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Jonathan Skrmetti is the Attorney General of Tennessee. 

Matt Odell is Managing Partner at Ten31 and CoFounder of OpenSats and Bitcoin Park. 

EPISODE: 137
BLOCK: 856800
PRICE: 1689 sats per dollar

Recorded Live at Bitcoin Park in Nashville: https://bitcoinpark.com 

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(00:03) CNBC INTRO: Kamala Harris and Bitcoin

(01:53) Introduction to the Show and Guest

(02:50) Role of the Attorney General in Tennessee

(06:08) Comparing State and Federal AG Roles

(12:56) Bitcoin Basics and Sats Explained

(20:41) Bitcoin's Role in Global Trade and Financial Access

(24:49) Regulatory Concerns for Bitcoin Businesses

(27:14) Open Source Software and Bitcoin

(33:33) Legal Clarity and Innovation in Bitcoin

(37:25) Strategies for Bitcoin Advocacy and Legal Defense

(46:02) State vs. Federal Jurisdiction in Bitcoin Cases

(50:23) Suing the Federal Government: State AG's Role

(52:32) The Mystery of Satoshi Nakamoto

[00:00:04] Unknown:

Who think if you're a single voter on crypto, that this could lose her the election if she doesn't come out and embrace like, Trump was all for the not taxing tips. Now she's all for   do you think she will ultimately embrace crypto as an industry?   I I predict  

[00:00:20] Unknown:

her verbiage will. And I do think that that part of the reason why is you see Trump's speech at the Bitcoin conference. It's just a matter of competing for votes that she's gonna adopt a thoughtful position. Now speaking as an American, not from a partisan perspective, I think that's a good thing. I think we should want great debate in the marketplace of ideas. Even if she offers a thoughtful digital assets framework or policy, even if I don't agree with all of it, I think that'll be a good thing for the country. But what I challenge Kamala Harris to do is not just cite the pieties in the words. Go into detail. Say what you actually believe about self custody of assets. Say what you actually believe about whether you think Gary Gensler should continue to be in the the leader of the SCC. So I think those specifics are gonna matter a lot, Kelly. For sure. But is what you're saying is just a general position of openness is probably all the industry really is looking for. This idea that it's not a partisan issue, that Republicans are for it and Democrats are against it. It should not be a partisan issue. Now what I think you are seeing is this tendency to really embrace whatever wins her the most votes. But when you're looking at your question, Andrew, of how do you assess the seriousness of that, the metric to use is how specific she actually gets on this policy proposals.  

[00:01:53] Unknown:

Happy Bitcoin Wednesday, freaks. It's your host, Odell, here for another   Citadel Dispatch. The interactive live show focused on actionable Bitcoin and Freedom Tech discussion.   If you're a long term,   ride or die freak out there, you might have noticed we've upgraded our setup.   We're ready to take civil dispatch to the next level and I couldn't have a better guest, to do that with. We have attorney general Jonathan Scrimetti here of Tennessee. Thank you so much for joining us. Thank you for having me. So, General, we,   I just put up on the feeds yesterday,   our conversation that we had at Bitcoin Park,   3 weeks ago, which did actually confuse some people because when I told them you were joining me for a conversation today, they were like, I listened to that last night. So for them, it's one day. It's relatively familiar to them. For us, it's been 3 weeks.  

But I like to take that conversation and kind of just continue   it to a degree.   So if you haven't listened to that, stay with us live   and then,   afterwards consider going back and, listening to that one. But,   one thing I wanted to to start with is   the attorney general's office. I I I feel like we didn't really get into that specifically. I mean,   people   hear AG in the news, you know, they they see the headlines, you know, the AG's doing this, AG's doing that. What is what is the role of the attorney general the state of Tennessee?  

[00:03:20] Unknown:

So at the highest level, we're the attorney for the state. My office, we are the attorneys for the state.   I represent the state. My staff represents the state anytime we're sued. So any state official sued in their official capacity,   any suits against the state.   We don't do criminal prosecutions here. A lot of state AGs do have that jurisdiction.   We do criminal appeals. So the prosecution happens with the DAs.   Everything else involving the state, every case whether it's a,   a car damaged on a state road where someone says give me $300 to fix my car,   to,   you know, multibillion dollar cases involving education funding,   or consumer protection cases brought on behalf of the state,   constitutional challenges against the state, suits by the state against the federal government.  

You know, at any given time, we have well north of 10,000 cases,  

[00:04:10] Unknown:

and we stay pretty busy. So that's interesting. So you don't actually   you're you're more defending your office more defends the state in   civil not I guess, are they civil they're considered civil cases. Civil cases. Yeah. So, but so I'm former formerly from New York.   I lived in New York all my life, and then my family and I moved down here 3 years ago Good move. To Tennessee. Thank you.   And  

[00:04:35] Unknown:

in New York, I think the AG does criminal cases. Right? They Yeah. So he does. Head of the police almost. Well, I mean, you get the district attorneys too, but the the AG has more criminal jurisdiction   and they're hyper aggressive up there with the civil enforcement too. So and and we're pretty aggressive here. I mean, we're you know, we take on a lot of big companies,   a lot of small local scammers doing consumer protection work, antitrust work.   But in New York, I think the line's a little bit more blurred between the criminal and the civil enforcement.  

[00:05:04] Unknown:

Okay. And then,   I mean,   I I think it was kind of funny. I,   ever since I could drive,   particularly in New York, it was like whenever you see the police lights,   you'd always I'd always, no matter what, feel like I'd feel pressure. Like, oh, my God. Like, did I do anything wrong? Did something go wrong?   And when I first sat down with you in the event space, I kinda felt like that, you know, I was like, oh, the AG is here. It's like, you know, hopefully you don't say the wrong thing. You don't end up in a, you know, criminal prosecution, but I'm glad, I guess, in the state of Tennessee, you wouldn't be the one in charge of that. Or maybe I'm not glad because I tend to like you. Well, I mean, I could take your money but not your freedom. And there you go. And I would say actually in Tennessee and maybe it's a bias thing or maybe it's,   maybe it's it's just an age thing, but I don't feel that way with Tennessee police. But with New York, it was always just like I felt like it was almost like a they weren't enforcing the law or trying to protect people. It always felt like it was a,   you know us against them kind of thing which is weird. But, anyway, I digress. So AG in the state of Tennessee. That's your role. What is the role of the AG in the federal government?  



[00:06:16] Unknown:

So in the federal government, the AG is the head of the Department of Justice. Okay. They do all the criminal enforcement. They do all the litigation for the federal government. So the agencies   well,   sometimes it gets a little complicated, but the the agencies generally   will come up with policies, will try to enforce their rules,   but then when it goes to federal court, typically, it's the DOJ representing them. And then if there's a criminal prosecution,   there's a huge chunk of the federal DOJ that does that.  

[00:06:43] Unknown:

Got it. So but on a federal in the federal situation, it's the AG that's filing these large federal criminal cases or Correct. Yeah. Okay. It's it's it's someone  

[00:06:53] Unknown:

with the delegated authority of the president. So the AG or sometimes the US attorney   who reports to the AG,   but all those guys are senate confirmed.   Got it. And one of them is gonna be signing off on it. Got it.  

[00:07:08] Unknown:

To me, this was always like something that I could just   kind of brush under the rug and not pay attention to. Like I don't,   you know, I   I I live I live a very fulfilled life. We're focused on my family. I'm doing absolutely nothing wrong. There's there's no reason for me to pay attention to all these different specifics in politics.   Until recently,   where,   Bitcoin has really become   more of a national political issue.   And where we're seeing these large,   these large criminal cases that are developing,   that all have different nuances to them.   But as someone who's very active in the industry and very active in in building businesses in Tennessee and and increasing the   Bitcoin industry in Tennessee, it's becoming one of those things that is much harder to ignore. And,   that's why we're very grateful that you came down to the park. This is your 2nd time at Bitcoin Park. Welcome back, by the way.  

That the governor came down, that that both of our senators came down.   It's it's   it's   really positive to see   just, you know, mutually beneficial discourse and   collaboration and,   just kind of working together. Because I think a lot of us have the same goals. But, I that's just, like, the overall context of I mean, this show, for instance, in general, like,   we This is a technical Bitcoin show.   Like, the idea of having the attorney general of the state on the show 3 years ago when it started  

[00:08:40] Unknown:

would be the most batshit crazy thing in the world. Yet, here we are and it's just a context thing. Right? Well, I mean, I I I'm a little intimidated by the technical nature of it because, you know, I'm an attorney. I'm not a technical Yeah. Bitcoin guy. So I think there's a lot we can talk about, but my ignorance is vast.  

[00:08:56] Unknown:

Yeah. So I do wanna talk about that.   So during,   well, first of all, before we talk before we dive into Bitcoin, I think it's really cool  

[00:09:04] Unknown:

how you got your position. So can we just go into that real quick? Yeah. Yeah. Sure. Yeah. So Tennessee is is unique. There's no other state that does it the way we do. In Tennessee, the Supreme Court picks the attorney general.   And so in in most states, it's elected. It's a statewide election, very competitive.   In the other states, either the governor or the legislature make the appointment,   and it's a   highly political process. I mean, if it's the governor, you know, the governor picks the lawyer they like the best and if it's the legislature, there's there's a lot of, you know, tap dancing.   Here, the court picks the AG. So we've got a 5 member court. You need 3 votes to get in. It's an 8 year term. So the idea is they pick a good lawyer and leave them alone for a while.  

So I was not going to apply. I was working for the governor.   The position came open. I'd previously worked for the my my predecessor   and it had not even occurred to me to apply for it when it came open. I thought he was going to re up when he didn't I thought there were other people that should.   There was a 2 week window for applications. I spent the 1st week trying to talk someone else into putting in for the job and I failed. I failed miserably at that.   And so when he decided not to,   and a couple other people that were,   I think, well positioned for it if they wanted it decided not to,   all of a sudden, my phone started ringing,   and there were only a few days left. And it was a long application,   so I didn't get it done till about 3 AM, the night before the deadline. I was scrambling so hard to get that done. I got it in with 29 minutes to spare. The day that they went on. Upload on the website or you had to hand deliver it. So would you hand deliver it at 3 AM? You email it and you bring it. No. It was so I was up till 3 AM finishing it, and I had to turn it in the next morning. Okay. Fair enough. It was shockingly stressful though for like what should be really simple.  

And there was an interview a few days later. I did the interview and I got the job. So I mean, it was this huge life change that happened super abruptly.  

[00:11:04] Unknown:

I'm extremely grateful for the opportunity. That's awesome. I mean, I think it's cool that you're appointed by the Supreme Court and I think it's really cool. The   the length of the term. So, what did you You said it's 8 year term? Yeah. It's an 8 year term. We're the only 8 year term for an AG in the country. So, we got 6 more years of you. Six more years. Awesome.   Yeah. I mean, I always   Once again, someone who tried to kind of   ignore politics as much as possible.   To me always like the shortness of term limits was always an issue. You know, it just seems so obvious from an incentive point of view. I mean, you don't you don't even run for election. But if you're running for elections, like as soon as you get elected,   you're   you're on the reelection campaign trail and trying to raise money. It's just automatic.  

So really cool incentives. I think it's important to highlight that, particularly if people didn't listen to our previous conversation.   Last but not least, before we go into Bitcoin, one more thing.   Your staff, everyone calls you general.  

[00:12:06] Unknown:

Is that is that weird? It's super weird. Yeah. It's super weird.   You know, it's the convention. They've they've done that for a long time across the country. You get to these AG get togethers, and it's like that scene from,   oh, gosh. Was it Fletch? You know, doctor, doctor, doctor. It's all general, general, general, general.   It's a little weird. Have you ever met, like, an army general? Yeah. I actually saw a marine general on Monday. Did he call you general? He did and I said he was a real general. Okay. I think he's just retired marine general. I'm like, yeah, that is a different league than me. I'm glad you covered the important topics.  

[00:12:41] Unknown:

Yeah. I don't know for whatever that that only happened I only realized that attorney generals were referred to as general when we met 3 weeks ago. Up until that point, I was just I mean, I was assumed as just AG or attorney general. Whatever. It doesn't matter.   So I was explaining this to you earlier. We have this live chat, that's Bitcoin powered.   Do you know what, sats are? No. Okay. So sats are the smallest unit of Bitcoin.   So there's a 100,000,000   sats in a Bitcoin.   Right now, sats are about 1600 sats or a dollar. You know, it's a free market, so that's always constantly changing.   So, with this live chat, they can just send us sats.  

And this one guy, no good, zapped us 10,000 sats.   He's the artist who made these two,   paintings. Oh, sweet. And he also,   designed all the art for   the show.   Like all the cover art, all the album art, everything like that.   And one of the cool things about No Good, just like he's become a very close friend of mine through the internet And I have I I assume his mom didn't give him that name when he was born. I have no idea what his his real name is or his legal name is or where he was born. But anyway,   they're zapping us at. So zap is like a a Bitcoin payment through the Internet.   And they're global. They're around the world. I told you before we started recording,   we have listeners in a 163 countries on this show, which is kind of   mind blowing.  

So Bitcoin.   We got sats out of the way. Why is sats important?   Because everyone's first reaction is Bitcoin's $60,000.   I can't afford that.   And the truth of the matter is, like, at scale, like, most people will never use   the the unit of Bitcoin.   Like, even even if the price never increased, the purchasing power never increased, like, imagine   denominating your life in units of $60,000   would just be ridiculous.   So there's been proposals to do the units in between   And, you know, like the u there's, like, a unit called bits that's that's in between, that's, like, closer to,   maybe it's, like, a 160   bits to a dollar or something like that. I don't even know the unit. I only focus on sats. But we just went to the extreme. Let's go to the lowest one,   and and dream big, and we expect Bitcoin purchasing power to increase. So, eventually,   you know, maybe a 100 sats will equal a dollar, or maybe 50 sats will equal a dollar. But sats. That's sats. The second thing we talked about last time we met   was your failure to enter Bitcoin journey. It was. It's a sad story.  

We don't have to relive that. I'm sure you've relived it in your head, way too many times.   But we gifted you a Bittax,   a small open source Bitcoin miner.  

[00:15:21] Unknown:

Have you plugged in your Bittax yet? So I regret to say I have not plugged it in because   we have these ethics rules about gift receipt.   So I'm going to purchase a Bittax. I'm gonna donate the one that I got.   I'm trying to figure out where where the  

[00:15:37] Unknown:

plug in the BitX,   and for some reason you find Bitcoin,   it donates the open source project. Like, if you don't change any settings on it, so I don't know if that changes the rules for you. I think it's the value of the device itself.   Fair enough. Fair enough. So so I've not tried it out yet. Well, if if you wanna I will be getting a bid ask. Gift it to someone. Yeah. I'm gonna gonna find a a school that'll put it to good use. Some bid ask Some We we had the first block that was ever found by a bid ask. So a Bitax is, like, basically a lottery miner. We call it a lottery miner.   And the reason is because a usual Bitcoin miner, you're making little bits of Bitcoin   every block that's found, like, every 10 minutes. Very small amounts. I mean, the more miners you have, it scales up.  

But it's a consistent payout schedule.   This is extremely low powered, so   you might find a block, you might not, but if you find a block, you get the whole entire reward. Right? So, like, the current reward is worth, like, $200,000   or whatever. So it's, like, you might find it, you might not. But if you do, all of a sudden you get, like, $200,000   from Bitcoin, which is really cool.   Okay. So, Bitcoin.   Where to start?   What what's your   What do you think Bitcoin is?   Not to put you on the spot.  

[00:16:46] Unknown:

I don't think it's fake money used by criminals Nice. To start with. No. I mean, I like   If I were better at math, I probably wouldn't have gone to law school.   So,   you know, it's, I mean, it's   it's something that's scarce   and persistent.   And,   you know, because of that,   it's a good way of transferring value.   I'm not a monetary theorist. I'm certain that that that was riddled with problems, but that's my basic understanding of it. Like, you can keep track of it. The blockchain is a reliable way of making sure that you know what the transaction record is. You know what belongs where, who has it.   And because it's scarce, because it's reliable,   you're able to use that as a measure of value with other people who want to use it as a measure of value.  

And,   it escapes some of the problems that you see with,   international transactions   in different currencies.   You know, you don't have to worry about   political   tides   devaluing it or otherwise messing around with it.   So the the sort of objective nature of it makes it,   special and different and potentially better.  

[00:18:05] Unknown:

Nailed it. Okay. We can just wrap the show.   The general has it all figured out. No. I think that's I mean, that's a great starting point.   I like I mean, you said early, you know, if I was a math guy, I wouldn't become a lawyer.   I think the cool part about Bitcoin is is not its complexity. It's easy to think it's very complex,   particularly if   you get obsessed with it and you go down the rabbit hole of Bitcoin and you're trying to learn all the different little pieces of Bitcoin. But the cool part about Bitcoin to me is that it's just incredibly simple.   And at, like, at the simplest level,   it's just money that's not controlled by a government, not controlled by a company, not controlled by an individual.  

It's just money for the people, by the people, and no one has control over it whatsoever. It is incredibly difficult to change by default. That's where that scarcity play comes in because   mathematically,   it's designed to only have 21,000,000 Bitcoin.   It's practically impossible for that to ever change.   If you're a math guy,   if you're a tech guy, you can look into the code. You can you can analyze the code and get some conviction based over that. I think most people will get conviction just based off of time. You know, as time goes on right now, what we're, like, year 15 of Bitcoin,   people have their first touch point. They're like, immediately, what's the first thing they say? It was like, oh, well, there's no way they're gonna stop at 21,000,000.  

And then, you know, 5 years goes by, and no new Bitcoin are created, and the supply doesn't get debased. And then 5 more years go by, and, you know, Bitcoin transactions aren't being censored or being stopped or or being debased. And then they start to develop conviction. I think that's just, like, humanity how humanity works. Like, that's how human humans logic things out.   But Bitcoin, it's money that's not controlled by anybody.   You can send it without permission, and you can receive it without permission.   And that's key,   and and and you can save it without permission.  

And those two elements are key for a good money   because   I think our society has been sold this, like, false premise   that you have to be   a financial   wizard or hire someone that is a financial wizard to manage your wealth.   But, really, you should be able to just focus on your life, live your life, have a fulfilling life, and save in something that just accrues purchasing power over time. And I think that's the promise of Bitcoin on the saving side. But then, ultimately, as that wealth increases and as your purchasing power increases and as you're able to pass down   that purchasing power, that saved time to   your children and their children,   they they need to be able to use it. Right? And that's where being able to spend it without permission is key.  

So the 2 it's funny because, like, in Bitcoin, especially if you start going down   the rabbit hole that is Bitcoin,   there's almost, like, 2 camps. It's, like, no. Bitcoin is valuable because you can spend it without permission. And then it's, like, no. Bitcoin's valuable because it's a great store of value and you can save it without permission. And the the truth of the matter is they're both correct and they're both wrong because you need the other one, like, if you don't have both of them together.   Okay. So that's, like, my general primer on Bitcoin.  

And you're absolutely right about the benefits in terms of of global trade or or just, you know, people that don't have access to the financial system. Right?   I've done a lot of work with Human Rights Foundation, with activists around the world. You know, a lot of people we take we take a lot of things for granted in the United States, in terms of our financial access, and a lot of people don't have that access.   And Bitcoin can make it as easy as as having an app on your phone.   But from, like, the regulatory standpoint in America,   you can break down the industry kinda into 2 different pieces.  

I guess,   so,   when I'm looking at When when when when I'm looking at Bitcoin in America So I titled this episode Bitcoin in America, by the way. Big title. We're halfway through it now. And now, I let you know what I titled it.   You can you can basically break down the tools in Bitcoin to these regulated   institutions.   Right? So I have a venture fund that's based here at Biggwick Park, state of Tennessee,   called 1031.   And we're the lead investor of a company called Strike, which is based out of Chicago.   And Strike is available in a 101 countries.   They have more licenses than Coinbase,   the juggernaut that is Coinbase.  

And in those countries, they provide Bitcoin buy, sell, send, and receive.   And they're heavily regulated.   You know, they have   49 licenses in America because you need an MSB license in every single state. They they're By the way, they're available in a 101 countries, but not New York state.   It's 49 states,   101 countries, but not New York. They're gonna get to New York hopefully soon, but they have the whole bit license thing over there.   So you have that aspect of the industry. Right? And they're interacting with,   with regular financial institutions, right, like banks.  

And they, you know, they serve that purpose of of bridging the gap between the two worlds, like the traditional fiat world and the Bitcoin world.   And so, on that side, it's like, okay, what is our biggest concern as Bitcoiners, as a constituency?   Our biggest concern is overregulation   in that space.   You know,   no one expects it to be   the world of, you know, Wild West private banking.   But in a lot of times, they're treated   as, like, a second tier financial institution.   Right? So that clip that I started it off with on CNBC   was Vivek   talking about,   Vice President Harris's future   crypto policy.  

And a lot of that policy is adopted by is, like, almost kinda spearheaded by Elizabeth Warren, and and Biden's administration has adopted it,   which is almost they they call it, like, I guess the vernacular is, like, choke point 2.9. It's, like, trying to choke out those companies   from the greater financial industry and just make their lives living hell to build businesses.   So that is something that we're intimately concerned about. I mean, I think it's one of those things that's, like, not necessarily,   bad for Bitcoin on a global basis, but it's bad for Bitcoin in America. It's bad like, the the businesses that are, like, leading the charge building up Bitcoin infrastructure should be based in America.  

They should be employing people in America, and and   they should be able to do it in a nonvague   regulatory environment. Absolutely.  

[00:24:51] Unknown:

Yeah. So I just I did a letter to the Department of the Treasury,   I guess, 2 days ago.   They were asking for input on regulation of AI.   And one of the things that I emphasized is we need to have a neutral financial infrastructure.   We can't be picking winners and losers.   We can't be going after disfavored groups.   You know, it's   a long way down the road to a social credit system.   And that ultimately is just a totalitarian dystopia. I mean, if if you start using technology,   even if it's just a little friction at first to make life difficult for people doing legal things that you don't like,   there you know, that road doesn't stop. I mean, you just keep doing more and more things to force compliance,   whether it's gentle nudging at first, but, you know, nobody ever ratchets down without serious effort on the part of people to reform a system.  

So   I think Bitcoin's in the same boat where,   there there should be neutral innovation. Obviously, everybody has to follow the same laws. If you're knowingly engaged in criminal conduct, if you're in a conspiracy with somebody committing crimes,   that's a problem. That's illegal. That's been illegal. Doesn't matter what technology you're using. But those are technology neutral laws and everybody knows what the rules are and there shouldn't be different rules for different people.   If bitcoin needs to be treated differently somehow   the way to do that is to pass legislation   identifying what the rules are so everybody's at least working from the same page   and this whole regulatory making it up as we go along approach   it's just   the interim regulation   of everybody right you want people to be scared and because they're scared they're not going to be pushing the limits and so you don't actually have to know what the law is you just know you don't like these people and what they're doing and you wanna stop them from trying to do more of it. That is the opposite of the rule of law, and that is not what we need in America. It stifles innovation,   and it undermines freedom.  



[00:26:53] Unknown:

Yeah. I mean, I agree wholeheartedly.   So, I mean, you're So then the other piece of the Bitcoin industry   or the Bitcoin toolset or the Bitcoin ecosystem, I guess ecosystem's a better way of putting it,   is this idea of open source software,   and the open source open source software tools that allow us to interact with bitcoin in a freedom oriented way.   I mean, you're a little bit of a nerd yourself.  

[00:27:17] Unknown:

Self described. I do.  

[00:27:19] Unknown:

Do you know what open source software is? Like Yeah. Are you familiar with the concept? Yep.   So, like,   open source software is   is is the underpinning of what makes bitcoin special and and valuable. It's the key value prop because if it wasn't if the software that runs bitcoin, bitcoin nodes all around the world wasn't open source, then there'd be a company or a person who was controlling it. Right?   It would be it would be closer software. And then it would have really no value because   if there's an individual in control of it, we just, like, recreated Venmo or something like that,   or recreated the US dollar.  

So   open source software is key to this movement. I call it, like, the overarching I call it the freedom tech movement, the idea of tech that enables freedom,   and empowers individuals. And as a result, human humanity should flourish if individuals are able to exercise their freedom.   And it's important here for Americans, I think, to have a broader lens,   and realize that in many parts of the world, you have way less freedom than we have in America, and these tools become even more valuable. I mean, the most,   maybe the,   you know, maybe it it could be considered an extreme example for some people, but you see it a lot,   in terms of,   used as a perspective example of America versus the rest of the world in terms of gun ownership. Right? And you'll see the meme, like, this is what happens when they take your guns away from you.  

I think a lot of,   a a a lot of,   guns rights   proponents would say that guns themselves are more of a defensive technology.   And I think Bitcoin goes even further than that in this idea that this is a this is a technology, and the greater open source movement is a technology that allows   individuals to defend themselves rather than,   you know, you know, more   projecting power. It's more of a defensive kind of technique. So, anyway, with with open source software,   we want a we in America, as an American, it would be nice it would be it's it's incredibly important to have a diverse ecosystem of open source tools and developers that are able to work on them without fear.   And right now, the main concern   that most developers have,   most open source developers have when I talk to them So, just for some context,   and for the new listeners out there,   I'm the cofounder of OpenSats,   which is a 501c3   that's focused on supporting open source developers.  

We run on a Bitcoin standard.   Our any donations that come in, whether they are Bitcoin or dollars,   we convert to bitcoin and hold as bitcoin.   And we pay all of our grants out as bitcoin. And so right now, we have grant recipients,   in 40 plus countries. They're receiving bitcoin on a monthly basis for their open source tools that they can't inherently monetize because they're open source tools.   And so as a result, I have a lot of conversations with these developers.   And a lot of those conversations recently have become,   you know, I don't really make much money doing this. I'm really glad that OpenSets exists and is paying me grants. But, you know, I could probably make more money in the private sector doing something I hate.  

And maybe I shouldn't be working on these tools because they could get me caught up in some kind of criminal litigation that I wasn't expecting, that   that was not intentional, that was not,   you know, that that was me just providing this tool out for people. And just one other piece of this, with Bitcoin,   like, do you understand the concept   of self custody bitcoin versus   custodial bitcoin?   I assume custodial is where someone else gives you access to the wallet Yeah. So like and they take the data. With custodial custodial is just the default across all financial tools.   Right? It's like, if you have money in a bank account,   like, ultimately you have to ask Chase Chase's permission to get access to that money. Right? And our whole financial system relies on trust, so everything is custodial. You know, even, like, if you have stock,   like, and and and the stock market crashes like it did last Monday, like, you better hope Charles Schwab is online because otherwise, you're not gonna be able to access your stock and Charles Schwab is offline. Right? So a tool like Strike   or Coinbase or something like that, these heavily regulated   companies, closed source products,   they're all custodial by nature. They're holding your bitcoin for you. And it's a similar customer   customer financial institution kind of,   relationship. Right? Where they're holding your money for you, and you're asking them permission to get access to your money. But they're giving you a service for it, a convenience.  

Maybe you don't trust yourself holding your bitcoin yourself, you know, peace of mind, security, and whatnot.   And then you have self custody, which is this kind of a radical new concept. Like,   previously,   in terms of money, like, the only way you could self custody something is, like, if you had, like, gold bars   and you kept them under your bed. Right?   Bitcoin allows you to do that on, like, a whole another level because, you know, you can have it on your phone. You can have it on a small USB device.   It doesn't weigh anything.  

You can actually secure it much better than securing gold under your bed. There's this, I mean,   going down the rabbit hole. There's this idea of multisig where you can have it in multiple jurisdictions. You can have 3 keys in different jurisdictions   and you need 2 of those keys to spend your Bitcoin. And no one can take it from you unless they have those 2 of those 3 keys. And you don't have to ask anyone's permission to do it.   So that's self custody bitcoin. And so there's   this industry heavily relies on this idea of   not even idea, in practice of open source tools, open source bitcoin wallets,   that you hold self custody bitcoin. And up until this point,   in America at least,   they have not been treated as   money services businesses.  

So all of those licenses, everything that Strike has,   everything that Coinbase has,   they don't they haven't needed those licenses. They're not expected to get those licenses. They're never touching any customers' money. They don't have customers.   They're literally just shipping code and people are using that code to hold Bitcoin themselves.   And so that's the key fear. I I think that's where most of the fear comes down to is if you're a developer of a money service business, if if you're a developer   of Probably not a money service business. Yeah. If you're a developer of an open source project   and you're considered a money service business, all of a sudden it opens up this massive can of worms of quote unquote non compliance   that you didn't believe that you needed to comply with in the 1st place. And I think it's practically un American to have to comply with that. So that was very long winded.  

But I wanted to give you the primer because I know you're not,   you know, that,  

[00:34:07] Unknown:

deep in the Bitcoin space and how we think about these things. Sure. I mean, I think the law needs to be clear. I mean, it's I've said it at the panel. I'll say it again. The most important thing the law can be the most important thing the law can be is clear because if you don't know exactly what it is, you don't know what needs to change, you don't   know, you know, what changes would fix the problem.   So if the law is clear, everybody knows what the rules are. If they don't like the rules, they can work to change them. If the law is not clear, if people start making things up as they go along   then you end up with this, you know, really scary situation where nobody wants to innovate,   nobody wants to speak up about it necessarily because they're worried that they may get caught in some gray area by people who don't like what they're saying. It's a real problem.  

So, you know, I tend to take the approach if the law doesn't clearly state   that something's illegal,   then it's legal.   I think that's traditionally the western approach to things   And,   you know, if it's not clearly defined   what what violation is happening and if people are reinterpreting   and it is a new context. I mean, I I understand why people are struggling to figure out how to carry over existing legal concepts   to a very different technological   context. We've seen that, you know, in in all sorts of different types of technology over the last 20 or 30 years and the courts have not been great at it. I mean I remember there was a case   not that long ago maybe maybe 25 years ago talking about the Internet   where it was like Internet in all caps and you know clearly this was somebody who who was reading articles from 15 years before to understand what DARPA was up to.  

So the law has not been great about it, but,   you know, unless you can point to   clearly how each element of a given crime   is is being violated by the person doing it,   you you shouldn't go after him and same with civil enforcement   if somebody's actively deceiving people that's a problem right there are plenty of scammers in the bitcoin world just like in the real world and you know that's not a bitcoin issue that's a scammer issue   but if you're making tools   and you're not engaged in any sort   of knowing collusion with somebody who's going to use them to break the law and is relying on you to make them a certain way so that they can do whatever crimes they want to do. If you're just putting tools out there   and if it's not clear that they should be   subject to a given regulation   you know maybe maybe there's some gray area and someone honestly didn't know that they were violating a law but in that case, you don't need the big bad government to come in and swat them down. That's just going to discourage anybody from doing anything that might potentially be a problem.  

So so if someone does inadvertently cross a line,   if it's really a good faith mistake,   you you don't smack them. I mean, you'd   help them solve the problem and do what they're supposed to do. But if it's not clear that there's a line that they're crossing,   then rewrite the law if you don't like what they're doing. You you don't just start enforcing things arbitrarily in a very broad way. That's not how the law is supposed to work and it undermines prosperity so much because nobody wants to go out and try new things nobody wants to innovate   nobody wants to be bold or brave   and you end up with a very timid economy full of people who are are content with stagnation  

[00:37:25] Unknown:

So, I mean, if you put yourself in our shoes,   with the the the the fears and the concerns that I've   explained to you,   and we can make let's we'll make this American specific, and we can make this even Tennessee specific,   because it's in your wheelhouse. You're a lawyer by trade.   Like, what is our best course of action? Like, I I don't wanna just, like, sit on my hands   and wait and see if, you know, friends get thrown in jail or have, like, a SWAT team come through their door. Like, how do we how do we make the best of this? I mean I think  

[00:38:00] Unknown:

the 2 best things to do are   first educate people get out there and explain what's going on explain like hey these open source developers are making tools   and you know if somebody goes to Home Depot and buys a hammer and kills someone with it.   You don't go to Home Depot and start arresting the people who sold the hammer.   You know if if the guy comes in and says I need a hammer to kill somebody you're in a different situation maybe but Right.   You know, it these are That's where the conspiracy part Exactly. Exactly. It's all about the mental state at the time.   The second thing is   get organized as an industry, as a community,   and get more active lobbying,   which I think is what's happening. I mean, I I was not super engaged with the Nashville event,   but I was here. I was over at another event on Saturday and saw a bunch of people talk to him there. You know,   get engaged and make sure that you are   educating the enforcement folks, educating the legislators.  

And if there are regulatory problems,   you know, start submitting comment letters, start doing amicus briefs.   Ultimately, the courts are the check   on, government overreach in the short term. In the long term, it's all about democracy in this country. It's all about the people voting. But in the short term,   it's all about   the courts   ultimately   deciding what the law says and if enforcers come in reading the law too broadly   the courts can reign them in and I think the courts have been doing a little bit more of that lately and I think that's a good thing. I think we need to be clear about what the rules are.   But educating the courts and educating the legislators   and being very vocal about it is the best way to start pushing back against,   any persistent overreach that you've been seeing.  



[00:39:46] Unknown:

So, I mean, in practice though, I guess,   in like the short to medium term,   the unfortunate reality is it's gonna There's gonna be multiple court cases and there's gonna be   These things are gonna be fought out in courts with like people's lives in limbo. Like there's no way to really avoid that, right?  

[00:40:05] Unknown:

To some extent, yeah. I mean, you know, we we've got dual sovereignty in this country. You got the federal government, you got the state governments.   Some state governments are a lot more,   we'll say aggressive than others,   in terms of of pushing the line on enforcement.   So people can move to states like Tennessee,   where there's more embrace of innovation, where you've got a government that is at least cognizant to some extent of these issues   and wants to encourage   the entrepreneurial spirit. Doesn't mean you're protected from the feds necessarily,   but you you at least have one less layer to worry about. And in the long run,   I think we necessarily will have to have   much clearer federal rules. You know, right now there's still some fighting over has jurisdiction over what   and what the scope of of appropriate regulation is.  

That that's not gonna go on forever. There are too many people to invest in this issue. There are too many people pushing.   There are too many legislators paying attention now for that situation to continue indefinitely.  

[00:41:11] Unknown:

I mean, one I mean, I think jurisdictional,   choice is a key aspect of   of the checks and balances in America. Right? I mean, I moved my family down from New York, and we didn't have to cross international borders. There was very little friction for us to be able to to choose where we wanted to live and choose which jurisdiction we wanted to live under.   But there's there's that piece there. Right? That there   that the federal government is becoming more involved.   And there's actually 2 pieces there that I think are kind of interesting and scary.   Well, the first piece is interesting and scary. So this is all digital software. Right? So there's one case in New York right now. The Southern District of New York is   is leading that case. Once again, not a lawyer. You're the lawyer.  

But my understanding is they're a they're a jurisdiction of   the of the federal arm. Right? Southern District of New York is federal government. Right. It's the DOJ. Yeah. But they're based in New York,   and they're more aggressive than maybe other jurisdictions   of the federal   legal apparatus.   And, like, they What they did was they just, like, opened the app in, like, downtown New York. This is a global app. Right? They, like, opened this open source app in New York and then, like, they send some bitcoin to it. They're like, okay. So this happened in our jurisdiction.   So we're gonna prosecute them there, which I think is kind of new. Right? Like, that concept is kind of new. Like, it used to be, like, oh, you're actually doing business in New York is very obvious.  

So I don't know what point I'm trying to make there except that this is a little bit scary. And then the second piece I have is like so how does that work   in that situation?   What what is so what is our version of SDNY  

[00:42:55] Unknown:

in Tennessee? So we've got 3 here. We got Okay. We got an office in Memphis. I used to work there for a while as a a civil rights prosecutor for the feds.   We have one in Nashville for the middle district, one based in Knoxville for the eastern district.   So SDNY   is traditionally   much more oriented toward finance.   Got it. They have really sophisticated   prosecutors there,   used to big white collar cases.   You know, you   in Tennessee,   you've got some good white collar folks, but you get a lot more guns, drugs. Right. I did a lot of human trafficking prosecutions when I was there. You know,   they're important cases, very important cases.  

They're not as complicated. They're not as sophisticated. There's not as much math involved, typically.   The SDNY guys, though, are used to big stock cases, big bank cases.   They they have a lot of institutional expertise and a lot of people,   who are very ambitious. It's super hard to get a job there. You get brilliant lawyers. They wanna leave a mark, and so they often look for big cases to bring.   And I can understand how from a prosecutorial perspective, new technology   could be appealing to look at,   because you you can make a name for yourself that way.   I I don't I don't think they're intending to come in,   you know, doing anything untoward. I think they're looking for interesting   big cases,   where the law is new would be my guess.  

And they see this as something new   and they think, you know, this is I mean, if you if you're gonna be a prosecutor who wants to go into private practice   Right. You know, having a a big footprint   in   innovative technology is not a bad way   to do that.   It's a good, like, name brand case. Yeah. Yeah. I mean, when you when you're the guy that did the big case Yeah. That's money in the bank when you start going to to law firms. Right? They wanna be able to say, we got this guy. You know, clearly, he knows what he's doing.   And and, again, like, I don't I don't wanna read too much into their motivations. I know there are a lot of people that give up a lot of money to do those jobs because they think it's really important,   to serve the public.  

But,   you know, that kind of overreach, I think,   comes from,   from ambition, really. You know, they they see a big potential case out there.   And sometimes when you're a prosecutor,   you see injustice or what you think is injustice, and you wanna get it.   But in situations like this, the law is just very   imperfect as a as a tool of justice. Right? If you're talking about, like,   a rape case or a murder case,   you know, it's a black and white kind of case. It's quite obvious. Yeah. And Yeah. You know, with with virtually no exceptions.   And   you you make the case, and you get the bad guy, and you do justice.  

When you're talking about big technology financial cases,   things get a lot blurrier which is why unless the lines are really clearly drawn,  

[00:45:51] Unknown:

criminal law is not the right tool to resolve these issues. So then my next question for you is the so, like, where does the   where does the state AG fall into that   situation? Is it just completely independent?  

[00:46:04] Unknown:

Totally independent. Those federal prosecutions? So there's I mean, there's federal preemption that means that sometimes federal law keeps us from having enforcement authority.   But we have really broad authority over consumer protection laws,   which are often pretty   parallel with the federal fraud laws.   So a lot of times you'll see us going after similar financial institutions   or pharma companies   or tech companies. We just won a huge case against Google, big antitrust suit. Oh, wow. We were in that with DOJ working together,   but we have our own independent enforcement. So if you're in a state that has   a lot of resources dedicated to enforcement, like New York, they've got a huge AG's office. Yeah. There are people there who are gonna keep themselves busy looking for cases.  

In Tennessee, we've got fewer resources, and we've got a much more pronounced commitment,   to restraint.   Right. And so, you know, when when it's time to bring a case, we bring it, and we win.   But not everything can be solved through litigation. Not everything can be solved through swinging a big hammer. Sometimes if you need clarity,   you need to give a safe harbor and develop the rules such that people know when they're breaking them rather than try to make examples of people who didn't know they were doing anything wrong.  

[00:47:17] Unknown:

Yeah. That makes sense to me.   So, I mean, you had one line. We're getting close to our   to our time limit here.   You had one line at when we're   we're in the event space with a packed crowd,   that used   that had   almost unanimous applause. People got very excited about it.   That one of your key roles as as a state AG   is suing the federal government.   Nasid even put a smile to your face. Can we just talk about that a little bit like how does that where does this fall into  

[00:47:51] Unknown:

everything else we've talked about? Sure. So you know in in our system, in our constitutional system, the biggest evil that we're trying to avoid is the concentration of power   in a small number of hands. And so at the federal level, we got separation of powers. We get the legislative, the executive, and the judicial branches.   But then there's also this,   vertical split where the federal government has certain enumerated powers.   Most of the governmental power is is kept at the state level. The federal government's gotten much more expansive than I think anybody originally intended or comprehended,   but there's still this huge reservoir of governing authority at the state level,   and one of the purposes of separating the power is that each part of the government checks the other parts,   And there was not sufficient checking of the federal agencies for a long time.  

And now there's a lot more. And so, you know, our general assembly and our governor   created a unit that basically   serves to sue the federal government.   And anytime there is overreach where a statute doesn't give an agency the authority that they're claiming, so they're doing something they're not authorized to do,   anytime they're acting outside the scope of what the constitution allows the federal government to do, if it interferes with anything the state's doing, we can sue and we can get a court to enjoin it. So, you know, there are some really contentious social issues right now where there's a lot of this action, a lot of gender identity litigation going on,   but at the heart, that's not litigation about gender identity. It's litigation about the structure of government   and who has the authority to do what.  

And it's it's not just there. I mean, we're doing   litigation over environmental regulation   over   various ESG disclosure requirements.   There's appliance stuff that we've been looking at where there are just these, you know, these regulations on appliances that the federal government's not authorized to impose   and as somebody who's occasionally   been very unhappy with a dryer that doesn't dry clothes after 2 runs,   you know, I'm a little personally invested in that but, you know,   you don't check the government, either either through voting or through using the structure to to correct problems, you know, you end up with this bloated concentration   of power in the federal agencies with no accountability.  

People don't understand where the law comes from   or why it is the way it is and they feel really alienated from it and you can't have a sustainable   republic   if people think that the law is being imposed on them by faceless bureaucrats who don't have to answer to them.  

[00:50:24] Unknown:

I meant to   that. So basically, like, the key is is   is where the federal government oversteps on the state's rights   is where the AG steps in and sues the federal government to kind of  

[00:50:36] Unknown:

establish that. To some extent, it's it's not even the state's rights as much as it is if the states are trying to govern in a particular area or if the states have decided there should be less government in a particular area. And the federal government,   you know, impedes on their ability to set that legal policy   then we can push back. So Awesome. You know, it's it's not like the civil war states rights kind of situation. It's   it's really like there are rules about government. Each part of it has its powers if if someone acts outside the scope of what they're supposed to do the other parts are supposed to push back and stop them. Awesome.  

[00:51:09] Unknown:

We're towards the end of our time here. Before we wrap, do you have any final thoughts for our audience? The big corners listening around the world?  

[00:51:16] Unknown:

You know,   I hesitate to even say this,   because I know that it is there there are many theories out there but I I   and you know you don't have to answer if this is like super gauche to ask but who is Satoshi?  

[00:51:32] Unknown:

We don't talk about that. No.   Nobody knows who Satoshi is. It's it's   it's kind of a marvel of of modern history   that someone who everyone wants to know,   has been able to   escape that public scrutiny. And it's not an easy thing to do. Like, I've I've had when we were talking about the legal conversations about developers being worried about,   potential   legal ramifications   for their work, A bunch of people always say, oh, well, why don't they just pull a satoshi? It's, like, you can't just, like, pull a satoshi. Like,   global governments,   mercenaries,   like, random companies, individuals that are incredibly wealthy have tried to figure out who this guy is. And no one has any idea.  

So, I mean, I would go back to my,   my claim earlier with most people is is time is a conviction thing. And it's like as time goes on, it becomes more and more likely that we'll just never find out. And it's kind of one of the beautiful birth stories of Bitcoin in the first place.   That, like, this person, like, stepped aside, put away their ego,   decided that they didn't wanna be a public face of the project, because it probably would have just killed it in its infancy   if that if that person had decided that they wanted to be, like, the supreme leader of Bitcoin.   Kinda amazing. It's a rabbit hole in itself. But, I hope we never find I personally hope we never find out.  

I will say, even if we did find out today,   that person has been   effectively removed from all development in Bitcoin.   So I'm just covering my bases. Like, if Satoshi turns out to be a complete asshole,   like, don't hold that against Bitcoin.   He hasn't been involved for a long long time. But you know it would be. Like, if that's a perfect and he doesn't have to be an asshole. Right? It's, like, then all of a sudden it becomes political. It's, like, 50% of the country thinks he's a horrible person. 50% of the country thinks he's a great person. It jades the whole project. Everything becomes,   a popularity contest. So, hopefully, that that never happens.  

But anyway, general, thanks again for joining us. This has been absolutely,   fantastic.   I know,   this is not your usual element. I see,   someone in the comments. Who is it? Sypher Hoodlum   said it's funny how last last week's episode of Citadel Dispatch was 15 prolific Bitcoin developers   on, like, 4 mics with no camera. And they weren't, like, holding their mics and stuff. And then we have the attorney general the next week in a beautifully welded studio, perfect audio.   That's still a dispatch for you freaks. But I I I think going forward,   we have our new producer at the park here. Paul is here and and Pete from,   Swan,   graciously   helped us set all this up.  

And I think, going forward, we're just gonna do higher production quality. I think I think the world needs it, and I think you freaks deserve it. So we're gonna keep that coming. And   the Attorney General had the honor of being the first one on this setup. So Cool. Thank you. Thank you, sir.