Paradigm Shift: Breaking Down The CLARITY ACT

Rob & Jesse Breakdown the details of the Bill Known as the CLARITY act and how it effects Markets,

Transcript

SPEAKER_02 0:01

Welcome back to the paradigm shift. I am, of course, Big Rob back with Jesse. How you doing, buddy? DJ Jazzy Jesse in the house, ready to go. All right, let's get it going. Today, we are going to talk about the Clarity Act and government corruption. Corruption in Congress. But mostly we're going to unpack the Clarity Act. There was a lot of over a hundred attempted amendments in this bill. And not many of them got through. But we're going to talk about some of them because people need to understand the malicious nature of some of these politicians when it comes to you as the average retail investor or just American citizen in general, right? People blind don't really follow along with some of the amendments with ill will some of these uh congressmen and women try to pass that are detrimental to you, and then you vote for them again.

SPEAKER_00 1:06

Right? Hey, that's the American way.

SPEAKER_02 1:10

I'm looking at you, Elizabeth Warren. So uh yes, the Clarity Act. So we've got uh I've got a handful of amendments. We've got some I've got a list of uh ones that were that are good for retail investors, and then I have a list of some that are detrimental to American retail investors. So we'll go one for one.

SPEAKER_00 1:32

Well why why don't we start with just a little background on what is the Clarity Act? Why are they making it? Why now? Good idea. Yeah.

SPEAKER_02 1:45

Far away. You got it, you got anything? You want me to start?

SPEAKER_00 1:50

Oh, okay. Well, let me go then. No, I I would say um, so for for anybody who's unfamiliar with this, Clarit Clarity Act relates to digital assets, uh, specifically the cryptocurrency marketplace space, etc. And in order for this to become a valid, uh regulated um let's say a marketplace that's taken seriously, that significant investment is in, and it's starting to be there uh thanks to the various ETFs, is that uh you have to have regulation, you have to remove risk from those various investment players, whether they be on Wall Street or or somewhere else, right? We got to remove the risk. And so um some of the some of the issue with I think the Clarity Act is like stable coins, for example, um, like tether USDT has gotten so large uh it's completely unregulated. It's it's like a runaway freight drain of uh uh of a crypto project, and there's things like that that there really needs to be uh laws around. And um more importantly, I think they would refer to it as uh guardrails. So that's kind of how I see this thing. It it's years and years in the making, and it's very, very difficult to get it pushed through.

SPEAKER_02 3:20

Yeah, and at the end of the day, to kind of you know give my quick little synopsis on it, basically, if if we want to see smart money, big money, capital flow into the digital asset space similar to the stock market or the S ⁇ P 500, uh, which is the same thing. I don't know why I just said that, but um you need these these guardrails in place, like like you were saying, Jesse. Um otherwise they're just not gonna play ball, right? That's that it's too much risk, and then you just have like to quote unfortunately Gary Ginsler, the Wild West, right? Where they will dabble, they will manipulate the market, but if you ever want to see the market cap of this entire asset class move up uh and continue to see adoption stuff, you need that capital to flow in. You need institutions, banks, and so so on and so forth to be coming into this space, whether you like them or you don't like them. They are a necessary evil.

SPEAKER_00 4:19

Yeah, and I I think we're really separating the good projects from the shit coins and rug poles, right? And there's more than enough of those. There's so many examples of uh that happening. There's misappropriation of customer funds. Uh, you know, you saw what happened with Luna that spiraled into Voyager and Celsius and all these various entities that went down in flames and you know, misleading statements, all these, all these different things. So really there needs to be a a framework. And so I think it's it's overdue. Uh, you know, really, you know, when this market cap passed a trillion, uh, they absolutely should have done it then. But the reality is, is you're dealing with politics, and politics are what they are, and sometimes the can gets kicked down the road, and here we are, right?

SPEAKER_02 5:14

Well, let's be real. Even at a trillion dollars, they they still just were not taking the asset class seriously. You still had your uh you still had your Black Rocks uh and your JP Morgan's calling it uh a pet rock and you know all that kind of stuff. But now all of a sudden they're they're elbow deep in the space.

SPEAKER_00 5:36

They're elbow deep in Ethereum rocks, right?

SPEAKER_02 5:40

Yeah, exactly. It's just interesting how that uh how that kind of played out. But uh meanwhile, they were probably buying the whole time. But but anyway, if I'm hoping most of you know what amendments are, right? Jesse, can you break down what an amendment is just so that everybody's on the same page before we continue? There's people who are probably not from the states, if they're listening overseas, whatever the case might be as well, right?

SPEAKER_00 6:05

Yeah, yeah. So typically you would have a legislature, whoever that may be, uh sponsor of the bill is how they would refer to them. And then you're gonna have like a co-sponsor or something like that. So somebody from one party, somebody from the other party, um, they're gonna have their team put together a framework of what they want to see in this prospective bill. They're gonna put it out there to um to you know the different uh houses, right? So you can go to the house, you can go to the Senate. And when it goes in there, everybody else gets to see it, and then they get to try and add on what they want to see in this bill or what they would like to see removed from the bill. And ultimately it's one of these things where you know that love it or hate it, this is how democracy works, that what you propose may not ultimately be anywhere near what you get at the finish line. And I think Brian Armstrong and Coinbase are learning that uh very intimately throughout this whole process, especially as I think Coinbase is a great example that they've uh they realized they needed a lobbying sort of wing for crypto. They've dove into the pool head first, but they're realizing that they're there there's some nuance to this thing, and I don't I don't know if they're quite there yet. So, anyway, yes, that's kind of how a bill works. That's and how the amendments get added, and I'll let you take it from there.

SPEAKER_02 7:37

Yeah, to quickly just kind of expand on Coinbase briefly before we get started here. Uh talk about a wolf in sheep's clothing, right? We have a company that has represented themselves as being uh trying to fight for the average retail investor in terms of yield, which is a big talking point in this build is the ability to stake uh your stable coin, which is uh a coin pegged to the US dollar in terms of value and gain yield on it, right? Now you have exchanges offering an average, I'd say, of three to five percent, right? Something along those lines, uh, depending on the exchange. Banks obviously don't want that to happen, right? Because they give you 0.01% or something like that, and they like it that way, and they know that or they're they fear that people will run to exchanges and stake their their idle money there in the form of stablecoin for five percent as opposed to 0.01% in your in your local savings account. But I digress, uh, going back to Coinbase. Now, Coinbase fought this, and everyone thought that it was because you know they were fighting on behalf of the retail investor because they were saying that they were fighting on behalf of the retail investor, right? Brian Armstrong was on TV saying this is not fair to the American people, and when really what it was was that a lot of people don't realize 19% of Coinbase's annual revenue, which equals, I think, almost two billion dollars, give or take, uh, is from their own stablecoin yield that they gain. So them with this bill passing with no yield on stable coins, Coinbase is giving up almost two billion dollars annually in revenue, 19% of their of their annual revenue. And I was saying that before they altered the bill. I said Coinbase isn't doing this for you, they're doing this for their 19 you know percent annual revenue. And sure enough, people people argued with me about it on YouTube and stuff, and oh no, Brian Armstrong's he's a superhero for the people, right? And then all of a sudden they amended it a little bit so that Coinbase could still gain their yield, but average retail investors could not. And now Brian Armstrong is perfectly fine with the bill as structured now that Coinbase can keep their 19% annual yield. Suddenly he's not fighting this bill anymore.

SPEAKER_00 10:07

Yeah, that's that's interesting. And and you know, for context on this also, I I think you're really kind of hitting the nail on the head because what what people got to realize is that Coinbase is domiciled within the US. They are not offshore. The offshore exchanges all have their own token. Coinbase does not because they're in the US. Now they do have a publicly traded stock, but they're missing all the benefits of like a BNB that what BNB gives Binance, right? And so if you think about it, they're they're functionally not competitive because of U.S. law. So that's why they're fighting this as hard as they can to be more competitive and on a more even footing with the Binances that are out there, right? And at the end of the day, is it all about the the people? You know, that's probably debatable, right? But I think what it does do is it makes them more competitive while still being US-based.

SPEAKER_02 11:12

Yeah. I think as a as a as the people, as the average retail investor, I think you're lucky to be considered an afterthought. True. Yes, true. You're you're what they talk about around the poker table later. And hey, what about the people? Yeah, screw those guys. Basically it. Yeah. All right, so let's get into these amendments a little bit. So, first, we're gonna let's go with a with a positive one first. So, amendments are provisions that were good for retail investors. Keep in mind not not all of these passed, right? But the point is to show the intent of some of these politicians, right? Uh, insider resale limitations uh um on assets. So you've got uh basically strengthened by adoption lummis amend uh amendment. So Cynthia Lummis has always been a champion for crypto, as we know, right?

SPEAKER_03 12:14

Yep.

SPEAKER_02 12:15

Uh on insider trading rules. Um so caps and insider affiliate resales to the public over 12 months to curb dumping and manipulation or insider trading protects retail from coordinated sell-offs that crash prices explicitly designed to reduce market manipulation risks. So we do need that. That is very, very good because how often do we see these uh these token unlocks? Now, here's a caveat to that, though. It's not always ill will. You take a project like Ondo, for example, who has like a 30% token unlock annually in January for the last two years since they've been around, right? That sounds awful, right? However, holders are incentivized to not sell their tokens, they make more money holding their tokens than they do selling them, right? So it's more financially beneficial for them to not dump on the market. So for the last two January since they've been around, I have been able to long on the day of the dump, or the not the dump, the day of the unlock, because what happens is people fear it, right? So they start to sell off leading into it, and then it doesn't dump. It's a self-fulfilling prophecy. The price goes down out of fear that the price will go down, but then on the day that it's supposed to unlock, nobody sells their tokens that have unlocked, and then I put in a long, and I think I gain like a 26% move to the upside on it uh in like two days because you have to know the nuance of these things, right? So while I do agree with this amendment that we do have to protect retail investors because let's be honest, how many retail investors on average look into this kind of stuff? Look into what the token unlock schedule is, uh, or anything like that when they buy something?

SPEAKER_00 14:12

Very few, very few. It's just what happened. Yeah, very easy to get uh dumped on in that that whole scenario. And you know, truthfully, I mean, I've I've seen this play out multiple times uh where the the longs, you know, those who got in early get dumped on uh by a project by potentially an early investor. You know, I I remember one project where the uh where the founder had an investor that was involved early on that the moment in one live dumped everything, totally caught him off guard, and he was like, what? You know, and it's it like tanked the whole the whole project, you know. But again, that that person who was selling, I mean, they didn't they didn't care about anybody else and they're they were just following the rules that are out there, which is no rules, you know?

SPEAKER_02 15:09

Yeah, that's exactly it. And this prevents that kind of a thing, right? Because let's be honest, that should be a securities transaction, anyways, right? If you're if you're if you're having all of these initial investors or you're giving tokens away to these um to these companies or or individuals, uh, and then their token unlocks come along and they dump them. I mean, you're you're selling them to them early, it's kind of a securities transaction.

SPEAKER_00 15:39

It is a securities transaction. So that that would fail the Howie test in the US. So that would be labeled the security if you were the project and you gave it to an investor prior to the uh market being able to get the coin. That would qualify as a security. So yeah.

SPEAKER_02 15:56

Yeah, you're guaranteeing a return, right? Yep.

SPEAKER_00 16:00

Yep.

SPEAKER_02 16:01

So so I do like that. Obviously, it's by Cynthia Lumis, so I wouldn't expect anything less uh from her. Uh amendment provisions, which are bad for retail investors. Uh prohibition on passive yield. So we we kind of touched on that one. So your idle stable coins can no longer gain uh APY, APR, however you want to word it, um, just sitting on an exchange. Now, the banks lobbied for this because, like I said before, they want to offer 0.01% uh on your fiat in your savings account as opposed to three to five percent on Coinbase or wherever else, right? Crypto.com, whatever. Now, this is obviously a screw job to the retail investor, and the reason for that is because banks could have argued and fought for the ability to offer the same yield as an exchange, i.e., five percent, three percent, whatever on your fiat.

SPEAKER_00 17:15

Wait a minute. They could have fought. You you're telling me you think the bankers are gonna offer their customers more money. I'm saying they could have. Oh, they could have, right, right.

SPEAKER_02 17:29

They had they had two options when it comes to art fighting this, right? They could argue to be able to offer more yield on your fiat, or they could try to bring how much yield the exchanges could offer down to their level, and they chose to do the latter, screwing over their own customers, right?

SPEAKER_00 17:52

Hey, it's the American way.

SPEAKER_02 17:56

Well, it's it's the it's the American way, but at the same time, the way that the banks did this for me is un-American, and I'm not even American. It's un-American because what they did was they tried to stifle any sort of competition which is anti-American.

SPEAKER_00 18:13

Well, it's not just anti-American, that's anti-um monopolistic, right?

SPEAKER_02 18:18

No, yeah, it is monopolistic.

SPEAKER_00 18:20

It is monopolistic, that's what I'm saying. Yeah, it is monopolistic, and America is historically anti-monopoly, you know.

SPEAKER_02 18:28

Yeah. So at the end of it, you know, the banks were trying to do what was good for them. Now they said their argument was that they're scared that there's going to be suddenly going to be a bank run, and everyone's gonna take all their money out of their savings accounts and put it all into an exchange to gain that yield, right? There's one problem with that argument. Coinbase, for example, has been offering three to five percent yield on stable coins for over seven years, and we have not seen this uh this bank run on people's savings accounts in seven years. Why would it all of a sudden happen? Is this bank run in the room with us now?

SPEAKER_00 19:19

Maybe, right?

SPEAKER_01 19:25

What are your thoughts on that?

SPEAKER_00 19:27

Yeah, you know, the funny thing with a bank run, fundamentally, I I kind of have a laugh about it because I feel like, and I know this isn't how banking works, that a bank should have those assets one-to-one. So if you want to off-ramp your assets out of the bank, you should be able to do so at any point in time, regardless of how many other people are there at the bank to get their assets. What you're telling me is that you can't withstand that because you don't have the assets one-to-one, you've got a fraction of them, right? I mean, this is kind of the paradox of a of a bank run is that you've borrowed out all the money, you only actually have a fraction of the money, and you know a bank run can sink your whole company, right? And the funny thing is, the the irony in this is I think the the banking lobby and that whole side in general likes to sort of discredit the crypto side of things by saying, Oh, yeah, they couldn't withstand a bank run. Oh, look what happened to FTX, you know. Yeah, they had a bank run, and and look, it all went under. Well, it went under because he was disorganized, but they actually paid back the creditors like 150%, which is insane. That's pure insanity. You know, they were profitable and they went bankrupt, right? So figure that one out. Now, on the other side, if you went to your local bank and everybody went there at once and pulled the money, I mean, what what does it take? Like 30% of the total value that's supposed to be there is gonna sink this thing, you know, the other 70% you just don't have.

SPEAKER_02 21:11

Yeah, I think they have um, I think it's a uh 10 it's a 10% uh or sorry, not a 10%, it's like a 90% borrow rate or something, right? So they can borrow up to 90% of what you have in your account. They can they can 9x it basically, right? So if you have you have 10 grand, they can borrow like 100 grand, so to speak, right? Or the sorry, not borrow, but they can lend out that money that they don't even have, right? Correct, right.

SPEAKER_00 21:39

So so really really the fundamental problem here is the banks in the US are too aggressive, way too aggressive. They're so aggressive that they don't even have a fraction of what you think they actually have. You know, and I I know I've told you about this before on the side, but I've run into this myself. uh personally with capital one a couple of times. And you know, one of the things with Capital One that gets me is that whenever I try to do a bank transfer in or out of Capital One, it takes it nearly a week. A week. Like it's 2026. You know, whereas if I did a crypto transaction to a wallet, instantaneous, borderless, all the way around the globe and back again. You know, figure that one out.

SPEAKER_02 22:29

Well I I remember reading a story here in Canada. There was a guy out east that uh I was listening to his story uh on the news he went to his bank to take out it was I don't know it was like eight grand or something like that. He wanted to buy a boat from a friend. Right? So he goes to the bank and says I want I need eight grand cash and they they say to him well what do you need it for? Yeah they want to know they want to know yeah none of your business and they're like well we need to know what you need the money for so he ends up telling them he wants to buy a boat from a friend.

SPEAKER_00 23:06

You know they told him go to your friend we need you to bring us uh a bill of sale like a like a uh receipt to prove that that's what you're using the eight grand for before we'll give you the eight grand even though why yeah yeah yeah even though it's his money right right they like I I couldn't believe what I was hearing but that's the world we're living in when it comes to fiat right and this banking system it's they say like I believe it's even in the fine print of the law that once you deposit no different than depositing crypto by the way once you deposit money into a bank account it's not your money anymore technically yeah yeah and just like with a crypto exchange if the bank goes quote bankrupt you stand in line as a creditor and you get a fraction back of what you actually put in there and you you you're last too right yes just like you are last right yeah yeah the the the the other companies and businesses and whales and important people they are all at the front of the line you're the last guy and they're like oh there's a couple crumbs left if you want them right yeah yeah you know I remember I had a uh former boss that um he was telling me he had a house this is probably like 10-15 years ago and it was in this particular area with a really good school district so all of the houses there appreciated like within like a year or year and a half two years like a good 200 grand over where everybody bought them right so he was like I'm selling that shit like sell it immediately you know so he sells it he gets his 200 grand difference you know minus his mortgage whatever it was and he he told us he's like yeah he's like I went to the bank and he said I want to cash this check and it was like 200 000 he's like I want it in cash and they were like like they completely errored out they were like well what you know and again they did the same well whoa whoa whoa what do you need it for none of your damn business why need it for cash it here it is and they were like God uh duh well we don't have that in the bank yeah you know what do you mean you don't have that in the bank you're a bank you know yeah last time I I I think the last time I tried to take out I don't even call it a large amount but I think last time I went to the bank to withdraw money from a teller I asked for five grand and they couldn't give it to me. I could see that yeah they're like we can give you three right right yeah so you you know what that makes me think it makes me think that the the banks are operating on very tight margins and this is why banks get bought up all the time why why it's constantly Pac-Man and you know they're eating each other right you can kind of see how that goes down because all it takes is a few not so good investments on the bank side and the whole house of cards goes down you know but then the funny thing the irony here is with this all the crypto stuff is they try to point out the quote illegitimacy of cryptocurrency yet honestly I could probably argue just as much if not more so the illegitimacy of TradFi you know well that's just it it's it's like they say when you point one finger three point back at you right or whatever the case might be yeah so it's it's exactly it they they say these things about um about digital assets but it's really exactly the same scenario for them. Yeah in fact in some cases it's worse like uh they say well we can't first of all Elizabeth Warren will say we can't track uh crypto transactions uh yeah you can tell me you don't understand blockchain so either you don't understand what blockchain technology is or you're lying it's one of the two right yeah yeah well I think on the one hand if you were simply saying the immutable ledger right every blockchain is a ledger it's a it's connected blocks we can see every single block in the chain that's why it's called blockchain right so you can see the paper trail on that chain now I can see the argument with like tornado cash so anybody who doesn't know tornado cash this is what North Korea uses when they steal billions of dollars out of various crypto projects and I I've heard the analogy like this it's like a getaway vehicle that rob the bank it's drives into a warehouse and like 18 vehicles drive out what do you do yeah how how do you ever how do you ever recover even a fraction of that well it's extremely difficult so I I can see you know wanting to put guardrails against the tor tornado cash in entities like that because that's facilitating money laundering but if you looked at it like just on a one-to-one no that doesn't make sense right yeah that's exactly it it's those third party uh you know tornado cash type projects that that make it difficult to track it's not blockchain technology itself no if anything you could argue but again you could argue the exact same thing about fiat how are you tracking uh you know a million dollar you know drug deal or something like that how are you tracking that fiat when they show up with a suitcase a briefcase full of money like where's where's the where's the tornado cash you know company that's mixing you know what I mean like it's it's not just as non-traceable yeah yeah yeah you know a lot of uh Pablo Escobar's cash fortune has never been found where'd that go who knows yeah this is buried somewhere you know yeah buried uh back to the good ones here uh you get to keep your own crypto wallet self-custody so that's another positive one that they're that they're uh putting in there that you're allowed self-custody which to me is kind of honestly kind of like fuck you too you know like what do you mean I'm allowed to hold my own money is basically what you're saying thank you yes say thank you he didn't say thank you like what it's mine of course I'm gonna hold it right the second I put it on an exchange it's not mine anymore right right yeah that's that's ridiculous but I'll take it but at the same time you know like what you know yeah um we'll do another one for the good uh they have to teach you basics so every crypto app or site must give you simple explanations about risks scams and how crypto works which is I mean yeah I mean you should you should have that but at the same time that's kind of like how do you put responsibility on an exchange for a person who chooses not to educate themselves on something before they buy it think of it like this it's like a uh disclaimer on a pack of cigarettes right or the the thing on the McDonald's coffee cup that says coffee could be hot no shit you know but they actually had to do that because someone sued them at some point said they didn't tell me the coffee'd be hot and they're like seriously that wasn't implied and they're like nope and then you know and now it's on yeah oh boy yeah I mean that is a good thing but again it just it goes to what you said like it's it's should be kind of implied but yeah uh what else do we have for the bad ah yes there was this one um or well actually kind of I want to piggyback off the last one that was bad uh in regards to yield because there was another kind of side effect potentially for that had it passed right and that was that it would have drove a lot of centralized exchanges overseas right which kind of and that was an Elizabeth Warren thing right so you combined that with the um there was another one that made it so that uh hot wallets as well would have to go overseas right they were going after decentralized uh applications right okay so it would drive them out of the US as well now you combine those two and what do you have you have Elizabeth Warren creating a scenario where the average American retail investor has extremely limited access to anything outside of your top cap projects that are on something like Coinbase for example right your Bitcoin your Ethereum your Solana your XRP anything basically outside of that retail investors would not have access to outside of a VPN how is that good how is that Elizabeth Warren helping Americans great question great question I think you know anytime that you have a new and emerging field or technology or business or marketplace I mean this is all of those right you need to always facilitate innovation promote innovation and you know one of my fundamental hangups with the the entire Clarity Act and Congress and I know I've said this before but I'll say it again is you know the SEC is like a square peg and a square hole yeah you know uh the CFTC the commodities exchange that's like the circle peg and the circle hole and this one's like an oversized star and they're trying to mash it into both of them and it's like what like no like it it needs its own thing to fit into like it is it is fundamentally different. It is fundamentally different in a bunch of different ways and just try and like you know put it in a box it's kind of like taking like an independent voter and saying well you're either Republican or Democrat and it's like maybe you're neither you know truthfully maybe maybe you know you're a little bit of both but truthfully you're neither one you know and that's kind of how this is it's neither you know like it needs a framework.

SPEAKER_02 34:15

Yeah uh I absolutely agree uh which kind of is a good segue into uh another one that was bad which was again Elizabeth Warren and she tried to create a scenario where there was ambiguity between who had control over digital assets she tried to keep that area as gray as humanly possible so so that Gary Ginsler 2.0 could come in and say well there's no real rules per se so let's just sue everybody right yeah which is what he did that's exactly what he did right yeah but she tried to do that she tried because they're trying to uh in this bill they're trying to give basically the majority of digital assets uh oversight to them to the CFTC right which and a side note uh you also now have uh congress trying to get Trump to increase the size of the CFTC because if you don't know this listeners the CFTC is actually a fraction of the size of the SEC so if they're gonna oversee millions of projects obviously they need to expand that uh that that agency right um but that would be better for digital assets because it would label them commodities not um under the guise of the SEC who is responsible obviously for securities and securities transactions now there's caveats to that stuff like uh initial coin offerings like we touched on earlier those sort of transactions like with XRP's initial uh uh ripple's initial uh ICO was uh declared securities sales right so a sale wrapped a certain way can be a securities transaction but it doesn't make the asset itself a security right right so in saying all that can you tell I followed along with the with the ripple case like in saying all that it would be better for investors if the CFTC oversaw uh the general digital asset space uh when it when it because you're not gonna get someone like Gary Gensler 2.0 coming in and labeling everything of security again. What do you think?

SPEAKER_00 36:51

Well you know what's really ironic though with that position is that the Trump administrate administration has fundamentally gutted numerous uh sections of the American government um also trump 2.0 has filled even less positions than Trump 1.0 which was running at like a graveyard shift with half the half the freaking people weren't even there right so what's what's interesting about saying that they would have to ramp up a government entity to manage this is fundamentally against the current administration. I don't even know if they realize that because I don't think they think down the road in anything that they do truthfully yeah I agree it's kind of it's kind of counter what the current administration you know kind of believes in but I mean it's just a side effect of expanding and and adding adoption you know to the to the digital asset space.

SPEAKER_02 37:55

And speaking of the administration uh another amendment that was introduced that was considered a bad amendment for retail investors but I respectfully disagree I feel it's a good amendment for the retail investor and that is that the uh the current administration or no administration in the White House or their family members would be allowed to invest in or be involved in cryptocurrency projects while they're in office I don't see how that's bad for the average retail investor because we all know unintended for the most part the only one who made any money in the last bull run was Trump.

SPEAKER_00 38:43

Yeah I I was gonna say I have a lot to say on this topic in particular. Fire away buddies okay so first of all I agree with you 100% that if you were in elected office you should not be able to front run any investment vehicle period any of them and right now in the American government front running is completely out of control. And the kicker is that if you or I were front running we would go to prison okay there are people in prison for front running and insider trading so there was a there was an article that I just read this morning on this and um you probably haven't heard this so let me kind of delve into this a little bit. So all along Trump 2.0 every couple of days whenever something crazy happens in the market there's usually a post that says somebody has insider info look at this look at this uh trade they took out look at this thing that happened where they made 200 million dollars in 15 minutes look at this stuff who the heck is this who's trading right no one ever knows no one knows who it is but clearly there's someone or some people doing it because it's it's being identified every time it happens and it happens every let's say like 10 days ish somewhere around there something happens right well apparently Trump had to disclose his first quarter uh stock trades and there are so many trades that it averaged out to I think it was 62 trades per day per day of pure front running. Okay and so clearly there is some sort of obviously he's not doing this himself you know clearly there is some sort of entity that he's tied to somehow or the or the sons are tied to that is front running everything that's happened. And so like there are multiple examples of it with NVIDIA with Palantir and they did it uh prominently with Dell. So Michael Dell and his wife uh donated something like five or six billion dollars in some philanthropic uh effort right and so from that donation Trump then took out a position in Dell okay what happened after he took out the position he announced their donation and you know what happened with the stock it went up like a hundred percent yeah so he's been doing that the whole time and the amount of what a coincidence what a coincidence right and and and here's the crazy part okay this is this is the part that'll just blow your mind is that you know you and I uh fundamentally know about Nancy Pelosi being the best trader of all time uh thanks to uh prominently the Pelosi tracker on X right and really what what's it following? Well it's following her husband Paul Pelosi in his trades and whatever and so he's been front running the whole time okay and the most he ever made in one quarter was five million dollars which for context was like crazy because it's like come on dude you're front running and you just made five million bucks Trump quarter one 750 million boom blue muscle 150 million I mean you know this is where they where where the argument's like oh yeah but he did it first yeah he did do it and yes he's been front running for years but not at that level not at that level they're both dirty is the problem they're both bad you know and you know like another really funny example of this is uh in in for a penny in for a pound scared yeah absolutely absolutely right um are you familiar with Marjorie Taylor Green yeah okay so she she was kind of like a firecracker personality you know southern state uh legislator whatever and for a good five years she was kind of a hard nosed sort of Republican always supported Trump et cetera well at the very end here the last couple of months she had this falling out with Trump over the Epstein files in particular right because one of the big MAGA talking points forever was release the files release the files release the files well obviously Trump's mentioned in them 38,000 times so now they're not releasing the files and so Trump got in a shouting match with her and another coincidence another coincidence right so basically she steps down okay now what's funny about all of this is is really none of that. The funny thing is that when she joined Congress she had a net worth of $7000 when she left five years later Marjorie Taylor Green had a net worth of 27 million. And guess What a coincidence. Yeah, what a coincidence, right? And now and now guess where she is today. Do you think she's still in her home state with her constituents? The answer is no. She just bought a five million dollar house in Costa Rica. Yeah. Yeah. So, you know, the the front-running corruption in Congress is insane right now. And everybody knows that with Trump there, that you know, Trump never divested his businesses, his assets. He never disclosed his tax returns. These are presidential norms that have been in place for like hundreds of years. He's never done any of them. Why? Because he's hiding everything all the time. He doesn't disclose it. So, you know what's funny about that one, too, is somebody did uh disclose his tax returns. And in doing so, he then sued the government. And apparently we're about to settle with him for like another billion dollars plus over his tax returns, where he cheated on his damn taxes. So again, me and all the regular people that are trying to play by the rules are getting absolutely screwed while everybody in Congress is taking advantage of it. Democrat and especially the current Republican, you know?

SPEAKER_02 45:29

Well, the thing is that we just let's be honest, this is the fault of the people who vote, right? Because we just allow this stuff, it just it happens because nobody does anything about it. No, right, nothing is done. There's no consequences, they don't get voted out, right? Like Pelosi, how long has she been there now?

SPEAKER_00 45:53

Two months, she's in her 80s, yeah.

SPEAKER_02 45:57

And this isn't new, right? Yeah, people are basically it's called passive permission, right? When someone is doing this, it's blatantly obvious you are, and I say this, I must stress, I say this non-sarcastically. I say this literally. You are the best investor trader the world has ever seen. Right? We know what you're doing, and people still vote for you to be there. Yeah, that is passive permission. That is people with their votes saying, I'm okay with you using insider information to while you're on a six-figure salary being worth eight figures because of your market manipulation or not necessarily manipulation, but your your insider trading that you would send me to prison for 25 to life for. But I'm cool with you doing it, bro.

SPEAKER_00 47:02

Right, right. Like, like, think about this metric, right? If if the average person, let's just say, completely average person, you, me, let's say we make 50% of our trades, we get them right. 50% are right, 50% are wrong, right? Let's just say that's the average person. Pelosi, Trump, Marjorie, Taylor Green, they're getting like 90% right. What that is fucked up. That is fucked up. Okay. I mean, come on now, come on, you know.

SPEAKER_01 47:36

And they're like, they're like when they're asking, what? I don't know what you mean.

SPEAKER_00 47:40

Yeah, yeah. What do you mean? And then they go, you know what? I'm gonna retire. It's time for me to be done. I'm I'm going to Costa Rica with my five million dollars.

SPEAKER_02 47:51

What? Come on. Uh, and again, it really what it really boils down to for me is the fact that it's not really as much that they're doing it, but it's that if you did it, you would go to jail for the rest of your life. Right. That is the problem, right?

SPEAKER_00 48:11

Yeah, and so again, we're trying to get this framework, let's say, right. That's the term, get it right, right? And we're trying to get it right, and we're trying to make it honest, and something like that, you know as well as I do, is never going to get approved because they want to front run that just like they want to front run everything else.

SPEAKER_02 48:34

Oh, yeah, they got to take their positions first, right?

SPEAKER_00 48:37

And you know, I I think you highlighted a really good point earlier, and and this is also where uh Trump 2.0 is very different from Trump 1.0, is that 2.0 is very much it, it has the the tech bro ethos of uh I think it's like the run run fast and break things, right? So it's basically they're moving faster than the law can catch them, right? And and like the tariffs is a great example of that, completely illegal. Well, how long did it take them to figure that out? Like a year, you know, okay, great. All right, what's the next thing? It's like, well, well, now we're gonna redo the tariffs based on this other obscure 1974 law. Okay, so it took months later. Guess what? Illegal. Okay, great. And so, you know, like like half of the problem here is the law system in the US ties this stuff up indefinitely. And and frankly, I mean, this is what Trump's done his entire life. He ties things up in in this legal, endless loop that just goes round and round and round and round, and eventually time moves on, right?

SPEAKER_02 49:46

Yeah, yeah, it just wraps everything up in litigation and moves on as though it doesn't exist. Pay some lawyer to to keep you know spinning the spinning the wheel.

SPEAKER_00 49:56

Yeah, yeah. And so ultimately, again, I mean, I I can totally see why that one would never get approved, even though to the to the average person, it should be obvious, because if it was you or me, we'd be uh sitting in jail.

SPEAKER_02 50:12

Well, the irony of it is that it's it's literally Congress, congressmen and women who are guilty of insider trading who are trying to point a finger at the administration and say, we want to stop you from insider trading because it's morally not right. Uh okay, how about we stop you too then from from front-running the stock market, right? What what the hell are we talking about here?

SPEAKER_00 50:38

Yeah, yeah, yeah. You know, it kind of reminds me of like if you looked at the Supreme Court and you said, Hey, I need you guys to police yourselves by putting in age limits and an ethics code. You think they're ever gonna do that? No, of course they're not.

SPEAKER_02 50:54

They would immediately find a way to pass a law that prevents them from having to do that.

SPEAKER_00 50:58

Right, right. So they're they're never gonna do, they're never gonna police themselves, just like all the legislators are never gonna police themselves. And what makes all of this worse is the Supreme Court verdict that basically made the president a king, where he can say at any point, um, you know, anything that happened under um my administration was all just they therefore is official duties. That's the term. It was official duties. Uh, me front running and making 750 million quarter one was official duties, and by the way, I'm pardoning all of my family. Yeah, you can't do anything.

SPEAKER_02 51:36

Well, it's not that's the thing is it's not just it that that doesn't just protect him and his office, but even bureaucrats, it protects. Gary Ginsler is a perfect example. Gary Ginsler destroyed the financial futures of untold millions of people over his tenure at the at the SEC. And he is completely and utterly safe and protected, shielded from litigation because of these rules, these laws that are put in place to protect anything that they decide to say is official duties, right?

SPEAKER_00 52:12

I don't know. Did did Biden pardon him at the end? I don't know if he did or not.

SPEAKER_02 52:16

No, he didn't need one. He's completely protected from litigation. You're not allowed to sue a bureaucrat that runs uh an agency like the SEC or CFTC if they cause damage to your uh finances based on their official duties in office.

SPEAKER_00 52:34

You know what pissed me off about Gensler? Now that I'm on a now that I'm on a hot kick here, what's pissing me off? Let me tell you about Gensler. You don't really grind my gears. What grinds my gears about Gary. Yeah, you know what does it with him is that he's kind of like a cop, right? So he's like a police officer that he's he has a designated city or county, and instead he's policing a completely different city or county that he has no jurisdiction over, that he's arresting everybody. He did it his entire time he was in office, he's trying to take them all to court, and lo and behold, he's got no legal grounds to stand on. And what's he doing in the meantime? He's pissing away resources and a ton of taxpayer dollars. And on top of all that, he's again stifling innovation in America, which is anti-American.

SPEAKER_02 53:36

Yep. Yeah, he will go, he will go down in the history books as a villain in the United States. He held back innovation for his entire tenure uh as a bureaucrat, uh, trying to make decisions that he was not voted into office to make.

SPEAKER_00 53:55

Right, right. Yeah. You know, imagine going back in time to like the Rockefeller, Henry Ford, or Hershey or Flagler, you know, all the all these all these big names, right, that were all involved in early innovation, you know, all different ways, you know, candy, railroads, you name it, right? Imagine if if the US government had said, you know what, we're gonna make it as hard as possible for every one of you to do business, and you're just gonna have to go somewhere else. Like, like, first of all, the country would be like half of what it is today. I mean, look at all the jobs and all all the all the prospering that came about from these guys. Like, yeah, the guy may be an asshole, but regardless, you can you can't ignore the downstream effects of him being based in the US, you know, and and that's what they're doing with crypto when they're when they're trying to be anti-crypto and pushing it somewhere else. Somebody else is gonna step up to the plate and accept it, you know. Like uh a great example of this is so in in Florida here, years ago, the governor was fundamentally against light speed rail. Okay. So the citizens of the state all voted on it, and everybody said, we want light speed rail. And they said, okay, we're gonna start by building a line between Tampa and Orlando. So it took years and years and years for federal funding to finally be allocated. The funds were allocated, right? Billions of dollars, not like one billion, but billions plural. So the governor at the time, Rick Scott, who's still our senator because people keep voting for him, turned it down. He said, Nope, I'm against light rail. No. So, regardless of all the people voting for it, regardless of the billions being allocated, he said no. What do you think they did with the money? It went elsewhere. Pittsburgh said, Hey, we'll take those billions. And they went, All right, here you go, Pittsburgh. Florida doesn't want it. And all the people in Florida were like, What? What do you mean we don't want the billions of dollars? Scam. And then what we did after that, we went ahead and re-elected him. Let's make him a senator.

SPEAKER_02 56:09

Good job, man.

unknown 56:11

Right?

SPEAKER_02 56:13

The thing is, voters they don't look at what these politicians are actually doing, right? They just they see them on TV, they say a bunch of nice shit that that makes you think that they're good for you. But no one actually goes and looks at this stuff that we're talking about that they're doing. Because if you knew this stuff, you'd be like, What the hell? No, we don't want you. Yeah, but that's all swept aside. We don't talk about it, we don't dive into that stuff, right? So it's too bad, man. It's too bad. This has been a this has been a very hot, hot topic. We may have to do a part two to this one.

SPEAKER_00 56:50

Yeah, yeah, we we might have to, you know. Overall, um the clarity, I mean, it still hasn't even passed yet, right? It still has not passed yet. They're still kicking it around.

SPEAKER_02 57:02

It's gotta go to uh it's gotta go one more place before the president's desk. I don't know where. I can't remember what it is. House. I don't know. It just left the agriculture committee, right?

SPEAKER_00 57:18

Agriculture?

SPEAKER_02 57:19

What? Uh what's it called? I don't know. I'm Canadian.

SPEAKER_00 57:23

I don't I don't know the send it to the farmers, have them review it.

SPEAKER_02 57:29

The uh yeah, it just it's got one more step, is all I know before it gets to the president's desk. So we are still a ways away. They're talking about like the 31st of May now, before that becomes a possibility. And for me, the biggest scare here is that there's a lot of people that are new to this kind of stuff that are expecting once that act passes for markets to just start going parabolic, and that is a big problem, in my opinion. People are gonna get wrecked because it's just let's here's what's happening across the the financial YouTube or crypto YouTube. Here's what's happening. Once the Clarity Act passes, markets are gonna go pumping like crazy, yeah. But what about the two wars that are going on and inflation rising and all and the potential now a 30% chance of a rate hike this year and stuff? What about all that? Oh, that's nothing, right? The Clarity Act's gonna pass, so markets are gonna go parabolic. Don't worry about inflation rising and rate hikes coming like none of that shit matters, man, right? Yeah, that's the problem.

SPEAKER_00 58:38

Yeah, yeah. Yeah, you know what I think the problem is right now is it's like I was thinking about this the other day that I feel like it's been a really long time since we've had like a win, like just something good that we can all agree like that's a good thing, we're all on board, let's do it, you know. Like, and this could sort of be like the first one of like a Trump 2.0 that it would be a good thing if they could get this passed, you know, but it's like we're we're still just going round and round and round, uh trying to, you know, add something, pull something out, and um I don't know, you know. I I think somebody must have gotten Brian Armstrong's ear and finally said, Look, dude, you you gotta get behind whatever is coming along because this is your one and only shot. And so now all of a sudden he's starting to sing a different tune, you know.

SPEAKER_02 59:30

Well, I think a perfect storm would be the Clarity Act passing, maybe June, early June, or sometime in June, get the Clarity Act passed and having uh an end to this war with Iran at the same time.

SPEAKER_00 59:43

Oh, yeah, that'd be a relief.

SPEAKER_02 59:46

That'd be fantastic.

SPEAKER_00 59:48

But reality, right? We do live in reality, sadly, and no one even knows why we're there to begin with.

unknown 59:57

Yeah, yeah.

SPEAKER_00 59:59

So maybe next year. Yeah, all right. One of these days we'll figure it out if we're not front running the market. Yeah, if we're not, yeah. Uh final thoughts? Uh final thoughts. So Clarity Act, I would say, by and large, a good thing. I would say the crypto market needs regulation and it's needed regulation for years. Uh, this would hopefully prevent some of the shenanigans of the current crypto market, or at least impose some penalties and some, again, guardrails, right? You have to have that stuff in place. If you want more adoption, you need more guardrails. Uh, one of the things that I've been talking about for a long time, it's kind of the big tuna, is the uh retirement accounts in the U.S., which it still has not tapped into, even though I think Trump maybe put a an executive bulletin or something on that. Or they cross that out.

SPEAKER_02 1:00:59

We'll dive into that in the part two. Okay. Put that feather in your cap, put it, put a tack in it because that is another amendment that Elizabeth Warren tried to pass. So we will unpack that in the next episode.

SPEAKER_00 1:01:10

Yeah, exactly. Uh, but that's a big deal, right? I mean, if you can get into the retirement accounts in the U.S., that is a significant amount of money that is on the table, and uh currently not in it. So um overall, I think it's a learning curve for Coinbase and Brian Armstrong and their legal team. I think they're trying to create a crypto lobby for the first time that's never previously existed because they want to compete with banking, but the banking lobby is significantly more powerful than the cryptocurrency lobby that's apparent, uh, especially by you know Elizabeth Warren and her various bad idea amendments. So at the end of the day, where does it leave the average person? I don't know, truthfully. I I don't know. You know, I mean, I would like to say that it comes out and the US market can participate in a broader way, but it's already been somewhat stifled. It's a stifling atmosphere thanks to Gensler and Warren and others. Um I again, I disagree with limiting innovation. We should always promote innovation. Um it's a lot of things in one.

SPEAKER_02 1:02:30

Yeah. I think what I would say is my final thought is that I would encourage you as uh as an American citizen who votes, I mean it's as easy as asking AI if you want to, right? Just look up whoever whatever politician you're considering voting for, look up what bills and what amendments they have supported over the last handful of years and answer the question internally did their activity signal to you that they're working in a beneficial way for you or not? Because a lot of times you end up voting for someone who's actually been acting in a detrimental way to your personal interests, to you and your family, your state, so on and so forth, right?

SPEAKER_00 1:03:20

Absolutely, absolutely. I I I think you know, when you look at again, like the Marjorie Taylor Green or the Pelosi or Trump, they're they're all examples of it. Is look look where they started when they came in the door and when where they're leaving when they exit the door. And I mean, you know, they are getting paid a salary to be there, and yes, they can invest, but can they cheat? Can they legally cheat? This is the this is the fundamental problem here. They're legally cheating, and who's paying for it? You know, like on the on the backside of every scalp, every trade that you pulled money out, somebody lost money somewhere.

SPEAKER_03 1:04:03

You know, stealing money, yeah.

SPEAKER_00 1:04:05

Yeah, you're stealing money and you're putting it all in the pocket of somebody that uh what are we doing here and why do we keep re-electing this person? I don't know.

SPEAKER_02 1:04:15

Well, and to answer the rhetorical question, I know somebody out there is asking the reason that they're legally doing it is because there's not a single soul running the SEC that's gonna go after anyone in Congress. It's that simple. They can, but they don't. They wouldn't dare. Because Congress holds the purse strings for the SEC.

SPEAKER_00 1:04:45

At least they're supposed to.

SPEAKER_02 1:04:47

Yeah.

SPEAKER_00 1:04:49

Trump's challenged that a few times recently, and Congress hasn't really reasserted its power, which is kind of weird because that's how the the Constitution was designed. And while we're on it, you know, I would just say summing this up that I could equally do an hour of the Constitution on its own. But this is an another thing right now in today's day and time that I'm fund fundamentally struggling with is that a lot of the actions within our government, regardless of the party, are anti-American, they're anti-constitutional.

SPEAKER_02 1:05:23

Yeah. We live in a world where they feel they can just do whatever they want.

SPEAKER_00 1:05:28

If you don't hold them accountable, they can. Right?

SPEAKER_02 1:05:31

Yeah.

SPEAKER_00 1:05:31

Passive permission.

SPEAKER_02 1:05:33

That's the word of the day.

unknown 1:05:34

Right?

SPEAKER_00 1:05:35

That'd be a good episode title for this one. Passive permission. There you go. There you go.

SPEAKER_02 1:05:42

All right, guys. This concludes our broadcast day. We will see you again on Wednesday.

SPEAKER_03 1:05:55

Yeah, no kidding.

SPEAKER_02 1:05:57

All right, buddy. I'll talk to you then. All right. Shift out.