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Episode 1180 of Bitcoin And . . . is LIVE!

Topics for today:

• UK Seize 61,000 BTC
• French Central Bank's Massive Deficit
• Loans, Loans, and More Loans. WCPGW?
• SEC Chair Atkins Unclear on KYC Wallets
• Duke of Hazard

Circle P:

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https://x.com/JRcowfarmer

Today's Articles:

https://www.bbc.com/news/articles/cy0415kk3rzo


https://cointelegraph.com/news/french-central-bank-deficit-great-bitcoin-arthur-hayes


https://cointelegraph.com/news/pavel-durov-funded-lifestyle-bitcoin-not-telegram


https://www.theblock.co/post/373032/coinbase-tops-1-billion-in-bitcoin-backed-onchain-loans-via-morpho


https://atlas21.com/wisconsin-passes-pro-crypto-law-exemptions-for-mining-staking-and-business/


https://bitcoinmagazine.com/politics/sec-crypto-policy-chairman-atkins-vague-on-wallet-rules


https://bitcoinnews.com/markets/ibit-bitcoin-options-overtakes/


https://decrypt.co/342230/kentucky-state-senator-sued-crypto-mining-business


https://bitcoinmagazine.com/news/templar-launches-native-bitcoin-lending-without-intermediaries


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[00:00:00] David Bennett:

Oh,   it's 10:21AM   Pacific Daylight Time. It's the October   2025,   and this   is your episode eleven eighty   of Bitcoin and turn the dime   again. Ladies and gentlemen,   we've got a Chinese woman who's been convicted after the world's   biggest   Bitcoin   seizure.   Kinda makes me wonder, is it is it a grand ball seizure? Is it some kind   of epileptic seizure? What kind of seizure   are we talking about? Of course, I I jest. We also have,   well, there's a problem with the French Central Bank, and Arthur Hayes   is gonna sorta tell us all about it. Yes, sir, ladies and gentlemen. This is where you get all your Bitcoin news that you can use and more, by the way, because we have more.   Pavel Durov tells us how he's been living.  

Well, specifically,   like, on what he's been living. So   there's there's that. And it's kinda surprising,   but kinda not.   Coinbase   has topped a billion dollar in Bitcoin backed loans.   Yeah, what could possibly go wrong?   Wisconsin   passes a pro crypto law. We'll we'll talk about it. The SEC chair,   well, is very vague.   Very, very vague   on the rules for wallets.   BlackRock is in the news, Kentucky is in the news,   and the Knights Templar   are in the news. Well, no. Not the Knights Templar, but Templar,   well, more Bitcoin lending. Again, what can possibly go wrong? Well, we hope   that it's not like this.  

Chinese woman convicted after world's biggest   Bitcoin seizure.   Osman Chia from the BBC,   a Chinese national has been convicted following   an international fraud investigation which resulted in what's believed to be   the single largest cryptocurrency   seizure in the world.   The Metropolitan   Police, oh my god, that means they're going to sell it all immediately because Britain   is lost and they don't know how to do the simplest things like, oh, I don't know, not spend money.   The Metropolitan Police says that it recovered 61,000   Bitcoin worth more than £5,000,000,000   sterling   or $6,700,000,000   US in current prices.  

Zemin Kwan,   best pronunciation   I can do,   also known as Yadi Zhang, we'll use that one, pled guilty on Monday at Southwark   Crown Court of illegally   acquiring and possessing   the cryptocurrency.   A second person appeared in court on Tuesday to admit their own role in the scheme.   Malaysian national,   Sing Hok Ling,   of Matlock   Derbyshire,   pleaded guilty at Southwark Crown Court,   of entering into a money laundering arrangement   on or before twenty third April twenty twenty four.   According to the charge,   he had been dealing in cryptocurrency   on Kwan's behalf,   quote, knowing or suspecting   his actions would facilitate the acquisition   or control of criminal property by another.  

Between 2014   and 2017,   Quan   led a large scale scam in China,   which involved   cheating   more than a 128,000   victims in storing the stolen funds and Bitcoin assets, the Metropolitan   Police said in a statement.   It said the 47 year old's guilty plea followed a seven year probe into a global money laundering web, which began when it got a tip-off about the transfer of criminal assets.   Quan had been, quote, evading justice for five years,   up to her arrest, which required a complex investigation   involving   multiple jurisdictions,   said detective sergeant Isabella Grotto,   who led the investigation.  

She fled China   using false documents   and entered The UK where she attempted to launder the stolen money by buying property,   said the MET.   I quote, by pleading guilty today,   missus Zhang or Quan, whatever. They keep changing the name. Hopes to bring some comfort to investigators   who have been waiting since 2017   for compensation   and to reinsure them or reassure them that the significant rise in cryptocurrency value means there are more than sufficient funds available to repay their losses,   said Kwan's solicitor,   Roger Sahota of Berkeley Square Solicitors.  

On Tuesday, the court heard that confiscation   proceedings had begun gun in an effort   to retrieve more than £16,200,000   from Ling with the figure to be adjusted to reflect cryptocurrency   rates when he is sentenced in November.   Some reports have suggested   the UK government will seek to retain   the seized funds.   The BBC has approached the Treasury and Home Office for a response.   Reforms to crime legislation under the previous conservative government   aim to make it easier for The UK authority   authorities   to seize, freeze, and recover crypto assets.   The change would also allow some victims   to apply for the release of their assets held in the accounts.  

The goddess   of wealth,   Well,   Quan had help from a Chinese takeaway worker named Jian Wen who was jailed for six years and eight months last year for her part in the criminal operation.   Wen,   44   laundered the proceeds from the scam and moved from living above a restaurant   to a multimillion   pound rented house in North London, said the Crown Prosecution Service.   She also bought two properties in Dubai worth more than £500,000   sterling. The Met said that it seized more than £300,000,000   sterling worth of Bitcoin from when?   Chinese media Outlook Life Week reported in 2024 that investors,   mostly between the ages of 50 and 75 years old, had poured hundreds of thousands   to tens of millions of Chinese yuan into investments   promoted by Kwon.  

Some of the victims, including business people, bank employees, and members of the judiciary,   were reportedly urged to invest with Kwon's scheme by family and friends.   The investors reportedly knew little about Kwon, who is described as, quote, the goddess   of wealth. Wealth. Wealth. Wealth.   Bitcoin and other cryptocurrencies are increasingly being used by organized criminals to disguise and transfer assets   so that fraudsters may enjoy the benefits of their criminal conduct,   said chief deputy   crown prosecutor Robin Whale. This case   involving the largest cryptocurrency seizure in The United Kingdom   illustrates the scale of criminal proceeds available   to those fraudsters.  

Monday's conviction marks the culmination   of years of dedicated investigation,   which has involved the police and Chinese law enforcement team, said Will Lin,   the MET's head of economic and cybercrime command.   Quan is being held in custody ahead of sentencing,   which will take place on the November 10 as part of a two day sentencing hearing   at which   Sang Hock Ling has also been asked to appear.   UK secretary minister Dan Jarvis   said the conviction sent a clear signal that The UK was not a safe haven for criminals.   Pausing.  

Are are you sure?   Have   you looked at The UK lately?   It looks like it's a pretty safe haven for criminals right now,   but, you know, that's not politically correct, so we'll move on. Quote, money laundering erodes trust,   undermines our economy,   when fuels the rise of serious organized crime. Yeah, nothing can eclipse your government, dude.   You wanna talk about organized crime?   Talk about federal governments across the   world. It is not just the West.   It's it.   It's almost like   governments around the world were governments.   You know, they were doing their thing. They weren't exactly   altogether evil. And then they run across this thing called organized crime or the mob. Right? You had the Italian mob. You had the yakuza in Japan. You had all kinds of different mobsters, and I can't remember what the Russian mob is named.  

But it looks to me   like somewhere in the, you know,   probably around the thirties, nineteen thirties,   government started looking at these guys going, you know,   instead of trying to arrest them and throw them in jail, which we are not very good at because they're that smart,   maybe we should hook up with these dudes   and let them teach us how they run their organizations   so that we can be as effective as they are because we can't even   hell, they couldn't even put Al Capone in jail   on anything other   than tax evasion. It was tax charges is what got Al Capone. They didn't get him on murder. They didn't get him on racketeering.   They didn't get him on criminal intent to   convey alcoholic beverages across   country lines. No. No. No. Nope. Nope. No. They had to go with   tax charges.  

He didn't pay his taxes.   And then I think he actually ended up dying of syphilis while in prison. It doesn't matter.   It's it seems clear to me   that federal governments across the world hooked up with organized crime after they figured out that they weren't ever really gonna be able to do anything about them. And that's why we live in the world we live in today.   Because the French central bank's deficit,   well,   it may be great for Bitcoin according to Arthur Hayes. Cointelegraph   Zoltan Vardai is writing,   the ballooning financial debt or deficit of France's central bank.  

The central bank has a financial deficit.   It may spur a new wave of money printing, potentially unlocking billions in new capital for Bitcoin.   France's central bank, the Banque de France,   reported a net loss   of €7,700,000,000   for the fiscal year 2024,   mainly driven by negative net interest rate income due to high interest payments according to a press release published in March. Yes.   A net   negative   due to high interest payments is coming to a government   read by organized crime near you.   Now I guess I should say,   if they had if the governments around the world had really adhered to what they had learned from organized crime,   honestly, they probably wouldn't even be here. We probably wouldn't even be in the oh, wait a minute. That's right. They're basically just stealing from the citizenry   to pad their own pockets. So the governments are actually fine or the people that work for them, but it's the citizenry that's gonna, you know, be bent over the table. Anyway, this brought France's government deficit over   a €186,000,000,000.  

That's a 176,000,000,000   US dollars in 2024,   representing   an entire 5.8%   of the country's   gross domestic   product.   Ladies and gentlemen, this is embarrassing,   honestly. It significantly   exceeds the European Union's 3% limit.   Wow.   So they are completely out out of line with the EU. Anyway,   France's central bank is now among the block's worst performers   with a shortfall signaling capital outflows from the country. Arthur Hayes, cofounder of BitMex,   believes   that France's financial deficit may catalyze   trillions of euros of money printing by the European Central Bank signaling fresh liquidity flowing into Bitcoin, quote, French capital   French, not fresh, but French capital is leaving France.  

Who would have guessed?   And if you take a look at the gross change   of any other member, it's the worst.   The real threat is French capital leaving for Germans and Japanese investing in their home markets because The US is changing the world order, Hayes told Cointelegraph.   Quote,   this   is what   predicates   the ECB to print now or print later in the trillions of euros,   and that's the aggregate size. It's another great thing for crypto, he says.   Around 60% of French bonds and debt are owed by foreign entities with Germany and Japan being the two largest bondholders.   But with reduced   US investment,   German and Japanese capital that previously financed France's budget,   it's no longer flowing in. Quote, my thesis is basically the ECB prints now   or they print later, and in both cases, they lose control because in both cases,   the people would rather either default,   redenominate,   do capital controls,   print the money, and have their way of life. End quote.  

According to Hayes,   the ECB   could either print later to try to save the European banking system or print now to enable French spending. There's just no other option.   France's growing fiscal deficit may prompt the ECB to pivot   to quantitative   easing,   oh, joy, which refers to central banks buying bonds and pumping money into the economy to encourage   spending in the face of stagnating economic   conditions.   In 2022,   Bitcoin benefited from the QE announcements   from some of the world's largest banks,   like the US Federal Reserve.   Bitcoin's price oh, they do the whole price analysis thing at the very end of this. We don't need that. What we need to know is that France and their central bank is outstripping   the EU   by leaps and bounds in just how   poorly   their economy is being managed.  

We knew France was in in trouble, but holy crap.   France has got real problems. And if Japan and Germany and by the way, they ain't the only ones involved   quote, unquote, France.   If they pull out and Germany   honestly, it is in Japan and Germany's best interest at this point   to stop funding the clown show in France   and start building things at home.   Japanese money for Japanese people, German money for German people.   I   I don't know. Maybe I'm just a Nazi.   Who knows?   Anyway,   let's get to Pavel Durov who says,   I funded my lifestyle from Bitcoin,   not Telegram.  

Martin Young,   Cointelegraph   again.   Messaging app Telegram founder and CEO, Pavel Durov, says he invested in Bitcoin when the cryptocurrency was in its infancy and has since used his holdings   to fund his lifestyle.   Quote, I was a big believer in Bitcoin since more or less the start of it. I got to buy my first few thousand Bitcoin in 2013,   and I didn't care much,   the Russian tech entrepreneur said on Lex Friedman's podcast on Tuesday. He added   that he bought at the local maximum, which was about $700   per Bitcoin,   and I just threw a couple of million dollars there.  

A few people ridiculed him when the price went down after Bitcoin tanked below 200 in the bear market that followed, but he told him, I don't care. I'm   not gonna sell it. I believe in this thing. I think this is the way money should work. Nobody can confiscate your Bitcoin from you. Nobody can censor you for political reasons, end quote.   Durov said that he has used his Bitcoin investment to fund his lifestyle. Quote, some people think if I'm able to rent nice locations or fly private jets, it's because I somehow extract money from Telegram.   Like I said,   Telegram is a money losing operation for me, personally.  

Bitcoin is something that allowed me to stay afloat, end quote.   He predicted that it will come to a point when Bitcoin is worth $1,000,000   due to governments printing money like, well, there's no   tomorrow. Nobody's printing Bitcoin, he said.   Bitcoin is here to stay. All the fiat currencies remain   to be seen.   Yes. That he's talking the existence,   the further existence of fiat currencies does indeed remain to be seen.   Durov, who was arrested   a year ago in France,   charged with facilitating crimes   committed by Telegram users, also discussed the Telegram open network,   which it developed in 2018 and 2019   to provide a blockchain for the messenger service.  

He added that Bitcoin and Shitcoin number one were not scalable enough to cope with the load   that our hundreds of millions of users would create,   end quote. The key innovation was inherently scalable through   shard chains. Oh, I haven't heard that one in a while.   Shard chains, he said. However,   despite successfully developing the technology, Telegram couldn't launch it   due to regulatory restrictions in The US.   The project, which is now called the Open Network,   is deeply embedded in the Telegram ecosystem and has gained momentum   for non fungible tokens. Quote, TON has become, I think,   the largest or the second largest blockchain in terms of daily NFT trading volumes. Well, good for you, Pavel.  

The network's native token, Toncoin,   hit an all time high of $8.25   in mid twenty twenty four and has since fallen more than 67%   from that level, just like a good shit coin should. Yeah. It's trading just like a shit coin. So Telegram loses money for   well, purse   it it loses Pavel Durov money personally. This, I didn't really know. I I guess I'd heard rumors, but here he is admitting that for him,   Telegram is just it just loses the money.   And all of his wealth that we see has come on the back of, well, him buying Bitcoin   in the early days.  

So good for him.   But   what's interesting   is that he's singing the praises here yet again, and he's he's sung the praises of Bitcoin on several times, which is why I'd never understood why he developed Toncoin.   Dude, just use Bitcoin.   I I don't   again, I don't understand.   I   dropped on my head at birth, I guess. But Coinbase tops $1,000,000,000   in Bitcoin backed on chain loans   via Morpho.   Again,   what could possibly go wrong?   James Hunt, the block.   Coinbase surpassed a billion dollars worth of Bitcoin backed on chain loan originations   on Tuesday,   just eight months after the service launched in January.  

Quote, next goal,   a $100,000,000,000   in on chain borrow originations.   Coinbase CEO Brian Armstrong posted on x, quote, these adoption charts   are   the are what every product manager wants to see. Hockey stick growth. The on chain economy is thriving, end quote.   Powered   by DeFi protocol, Morpho,   a Coinbase Ventures portfolio project.   The crypto exchange originally offered borrowers up to $100,000   in USDC,   that's Circle Stablecoin,   using their Bitcoin holdings on Coinbase as collateral without having to sell the underlying   asset   and incur a taxable event. Quote, the integration of Bitcoin backed loans on Coinbase   is TradFi in the front,   DeFi in the back,   Coinbase VP of product Max Brandsberg said at the time.  

That's a mullet   of economic activity right there, ladies and gentlemen. By April,   this limit had been lifted to $1,000,000   after generating a $130,000,000   in originations   in just the first few months with plans to increase it further. Quote, the on chain economy is growing and we're growing with it, Coinbase posted on x on Tuesday, quote, loan limits are increasing.   Get up to $5,000,000   in USDC   against your Bitcoin   rolling out soon, end quote.   Coinbase previously offered a Bitcoin backed loan program for retail customers,   but that was sunset   in November 2023   amid a legal battle with   our friends at the SEC   under the Biden administration.  

However,   with this revamped service, Coinbase simply provides an interface   to access Morpho   on its Ethereum layer two base protocol,   but does not directly manage the loans itself.   Oh,   yeah. Okay. I see how this is working. When a Coinbase customer opts for an on chain loan, their Bitcoin collateral is converted   one to one into Coinbase wrapped Bitcoin or CBBTC   with no fee, and then it's transferred to Morpho.   The DeFi protocol then disperses the USDC loan to the customer's Coinbase account.   Loans must be over collateralized   with at least 133%   collateral ratio,   though borrowers can select any higher loan to value level that they prefer.  

If the loan balance climbs to 86%   of the collateral's market value,   the position is fully liquidated to repay the debt and then cover a penalty fee.   Again, what could possibly go wrong? Interest rates adjust automatically with each block on base while repayment remains flexible   with no minimums or deadlines provided,   users maintain a healthy   LTV.   Okay. Let's let's just take a breath on that.   You got a fifteen year   or at list no. Let's let's take it. I think there's a ten year fixed mortgage in The United States. There's a fifteen year fixed mortgage rate on in The United States. And then there's a thirty year fixed mortgage rate. Now all the people that got flexible   or adjustable   rate mortgages or arms,   And they were that's what they were getting pre 02/2008.  

And we know what the outcome   of having variable interest rates on the housing market was because we can just go look at The Big Short and watch that movie or go watch the movie Margin Call if you want to find out what the hell happened during that time. Those two movies   together, watch them multiple times,   not just once each. I'm telling you they're   they're great movies. They're really fun to watch, but they really do a good job   in trying to   line out exactly what the hell happened   preceding 2,008   and then into the collapse after 2008   and into 02/2009.  

So what did we just read here?   Interest rates adjust   automatically   with every block on the base protocol.   That is a terrifying situation.   That should terrify the living crap out of anybody that wants to have anything to do with this particular product.   I would   run,   not walk as far away from this lending   product as I possibly could.   If you need to take a loan with your Bitcoin,   go to somebody like Unchained.   They're in Austin, Texas.   They are not   steaming piles of crap that Brian Armstrong has become.   This   this product right here   is a dangerous product,   and they just skip over it in this in this the block story.  

Remember what I'm saying.   This   product   has variable interest rates   that adjust automatically   with every passing block   on the base blockchain.   And   your Bitcoin is at risk   every passing block. I'm just I'm just saying, guys, be be careful.   While Bitcoin is currently the only collateral option for the on chain loan service, Coinbase previously said that it aims to support   shit coins in the future, and the service is currently available to US customer use or US users   excluding   can you guess who?   In The Unite who would be excluded from using any kind of product that has anything to do with Bitcoin or cryptocurrency in The United States?   That would be the residents of New York   because of the bit license.  

Earlier in September,   Coinbase rolled out a new feature allowing users to lend   their USDC   on chain,   offering yields   of up to 10.8%.   Again, probably you need to stay away from that song, bitch, as well. Let's let's go to Wisconsin,   the land of cheese.   Wisconsin passes pro crypto law, exemptions for mining, staking, and business.   Sounds pretty cheesy to me. Atlas twenty one has it. Wisconsin lawmakers are working to transform the state   into a more favorable territory for digital assets, and a new bill could ease regulatory burdens for companies and individuals operating in the digital asset sector.   Assembly bill four seventy one introduced by Republican members of the Wisconsin Assembly and assigned to the Committee on Financial Institutions   seeks to exempt certain digital asset activities   from the requirement to obtain licensure as money transmission services.  

If approved,   the measure would make it easier to accept cryptocurrency payments,   develop blockchain software,   conduct mining operations,   or stake tokens without needing specific state authorizations.   The bill exempts a range of digital asset related activities from licensing requirements,   including mining, staking, and direct exchange between digital assets   that do not involve conversion   to fiat currency. Oh, well, that would be nice.   Additionally,   the proposed legislation introduces a securities exemption for third party providers   offering   technical   staking services provided that the rewards distributed   consist solely   of those generated by the blockchain network itself.  

The initiative aims to make Wisconsin   a less cheesy   jurisdiction   for crypto entrepreneurs.   Despite this vision, state Democrats have introduced bills requiring stricter oversight   of Bitcoin ATMs, citing their role in facilitating   scams.   A bill filed in July in the assembly by Democratic lawmakers requires all Bitcoin ATMs   operating in the state to obtain a license, and yada yada yada.   Really don't need much more than that. So Wisconsin   is trying,   and we'll see how it goes. Because, you know, honestly,   we're not doing too terribly well on these Bitcoin bills in all these state legislatures.   I think there's more that have failed,   been vetoed,   or voted   down than have actually become law in all these respective states.  

Well, let's run the numbers.   CNBC   Futures and Commodities says the government is now shut   down. Apparently, it shut down at midnight.   I kinda knew about this this morning, but, you know, might as well remind you, your if you're in The United States, ladies and gentlemen, your government is shut down. I see memes   that's being spread around that, like, says things like all other governments in the world and it show you know, laughing at The US and shows this dude laughing. And I'm like, you mean like, The UK that's about to give you a digital ID whether you want it or not? Even though nobody really wants this thing, is is is that's that's what a functioning government does.   Personally, I like the US government being shut down because the the less they can touch is the less they screw up, like   energy,   which is down   across the board, except, of course, for natural gas because of a deal that got worked out   with Trump and and, I believe, The UK. Anyway, Murbin crude is down a point to $67.51.  

Brent Norcie down a point to sixty five thirty eight.   West Texas Intermediate,   Homeland Oil, is down a point to sixty one seventy six. But then we have natural gas, which is up almost five full points today, back up to three forty six. The deal that's been struck   is something like 20,000,000   pounds or 20,000,000   tons or I don't know.   The The UK   is gonna have to buy a shit ton   of natural gas, and they're gonna be buying it from The United States given a deal that Trump has made. Why would they have to buy it from us?   Because the nasty Russians   and their nasty natural gas   because they're attacking Ukraine. So they're they're basically going to pay through the nose   to have natural gas shipped to them   when they've got natural gas fields aplenty   just off the North Shore of that tiny   island nation. But no.  

No. No. No.   The greenies refuse to have anything to do with that energy, so they'll buy ours, which is fine. I don't mind selling them the natural gas that that the companies I'm involved with produces. In fact, I wish I could sell it to them at $12   per thousand cubic feet. Gasoline   is down 1.81%   to a buck 88 a gallon. Good luck finding it.   Shiny metal rocks are mixed today.   Gold is up a half point to yet another all time high, $3,892.   Platinum is down over a point. Silver is up over two points, and copper is up a half point while palladium is the biggest loser, 1.16%   to the downside.  

Ag is mostly in the red today. I got the biggest loser is gonna be   sugar? Yep. Sugar is down 2.7%.   Soybeans are up point 5%,   and that is not the biggest winner. Coffee is,   2.57%   to the upside. I bring soybeans up because there is major stuff going on   in The United States soybean market.   We somehow or another are responsible for sending a whole bunch of soybeans to Argentina,   who in turn is selling it to   China.   And, honestly, we're really not gonna know what the hell happened.   Why?   Because   the government shutdowns,   you know when they happen?  

If you go back in history and you look at all the government shutdowns over the last, I don't know, twenty years, they all happen around harvest time   for ag producers.   Specifically   well, I mean, everything gets harvested around this time anyway.   But grain,   we can do all kinds of weird,   technically illegal   shit with grain as far as the United States government is concerned   when nobody's watching   because nobody's keeping any records at all right now on who's getting what in grain   because of the government shutdown, which just happens to coincide with, well,   harvest.  

Yay.   You're a mafia government at work there. I got, livestock is pretty much in the red today. Live cattle down point 15%.   Lean hogs down almost 2%. Feeder cattle down a third.   S and P is up a quarter point. Nasdaq is up a quarter point. Dow is basically sideways   as is the S and P Mini, only slightly in the red.   $116,900   gives   us a $2,330,000,000,000   market cap, and we can now get over 30 ounces of shiny metal rocks with our one Bitcoin, of which there are nineteen million nine hundred and twenty eight thousand seven and nineteen point nine two of.   And average fees per block are low, 0.02   BTC   taken in fees   on a per block basis. There looks to be about 50 blocks carrying a 139,000   unconfirmed transactions   waiting to clear at high priority rates of two. Satoshis per v byte low priority   will get you in at one. And Zeta Hash is holding   1.06   Zeta Hash's per second   is the hash rate of the Bitcoin network, which provides us all of our nice   beefy ass security   from   the last couple of episodes.  

If you did not listen to yesterday's episode,   it's a two and a half hour long interview I did with a dairyman   by the name of of j r Burdick.   Go listen to it.   You get there's some serious agricultural history   as to why we find ourselves with $29   a pound rib eye from freaking Costco.   It started thirty years ago, and it's surprising   that we almost   that almost none of us understand how this works.   We get into   a lot of how fiat currency   has   destroyed   American agriculture   on almost every level it can be destroyed.   If you wanna find out what the hell's going on in agriculture,   go listen to Bitcoin and JR Burdick. That was the title of yesterday's episode.  

And from that episode, Pies with a 121 SAT says, thank you, gentlemen. No thank you.   Bitcoin for president with 500 says, love the show. Well done, sir. I wish I had more to give.   Maybe you've given enough.   If it hurt to give it, well, then you probably gave enough, and I appreciate Ari Satoshi.   Paul Cernine with 500 says,   thank you   for another insightful episode and the words of calm and wisdom regarding the knots versus core discussion.   This perspective is exactly what's needed right now. Keep up the good work.   Thank you. I appreciate that. Koala with a 109 says, great effing episode.  

DK Black Sheep with oh, shit. 5,000   sats. Woo.   Good morning from a Danish fan of your show.   I like Danish too.   Nice and fluffy. A little bit of cream cheese on it.   Good. Wartime with a 133   says, I think it's Nazis versus Cornholios.   Also,   corp corpo   corpoists?   Corpoists.   War time with another 133   says cheers, and that's the weather report.   Welcome   to part two of the news that you can use, SEC crypto policy, where chairman Atkins is vague on wallet rules.   This is out of Frank Korva   writing for Bitcoin Magazine. Today, in a media   scrum after his opening remarks at the SEC CFTC roundtable on regulatory harmonization   efforts,   US Securities and Exchange Commission chairman Paul Atkins   expressed his excitement,   oh, he's excited,   regarding   bringing tokenized securities   on chain, though he didn't really offer any insight into what platforms or protocols these assets might trade on.  

The latter may be particularly   important to Bitcoin enthusiasts,   of which I am I'm definitely I'm somewhat of a Bitcoin enthusiast myself   because the wallets that you use to trade tokenized securities on chain will likely require   identifying information,   and such a rule could spill over to Bitcoin wallets.   It ain't spilling over to mine.   So I asked the chairman what securities coming on chain looked like to him. Would it look   like gated platforms like Fidelity and Charles Schwab employing blockchain to settle transactions on the back end, or   would it look more like tokenized   stocks   trading on decentralized   exchanges?  

He did not respond to my questions directly. He instead first shared how securities trading on blockchains   can reduce settlement time.   Deflecting much. Quote, the great thing about tokens is that you can have payment and exchange of the actual asset online at the same time.   It's t zero.   Basically,   instantaneous   clearance, chairman Atkins told me.   And he followed up this statement with some mildly concerning language.   Quote, so maybe we'll have to even build in like a speed bump   to make sure that we don't have any mistakes or wire money to the wrong place.   We will be working realistically for the next year or two   to try to get where we have good guardrails   around the system, the chairman added.  

Words like speed bump and guardrails   triggered alarm bells as they indicate some form of control. And where there's control,   there's often KYC.   If tokenized securities end up trading within the walled gardens of traditional brokerages,   then the of the issue of KYC isn't so concerning as these platforms   already KYC all of their customers.   The issue becomes more critical if tokenized securities   can be traded through protocols like Uniswap   via wallets like MetaMask   and Trust Wallet,   which would then likely be required to KYC their customers.   If this happens,   it begs the following questions.  

Will this lead to all crypto wallets having to KYC their users?   Will this rule eventually bleed over into Bitcoin only wallets?   Based on my interactions with the chairman, I got the impression that he doesn't currently have the answer to these questions.   It is, or rather, that is, he wasn't being evasive   as much as he genuinely didn't seem to know exactly what the broader picture around tokenized securities looks like right now as he's waiting for congress to act. Much regarding crypto market regulation hangs in the balance as the senate discusses and revises the Clarity Act, the digital assets market structure bill. The chairman stated that he's paying attention to Clarity   as it works its way through the legislative process. Quote, there's the Market Structure Act that cleared the house and is now being discussed in the senate.  

We'll see what happens, end quote.   In the meantime,   if you want to protect your right to use your Bitcoin wallet privately and permissionlessly,   be sure to contact your elected officials as part of the Satoshi needs you campaign.   And if you don't know what that is, you gotta go back to Monday's show   where I read you   Frank Korva's piece entitled   Satoshi needs   you. And he does. We I mean,   there's a lot of us that are are very cynical about calling our senators and and state reps and all that kind of stuff.   And while I don't   I don't necessarily blame anybody for being skeptical   about doing such a thing because   do you feel like you're being served by your senator or representative?  

Probably not.   However,   whenever it is that you call,   they, by law,   have to take down your opinion.   And those opinions are, generally speaking,   written into a style of report   that is easily viewable by whoever office you call. So their lackeys will put together a presentation   of all that day's calls, and then they'll they'll, like, meet them out to where this guy these these people called in here, and this is what their sentiment is in here. And then it's all boiled down, and then it probably gets into a one page format that the senator or the representative themselves or at least   their most trusted chief of staff or somebody like that reads and basically tells them what the hell is going on. And, you know,   we get enough people   to call our state reps and all that kind of stuff, and we all say, no, you're not gonna be KYC, my Bitcoin only wallet.  

But here is what is gonna happen.   If you're not Bitcoin only,   if you've got a ledger,   if you're using MetaMask,   whatever, if you're using, God forbid, the Brave Wallet on the Brave Browser, I love the browser.   I hate the shit coinery. It doesn't really matter because it it is my go to browser. It is very good. I I   very much appreciate the ad blocking, but I I don't appreciate the shit cornering. They're going to KYC AML you   like nobody's business.   It's going to happen.   The only thing that we have,   the only thing that we ever really had, and the only thing that we will have into the future   is a good solid   Bitcoin   only wallet, which if for whatever reason   you still own shitcoins,   stop it.  

Because it's going to get you into trouble. Because what's gonna happen is you're inevitably going to keep those shitcoins on the same wallet, like a ledger or a Trezor or something like that, along with your Bitcoin, and they're going to AML KYC the whole thing.   The whole thing. Because Trezor and Ledger are I guarantee you, they are salivating   at being able to hold   tokenized   securities   and equities   on their wallets. They want   you to be able to hold NVIDIA stock as a tokenized asset on the ledger. They want that.   And they are going to comply with any AML KYC shit so that they can get there.  

It's going to happen. It is not a question of if. It is a question of when.   And if your Bitcoin is on there, it's going to be automatically KYC'd   too.   You have to get your Bitcoin onto something like a cold card wallet. And   please understand this.   Your Bitcoin is never really on your wallet.   Your   wallet isn't really a wallet. It's a signing device.   It's how you vector   the Bitcoin that's under your control,   which lives on the blockchain.   That's that's what your wallet does. It doesn't actually contain any Bitcoin. The files aren't actually in the computer. You know, it's just   I'm just saying   Bitcoin only wallet is your only hope out of this.  

Sell your shit coins, buy Bitcoin,   then buy a cold card, and put everything there. Right? Let that be your vectoring device because I doubt very seriously that   I I I doubt seriously that Novak would stay in the business   producing hardware wallets. He'd probably go find something else to go do and make money at because he could figure out how to do that just fine   without making   hardware wallets anymore   if it got to the point where The United States and Canadian governments got on his ass and said, you will start producing   CoinKite   cold card wallets with k KYC   AML. He'd be like, fuck you. I'm gonna go do something else.  

Every all this software is already released. He actually has already provided all the plans to build your own cold card wallet if you want to.   We don't need to comply with this.   But if you're using a ledger and a treasure, you will be forced to comply with this. And the only reason that you should be using that is if you're a shitcoiner, and I've already told you don't do that.   Moving on to BlackRock.   IBit overtakes   Deribit   as world's largest Bitcoin   options   venue. Not ETF,   options   venue.   It's now the BlackRock's   iBit   is now being looked at as an exchange   in a way. Bitcoin news, Alex, Larry.  

BlackRock's   iShares Bitcoin trust has officially become the biggest Bitcoin options venue surpassing Deribit.   This is a big deal for the world of Bitcoin derivatives   as Wall Street's influence is now clearly extending into the area.   According to Bloomberg, open interest in options on iBit here hit nearly $38,000,000,000   after the last contract expiry. Darabit was then at about 32,000,000,000.   That's a huge jump considering iBit only launched options trading in November   2024,   and Darabit has been the go to exchange for Bitcoin derivatives   since 2016.  

2016.   IBit's growth has been historic,   meteoric.   By mid twenty twenty four, the ETF had already reached $70,000,000,000   in assets under management.   A month later, iBit passed 80,000,000,000 in assets under management, breaking speed records compared to older giants like Spider Gold Shares or Vanguard's S and P five hundred ETF,   which took years   to hit the same marks.   Today, iBit manages around $87,000,000,000   and has become the largest Bitcoin ETF in the world.   The rapid growth of iBit is part of a bigger story. The shift of Bitcoin trading   from offshore hubs   to regulated   United States based markets. And for years,   platforms like Derabit thrived on leverage   and high risk trading,   becoming the main hub for Bitcoin options. But that dominance is now being challenged by Wall Street backed products like iBit, which have regulation,   have credibility,   and have massive institutional   capital involved.  

This is a big deal as iBit has created a feedback loop where more liquidity   attracts   more inflows,   strengthening its position   even more.   George Mandres,   senior trader at XBTO   Trading, told Bloomberg that Wall Street's involvement is changing Bitcoin markets.   The involvement of traditional finance,   he said, brings substantial capital and trading expertise,   which means tighter spreads,   deeper liquidity,   and more efficiency.   Mandres even thinks that the presence of big institutions will reduce the extremes   of Bitcoin's famous price swings,   the volatility   of volatility,   as he calls it.  

Despite being surpassed,   Darabid is still a major player in the market. It was acquired by Coinbase   for $2,900,000,000   in August 2024.   The platform is still attracting Bitcoin native traders who prefer offshore flexible environments.   Analysts believe   iBit's rise hasn't hurt Deribit.   Instead,   it has created new opportunities.   IBit's US based products have opened the door for retail investors and institutions that were previously   unable   or unwilling   to access Derabit.   And it's worth noting that this situation has also created   arbitrage   opportunities   and has improved risk management.  

This is what many see as the future,   two parallel   ecosystems.   One   will be around regulated products like iBit for institutional investors and US retail traders who want compliance and oversight   and mommy to change their diapers. The other will be offshore   for those who want higher risk, more leverage, and experimental financial products so that they could have face ripping depression,   like 100 x leverage on BitMex, you know, back in the day. So there you go.   Onto Kentucky,   where a state senator is being sued   over a Bitcoin mining business,   Simon Chandler   from Decrypt.  

Kentucky senator Brandon Smith,   oh, from Hazard County, Kentucky,   is facing   two, count them, one, two separate legal cases related to Bitcoin mining repair business   that he founded   in Letcher County, Kentucky.   Smith is the CEO and cofounder of Mohawk Energy,   which in 2022   pivoted from coal cleanup operations   to ASIC repair operations and other Bitcoin mining services.   Wow.   Going from cleaning up old coal mines   to repairing computer equipment   is quite the jump.   Local outlet   Lexington Herald Leader reports that Ricky Dale Cole   sued Smith in Letcher Circuit Court in January, accusing the lawmaker of misrepresenting   the value of Mohawk Energy.  

Cole claims that he sold a warehouse to Mohawk,   agreeing with Smith to sell the premises below market price   in return for a 20%   stake in the business. Oh, there you go. There you go. Yet, Cole's suit alleges that the company has refused to share info about its finances   and that he has not profited from the deal. He also alleged that Smith made false promises and representations.   This suit comes in addition to a different case   filed in November   2023   by Huobi   subsidiary,   HBT Power.   And they alleged a breach of contract and misrepresentation   following an agreement with Mohawk Energy in June 2022.  

Now according to those allegations,   Smith had made a deal to work with HBT Power employees   to train his own workers   and acquire the in house ability to repair Bitcoin mining machines.   However,   Smith and other Mohawk representatives   eventually asked   HBT   Power personnel to leave Mohawk's premises.   With HBT Power claiming that Smith did not own the warehouse at the time, he entered into a contract with the Chinese company.   Smith has denied these allegations against him and has filed counterclaims   against both plaintiffs.   Despite the legal difficulties   surrounding Mohawk's pivot to crypto, Smith remains optimistic about the industry's future in The United States   and Kentucky.  

Smith had been instrumental in securing the passage of several crypto related bills in Kentucky,   including a 2021 bill which he authored   that provided tax incentives   for investments in cryptocurrency mining.   Speaking due to Crypt,   in his capacity   as Mohawk Energy CEO,   Smith said that the company is excited to return to its mission of job creation and trading   once the litigation is over. While it isn't unfortunate that Huobi and its Shell subsidiary,   HBT Power,   breached their eight year contract   and refused to start operating at the Mohawk plant. That does not impact Mohawk's   long term plans to bring more jobs   and more technology training to the region.  

Our counter suits   to the complaints   explain our position, end quote.   Mohawk's difficult pivot   came during a period when The US cryptocurrency mining sector   rip rip rip rip   witnessed rapid expansion   with Bitcoin mining sites in The US increasing in number by 23   between the years 2022   and 2024   to 48   Bitcoin mining sites. And according   to Shannon Squires, the chief mining officer   Oh, shit.   We have a chief mining officer as part of the c suite now, ladies and gentlemen. Chief mining officer, Sharon Squires, at Compass Mining said that such growth has continued this year as evidenced by Bitcoin's hash rate reaching new all time highs recently. Quote,   in The   US, the momentum, especially   visible in states like Texas and Wyoming,   The expansion seems to be mostly coming from existing companies rather than new players entering the market.  

While affirming that the American cryptocurrency   or rather crypto mining industry has become increasingly professionalized in recent years,   there's still some degree of variability   with some endeavors popping up and fading quicker than others. She added, quote, while Bitcoin mining is no longer the wild west it once was,   companies still need to do their homework and work with established partners that have proven themselves   through multiple cycles. Yeah. That's actually probably damn good advice.   I wanna go back up to this one   just for a sec.  

Cole's suit alleges the company   refused to share info about its finances.   Stop right there. That's your fault.   You should have seen the finance   documents   before you ever handed over the money.   That's your issue.   I mean, the I don't care if if Smith from Mohawk Energy   and   Smith, the senator, is is a scumbag,   dukes of hazard   level villain.   I don't   care. If you entered into an agreement and I'm not I'm not saying that he might not that this coal guy might not win. I'm just saying,   if you're dumb enough   to take a to pay money,   to take a supposed 20%   stake in the company because you you're you're you're gonna sell something to that company at a lower rate, and you don't   look at the financial statements, you don't require that on the table   so that you and your accountant can go through it with a fine tooth comb,   that's your fault.  

You should have looked at that before,   not after you cut the fucking check.   I don't know how stupid people are these days, but that's   just dumb.   Last one for the day, Temp Templar launches native Bitcoin lending without intermediaries.   Again, subtitle, what could possibly go wrong? Vivek Sin writing for Bitcoin magazine in a significant development for Bitcoin holders.   Templar Protocol has announced the launch of its main net,   introducing the first, quote,   cipher lending protocol that enables users to borrow US dollar stablecoins   against their native Bitcoin without any intermediaries.  

The launch comes at a time when institutional custody solutions are controlling   an increasing share of the Bitcoin supply with Coinbase alone holding 10%   of the circulating   Bitcoin.   The protocol, which has already secured a $100,000,000   in lending commitments, combines decentralized   multi party computation   or MPC   network technology with immutable smart contracts   to ensure user collateral remains secure and free from unauthorized   intervention.   This launch marks a departure from traditional centralized lending platforms   and wrap token solutions that have dominated Bitcoin lending. Quote,   the institutions have arrived,   and they're hoovering up BTC   using centralized   custody of companies like Coinbase,   notes royal f zero zero one,   I think.  

Royal fool oh, Royal Fool. It's in lead speak   because, yes, that's   that that's what I want from my CEO   is lead speak in their last name.   Royal fool, Templar Protocol pseudonymous   founder,   quote, with Templar.   You send your BTC to an immutable smart contract   running on a p two p network, which then sends you stablecoins,   end quote.   The protocol introduces several key innovations. Oh, joy. Including permissionless   access without KYC requirements,   open source architecture with no administrative backdoors. How how do we know? And privacy first design   suit speak. That's   privacy first design is suit speak.  

Just saying. At launch,   Templar supports native assets across Bitcoin and other chains. The technical architecture   employs a decentralized MPC network for securing Bitcoin deposits while smart contracts manage collateralization   and repayment processes   automagically.   This removes the need for traditional custodians while maintaining security and efficiency.   Quote, Bitcoin was recreated   to replace banks,   not to be a novel toy toy asset for Wall Street to financialize   and control,   says royal fool.   Templar restores Bitcoin   to its proper place as a permissionless censorship resistant asset in the context of borrowing and lending, end quote.  

While shitcoin number one,   DeFi ecosystem has flourished, Bitcoin lending has remained   largely centralized.   Templar's solution aims to change this dynamic by providing a decentralized lending option for Bitcoin holders.   The protocol's road map includes implementing additional privacy features such as differential   privacy   and zero knowledge protections against predatory liquidations.   Templar is also being integrated with various prime brokers   and wallet providers   to expand its accessibility.   This development comes at a crucial time in the Bitcoin market as demand   for decentralized   financial services continues to grow.  

Templar's approach of enabling native asset lend lending without wrapping or bridging could set a new standard for cross chain DeFi interactions.   The Templar main net is now live and accessible through their website with documentation   and support available through their official channels. The team emphasizes their commitment to expanding the protocol's capabilities   while maintaining   its core principles of permissionless access   and user sovereignty.   I'm I'm worried that I'm not getting a lot of information out of this news story.   I don't want to see   what happened with BlockFi   happen again.  

And we we seem to have learned nothing from the FTX, Alameda,   BlockFi,   whatever else it was, the the   the algorithmic   stablecoin.   I can't remember the name of it. That whole mess.   And BlockFi was right in the middle of it.   And a whole bunch of people that had loans against their Bitcoin   got their Bitcoin liquidated   even if   they weren't in danger of being liquidated under normal circumstances.   You know,   normal circumstances   like,   Sam Bankman fried not stealing everybody's money and making a giant mess of things. Now, they would have been fine. They would have been able to pay the loan. But no, BlockFi was doing dirty dealings with all these other assholes on the other end, and they all went belly up together. And the people that had their Bitcoin   in this protocol or this platform named BlockFi,   they all got hosed.  

That all got host.   I just don't wanna see it happen again, and it looks like we're not learning from our past. It looks like we're not learning from our mistakes. And if we can't do that,   we're gonna have more problems.   Then,   God forbid, we don't need any more problems. I'll see you on the other side.   This has been Bitcoin, and and I'm your host, David Bennett. I hope you enjoyed today's episode and hope to see you again real soon.   Have a great day.