On The Brink with Castle Island

Chase Lochmiller, cofounder and CEO of Crusoe Energy Systems joins the show. In this episode we discuss: Crusoe’s approach to addressing the issue of natural gas flaring by monetizing stranded energy The process by which Crusoe turns this stranded energy into Bitcoin How Chase sees the compute use cases that can benefit from capturing stranded energy Chase’s career path from finance to crypto to founding Crusoe The impact that successfully climbing Mount Everest has had on his career. To learn more about Crusoe Energy Systems visit their website.

Matt and Nic return for deals and the news of the week. In this episode:  The OCC clarifies that banks can custody dollars for stablecoin issuers Maker's flippening in collateral types, and what that means for the system Tether falls below 80% of stablecoin market share Two congressional bills propose to federally regulate crypto exchanges and tokens "Stablecoins" or "cryptodollars"? Cambridge AltFin releases their long-awaited cryptoasset benchmarking report The prospects for big tech antritrust What to replace the 60/40 portfolio with Content mentioned in this episode: OCC, OCC Chief Counsel’s Interpretation on National Bank and Federal Savings Association Authority to Hold Stablecoin Reserves Coin Center, Two new bills in Congress would clarify agency jurisdiction over cryptocurrency Cambridge Center for Alternative Finance, 3rd Global Cryptoasset Benchmarking Study ECB Crypto-assets Task Force, Stablecoins: Implications for monetary policy, financial stability, market infrastructure and payments, and banking supervision in the euro area Apolline Blandin on OTB, Estimating Bitcoin's Energy Footprint

Jeff Dorman is the CIO at Arca, which is currently engaged in a fascinating standoff with Gnosis, a token project in which they have a position. Arca is asserting that Gnosis has delivered little value to tokenholders and has proposed that they perform a tender offer for GNO tokens with the assets held on their balance sheet (which exceed the capitalization of GNO). Covered in this episode:  The original purpose of Gnosis as laid out in the whitepaper Why Gnosis only sold 5% of their tokens in the initial sale How Gnosis's dutch auction backfired How the original objective to create a prediction market failed The history of Gnosis' non-core products and expenditures – and why they don't accrue value to GNO Under what circumstances pivoting is permissible – and when it isn't The existence of obligations towards tokenholders, even if implicit and unstated What should a well-codified arrangement between tokenholders and token issuers look like? Jeff's view of whether the utility theory of tokens is still valid The substance of Arca's proposal to Gnosis, and their preferred resolution Arca's proposal around a tender offer to buy back GNO at a fixed price with treasury assets Why large investors exerting themselves in governance benefits smaller shareholders How Arca's GNO position is similar to the ESG movement Arca's response to the rebuttal that tokenholders have no rights Arca's leverage to achieve a positive outcome – and willingness to litigate Whether explicit security tokens like Arcoin and INX will converge to tokens with equity-like characteristics  

Tom Lombardi, Managing Director at 3iQ Corp, joins the show. In this episode we discuss: Tom’s path from traditional finance to the cryptoasset industry The enterprise blockchain era: lessons learned and the second order effects of the hype cycle The state of institutional exchange infrastructure The crypto-asset-management segment and how 3iQ is positioned to capture this opportunity   To learn more visit www.3iq.ca and follow Tom on Twitter @tomlombardi  

Matt and Nic return to cover news of the week. In this episode:  Our review of NFL week 1 Whether or not securities law topics come up at parties Why we're so excited about Kraken getting the Wyoming SPDI Why the SPDI being full reserve is so important – and why it eliminates certain regulators from the picture How Kraken's bank charter is reminiscent of a classic scene in There Will Be Blood Why Wyoming's SPDI is a long-awaited rebuke to Operation Choke Point Michael Saylor stacks MORE sats How Matt was able to initially break the Microstrategy news Why financial services firms looking at crypto need buy-in from the top Michael Saylor's revealing quote about Bitcoin's hard forks Why shrugging off hard forks defeats a key critique of Bitcoin What the SEC settlement with Unikorn inc means for other tokens The SEC sanctions rapper TI Matt's embarrassing TI story Our current view on handshakes Why the settlement quality of stablecoins is context-specific

Today, Kraken Financial, a wholly-owned subsidiary of Kraken, became the first financial institution to receive the Special Purpose Depository Institution (SPDI) charter from the State of Wyoming. To celebrate this major milestone, David Kinitsky, CEO of Kraken Financial, and Marco Santori, Kraken CLO, joined us on the show. In this episode:  Why Kraken decided to open an office in Wyoming and pursue the SPDI Why David and Marco chose to join Kraken and work on this project Kraken's journey to obtaining the SPDI and what's next Why Kraken Financial will not seek oversight from the FDIC – and why it doesn't need deposit insurance What an SPDI will enable Kraken to do What distinguishes a full reserve bank – and why take that approach How Kraken Financial would distinguish itself from the standard banks that service crypto companies and from full reserve bitcoin custodians Whether Kraken expects NY to honor reciprocity for the Wyoming SPDI The relationship between Kraken group and Kraken Financial The next steps to take the SPDI approval and become an operational, fully-fledged deposit taking institution What the SPDI will mean for existing Kraken customers  Read more about the SPDI here. 

Gabriel Shapiro, partner at BSV Law (no relationship to the coin), joins the show to chat securities law, tokenized securities, and the nature of industry regulation. In this episode:  Gabriel's introduction to the crypto industry and Nick Szabo's influence Gabriel's view on what public blockchains are for, most fundamentally Why there is an inherent tension between blockchains and the law Can public blockchains be made compatible with the law, and to what extent? The best opportunities for synergy between the law and crypto Gabriel's case for real tokenized securities How stock certificates are held and organized in legacy markets Domains where tokenized securities could outperform the current state of affairs A mistake investors make when interpreting SEC behavior Why the SEC will often let private litigation play out before imposing a fine The contrast between the EOS/Block One and Sia/ Nebulous Gabriel's critique of Hester Pierce's safe harbor for tokens - and her response Precedents to consider when looking at the utility/security distinction Whether a "Hinman test" for sufficient decentralization exists and what it entails Gabriel's proposed modification to securities laws to suit the reality of the industry The effect of election outcomes on securities enforcement Follow Gabriel on Twitter and read his fantastic series on Medium, Size Does Matter

Matt and Nic return for deals and news of the week. In this episode:  the NFL is BACK Matt's predictions for the Patriots season New data on countries where crypto penetration is highest Mastercard launches a CBDC testing platform USDC launches on Algorand Past is prologue for stablecoins moving chains DCG continues to grow into a juggernaut Our Sushiswap explainer Can DeFi projects maintain sustainable moats? What distinguishes DeFi tokens from ICOs? Why you can't apply traditional equity earnings multiples to DeFi valuations How Sushi reminds us of Monero's origins How Curve reminds us of Dash's launch Why communities often stick with botched 'fair launches' Content mentioned in this episode:  Avichal Garg and Curtis Spencer on On The Brink Ruben Galindo appears on the show Jump Capital's mid-2020 crypto theses Chainalysis' 2020 global crypto adoption index Bitcoin: A Novel Economic Institution from Ark Invest

Ruben Galindo, cofounder and CEO of Airtm, joins the show. Recently, Airtm has been in the news as it was reported that Juan Guaidó, Venezuela's would-be President, was using the app to coordinate the disbursement of funds seized from the Maduro regime to healthcare workers in Venezuela. In this episode: Why Ruben cofounded Airtm  How Airtm creates local liquidity for dollars against any local currency How Airtm manages their reserve How Bitcoin and Ethereum intersect with AirUSD How Airtm creates local liquidity on their platform The size of Airtm's userbase globally and in Venezuela Why international freelancers gravitate towards AirTM The genesis of Airdrop Venezuela How Airtm linked up with Venezuelan president Juan Guaido to distribute payments to Venezuelans The genesis of the plan to distribute seized funds to Venezuelan healthcare workers How Airtm is planning to route around Maduro's attempts at censorship How Airtm manages the physical risks of running a grey market business in Venezuela Read more about Airtm here.

Avichal Garg and Curtis Spencer, founding partners of Electric Capital, join the show. In this episode we discuss: Their path from entrepreneurship to starting Electric Capital The experience of raising a $110M fund II from institutional limited partners The current state of play for layer one smart contract platforms Framing decentralized finance for the non-crypto native The geopolitical chess match for the USA and China vis a vis cryptoasset regulation The outlook for privacy coins   To learn more about Electric Capital visit their website and follow Avichal and Curtis on Twitter