Bitcoin
$42,095.04-1.40%
Ethereum
$2,874-4.54%
XRP
$0.928478-0.89%
Cardano
$2.05-2.00%
Polkadot
$27.51-5.15%
Stellar
$0.272567-2.73%
Dogecoin
$0.208166+0.12%
Chainlink
$22.25-4.32%
Uniswap
$19.89-5.29%
Polygon
$1.10-3.17%
Litecoin
$151.44-4.48%
Bitcoin Cash
$515.29-3.82%
Wrapped Bitcoin
$42,105.65-1.55%
Algorand
$1.65-2.06%
Cosmos
$32.03-8.65%
Filecoin
$70.38-4.92%
The Graph
$0.681433-2.52%
Tron
$0.090093-2.19%
Ethereum Classic
$47.23-3.62%
Aave
$282.33-4.06%
Tezos
$4.83-5.30%
Monero
$226.84-1.33%
EOS
$4.03-3.37%
NEO
$38.74-4.81%
IOTA
$1.26-2.35%
BitTorrent
$0.003263-2.04%
Bitcoin SV
$142.85+4.87%
Maker
$2,383.67-3.95%
Waves
$22.86-3.22%
Dash
$162.14-5.07%
Decred
$109.82-6.87%
Decentraland
$0.642701-4.08%
ICON
$1.52-6.41%
NEM
$0.148870-2.97%
Zcash
$115.15-1.89%
OmiseGO
$8.73-18.28%
Paxos Standard
$1.01-0.17%
NuCypher
$0.270706-3.47%
Yearn Finance
$28,466.72-3.02%
Qtum
$9.62-6.33%
Bitcoin Gold
$51.70-5.35%
Basic Attention Token
$0.629000-3.57%
0x
$0.862859-5.01%
Bancor
$3.39-3.58%
Ren
$0.748073-4.64%
Fetch.ai
$0.637653-3.75%
Siacoin
$0.014673-4.60%
Band Protocol
$7.15-5.55%
Kava.io
$4.85-4.48%
Nano
$4.51-5.78%
Loopring
$0.385985-4.76%
Numeraire
$44.62+12.64%
Storj
$1.06-6.68%
Lisk
$2.83-7.07%
Civic
$0.399659-3.65%
Orchid
$0.331880+0.90%
PAX Gold
$1,784.38+0.67%
Enzyme
$160.29+53.68%
Augur
$20.12-8.49%
Aragon
$4.62-6.22%
district0x
$0.143819-3.85%
Kyber Network
$1.43-3.68%
SingularDTV
$0.001341-0.03%
Tether
$1.00+0.02%
USD Coin
$1.00-0.03%
Dai
$1.00+0.09%

Turning Point: The Crypto Industry's Battle Against the Infrastructure Bill, Feat. Jake Chervinsky

Blockchain Association member and crypto lawyer Jake Chervinsky gives the insider view of a monumental moment in crypto history.

Listen on:

On this episode

Blockchain Association member and crypto lawyer Jake Chervinsky gives the insider view of a monumental moment in crypto history.

This episode is sponsored by NYDIG.

Jake Chervinsky is the general counsel for Compound Labs and DeFi lead at the Blockchain Association. Over the last few weeks he has been deeply involved in the battle against the onerous crypto provision in the infrastructure bill.

In this discussion with NLW, Jake provides a blow-by-blow overview and insider's account of the battle, from first learning of the provision to the moment that a senator’s special interest broke the bill. Finally, they discuss what the legacy of this event will be for the crypto industry and why we’re likely to be stronger now than ever.

“The Breakdown” is written, produced by and features NLW, with editing by Rob Mitchell and additional production support by Eleanor Pahl. Adam B. Levine is our executive producer and our theme music is “Countdown” by Neon Beach. The music you heard today behind our sponsor is “Tidal Wave” by BRASKO. Image credit: uzenzen/iStock/Getty Images Plus, modified by CoinDesk.

Transcript

NLW

What's going on guys? It is Thursday, August 12 and as you well know, the last few weeks for some of the craziest in crypto history. The battle against the infrastructure bill will, I believe, go down in history as one of the most significant, transformational moments in the history of this industry. Today, I'm joined by someone who had an absolute inside seat into that and who was in fact instrumental in helping fight for our case. Jake Chervinsky is the general counsel at Compound Labs, and also works on DeFi issues with the Blockchain Association. Now, when I was reflecting on this infrastructure bill battle, one of the things that stood out to me is because I have a daily show, every day was just a little piece of the story. But I never got to tell the story in full, linear glory with every twist and turn and exploring what the implications might be. So, that's what Jake and I try to do today. We go over the play-by-play of what happened, how it went down, what it felt like as it was happening and who really was involved. So if you want a single, pretty comprehensive source and oral history on the crypto industry's fight against the infrastructure bill, and specifically the crypto provision that was duped into the infrastructure bill at the 11th hour, this is for you. 

NLW

Alright, Jake, welcome to "The Breakdown." It's great to have you here. 

Jake Chervinsky

Hey, thanks for having me. 

NLW

So, we have collectively lived through an experience, you, I think, have been at the eye of the storm, and so like we were just talking about, I think, you know, I was reflecting on just all the coverage that we had over here on "The Breakdown" and it was so day-to-day that there's not like one canonical accounting of this whole saga, and I think it's going to be an inflection point moment for this industry. And so what I thought would be fun today is actually do a little bit of that recap from beginning to end. You know, you had a particular vantage point on it, that I think would be really valuable, so that's what I'm hoping for. I think it'll be really fun. Before that, though, I guess just you know, tell us a little bit about who you are, what you do, you know, what you were spending your time on coming into this before everything got derailed.

Jake Chervinsky

Yeah, sure, that sounds great. So I guess for starters, I am Jake Chervinsky, I am general counsel for Compound Labs. We are an open source software development company in the decentralized finance space, best known as the original developer of the Compound protocol. I am also the co-chair of the DeFi Working Group for the Blockchain Association. So, that's sort of how I got to start working on policy issues, including this whole saga over the last couple of weeks. Before we launch into it, and I love your idea about just sort of going through the blow-by-blow of the craziness that has been this whole saga. Let me start with my usual disclaimer, I am a lawyer, but I am not your lawyer. I don't represent anyone in the audience, except for my company, if anyone is listening. And so, nothing that I say here is intended as legal advice. I'm also just here to give my personal thoughts and observations of this whole saga. I'm not here to speak on behalf of my company. Cool, perfect.

NLW

So that said, let's start with the beginning. I mean, I remember this sort of thing coming out of nowhere and almost being in disbelief that this was, you know, like, it was like, "Oh, the infrastructure bill is getting a vote. Wait, what?" So that was I think, you know, two Wednesdays ago or something. I don't know the exact date, I could actually pull it up. But either way, what do you remember of first finding out about this? Was it with the rest of us? Did you get you know, kind of started to see text messages lit up? When did you kind of become aware that there was a provision in the infrastructure bill that related to cryptocurrency?

Jake Chervinsky

Right, so I found out only a couple of days before everybody else did. And in fact, this was a huge surprise to the entire industry and to our policy infrastructure here in Washington, D.C. where I'm based. We had been, just for context, and when I say we, I mean the Blockchain Association and others who are working on crypto policy, had been in touch with Congress for a really long time talking about what provisions might go into the infrastructure bill. In fact, the Blockchain Association had been making suggestions to Senator Portman's staff, Senator Portman was the lead republican negotiator for the infrastructure bill in the Senate, and had discussed all kinds of different options for what kinds of crypto tax provisions might go into the bill. But, none of them as you might expect, had anything to do with the language that ended up going into the bill. So nobody found out about this until, I guess it was the Friday before everyone in the industry found out, that's when for the first time this draft language was sent around to the industry. And I found out about it on the following Monday. It's kind of a funny story. I went into the Blockchain Association's office to see everyone, and it was actually the first time I had gone in since before the pandemic, and I walked into the office and everyone said, "Hey, Jake, we're dealing with a crisis." And I said, "Oh, you guys, you're always dealing with some kind of crisis." So, give me a break, right? That's just always sort of the mood in D.C., there's always some fire to put out. And they said, "No, Jake, you don't understand, this is a really serious situation." And it took them a few hours, actually, to convince me that this was a real problem, but once I looked at the language, and started talking about the likelihood that it would actually end up in the infrastructure bill and passing, I realized that this was, I think, the most damaging language to find its way into legislation that we've ever seen in the crypto industry. And I know that sounds like an exaggeration, but I actually don't think that it is. So that was when I found out. And of course, all of this was a learning experience for everyone in crypto about how the legislative process works. So, that's right, the vote on the initial bill, which was sort of a placeholder from the house and did not actually have the final language and nothing related to this, this crypto tax provision, the vote was that week.

NLW

Okay, so let's talk about I think that very first set of efforts to change it, because, you know, obviously, there'll be a lot of things to come with the amendments and things like that, that we'll get into. But first, there was a process of trying to actually get what was going to be voted on in the initial language of the bill changed, right. So I imagine that consumed a lot of that week, going into that first weekend, which would have been the weekend that July turned into August. I remember sort of the on the other side of that is when we had to start talking about amendments and things like that, but let's talk about what was happening that week, and maybe we can use that as a way to introduce like, who are some of the players that are involved? You know, there is obviously a D.C. infrastructure that has been built over the course of the last few years to address this sort of thing. What are the levers they're trying to pull at that time? How much did you guys know about, you know, the intentions? You know, like, were there things that were red flags that were weird, you know, information that you didn't weren't getting kind of just like, I would love the behind the scenes on that first push to change something before we even had to get to amendments in the actual provision itself?

Jake Chervinsky

Sure. So, that's totally right. So that first week was us learning about what the language said, trying to understand what it meant, and then trying to lobby Congress to change it before the language was published, because we knew that once the language was published, and what was expected to be the final bill, it would be much harder to get a change through an amendment process. So really, we spent the week trying to convince Congress that this was a mistake, and that they needed to change the language before it was finalized. I think when we first heard about the language, and it had not yet been published, it was only, you know, folks who are working on policy here in DC, who were really looking at this, we thought it was a mistake because the language was unbelievably broad. And just to give the details. For folks who don't know the amendment or excuse me what the provision was going to do, the provision was a change to the tax code definition of a broker. Brokers are entities that are required to do IRS reporting and they have to do form 1099, which I'm guessing most people in the audience are familiar with. Those are the forums that tell you what taxes you owe on capital gains. And usually you get this from a securities broker, or another type of custodial intermediary, a centralized financial institution that you're using to do investments. On the definition that was proposed at that time, would expand the group of brokers to include and I'll just read this language for those who had heard it before, it would include "any person who, for consideration, regularly provides any service or application, even if noncustodial, to facilitate transfers of digital assets, including any decentralized exchange, or peer-to-peer marketplace," and for the non-lawyers in the audience, which is hopefully most of you, basically what that means is, every single market actor in crypto, who is involved in the process of facilitating transfers of digital assets might be required to identify the users who they are facilitating transfers for, and then prepare these form 1099s, to give to those users, and then also file to the government. Now, as we all understand, that is fundamentally impossible for most crypto market actors, right? Think about someone like a miner, who is in theory, facilitating transfers of digital assets by including those transactions in a block on the blockchain, but they do not have any information about who the users of the blockchain are. So there is fundamentally no way for them to get the information that they need in order to do this, you know, tax reporting compliance. So, when we saw that we thought, this has to be a mistake, right, there's no way that this law could possibly work. So the senators must not understand what they're doing. And over the course of that first week, in having conversations with staff and members on the hill, what we realized was a few things. First, we realized this actually was not a mistake, this was intentional. And not only was it intentional on the part of the senators and particularly Senators Portman and Sinema who were the two negotiators. But the language had come from the Treasury Department, and had been approved by the Treasury Department, which I'm sure we'll get into a little bit more as we go through this discussion. But what that meant was, there was some real juice behind including this provision as it had been drafted in the bill. This wasn't the kind of thing that we were going to quickly resolve by explaining to one person that they have gotten some fundamental concept wrong. The second thing that we learned was, the provision had been scored by JCT, the Joint Committee on Taxation as raising $28 billion in new tax revenue. And it's really important to understand sort of why the provision ended up in the bill, the provision was included, not because it has anything to do with infrastructure, but instead as a "pay for provision." A pay for provision is a provision designed to raise revenue to offset new spending in a bill. And this infrastructure bill was proposing about $1.2 trillion of new spending. So the goal was to include as many provisions as possible to raise money to offset that new spending. And somehow the JCT, which did the scoring for this provision, decided that it was going to raise $20 billion in tax revenue that was not being paid by folks who were making money in crypto, even though that tax was already owed. Now how they came to that calculation, I have no idea. But what it meant was just removing the provision as a whole was pretty much a non-starter, because that would take $28 billion away from the calculation of the cost of the infrastructure bill. So we learned over the course of this week that fixing this provision was going to be a much harder challenge than we hoped when we first found out about it.

NLW

So, a lot to unpack here. First, I think that it's just worth putting a point on that last piece, like, no one has seen the math that got to $28 billion. Right, it is the most opaque part of this in some ways. It's like how this number was kind of, gleaned from thin air or what, you know, what spreadsheet, like got to a presumption of $28 billion of evaded taxes or non-reported taxes?

Jake Chervinsky

That's correct. We do not know how they got that number. They will not tell us their methodology. I will tell you personally, it doesn't make any sense to me at all. I don't think it is even possible to come up with a remotely reliable methodology that could predict how much in taxes is owed to the U.S. government, but has not been paid, or to figure out how any particular provision that results in more tax reporting, how much more revenue, that type of provision would possibly raise. I think this isn't to necessarily cast aspersions on the folks at the JCT, I think that they do really great work. I don't think that they're out to be malicious in any way. I just think that there's an element of these calculations that are more political than anything else, right. The goal is to juke the numbers to make it look good so that the senators who vote for it can say they're not, you know, forcing the money printer to go brr too much. I think that's much more what this is than a really legitimate calculation of what the impact of the provision would be.

NLW

Yeah. And I agree, it's very unlikely to me that the folks over at the JCT are sitting there being like, "Ah finally, our chance to screw crypto." It's more just like what set of constraints were put upon them to do it, but it's okay. So at that point, I just wanted to flag because even now, days later, you know, like, there's the big outstanding thing is like that calculation wasn't, you know, absolutely endemic to the whole story that followed. Second piece, though, it sounds like there are, or I guess, I want to get your take on, there are sort of two things happening simultaneously. One is, how do we get this money accounted for reasonably in the context of a bill, where raising taxes, for example, is a non-starter for the GOP, right? So we have to use these sorts of other methods. That's one piece of this. But then the second piece is, it feels like there was an attempt to kill two birds with one stone, in terms of the Treasury giving itself a lot of leeway to kind of write laws as it related to crypto while also getting this pay for provision figured out? I mean, did it feel like that then? Or is that sort of later that it started to feel like there are these two separate things going on?

Jake Chervinsky

So I would say by the end of that first week, as we were having discussions with staff on the Hill, and we were learning that as we proposed alternative language for the provision, the language we proposed was being sent over to the Treasury Department for its review and approval. I think that's when we realized this is a much bigger situation than we thought. Now, I will say that some people will accuse me of being paranoid about the Treasury Department. So I will just, you know, flag that because there are a lot of people who will say, "it's not Treasury's goal to attack crypto, they're really just trying to do a good job of figuring out who owes taxes, they want to make it easier for people who are interacting with crypto to know what taxes they owe." Look, I think that that's possible. But here was my impression, when I heard that the Treasury was involved. This reminded me immediately of the fight that we had had with the Treasury Department only seven or eight months ago, over the proposed rule that FinCEN put forward to expand the anti-money laundering laws to capture more people within crypto. And we'll spare everyone all the details about that. But we knew that the Treasury Department as a whole was already trying to expand its jurisdiction beyond custodial intermediaries, which is traditionally where all of these types of financial regulations have applied, right? To financial institutions that are taking custody of other people's assets, the Treasury has been trying to get more surveillance of financial activity within the crypto ecosystem, even where there are only non-custodial parties involved. And so to me, this provision struck me as just another way for the Treasury Department to get to that ultimate result of surveilling more of the crypto ecosystem, even though they had failed to do that through the Bank Secrecy Act, or at least so far have have not succeeded in expanding the Bank Secrecy Act to capture that activity, that this was a way to sort of backdoor the same type of requirement through the tax code and specifically by attaching it to a must-pass bill, a major piece of legislation, that there is no way we would stop. And I think it's worth everyone knowing if this provision had been proposed as a standalone bill, right, just four pages, changing the tax code in this one way, there is zero chance that he would make its way through Congress, he would absolutely not move forward. Most legislation that is specific to crypto does not move forward. But instead, this is four pages out of a 2700 page infrastructure bill that is guaranteed to pass. And so to me, it felt like the Treasury trying to sneak in requirements into must-pass legislation that ordinarily would never pass scrutiny if we were really focused on it and discussing it, in a more open and honest and deliberative process.

NLW

I think that what we saw, which we'll get into over the next, you know, eight or nine days adds a lot of credence to that perspective, frankly, given that we came within a hair's breadth of unanimous consent, but we'll get to that. There were two things that really well, one thing that didn't blow my mind and then one thing that blew my mind in terms of the blowback from folks who are sort of, not of the crypto industry who are commenting on this, the immediate attempt of kind of naysayers and no-coiners was, "Oh, this is just people who want to keep their tax avoidance going," right? And that narrative did not stick. I mean, the media tried to kind of perpetuate that for a day or two, just reporting back what high profile people were saying, and it 100% did not stick and didn't make any sense. When every exchange CEO in the world was like, dude, we've been asking you for help on how to report taxes forever, because it's actually enormously complicated based on the nature of UTXOs and all these technical parts of this. And yes, we are definitely brokers. And this is fine, but like stop going after them that just doesn't hold any weight. And then it shifted, the narrative shifted in terms of that blowback to "You guys don't understand, Treasury's not trying to do that, the intention isn't to go after any of these people who it's important, like who can't be targeted. Of course, that's not our intention." And for me, this is absolutely mind blowing. Because like, I don't know in what universe people don't understand, it has nothing to do with conspiracy about the particular people in power now, laws are about who interprets them later, not just right now, if we wrote every law, like, we had a lot of years as a human society, where our guiding principle was how well will this particular ruler implement this thing that we're a little uncomfortable with? And that did not work out that well for us, you know, because there's always a next one. And so it was crazy to me, but that was like, oh, from the, from the absolute sort of like a lead of, you know, the Beltway elite. That was the refrain over and over all the way up to Portman was, "of course, that's not our intention, you know, just, it's not what it's about." I guess, like, you must have been hearing that too. Was that the same message that you guys were getting as you were having these conversations? Of course, that's not the intention. That's not what they're trying to do. 

Jake Chervinsky

That was exactly the message. And, you know, for the reasons I just explained, I think I am predisposed not to believe that message necessarily, or at least not to take it on faith. Right? "Don't trust, verify," I think applies in this circumstance. Also, our response to that was, look, if that's not your goal, then let's just change the language to clarify that that's not your goal, right. And I think this is also a circumstance where you have to look at actions, not words. So the senators and Treasury can say all they want you about what the intent is. But when they are rejecting our proposed alternative language that matches up with exactly what they're saying they're trying to do, but they're not okay with that language. I think that speaks much more loudly than what they were saying on Twitter.

NLW

So okay, perfect. So okay, the first week, you know, we've kind of bled into the beginning of the next week, I remember that that sort of Monday, the first Monday in August, I think there was an NYT article that was titled something like cryptocurrency wins, wins, you know, some concessions or whatever. Right. And so there was a small language change before it made it into the actual bill. But it was clear that it wasn't even close to enough. And it seemed like that was when at the beginning of the next week that the senators from Wyoming from Pennsylvania and from Oregon started to get involved in their real conversations about amendments. So I guess let's zoom forward into the beginning of that next week. When do you guys realize that you're going to have to go through the amendment process? How are you trying to figure out who the allies are? And what was sort of like, what is that build up process looking like?

Jake Chervinsky

Yeah, so. So let me just set the stage a little bit first, about sort of how things turned out on Sunday of that week. And then we can talk about sort of where we went from there. So initially, right, we thought this was a mistake. We argued that should be changed. We realized, no, this is not a mistake. This is intentional. And what that meant was, we knew that the idea of just removing the provision entirely was off the table. We started advocating for an alternative, as I said, that would only apply to those custodial intermediaries, the exchanges, and the custodians, who, like you said, completely agree that they should be treated as brokers. And they should do tax reporting, right? They actually want clarity about how to do that. And that language was also rejected. So that was sort of the signal for us that this is about something bigger than just the exchanges and the custodians and the other regulated financial institutions. What we ended up with on Sunday was a slight improvement on the language. We got the term "application" removed, we changed facilitate to effectuate, we removed the reference at the end of the provision to decentralized exchanges and peer-to-peer marketplaces. So things that at least, were moving in the right direction. But nonetheless, I think the main change that happened from the first draft we saw to the version that was published on Sunday was just to make the rule more vague, right? We had expressed our concerns about who would be captured by the law. We asked for clarity to change the rules so that it would be obvious that these people who should not be captured or would not be captured and he results, I think, again, just as you said, to leave as much room for Treasury to interpret this later, was to just make the rule as vague as possible so that it didn't really mean anything. So that's what we got on Sunday. On Monday, we started working on an amendment because we knew there would be a vote on the bill. And the only way then to get the language changed was to have some other senators other than Senator Portman who was at that point, pretty clearly locked into the language that had come out in the final bill on on Sunday, or at least what was then treated as the final bill, our goal is to get other senators who could propose an amendment to fix this language. And that's where I think the entire industry really started to band together. And we really started to have major influence in D.C. And that happens in a couple of ways. First of all, a group of policy advocates got together in D.C. and started really coordinating our efforts in terms of reaching out to different senate offices to see who might be interested in working on a fix for this terrible language. And I think that, you know, the main leaders of that group are the ones you expect: Blockchain Association, which is the industry's primary trade association, and Coin Center, which is an independent nonprofit, were sort of like the two major voices in the room. But then also, many other members of industry got more involved fighting this than I think they ever have before. And that includes Blockchain Association members, like Kraken, and DCG, and so many others, but also non-members. So other major U.S. crypto companies, like Coinbase, and Square, and some venture firms, we all sort of got together to center around a joint strategy of how to work out some kind of fix for this issue. At the same time, we started hearing from senators in sort of the same way that everybody else did, through tweets, right? Senators were just sort of showing up having followed all of this drama, and having taken an interest in it, and going on Twitter to express their disapproval for how the language had come out in the published bill. And that's, at least for me, how, you know, I started hearing about Senator Wyden, a Democrat from Oregon, Senator Toomey, Republican from Pennsylvania, and Senator Lummis, Republican from Wyoming who is well known for being you know, very constructive, very positive on Bitcoin, specifically, but on the crypto industry as a whole. And so that was sort of the bipartisan group that started to form earlier that week, to work out language for an amendment that would fix this language.

NLW

This is a good point at which to bring in this sort of larger community part of the story because obviously, I don't necessarily think that it was super surprising to those of us who are in this industry, to see how many people were mobilized, how fast, with what fervor, right? Perhaps surprising to see some amount of traditional tribalism put aside. But just in terms of pure mobilization, this is a group that I think we all know, has this capacity to move loudly and quickly. But it seemed like it took a lot of the D.C. establishment super off-guard, that there was this sort of there was this sort of movement. Do you remember what day it was that Fight for the Future started putting up their tools for calling? Was it when the first amendment was proposed, or the first language of the First Amendment was proposed?

Jake Chervinsky

Yeah, that's right. I don't remember exactly the day. But I mean, basically what happened was, I had written a thread the previous week, I think on July 30, before the language had even come out. And I had said that folks should call their senators and also call their representatives. And part of that effort was just to make sure that people on the Hill understood that they could not steamroll crypto and get away with it, right? That there were a lot of people in this country who cared deeply about this issue. And they needed to listen to us when we told them that this language was unacceptable and needed to be changed. So we got a bunch of calls over that first weekend when we were still, you know, working sort of behind the scenes to clean up the language. Fight for the Future, which is a phenomenal digital rights advocacy organization, has been around for a very long time. They got involved, once we knew that there was an amendment that was going to be proposed. And that was the point where all of us again, sort of in a coordinated strategy said, "Look, there's going to be a moment where we need to get as many calls into senators as humanly possible to tell the senators, they need to take this amendment seriously, and they need to vote yes on it and Fight for the Future was so helpful in creating a tool that helps people both figure out how to call their senators, but also to figure out what to say to Senate staff on and I think in the course of a few days, about a week, we got something like 40,000 calls into senators, and this honestly blew away everyone in D.C., you know, I think you're right us in crypto, like we know how passionate people are about this. And we had seen this happen a little bit in the fight over the FinCEN proposed rule at the beginning of the year, where we had made a call for comment letters, and 1000s of 1000s of people showed up to write into FinCEN. But the Hill hadn't really experienced that, right? Like senators were not really paying attention to that process. This really was the first time that I think most members really saw how passionate people in crypto are and also how many of us there are and how much we can mobilize and how quickly we can mobilize that group of very dedicated constituents. So definitely the senators were taken by surprise, staff was taken by surprise, the media establishment here in D.C., completely and totally taken by surprise. And we started seeing these articles come out about, you know, crypto's new lobbying muscle in D.C. And that was a really great thing to see. And also extremely important to our efforts to actually influence these senators to make a change to the bill.

NLW

One of the things that I noticed that I thought was positive and I'm interested in your take, because you're living in it even more, is that, you know, we have our differences with media, but a lot of what covers us is traditional financial media, right? Like, we're probably the only industry that can quote our hitlist of our least favorite, you know, Financial Times authors by name, right? But that's, again, it's the Financial Times, it's traditional financial media. During this, all of a sudden, we were in the political beat, right, we were dealing with political writers who hadn't had a chance to really understand this. And I saw at least a fair bit of people genuinely trying to get themselves up to speed without bringing prior assumptions, or at least without bringing over prior assumptions into their reportage on the bill battle itself. I mean, a couple, you know, folks from the Washington Post, but it felt like a positive example of, you know, this, this completely other side of the media focused on politics, who was like, I have no idea what to make of crypto. So it's like, genuine sort of objectivity from the standpoint of not having priors or something like that, which was just kind of refreshing to see. But I don't know if that resonated with your experience.

Jake Chervinsky

Yeah, I. I mean, I think you're maybe giving them a little more credit than I would, I think there was still, you know, like, I think there's still a lot of old tapes that are being played. And that's true across mainstream media even, you know, even in political reporting. You mentioned this earlier, the initial reaction was, "Oh, it's just a bunch of crypto people who don't want to pay their taxes.|" And that was absolutely false. And we worked very hard to explain to people this is not about trying to evade taxes. This is about not forcing individuals and companies to comply with regulations that they are literally incapable of complying with, and that will not achieve the supposed objective of the provision. So I think that once people started learning that they started coming around. I think the other thing that really got a lot of political reporters to pay more attention, and really dig into the details here, they really started to understand it was the bipartisan nature of both sides of this issue, right, because the initial provision was bipartisan, the one that that was totally unacceptable and unworkable, because it had the support of both senators Portman and Sinema. And then also the opposition to that provision was bipartisan in the form of Senator Wyden and Senators Toomey and Lummis, and it's just really rare for there to be a big fight over some issue in D.C., that stops a major piece of legislation from moving forward as expected, but that does not fall along party lines. And I think that just made for a really good story and something that the reporters really wanted to dig into more.

NLW

I also think that that's extremely to the benefit of this industry. I think one of my risk factors, not just sort of regulation in general, but the calcification of crypto into just yet another partisan football where it's, you know, I mean, the the easy dividing lines would have been GOP on the side of, you know, companies and democrats are against that. And I think it was to our benefit that, you know, in some ways, the most influential voice on on the sort of amendment side was Senator Wyden, right Senate Finance chair from Oregon, who's a Democrat who has not historically, he wouldn't have been the guy who was against raising taxes, you know, to pay for this bill.

Yeah. And that's absolutely right. We owe Senator Wyden just a huge debt of gratitude for joining us to fight the overbreadth in this bill. Senator Wyden, for those who don't know, has for a very long time, and I mean for decades, has been a champion of the rights of software developers, and of the concept of open source software development in general. So you know, back in the 90s, he was one of the few who was advocating in favor of encryption. And so he was a natural ally to take on this fight. That doesn't mean that he agrees with, you know, the industry view on everything. You know, for example, there was a tweet he put out in the middle of this saga that talked about the environmental harm caused by proof-of-work mining, that's obviously not something that necessarily we agree with him on. But that's okay. The point of this is to find a group of policymakers who can get together on really important issues that everyone can get behind. And we are so thankful to Senator Wyden for being one of the first Democrats anyway to come out to help us make that clear. And definitely, you know, we were concerns going into this, I will say, especially after the last few months of primarily Democratic attacks on the crypto industry, a lot of that coming through Senator Warren, who has really made a name for herself as an antagonist toward crypto, we were really worried that this was going to fall down party lines, right Republicans against the provision and Democrats in favor of it. And it is extremely important, as you said, that this is not a partisan issue so that folks on both sides of the aisle can understand what the benefits and the costs are. And you know, how to sort of move forward in an intelligent and nuanced way.

NLW

Okay, so we've got now the emergence of a set of allies in the Senate, we've got this sort of industry showing up to be loud. We've got media who are changing their tune from a week before, even if they were a little late to the party. We'll focus on the fact that they arrived there eventually. And that's sort of the middle of the week and the first amendment proposal comes out from Senators Wyden, Toomey and Lummis. Let's talk about sort of the next couple days because I think that was the middle of the week and I can't remember when it was, but let's talk about how we got from there to the counter amendment.

Jake Chervinsky

Sure. So um, we went into Thursday. So one week ago, I guess that would have been the fifth. We went into Thursday expecting the Senate to have a vote on cloture for the infrastructure bill. Cloture basically means a vote to end debate on the bill. And any amendments that had to go into the bill had to be proposed before the Senate voted on cloture, an amendment proposed bill for a cloture would pass with a 60 vote threshold. So we went into Thursday doing two things number one, trying to actually get the amendment proposed so that we could get a vote and we were very concerned that we were not going to get a vote. And then secondly, trying to whip yes votes in the Senate in favor of the amendment. And we were feeling really good going into Thursday because, as I said, there really was a lot of bipartisan support for this fix. Senator Portman even came out with a tweet on Thursday morning, totally unexpected, saying, you know, even though he was the one who had put the original language into the bill, saying he agreed that there were problems with the language and he wanted there to be a vote on the Wyden, Lummis, Toomey amendment. And just for context, what the amendment would have done is, first of all, clarified the broker definition to be less wide-ranging to capture ordinary folks who were just using crypto protocols, you know, using Bitcoin or using DeFi who really have no business being treated as brokers. It also would have added an exemption for miners and stakers and validators, and software developers and hardware wallet and software wallet providers, and all these other types of non-custodial actors, for whom it just makes no sense to apply the broker definition. And we were feeling really good about the benefit that we would get from this amendment. Although it wasn't perfect. It would certainly have been a massive improvement to the bill. So we went into Thursday hoping that before the evening cloture vote, we expected that we would have a vote on the amendment. We were then shocked in the middle of the day Thursday by a competing amendment that was put forward by Senator Portman, even though he had seemed to express support for the Wyden amendment. He put forward his own competing amendment jointly with Senator Warner, Mark Warner, a Democrat from Virginia, my home state, and the competing amendment was framed as a fix, but actually didn't help at all. It basically didn't change the definition of broker at all. It had an exemption for miners. But the exemption was limited to proof-of-work mining. So stakers, in a proof-of-stake system wouldn't be included, eliminated the exemption for software developers who are just writing code, which to me just sort of blows my mind, because that's almost like saying, we don't want the first amendment to apply here, which is, is obviously not something that Congress can do, even if it wants to. And then we learned midday on Thursday, that the Treasury Department was lobbying actively against the Wyden amendment and in favor of the Warner amendment. And not only was the Treasury Department doing this itself, and we later got a report that Secretary Yellen herself was making phone calls to advocate in favor of the Warner amendment, but the White House and the Biden administration had also jumped in to oppose the Wyden amendment and to support the Warner amendment. So really, you know, for me what what this looked like was an attempt to give Democrats in particular cover to vote for an amendment that would allow them to say, we did something to fix this awful crypto tax provision, even though they weren't actually doing anything to fix the crypto tax provision. And then when we would come up to say, look, this amendment, this Warner amendment, doesn't do anything to solve the problem. It was the Wyden amendment that you were supposed to vote for, then they could just say, "Oh, this is just industry whining about having to make a compromise and not getting everything that wants to bad for you. Everyone has to compromise." So that was sort of the position that we were stuck in in the middle of the day Thursday.

NLW

Yeah, I remember that sequence of things was, it was like, every time I reopened Twitter after going and having a meeting or doing something, there was another part of the saga. Right, it was Senator Portman with his tweet, seemingly in support. Then two hours later, it was the counter amendment. And then later that afternoon, it was reported about the Treasury Department. And then later that night, it was the White House with their statement. And it was just in fasci. With that, I mean, in listening to read exactly like that, to me as an outsider as well, of like, we're setting up a narrative of you guys are new at this and bad at compromise. And, like, it's basically it was like, when two people disagree, one person counteroffers and the other person counteroffers and you take that second counteroffer, because it's the last counteroffer. You know what I mean? Like, that's it, it's like, that's compromise. That's the definition of compromise. Right. It's like, that's not the definition of compromise. That's just like, it's just theater. You know, if you know, what was I guessing? Okay, so, the one other piece that I wanted to mention that I kind of skipped over that I thought was really worth noting, going back to just the opacity with which these numbers were explained. And also, the sort of reasons to not believe that "that's not our intention to go after them." Earlier in the week before we even got to the amendment process. Or I guess, when when the first amendment was proposed, wasn't there a report that the JCT came back and said that if that amendment went through, it would leave a $5 billion gap? And so on the one hand, they were saying this is not intended to target these people. And then when an amendment was written that said, okay, cool, it doesn't target those people. They were like, Oh, well, then there's 5 billion missing, let's think, Well, that sounds to me, not being a math professor, that those people were intended to be targeted to the tune of $5 million.

Jake Chervinsky

Yeah, that's right. And I mean, like, just to the point about compromise, you know, we had already been negotiating with Senators Wyden, Lummis and Toomey for the entire week leading up to Thursday, right? So we had already sort of "done the work" of negotiating a compromise that we frankly, weren't all that happy with. But there was such an improvement to the bill that we were gonna, you know, in a full throated way, advocate for it as strongly as we could anyway. So to then be told, "Oh, you guys aren't willing to compromise?" I think it was certainly not accurate and I think not fair. But yes. When the Wyden amendment was put together, it was rescinded by JCT and JCT said with this amendment, the crypto provision will only raise $23 billion in tax revenue instead of $28 billion. And again, the question is, what methodology are you using? And who is it that you think is not going to do reporting now, that is going to account for those $5 billion in lost revenue? We still have no answer to that question. The other thing that was kind of crazy throughout the day on Thursday with the Warner amendments, which literally we saw the text for the first time on the same day, was that it was proposed that the Senate vote on that amendment. That amendment was never scored, as far as I know, it hadn't been scored on that day. And I think even until today, it was not scored. So we have no idea what the impact would have been of that provision. And again, I think that just sort of shows the gamesmanship around these numbers that the Senate was willing to vote on an amendment that hadn't been scored at all just sort of betrays the fact that that these numbers are more for show than they are for anything else.

NLW

So take us into Friday and going into the weekend, we've gone from feeling optimistic to feeling not so optimistic. And then there's just even more procedural stuff that happens. So with the talk about Friday up into kind of Saturday, midday, I guess.

Jake Chervinsky

Yeah. So I mean, so first of all, on Thursday, the cloture vote that we had expected did not happen. And partly that was because of all of this drama around the amendments to the crypto provision. You know, Senator Warner had proposed his amendments. Then later in the day, he changed his amendment. And later in the day, he changed it yet again. So there were three different versions of this competing amendment. And in the end, the Senate said, "We need more time to figure this out." Now, I think just two things about that. One is, it is unbelievably amazing that the crypto industry could possibly have that kind of impact on the infrastructure bill, that the vote would be held up because of our little amendment, I think is kind of wild. The second thing is we can't take total credit for it. So let's not get you know, too far out over our skis here. There were any number of other industries that were having the same kind of battle over any number of other amendments, but the result was the cloture vote was pushed to the weekend. So now we spent Friday and Saturday, and then Sunday, trying to advocate for the Wyden amendment and against the Warner amendment. And what this ended up leading to, and I think that this is also to Senator Warner's credit, I think that Senator Warner, when he first proposed this amendment on Thursday, did not understand the complexity and the controversy that he was getting himself into. And I think as he started getting these 1000s of calls from the crypto industry, and started hearing all of the complaints about why this amendment he had proposed, it didn't make any sense. I think that he and I'm just speculating here, but I think that he started rethinking some of the assumptions that he had made. And I think particularly he started rethinking some of the things he had been told by the Treasury Department and by the Biden administration. And frankly, I think the Biden administration itself started rethinking some of the things that the Treasury had been saying. And so Friday and Saturday, was marked by advocacy for the Wyden amendments and against the Warner amendment, but also behind the scenes, a lot of work among these senators who have these competing amendments to strike a deal to come up with a compromise amendment that everyone could get behind that could then be passed before the cloture vote, which ended up happening on Sunday night. So we spent basically the whole weekend getting calls and, you know, tweets from senators to convey to them how important it was to fix this provision in the bill, and also trying to work on compromise language that all of the senators could get behind, so that we didn't have to fight between these competing amendments.

NLW

So let's talk about Sunday, because that's when it started to seem clear that even if we got to a compromise, it wasn't going to get a vote. Remember, that was sort of the reportage on that day. So again, another kind of deflating moment after things starting to seem like they were headed towards some amount of, you know, actual compromise.

Jake Chervinsky

Right. So for various reasons, unfortunately, the compromise talks stalled. And look, it is really hard to get four or five senators around a table to work out a deal on language that is so controversial in such a short period of time. But I will say it was really amazing that the members themselves, the senators themselves, started working on this directly with each other over the weekend. So usually these issues all get hashed out by staff, right staff works out some kind of deal. Then they bring it to their boss to say, Hey, boss, do you agree with this or not? And over the weekend, the senators themselves were talking about what this language should look like. So they work really as hard as I think they possibly could to get something put together before the cloture vote on Sunday. Unfortunately, it just didn't happen in time and so on Sunday, the cloture vote and forward, it passed by a pretty wide margin. I think there were 68 votes in favor of cloture, you only need 60 to end debate on the bill. And once that happened, Senator Schumer said, All amendments are now out of order. Meaning if you wanted to amend this bill, you had to do it before a cloture. That's the end of the amendment process. And what that meant was we had missed our shot to pass even a compromise amendment by a 60 vote threshold, the only way to change the bill at that point was by unanimous consent, the Senate can basically do anything at once by unanimous consent. So even though debate had ended, we still had basically a 30 hour period between Sunday and Tuesday, which was the final vote on the whole bill, to try to get unanimous consent for a compromise deal. So that's where we were heading into Monday.

NLW

So this seems insane, right? We've gone from trying to get a compromise deal and 60 people to vote for it to still trying to get the same compromise deal, but all of a sudden to get 100 people to vote for it. Right. So what's that, like? What's that process? 

Jake Chervinsky

Well, look, it was a real challenge. And we knew going into Monday that we didn't have the best chance of getting the deal done that Sunday was really our best shot. Look, it's very rare for the Senate to even sit on a Saturday, let alone on a Saturday and the Sunday. This is a major piece of legislation, and they were paying very close attention. And we knew if we were going to get this done, the best shot was before the vote on Sunday. So we went into Monday, just hoping that if we got enough calls into senators, and we got enough bipartisan support, and particularly if we could work out a compromise, or rather if the senators could work out a compromise that all of the different stakeholders could approve. And that included the industry, the grassroots, right the community, the people who are making those calls, the Treasury Department and the Biden administration, that was the only way we were ever going to get all 100 senators to agree about letting this amendment go through. And luckily, somehow, through some miracle, we actually did that. It seemed like heading into midday Monday, every single stakeholder approved of the compromise deal that ultimately did get worked out. And I would say the compromise was similar to the Wyden amendment with some elements of the Warner amendment. It had been watered down to the point where I wouldn't call it a perfect fix by any stretch of the imagination for the infrastructure bill. But it was still a massive improvement from the original language that had been published the previous Sunday. So we were really, really hoping that we were going to get this done. The problem is ultimately, as we can discuss, the craziness of the legislative process got ahead of us. And unanimous consensus proved to be too difficult of a thing to get. And ultimately, unfortunately, despite some drama on the Senate floor, we were not successful.

NLW

What was the thing that ended up killing the unanimous consent? 

Jake Chervinsky

Well, as I said, you need 100 senators to agree, if one senator objects, that's it, you don't have unanimous consent. And so the way the process worked was, the amendment was proposed. And then the question was posed to the entire senate: does anyone object to this amendment? And there was one senator who decided to stand up, Senator Richard Shelby, a Republican from Alabama, who I'm sure will go down in history as one of the great antagonists of crypto, who stood up and said, basically, he agrees with the amendments, he thinks that it is a good change to the bill. But he has his own amendments that he also thinks is a good change to the bill, which is an additional $50 billion in defense spending, much of it of course, which would be spent in his home state of Alabama, and he said, I will only vote for this crypto amendment, if I also get my defense spending amendment. And then the question was, are there any other senators who object to Senator Shelby's request for $50 billion dollars in defense spending? And naturally, yes, Bernie Sanders was the first senator to stand up, although I'm sure there would have been probably 50 objections to Senator Shelby. Yeah, and Senator Sanders said No, I will not accept that amendment. And so because Senator Shelby couldn't get what he wanted, he decided that nobody else would get what they wanted, either. And he maintained his objection to the crypto provision and because of this unanimous consent process, that was the end of the game, that was the death of the compromise.

NLW

Brought down by big toddler energy.

Jake Chervinsky

Something like that, unfortunately. Now look, I will say as much as we, you know, want to villainize Senator Shelby, I think it's also fair to say if it hadn't been him, it would have been somebody else. There were 16 senators who had their own amendments that they didn't get, I think any of them could have been logical objectors to this amendment. There's also the matter of Senators Warren and Brown, both of whom are simply committed critics, and are just simply hostile to crypto in general. And I think it would have been somewhat surprising for both of them to let this go. I don't know, this is all speculation. But um, you know, I think we, you know, we can blame Senator Shelby. But I think, you know, ultimately, it's just a failure of the process to get the compromise of them and put forward before cloture, because, frankly, nothing happens by unanimous consent really, in the Senate of any consequence.

NLW

So let's talk I guess now about that sort of the bummer after so many ups and downs, I mean, the sine wave of the energy for this, I can't imagine having lived through it, but it was enough just being an observer. But let's talk about the legacy of this. So quickly, I'm interested in a little bit of what happens next in terms of House and legal challenges. But then I want to talk about more the galvanizing effect, what we learned about who new opponents might be, what it means next, for how we are organized, I kind of want to look forward, not just in terms of the infrastructure bill, but also in terms of kind of the broader set of crypto advocacy in DC. 

Jake Chervinsky

Sounds good, so let me give you just a few things to expect next, and then we can get into sort of the broader picture. So next, the bill goes to the House of Representatives. So the House of Representatives will have a chance to amend the bill and we will definitely engage with the House. We have a lot of friends in the House. I think actually many more friends in the House, who understand crypto very deeply, and are allied with us in terms of the benefits of innovation, and sort of the silliness of having a provision like this one. The problem is, the broader politics of the infrastructure bill are now going to take over. The infrastructure bill is a centerpiece of President Biden's campaign promises. This is perhaps the most important legislative priority of this entire Congress, and certainly for this year. And I think the idea that the House will somehow prevent the infrastructure bill from moving forward is implausible. So this bill is going to move forward, the most likely way that the bill moves forward is that the House decides not to make any amendments at all. And the reason for that is because if the House amends the bill, the bill then has to go to conference, again with the Senate, so that the Senate has to take yet another vote to reconcile its version of the bill with the House version of the bill. I do not think that Nancy Pelosi, who will be in charge of this process in the House, wants that to happen. I do not think that Chuck Schumer wants the Senate to have to take another vote on this bill. So I think the most likely scenario is that there will be no further opportunity for amendments. And the language that we have now is the language that will go into effect. The good news is, the language doesn't take effect until 2023. In fact, it doesn't require any new reporting until after December 31 of 2023, meaning reports filed in 2024 will have to include transactions that are subject to the provision from fiscal year 2023. So that means we've got at least roughly 15 months before anybody really needs to start collecting new information or changing in any way the business that they do, or the way in which they interact with crypto as a result of this provision. So what we're going to have to do is number one, we're gonna have to work with the Treasury Department in rulemaking, because the Treasury will have to define what this language actually means. I think if you just read the language of the provision, it makes no sense at all. I do not think that this language explains in any way who is subject to it. So the Treasury Department will have to do rulemaking to say, who actually is a broker under this rule? And what do those brokers actually have to do? So we will be able to, to lobby the Treasury and that process, and if they try to construe this provision in a way that is overbroad or unconstitutional, we'll be able to challenge that. And then I think moving forward beyond that, there are some really big questions in my mind, and I think in the minds of many people who are who are watching this play out, who have a sense of the legal and constitutional issues, that that there are Fourth Amendment concerns about whether the government can actually deputize such a broad range of private actors to conduct financial surveillance of other US citizens and companies, and then report that information that they obtained through surveillance to the government. So I think it is possible, ultimately, that we will end up in court challenging this law as a violation of our financial privacy rights. But that is a conversation certainly for another day.

NLW

No, that's great, that's our next podcast, let's talk I guess is just about the legacy. So that's kind of the wrap up of maybe the bill itself. But, you know, I want to talk about the galvanizing effect, perhaps on a couple levels, first, within the crypto industry and what you saw shift or your observations, but then also in terms of Washington, you know, it felt, again, as an outside observer, that there was the potential that the attempt to juke this through at the last minute, did more to actually build allies for us and create sympathy for this industry than just a normal piece of legislation kind of making guided even quietly by the Treasury might have. But that's, that's what I'm interested in your take on?

Jake Chervinsky

Look, you could call me pollyannaish, or overly optimistic for this, but that is my read on this. I even sent a text message to a couple people right after the death of the compromise, thanks to Senator Shelby on Monday saying, I'm not sure this is bad, holistically speaking, I think that we can still overcome this rule, I think we can figure out a way to solve this particular problem. I do not think that there is anything else that could possibly have helped us more though, in terms of professionalizing our policy operation in D.C., and getting everyone in the industry and the community together on the importance of advocacy on crypto policy. And so I think it is possible and again, right, you could call me overly optimistic that this is a real turning point for us that ultimately, we will look back on as one of the most important and frankly, one of the most positive events, again, holistically speaking that we've had so far, in terms of the industry's interactions with government.

NLW

Well, I tend to share that perspective, just from a real political perspective. It's like people do not like seeing power, try to swoop smaller powers away quietly, rather than through what we presumed to have the due process. And I think that is sort of irrespective I guess, of the particulars of the situation. And it felt to me like there was a lot of attention that was focused here that you know, this shifted, again, the narrative from these are tax evaders, and drug dealers, which is kind of what what had been the the the attempt to, these are literally people building new opportunities, new software and industry that's growing, employing a huge number of people who want the ability to do that and play by the rules. But the rules have to be fair to them, too. And I think if that's the legacy, it's going to be a pretty remarkable and unexpected twist and a wild moment.

Jake Chervinsky

That spot on I you know, I think we came into this especially just at through the lens of the policymakers in a position where they believed that crypto could be steamrolled to raise a few extra billion dollars on paper for the infrastructure bill, that really what's going on in the industry is just a bunch of tax dodging and regulatory evasion. And I think we're coming out of it on the other side, with a much improved understanding of the true promise of what we are building here. And also the passion that people have for what's going on in this ecosystem. That really matters. There are very, very few issues, where so many people are so vocal and so dedicated and care so much about this. And you're starting to see people who are, you know, changing their Twitter names to say that they are single issue voters, right, people who are coming out to say, Look, I don't care about anything else in politics. In fact, I'm in crypto because I don't want to be involved in politics. But this is the one thing that I care about. And I'm going to put my vote toward people who are running for office who support this industry. And I'm going to put my dollars toward that too. And I think that message is being received loud and clear in D.C. And that is just a major turning point from what the industry looked like before, which was a combination of crypto anarchists, libertarians, who had no interest in ever engaging with policymakers, who maybe really were trying to defund the government by evading taxes, and also a disjointed group of companies that were advocating for policies that benefited them individually, but did not have a coordinated strategy to advocate on behalf of the industry and the technology together, and were coming out on the other side has a much improved industry with a coordinated strategy, and real arguments that don't rely on some fantastical idea of anarchism, but rather depend on coming up with good policy that benefits U.S. interests. And I think that senators are starting to learn much more about why those arguments matter and why they should care about them. So I am, again, perhaps overly optimistic, but I am feeling pretty good going forward. That's that this is a turning point, and that we will in the end be better for it.

NLW

Well, Jake, I know I speak for many, if not most of "The Breakdown" community, and thank you for all your hard work and everyone else's hard work there over the last couple of weeks, and maybe a downpayment on a thanks for a lot more to come. Appreciate you coming on the show, and it's always great to chat. And I'm sure we're gonna have to do a lot more of these going forward.

Jake Chervinsky

It's my pleasure. And thank you for covering all of this. Because really, and truly, I think people underestimate how important it was, and how much impact it made for everyone to be so engaged and to be making calls to senators, and to be tweeting at senators and blowing up their phones. This stuff really matters. And it's thanks to you that everyone stayed so engaged. So right back at you, thank you for your help with all of this. And I'm sure we'll have some good fun and some good fights going forward together. Cheers.

NLW

Reflecting on that conversation, I want to just put a pin in this last idea that this is going to be positive for the industry. I genuinely believe that that is the most likely outcome. And as much as it's funny to say so on Twitter, I don't think that's just cope. As I was saying to Jake, I believe that people really, really hate it when those in power use sneaky means to try to get an edge on someone who might be coming up against or encroaching upon that power. We have an inherent distaste for that, that's why we like fair fights. We like things that feel like they're on a level playing field. This was not that, as should be clear from everything that Jake said. Speaking of that, not a fair fight. I also want to point out how involved the invisible hand in this whole story was, which was the Treasury Department. I do not believe we've heard the last of the Treasury Department's attempts to try to win back power over the crypto industry. I believe that whoever is there and perhaps who was also there before, under previous Secretary of the Treasury,  Steven Mnuchin, is more convinced than others in government that the crypto industry represents a threat to what they do. This will not be the last that we hear from them. And it's probably worth our time to better understand who is in the Treasury, what bone they have to pick and what power they have to exert an influence on the way the crypto industry evolves from a regulatory standpoint. For now though, I hope you enjoyed this oral history of such an important moment in the development of the crypto space. I appreciate you listening and until tomorrow, be safe and take care of each other. Peace!

Loading...