Episode 104:


Leah Wald

Discussing Bitcoin’s Ecosystem




This is the first transcript I’m putting out. While editing, I sometimes shortened or changed sentences. To hear what we said in real time, check the unedited audio and video footage. Changes are made at my sole discretion and were not cleared with the guest in any way. If I change things, it’s for the purpose of explaining it as I meant it, or how I believe, in good faith, that the guest meant it. My intention is to make these transcripts equally or greater fun to read compared to listening to the original audio. I have also experimented with having this version of the podcast synthesized back into an audio version that will be read at double speed. The hope is that it will stand out as a podcast worth listening to or reading about.


Sasha Hodder (00:00:00):
Hello everyone. Welcome to the HODLcast. We’re coming to your from the moon, exploring some of the zoom settings. Today we have special guest, Leah Wald!

Leah Wald (00:00:16):
Sasha has a pup. So if, um, Mr. Gator does decide to join us again, you will have a guest appearance of someone else on the moon. But thanks Sasha.

Thank you for coming today Leah. So let’s just take it away. Leah, how, how did you get involved in Bitcoin?
Leah Wald
Um, yeah, so that’s always a difficult question, right? It’s always, how did you start like full time as your job decided to jump into or learn about it going, but I guess I’ll start with how I started with Tyler.

Leah (00:00:58):
Um, so actually I started because I learned about shitcoins first and one of my friends is a partner at Andreessen Horowitz and he was sending me all these articles about all the ICOs that he was excited about. And at the time I was working for a Canadian licensing company and I was helping them structure their IPO. So I get sent all these articles about ICO. I go to the CTO and I’m like, Oh my God, why are we not doing an ICO? This is the most amazing thing ever. You know, we just need the liquidity. We should do this. And looking into it, of course, whatever it looks like it’s too good to be true definitely is. Tyler, was one of our closest family friends and people don’t often know the background of that.

Leah (00:01:48):
And that ties into the story. So, his son and my brothers started their first company and dropped out of college. The parents decided, all right, let’s, let’s help our sons out. So, I’ve known Tyler since, what, 13, 14 years old? He was a Thanksgiving dinner and I’m telling him about all these ICO. And I was very surprised, at the time he was 68, he’s telling me about Bitcoin and that he had been mining and he’s been, you know, investing, and he’s all excited and I pretty much was looking across the table and I’ve known Tyler forever, but I’m like, like, seriously man? And so, one of the first things he said is, Leah, that ICO idea, that’s totally illegal.

Leah (00:02:39):
You can’t do that. Like you’re being ridiculous. Stop this. There’s Bitcoin. And so, the voice of reason. And so needless to say, I actually quit that job and started with Tyler for the full time. So that’s actually how I ended up in it. I will say, and this is contrary to what people love to, to say about the space, I did find it confusing at first, right? ICOs just sounded amazing. Oh yeah. Really amazing. And until you have a good voice of reason, whether it’s YouTube stars like Tone, Jimmy, Giacomo, well there’s so many amazing people in the space, or you attend a conference and you actually get enough knowledge that you can make your own decisions and understand the importance of Bitcoin, it’s dangerous to go down that alt-coin route.

Leah (00:03:36):
I think that it’s tough. So I feel like I was lucky that even when I hadn’t even, you know, known too much about it besides these articles being sent. And you know, Andreessen Horowitz is pretty reputable, so I was thinking that it’s very kosher. But luckily Tyler straightened me out hardcore pretty quickly. So, so then we went full time. I was like, Tyler, I don’t think I can afford my rent. Uh, what’s this idea? Then we launched Lucid and that’s how that started.

Sasha (00:04:31):
I used to watch the morning brief with you, Jimmy and Tone, pretty much every day while I was driving, running, whatever, I was listening to it. And, uh, that was before I had met you. So it was really cool when I got to meet you in person. How did you get involved with co-hosting that show?

Um, so to say thank you Jimmy and tone because they did a morning brief yesterday, so I’m like, you know, so it’s really exciting that it came back. I met tone in kind of a ridiculous way, and I was very lucky that Tone believed in me enough to throw me into the fire of trying to moderate the Bitcoin morning brief when it was just Tone and Jimmy. I had absolutely no idea what I was doing. And also, I didn’t know that much about the minutiae of Bitcoin, but you learn quickly. Yeah. That’s where I feel like we’re really lucky with certain people in the space. I feel like our community actually really supports the community, they really took me under their wing and I’m really, really appreciative about that because otherwise I think it is really difficult at the beginning to understand the important differences of the space. And also, when you’re first beginning, the tech, the price, everything that goes into it, from mining to, why certain blockchains are so centralized over here. I got really lucky and also I sounded really stupid at the beginning, but you know, I started to learn, I think from the best of the best.

Sasha (00:06:02):
I never thought you sounded stupid at the beginning. I liked your voice, or your opinion, and it helped me understand everything as well. I learned a lot through you guys.
Leah (00:06:17):
That’s pretty awesome. And then tone brought you on. So maybe a question for you is just, you know, when tone started the law review actually you were at my house.
Sasha (00:06:31):
Yeah. That was the first time I met both you and Tone. Adella called, she was like, what are you doing this afternoon? And I was like, Oh, I’m just sitting here working. She’s like, no, come with me. We’re doing something. She told me on the way. I didn’t think I was going to be on the show. I thought I was just going to watch you guys do it, which would’ve been cool anyway.

Leah (00:06:50):
So for everybody out there, you know, we’re going to talk about price, we’re gonna talk about economics. We’re going to talk about a lot of things, but also I’m going to throw at Sasha some more questions that I have. So can I actually just throw them at, yeah. All right, let’s have that. So Hester Pierce, our crypto Mom, has thrown out guidance and people are definitely almost binary on being upset about it or being excited about it. What is the importance of the guidance and really what the guidance is actually saying. Can you break it down?

Sasha (00:07:33):
Yeah, sure. So, Hester has been very helpful I think to the community from her role at the SEC as a commissioner. She’s been very inviting to projects to reach out to her and she’ll have phone meetings with them. She’ll review different documents and while she can’t let them know without an official No Action letter, she understands what a lot of the companies who are trying to tokenize are going through. The agony of if you’re launching an exchange, how do you know whether something’s a security or not? Because if you are launching an exchange and you list a security inadvertently, you can then be charged with running an unlicensed securities exchange. Likewise, if you’re a token project and you’re trying to launch and you’re trying to follow the rules, it’s very difficult to know if you’re a security or not.

Sasha (00:08:36):
We have that Howey test. Lots of people say, okay, well my token is different than every other token because I’m selling a good or a service – and that is a valid argument. If you’re selling a token, like what was issued with the turnkey jet letter, those tokens only work to buy access to the jet, so they really are a service kind of token. It’s like going to the movie theater and you’re paying for that, but they’re not allowed to go outside that ecosystem. So then other tokens that are not able to stay within that limited access/ticket sale kind of ecosystem, they have the options of using regulation D, Regulation, crowd funding or Aegulation A+. The A+ is very expensive and time consuming for a token project to attempt. The lawyers are charging upwards of a hundred grand to do this. Yeah, and there’s been a lot of A+ applications. The SEC has to approve it first. They’ve only approved one to my knowledge. So a lot of these companies have spent all this money to get nowhere, and Hester sees that. Rather, Commissioner Peirce, I feel like I’m on a first name basis, but I’ve never met the woman. I have a lot of respect for her and should use her proper title.

Sasha (00:09:49):
She sees the applications and knows what they’ve gone through to get where they are and probably knows that these people that are taking the steps to go through the actual regulated channels, that they’re probably not the same crowd as the ICO scammers. Now I heard her on a podcast with Laura shin last night and Laura, I heard the podcast last night. It was from Friday, but uh, Laura did a good job asking her, well, there’s a lot of people that think they’re not scammers that are, but you know, their product is still going to be a scam. How do you feel about that? And, Commissioner Peirce said we don’t know, , there’s no way to know right now if there’s ever going to be a successful kind of token, you know, right now a company that follows the rules often gets locked out from being on crypto exchanges because they are securities. So it’s like kind of a stall mate. And with this safe Harbor that she proposed, they get a three year window to try and amp up to get some kind of metric that meets that sufficiently decentralized definition. So if you remember that long, long podcast that Tone did, when the Hinmamn speech,

Leah (00:11:13):
By the way, do you know the story behind that really quickly? Not the Hinman speech, and don’t forget what you’re saying. That’s when I was getting my knee surgery. And so it was only supposed to be like a four hour surgery, so separate ACL and then they figured out that it was a separate meniscus. So I was under for nine hours and tone started off that he would do the show until I texted that I was out of surgery.

Sasha (00:11:54):
Ah, that’s why it was a nine-hour show as tone and many others pointed out that that of whether something’s decentralized or not as a really moving target and there’s no way to really know if something is sufficiently decentralized. Now Tone would probably say nothing is ever going to be sufficiently decentralized that wasn’t launched through a proof of work mining protocol with an anonymous owner or creator. But, uh, the SEC has said Ethereum is now decentralized because it can’t be shut down by Vitalik. They look at several different factors. How many people are building on it, how much something’s trading, where is it available? Is it listed on a lot of exchanges? Those were some of the metrics. And then they gave us a pretty extensive list of what categories or factors they look at us for something to be decentralized. Now where a lot of people are criticizing a commissioner Peirce’s Safe Harbor proposal is that there’s still no definite target of what is going to constitute decentralized.

Sasha (00:12:50):
But she said she wanted to put it out there to the community before taking it officially to the SEC. Well, I don’t know that process of maybe it already is officially there, but she wanted to get feedback and comments so people can say, Hey, you need to do it this way for it to work better. To create this decentralized targeted for three years out. So I think that’s the right approach. To get the people who are invested in it and want to see it succeed, have them comment and say what they need for it to work. And the caveat here is that it’s still subject to the anti-fraud provisions of the securities laws, so anyone lying is still able to be held liable under the securities laws.

Sasha (00:13:44):
So we shouldn’t see what we saw in 2017 of fake LinkedIn profiles and things like that. Mind you, we might still see it and you know, they might still be there, and they have three years to exit scam now. So I think it’s a positive overall because at least we’ll get some data on how this works and the token projects that are trying to launch using these regulated crowd funding models or other things that her version is a lot more streamlined and it allows the token not to be locked up for that first year, which is really important. If a token is trying to launch and get started, it needs to be able to move. Whereas right now if you move the token in that one year period, you’re automatically violating securities laws. So I think that’s the good part.

Sasha (00:14:35):
But I was surprised at how many people were coming out really negative against it. And I was wondering, are they just pissed because it’s going to be easier for companies to do this and they won’t be able to charge as much money to go through the current complicated and cumbersome process. But maybe I’m missing some other major other reason. They’re screaming investor protection as the reason, but, you know, people can go and gamble on roulette. So let them gamble on ICO coins too. And as long as they know that it’s gamble and they have certain disclosures and they’re not being lied to about the project, then it should be better.

Leah (00:15:12):
Yeah. And you know, there’s so much being talked about, fed coin is still being talked about, you know, GBTC, most countries around the world, I can talk a little to Singapore of what we’re seeing. You know, it’s, it is interesting and I still always as a Bitcoin maximalist think that Bitcoin arrives and if anything, you know, there is going to be a day of reckoning that it, you know, it’ll show if anything, the differences and really how to understand that. There’s just, you know, with the ICO and the other alts, how they are centralized versus how Bitcoin is just so different and whatever Bitcoin truly becomes, because there’s just so much we can talk about lightning and the controversies around what’s happening, I’m a big fan of what Christian Decker has been building with C lightning and everything, but there’s so much still being built. It’s so exciting that now it’ll be interesting to see where and what Bitcoin truly becomes. Its developing every day. Um, to go back just to terms, uh, everyone mentions this Howey test. I’m going to be like the, you know, the person who doesn’t understand everything because half the time I don’t. Um, just so we can break it down, what is the, Howey test?

Sasha (00:16:30):
Okay. So, it started off in 1946 with these orange groves in Florida. So, people were giving this orange Grove farmer their money. The farmer was planting trees and giving them a share of his orange sales. So, the SEC looked at it and said, that’s a passive investment. The securities act of 33 and 34 have enumerated what are securities are, there’s a list. If it’s a stock, it’s a security. If it’s a bond, it’s a security. Um, there’s about 19 different things in their forward contracts, Um, but they didn’t have anything that captured what these orange groves were. So, then they created a test. Uh, I, I always think of it as four factors, but I’ve seen it written a lot as three factors as well. But basically, it’s, if there’s an investment of money into a common enterprise [with the expectation of profits] where you’re relying on the efforts of others. So, it’s any kind of passive investment would be considered an investment contract. If you don’t have control over it, if you’re not doing any labor, like you’re not out there farming those trees, but you’re going to get a profit off the farmers efforts on the orange trees and you don’t control if he doesn’t go and do whatever is required to take care of those orange trees, like watering them. If he doesn’t go and water them as he said he was going to do, but instead, he lets them die. You, as an investor, couldn’t control that. You might live in another state or something. So that’s when it becomes, okay well we might need to regulate this under this securities laws because this person’s offering a potential to make money and he might lie and so we want to make sure he’s regulated so that he’s not lying to the investors is kind of how it, how it all came about.

Sasha (00:18:25):
But how it works in context of you know, Bitcoin or not Bitcoin because Bitcoin itself is not an investment contract because there’s no central party that you’re relying on. It’s, it’s what we call decentralized. So you know, no one person is in charge of it or can turn it off. But the difference with all the ICO companies is there is a central party that’s issuing them and they’re telling you, or the idea behind it is that you’re going to make a profit based on the work of that company who’s issuing their new blockchain. So that’s why the sec can attach regulation to those, um, under the securities laws. Does that make sense?

Leah (00:19:08):
Yeah. And for traditional equities, which is kind of funny, which people don’t often think about or know is that a, you can actually trade orange juice futures. So it reminded me of that. But they, yeah, that’s, that’s very interesting. Um, okay, I’ll stop bombarding you. We’ll go back and forth. Um,

Sasha (00:19:29):
well why don’t you tell us a little bit about, so you’ve been at conferences and whatnot in Singapore. What’s it like out there? I hear all the time everyone that is trying to do some kind of crypto project in America are often saying, Oh, the rules here are too annoying. We’re going to go to Singapore. Is it a free for all? What’s going on?

Leah (00:19:50):
Yeah, Singapore is fascinating right now. They’re really regulatory forward. Um, and they’re putting forth a lot of guidance and this is for any company structures. They have this new, it just launched I believe a month ago. VC type of incorporation structure. The MAS is literally putting out guidance every day. Um, what’s interesting, which is a very sad catalyst, is that a lot of other companies in Hong Kong, um, started making the move just based on, um, you know, the environment. So, uh,

Sasha (00:20:31):
What sort of environment. Do you mean regulatory or the virus?

Leah (00:20:35):
Yes. Now virus and you know, there was just so much, and then so it was kind of the double whammy of Singapore becoming really an incredible location, uh, from a tax perspective, right. Cap gains, you know, really taxes is incredible for any company that wants to be working there. Um, and then also just the environment generally for working with everything that was going on with Hong Kong. Um, so it’s very interesting. I think Singapore is really trying their best to compete with the Cayman islands, Malta and Estonia and other tax havens around the world that, you know, have, for the most part, a very bad brand image, um, kind of a stigma and for the most part really aren’t the best places to be incorporating a company. I think Singapore is doing a really brilliant job, they at least are really pushing for it.

Leah (00:21:38):
I don’t know if people know, but we have our Baakt product in the States. Well, they also launched the launched a product on the Singaporean exchange. And that’s the only other place. It already shows and it was pretty much very quickly on the back of, so it was, I think in December, um, don’t quote me, but very recently, so they really needed the back CEO that has just become a Senator. That’s exciting too. I mean, there’s, there’s a lot going on. You know, I’m actually like really excited about the positive developments. I do think that in the end of the day it’s going to show the divide of importance in difference of Bitcoin, at the end of the day, the Baakt product is on Bitcoin.

Leah (00:22:43):
Right. I think it’s just kind of an interesting time, we have the havening coming so soon, right? So I guess I can stop even right there. Cause that becomes like an entirely different conversation. But, um, the question is, you know, with the price action and we have a lot of TA practitioners saying, you know, from every single end of the spectrum, if anything, like CoinDesk articles are so funny right now because it’s $200,000 or we’re going down. I think that no matter what, we’re going to have news coming out and if anything, having news in this space creates a psychological impetus of, you know, it just excitement or rational exuberance that can lead to the photo that we saw. And I think this time around, I think that the people that are going to be coming in, I think it’s going to be more smart money, but also I think that we’re going to remember what happened in the past. And so if anything, I don’t think we’re going to see the type of drop and the type of price action that we saw, the craziness of, you know, and that that wasn’t happening.
Can you define smart money and dumb money? I hear the terms all the time and I never quite know what it means.

Leah (00:24:23):
Yeah. You know what, it’s probably not a good PC term. It really isn’t. Um, but I guess, and I’m not skirting those questions, we’ll go back into it, but, because you have me thinking about just price action, at least from my perspective of coming up to the havening cause I was like our conversation prior to this, you know, I think that it’s been traders within our ecosystem. Um, and so when it comes to smart money, I do think when institutions and more, you know, seasoned veterans and investors, uh, smart money I guess, um, get excited about all the different activity and the volume spikes we’ve been seeing recently. I think that people are starting to pay attention. I think that it’s going to go beyond our ecosystem of already traders within the space, um, and start bringing in more people who traditionally are just volatility, the traditional markets. So you guys aren’t dumb.

Leah (00:25:20):
That is a really bad thing to say, dumb money. I guess smart money, at least for me, that just means that more seasoned veteran traders or investors are coming from the traditional equity world are getting more interested in figuring out crypto and how to play this system. And again, whether it’s the products like the GBTC, and then within their Schwab account.
So can investment advisors buy a little bit of that GBTC for their clients now?

Leah (00:26:20):
So that’s pretty interesting in that the niche that Tyler and I had in the space, the focus that we had is was investment strategies, you know, straightforward discretionary asset management for institutional investors and high net worth individuals. Okay. And an asset management firm is just simply put that, we have a discretionary account and we have fiduciary responsibility over those two accounts. So, uh, with your Schwab account, we can dip in, based on whatever your risk tolerance is, whatever portfolio, if you want, you know, conservative, moderate, aggressive. Um, but we can assist with that. Um, and we can again, dip into your Schwab account, make changes accordingly or not. You can say, no, I don’t want you to do that. Um, so in, you know, moving from 2016 actually, you know, going forward, um, we were able to play the GBTC within our client’s accounts if they were, if they were comfortable with it.

Leah (00:27:21):
The RA we were under at the time actually, , was more conservative and they weren’t that comfortable about GBTC ways that the risk statement.. So typically you are under an RIA or you have your own RIA. So then we’re registering our own RIA, so therefore we could have more of an aggressive risk portfolio, and therefore actually have portfolios that again could allocate more in Bitcoin. Um, and especially with all the products that were coming out. So, to your question, yes, within your traditional, you could access bitcoin through gbtc. So, if you know were in, back when Tyler was still with us, I could just advise you if you weren’t one of our discretionary accounts and say, Hey, I think it’s a really good time to buy GBTC you know.

Leah (00:28:14):
And with GBTC I should say there’s a lot of money to be played on the premiums and discounts. Um, there’s a good show where Tyler and tone just talked about GBTC if anyone’s curious. Um, but again, GBTC has to trust, right and treat it as penny stock. So it is not Bitcoin, but it has exposure to Bitcoin. So it’s underlying Bitcoin,. And what’s interesting about that is there’s actually more products coming out of people who wanted to create, uh, an art creating, I think a more, a better GBTC product. They have like the most Bitcoin of anyone. They are, they’re massive and they’re a really incredible reputable, you know, from the veterans.

Leah (00:29:12):
Um, but then after GBTC, they kept going. The GBTC ticker, the Bitcoin investment trust, is by far the most traded one. But they do have a suite of options.

I wonder how they handle their private key cause imagine how much they have. They must have a multisig with like a hundred people needing to sign something.
Right. And I’m probably wrong, but I did look into it. I’m probably wrong. Someone helped me after this show and I probably sound stupid, but I don’t believe they’re FTC assured. So they, um, so it’s, it’s interesting, you know, again that there’s liability and it was always interesting, I think, you know, when we were talking before about the back product was launched of um, what is, you know, what they were talking about, you know, how, how’s it being done? I think that, you know, just custodianship right now, you know, is, is an interesting, is an interesting space.

Sasha (00:30:23):
I’ve been hearing Fidelity has been doing a lot of work around custody, but I don’t know exactly what that means. I just hear it. Oh, Fidelity’s getting a lot of custody solutions ready,
It’s so fascinating. And then of course, you know, when Coinbase launched their custody service, um, you know, that a lot of people ran into that. There’s companies like out of Hong Kong called hex trust. I know there’s so much to build in this space. It’s difficult to get a bank account if you’re starting off in the space. Uh, silver gate has a nice monopoly. What do you think about the current regulatory environment of countries being worried about and only allowing certain companies to, you know, be involved in this space?

Sasha (00:31:40):
Yeah, that’s a good question. I have one client that has a silver gate account and they are by far my most successful client. And I think having that bank account is a big key to their ability to succeed right now. If you are a Money service business, and you need a bank account, you either need $1 million or $300,000 in transaction volume going through the account each month for bank to touch you. It’s a big challenge. Especially I work with a lot of Bitcoin ATM companies and that’s where it’s the hardest for them because they actually have cash on hand that they need to deposit into the bank. But if they aren’t big enough yet to have a proper MSB bank account, they have to like go deposit it through several different personal accounts and then transfer it around and use smaller OTC players.
Sasha (00:32:39):
Some of the more reputable OTC players won’t do transfers under a hundred grand, so they need smaller ones like 5,000 bucks a time. But if you’re using one of those, OTC transfers is different than putting it to Coinbase. You still have to get the cash into your account. So you basically have to, it’s, I mean it’s the only way to do it right now. You have to go and put it in a bunch of different bank accounts and then transfer it into your other like if you have a business account and the bank hasn’t figured out that you’re an MSB yet, that’s your goal is to not let them know – it’s horrible. But as soon as they know, you’re going to lose your bank account, so, in order to survive, they’ll move money into there and then transfer it to wire, transfer it to an OTC desk or they’ll go on local Bitcoins and try and sell Bitcoin, um, or sort of buy big so that they can get rid of their cash and go deposit it straight into that person’s bank account.

Sasha (00:33:39):
So it’s a real mess and it adds hours and hours of work trying to navigate this weird system. So, I would love to see the banks get more on board. I used to work at TD bank as a small business advisor and even then, it was difficult to open a business account. It required a lot more due diligence than opening a regular personal account. But nothing like what we see if they’re opening an MSB account now is like a 66 page application sometimes. And uh, it needed a personal financial statement and all your tax history, photos of your office, they really cross all the T’s and dot the I’s. I don’t think it’s going to get any easier. We’re waiting. You and I were kind of hoping that this FinCEN guidance everyone is anticipating would come out before our podcast today, but you know, we’ve heard bits and pieces that something’s going to happen around that’s going to impact crypto.

Sasha (00:34:39):
Oh, the dog, I guess we’re not giving the Gatorade enough attention or he doesn’t like the FinCEN guidance. He’s very intuitive.
What are you expecting from the guidance? You know, I was talking to a couple of friends today and I said, uh, you know, FinCEN guidance may drop this morning. And they said, wait, what? So what are we expecting?

Sasha (00:35:11):
On May 9th of 2019, we got a guidance that kind of summarized all their past guidance’s where they said, who has to register as an MSB. Basically that is broken down to whether the person is an end user, an exchanger or an administrator and whether the company is taking custody or not. So anyone that’s taken custody of someone else’s assets and converting them from Bitcoin to Fiat, or from Bitcoin to any coins, if you, as a business, take someone’s asset, you give them back a different asset, then you’re an exchanger or if you’re taking a profit off of it. So then once you’re considered someone that’s regulated by this, you have to follow the protocols of being an MSB, a Money Service Business, you need to have a compliance officer, you need to keep good records, five-year records of suspicious activity reports, currency transaction reports, and, a whole slew of things.
Sasha (00:36:06):
But you know, once you know that you’re, that, an MSB, you can comply with it. But the question for a lot of companies is, Am I money service business or not? They think that they’re non-custodial. A lot of people come in, Oh, I’ve got a non-custodial exchange. And then when you get into the nuts and bolts of it, it’s like they’re still taking a profit from it. They’re still taking someone’s assets and moving it. I don’t know why they think they’re not custodial. A lot of times it’s just they want to be, so they call themselves that. But right now if you really are truly non-custodial, you don’t have to comply. You don’t have to KYC, everyone. You don’t have to do all that. You’re not regulated because you’re not taking hold of anyone’s money and giving them back something different. So I hope that the guidance doesn’t impact that because that will really wreak havoc on the whole Bitcoin ecosystem because it would make it so that every wallet, you know, green wallet or blockchain.info, every truly noncustodial wallet that that people are using would all of a sudden have to KYC people.

Sasha (00:37:16):
And that certainly hasn’t come out. That’s just what I hope doesn’t happen. Um, but what I think will be addressed, they talked a lot about privacy coins last May and I think they still didn’t fully understand privacy coins and they talked about mixers and that was the part of the guidance that I think lacked a lot of clarity and it brought up more questions than answers. So I think they’re probably going to build on that this year. And I think it will come out that, you know, if you’re mixing you might be considered a money launderer like that’s what they just charge the helix guy with was money laundering and unregistered money service business. I think that’s a bit of a new, it’s a case of first impression, because with the mixer that was a custodial, like they were taking custody, but they were taking in someone’s Bitcoin, giving them back clean, mixed Bitcoin.

Sasha (00:38:06):
But it’s still, they took custody, they gave them back a different Bitcoin. So maybe that’s a transmission or maybe because it’s the same asset, it’s not, I don’t really know how, how that’s going to get decided. But what they were doing was taking coins from Alpha Bay, like dark web Bitcoin that was used to buy drugs, and then cleaning it. And that, I think, is pretty clearly money-laundering there. So I think the money laundering laws are going to be probably applied across the board to mixers, which means, you know, mixers are going to have to go out of America.

Leah (00:38:41):
Great. So not talking about the criminal case, a lot of people have been talking about mixing right now, but how do you think that that’ll affect just generally, you know, the just mixing, I mean if I’m taking your Bitcoin and I’m sending a different Bitcoin, you know, do you think that this is going to have huge ramifications for just the whole, you know, industry in general or what could happen?

Sasha (00:39:09):
Well, I don’t think people are mixing a whole lot right now. I think unless you’ve got some criminal activity going on, you don’t have a need to mix. Maybe I’m wrong on that. Like some people, you know, that are really into privacy might, and my technical knowledge of how the mixing works is a little naive right now. I need to look up, like maybe try a mixer myself to, you know, you never, you can read about it, but until you go through the steps of sending a coin and seeing what’s happening, it’s hard for me anyway, to really grasp what it is. So, um, I know there’s decentralized or non-custodial mixers and custodial ones, so hopefully the noncustodial ones still, you know, remain unregulated. I think that, I think mixing, you know, there’s a fungibility problem with Bitcoin that looks like it’s happening and mixing kind of fixes that. So I think from what I can tell, it’s a really important step to the growth of our ecosystem. Um, but you know, from the government’s side, it’s like, Hey, you’re hiding your money and you’re laundering it, so we’re going to regulate it. And I see both arguments as valid depending on what side you’re sitting on. So it’ll be interesting to see what happened, but hopefully the noncustodial mixers are not impacted by any upcoming regulatory guidance.

Leah (00:40:21):
Yeah. Okay. I have another question for you. Um, and also I guess this is something that’s not talked about that I’m factoring into. My price section or projections for pre havening is that it’s falling on tax season.

Leah (00:40:48):
I actually asked you previously, given, my situation with Tyler, how do I account for my taxes and you helped me out. Um, and so at spot during the time that I received and I hold it over year, yada, yada, yada, it seemed pretty straightforward. Now I do think that, and you know, maybe everybody here is a genius, but at the time I didn’t know it was so easy to understand what taxes I needed to pay. And I know a lot of people here think that. So, for everybody else here, could you explain?

Sasha (00:41:34):
Well, the hard part with taxes is that many people didn’t keep great records in the 2015, 16 and earlier eras, but if you were trading on Coinbase or somewhere like that or you know, you guys enter your business account, obviously have records of when you purchase the Bitcoin and sold it. So if you’ve got those records then you treat it just like a stock. The purchase price, the sale price, the difference between that as either your capital gain or capital loss. If you were day trading or short-term trading under a year, if you had a gain, that gain is treated as your regular income level. Whereas if you held it over a year, it becomes a capital gain, which is going to be typically around 15%, so lower than your income level.

Sasha (00:42:30):
Um, this year though, they added a complication of the airdrops. So it came out a few months ago and I don’t think it’s going to be something that’s easy to implement for the IRS at all, but they want everyone that received an airdrop to pay tax on the value of the airdrop. Even if they didn’t touch the airdrop, they’re still supposed to have a tax consequences as income. The moment the airdrop hit their account. Now a lot of coins that were airdropped were valueless, so you can just write it off. But for Bitcoin cash, which I think was the main thing they were trying to target. It did have a value by the time it came on Coinbase, the first time it was tradable. So people who had their own keys, they got their Bitcoin cash in like June, I think June or July.

Sasha (00:43:20):
People that had their Bitcoin on Coinbase didn’t get their Bitcoin cash until like six or eight months later. And that value is being considered income the moment that that Bitcoin cash hit the account. Now everyone said that the regulation was ridiculous because the IRS maybe didn’t know how many different airdrops or forks there were. Um, you know, there’s, I think hundreds of them, especially if you had it like my ether wallet. You got airdropped at ton of different things, but the real one, I think they were going after with the Bitcoin cash and you know, I think they probably received a lot of questions about that from accountants. You know, the couple of years leading up to it. And it kind of makes sense for that one. Like if you got a bunch of stuff that was worth $2,300 and then you sold it, okay.

Sasha (00:44:08):
When it came in, it was income and the, you know, you didn’t have a cost basis other than the 2300, so that’s added to your income for the year. Um, if you, even if you didn’t sell it, that’s where it becomes a little bit unfair. I think if people just were like, screw that, I don’t want to touch my Bitcoin cash, even though it’s worth money. Like they said, I’m fundamentally against them, so I don’t want it. Um, they, they still are going to have to, if they had to come through Coinbase, now it has to report to the IRS.

Leah (00:44:52):
But it seems as if it’s still pretty straight forward with Bitcoin. Yeah. Because Lucid we had a pretty high minimum of investment to be able to work with us. We actually did Fiat, Bitcoin, if you want us pay us in D flawless diamonds or gold coins. We never got the diamonds. Uh, we didn’t get the coins, but actually we worked with a lot of people with coins. We did get Bitcoin, in various payments, mainly for consulting or for the webinars or for the workshops, etcetera. We did pay some of our employees, if they asked, out in Bitcoin. If you remember why I was asking is just how do we account for those various levels and for the month that I got paid out in Bitcoin, um, how would I account for it, you know, during this taxable year, especially because I put it then on Kraken to trade. And you know, it seems as if everything starts getting confusing, but it actually came down to being quite simple, at least for Bitcoin. Sounds like everything else. Yeah. So maybe everybody stay away from everything else. You already know I’m a maximalist.
Sasha (00:46:16):
And, if you buy and hold your Bitcoin, you don’t have to pay tax until you sell it. So it’s only if you’re earning it from mining or you earn it as like your employees might have earned it, then it’s income the same way their cash would be treated like income. But if you’re someone that say, bought some Bitcoin and just haven’t sold it yet, there’s no tax implication until the day that you sell it. At which point you’ll have to calculate what you paid for it, what you sold it for, and the difference. And then pay tax on the difference if it was over a year at your capital gains rate.

Leah (00:46:52):
And it’s a spot at the time that you received it, correct? Yes. Yeah. Yes. So pretty simple. Yeah.

Sasha (00:47:02):
Yeah. But if the people that are, say, trying to, like if you’re a store and you want to implement Bitcoin payments as something that people can buy coffee with, say you and I have a cafe and we want to accept Bitcoin, that’s going to make it a little bit more challenging for us than if we were just accepting cash because we’d have to keep track of the price of every single time someone bought it and then when we sell it. So it really adds a layer of complication that I think is hindering adoption and coin center right now has put this crypto tax fairness act. I mean, that’s what they called it a few years ago. I think they have it, it’s under a different name this time. But it basically asks for the de minimis exemption that’s applied to other currencies. So the value is 600. So if the transactions less than $600, it wouldn’t have a taxable implication. So I think that would make a lot of sense if it came to fruition.

Leah (00:48:02):
Yeah. Um, I have a friend in Singapore who at all his restaurants, actually, he runs a lightning node and if you pay in lightning, or in Bitcoin, um, you get a 15% discount. Holy crap. You guys before it, uh, you know who you are, you rock. Um, but, but yeah, it, you know, that’s been a topic of conversation with the latest lightning developments for sure. That, you know, I’ve been thinking about how you can do the taxes around that. I know, you know, we’re talking about really exciting things right now, Taxes.
So, can you give us a price prediction for the halvening? I know you probably hate when people ask cause it’s such a hard question, but uh, well I know you’re one of the people that look at the price pretty closely and have some good insights.
Leah (00:48:59):
well I appreciate that. I am no, which I’ve always said TA practitioner. I know very little. I should say, so I, I have my Hodl stash and I day trade and that’s how I do it. I freak out if I have a, you know, I was more of a position trader or swing trader when Tyler was with me. Um, and thank you, Socrates. He was always helping me out as well. But myself, I always freak out a little bit if I have position and fall asleep at night. I do love day trading, but, um, so on the daily, when I was playing around with the 15 minutes a day, I actually, you know, I can bring it up later, but, um, it actually looked a little bearish to me.

Leah (00:49:55):
You know, you, you saw this insane drop. I mean, you see everything, you know, I think that post halvening we’re going to see a lot of activity, which is very exciting for us traders. I think that there’s going to definitely be a lot more activity coming into it, you know, given historicity, we’ve seen wonderful bull runs afterwards. The question is right prior and right after, what are we going to be seeing? And you know, everybody is massive bull right now for posts halvening right afterwards. And I don’t think that that’s going to be happening. Just a small, small timeframe when I was looking at the 15 minute where we are in a, in a bearish foster, I know I’m going to sound real stupid everybody else here who is actually brilliant at it. But, um, I dunno, I like looking at volume more and, um, it, it just seems like there’s a bit of a war going on. Um, which is fun and exciting. Um, but also since there’s such a war going on, I think that it’s, it’s playing around a little bit. Um, but at least this morning I was looking a little bearish. I think, you know, the fact that we’re playing with 10 K a lot is, is a little dangerous. Um, so that the probabilities of falling a little lower, maybe you can say 8,500 is more possible, but who knows. I will keep my Hodl stash.
Do you think we’re still at a point where like one trader or some whales can move the market or are we past that?

Totally. Totally. You know, and we’ve seen that again, we saw that what, five days ago, a lesson. There are speculations on who did that, I’m not going to put on a tinfoil hat with that. For the most part it isn’t really existing, even though regulators are, are saying that there’s the dangerous and that they’re seeing it. I do think for sure, you know, one wheel can move the market and we’ve seen that before. And so, at least for me, and coming again, I’m no TA expert by any means, but coming from a fundamental background in a traditional equities background, you know, you see one activist investing hedge fund go in and they’re a complete market maker, right? So, you know, people are following, they see that, you know, someone’s bought up Sony, whatever it may be, sued the bees as an example, and boom, Oh my God, they’re brilliant. And it can, you know, uh, appreciate 15% in a week. It hits a price target. They sell, they can say it was not a pump and dump because it hit their price target. We had that, you know, prior. Um, but we don’t have that guidance to my knowledge. But you’re the lawyer. So I think that a lot of people can take advantage of that and I think that we have some big bad holders for sure. I wish it was you and I. I guess maybe back at you, what do you think?

Sasha (00:53:16):
Um, yeah, I think there probably, I think there already exists some regulatory, it’s cause the exchanges, you know, if they’re starting to sell their own bags, that would be like proprietary trading, which is illegal on the traditional exchanges. But because they’re not regulated securities exchanges, I think a lot of proprietary trading happens and good for them until, until the party’s over for that. I think probably this year we’ll see, you know with the same kind of way has a commissioner Peirce presented this safe Harbor for tokens? I think the 2020, not that that came to light yet, but I think something’s going to happen this year for the American crypto exchanges to get some heightened regulation that’s almost like making them a quasi-securities exchange so that they have to follow at least some of the more basic like disclosures and you know, the proprietary trading rules. And um, some of them, you know, anti-market manipulation side of things should be applied to them and, and how they’re storing. And I think that’s a large reason that they haven’t figured out how to regulate them because the, you know, the exchanges, the actual stock exchanges, they have insurance and a lot of rules on this storage, but it’s not that difficult to store. You know, they’re not working with stock certificates anymore and all in a centralized storage area, which I guess it is on most of the exchanges too. But it’s just the different nature of holding these private keys versus holding, you know, electronics stocks.
Leah (00:55:02):
yeah, most definitely. And I guess because these exchanges, for the most part, we’re talking about KYC AML, they would know who is, you know, dumping or pumping or, and again, minimums, maximums that they’re allowed to have and on the accounts. So I guess, yeah, it is changing an environment at least in the U S with exchanges that have KYC AML, but that’s probably not the whales that are bumping in nothing or, or maybe again, those speculation on Mr. BitMex having played around, you know, a couple of days ago, but, but yeah.

Sasha (00:55:36):
Yeah. So what are you most excited about this year?

Leah (00:55:41):
Ooh, that is definitely a tough question. because there’s a couple of companies and projects that I’m toying with that I haven’t announced yet that I plan on working with full time. Um, I do think that there is more opportunity for valid great hedge funds to come into the space and build very interesting products that help the space are lucrative, are very exciting. And yeah, again, very much helped the space. Um, I guess I should say, you know, again what Tyler I were doing with asset management, the word asset management, you know, everybody snoozes, right? Like, you know, we’re working with 401ks, we’re working with the retirement funds for Australian and clients. The super is, you know, it’s a, it sounds like boring stuff, right? For the most part, but anyone that knows traditional markets knows that actually asset management is really exciting. You rolled a lot of money and not only do you have a lot of power, but, um, I personally, I love the fact that we can make sure that people have a really good experience with Bitcoin in a really safe way and that that would be their entry point into actually buying Bitcoins. But again, if I could help your retirement fund grow, let you have exposure to Bitcoin, uh, teach you what GBTC is. When you say, what the heck is the, you know, actually you’re coming to me because you’re saying I want exposure to Bitcoin. Can you help me with GBTC but grow your retirement account, help your kids with an educational fund. Um, how to have a good experience with it, make sure you don’t lose money and mortgage the house. It felt really, really good because that’s really important that you know, that our retirement funds are taken care of. But again, for the ecosystem that, that, you know, will actually not you, I shouldn’t use an example cause you’ve had Bitcoin for a very long time, but, people know corners entering the space, um, and just have that good experience and then start to learn more about it, talk to their friends about it in a really good way. Like teach them, Hey, it’s as easy as going into your Schwab or any brokerage account, let me teach you and then start learning everything else. But I think it’s a, a really nice soft landing. And again, if, if there’s a lot of volume into the space via GBTC, then you know, again, there’s, there’s a lot of activity and that’s even great for institutional investors.

Leah (00:58:19):
Um, so to go back, what am I most excited about? I think if I sit management firms and large ones, you know, start investing in more of these products, it hedge funds, you know, and there’s some great ones entering the space. And I think that when they do a great job that is not scammy kick out the scammy hedge funds, which most of them for the most part of have already disappeared. I think that there’s just a lot of cool products to build, you know, close ended funds with Bitcoins in them. You know, just, I think that there’s going to be smarter investors. Um, there’s going to be new products, there’s gonna be new firms, and that are going to do really well, that are going to play it well. And that a lot of, again, the institutional investors or veterans or just, uh, people that, that play the markets really well are going to be excited about. And, someone like me, who loves building, well this is a route I can really get into. What about you?
Sasha (00:59:30):
And you really could tell you’re excited.
Sasha (00:59:33):
I’m excited about a lot of the same things that you beautifully articulated. But as an attorney, it’s fun and even though the guidance might not be what we want, I love when new stuff comes out. It’s like you get to dive through it and see if your previous interpretation matches the guidance and it’s really exciting. All the lawyers kind of race to twitter to comment about it. It’s like we’re really creating new, like everything’s new laws and new ways of looking at this or forcing the government to examine old laws and, and kind of revitalize them. While unfortunately so far we haven’t seen the most cutting edge or the best in new law that’s coming, but we’re dealing with things like the 1946 howey test from the Supreme court, whereas this is forcing everything to be looked at in a new light. So that’s what I kind of find interesting about it. And, you know, I’m, uh, I’m here for the pamp.

Leah (01:00:24):
It’s gonna be really fun this year.

Sasha (01:00:25):
If we see Bitcoin take off like 2017, early 18, it was scary, going to conferences and just seeing piles of people, all these people with all these crazy ideas to get rich while making the world a better place. A lot of them turned out to be scammers and like got all these people very excited about technology and talking and there was just, there was a huge level of energy that was there and uh, and I, you know, I kind of want to go see that happen again, even if it’s going to be a mess. It’s just fun to watch and uh, and some new good things will come out of it., There’ll be a rising star that helps promote the whole community.

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Sasha Hodler · #HODLCast Bitbonics - We belong together Welcome to the HODLCast BITBONICS! Today is March 29, 2020 and today's twitter search was about "we belong together". Here are the top 5 tweets. Number 5, from @abbracadabra_ my fave story about we belong...

Top 5 #LocationData Tweets

Sasha Hodler · #HODLCast Bitbonics - Location Data Welcome to the HODLCast BITBONICS! Today is March 26, 2020 and today's twitter search was about "Location Data". Here are the top 5 tweets! Number 5, from @JuliaAngwin I’m hearing more and more cries for us to use...

Top 5 SEC Tweets

Sasha Hodler · #HODLCast Bitbonics - SEC Welcome to the HODLCast BITBONICS! Today is March 25, 2020 and today's twitter search was about SEC. Here are the top 5 tweets! Number 5, from @AndoniOlta Here is a must read analysis of the latest ruling on SEC v. Telegram by...

Top 5 #ReopenAmerica Tweets

Sasha Hodler · #HODLCast Bitbonics - #ReopenAmerica Welcome to the HODLCast BITBONICS! Today is March 24, 2020 and today's twitter search was about #ReopenAmerica. Here are the top 5 tweets! Number 5, from @roe_moore: If y’all #ReopenAmerica, you are gonna have to...

Top 5 #WhiteHousePressConference Tweets

Sasha Hodler · #HODLCast Bitbonics - #whitehousepressconference Welcome to the HODLCast BITBONICS! Today is March 23, 2020 and today's twitter search was #WhiteHousePressConference. Here are the top 5 tweets!         Number 5, from @TexDem16:...

Top 5 #Platinum Tweets

Sasha Hodler · #HODLCast Bitbonics - #Platinum Welcome to the HODLCast BITBONICS! Today is March 21, 2020 and today's twitter search was #platinum. Here are the top five tweets!   Number 5, from @atraderdiary: #Platinum follows a similar trend as #Silver....

Top 5 #tether Tweets

Sasha Hodler · #HODLCast Bitbonics - #tether These are the top five tweets about #tether on March 20, 2020. Number 5 @___CryptoNews said, Tether Stablecoin Launches on Its Seventh Blockchain: The world's largest stablecoin by market value is now live on the Bitcoin...

#Bitbonics #Top5 Richard Burr

Sasha Hodler · #HODLCast Bitbonics - Richard BurrToday's #bitbonics twitter search was about Richard Burr. Here are the #Top5 Number 5 @AshaRangappa_ said, “So, I know people can be savvy investors but Richard Burr sold lawn equipment before he became a senator in...

Top 5 #VirtualMeeting Tweets

Sasha Hodler · #HODLCast Bitbonics - #VirtualMeeting These are the top five tweets about #VirtualMeeting on March 18, 2020. Number 5 @MedStuCo said, We may not have had our usual Eboard meeting this week, but that didn’t stop us #virtualmeeting #medfieldps. Number 4...

Top 5 #ExponentialGrowth Tweets

Sasha Hodler Welcome to the HODLCast BITBONICS. Today is March 17, 2020 and today's hash tag twitter search was #ExponentialGrowth. Here are the top five tweets. Number 5, from @kennekai    “Around Feb12 there was a change in diagnosis classification which may have...

Top 5 #Ventilator tweets

Sasha Hodler · #HODLCast Bitbonics - #Ventilator Welcome to the HODLCast BITBONICS. Today is March 16, 2020 and today's twitter search was #Ventilator. Here are the top five tweets. Number 5 from @EndCoronavirus “We are expecting a shortage of mechanical breathing...

Top 5 #Inflation tweets

Sasha Hodler · #HODLCast Bitbonics - #inflation Welcome to the HODLCast BITBONICS. Today is March 14, 2020 and today's twitter search was #Inflation. Here are the top five tweets. Number 5 @XRPDrop said, “Less supplies and more money paying way for #inflation” Number...

Bitbonics #Top5 #Oil

Sasha Hodler · Bitbonics - 2 - March 11 #oilWelcome to the #HODLCast #Bitbonics - Today is March 11, 2020 and the #top5 tweets about #OIL were: Number 5 @incugneto said, My dad had a saying when oil would have a significant crisis or price shock of some kind that sums...

HODLCast Weekly Newsletter

  HODLCast Weekly Newsletter  March 9, 2020 I hope everyone is doing well and staying healthy, this virus feels pretty scary. Some rumors suggest that China has actually cemented some of their quarantined population into their dwellings. Business seems to be...

Transcript of Ep. 65 – Moon Math Win

Transcript of Ep. 65 – Moon Math Win

Episode 65:   Jared of MoonMath.WinThe Cathedral and the BazaarSasha Hodler · The HodlCast Episode 65 with Moonmath.winTranscript:  Sasha: All right. Hello everyone. Good morning. Today is February 6th, 2019. This is the HODL cast and we have a special...

Documenting Bitcoin History: David Foox on HodlCast 102

Documenting Bitcoin History: David Foox on HodlCast 102

Episode 102:   David FooxDocumenting Bitcoin HistorySasha Hodler · Ep. 102 with David Foox, creator of the amazing Bit x Bit: In Bitcoin We Trust documentaryOn this installment of the podcast, Sasha Hodder catches up with David Foox, who is something of a...

John McAfee Goes Wild!

John McAfee Goes Wild!

Sasha Hodler · HodlCast Ep. 98 - John McAfee Discussing Congress Coin & the McAfee DexThere’s a lot of things you can call John McAfee, probably with good cause. One thing you can’t call him, though, is boring. Listen in on episode 98 of the HodlCast to get an...

Crypto Mom to the Rescue!

SEC Commissioner Hester Peirce Proposes 3-Year Safe Harbor Period for Crypto Tokens Coindesk reported today that SEC Commissioner Hester Peirce (“Crypto Mom”) has formally proposed a safe harbor to give token projects the ability to sell tokens, and a three-year...

Wallet Education & Innovation – Ballet

Wallet Education & Innovation – Ballet

Sasha Hodler · Hodlcast Ep. 101 with Tatiana Moroz and Bobby LeeHodlcast 101 with Tatiana Moroz & Bobby Lee In this new installment of the Hodlcast, Sasha gets in touch with Bobby Lee (no, not the one of Mad TV fame) to discuss his entry onto the wallet market...

The PredictionCast

Sasha Hodler · The PredictionCast - 2020!Written by Emoji Nakamoto & Artwork by Indelible Trade Ups, Downs, Forecasts And Laughs in this Year’s PredictionCast 2019 was an incredible year for Crypto. As the fog of bull market mania lifted, clear eyes and productive...

LLC, PBC, or NonProfit?

Many startups struggle deciding what type of business entity will be right for them. Here, we will identify the differences of each structure, the Limited Liability Company, Public Benefit Corporation, or 501(c)(3) Nonprofit Organization. All three structures offer...

Ready for your Title 31 Exam?

The Internal Revenue Service (IRS) is auditing companies who registered with the Financial Crimes Enforcement Network (FinCEN) as a Money Service Business (MSB) involved in the Bitcoin space – it’s called a Title 31 Exam. These exams were typically reserved for Indian...

International Breach of Contract

How to deal with a breach of contract when the breaching party lives in another country? I’ve seen this a number of times when an American company contracts with a foreign company for services in the cryptocurrency industry -- and then the foreign company fails to...



WILL BITFINEX AND TETHER PROVE THEY DID NOT DO BUSINESS IN NEW YORK? Today Bitfinex and Tether, replied to the OAG with two documents, an affidavit by their attorney, Stuart Hoegner, and a Reply Memo supporting their Motion to Dismiss. Bitfinex and Tether are...

The Saga Continues… USAG v. Bitfinex/Tether

The Saga Continues… USAG v. Bitfinex/Tether

Sasha Hodler · HodlCast Ep. 81 A deep dive into Bitfinex with Amy Castor The saga continues — NYAG v. Bitfinex/Tether Quick Summary of the recent NYAG Decision and Order: IN THE MATTER OF THE INQUIRY BY LETITIA JAMES, ATTORNEY GENERAL OF THE STATE OF NEW YORK, v....

SUMMARY of the May 9 FinCEN Guidance

SUMMARY of the May 9 FinCEN Guidance

“This guidance does not establish any new regulatory expectations or requirements.” https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf TL;DR An MSB needs to register with FinCEN, (it’s free, you file Form 107), get an...

SUMMARY of the May 9 FinCEN Guidance:

FinCEN's recent guidance begins with the caveat, “This guidance does not establish any new regulatory expectations or requirements.” https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf TL;DR An MSB needs to register with...

The FinCEN Travel Rule

The FinCEN Travel Rule

I came across a new (to me) aspect of the Bank Secrecy Act recently — rule [31 CFR 103.33(g)] (the “Travel Rule”) which requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more...

Grow Your Blog Community

With Wix Blog, you’re not only sharing your voice with the world, you can also grow an active online community. That’s why the Wix blog comes with a built-in members area - so that readers can easily sign easily up to become members of your blog. What can members do?...

Design a Stunning Blog

When it comes to design, the Wix blog has everything you need to create beautiful posts that will grab your reader's attention. Check out our essential design features. Choose from 8 stunning layouts Your Wix Blog comes with 8 beautiful layouts. From your blog's...

Now You Can Blog from Everywhere!

We’ve made it quick and convenient for you to manage your blog from anywhere. In this blog post we’ll share the ways you can post to your Wix Blog. Blogging from Your Wix Blog Dashboard On the dashboard, you have everything you need to manage your blog in one place....

Bitcoin Hedge Fund Rules

Bitcoin Hedge Fund Rules

In today’s article, we will explore whether a Bitcoin hedge fund requires Securities and Exchange Commission (SEC) or Commodities and Futures Trading Commission (CFTC) registration. What is a Bitcoin Hedge Fund? A Hedge Fund (or Private Fund) is when you put two LLCs...

Florida Money Transmission after the Espinoza Opinion

Florida Money Transmission after the Espinoza Opinion

On January 30, 2019, the State of Florida appealed forcing Mr. Espinoza to relive the trial for his 2013 and 2014 localbitcoins.com sales to undercover cops. See http://www.3dca.flcourts.org/Opinions/3D16-1860.pdf. The counts against Mr. Espinoza include: Count...

Bitcoin & the FBAR

Bitcoin & the FBAR

I had the opportunity to participate on a Legal Panel with David Silver at the Unconfiscatable, Bitcoin not Blockchain Conference put on by Tone Vays in Las Vegas. It was quite an honor to be part of it; the conference was hands down the best Bitcoin event I’ve...

The Bitmain Lawsuit

The Bitmain Lawsuit

Gor Gevorkyan v. Bitmain, Inc., Bitmain Technologies, Ltd. And DOES 1 to 10 A lawsuit was filed in the Northern District of California against Bitmain on 11/19/2018. See https://www.scribd.com/document/393971649/Bitmain-Class-Action In a brief summary, the Plaintiff...

SEC’s November 16 Comments

Ready or Not, Here They Come, You Can’t Hide, Gonna Find You and Make You Register & Refund First and foremost, today’s expansive press release was made with the following disclaimer: “This statement . . . is not a rule, regulation, or statement of the Securities...

Operation Choke Point

I was skimming the facebook page of a soon-to-be-podcast guest, Kingsley Edwards, and came across a disturbing article describing Operation Choke Point.[1] The name of the Operation struck me as odd and after a few lines of reading, I knew it was the problem facing...

Know Yo Customer

Know Yo Customer

This is not legal advice, just my opinion. I’ve met many brilliant entrepreneurs bravely navigating the alphabet soup of the American crypto regulatory environment. Today’s post is focused on the importance of knowing your customers (“KYC”) if you are a Money Service...

Mr. Terpin v. AT&T

Mr. Terpin v. AT&T

Terpin v. AT&T Inc., AT&T Mobility, LLC, and DOES 1–25 One of the biggest news stories of the week was Michael Terpin (“Mr. Terpin”) suing AT&T after getting his sim-card hijacked. These types of hacks through the phone company are not a new phenomenon,...

OCC Banking Charter for FinTECH

OCC Banking Charter for FinTECH

Is this The End of State-by-State Money Transmission Licensing? The Office of the Comptroller of the Currency, U.S. Department of Treasury (“OCC”) came out with some big news on Tuesday, July 31, 2018. Now crypto (fintech) companies can apply for special-purposes...

Removing a member from an LLC

Removing a member from an LLC

Unfortunately, business relationships don’t always work out as expected, and you may need to remove your partners from their equity ownership / member position in your LLC. Hopefully this process is clearly defined in your Operating Agreement. If not, it can quickly...

Giving Tokens the Hammer

Giving Tokens the Hammer

The 2009 invention of Bitcoin has forever changed financial technology. Through the rise of economic innovation, Cryptocurrency makes it possible for any person or company to create a coin or token linked to their brand—and to give it a plethora of functionality. Some...

CFTC Employees are now allowed to Trade Crypto

CFTC Employees are now allowed to Trade Crypto

Upon first seeing this headline, my thoughts were, “uh oh, things are going to get a lot less productive over at the CFTC!” I remember my first few months of trading, it can be highly addictive!  The important thing here is that we got another layer of clarity to...

Bitcoin & Taxes

Bitcoin & Taxes

After the recent ruling in the case with Coinbase, Bitcoin Tax has been a hot topic, and I wanted to try my hand at navigating it. This is not legal or tax advice.Only 800-900 Americans reported any bitcoin tax related events between 2013-2015, even-though there were...

Bitcoin & Estate Planning

Bitcoin & Estate Planning

Bitcoin & Estate Planning Agenda: 1. Get a will 2. Make a tax plan 3. Dig some holes in your backyard (or find an executor you trust) Disclaimer – This is not legal or investment advice. T'is the season to be... morbid. Have you thought about what would happen to...

What is Bitcoin

What is Bitcoin

What is Bitcoin? Over the past few weeks, as the Bitcoin price has soared, lots of people have been reaching out to ask me, "What is Bitcoin?" It prompted me to start this blog- and while I am a licensed attorney in Florida - I want to preface that this is not legal...

Celebrity Backed ICOs

Celebrity Backed ICOs

Anyone who endorses ICOs or any kind of Cryptocurrency should be careful not to overstep the Securities Laws and potentially be prosecuted for a Pump and Dump scheme. After the recent Senate Hearing on Feb 9, 2018, Securities and Exchange Commission (“SEC”) Chairman...

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