This is a scandal Elizabeth Warren and her crew touched off a financial panic because they were trying to kill off the crypto industry and they succeeded they kicked off the biggest bank run in decades none of that would have happened I think had the FED not and why do they get away with it because the banks guess what the FED said about us in private why they're targeting this industry particularly well Elizabeth Warren said It herself she wants a central bank digital currency but then I had a a conversation in recent months with someone who
was at the table and told me what really happened it was 100% but here's the punchline they're doing it [Applause] again this rip of tftc was brought to you by river it's the best place to buy Bitcoin go to river.com tftc and enjoy this episode Kaitlyn it's been Uh been too long but we're back having you on tftc and to talk about something very important something that has been somewhat brushed under the rug since the first quarter second quarter of 2023 which is uh the the banking crisis that unfolded obviously big headlines are Silicon Valley
Bank uh First Republic but there were a few Banks uh a couple banks particularly silvergate and Signature Bank which were heavily Involved with Bitcoin and crypto businesses banking them providing services to the industry that uh many have surmised were taken behind the shed and shot in the head uh somewhat unlawfully or they were signal out in what many are calling operation choke point 2.0 there's been a development um some information brought to light in the last week particularly uh Elaine HRI heich from silvergate uh wrote A A Brief uh as part of their Bankruptcy filings
at uh the process at silvergate and it's become apparent that silvergate was completely solvent at the time that they were Force IR one and there were some uh how should we say it um uh arbitrary uh rules thrust on quote unquote crypto banks that that forced these Banks to go under so you are the founder and CEO of custodia which has been on the tip of the spear uh in this fight against this current Administration um and the attack on the banking industry within Bitcoin and broader crypto and so I think you can give a
better highlevel view of exactly what's going on and what you're seeing and the significance of of this uh brief that was put out last week yeah well thank you it's great intro uh before we Dive In by the way cool to be back to you you and I did a couple of podcasts in your early years and then we went in slightly different Directions you've become such an expert in mining and uh we'll come back and talk about mining because there was a mining conference at the University of Wyoming last week and then I went
down the banking path trying to solve the banking problem for this space and haven't quite solved it yet we're up against some pretty crazy um abuses of regulatory power and uh to your point what happened last week was um silvergate getting ready to pay Out the remaining funds um it liquidated it didn't um it didn't um um you know fail um and and Elaine actually said that in her affidavit and so what she admitted was something that a lot of people had suspected but no one had ever said it when silvergate I'm sorry when Signature
Bank failed Barney Frank came right out and said something happened here this is wrong um but when signature failed or silvergate sorry 's I'm mixing them up When silvergate failed um nobody said that because they were muzzled they couldn't say anything and now they're unmuzzled and we see what uh elain said and um credit to Nick Carter for not only being the first to report about operation ch. 2.0 but also for during the middle of the night in Singapore tweeting about this filing which was so important because it confirmed that the FED according to Elaine
swor affidavit in the court filing said to them you Will either diversify away from your crypto customer base or you will throw in the towel I'm paraphrasing but um diversify means you have to go from 100% of your customers being crypto companies to being to having 15% of your customers being crypto companies and I'm sure they gave them an impossibly short period of time to do that and it was not possible and Elaine talks about how they had a financial adviser who was looking at the Different options and ended up concluding that the only option
for them was to liquidate and here was the irony if that had happened in a vacuum we wouldn't be talking but to your point there was a systemic run that started and here's the AHA silvergate announced on the afternoon of March 8th 2023 that it was voluntarily quote unquote liquidating the very next day the systemic Bank Run started yeah and it's uh we'll dive into The arbitrary nature of signaling out these particular banks for servicing um Bitcoin and crypto companies but let's dive into the affidavit Logan if you can pull up the first screenshot from
Nick uh as he was reporting over at uh token 2049 yeah but here's what Elaine said uh in section 17 following the rapid contraction of silvergate Banks Business silvergate Bank had stabilized was able to meet regulatory Capital requirements and had The capability to continue to serve its customers that had kept their deposits with with silvergate bank here's the red line however the increased supervisory pressure on silvergate bank and other Banks focused on servicing crypto asset businesses forc silvergate Bank to to a point where it would have needed to remake its business model away from its
focus on crypto asset businesses seek to sell itself as a going concern in the shadow of the regular overhang or begin Winding down its affairs with the goal preserving as much value as possible for stakeholders and so has there ever ever been a signaling out of an industry and Banks essentially being forced by The Regulators to switch their business model on the go like this in US history not that I'm aware of and somebody just asked me about this today if the if the bank Regulators are going to do something like put that 15% rule
in place Ela didn't talk about it publicly You'll note there are some footnotes that she talks about how there are certain things she can't talk about because it's deemed confidential supervisor information okay that's how the bank Regulators work Tyler winkl Vos had a very the Federal Bank Regulators um that but Tyler winlos had a very um good description of it it's uh when The Regulators come in they say hey you've got a nice Bank there to the bank CEO and said and say to them gee it would be A shame if you lost lost your
Charter um if you didn't do the following okay so that is how this stuff works and a lot came out in the litigation for operation chokepoint 1.0 where the payday lenders got together and sued the FDIC because they were the instigator of this during the first Obama term now comes operation choke point 2.0 the FDIC agreed to settle that lawsuit and said they wouldn't do it again and I do believe that the FDIC Violated the terms of the settlement of that lawsuit but um this was the FED okay so now we know that I mean
we already knew the Fed was coordinating on operation 2.2.0 but here's the thing if the bank Regulators are going to get together and arbitrarily and capriciously put a limit on A bank's ability to serve a lawful industry like they did the law requires that to be put through a public notice and comment process In order for it to be deemed valid okay so here's the problem Bank Regulators do this kind of stuff that's not legal all the time and they hide behind confidential supervisory information and banks have to deal with this kind of back room
pressure all the time the FDIC in that operation show. 1.0 lawsuit originally lied and said that they weren't pressuring the banks to to do to debank the payday lenders and that operation choke point 1.0 went To 30 different Industries before it was shut down under Trump and and that lawsuit was settled in 2017 but here's the punchline they're doing it again and why do they get away with it because the banks don't sue them and if they try to sue them the federal Regulators will hide behind confidential supervisory ad information so you see in that
affidavit is multiple references to there's more but we can't tell you because it's Confidential supervisory information this is essentially a gag order like you can't tell correct can't tell the public all this information and that's the other thing like so the Smoking Gun and to rewind this for everybody take a trip down memory lane particularly with silvergate we'll go through silvergate and signature silvergate uh got caught up in FTX and the narrative around the run on silvergate was that they had taken Customer deposits they were lending them out and they didn't have enough cash on
the balance sheet to pay um depositors as they were withdrawing their cash that wasn't the case if you understand silvergate balance sheet and the way they were handling uh their their Crypt backed loans like they were ensuring that they had plenty of cash to make sure that they in treasury reserves to make sure that they could handle withdrawals as they were coming they Wanted to be 100% backed even though they're not regulatory regulatorily um uh mandated to do so but they weren't they understood that they're in Risky industry and they just wanted to provide those
assurances to their customers and they did as you said they didn't they weren't uh they didn't testify yeah Elaine said that in that first sentence you just read she said that silver gay survived the bank run yes and and this is like building on your point that the The Regulators are lying so whether was the combination of the regulators and the media but the whole uh scene around the unwinding of silvergate was this was run of the bank they were poorly run um and they just tried to basically bmer the whole industry crypto's risky don't
Bank it look what happened to silvergate and then similarly the signature which is even odotter because if anybody's listening doesn't remember they essentially got taken out behind the Woodshed on a Sunday night and didn't even have the opportunity to open up Monday morning to prove that their balance sheet was sufficiently robust well a couple things those of you who are Bank experts know that the FDIC almost always closes banks on a Friday night so Marty it was interesting you pointed out this was a Sunday night it was very unusual because they usually take the weekend
to figure out how to get a bank sold and get the you know Depositors you know assumed by another bank but this was a Sunday night so it was a rush job that clearly happened a couple of days after the norm but here's the other thing mult multiple folks have confirmed that silvergate or sorry signature had the usdc reserves coming in Monday morning they had plenty of liquidity lined up because Silicon Valley Bank had failed and Silicon Valley Bank had to you know the depositors had to move their reserves And the reserves were coming over
to Signature so signature was not only solvent as Barney Frank said it was liquid and the money was coming Monday morning so yes there were there were Bank runs happening at both of these banks no doubt and they were both caught up with FTX they both had compliance issues with that but I asked someone today has a bank ever been shut down because of a compliance problem what you see with compliance problems is fines Consent orders you know people getting fired directors getting fired you don't see the entire Bank suddenly shut down without a buildup
to to those things and I don't think it there's been a bank that's actually been shut down for compliance problems again all those other things that that build up to it yes no doubt there were fines coming because of the FTX issues and the like and they did pay fines um there was a consent order but that's not what Caused them to liquidate what caused them to liquidate was the FED gave them that this ultimatum and it sounds like the FDIC did the same thing and just to put a punch line on on it those
were separated by four days right the mar March 8th was I think a Wednesday the Silicon Valley Bank Run started on Thursday the 9th Silicon Valley Bank failed Friday the 10th signature failed Sunday the 12th so there you have it now what Touched all this off was the FED giving the ultimatum to to to to silvergate in an environment where everybody knew there was this Crackdown because to go back a little bit in time the the White House and fed and FDIC and OCC made announcements in January that's when custodia got denied then the OCC
Charters by paxos and proo got withdrawn voluntarily quote unquote of course being sarcastic there in February and March respectively so everybody was On edge and knew and you know with fractional Reserve Banks you you take your money out and and and I don't blame the corporate treasurers for doing this they lose their job if they didn't take their money out right away they ask the questions later so that Traditional Bank model where the bank is holding 10 cents of cash to back demand deposits that could be withdrawn in the span of minutes it it just
doesn't work anymore and crypto is of course being targeted By The Regulators we know why but the this is a bigger issue I like how Austin Campbell summarized it up that the bank Regulators are applying 1970s risk management tools to 2020s problems this episode was presented by river river is the best most secure place to buy Bitcoin in the United States go to river.com tftc set up an account today you'll be able to DCA into Bitcoin without paying any fees you'll be able to give people Bitcoin via river links You'll be able to spend and
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bit key is a great first step so tell them to get a bit key go to bit keyworld use the code tfc2 checkout they'll get 20% off their first bit key you said we know why the The Regulators are targeting uh crypto companies and banks that that bank those companies but For anybody who's listening who may be unaware what let's explain why they're targeting this industry particularly well Elizabeth Warren said it herself she wants a central bank digital currency I'm that's dead serious it she she told Chuck Todd it's on John deon's um it just
went around over the weekend on John deon's campaign Twitter account U very very short interview yes she wants a central bank digital currency and everything that is Bitcoin Or even Crypt based by is deemed by them to be a threat to that total control that they're after yeah and again on to the deception that The Regulators in combination with the media are using like going back to Signature Bank Logan if you can throw up that third screenshot I put in our chat I think this is the smoking gum for Signature particularly because again going down
memory lane if you remember the narrative around signature the Sunday that the federal Regulators took it behind the Woodshed it was about commercial real estate uh next next one Logan no the the one before that um there you go oh that's yeah there you go oh wait yes that was it that was it Logan my bad but this is the Smoking Gun here which is that um The Narrative around Signature Bank was it had problems with its commercial real estate book it wasn't well capitalized but then uh when it was eventually sold to Flagstar Bank
uh explicitly the regulator said the sale should not include the transfer of cash depositors related to Signature Banks digital asset banking business and so they tried to write it off as a commercial real estate exposure problem but it seemed like were directly attacking the bank's digital asset banking businesses correct that's exactly what they were doing Marty that's exactly what they were doing this is Unlawful and uh I mentioned earlier that if they actually put that 15% limit out there for public notice and comment if they were trying to do this according to the administrative procedure
act it would have immediately been sued by the crypto industry because that is arbitrary and capricious to say oh 15% you can't have more than 15% of your exposure to this one particular industry leaving that procedural question aside from a substantive perspective I agree With Austin Campbell's point that we should actually have specialist Banks serving this industry a it is high- risk from a liquidity perspective because there have been Bank runs right no question you know everything moves fast fast in crypto and you've got to be able to cash your demand depositors out on demand
and the only way to do that is for you to hold cash and T bills maybe t- bills but that's it cash and t- bills against your customers assets custodia It's public information we've never held anything other than short-term T bills against our customers funds deposits so that's the way you do it and then you build a compliance Department that specializes is in compliance for high-risk customers and we've proven you can do it and the FED knows because the FED has across time periods reviewed every single payment originated by custodia yes if you bank with
custodia the FED has been watching Very very closely so but they haven't found anything we have a clean compliance record so they know we're clean so they know that somebody who specializes in this can figure out how to separate the wheat from the chaff and can manage the asset liability mismatch risk but traditional Banks what they've instead tried to do is push this out to a broader group of banks most banks have watched what happened here and said not worth the regulatory risk and most of Them don't want to invest in the specialized compliance people
and tools that you need in order to to bank high-risk customers now you would probably quibble whether these are high risk customers but under the bank secrecy act and and other anti-money laundering and ofac laws they are deemed high-risk customers and that's that's just the way it is um but the point is it can be done and yet the vast majority of banks won't invest in the specialized Compliance requirements to do it Ergo what did they achieve what they're really trying to do is push the entire crypto industry well first of all they wanted us
to completely fail and I actually think they thought that the entire industry would fail they did Ed in in murdering Su silvergate signature and patigo um they're not around anymore paxos had an application for a bank subsidiary of course it's got its Non-bank sub subsidiaries that are still operating and then custodia you know we fought it and I'm glad we did because we're still alive because we fought it they clearly did try to kill all of us and they succeeded in killing three of the five and causing the fourth the paxos bank application to be
quote unquote voluntarily withdrawn well you mentioned earlier that during operation choke point 1.0 is Important that um people stood up and sued the government Regulators for U being arbitrary and capricious and now with operation choke point 2.0 targeting our industry custodia the pank that you found in our CEO of you guys are standing up and you alluded to it or fighting back on behalf of the industry in common sense I would argue and so what has that been like for you as a company for you personally uh as much as you can disclose I imagine
There's much that you cannot yeah well look I I have a legal background So and I've litigated before this is actually my fifth lawsuit in my life um two personal um two U were when I was on the Morgan Stanley 401k plan as a fiduciary I got personally named in two multi-billion dollar lawsuits there both of which were dismissed but it does tend to focus the mind when you're personally named in a multi-billion dollar lawsuit twice but anyway I I did have experience With this and um and uh I'm not as I'm not as afraid
of it as I think some others might have been um but I also just have a very deep sense of right and wrong and did I expect to spend you know four and a half years of my life uh working on this and not be a lot further down the path no I didn't um we knew it was possible that that something would go Haywire but in the early years Marty and you remember this all those Wyoming laws Washington DC was embracing them and the Fed was embracing them the state of Wyoming had more than
a hundred meetings with the the the FED mostly Kansas City but also Board of Governors people from DC and that they were meeting weekly to get the new Charter up and running and it is public information that Esther George the then president of the Kansas City fed said she respected what Wyoming had done and thought they had taken a a thoughtful approach to the new digital Asset banking Charter so this clearly was going down a good path a friendly path until FTX happened and Elizabeth Warren's crew stepped in and started operation choke point 2.0 and
now fast forward you know 18 months plus later that here we are in litigation we're at the 10th Circuit Court of Appeals uh the case is now what lawyers would call fully briefed and um heading to oral argument and then decision next and that's why I think it's Important to get this story out there particularly the story of silver I think the timing couldn't be better um for people making the case that this industry is being targeted targeted than this affidavit to come out last week and as you mentioned there there is a targeted effort
by individuals within the government you put together um somewhat of a a flowchart uh separating the the actors um oh that was Nick Carter oh This was Nick so the architects of Choke 2.0 we can pull this up Logan but he did that in February 2023 Marty and I am amazed because in the fog of War I don't know how he got that so accurate it's incredible so let's walk through this right now like because it is a multifaceted effort across different federal agencies um to to Really Target this we have the Senate the Federal
Reserve New York state so not a federal entity but alth I would in Retrospect that's the one change I would make I would leave Adrien Harris off she I don't think she was part of this no in fact actually I think she got she was the Regulator of signature but I think she got I don't think she was the instigator let's put it that way um of of what happened to Signature that was coming out of the FDIC it was coming out of everybody on the leftand side and in the upper right and middle column
of Nick's chart there yeah and so this is An Administration uh with some senate members that that that is targeting this so you have all the way up to the White House obviously the SEC Gary Gensler has been getting a lot of flak over over the years particularly the last three years for his posturing the treasury the FDIC and the Federal Reserve and what do you think it's going to take to change polic like trying to not be political leading up to the election Here but is is it the doing of this current Administration that
that really has a Hardline on this there's obviously been rumors that Elizabeth Warren has had her pick of the litter to to place individuals within the Biden Administration to push forward her particular agenda do you think she is at the core of all this well so we had whistleblowers come forward DC is a Civ thank God and so I knew the weekend after we were denied which was on a Friday January 27th incidentally during an fomc blackout week when the fed's not supposed to do anything but fomc business and they rushed to deny this applicant
who's been outstanding for two years at that point um more than two years at that point and so obviously something was coordinated and it all the White House announcement and the FED um announc of an anti-crypto policy plus the custodia denial all hit at 11:00 a.m. eastern on Friday January 27th During an fomc blackout week totally coordinated but that weekend we had the first whistleblower come forward and he gave me Barat Ram merch's name that's the guy in the upper left chart who was at the White House and he he explained all kinds of the
politics of it it kind of at this point doesn't matter but it took me a little bit to figure out and it was subsequent people who told me about the deal that Warren had cut with Biden that when she dropped out of the 2020 presidential race that she would endorse him if she got control of financial services and economic policy and personnel and she has her people all over these federal financial Regulators as well as she controls the office of presidential Personnel at the White House these are her acolytes her her staffers her former staffers
uh and that was the deal and Biden has upheld the deal and it's a very good question how much does Harris know about this and how Much if any does is she bound by any of this and we don't have the answer yet so I I don't want to get political I think Trump made it pretty clear he would clean house but what I would say is that I'm not sure I'm not sure yet whether Harris will or not she she hasn't said anything yet this was a deal between Biden and Warren and scaramucci told
me that the deal was off after the first term it was only a first term deal anyway so he was optimistic and again no One knows but he was optimistic that even if Biden had been reelected that the deal would not have held um my point though is and there is a list that's been put together of all the senior career staffers at these agencies it's not enough at the at the political level definitely the political people were were were the Warren acolytes and they locked arms and got this done and in in particular it
was Barat Ram merty so I'm told by that first whistleblower Gary Gensler Mar gromberg and Michael bar and um those were the those were the people who did this and um to be honest here's the punchline without getting too In The Weeds on the DC politics what did they achieve they kicked off the biggest bank run in decades and it cost the FDIC Insurance Fund about 40 billion to make the depositors of Silicon Valley Bank Signature Bank and First Republic Bank whole and there's another another angle To this JP Morgan had wanted to buy First
Republic Bank for years First Republic in order for JP Morgan to be able to buy it had to be deemed insolvent there are all kinds of questions whether First Republic was really insolvent or not same same kind of thing but in order for JP Morgan to be able to buy it because JP Morgan has more than 10% of the deposits in the US banking system and there is a statutory limit that no Bank can have more than 10% of deposits how did JP Morgan get to buy First Republic because it was deemed insolvent okay the
stock I went back and looked just a couple days ago JP Morgan's stock went up by almost 15 billion in market value that's how much the FDIC Insurance Fund got hit to make First Republic depositors whole so that was in essence a dollar Ford dooll transfer from the FDIC to JP Morgan shareholders none of that would have happened I think had the FED not done What it did to silvergate five four or five days before yeah and it's astonishing considering the Panic that ensued from particularly Silicon Valley Bank obviously you had most of Silicon Valley
venture capital funds startups those startup Founders those fund managers banking with Silicon Valley Bank and there was deep worry that the startup industry within the United States was going to be at systemic risk levels if Somebody didn't step in and to think that all this was cited by Elizabeth Warren and a gang of motivated individuals within the federal government and the Regulators below them to pinpoint the Bitcoin and crypto industry is insane like the amount of chaos that ensued is it's nothing to take light those I I remember cuz it's affected I run a fun
at 10:31 we were out Sil we had to move our money to Silicon Valley Bank and and all this is Going on we had a we had a bank C for for a number of months CU there was a lot of uncertainty that was incited into the market yeah correct everybody did um it is it is stunning even for custodia just the the number of people who are still struggling with Banking and and I've publicly disclosed we've been debanked multiple times each time due to no fault of our own we have not had challenges on
the compliance front because we've invested so much money and Time and effort in the processes around it and so us getting debanked we're in the same boat as everybody else so this is why if if custodia can get a Fed master account then we can get a Fed master account for the industry and finally we're not ryant upon these Banks who to be honest do want to service us why would a capitalist not want a customer especially if they're a customer that they can charge High fees to of course They would why does the banking
industry turn us away it's the regulatory pressure that they're getting and um that's that's what custodia man I did not expect us to be the poster child for fighting against this but you can see why a lot of banks don't fight it um again the the the confidential supervisory information thing causes a lot of this stuff to happen behind closed doors and in a way that can't be brought out in litigation Again look at the footnotes that Elaine had in her in her um in her affidavit I wish we could frankly get the real story
but she made it clear she can't give it because of confidential supervisor information she gave as much as she could but uh I would love to know the real story because there's a lot that I know that I can't share for the same reason and um man if you knew at all man you'd be like why do we have this system because what happened is when The Regulators got captured by political interests they got weaponized against law-abiding citizens and there was a great quote from the I think it was the center for government accountability that
said Deb banking turns law- abiding citizens into criminals and the states can set them free yes indeed that was a great quote and yes the states can set them free and Marty here's what's fun the states are starting to get really pissed off about all this because it's Targeted way too many Industries unfairly and it's not a political itical party thing per se because the guy who's the most outspoken against it in Wyoming is a Democrat but here's the fun part the Chief Financial Officer of Florida Jimmy petronis a few weeks ago said it's time
for Florida to set up our own bank because we don't want our Florida companies to be debanked for political reasons and why are we spending all this You know paying out all this money to New York and San Francisco Banks we should keep that money inside Florida and so he wants to set up his own bank and you know he's going to have the same fed master account fight that we're going to have state of Texas has has its own master account so the FED has historically been you know picking winners and losers and giving
these valuable accounts to you know its friends um meanwhile blocking legally Eligible applicants like custodia that did nothing but try to comply with their laws and rules but I digress um it's going to be interesting and and I will tell I will tell you this there's some chatter that look If the Fed is going to start to weaponize access to the banking system to the payment system so that only its friends get it and it's perceived enemies I say perceived because we're not real enemies but they clearly Perceive us as such because they're trying to
kill us if that's what's going to happen well then maybe there should be a competing Federal Reserve maybe certain States should get together and say we need to create a new Clearing House origin Al there were multiple clearing houses that were competing with each other in the AC a system and then they all ended up getting merged in together but there's plenty of History plenty of examples of Clearing Houses being created and if the states are starting to get pissed off rightfully so about their businesses unfairly and unlawfully being debanked don't be surprised if in
the next few years you see that if there's not serious fed reform in the meantime I would love to see that just from the pure basis that competition's good the FED needs competition and it's it's ironic too because you're you're attacking an Industry U two industries really like a banking industry and then the industry it's trying to bank below it which is the the Bitcoin industry and there are serious problems throughout our economy and our financial system that many bitcoiners yourself included are trying to fix by creating businesses and tools that enable people to secure
their financial future and adopt a better money and it's just extremely ironic when you ju suppose what many our Industry are trying to do with what's going on at the FED monetary policy level I mean they just cut rates by 50 bips 25 bips more than was expected just two months ago which signals that there may be something uh a foot in the back end of the financial system here particularly uh from a liquidity perspective they're proclaiming that inflation is somewhat tame but I saw you retweeted Lyn Alden earlier today the rate of Inflation has
been tamed to to an extent depending on what metric you look at but absolute inflation people are still feeling it like that lower rate of inflation is still building on a higher base that people are still paying more and more month in and month out than they were four years ago totally my cup of coffee I was tweeting about going to Costco for the first time in several months that the sticker shock oh my God my cup of coffee they used to put 80 They used to put 100K cups in the box now they only
put 80 and it's about the same price that they're charging for what they used to have 100 K cups in the box and that just happened Marty so I mean that's in the last I don't know six plus months that that that that that happened that's the kind of sticker shock that we're all living with yeah I mean Parker Lois was tweeting about where we get our eggs and our beef Shir Tail Creek Farms here in Austin they just raised their egg prices by 9% which is material that's not right anywhere near the uh 2
and 1 half to 3% Target whatever the target is now that the FED is proclaiming and what does Justice look like for taking it back to operation choke point 2.0 what does Justice look like I just thinking now I'm getting somewhat uh worked up because you think about not only did this targeted attack on a particular industry in sight this Banking crisis that had the country in a state of panic for a couple of months last year and people were forced to JP comes out ahead JP Morgan comes out ahead but then not only that
like on the other side you have really good people I know him personally Allan Lane is a great guy who was running a very good business and then I don't know um Barney Frank personally at all but it's ironic that they took the guy who's one half of the dot Frank act which was Written and passed in law to make sure that consumer protection students were put into place uh within the banking industry and it seems like they were not insolvent but uh it's almost like they were trying to humiliate somebody who created um created
legislation to to put consumer protection in place within the banking industry it's almost like it was a humiliation ritual of what many would deem to be good people I would love to talk to him actually um I talked to Chris Dodd um not long after Dodd Frank occurred but I would love to talk to Barney Frank and the problem is right now because of all the litigation you know they're all still trying to settle their compliance problems they're all trying still trying to settle their shareholder lawsuits right there's still some you know they're not ready
to to to be Unleashed to talk yet and that's why um probably he hasn't talked more than he did right at that time thank goodness He did speak out at that time because to your point he's such a credible witness for what happened and we wouldn't have known that silver that that that signature had been suicided had he not talked about it that weekend he probably afterward was told stop talking about it but um for now but he'll be back I assume we'll we'll all get to know the real story once all the litigation over
but um but is there Justice look custodia getting a master account would Be Justice um and so we'll see if that Justice comes we disclosed that us not having a master account has cost custodia $8 million in counting which for a small organization is crushing and that doesn't even include the legal costs so um yeah we're we ended up you know fighting this fight on behalf of the industry that we didn't we didn't pick this fight it came to us and here's a funny thing Marty if you look at that list of the five crypto
native companies That were either already Banks or were applying to become some form of bank at the FED of the OCC like I said three of them are gone silvergate signature and pertigo not operating the um paxos Bank Charter subsidiary application was withdrawn that leaves the only one still operating as custodia that's it so we survived it and here's the funny thing I think they so disrespected a woman from Wyoming I'm deliberately saying both of those words A woman from Wyoming they thought that I was just a wilting we were wilting wall flowers that would
that we're hillbilly idiots and we would not stand our ground and we would turn and run when the giant bully came and disparaged us the way that it did and and we filed a complaint with the FED Inspector General that what they publicly said about us was filled with lies and filled with inaccuracies that the FED refused to correct and of course the inspector general complaint Went nowhere the Inspector General reports to J Powell so kind of a conflict there but um uh is in our lawsuit filing that you should Pro you should probably put
that up in the show notes Here our lawsuit filing discloses and I'm so glad that our lawsuit finally was able to get it out there guess what the FED said about us in private they said we had an impressive and experienced management team guess what they said about us in public deficient And limited experience okay there were eight categories of 180 degree flip-flops so we can prove that the FED actually thought highly of custodia with their own words that came out in Discovery here's the funny part that was all behind that was all sealed in
the court filings at the district court but it got unsealed in the court filings at the Appellate Court so you now can go see in the filing that custodia filed last Wednesday you can see some of the Words that the FED itself used before Elizabeth Warren and her crew decided to crush us they really actually thought highly of us and what they said publicly was 180 degrees deliberate disparagement gun to their back from Elizabeth Warren you may think you can't say it well again you're asking about Justice right I mean this is what this is
why the courts exist and um you know look the two fishermen in ler Brigh will have changed the entire administrative state in Washington DC that's the case in which the Chevron Defence Doctrine was overturned they were two fishermen right I'm sure that whatever agency you know boarded their boats and and made them pay for the inspections um thought they were hillbilly idiots too and uh so the funny thing is like go and look at what the FED clearly did in this or organized coordinated attempt to kill all the Crypto banks in that January to March
2023 time period that's when all of us either got denied or or shot or quote unquote voluntarily withdrew all five of us in that January to early March late January to early March six week time period all of us and so what do you think they were trying to do with custodia we weren't operating at that point they were trying to scare the hell out of us and make us run away and we didn't they had no idea Who they were dealing with in our board in the state of Wyoming backing us in our shareholders
backing us I mean many in the industry have surmised that the FED is posturing this way because anybody who's listening is unaware of the way custodia operates you guys are fully one to one reserved back Bank correct correct so many in the industry are talking saying yeah it makes sense to us the FED wouldn't allow this because it would set The precedent that oh there's an actual safe bank that that has full res reses in the system and once you create that optionality for the market um people are going to say oh I can I
can bank with this extremely safe bank or go into these other risky fractally Reserve Banks do you think that is behind any intention of this this sort of stal Waring well I thought so but then I had a a conversation in recent months with someone who was at the table and told me What really happened it was 100% our association with crypto period full stop so there was 86 pages of vitriol and Hyperbole and lies about us but what really mattered the one thing that drove the Fed was I'm told by an Insider our association
with crypto and and and Marty in in that's why the silvergate thing was so meaningful to me when I saw it all come out last week because I had thought I wasn't sure what really happened in silvergate I thought that They'd had a bank run and they did but what I didn't know is that they'd survived it yeah they had the compliance problems and all that right but but they survived it If the Fed hadn't given them that ultimatum they would still still be here the other bank runs probably wouldn't have happened and the fdic's
deposit Insurance Fund wouldn't have had a $40 billion hit and it only has $110 billion dollar or so in it right now so that $40 billion hit is hugee to the FDIC and every other bank in the country who was innocent in all this had to increase their deposit insurance premiums which means that every other bank in the country is now charging all the customers more fees to recover those Deposit Insurance so we all paid for it so so it wouldn't have happened that's the that's the AHA it wouldn't have happened most likely it certainly
wouldn't have happened in the way that it did because because the Panic at Silicon Valley Bank was literally one day after the announcement of silvergate you cannot ignore that coincidence in the backdrop of what you were talking about back then of all the just jitteriness in the financial markets and to your point the F fractional Reserve Banks historically people have especially the corporate treasurers they'll withdraw their money first and ask questions later and if the bank survives they'll put it back the Next day but there is so much job risk so much career risk to
a corporate Treasurer think about all those startups that had all their money at Silicon Valley Bank there's so much career risk to the corporate treasurer if the if the the bank where they have the C the the company's funds has a bank run everybody's going to be rushing to the exit first so I the funny thing is I don't think that's what actually happened in terms of the FED denial and I I'm taking it straight from the lion's mouth it was all crypto they were just trying to kill crypto and they succeeded in killing three
of those five crypto Banks and only one of the five of us is still operating yeah and I think this is the most important thing that we can get out of this episode and hopefully get out to the broader public is the cost uh that the FDIC paid which means the taxpayers paid the increase in the insurance Premiums like everybody's paying that cost and that's the unfortunate one of the unfortunate things about being in this industry is that the uh mainstream perception of of what we do in this industry is oh these guys are crazy
speculators scammers whatever there certainly is some of that in some areas of the industry but I believe that most people in this industry are trying to build good products that increase the quality of Life for every individual those products touch and yeah that is a thing that doesn't play in our favor is the the mainstream narrative that we're just some crazy crypto Bros and gals that are that are highly speculative and not adding any value to the economy and there are plenty of data points against that to prove that um Bitcoin is really increasing the
quality of life particularly for people who use it as a savings vehicle and hold it for the long Term and um I think to help turn the tide of perception particularly in the eyes of the public it's important to highlight that this targeting of our industry had an adverse effect on every American in one way or another absolutely and I'm hoping that the Press picks this up I am aware of some stories being written I've gotten some calls today about all of this I'm hoping that this goes Nationwide Nick I know is writing a he
already announced he's Going to be writing a follow-up story um he was at token 2049 and you know tweeting in the middle of the night fired up poor guy didn't get any sleep that night um fired up pissed off about you know what what we all kind of knew but didn't really know until the the news came out last week but my point is like I think this is It's time for this to go National this is a scandal Elizabeth Warren and her crew touched off a financial panic because they were Trying to kill off
the crypto industry and it probably almost certainly wouldn't have happened had they not done what they did to silvergate and then the next day the Panic ensued holy cow and it also shows how fragile the system is um it really does oh my gosh if a small bank that that was serving a relatively small industry could touch off a systemwide bank run yeah this is we and you and I talked about this going back to like 2016 maybe When we did our first podcast together um the traditional Financial system has never been stable this is
not news to most of us that that it is subject to periodic bouts of instability and part of the thing that we like Bitcoin so much for it's not price stable but it's systemically stable the dollar might be relatively price stable right now relatively um but it is it is there's a perception that it has systemic stability it does not Bitcoin as a System is far more stable yeah and it's something that the banking industry should be embracing because if you're looking for a way out of these problems like let's build on a strong Foundation
which Bitcoin provides and not only that you mentioned it earlier but the um industry that is bubbling up around Bitcoin like those are paying customers and it is an industry that is growing rapidly and an asset that is at $1.5 trillion dollars uh combined with Bitcoin and the other crypto currencies and adoption continues the way it has for the first 15 years that market cap and that addressable markets only going to grow even larger orders of magnitude larger and so there's an opportunity for the United States economy to Foster this Innovation and make sure that
actually happens here in the United States and to think that we actively have politicians and Regulators attacking what could be a Golden Goose in the 21st century is Completely insane and not only are they suiciding these banks that they don't like but uh they may not know but they're suiciding themselves in the long run they are and that's why I do so appreciate and have tried to be so politically neutral I appreciate the Democrats who have broken ranks with this waren crew there is a a war going on inside the Democratic Party between the Warren
crew and the more moderate Wing over this financial services policy And it's just an unknown what Harris is going to do and I've heard Rumblings that she's going to clean house so all these people are going to be gone I think it's more likely that Trump would clean house we can probably all assume that that would be the case because Trump at least has come out publicly and and strongly in support of crypto's right to exist and if Trump really wanted to support us he would take the taxes off Bitcoin and let it compete With
the dollar and may the best system win I and I I I I don't put it past Trump to do something like that and just say to all the entrepreneurs come back get get get out of the Middle East get out of Singapore come back to the United States no more taxes on bitcoin heck look what El Salvador did accomplish by doing just that one simple thing no no taxes on big coin we recognize it as legal tender the US doesn't even have to do that just say no more taxes on it and And let
it let it develop accordingly and like I said you know if the powers that be want to do anti-money laundering and counter financing of terrorism we've proven that it can be done it absolutely can be done even in this high-risk industry we've proven it so and they know it that's the funny thing we said we filed that in our lawsuit filing the FED has across time periods reviewed every single payment originated by custodia every single one I can't think Of another bank that's been reviewed at that level of detail or another industry that's been so
targeted like this but stop and think about what that means for the banks that have been willing to service it the cost that they're incurring because of all the compliance people that they have to hire and all the risk manage with people that they have to hire it's a high cost industry but I think this industry is willing to pay it So it doesn't just because you you take taxes off it and and bring entrepreneurs back in does not mean that you're abandoning the policy objective of shutting down money laundering and terrorism financing I think
those two things can coexist so um we'll see you know if the if the Republicans take the Senate which I think there's a very high probability occurs Tim Scott will be the chairman of Senate Banking and he's a he's a bitcoiner he came out with Senator lumus to the scaramucci Salt conference in Jackson Hall about a month ago and I got a chance to spend some time with him shared everything he knows what's what re even the things I can't share now um that the things that I that I legally could share with him I
did so he knows um there's some there's some bad stuff going on here and one of the interesting questions is who's going to be in control of the Department of Justice because if there are Congressional subpoenas or even criminal referrals um it does matter who's in control of the Department of Justice as to whether those things you know um have any teeth we've seen that in the in the um in this Congress where the where Congress and the Department of Justice are controlled by the same party Congressional subpoenas have teeth and if someone ignores them
we saw that with Bannon and Navaro in the January 6th committee um and they went to jail for Ignoring them but the most important thing is it for Congressional subpoenas to have that kind of teeth it does require the Department of Justice to have the same political party because what has evolved is that you know if it's if it's a different political party and we've seen it on both sides of the aisle and there's a congressional subpoena that comes for an investigation if if the subpoena e decides to ignore It then there might not be
any conse quence it used to be that Congress had a jail and Congress had a they do have a police force they they could historically arrest people for ignoring Congressional subpoenas that got changed I don't know 30 40 years ago so that the Department of Justice which was then supposedly more independent and less political would be the one that would do the prosecuting well unfortunately the the justice department has become very Political I I I was just talking to somebody about this it goes back to the George W bush you know Patriot Act era um
when the justice department became very political and ever since then it regardless of which party was in charge of the justice department they they chose whether to prosecute the referrals that came from Congress so if you have the the same political party controlling The subpoena power and the doj you're going to have some teeth if crimes are Uncover CED but if it's a split in control then all that's going to happen on in Congress is just investigations and people ignoring subpoenas so this is going to be fascinating to watch because what we're just talking about
right now applies across the entire federal government and it's not just the the banking Regulators there are things like this analogous things that have happened that folks have been alleging are illegal and um it ctions matter and We'll see if if the same political party is in control of subpoena power the Senate has more subpoena power than the house does I actually asked the question why with the Republicans in charge of the house was there not an investigation into all this and the response was two things one the Senate does have more subpoena power than
the house although of course we do see the house subpoenaing it's coming from certain committees it's not coming from Financial services and the second point is McKenry who controls the house Financial Services committee right now has been trying to get legislation done and so the last thing with Biden in control of the doj the last thing he he wants to do is send over you know subpoena criminal referrals for failure to appear he doesn't even want to do the subpoenas he doesn't even want to do the investigation because he's trying to get a stable coin
bill passed so that's the Incentives the weird incentives in DC I know I went off on a little tangent here but the the punchline of this whole of this whole discussion in the last couple minutes is elections matter it do matter and again I I want to belabor the point that it we have a massive opportunity in front of us as Americans and as an American citizen I want to see us take advantage of that despite all of this weaponization of the federal government And Regulatory Agencies the United States still has a leg up on
a lot of the world in regards to Innovation around Bitcoin and broader crypto um and like you mention mention I know a lot of people going to Dubai going to Singapore going to El Salvador because they simply do not want to put up with The Regulators here in the United States and I think we're at a critical Junction in the industry in the within the United States where it can go one way or the Other we could shoot ourselves in the foot and give up the massive lead that we have I mean per capita I
believe I think this is still true Americans hold the most Bitcoin uh in any country in the world uh we've got the most businesses here we a lot of we have a lot of Bitcoin within the borders of the United States a lot of businesses a lot of individuals who want a lot of miners most hash rate um not per capita but like we have the largest percentage Of hash rate out of all the countries in the world post Chinese mining ban like it it's all happening here despite all of the weaponization of these regulators
and the federal government and I I can see it people are getting fed up and deciding to use their option to exit to other more favorable jurisdictions and so I do think this elections are important particularly this one as it pertains to our particular industry and um I would hate to see us blow the Opportunity that we have the Head Start that we have and I think it's imperative that we make the correct decisions over these next six months a absolutely and uh so much of it because we've seen how much power these federal agencies
have grabbed I think the pendulum is swinging back with the Chevron Defence Doctrine overturned um there were three Supreme Court cases at the end of the last term that clipped the wings of federal agencies including One of the FED itself that said that that someone can challenge a federal rule the statute of limitations doesn't start to toll until until the party has been harmed by the rule so the FED had been arguing all the way up to the Supreme Court that if there's a five-year statute of limitations that ends five years after the rule got
created and the Supreme Court said nope that ends five years after the party was harmed by the rule so you can sue over Every single rule that has been implemented if you've been wrongfully harmed by it think about the implications of that in in addition to Chevron refence being overturned right these federal agencies have and the SEC has had its wings clipped multiple times these federal agencies have had their wings clipped by the by the recent um Supreme Court decisions and uh so that pendulum is clearly swinging back it's going to take a long time
for those Rules to be overturned in court and for the the court cases to work through the Supreme Court but I will say um it's public information that custodia has three former US solicitors General who have either who either represent us or who have filed amicus briefs on our side in the case and one of them is Paul Clement and he's the attorney who represented the two fishermen at ler bride Enterprises who Literally you know got the administrative State challenged at all the way up to the Supreme Court and uh he his by the way
is also something you should put up in the show notes because you probably have a lot of listeners who are um who are fed historians and armchair fed historians um one of the things that that folks have said for years about the FED is that it has an unusual structure which it does the federal agency is the Board of Governors In Washington DC and then there are 12 private corporations the the regional Reserve Banks and so it's a hybrid from that perspective but the federal the there's no question that the that the agency in Washington
DC is a federal agency subject to the Freedom of Information Act subject to the administrative procedure act all of those acts that apply to federal agencies the reserve banks are private corporations and their boards are Controlled by the banking industry and if the presidents of reserve banks are doing official US Government business the question is have they been properly appointed under the US Constitution's appointments clause which requires that the president nominate and Senate confirm the principal officers of the United States and that there has to be when administrative decisions are made when when US Government
decisions are made there has to be a Nexus to a Presidentially appointed Senate confirmed officer but there is not that Nexus in the case of the Federal Reserve Banks the 12 privately owned their boards are controlled by the banking by the private sector so uh Paul Paul opens up that whole question and um that's Paul Clement folks he's uh he's pretty famous in Supreme Court circles um so I will just point you to the Amicus brief and his analysis it's beautifully written in my humble opinion U and even Some somebody who's not a lawyer would
I think appreciate reading that I mean it's this reminds me of a conversation I had uh the other week on this podcast particularly about the intersection and the interaction between the populace and the federal government and you mentioned many examples where it's Chevron Defence what custodia is doing to Su the Federal Reserve like it feels like for many decades the populace has been in a rather complacent um State And I think over the last three or four years particularly people are beginning to realize like oh if I actually participate file Freedom of Information Act um
request if I actually sue the government if I take the fight to them when they're overreaching their bounds like you'll be surprised at the amount of power your punch has at the end of the day and this is another great example like is the federal government or particularly the Federal Reserve operating in an unconstitutional Way by not having this Nexus that is written as a law that is necessary for them to actually to operate legally yeah there's a there's a book written a couple of books written on the FED that I recommend um there's one
called the power and Independence of the Federal Reserve there's a whole chapter on this very issue written by Peter KY Brown uh Professor at the University of Pennsylvania Law School uh and Roger lowenstein's um book I forget the name of it but it's a famous book on the on on the the history of the Federal Reserve and you know what's fun Marty is Wyoming's first congressman Frank Mandell I'd never heard of the guy he was he was highlighted in the Lowenstein book because he was there when the Fed was being debated he was in Congress
in 1911 12 when the Fed was being debated And he warned that the structure of the Federal Reserve was such that this was an organization that was going to centralize in its power and that that power over money and credit was going to centralize in New York and Washington DC man was he preent he was right that's exactly what happened it's part of the reason why the FED got created with these 12 private organizations is they wanted some decentralization in the FED they did not Want all decisions to be made out of Washington DC and
back then the the the Federal Reserve Board of Governors didn't even exist the Fed was just these 12 um you unaffiliated Regional banks that banked the banks in their regions and each each one at the time had a different interest rate and monetary policy imagine that so go back to what we were talking about earlier states are starting to get pissed off and fight back when I talked to Chuck gray um by The way I highlighted his speech he's the secretary of state of Wyoming he's the number two official elected official in Wyoming he's one
of us he's a bitcoiner and he was skeptical in the beginning he comes from a caucus in the Wyoming legislature that has been skeptical but now that Trump has come out strongly in support I've seen the the skepticism turn and I will congratulate Chuck because he has preceded Trump's um um speeches he came Out strongly for Bitcoin literally the day before Trump's Nashville speech which nobody knew was coming and not to the extent that it was and then he just gave another great speech right before like literally two hours before Trump was paying for cheeseburgers
at pubkey in New York with Bitcoin and that speech I would highlight with Chuck is worth listening to for all bitcoiners because Chuck's in a position of real power first of all he comes out with a Full-throated defense of federalism that the states are the primary unit of government in this country and that if the states are being if if the banking system is being weaponized against the States you know was really interested when I talked to him afterwards about Jimmy petronis in Florida proposing to start their own bank and that maybe the state should
be locking arms and starting their own Clearing Houses that's what the FED is it's a clearing House so wow if the states start start Gathering power together I know it's hard because it's the states are meant to be decentralized but if they start joining forces there's plenty of History that's why I brought this whole thread up again historically the Fed was 12 different legal entities all owned by the private banking industry all of them and they still are they're governed by the Board of Governors which is their regulator and that's the federal agency But you
mentioned the Freedom of Information Act earlier the Kansas City fed has maintains that the Freedom of Information Act doesn't apply to it so try a Foya request to the Kansas City fed it's going to get rejected and they're going to explain to you they're a private organization and they don't have to comply with it and so you can imagine the the football that's happens something in DC gets done they'll ship it off to one of these Reserve Banks Where where the Freedom of Information Act doesn't apply or at least they take the position it doesn't
apply right so then DC says oh Freedom of Information Act you know we don't have it in DC and try to go get it from Kansas City and Kansas City says well the Freedom of Information Act doesn't apply so you can imagine the games that get played on on on acts like that um and it's going to be interesting to because of course Peter KY Brown points out that what you Have with the regional federal reserve banks sitting on the fomc the Federal Open markets committee that votes interest rates you actually have economically self-interested people
voting themselves interest because the FED prints the money to pay the banks the interest right but remember if they're not presidentially appointed or Senate confirmed or appropriately a derivative Thereof is that constitutional that's the question that that Paul Clement asks in his brief prettyful it's a very good question that I think more people should ask and should probably get more tick in the mainstream and I completely I've been saying it for years partly inspired by the work um that you and many other individuals did in Wyoming states are going to lead the way um yeah
not only In Bitcoin but I think we've seen a postco um really claiming their autonomy from the federal government I really like that Trend hope it continues um to to increase in magnitude and and veracity and I do think the federal government is doing a very good job of of increasing the momentum to to how antagonistic they are being towards particular IND abely yeah absolutely yeah don't be keep your eye on Chuck Gray he's he's definitely An upcoming politician nationally who has has come out with one of the best Bitcoin Pro Bitcoin speeches of the
year because it was really pro- freedom and he he gets it at a visceral level that it's about financial privacy and he called a cbdc Sinister and um he he defends Wyoming's Industries especially the energy industry wants Wyoming to develop its Bitcoin mining industry we've got we've got some issues in Wyoming with the Public Utilities Commission because it's such a vast space which by the way so is Texas but Texas deregulated look what happened Wyoming I think should be going down that same path uh because right now energy costs we we're Wyoming is one of
the largest energy producing states and 90% of the energy that we produce gets exported outside of the state and so the state doesn't benefit from it other than just the mineral royalties that get paid into the state and by the way that's why We have a sovereign wealth fund the state has net assets not net debt it's one of two states in the country that has net assets even a in even taking its public sector pension obligations into account it's the U it's it's Wyoming and Alaska that are that that have net assets as States
because we do get mineral royalties but we haven't built Industries and jobs around the the exporting of of of that energy and if we can keep it in Wyoming great but part of The reason we don't is the Public Utilities Commission forces a subsidy for the transmission costs so you know that that problem got solved in Texas when when it got deregulated and urot started to develop actually market-based Solutions and you know what's going on in the Bitcoin mining space no one articulates it better than you do how that helps to balance the Texas grid
and how it helps to keep power prices down in Texas um and I hope Wyoming does the Same thing and and keep an eye on Chuck gray uh there are other of course politicians I I I can't thank Senator Chris rice enough um he's the Democrat I mentioned earlier uh and then of course Senator lumus Governor Gordon um they've all just been big supporters of what we're doing here and they're appalled at what the federal government has done to the state and they're fighting States will lead the way and I know we're going over time
we only Booked an hour had the last question I prepped you for it earlier but looking ahead what is a bold prediction or idea you have for our industry that you think many people would disagree with would disagree with uh I I think that Bitcoin I've predicted it before but I'll say it again I think that Bitcoin is going to take down a global systemically important Bank we see this with all the big Banks wanting to pile into Bitcoin and they're going to Fractionally reserve it they're going to re hypothecate it they're going to commingle
it with prime brokerage collateral and let people substitute when there's a margin call oh I'll substitute a t- bill or Apple stock for the Margin Call that I got on my Bitcoin loan and they're going to find themselves fractional and it's going to take down a large Bank um and I do believe that that's eventually going to happen because these Banks don't have The risk management mindset um they've got to Austin campell's point this the 1970s mindset of let's just diversify the risk um as opposed to no let's actually segregate it and and shut the
asset liability risk and Margin Call risk down you can do that and have a vibrant economy and I will say something controversial here there are a number of bitcoiners who are hardcore hey we ought to have raw raw leverage on bitcoin and You've heard me say this before a fool and his Bitcoin are soon parted fascinating debate in safe's podcast with Michael sailor that was recorded last week the last hour of it is the two of them arguing over this very Point Michael sailor is is is it just thinks it's the greatest thing ever that
the the large banks are coming for Bitcoin and that we can all leverage our Bitcoin and safe um is views it the way I do which is uh don't that's that is way too Risky and and and um U Andreas I think put it best Bitcoin is a disinflationary asset it is not an asset that inherently has yield and if you are investing in Bitcoin yield that yield is coming from somewhere and you better go figure out where the yields coming from and whether the yield is appropriately compensating you for the risk um and and
I and I think Michael puts way too much faith in the large Banks uh for their ability to risk Manage this they've never seen anything like Bitcoin this is the apex predator to borrow a a phrase from Trace Mayer from years ago this this is the apex predator of Finance if they get themselves leveraged at all more than one to one they're going to get in trouble at some point and um and I guarantee you they're going to get themselves leveraged more than one to one they don't have the risk systems to segregate Bitcoin and
they don't have The philosophy to segregate Bitcoin either um Michael sailor would of course love to borrow the US dollar he's basically the uh what was the name of the um of the of the industrialist in um viar Germany who went short the mark and then bought a bunch of industrial businesses and made a fortune off the hyperinflation that's that's what Michael sailor is he's the equivalent of that shorting the US doll to buy Bitcoin he is doing that by by borrowing in US Dollars to buy Bitcoin um it's a it's not a strategy I
would recommend I think it's a risky strategy it's it's paid off brilliantly for him though but um but he he might ironically play A Part uh because of all the banks coming for Bitcoin um and S some of these Bitcoin and some of these big Banks getting over their skis we haven't talked about this maybe it's a good place to end um the FED did give supervisory non- objections which means that let Bank of New York Melon get into the businesses that the FED officially claims are so risky that they threaten Financial system stability so
watch what they do not what they say yeah the the banks are used to uh the fed and the treasury coming in and printing money and issuing bills when they get into trouble they're going to find out the hard way that you can't print more Bitcoin um yes the scarcest asset in the world Caitlyn thank you for all that you're doing this is a very Important conversation freaks get the word out Elizabeth Warren in an attempt to kill our industry incited a banking crisis that put the US in a very precarious situation in the spring
of 2023 it's a headline that needs to get out there and as was proven by this affidavit written last week it's actually what happened these Banks were secure they had enough deposits they were able to unwind successfully get every every body back their money um but Elizabeth Warren for some reason or another targeted our industry and put the American banking system at risk I think that's a pretty serious act on behalf of the senator from Massachusetts hopefully soon to be former senator from Massachusetts I I haven't endorsed anyone but the closest I've come is John
Deon I know a lot of bitcoiners because of his work with ripple are hesitant to help him man oh man has he done a lot for our industry And would he do a lot for our industry if he's able to win that election so I hope that the hardcore Maxis um can look at what he did and say you know what he actually helped helped Society even though he was he was doing it on behalf of the xrp holders he represented the individual xrp holders most bitcoiners probably don't even know he aggregated 60,000 xrp holders
to agree to be sued by the SEC it's insane what happened and most bitcoiners are probably not paying Attention to that and he won that's what's interesting about it and so yes okay the Maxis hate xrp but um what John did for 60,000 individuals there was just incredible and what he's trying to do now is knock off Elizabeth Warren let's put it this way if the Democrats keep the Senate and shared Brown loses guess who's going to be the ranking Democrat on Senate banking Elizabeth Warren Yeah enough of an incentive I'd rather Ally with a
ripple guy than see her become uh get into that position so if you're listening you're Massachusetts freaks get on get on the uh the sidewalk start knocking on doors it's time how there a question we talk about a lot here in the comments like how do the people of Massachusetts put up with this are they proud of her I I can't imagine that they are but Well he accepts Bitcoin um he see he uh I think I saw um metal law man James Murphy um he's challenging a lot of us to step up and donate
Bitcoin i' right at the moment you know we I I run a mixed company and I don't make political endorsements but the closer the more I learn about what Warren did here the the more I realize she almost killed my company and she was targeting our industry and I'm coming pretty close to making that end and thinking hard about Making a contribution so um bitcoiners who care about the US market um go look up uh his he does accept Bitcoin so um give give some thought to it I won't recommend it but give some thought
to it Elizabeth La you came out you came at the wrong woman we're gonna win Kaitlin thank you for joining us thank this was great really fun really great and uh we'll do this again we let's let's uh let's do a mining one at some point soon got to get you to w Ying Bitcoin Research Institute at the University of Wyoming um we this state is all in so we'll get you here sometime soon well I got will Cole Shilling me Wyoming literally every day so I'm going to make the pilgrimage soon so thank you
keep up the fight and uh we'll do this sooner than uh two or three years between uh this episode and last episode we recorded enjoy night yeah you too thanks a lot peace love freaks
