basically going to be mostly just their work. Nishad is expected to give a first -hand account of how the Alameda backdoor was enabled in the code. Nishad was reportedly extremely distressed and wracked with guilt during the final weeks at FTX and was confrontational with Sam during that time. Gary was one of the last employees left in the Bahamas as the exchange collapsed and famously coded almost the entire platform by himself. Some have speculated about how he will be as a witness given that he is notoriously quiet. Now, each of these three key witnesses have already pleaded guilty to criminal fraud charges and have agreed to testify in exchange for a lighter sentence. Prosecutors will need to demonstrate that each one is presenting an honest account of events rather than merely throwing Sam under the bus to save themselves. There are also complicated personal relationships between each of these executives and Sam, which could be used by the defense. All three cohabitated with Sam in a Bahamas penthouse and were some of Sam's closest friends as well as employees. To give an indication of how hostile cross -examination could become, last week a DOJ motion to prevent the defense from asking questions about recreational drug use was denied. The defense will need to provide notice to the court before asking witnesses about their drug use, but the subject was not ruled to be out of bounds. Another FTX executive who has pleaded guilty to criminal charges is Ryan Salem, who served as CEO of FTX Digital Markets. FTX Digital Markets was the operating company for the Bahamas. Now, Salem was particularly involved in the political campaign side of things for Sam and was charged with violations of campaign financing law in relation to making straw donations to politicians on Sam's direction as well as operating an unlicensed money -transmitting business. Unlike the other three, Salem is not cooperating with prosecutors as part of his plea deal, but could be called to testify as a non -cooperating witness. Alameda co -CEO Sam Trabuco has not been heard from since he stepped away from the company last August. He has not been disclosed as a witness and has not been charged at this stage. The DOJ has also flagged that they have at least two additional witnesses set to testify under a grant of immunity but have not publicly identified them at this stage. By and large, speculation about who those witnesses might be include not only Trabuco who we just mentioned, but Daniel Friedberg who served as FTX's chief compliance officer and who had formerly been implicated in a major online poker scandal, and Constance Wang who was FTX's COO and was described as Sam's right hand during fundraising efforts. Now in addition to FTX executives, the DOJ will also call multiple customers and investors to give brief testimony. Prosecutors have flagged that they will call upon retail customers who traded tens of thousands of dollars on the platform, as well as institutional clients who traded millions of dollars. The high range could imply notable industry figures will make an appearance on the witness stand. Several high profile market makers are listed as top creditors of FTX and are no doubt none too happy about their funds being locked up in the bankruptcy process. Both customers and investors are intended to present their understanding of the FTX terms of service and representations made about the use of customer funds, which could be crucial in refuting possible defenses. Which indeed brings us to that section of this primer, what are the defense strategies that Sam might try to employ? SPF's legal team have flagged a few potential arguments. In a filing on Monday, they sought clarification on a few issues they may wish to present. The filing asked whether the defense could argue that FTX International was not regulated in the US and therefore did not have to follow applicable rules. They also asked whether Sam could discuss the likelihood that creditors could see massive returns from the bankruptcy process. Still, the primary defense expected from SPF relates to instructions from legal counsel. In August, SPF's team flagged a plan to argue that he relied on advice from both in -house attorneys as well as lawyers from Fenwick and West in basically all elements of FTX's operation. Sam sought to introduce advice from lawyers on topics ranging from his use of self -deleting messages, unconventional banking relationships, and intercompany financial arrangements. The DOJ objected to this defense, claiming that not enough detail had been provided, but the judge reserved their decision on this point until later in the trial. The judge said that they would make rulings on individual advice of counsel arguments on a case -by -case basis as they come up. Outside of what indications we've gotten from Sam's team, the industry and the wider world at large have had no problem speculating about how he might defend himself as well. Bloomberg's Matt Levine paraphrased his view of a likely defense as The crypto market crashed, there was a run on the bank, and the run on the bank is what evaporated the customer's money. It was an accident, perhaps a careless accident but not theft. Certainly, in media commentary, SPF has been focused on the bank run, rather than the hole in Alameda's balance sheet as the cause of FTX's collapse. Now, of course, there are some obvious issues with that defense, particularly if witnesses establish that Alameda had effectively commandeered customer funds in contravention of the exchange's terms of service. Another plank of Sam's defense will likely be to rely on prosecutors being unable to In a New Yorker article published last month, the journalist wrote, Going back to his article, Matt Levine again sketched out a plausible way that Sam could brush off an $8 billion balance sheet hole as a careless oversight rather than willful fraud. He suggested Sam could claim he thought FTX had so much money that $8 billion was a rounding error. From Levine's back of the napkin math, at its height, FTX had somewhere approaching $100 billion in crypto assets on its books. Finally, it's also expected that Sam will seek to blame Caroline for mismanaging Alameda. The publication of excerpts from Caroline's journal was an attempt to paint her as a naive child way out of her depths, and some of Sam's leaked writings also showed a belief that Alameda had failed to hedge correctly, as if that was the main issue here. Now, one thing that's important to note is that when considering defenses, SPF does not need to prove his innocence. He only needs to introduce a shred of doubt in the minds of the jury. To convict, the 12 jurors must be convinced beyond a reasonable doubt that Sam is guilty and reach a unanimous decision. Prosecutors often fail to get their cases over the line due to being unable to entirely convince each juror of the defendant's guilt. This can be even more of a difficulty when the case involves complicated financial crime which can be difficult to fully understand. And yet, many commentators are convinced that the case is damning. Daniel C. Silva, a former prosecutor who participated in the BitConnect case, said, Now, in terms of the latest from the bankruptcy, as the trial gets underway, the FTX bankruptcy process is entering its 10th month and has had no shortage of intrigue. The current focus has been on pursuing clawbacks from people and organizations that had been, in the estimation of the bankruptcy estate, unjustly enriched by FTX. On the very top of that list are Sam's parents, Joseph Bankman and Barbara Fried. Two weeks ago, the estate sued Bankman and Fried, claiming that they had received over $26 million in gifts from FTX, including a luxury property in the Bahamas. The lawsuit alleges that Bankman was intimately involved in the operations at FTX and used his position to enrich himself. You may have seen the now -famous email where he tried to raise his salary to a million dollars by threatening to involve Sam's mother. Now, speaking of Sam's mother, Barbara Fried is alleged to have directed political donation efforts at FTX. This instructing included Sam on how to structure donations to avoid donation limits. She is also alleged to have knowledge of loans made to FTX executives, which were then used to fund election campaigns. All in all, the lawsuit alleged that the pair, quote, Now, for their part, Sam's parents immediately hit back at the lawsuit through lawyers saying, A last note on the bankruptcy, while current FTX CEO John J. Wray has no doubt been cooperating with prosecutors in providing internal documents, he is not currently expected to testify as a witness. Now, in terms of the latest trial procedural stuff and timeline, today was technically the first day of the trial with jury selection the goal. Both sides have alleged the other is attempting to bias the jury pool. The DOJ claimed that Sam's questions for the jury about effective altruism, political donations and ADHD are intended to paint him in a sympathetic light. In particular, prosecutors are concerned that asking about charitable and political donations could improperly introduce the idea that Sam's actions were justified outside of evidence. The defense, meanwhile, have complained that the DOJ are treating Sam's fraud as an established fact in their jury questioning by omitting the word allegedly. They also claim a question about being stopped or questioned by the police is intended to racially filter the jury in a manner irrelevant to the case. Last week, as I intimated before, SPF placed a last minute appeal to be released from jail for the duration of the trial. Sam's team claimed that his incarceration would be an unreasonable barrier to adequately preparing for each day's hearing. Unfortunately for him, the judge found this argument insufficiently convincing and stated that they consider Sam to be a flight risk. They said, Sam was granted some concessions to be allowed to meet with his lawyers early at the courthouse each day, as well as during jail visiting on off days. Now, while a decision is yet to be made on exactly how Sam can introduce the concept that he relied on the advice of lawyers, limits were placed on what can be said during the defense's opening arguments. Specifically, Sam's lawyers have been prohibited from mentioning any advice of counsel arguments while presenting their case. The judge ruled that this argument may confuse or prejudice a jury when presented without specifics and evidence. The trial is currently scheduled to take six weeks. Jury selection is expected to be completed by the end of today's hearing, although before I was recording this, there were some indications that it might go into tomorrow morning as well. In either case, tomorrow we will likely see the beginnings of opening arguments. After that, the prosecution will present its case and call its witnesses. The DOJ has estimated their case will take four to five weeks. The defense will then have an opportunity to present their case, which they have estimated will be much shorter, taking around a week and a half. Now, the defense is not compelled to present a case and can simply choose not to if they are confident the charges have not been proven. We don't yet have any indication of whether SPF will speak in his own defense. Traditional legal strategy suggests that defendants should never take to the witness stand to avoid giving prosecutors an opportunity to cross -examine them. However, this is no ordinary trial and SPF is no ordinary defendant. Judging from how extensively Sam has defended himself in the media, I would not be surprised if his lawyers have a tough time keeping him out of the witness box. Hearings will be held four days a week with a short break after three weeks. If the trial takes longer than six weeks, it will be extended, but the consensus seems to be that it will be all over by Thanksgiving. And won't that be something to be thankful for? Now, even if Sam escapes a guilty verdict, his legal troubles will continue well into next year. The DOJ will present additional charges related to bribery of Chinese officials, as well as political donation violations during a second criminal trial, which is scheduled for March. Sam will also face civil lawsuits from the SEC and the CFTC after the first criminal trial is concluded. Beyond that, there's still the possibilities of lawsuits from the FTX bankruptcy estate, as well as from former customers and investors. So my friends, that is the lay of the land. That is what we are going into. Like I said at the top, for me, the most interesting thing, the thing that I will be watching most closely, is actually the meta -narrative analysis around this. I want to know how much, especially mainstream media looks at this and treats this like what it is, which is Sam Bankman -Fried going on trial, versus what I fear it might become, which is the entire crypto industry being put on trial. But in any event, this truly is a scenario where the only way out is through. So get on your boots, friends, because we are getting into the muck. Until next time, be safe and take care of each other. Peace.
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"New York. I flew to Boston, crammed into a small white hatchback with three other women and set off for the bachelorette party. I sat directly behind one of the Caroline Ellison. I knew Caroline as co -CEO of Alameda Research, a powerful crypto trading firm and part of Sam Bankman -Fried's crypto empire. Sam was best known as the CEO of FTX, which is a crypto exchange, but he also owned Alameda, which was basically a crypto hedge fund. It bought and sold digital currencies on a bunch of exchanges, including FTX, and it seemed like things were going well for Caroline. It's not the most chill thing I could have done, but I guess I'm pretty proud of what I've done and proud of sort of how I've grown by working here. Caroline was in charge of trading billions of dollars in crypto. She was 27 and pretty green at running an investment company. She'd been co CEO of Alameda for less than a year, and it was a bit overwhelming. There are like a bunch of decisions that have to be made someone and has to make all of them. And a lot of them are like really uncertain, which is to terrifying me. But she still found time to have fun. I've gotten into writing larks. That's live action roleplay. So you write character descriptions for people, tell them what their relationships with other characters are like. And then from there, they can kind of choose to interpret those characters how they want and choose like do and say what they want. On that drive, I tried not to talk about work, mostly. I knew I was a crypto reporter, and I didn't want to make things too weird for the bride to be. But on In the the long drive, as I tried to get some sleep after my red eye flight, I overheard Caroline say that she and Sam had broken up the month before. My ears perked up. I'd heard Caroline and Sam had a thing. But
The Defiant - DeFi Podcast
A highlight from CFTC Cracks Down On DeFi
"Hey everyone, happy Monday and thank you for joining us for this special live stream that we're doing today to discuss the CFTC's latest crackdown on DeFi. We're joined by Will Warren, co -founder and co -CEO of 0x, and Ashley Ebersole, general counsel at 0x, and of course Owen for now, our staff reporter, and I'm YYCTrader, your head of news. So 0x's matcha aggregator was one of the projects targeted specifically by the CFTC, so we're glad to have Will and Ashley on the show to tell us what happened and what this action could potentially mean for DeFi moving forward. So let's dive straight in, start at the beginning. When did the CFTC first get in touch with you guys? You said in the tweet that you've engaged in discussions with them. Sure, well first I just want to say thank you for having us on today. It's great to be with you all and with your listeners and to discuss what for us are very recent and pertinent issues. I'm Ashley Ebersole and like you said, I'm general counsel here. I previously was with the Securities and Exchange Commission here in Washington DC for about five years where I was part of the working groups internally that were looking at the agency's approach to the crypto space. So I've been on the regulatory side as well as law firms and now with 0x. So regarding your question, the CFTC had reached out to us earlier this year and their focus was exactly as last week's order described, leverage tokens that US users could potentially trade via our matcha platform. The CFTC views these tokens as derivatives that are within its jurisdiction. It does not have jurisdiction over the spot market in tokens that are not derivatives in some way. So the fact that these offered a multiple return gave them a derivative feature that the CFTC was focused on. I think after discussions with the agency and the staff there, as well as our lawyers, we determined a settled case on terms that we could live with and that we thought could advance DeFi stance with the agency. Our main takeaway is that we're a nascent industry in Web3 and we're figuring it out alongside regulators. And at this stage, there's always some tension between the innovators and regulators that have the laudable duty of looking out for our users. It's uncharted waters on both sides and we always knew that there would be challenges with regulation as we grew, that was expected as this space expanded. This is part of the journey for 0x and matcha. We're glad that we were able to address these issues with the CFTC and that it was just a friction point. And that we at matcha and 0x more broadly and the entire industry, including the other entities that were part of that order, are walking away intact, operating and with greater clarity. So, all in all, we have a very positive outlook for the future, we're operational on matcha and matcha does have some tokens that are now restricted for trading by U .S. persons. But beyond that, everything's running as usual. So check out matcha .xyz and see for yourself. I'm just trying to get the, you know, it's Monday morning, I'm trying to get the ground work back in my head. So like, when you say restriction for U .S. persons, is that done via, that's done via VPN, I would assume, or like kind of based on IP address? Is that how you restrict? And if we're getting into details that we can't discuss, you know, let me know. But is that how you restrict based on jurisdiction? Yeah. I mean, look, certainly. Sorry. Yeah. Go ahead. Yeah. I can jump in and share like a little bit more context about like kind of how we were engaging with the CFTC and kind of kind of the outcome. But yeah, before digging into it, just want to echo Ashley's points that, yeah, Web3 is a nascent industry. And, you know, we are figuring this out right now. So are the regulators. And we're trying to figure out how to make things, you know, make things work. And it's challenging. Yeah. And in particular, you know, so for matcha, I guess, like before kind of talking about how, you know, how we responded to the order, like what processes we put in place, I think it's worth kind of highlighting, like, first of all, like, what is matcha and how does it work? Yeah, because, you know, the processes that we put in place also are kind of related to how matcha is designed and how it works.
Thinking Crypto News & Interviews
A highlight from Leemon Baird Interview - Hedera Hashgraph, HBAR Tokenomics, Hyundai & Kia on Hedera, Governing Council, Dropp Fed Now, CBDCs
"This content is brought to you by Link2, which makes private equity investment easy. Link2 is a great platform that allows you to get equity in companies before they go public, before they do an IPO. Within their portfolio includes crypto companies, AI companies, and fintech companies. Some of the crypto companies you may recognize include Circle, Ripple, Chainalysis, Ledger, Dapper Labs, and many more. If you'd like to learn more about Link2, please visit the link in the description. Welcome back to the Thinking Crypto Podcast, your home for cryptocurrency news and interviews. With me today is Dr. Leemon Beard, who's the co -founder of Hedera and the co -CEO of Swirls Labs. Dr. Leemon, it is great to have you on the show. Oh, it's great to be here. Thanks. As I was saying before the recording, I'm a big fan of Hedera. I've interviewed Mance and a few folks from your end as well, and really excited to be speaking with you. Before we get into all things Hedera, I'd love to get to know you a bit better. Tell us about yourself. Where are you from and where'd you grow up? Well, I am from everywhere, at least in the United States. So from the day I was born to now, on average, I've moved every three years. Wow. So I've been all over, all in the United States. Haven't really lived overseas, done lots of visiting overseas, but I've moved around a lot. And so I spent 24 years in the Air Force. I've been starting companies for the last 23 years, all of them with Mance. We've co -founded a whole bunch of companies and I got to be a college professor for a long time. I got to be a research scientist for a long time. I can never just do one thing. I'm kind of scatterbrained and just keep doing different things. It sounds like you got the entrepreneurial bug. You're an entrepreneur at heart and you and Mance have built a lot of different companies. Yeah, fun stuff. Tell us about how the idea of co -founding Hedera came about. So one of the fun stuff I do is just math problems, just for fun. So I have these math problems that I just work on because they're fun, they're puzzles. And some of them I go for decades and I'll never solve them. And I know that, but it's okay. It's just fun. One of them was, well, could computers come to agreement in a way that's really, really fast and really, really secure? Not because I wanted to use it for anything. It's just a really cool math problem. So in 2012, I started working on that and I worked on that for several years. And in 2015, I had repeatedly convinced myself it was unsolvable. So it's just, I work on it for a week and I'll just look at all the parts and I say, yeah, you have to choose. You can be secure. You can be fast. You really can't be both. And I would put it aside, but, you know, some problems just keep coming back and gnawing at me. And in 2015, I realized, wait a second. If you just add two hashes to every message you sent, so every message remembers what is the last message I sent to the last message I received, then suddenly any computer that collected all those messages will actually be able to see the history of how information flowed through the network. And then you can run these really old algorithms that are super secure, asynchronous, Byzantine, fault tolerant, whose only problem is that you have to send lots of votes back and forth and receipts on votes, lots of traffic. But you could do them with zero traffic, with virtual voting. And you'd have all the power and security of that, but you would have just blazing speed because all you have to do is gossip out the transactions, which you have to do anyway, and then there is zero additional communication to reach ABFT consensus with all kinds of math proofs. So that was in 2015. And Mance and I looked at that and said, you know what? That would be a good company. And so then we went from there. And I'm curious about the parallel of blockchain and crypto in addition to Hedera and what you were trying to solve the problem. Was there a aha moment when maybe you first saw Bitcoin or different cryptocurrencies and you're like, well, this is possibly a solution I can merge into Hashgraph or whatever it may be. Is that kind of something that took place? A little bit different. So of course I was aware of these things and I thought, oh, that's cool. You know, proof of work, Bitcoin, that's interesting. For whatever reason, it's not particularly math that is interesting to me right now. I'm wondering what's going on in the world. I know about that. It's cool. And maybe, you know, we'll have the important impacts on things. But in 2015, we realized, wait a second, you can have both security and speed at the same time. Whereas a proof of work protocol like that has neither. It's not ABFT, it's not BFT. It's not fast. It's certainly not green if you're using lots of electricity. And so in 2015, what we realized is that surprisingly this answer would allow you to build an incredibly fast and secure distributed ledger technology. So a blockchain, a DLT. And so we actually started a company to do that private DLTs. And then the second big thing that we realized is in 2016, I remember we were sitting in a restaurant and we realized, you know, what you really need is good governance. Nobody has truly good decentralized governance. You say, well, it's decentralized. Anyone in the world can govern. And then what you end up with is a small handful of people that just kind of rise to the top and have the power and they end up doing the governing. What you really need is to have huge organizations, schools, universities, companies that are well -respected that are not going to be bribed for a million dollars. You have to bribe them a billion dollars to do something bad because they care about their reputation. You then have them govern with guarantees that no one has more power than another. So if you have 29 council members, each of them owns exactly one 29th and has exactly one 29th of the power in the voting. And you publish the minutes of other discussions. You have transparency in your governance. And so for a public ledger, that was the killer app or the killer property was being able to have this good decentralized governance that's guaranteed to not allow the power to just sort of accumulate over time into one small handful of people behind the scenes running everything.
The Breakdown
A highlight from Coinbase Launches Crypto Policy Coalition as FDIC Warns of Crypto Dangers to Banks
"Welcome back to The Breakdown with me, N .L .W. It's a daily podcast on macro, Bitcoin and the big picture power shifts remaking our world. What's going on, guys, it is Wednesday, August 16th, and today we are once again talking about a day that shows on the one hand regulatory challenges and on the other hand, the crypto industry just keeping chugging forward. Before we get into that, however, if you are enjoying The Breakdown, please go subscribe to it. Give it a rating, give it a review. Or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit .ly slash breakdown pod. Hello, friends. So as I said, today is a day of contrasts, which really, I think, sums up the moment that we are in in crypto right now. Let's start on what could be interpreted as the negative side with a new set of FDIC warnings. The Federal Deposit Insurance Corporation, the FDIC, has added crypto as one of the five most important categories of risk to the banking sector in this year's annual review. The FDIC report reflected on last year's calamities within the crypto industry and said the agency was prepared to engage in, quote, robust supervisory discussions with the banks it oversees in relation to crypto. Now, for completeness, the other four risks to the banking sector were credit risks, market risks, operational risk and climate related financial risk. But obviously, we are concerned mostly with the crypto risk here. The FDIC noted that it has, quote, generally been aware of some banks interest in crypto asset related activities through its normal supervision process. However, as that interest has escalated, the agency has desired to better understand the risks that crypto could impose on banks. In their accounting, the FDIC included a long list of potential risks, including fraud, legal uncertainties, misleading or inaccurate representations and disclosures, risk management practices exhibiting a lack of maturity and robustness and platform and other operational vulnerabilities, end quote. In addition, the report highlighted contagion risk due to the close interconnections within the crypto industry, which they said can present concentration risk for banks with exposure to crypto clients. While the report adds no new policy or supervision requirements, the FDIC did say that it, quote, continues to closely monitor crypto asset related exposures of banking organizations. Now, of course, this report comes just one week after the Federal Reserve introduced its new novel activity supervision program. This new policy provided a framework for banks to seek approval for crypto related activities and established a dedicated supervisory team to deal with issues related to crypto. The concern is, of course, that these statements from regulators are just a formalization of what has become known as Operation Choke Point 2 .0, effectively a sub legal way for regulators to financial institutions that they should not be dealing with the crypto industry. By not putting forward official restrictions, there are no formal crypto bans that could be challenged in court. The FDIC was careful to include in their report the now common phrasing that, quote, banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type as permitted by law or regulation. And thus, regulators are making it clear that they are not legally restricting banks from dealing with the crypto industry, but simply working to better understand the, quote, novel and complex risks represented by crypto. The open question is whether the threat of enhanced regulatory scrutiny is enough to dissuade banks from working with crypto customers. Now, there is a lot of really interesting tension in this document, as well as in the statement from the Fed last week. On the one hand, there was never going to be an annual report that didn't include this. Two banks that did have crypto concentration risk blew up this year and tapped the FDIC to shoulder losses. And even if we believe that those were hit jobs, it's still a notable part of this year's review. The problem is the same that it always has been, that general warnings without specifics that banks and financial institutions can follow de facto mean a freezing process where banks just decide that it's not worth the risk to deal with this industry. Now, interestingly, the most recent Fed document seems to be nudging to a different phase in this, in which even if onerous and even if increasing regulatory supervision, they are nominally providing a path for banks and financial institutions to deal with stablecoins. In that case, they sort of have the have your cake and eat it to benefit of in the short term, still probably having something of a freezing effect on activity in that area, but in the more medium to long term, still providing some path for those in institutions that are willing to take on the risk, giving them cloud cover to say, look, we were never trying to freeze activity. These were just the important hoops to have to jump through. In many ways, it's hard to get too chuffed about this particular FDIC report in that it feels both inevitable after what happened over the last six months, as well as sort of in line with what we already knew. Now let's flip over to the other side of this coin and talk about how the crypto industry has continued to respond to these regulatory challenges. Coinbase has launched an independent advocacy group, the Stand with Crypto Alliance. The group is aimed at mobilizing support for legislation that would form the basis of a regulatory framework for crypto in the US. Coinbase says that the group will be quote crypto's first true grassroots movement that will be organized on chain. Now, of course, other lobbying groups focused on crypto have represented industry voices. However, this group is intended to be much more focused on getting real legislation done. Coinbase wrote in a statement, by providing a launchpad, the Alliance is mobilizing the is over. America's crypto constituency is strong and we'll be holding them accountable this fall when Congress votes on common sense legislation to protect consumers and their right to crypto. Varyar shares that Coinbase's chief policy officer said, I think a few politicians are seeing crypto as an easy shot to take. I don't think they have fully understood the passion in the community behind it. Now it's worth noting that previous mobilization efforts of crypto constituents have proved to have a powerful impact on influencing lawmakers. In August of 2021, passionate crypto voters contacted the representatives in an effort to soften reporting requirements in the infrastructure bill. Now the bill was ultimately passed without amendment due to an unrelated political move of one intransigent senator, but the mobilization effort was viewed as a success, with the crypto community frankly holding up efforts for weeks and many lawmakers recognizing for the first time just how large and passionate the crypto community is. In rallying this new group, Coinbase are attempting to remind Congress that this community is still here and still care deeply about the passage of functional crypto legislation. Now interestingly, this Coinbase group was not the only advocacy organization announced yesterday. I saw a tweet from Nick Carter that read, sorely needed excited to see where this goes. Proof of work has been an afterthought in crypto conversations in Washington for too long. What he's referring to is the fact that the crypto mining industry now has its own lobbyist group in Washington. The Digital Energy Council is designed to push Congress for sensible regulation that will allow Bitcoin mining to continue to grow in the US. The group said in a statement on Tuesday that will be advocating for policies that, quote, promote responsible and sustainable energy development, grid resilience, maintain United States competitiveness, and protect national security. Miners have of course faced a stream of criticism from Democrat lawmakers in recent years based on assumptions around environmental harm and concerns over excessive energy usage. The political attacks reached a crescendo in May when the White House proposed a punitive 30 % tax on the mining industry to account for the, quote, harms they impose on society. Tom Mapes, the founder of the Digital Energy Council, said that the organization will, quote, focus on how both the digital asset mining and energy industries can collaborate and work together to bolster energy infrastructure, increase resilience, and support energy sustainability and efficiency that has been lost in policy conversations, yet is critical during this pivotal moment of energy modernization. Mapes previously worked on energy policy at fellow lobbying group the Chamber of Digital Commerce and was also the chief of staff at the Department of Energy's Office of International Affairs. A key part of the lobbying group will focus on dispelling lawmakers' misconceptions around digital asset mining, and the group will also have a focus on cultivating economic development in rural and overlooked communities, which can benefit from investment by the mining industry. The goal, Mapes said, is to highlight that digital asset mining is a real -world tool that can be utilized to meet the United States' energy goals. Zach Bradford, the CEO of mining company CleanSpark, noted that the new lobbying group is, quote, uniquely focused on the intersection of mining and energy abundance. He said in a statement that, quote, politics is a team sport, and the broader our coalition and the more dedicated the efforts, the better. Senator Lisa Murkowski of Alaska was one of the first lawmakers to pay attention to crypto mining as a relevant industry. She said in a statement, in 2018, as the chairman of the Energy and Natural Resources Committee, I held the first hearing to explore digital asset mining and the applications and potential impacts on our nation's energy supply. In the past five years, this industry has grown exponentially throughout the United States, and I've seen this technology already bring new opportunities to rural states like Alaska. I look forward to working with the Digital Energy Council to develop best practices for collaboration throughout Alaska and the United States. Senator Cynthia Lummis, who of course has long been a staunch advocate for the crypto industry, said financial innovation will unleash new prosperity and opportunity for the next generation of Americans, and crypto asset mining is an important part of this future. Innovative mining technologies will allow us to harness underutilized energy sources and drive jobs in rural America while generating provably scarce wealth. All Americans should be paying attention to the important work being done by crypto asset miners. Now, one last note on this theme at this intersection of crypto regulation versus crypto lobbying. Republican allies have continued to push their efforts to figure out just how the hell Prometheum was granted a special purpose broker dealer license. Now, this new category of SPBD license was established in December 2020 in order to allow firms to custody and transact in digital assets. For over two years, FINRA, which is the industry oversight arm of the SEC, refused to issue any licenses to applicants. Prometheum was granted the first of its kind SPBD license in May, which was just in time coincidentally for the firm's co -CEO Aaron Kaplan to appear in a congressional hearing the following week. Kaplan promoted just how viable the SEC's existing path to regulatory compliance is for crypto firms, which was of course a distraction from efforts to engage with the table legislative efforts. However, as everyone noted, the appearance was incredibly weird. Following the hearing, it became clear that Prometheum couldn't actually legally offer any crypto assets for sale. It had no viable business model, and even had some strange ties to a Chinese megafirm. Despite multiple media appearances subsequently, Kaplan and Prometheum appeared to have no clear answers for literally any of these issues. This has led to much scrutiny, and now House Financial Services Committee Republicans led by Chairman Patrick McHenry have asked both the SEC and FINRA to explain themselves. In a letter made public on Tuesday, the lawmakers asked for documents and communications related to the approval of Prometheum's license. They noted that the timing and circumstances surrounding the approval of Prometheum as the first SPBD raised serious questions. The letter raised concerns that the approval was aimed at demonstrating that legislation is not needed and that regulators had touted the Prometheum approval multiple times in public statements to support their position that digital asset firms can comply with the existing regulatory framework. The lawmakers pointed out, however, that while Prometheum claims it has the silver bullet for regulated digital asset offerings, it has not yet served a single customer. They said, quote, It is unclear why FINRA would have chosen to approve a firm with no operating history and no track record of serving customers over all the applications that it has received. The letter also addressed the troubling ties between Prometheum and Chinese firm Shanghai Wangqing Blockchain, which has, quote, deep ties to the CCP. The letter claimed this raises, quote, serious national security and data privacy concerns. Senator Tommy Tuberville of Alabama said, The SEC and FINRA are dragging their feet and failing at their core mission. It's past time they look into Prometheum's ties to China. Thank you to Patrick McHenry and the Financial Committee for keeping up the pressure on this issue and looking out for American investors. Now, as you might imagine, the crypto industry remains extremely skeptical of this company. Jared Klee tweeted, Besides not being able to settle transactions, a director with deep ties to the China Communist Party and zero customers, Prometheum looks like a great company. The SEC and FINRA have been given until Tuesday to produce the relevant documents and communications to explain this frankly baffling licensing decision. So, friends, that is the story from here. We are in a very in -between moment. It feels like the plates are shifting and like things are starting to line up in a productive direction for the industry. But there's still a lot of work before us. Appreciate you listening as always. And until next time, be safe and take care of each other. Peace.
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"You have car that has co -ceos that's true that is true so so it's hard to say yeah but um they're doing what they can to engineer this of course this has led to of a lot speculation Shree Natarajan has a great article on the Bloomberg that talks about how everyone's whispering and trying to tease out what's going on here inside the halls of Morgan Stanley like you do wonder about like the jockeying that's going on behind the scenes and people like trying to that make sure they're aligned with maybe who will be the next CEO or all three of them just in case because you don't know yeah you got to pick the right horse so okay go go ahead no the one thing I was thinking is you were going through each of the individuals like it it is is interesting like M &A is such a big important thing and we know it's been a rougher year right or a rougher environment but they also all these firms have also been building out their wealth management businesses like so these are like kind of two key pillars that you don't want to lose absolutely and wealth management has really been something that stabilized Stanley's Morgan profits and profit margins and has really allowed it to overtake the other big banks when it comes to just being predictable and investors will reward a company for generating predictable profits so much so that you can see Goldman Sachs which leaned the other way after the financial crisis and doubled down on trading and investment banking started to build out its wealth management business more aggressively JP Morgan Chase is doing the same thing when it acquired First Republic eventually so these are all growth points for the big banks having said that we're entering a different macroeconomic environment or we are in a different environment right where rates will be higher for longer and you have analysts like wait rates rates are going to be higher for longer or high for longer how about that? Dick Beauvais was saying the noted bank analyst that maybe wealth management is not the way forward for this next era that's a really good point right have like to you think about what's the environment we're going to be in and who do we need in place to make sure that we have a growth strategy going forward. um we love you this is so it's such a fun story to to work on she pitched us early she's like hey check out the longer video too you can find that at Bloomberg .com a lot of people worked on that so I appreciate the shout out Scarlet food Bloomberg original correspondent but she does so much more TV radio you name it hang out with you guys thank you this is Bloomberg financial advisors are you looking to add or switch custodians are you going independent interactive brokers provides lowest cost trading and turnkey custody solutions for all size firms trade globally from a single integrated master account with no ticket charges no custody fees no minimums and no tech form or reporting fees plus IBKR has no advisory team or prop trading group to compete with you for your clients switch to the custody solutions that work for you at IBKR .com slash RIA from New York another update on Wall Street in fact records to London UK businesses are feeling the effects of high prices to home call the hang sang down about 1 .3
Bloomberg Radio New York - Recording Feed
Monitor Show 19:00 08-08-2023 19:00
"This is fintech valuations, you know, just continues to be slashed, now slashed by more than 70 percent. This is an exclusive that you had yesterday, Brian, and Warburg, Pinkerson, Canada Pension Plans Investment Board, a couple of names just opting out and not participating in that buyback. Well, and obviously the first one, the big one, was Alibaba itself saying it didn't want to take part in the buyback. The next hour of Bloomberg Daybreak Asia begins right now. Broadcasting 24 hours a day at Bloomberg .com and the Bloomberg Business Act. This is Bloomberg Radio. This is Bloomberg Daybreak Asia for this Wednesday, August 9th in Hong Kong, Tuesday, August 8th in New York. Coming up this hour, U .S. bank shares decline after Moody's downgrades 10 U .S. lenders and warns of future risk. China's darkening sentiment worsens in the property market as developer Country Garden wobbles, and China probably fell into consumer deflation in the month of July. Mexico, Canada surpass China's exporters to the U .S. Former FDX co -CEO Salem considers plea deal. July officially the hottest month in Earth's recorded history. I'm Ed Baxter with Global News. Both France and Colombia move on to the quarterfinals of the Women's World Cup. I'm Dan Schwartzman. I'll have that story and more coming up in Bloomberg Sports. In equities Japanese and in U .S. Treasuries, in less than an hour from now, it is time.
Bloomberg Radio New York - Recording Feed
Monitor Show 18:00 08-08-2023 18:00
"Come on. No, that's what he's saying. Wait, I do it unless, except for my back problem? Ooh, ooh. Yeah, try acupuncture, Elon. It works. Try some other things. All right. Anyway, do not miss Daybreak Asia, coming up with Doug Krisner and Brian Curtis at the top of the hour. It's nice to be back. It's nice to be back with you, Carol. Welcome back from the city. Welcome back, Carol. Thank you. Thank you. I'm still liking the glasses. Yeah, thank you. All right. Don't go anywhere, everybody. Daybreak Asia starts right now. Broadcasting 24 hours a day at Bloomberg .com and the Bloomberg Business Act. This is Bloomberg Radio. This is Bloomberg Daybreak Asia for this Wednesday, August 9th in Hong Kong, Tuesday, August 8th in New York. And coming up today. U .S. banking shares decline after Moody's downgrades 10 banks and warns of future risk. China's darkening sentiment worsens in the property sector as developer Country Garden wobbles. And Chinese consumer prices probably fell into deflation in July. Mexico, Canada, surpass China's exporters to the U .S. Former FDX co -CEO Salem considers plea deal. July officially the hottest month in Earth's recorded history. I'm Ed Baxter with Global News. Both France and Colombia move on to the quarterfinals of the Women's World Cup. I'm Dan Schwartzman. And I'll have that story and more coming up in Bloomberg Sports. That's all straight ahead on Bloomberg Daybreak Asia. On Bloomberg 1130 New York, Bloomberg 99 .1 Washington, D .C., Bloomberg 106 .1 Boston, Bloomberg 960 San Francisco, Sirius XM119, and around the world on BloombergRadio .com and via the Bloomberg Business Act. Hi, everybody. Good morning from Hong Kong. I'm Brian Curtis along with Rishad Salamat in London and Doug Krisner in New York.
WTOP
"co ceos" Discussed on WTOP
"The deal work. Current owner Dan Snyder and his wife Tanya, the team's co CEO did not attend, and at last report there was no word from the Harris group. Campaign 2024 on WTO. Virginia's Republican governor is reconsidering a bid for the 2024 presidential nomination. Glenn youngkin earlier said he would not be running and instead focused on Virginia and getting a majority in the state's General Assembly. Top Republican sources tell axios that there are some powerful GOP donors that won't support former president Trump and our growing concern about Florida governor Ron DeSantis. Those donors are encouraging youngkin to jump into the race, axios reports any announcement about a youngkin presidential bid would likely come after the state legislative races in November. The NAACP issued a travel advisory for Florida over the weekend because of the state's conservative politics, the warning tells tourists that recent laws championed by governor Ron DeSantis and Florida lawmakers are openly hostile toward African Americans, people of color and LGBTQ+ individuals, a desantis spokesperson calls it nothing more than a stunt. Maryland governor Wes Moore spoke about his support for the travel advisory on MSNBC with Simone Sanders Townsend. We need to make bigotry expensive. We need to make sure that people know that if you can actually confront it and say, don't spend your dollars. In states that are going to ban history. Don't spend your dollars. It in states don't move your businesses in states. Don't be an entrepreneur in a state where you know the broad and beautiful history of the people of that state, there's not going to be heard or respected. Moore says Maryland will defend the teaching of history for everyone. For the second time in less than a week, a student has been shot outside a D.C. school. Luckily, the student is expected to leave the hospital sometime this evening, or tomorrow. It happened here outside kip D.C. college preparatory school near union market in 18 year old was shot and rushed to the hospital, no word yet on a suspect or reason behind the shooting. The school went into lockdown mode and parents were called to come and pick up their students. Kip will be closed on Tuesday and mental health counselors will be on hand to help any student in need when the school reopens on Wednesday. The shooting comes on the heels of a fatal shooting just 5 days ago at Theodore Roosevelt high school in northwest at kip D.C. college prep Kyle Cooper WTO news. Two months ago, three men were killed when a driver crashed into their car on rock creek Parkway. Now the driver's been charged. A lift driver and his two passengers were killed in the march 15th crash when U.S. park police say their car was hit by a driver who had bolted away from a traffic stop. The driver 43 year old Nikita Marie walker of D.C. has been arrested and charged with second degree murder. The deadly crash happened on rock creek Parkway near peace street northwest. The car that walker was driving had 44 unpaid speed camera tickets, totaling more than $12,000, along rock creek Parkway, particularly on WTO P news. A man is charged with murder after police found the 63 year old woman he was renting from, shot dead in a manassas home. Prince William county police say this happened yesterday. 61 year old roger Allen photos accused of killing 63 year old Joyce francine Gould of manassas in a home on minor hill road during an argument. Investigators say foot was Gould's Tenet. Another tenant found Gould on the kitchen floor and called 9-1-1.
CoinDesk Podcast Network
"co ceos" Discussed on CoinDesk Podcast Network
"Three meets IRL. Happening April 26th through 28th in Austin, Texas. Consensus is the industry's only event bringing together all sides of crypto web three and the metaverse. Immerse yourself in all that blockchain technology has to offer marketers, advertisers, brand leaders, creators, builders, founders, entrepreneurs, and more. All right, so we are back with Adam brotman and Andy sack from form three. They're both cofounders or co CEOs. They have another partner Joe who's not on with us today, but that's the team behind forum three. For anyone who doesn't know, forum three is building some amazing tools to bring brands into web three, especially Starbucks, but also I know they're deep in some other amazing projects. First off, I would just love for you both to introduce yourselves and tell us a little bit about your backgrounds. And then also how you guys met. I'm Andy sack. I'm best friends with that abroad for 20 years. Professionally speaking, I'm a web one entrepreneur, started my first Internet company in 1994, switched sides and became a venture capitalist. I have a venture fund, a web two venture fund here in Seattle called founders co op and I spent 6 years working with such an Microsoft consulting on innovation and digital transformation at Microsoft, but prior to starting keen capital, which is a web three fund of funds, which led to the creation of form three. And I'm Adam brotman. Also, best Friends, Andy sack for 20 years, which is my claim to fame. I've actually been an entrepreneur a couple of times in my career, but kind of evenly split my career between being an entrepreneur and being an executive. So I was an entrepreneur right out of law school and out of being a lawyer and started in ran a company in the digital media space for about ten years and then went on to be the chief digital officer at Starbucks for about ten years. Went to J crew from there as president and eventually co CEO for a bit and then came back to being an entrepreneur again. And I'm excited to be here with you guys. Amazing. Well, thank you both for joining us. I know you all are always cooking up a bunch of cool things from mentorship to investments to building new products and advising many companies. So really excited for you to share them with our Gen Z listeners a little bit more about yourselves. So Adam, I think I first got to know you when you were actually still at J crew and you were, you know, you are a marketing leader. He'd been sort of on the inside at the corporate track. I think one of the things that you're most well known for is your work starting to build Starbucks original loyalty program in the mobile app. What got you interested in being an entrepreneur again and helping to sort of build this web three loyalty program? Was it Andy? Was it something you saw? What got you to move from corporate marketer to entrepreneur again? It's a great question because having been an entrepreneur before and I understood that it's not for the faint of heart. There's something sort of exciting and impactful even about being able to build things at a company with big scale in some senses you can have your best of both worlds if you get lucky like I did where you can be a little bit intrapreneurial but also have a big company behind you and a big brand which really helps. But what happened is in 2021, I was back to being entrepreneurial again. I had left J crew. I was CEO of bright room and Andy was starting a venture fund. And Andy and I had always wanted to work together our entire friendship. And we're kind of looking for the right opportunity and serendipitously, Andy had been trying to get me into crypto and into thinking about blockchain and web three for a while. When he decided to start a fund called king capital that was going to focus on web three, as a venture fund. And he asked me to invest in it and be his special adviser. And it was kind of an excuse for us to work together to be honest on both of our parts. And so I happily jumped in and you know anything about the space and long story short, which has a fun ending, which is that we're here with you guys today as cofounders forum three is that I just totally got red tilled and went down the rabbit hole. Thanks to Andy. And it was to learn the space in general. But honestly, we kind of discovered NFTs together in that time. I had this crypto background and had been in the space for a while. NFTs were just starting to kind of become a thing to pay attention to at the end of 2020, beginning of 2021. And even though they've been around for a few years and in my learning journey to be to work with Andy on his web three fund, I was like, man, check out these digital collectibles and I got really excited about what could happen with a programmable digital collectible in the context of a brand and I'm sure we'll talk more about that later. And Andy mutant is like, yeah, I think you're right. I think we should dig into this more and we started to talk every day, which wasn't, you know, we didn't need to talk every day from a business perspective about web three just because of this fund, but we did. And we both just decided, like, we got to do something together in the space. And it culminated in being entrepreneurial again.
CoinDesk Podcast Network
"co ceos" Discussed on CoinDesk Podcast Network
"I think that that might be the same sort of emotional connection that people feel to owning part of a royalty song and who knows if they keep their NFT for like 500 years, maybe it'll pay off in BRI positive, but regardless, they feel like they're a part of something. You know, it feels a little bit more like band and art collectible, but you also get to say, oh, I own this small sliver of this song that I love. And I think that emotionally is probably worth the spend. Last I looked, I think they were going for just under one eth on open sea, which meant you're 253 $100 investment. It was now worth $1500. So that's the least you're potentially getting value that way. Love that. Final story I want to talk before we talk to Adam and Andy is about Pharrell. Pharrell, also, the music business was just announced as the head of Louis Vuitton as their men's fashion creative director kind of taking over the role of Virgil. Less interested in hearing your take on that, more interested in hearing your take on. He also was named the sort of brand director of the doodles, which is a web three community and project that's got a lot of fans and a lot of folks in the space. Excited about. And we started to see some sort of negative takes of, does this mean he's walking away from that project? And I guess I wanted to get your thoughts on the fact of what it means when celebrities get attached to these sort of NFT web three projects, is that in essence, really just trying to bring status and attention to a project, or do we really expect them to be actively involved? Yeah, well, it's a good question. And I think that anyone who's familiar with business and who's familiar with celebrities and talent know that many celebs and sort of people of influence are involved in a ton of different things. Some ways very hands on in some ways a little bit more tangentially. And I think that's an example of sort of what we're seeing with Pharrell. I'm sure his full-time 40 hours a week job is not working at the doodles. However, I'm sure he has an advisory role. I know he's working with him on some music stuff. I know he's promoted some of the things that they've been working on in work sort of closely with Julian and Evan and Scott and co. At the same time, I'm sure he's going to be very involved in the Louis Vuitton sort of men stuff as a creative director. Pharrell is a timeless icon. He actually joined us last year at VidCon and just did an incredible job sort of enlightening the V fronts community, but how he thinks about things and why he has gone into this space of web three in such a big way, but to me it's a little bit of and not or I think he can do both. I mean, I'm also someone who works for Gary Vaynerchuk, who is, I think, CEO of about 25 different companies. And he manages to do all of those and I believe Pharrell can do the same thing. And to me, the more sort of people of influence or legitimately involved with legitimate web three programs and projects, the better, I think Pharrell sort of his star rising helps the doodle star rise kind of tide lifts all boats and you know I'm optimistic about this and I think it's a big announcement for him and certainly doesn't preclude him from doing anything with the doodles. Maybe we're going to see some type of doodles LV collab. I mean, that's what I think some people are speculating. There was a kind of saltier side. I was looking at this tweet for amazing Rothschild, who was the artist who lost the big Hermes lawsuit last week that we had chatted about. And he tweeted that he said, I, for one, am starting to believe that the big hires in web three are some of the most meaningless titles in any industry. And I took that as obviously someone who's also a little anti brand right now. But I do sort of wonder if the idea, especially within web three where so much focus still is on floor price is this idea. If we can give X person this much money to align to our brand, does that 20% up our floor price, which makes us also more money. It makes our holders still happy. And I don't think that's a long-term brand solution. No, and I also don't think it's a realistic expectation of someone who is a musician in a designer and a creative and involved in many other things. I think oftentimes in this sort of microcosm of crypto Twitter, it seems like that's all people are doing all day every day. And the reality for talent is they're working on a lot of different programs and projects and they won't be able to dedicate like a 100% of their time to one thing most likely. At least that's my experience in working with talent. I think you hit it on the nose right there. All right, after the break, we have two amazing guests. This is our first double guest show. We have both Adam brotman and Andy sack, both have had unbelievable careers before they got together to start forum three. Form three is a consultancy and a kind of agency that is building out web three ecosystems. They are most notable right now for building at the Starbucks Odyssey project, I think a lot of people are excited about understanding what's going to happen. It is one of the biggest brands building in web three right now. So after the break, we will talk to Adam and Andy.
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"Watching Google parent Alphabet. It's up 4% after revealing a plan to cut 12,000 jobs are also watching Netflix up 8 and a half percent after reporting stronger than expected subscriber numbers, and that's a Bloomberg business flash, Tom and greedy. Thanks so much, Karen greatly greatly appreciate it. Pretty good in Tom Keenan. Now we're going to do a little bit of entertainment thing which we can do with a font of entertainment wisdom from the left coast, not LA though, from San Francisco, Edward ludlow joins us. Of course, host star of Bloomberg technology as well. And let me start with a Paul Sweeney question of financial question, and this is on Netflix, but really on all that you've learned covering this for Bloomberg technology. Exactly when do these people begin to make money? This is the question. Get straight to the question. I think the reason it's important the reshuffle that happened yesterday is that Greg Peters who jumped from COO to co CEO probably is the right person to address the EPS issue. What we saw in the fourth quarter was an evidence that there are conscious consumers out there, right? And that actually adds a not terrifying people willing to use an ad supported tier and largely the street sees that as accretive and positive for the top line this year, but on the bottom line, the thing they're really clamping down on is password sharing. So I don't know if you and Paul share your Netflix passwords, Tom, or if you're in credit share your Netflix passwords. But that soon to be a thing of the past and Netflix is going to challenge for them. Was that in the subscription Bill this quarter, I still don't have an answer on that. No. You make a joke about it, but that building. But it's important. Fed pill uses my password. Well, Harvey. That explains a lot because the AI behind the platform which shows you what you want to see on the platform has a lot of crafts on there. You know what I'm saying? When you log into your Netflix account, time I get that dog content. But it's a serious problem, and yes, they're just starting to roll this out now. They're kind of late to it, having talked about it for a long time, but from this quarter onwards, they will start clamping down on it. And actually, there's going to be some churn, right? There's going to be people that say, you won't let me share the password. My friends and family fine. I'm leaving. I'm off elsewhere, but actually there was some fighting talk for management who say a lot of people are going to be happy to pay for this because it's just easy to do. Well, and when it comes to this kind of ad tier, this low cost add tier, by the way, what kind of precedent does it set for its peers? We of course know Disney+ has rolled that out as well. But for some of its other competitors, what does this mean? Pressure to get the pricing right. I mean, if you take Disney as the parallel example, Disney owns Hulu and Hulu has had an ad supported tier for quite a long time in Disney learned a lot from that. It's not necessarily the price as well, but the frequency and the type of ads. Hulu can be infuriating to watch at times because you pause every few minutes to watch a wide range of advertising. And Disney, with its own platform, the Disney+ platform has kind of paired back the ad in your face level, I suppose. What's the hit making variable here? I see a headline. This is from variety. Thank you, Jordan Moreau. Regal cinema is to shut down 39 U.S. theaters amid bankruptcy. I mean, Disney+ are they hinging everything on Mandalorian being a success? It's a good point. It's not just about what it is. It's about the cadence of it. You know, if you look at the third party data of all of the most watch hits in the final three months of 2022, Netflix comes out on top, one reason the Netflix comes out on top. They simply have much more programming. And if you compare Netflix to Disney to Warner Brothers discovery, paramount, whatever. Netflix was more nimble during the pandemic era. Remember, shows take time to make months and months to end. And while elders were shut down and disrupted by the pandemic Netflix approve, proved to be more nimble in making those new shows. So yes, it's about having the top hits. But you actually need quite a big pipeline of content to keep subscribers on side. Paul from Aruba called in to have me ask that question. Nailed it. The Netflix model of multiple opportunities screams the record business of ages ago. Their handling this, when the birds hit, no one knew who they were with tambourine man, and when Crosby stills Nash hit with sweet Judy blue eyes, nobody had a clue who they were in the way you do that is to have 12 projects. Because you don't know which one's going to hit and add ludlow talks about Disney taking a different path. You know, your time are the record business, but to me, as on the nose, this is an Ed correct me if I'm wrong, kind of mirrors to me the studios of old, the MGM, where they were kind of signing in or having actors on contract for just that particular studio. It almost feels like Netflix is kind of doing that. Not with actors necessarily, but with screenwriters with directors, thank you. We call it a show runners. Those of us who know, you know, if you're cool and hang out with that ludlow, there's showrunners. I clearly don't hang out at love love, but essentially a showrunner concept Ed how much Richard Truman is my show runner. Okay, continue. Well, this is, again, let's go back to the news, which is that Ted sarandos is still the co CEO and why that's important is he's the man about Hollywood. Reed Hastings was never the man about Hollywood. Go back 25 years when they got
The Breakdown
Would a Genesis Bankruptcy Actually Be Good for Crypto?
"All right, Friends, we are back with another discussion of 2022 cleanup, although today's news I would argue could be a heck of a lot more bullish than it might seem at first. So of course, one of the biggest outstanding questions after the fall of FTX has been how far the fallout and contagion might go. And fallout there has been. For example, there has been a significant chilling of the relationship between the crypto industry and the Washington D.C. establishment. However, frankly, the main short term thing that people have been worried about is whether the collapse of FTX would cause other crypto institutional failures. In that context, the biggest spotlight has been on genesis and its parent company digital currency group or DCG. I say this every time, but DCG is also the parent group of coin desk. Now, genesis was hit hard in the three arrows capital collapse. They lost about 2.4 billion in loans out to the hedge fund, and ultimately ended up their biggest creditor with a $1.2 billion claim after liquidating collateral. That claim was eventually moved over to the books of DCG, a move which would later complicate DCG other liquidity issues. When FTX went under, genesis announced that they had something like 175 million trapped there, but it seemed there were bigger issues than that. That same week, genesis lending halted withdrawals, which was problematic both for their main customer base, as well as for the users of Gemini urn, which was crypto exchange Gemini's yield feature. Gemini users have about $900 million or so stuck on genesis as we record. And since then, the tension around the situation has done nothing but grow. Over the past few weeks, there has been an ever escalating war of words. Cameron winklevoss the co CEO of Gemini has published two separate open letters around the case. The first being directed to DCG CEO Barry silbert, accusing him of bad faith stall tactics, and asking him to meet with them to find a resolution, and the second being to the DCG board. Basically demanding that silbert be removed from the CEO role.
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"2023. I mean, that's what we do here at Bloomberg. We talk markets. But what about private markets? We do spend a good time talking about them, but we really want to get into it with Scott sperling, the co CEO at Thomas H Lee partners. He's a great voice when it comes to everything that's happening when it comes to private alternatives. He's been a decade with the Harvard management company overseeing alternative assets for Harvard's endowment. He's joining us now with an outlook on private equity. It's good to have you with us Scott. How are you? Thank you. Good. Good. Beautiful day in Boston. What more can we ask for? I mean, I guess what more we could ask for is, I don't know, you know, a decade of near zero rates, but that's neither here nor there. I think that that prayer was already answered. We got that. The question is now what? So now what? In 2023 and beyond as the fed looks at or I guess traders look at a terminal rate of 5%. Which, you know, when you look historically, is not all that high. That's what everybody keeps saying, Scott. It is, it is if you're under 40. That's the truth. And I don't mean that in a funny way. I truly mean that. Look at the percentage of people you have on Wall Street now who've never lived in an interest rate environment that we saw in the 70s, 80s or 90s. An amazing percentage actually didn't live through the great financial recession in 2008. Now, fortunately or unfortunately, I still remember the first mortgage that my wife and I got back in 1981. Can I guess with 17 and a half percent? I was going to say 15. I mean, that's the thing. So, okay, so does that mean we have a repeat of the 1980s? Yeah, so I don't think so. I think that the world has evolved the nature of the business models that are prevalent in the preponderance of the value in the public markets and also in the private markets as much better than the nature of the business models that existed back in the 80s. I think the ability to better control inflation does exist relative to where we were in the late 70s and early 80s given the enormity of the pop and energy prices. But what we are losing is the benefit of 20 to 30 years of strong anti inflationary forces, such as technologies that allowed us to produce much more energy at much lower pricing technologies and the ability to move manufacturing globally to places that could do it much less expensively. And we are in a period where the cost of regulation is going up. Those three very anti inflationary forces that predominated for most of the last two to three decades. Allowed the fed and then more recently, fiscal authorities to pump enormous amounts of liquidity into the system without causing inflation. And that resulted in that zero interest rate environment that we referred to that we already had the benefit of as we look forward because those anti inflationary forces have been reversed or at least a run out of steam. And we are looking at a series of things that will be a challenge from an inflationary perspective in terms of putting it back in the tube, I guess most forcefully, let's look at wage price inflation and the need for people to get ever higher wages to deal with the ever higher cost of living. The fed is going to be very focused on trying to do whatever it takes to not put us back into a situation that we experience in the 80s. And I think there's a high probability they will succeed. The bigger question is what's the new normal when we get there? Is it for 5% interest rates or three and a half percent interest rates? Can they get to 2% inflation or will we be back in a world of about three to 4% inflation? That would have been Nirvana as we thought about it for most of the 1970s, 80s and even into the 90s, but seems very high today. And the implication for that is what we've been talking about, which is it has a very significant impact on the way that we price the value of companies in the public markets and also in the private markets for those of us in private equity. Well, Scott, let's bring it back to your point the private markets. I'm curious what the bull case is for private markets at a time when I think it's widely understood that private lags public markets. And if there's still a lot of pain in store for the public markets, then by definition, does that mean we're still going to be a lot of pain in the private market? So what is the incentive to pursue that? Well, I think that there are two sets of opportunities. And interestingly, if you look at the data over the course of the last 30 years, it has been periods of economic turmoil where you have the most attractive investing opportunities for private equity. Because of the nature of the patients that we can have as an investor. And because of the ability, at least for firms like ours who can help companies better navigate difficult financial situations when we see this
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"Lemonade says it's on its way to profitability. Shares popped after reporting smaller than expected losses in the third quarter. Lemonade saint can reach profitability without quote any further infusion of capital. Here to discuss lemonade chair and co CEO Daniel Schreiber. So Daniel, when do you get to that coveted profitability? Well, with tiny corner right now, we've let it be known that within a matter of weeks we will see peak losses, so our losses are going to begin to edge downwards already in Q four. We're going to see shrinking losses even as our business continues to grow. We reported 77% revenue growth year on year, so we're seeing strong growth and shrinking losses, so we're very much on the path. And this is really a reflection of the business doing what it was designed to do. This is the output of many product launches, many market launches. 12,000 pushes of production software just during the course of the last year alone, and all of these investments are beginning to pay off its very gratifying. Now, you said you've moderated spending and the pace of hiring and that you basically have enough gas in the tank, you know, not to need any additional capital and to subsist on the capital that you have until you get to that point. What's your outlook if the macro environment continues to be very challenged if we go into a recession? We're fortunate to be working in an industry that is pretty resilient when it comes to recessions, so we are seeing green indicators flashing on our screens really across the business strong demand, strong unit economics, strong marketing efficiencies, strong operational efficiencies, there are a couple of areas where we're impacted by the macro, for example, cost of capital has definitely shut up, which is why we'll be spending it much more cautiously, but actually in terms of the fundamentals of our business insurance as a space as an industry is reasonably resilient, inflation impacts us somewhat, loss of capital, would impact us if we weren't for the fact that we're already well funded, but other than that, we're reasonably impervious to what's happening out there, which is a fortunate position to be in. Now, since the acquisition of metro mile, a third of the business as I understand it is renters, 20% of the business is cars. What's what a trends are you seeing in the insurance industry given rising inflation, given consumers under pressure, you know, when it comes to basic gas and groceries. So inflation does affect our industry and affect the fine insurance space perhaps more than others just because the supply chain impact on the car industry has been pretty profound. You take a call into a shop today to get repaired, your pay a lot more than you would otherwise. And we're not talking about the 9% inflation you're talking here about 20 or 30% inflation, specifically within that industry. So definitely an impact there and an industry where you can't raise prices Willy nilly. Everything has to be approved by regulators and 50 regulators at that. You can often get timing mismatches between the time that you apply to change rates and when you can actually change those rates and inflation does impact you that way
Bloomberg Radio New York
"co ceos" Discussed on Bloomberg Radio New York
"Is Gerard O'Reilly He is the chief investment officer and co CEO at dimensional fund advisers managing about 650 $1 billion in client assets So let's talk about factors a little bit How did the academic research that Rex and David the two cofounders of DFA How did that become part of the investment process So I guess there's a couple of salient points there One is factor research in itself And we talked a little bit earlier on about models and what they're useful for and how you draw inferences from them I really look in factor models as way to organize historical data so you can try to understand better What really drove differences in returns across different groups of securities different groups of stocks different group of bonds And from those you can glean very important insights about the drivers of expected returns the drivers of differences in risk across different asset categories And so I think that's the important aspect of factor models So when you put the dimension in its founding in context of kind of a burgeoning field in the 80s and in the 90s when more and more factor models were being developed and tested and so on the founding was to I would say address an institutional need that David had identified which was there weren't many systematic strategies that targeted the returns of small cap stocks And he found that that was a hole in many institutional investor portfolios And along the set around the same time because David had done his MBA at University of Chicago Now blue school of business around that same time there was evidence coming out that smaller cap stocks also had higher average returns historically and reasons promoted about why that would be higher expected returns going forward And so around that time was kind of when those factor models were developing So it started with the client need And then it was well let me go to the academics and understand what are the research around this client need Am I going to do something here that makes sense or not make sense from an academic perspective and then how do I build a good robust solution to address that client need And then of course in the 90s you had the three factor model come along and then in the mid 90s you had momentum come along and in the 2000s you had things like profitability and investment come along So you had lots of different factors uncovered over time But the way that we look on each one of those is their models they give us insights from the data How do you use that to build robust portfolios And I would say that's been kind of part of our heritage for 40 years How do we build portfolios that can target these premiums but B robust regardless of the market environment And we've been through many different market crises with a broad range of investment strategies that have come out quite well the other side So let's talk a little bit about gene fama and Ken French's what started out as a three factor model It eventually became 5 and 7 Now there are hundreds of factors many of which don't really add a whole lot of alpha or not consistent enough alpha to justify their complications and costs Tell us a little bit about the fama French factor model Yeah so when you go to the 80s there was a lot of empirical evidence being uncovered that the prevailing model from the 60s and the 70s the capital asset pricing model didn't explain the data very well So when you look at the it was a beautiful model it was very intuitive But it didn't explain the data all that well And so can and gene in the early 90s started to organize all the data to say can we put some of these observations in one kind of unified viewpoint of the historical data And from that exercise came a better model in the sense that it could explain the returns that you saw among stocks far better than the capital asset pricing model So explain more of the returns more of the variation that you saw on the returns across stocks And so subsequently came the three factor model then to your point lots of factors have been added if you look at fema frenchs are even Ken's website now You'll see a profitability factory you'll see an investment factor you'll see momentum factors you'll see all different types of factors And as I mentioned earlier factors are really great to help you organize the historical data But you don't want to get too starry eyed about the latest factor model I kind of view a lot of the academic research over the past 30 years as doing variants on a theme And so it's not that kind of aha brand new discovery but it refines your understanding of existing factors So there's probably 20 or 30 or 40 different value factors out there But you don't need all 20 or 30 or 40 when you're managing a strategy but you can get insights from the different factors on how to manage a strategy effectively And so what I mean by that is if you think about what data are available you have security prices you have data from income statements So things like income or profits or revenues are expenses And you have data from balance sheets assets and liabilities They're the broadly the data that are available to go test And when you look at all of those factor models they're variants on a theme They're either looking at current values of those variables whether it's current income or current price to book ratios or price earnings ratios or they're looking at how they've changed How to have prices changed over the past number of months How have assets grown over the past number of months How is profitability changed over the past number of months So there's three data sources and people do two things with them So there's actually really kind of 6 that you can think about that kind of encompass most of the hundreds of factors that you see out there And I think that if you have coverage of those 6 current prices current balance sheet items current income statement items and then how each one of those have changed in recent past You have pretty broad coverage of all the various different factor literature that's available And that's what we do at dimensional Really really interesting stuff Coming up we continue our conversation with gerardo Riley chief investment officer and co CEO of dimensional funds discussing.
The Drill Down
"co ceos" Discussed on The Drill Down
"You can.
The Drill Down
A highlight from Ep. 97: Origin Materials Co-CEOs John Bissell and Rich Riley, Laureate Education, Aerie Pharmaceuticals, GreenSky, Goldman Sachs.
"Like Athletic jersey from nike or adidas or something is often a typically polyester jersey in. That's after these axiom materials. So the polyester is the same as the serve and when you use our technology to make that he t it's exactly the same stuff sandy but it has a way lower separate is functionally meant to be as functionally the same. It is it is exactly the same in fact if you gave it to a lab to go analyze it you'd have to. You'd have to get beyond the electrons into the nucleus to understand that it came from a different source. It is exactly the same house apostle yes. That's the magic of sort of chemistry Is that as long as you arrange the atoms in the right configuration than you get the same thing on the other side and so without getting into all of the nitty gritty on it essentially the chemical transformations that we do and able to make the same stuff that you make from trillion but we make charting with that with would feedstocks instead and the trick with that kind of thing. Is you know we joke. Sometimes in the industry the you can make anything out of anything. The question is can you make economically and so in our case It's not surprising to most people in the industry that you might be able to make the would that surprising things you can do it so economically and that sort of our trek will. I would seem
The Drill Down
"co ceos" Discussed on The Drill Down
"Welcome to the drill down. We're gonna explain the business to respond a few stocks on the move. But first let's get the three most important business developments of the day with executive producer. Isaac webster isaac cordless with retail sales. Us retail sales rebounded in august despite the delta variant report shows that a resilience of economic recovery suggests households are boosting spending sales. At the nation's retailers rose point seven percent in august. The commerce department said that despite a big decline in car sales related to product shortages and shipping problems excluding. Cars sales wrote rose at one point eight percent. That's a big number and it shows you know just how people came on the stimulus with really improved balance sheets with lower credit card debt higher savings rates and Some people define a financially throughout the pandemic. Now let's get to the banks of i. I should say central bank. The fed senator senator elizabeth warren of massachusetts is calling on fed banks to prevent its leaders from stock trading. Senator warned sent letters to the twelve regional fed presidents asking them to ban ownership of individual stocks among their top officials at their banks. Warren has asked for response by october. Fifteenth now why this request now well last week. The wall street journal reported that dallas fed president. Robert kaplan and boston fed president. Eric rosengren actively traded stocks and other investments over the course of twenty twenty so so i looked at the trading reports from a dallas. Fed president caplin. This guy was trading shares of tesla. Were in a highly highly speculative stock. The loved testing might not. There's no one other that's going to say it's a it's a safe value investment or something's reflecting the broader economy. I mean the rest of his stuff looked pretty plain. Jane but i was just by jaw was on the floor when i saw that last week. Is just a mind boggling that this stock trading has been going on. In my opinion it's It seems like a no brainer. When you're in the position of being fed fed bank president you should not be able to trade stocks like this and maybe m- logical. I'm more concerned with the individual equity trading of our congressional leaders as well. That's also a problem it's They should be in the market. Great come on in the water's warm but individual picking of stock starts to look towards a you start to look messy. There's plenty of ways to invest without investing individually like that. So you know do your homework. Elected officials and fed presidents all right. Let's move on China has formally applied to join the eleven asian asia. Pacific trade pact. Beijing is seeking draw traditional american allies into his economic orbit. Now you may remember that. The this asia pacific trade pact was championed by president. Obama to counter china and beijing's application to join comes a day after the biden administration unveiled a new secret new security partnership with the uk and australia in the pacific region. What's dr drilling down on today. Let's look laureate education. It's not what it used to be I've never even heard so l. A. u. r. is how trade shares rose today and they've risen thirty four percent a year so tell me about laureate education so this was the business that owned a company that owned the walden education business. It was a for profit education company in the us okay trouble with federal authorities. They divest themselves of that. They sold walden university and Their businesses very different. Now they run to universities in mexico to universities and vocational school in peru there out of the for profit. Us education business. They're in very different. Markets were the role of higher. Education is very different and so other doing quite well of generating a ton of cash and indeed the sale of all the university also generated a lot of cash. They announced that they're going to distribute a big chunk of that by giving a special dividend of seven dollars per share On october twenty nine to the shareholder total distribution about one point three billion dollars and this is a stock trading. Seventeen bucks so seventy dollars share distribution pretty big dividend from these guys so i thought it was just interesting to go back and take a look at them and what's interesting about. Their business is with the walden Business out of there out from underneath or corporate umbrella and with potential problems with us regular also no longer there problem. They're showing some real growth Even throughout cove in mexico and peru and. i don't know how much this is appreciative stock price. I don't care but what was interesting to me is that they lowered what they were charging students a discounted student in mexico in particular during the pandemic would suggests that when they stopped the discounting. There's even more revenues to come and perhaps even more dividends to come here. Ceo easy lift. Sarah hanson talking about that mexican discounting and what was going through and how average pricing was down the last year. Maybe not next discounting in mexico was What do we need in order to have a very difficult time during the and those this was slightly higher in mexico than improve Is going to be short. Term nature also What is Would be Wish be which we intrude. His students would flip over to online delivery during the economic you know past. The migration to fully online on combine would driving a to be a temporary reduction in the average and pricing in mexico so temporary by definition. It's going to end. That might provide a bigger boost to this business of providing education in mexico and peru. I wish next drill down. Let's look at airy airy trades under a e. r. i. shares tumbled over twenty percent and they've lost nine percent since the beginning of the year. What's going on with airy pharmaceuticals not to be confused with our sponsors era airy Is a pretty pharma company that has been working on a treatment for dry dry as an increasing medical problems. People spend more time on their phones. More temps stay on their computers I full disclosure. i have gone through dry. I doubt many times. It is very painful. Sorry to hear that Well and in some cases was this treatment But not enough cases to be statistically significant. Let's talk about how drugs get approved by the fda so companies submit things for trials. They typically those phase one phase two slightly bigger phase two and then a very big phase three trial to make sure drugs are efficacious and safe so unusual that earlier trials the safety and hinted efficacy and the later phase. Three trial tries to prove both ins and scale but sometimes accompanied with certain drugs Approval to do a phase to be study which is bigger than a typical phase. Two study not as big as a phase three study or these studies are very expensive to conduct. And if if approved by the fda for certain kinds of Medical problems a phase. Two beast is sufficient enough to get to the market. But you've got to declare very clearly what you're Statistically significant endpoint will be which involves both the effectiveness with efficacious treatment itself. And also how long it's gonna take well. These guys airy picked us did uh statistical data. I think was twenty eight days. Twenty four days This drug would work. And then they did.
The Drill Down
"co ceos" Discussed on The Drill Down
WTOP
"co ceos" Discussed on WTOP
"It's 8 45 when he had for us, Dave Johnson, you know, the Washington football team is no longer just Dan Snyder's team to run. His wife, Tanya Snyder, is now the co chief executive officer, And now she's being heard as she explained to ESPN. Adam Schefter is podcast. I've always had respect for people we've had in position that were hired and paid very well and to do a job and left. Do their job. I did have meetings and I tried to give input and feedback, most of which, you know, nothing happened. So I couldn't be more excited to make the make the changes and get involved. And I'm doing everything I can every day Emphasis on everything. She is involved in everything, including that new name looked at each and every I mean, 42,000 each and every name just making sure that we did not miss a great one. We are looking at the rollout date, You know relatively soon, and we just have to do the timing with merchandise and so many other Things that are important. Yes, not to confirm the name is down to three options set to be announced early next year. Next half hour. What about a new stadium? Nationals? 85 loss of braised raised right now. 2.5 games in first place over the Phillies, Nana least the Orioles get that 73 win over the Royals Mystics played in Seattle last night. Yeah, they ran into a storm. The Seattle's nicknamed by the way Mistakes ran into 115 70 were lost U S Men's National Team World Cup qualifier tonight. Honduras. They've had a disappointing started qualifying campaign with ties against El Salvador in Canada. Dave Johnson. Wtlv Sports still ahead of big development in the legal battle involving Britney Spears, it's 8 46, Today's innovation and government report highlights the governments it modernization opportunities. Travis Rozic, chief technology and strategy officer at Blue Vector, says security programs need to be more proactive and less reliant on the signature sharing. From a threat. Intel signature based sharing is the fastest way to detective threat. It's the most surgical way to detect a known threat and have context about it. The challenges the adversaries have changed over the last several years, such that they create tools and capabilities that evade signature based detection. You know, it's kind of like fighting the last battle or the last war, right? I kind of use the analogy or scenario that this type of mitigation is like driving your car by only looking in your review mirror..
The Unmistakable Creative Podcast
"co ceos" Discussed on The Unmistakable Creative Podcast
"I think i've done that pretty well. You know so. What are the other things that struck me in. This is one of the things. I actually highlighted. As i don't make a point of either bold highlight or just underline. I'm take notes and this struck me. Particular is the reality is there are no dead end jobs. There's no getting ahead. There are no lousy parts of life. That should be met with impatient. Dance holds extremely valuable lessons development. Should be cherished and robert greene said this in the book mastery said no experience in your life should be thought of as wasted. I think the reason that that in particular stood out to me was because my first job out of high school was at mcdonald's are in high. School was at mcdonalds. And i look back at that and you know that was one of the best character-building experiences ever because i think it one top me how privileged i was. Because you know for me it was. Hey this is my job during my senior year. I'm outta here. Eight months would not let you quit. She was like there's no way in hell. You're quitting after three months. I wanted to quit. And basically i had this angry jamaican lady as manager who you just constantly. Which is odd paradox. In and of itself but i have never been angry jamaican person either exist but the crazy thing was like i didn't realize it at the time obviously but now i look back and so you know that was basically life from a lot of the people working there for me. It was just a pitstop. Yeah yeah and i guess how people learn to recognize the value in what seems like a data. I think to me you know. I'm writing a new book. That i plan to self publishing section in entitled find job that you hate and i said look good for you appreciate because after that you will appreciate the jobs that you have after in a way that you never would otherwise. Is that actually. The title of the books can find a job. You hate no no. That would be a good title for yeah. That'd be great for a buck. I'd love that title. But if i had that title by subtitle it would be so the the it would find a job. You hate the subtitle. Be then love it. That would be my subtitle and that's hugely important. It's like i love the idea find job. Hey because it's funny right but really. I don't believe believe in hitting a job. I think i think it's a get a job and then be grapes was how you have it. Work your absolute hardest at it. Separate yourself every way you can in terms of being excellent in terms of what you what you give your employer give as much as you can with as minimal of expectations of receiving as you can and then you will find yourself growing mightily and and having great success.
The Unmistakable Creative Podcast
"co ceos" Discussed on The Unmistakable Creative Podcast
"Instantly find brilliant. I can meet someone who's poor and down. On their luck instantly a find berlin brilliance. I can meet a wall street. Billionaire instantly find brains in them but probably not the thing that everyone else thinks is brilliant about them. So i find things that i find. Brilliant about just about everybody and so everyone in the world has become my teacher. Every single person i've ever met is my teacher and and and the attitude that you can learn so tremendously much from anybody you meet and maybe particularly those that other people would consider unworthy. Learning from those are greatest teachers. Okay so when you have the whole world as your group of teachers and you have an enormous belief in their brilliance in their wisdom in their capability. Then you've got a huge army at your disposal because when you go out and belief so deeply and other people they feel it they know it it. It helps them blossom and become the best version of themselves. And so you know like i. I guess i didn't write this in the book. But i often say it since with the creation of my docu series connected. I'm not sure if you know about that but anyway my docu series is all about demonstrating that all of us in this world. Really all the same in the sense that all of us want to be seen valued understood and love. I mean that's what we all want and we go about it very very different ways. Some people very effectively and some people not so effectively. I would say that very very wealthy people tend to go about being seen valued understood in love with much less skill and much less effectiveness than poor people in my mind. There's absolutely no question that that's true for. People tend to value in life. The things that are most important loyalty love for family cooperation helping others. I mean a lot of people who are quote unquote poor again. Put that in quotes. Because it's made being not having much money doesn't make you for having a poor spirit makes you more but but people who care about each other love each other help each other and are always in service of others. If they have no dollars they're rich. In the rich and friendships the rich and fulfillment the rich the connection in unity with god. No matter how. You define god by the way i say. God i don't mean the god of some religion i mean like finding my book that which is more powerful than us in beautiful and loving and all knowing and something that unites us all and so you know that it being in touch with god being touch with love being in touch with you. Know sort of universal consciousness Being touch with and being able to make a connection with other human beings animals or nature. I mean that's all fulfillment comes from natural brilliance. Comes from and that's the power that i've been able to. I think quite successfully harnessed to help me. To for instance build a law firm or for instance run chipotle effectively or You know write a good book or do my docu series or anything that i've done in my life that other people would say. Hey that's cool. that's successful. how did you do that. It's it's really from learning learning as much as i can from other people in working my very hardest to help other people at their best. But if you want to help other people be at their best. The best place to start is to really learn to love people to respect them. To know that they're filled with brilliance to to admire that brilliance to learn from that brilliance and..
The Unmistakable Creative Podcast
"co ceos" Discussed on The Unmistakable Creative Podcast
"For 'cause i remember being at the mba program. I wish i had gotten a law degree. Because when i i remember i had a cousin who was an attorney who was getting an mba said. Listen man if you're an attorney you can do anything. An nba does but the vice versa is not true. La degree is former useful. Yeah yeah i you know. I actually agree with that. I think that The law degree while it doesn't teach you business per se. It is an incredible business degree. I mean by the time. I went over to be. Ceo of outlay There there were so many things that i took from my my legal education and my My law career. That i think really really helped me as a ceo. I mean for instance decisiveness. A lawyer you learn to to a great deal of discipline in decision making and and that's That's a skill that you get a lot of repetition at at making decisions making decisions making decisions and making really tough decisions and making really tough decisions really really fast with limited information You know you have to think on. You have to learn to think going to be a trial lawyer which i was yet to learn to think on your feet after onto adversity quickly and effectively and in a way. That's convincing a judge or jury you have to you have to To to learn to really decrepit able to be credible. Yes no. you're talking about. They know what you're talking about if the work really really hard and understand the law in the facts super super well So you know when you do all that when he learned to digest because the basically as a lawyer in law school and in the career of being a lawyer you you learned to digest here roic announced information quickly. You learn to take a lot in and make a quick decision from it. You learn To think logically better it well. Those things are critically important. Every business absolutely every business particularly being decisive with less than all the information. So i think it's great great education. I can recommend it highly enough to anyone who has an interest in it so one of the things that you say in the book is that we as humans are inherently limited. Our brains are only so beg. Our bodies are only so strong. Our ability to understand the whole truth of the universe is limited. These limitations affect us all and i. I think that really struck a chord with me because it was so real and it will bid to people here up head. Justyna must zealand's ex wife here. I'm to talk about the psychology areas And s question to a couple of people In some form or another and you know one of the things she told me is that i don't get all deterministic here but i don't think that being like you on is something that can be learned. That is something that's inherent and you know. My old mentor. Greg hurdle echoed that exact sentiment. He said you know people often look at what's possible but don't think about what's probable Do as somebody who's achieved what you have. I really curious You know what your take on that. I mean you wrote these exact words. Which i think echo those sentiments just in different words. Well yeah i mean..
Heartland Newsfeed Radio Network
Washington Football Team Names Tanya Snyder Co-CEO of Franchise
"The washington football team underwent what they call a very significant change in leadership. Today they have announced the promotion of tonya. Snyder as the team's co ceo. Tonya snyder is the owner. Dan snyder wife and tanya has been running what they call the philanthropic activities of the team. Since dan snyder bought the team in nineteen nine.
Skimm'd from The Couch
"co ceos" Discussed on Skimm'd from The Couch
"Hey everyone it's currently. I'm really excited to introduce our guests. Today we have to bam mara lady. Anna hirabayashi are the co founders. Enco ceos of shine a digital self company. That's on a mission to make caring for mental and emotional health easier. Mara naomi actually started out as co workers at do something dot org before going out on their own shine started as their side hustle and now the platform has over four million active users. Mara naomi thank you so much for joining me. Welcome to skin from the couch. Thanks for having parlor excited to be here now. I have to say it's the first time since the pandemic that. I actually have seen two people on a couch. He can't see them as a podcast air literally sitting next to each other. And i'm like oh my gosh human contact. What does that link that. We're gonna jump in. And i'm going to ask each of you to scam your resume late. I can start. I moved to new york in two thousand six the same year that twitter came about so it was basically right when socially news coming on the map. I started at the weather channel and quickly realized that. Tv advertising was was changing in a major way and so got the opportunity to actually be this seventh employee of the first boutique. Social media marketing agency called attention. I got to be part of fast. Growing startup changed the way brands. Figure out how to adjust to this new world. Really connect with people over social and it was there that i started offering pro bono work for not for profits to use these new tools as a way to connect with people around their impacting ultimately get more donors or funding or whatever. It may be that. Let me do something. That was a client and became really passionate about what they were building and actually joined do something as director of marketing and later became the chief marketing officer there and was there for five years helping to scale the organization from zero to five million members and help young people. Gen z and millennials <hes>. Find more ways to get involved in social action and it was there that i met morrisseau always been really passionate about how he used the new tools at our disposal to break the stigma build connections and raise awareness for the things that matter snap those fishing sam. I think my career started as a side hustle very similar to shine. I paid my way through college. I was the first in my family to go to college. In part of how i paid for college was so many a lot of creative side. hustles engaged. I always found a way to turn those into resume. Builders so i worked for current tv and worked with twitter early on in some of the early social networks as an intern. Part of what. I was doing was handing out swag on campus but i also turn those into internships air quotes that allowed me to get into a couple of really powerful opportunities that actually were really focused on getting more people of color to jobs in new york in in a digital internet. Mtv networks said learned a lot about digital in in a different way. What is the look like to engage people in kind of involve a platform. It started on tv and then went to a start up. Had a really really a fantastic time. One of the first employees at a fashion startup. That was a joint venture with american express. I learned a lot about what it looks like to merge kind of older brands with a new emerging brand that was very creative and oversaw their digital media from media to <hes>. member experience and similar to me. i found myself just really leaning towards impacts and wanting to know how i could make a deeper impact in the world heard about do something applied online. Met naomi <unk>. I'm so in and went to do something to lead their their mobile engagement. In so at the time that meant tax messaging and actually similar to naomi we partner together to show their member userbase from zero to five million users shirley using text messaging and it led us to to spend some more time together to know each other in an ultimate to start shine when a shine so shiners leading self care app. We make it easy and inclusive for you to start daily self care ritual. That's going to be relevant to your world and fun facts. Sweeper actually honored as one of the best apps of twenty twenty by apple. We'd like low key heavy award like right behind us. You know we're so pumped about it. But i think particularly this year it's mental lot because our mission has been so rooted in inclusivity representation and to see this year's intersection of the pandemic the uprising for racial justice fee. Election the us and how he's been able to directly address that head on in our content every diet <hes>. Through something we call the daily shine which is really we almost a podcast meets meditation. It's recorded fresh every day. And so you're going to hear meditation. That's relevant to your world every single day and so for those reasons it's it's led to this being such a powerful year for the company. Where so many people are recognizing that they need to support often for the first time and that they need that support to see them and to be inclusive and to recognize what they're going through in this very specific time and they're very specific experiences.