The Aaron Day Show: S2E2 – The Unjust SEC Case Against Dragonchain

To a sentence of time, sir. is there anywhere is

the wicked gather stones and build up prisons in our name there's a story that you've heard before it's been told in every age of a gentle soul misplaced inside a cave

And notice it.

He stands in the presence Looking back he sees the boy he was is gone And there's no free

Free There's a fire inside That burns in you and me And the truth denied Is warm I'm awake tonight And your spirit's supposed to meet I

can't be polite Said Russell Brinkley welcome back to the aaron day show this is episode two season two uh we've got an exciting show tonight we've got a couple of guests we're gonna be talking about the unjust case of the sec versus dragon chain uh but before we get going with that I've got some housekeeping items to go through and obviously played the free ross song at the beginning so in

theory um in just a few days on monday Ross Ulbricht will finally be free. That's if Trump makes good on his promise to commute Ross's sentence. So that's why I played that song at the beginning and we'll play it at the end as well. And hopefully that'll be the last time we have to play that song. So with that said, I will jump through the talk. If you didn't catch last week's episode, I encourage you to check it out. The subject was freedom versus technocracy, but it ended up taking A very interesting twist. We ended up talking about consciousness and ayahuasca and a whole variety of things by the end. But I think the conversation about technocracy is going to be,

unfortunately, an enduring one with what's going on with Trump and with the PayPal mafia kind of infiltrating his administration. So I'm going to continue to talk about that topic and bring on guests related to that topic. and I just want to walk through some of the events that we have coming up I'm booking things throughout the year but we have three events coming up starting next week the first is the wag me we're all going to make it which is the biggest blockchain event in america and they're estimating ten thousand attendees so that will be next week the twenty second through the twenty fourth uh in miami and my talk At that event is going to be

specifically focused on Roger's situation, although at this point I may also be talking about Ian Freeman and I may also be talking about our guests today and their situation with Dragon Chain as well. Immediately following the Wagby event is the Counterparty event, also in Miami, and this is a more intimate gathering of people two hundred to three hundred people who will be focused on talking about solutions on how we can exit and build and work outside of the system so I'm likely going to be talking uh at this event about this article that I continue to work on because it's a moving parts but I'm going to talk about the bitcoin strategic reserve tether

and how I think that this could be the biggest financial fraud in u.s history and that's going to be a theme of mine for a while although you know I think we're going to get the Bitcoin strategic reserve or not in fairly short order. So I'm not sure I'm going to be able to prevent much, but I'm going to try to send out some warning signals on that. And then immediately following the counterparty, I'm going to be in Mexico. Morelia, Mexico at the People's Reset from January the twenty second through February the second. This is also a very hands on event with a lot of workshops and people talking about things like using alternative currencies, growing your own food. It is very much an exit and

build event that Derek Brose is putting together. And Derek has been doing some excellent work for years on these topics. And then next month, later in the month, I guess a couple of weeks after that, I will be at Anarchapoco talking about, well, it's February the twenty seventh through the twenty first. And so that's probably going to be more of an updated CBDC technocracy and alternative currency talk. And just as a reminder, we're still working aggressively on the Free Roger Now campaign. So I encourage you to go to freerogernow.org and sign the open letter and learn about the case. Hopefully Roger will be

added to this early pardon list. And if not, there are several ways that We can get him out of this. I mean, one is he could win his extradition case in Spain, in which case, you know, he could suddenly be a free man at any moment. The other is that the DOJ drops the case. The other is that he resolves the case or then there's a pardon. So there's certainly a multi-channel approach and we'll continue to be following and sharing content on that. And I encourage you to share the content as well. Also, there was an event today in Concord, at the State House in New Hampshire, support of Ian Freeman. There will be an appeal hearing for Ian's case on February the fifth.

in Boston. And so my wife and I will be attending that. I encourage you to attend as well. It is always helpful to have a strong showing. We certainly packed the courthouse and then an additional courtroom for Ian's sentencing hearing. And if there's any justice at all, he should have a really good shot at getting this case overturned. And so we'll keep an eye out for that. I'm going to lead into this talk before I bring the guests on and provide a little bit of context. If you've been watching this podcast at all or following me at all, you know that my number one issue has been warning people about CBDCs.

because once we have complete digital trackable programmable money it is the gateway to absolute digital tyranny it's the the key component for social credit systems digital ids all of it and I realized in twenty twenty two, I wasn't surprised so much about the covid stuff and the vaccines. I've been aware of public health being kind of a death cult for a while, but I was surprised by the fact that. in particular people that are at this intersection of liberty and crypto were being targeted by the federal government so ian freeman uh being one example that I was personally aware of and then also jeremy kaufman uh who started library both of

those are are two are they're both free staters and I was really curious as to why significant resources were being spent on people that were promoting liberty and ostensibly following the law, because both of these were cases where a massive amount of time and resources and people were spent on these cases. And so that's when I really uncovered and did a deep dive on CBDCs and realized that globally, countries all over the world, now, one hundred and thirty four of them representing ninety eight percent of the GDP, were at various phases in accelerating the development of CBDCs. And along with that is in order for CBDCs to be successful, because once people realize how bad they are and how

tight of a digital leash you're on with CBDCs, for other alternatives. people will start looking And that's where the government regulation kicks in. So what you'll see on the screen There is President Biden signing Executive Order one four zero six seven on March the ninth, twenty twenty two. And I think this leads into the conversation we're going to have with our guests today. And it also impacts Ian and it also impacts Roger Ver and many others. What this executive order did was it authorized the United States to pursue a CBDC and it also authorized a whole of government approach to cracking down on crypto. And when I say a whole of government approach,

I mean a whole of government approach. And by the way, this needs to be updated. This was an old slide that I did. But when I say whole of government, the SEC has cracked down on more than one hundred and twenty seven companies. You have the Department of Justice going after coin mixing services, so services that seek to take transparent blockchains and obfuscate the transactions, basically adding privacy to the transactions. There have been numerous arrests and people targeted there. You have the FDIC and others, and actually the Federal Reserve, working with the SEC to collapse banks that are, you know, crypto friendly. And I'm not even talking about the banking I'm

actually talking about in particular signature bank, Silvergate bank. Those two banks had a service that was competitive to the federal reserves fed now system. And so it could be argued that they were targeted. You have the CFTC, which, uh, uh, Had forty seven actions in twenty twenty twenty three alone, really going after digital assets and DeFi. You have the Treasury Department, the largest ever settlement in the history of the United States Treasury, was going after the crypto exchange Binance, where they collected four billion dollars on that. And then through the CEO in jail, you have a massive operation going now. with the IRS who is,

they're selectively targeting people now, but I've spoken with someone at the IRS and, you know, the whole point of a case like Roger's is to set an example. And once that example is set, This eighty seven thousand IRS agents that are being hired, the number one focus area for hiring is actually cryptocurrency enforcement. So this is Biden's whole of government approach. And everybody has felt that if you're in crypto, you felt it one way or another, either directly or indirectly. Either you've been sued, you've been thrown in jail, you've been debanked. you have had to give more information to cryptocurrency exchanges you name it this was all absolutely coordinated and

this was in fact federal government policy and so um so I guess we'll get into it now I'm going to uh before we do that before we do this I'm going to play a little short video about dragon chain so that you can see a little bit about what that's Platform and ecosystem with the marketplace for developers to build projects and for businesses to actually leverage blockchain tech. We at Dragonchain believe that there's a really significant potential for blockchain technologies to provide a real value back to the world around us, society around us. It's something that I don't think we've seen before in the world.

It's almost like early-day Windows to a computer, you know, making it easier for people to use and to understand. If all the other companies are focused on making coffee, we're trying to build a cup. The fact that we allow developers to code in the language they've used for decades and to use models they've used for decades and yet still tap into this extreme security that Bitcoin and Ethereum provide. So we're excited to actually have the commercial platform set and ready to go, almost cookie cutter style for all these various enterprises, right? you're having all the things So with that, that Dragonchain gives. You have the scalability, you have the public-private

hybrid aspect of a blockchain. It will allow a business to build capabilities and deploy them and use them in a scalable way that mirrors what they're already doing. but we'll leverage blockchain and all of the capabilities including currency and proof of existence and things like that. We're super excited because it's an actual scalable something that we can commercial thing and it's readily distribute in mass to anyone that wants to use blockchain. The Dragonchain commercial platform will launch on April fifth, Satoshi's birthday. We're a very philosophically driven company and project. From the technology all the way to the politics, it's all about individual liberty.

It's all about, you know, all humans are welcome. There we go. All right. So that's that's the the short the short I'll introduce these guys, give you a little bit of their bio and then have them have them talk as well. And then we can get the get the show going. I met these guys actually. I was a guest on Joe's podcast, World Blockchain Roundtable. In fact, it's a it's a recurring podcast that's on every Thursday at eleven o'clock and Eastern Time. to check it out. And I actually encourage you It's a phenomenal show. They take on interesting topics each week.

And there's usually a panel with anywhere from it could be four to seven people with a whole wide range of expertise. And so that's how I actually got to know these guys and this is one of those typical stories where it always seems where the sec or whoever the government is they're targeting people that are promoting individual rights and promoting freedom and building real solutions and so this is a you know it's unfortunate that this situation even exists but it does fit the uh the typical model so I'll give you a little background on these guys so joe rhodes is founder and CEO of Dragon Chain. the architect, He has over twenty years of experience in software architecture with a focus

on security and scalability. He's worked on a number of technology startups since the mid-nineties and has been a thought leader in blockchain technology since twenty ten, contributing to projects at companies like Overstock, Coinbase, Lockheed Martin and the Walt Disney Company. Dragonchain itself was originally developed from Disney's incubator as the Disney private blockchain platform before it was spun out into Dragonchain in twenty seventeen. So he's known for his visionary approach, aiming to bring blockchain technology to businesses in a scalable and secure Manor in twenty twenty two, Joe and Dragon Chain face legal scrutiny from the SEC being charged with conducting unregistered

securities offerings, raising sixteen and a half million through the sale of DRGN tokens. Despite this and as we'll discuss, these were actually utility tokens. And Greg Lang is the founder and CEO of Rivet, previously known as Open Relay, where he's pioneering blockchain gateways with a focus on privacy. and scalability and extropian cyberpunk at heart. Greg's vision has led to innovations like EtherCATL and Cardinal EVM, enhancing blockchain infrastructure. His leadership has forged key partnerships, including MyEtherWallet, and he's a recognized speaker on the economics of privacy by design in the blockchain space. And I also understand that

you're you have a background as a lawyer even though you're not a practicing lawyer which I actually didn't realize that until about a week ago so both of these guys are absolutely incredibly sharp and incredibly principled so I really look forward to the conversation and thank you guys for joining thanks for having us yeah thanks for having me here great So I guess where to begin. So, I mean, I played a little short video, but Joe, do you want to talk about, because my audience, it fits, it's kind of a weird combination. the one hand you have people that are, I mean, have been in crypto for over ten years and are hardcore. there are a lot of people On the other hand, that come to the show

because they've just started learning about CBDC. So it'd be really helpful to give kind of a really high level background on you and Dragonchain, just what it is and so forth. Okay. OK, so I guess high level and the important parts, I guess. I'm a software guy, right? And I'm a nerd, and I love to. to solve problems with software and that's been for a long time and I got I happened to get really good at it and so I was involved in a lot of interesting projects and At one point we had a very small little research group and you know, we is engineering research So it was you know kind of applied Research and one of my guys

brought in Satoshi's white paper, you know, and he said, hey, we should maybe look at this, you know, because that's what we would do. We would look at new tech, see where we could apply it for our customers. And it was fun. And I, you know, took it out. read it over the weekend, came back and we, you know, the whole the whole team, it was, you know, it's it's everybody needs to understand this so that we can catch the things that, you know, I might catch stuff that somebody else doesn't and vice versa. And, you know, we essentially started off with, OK, everybody has to either mine or acquire some Bitcoin. And this is twenty ten. Right. So you had to. you had to go through all

the stuff to get a Diwala account and get your bank account hooked up to it and then transfer money into Diwala and then from, from Diwala into Mount Cox and, uh, you know, make your purchase and get it out. And that was the beauty of Bitcoin is you don't leave it there. Right. And, um, you know, so I, I did a little bit of tiny bit of CPU mining. I did, you know, and from there we then did anything we could with it. You know, we, we went straight in and tried to, you know, understand how it worked and how, you know, where, where it didn't work, right. Or where it might not scale if you got, you know, a lot of people using it. And, and, The interesting part because you know,

we were just building stuff. And, you know, we ended up open sourcing some libraries and Coinbase then hired us to build some more of their libraries and, and it you know, it was fun, really fun. But the thing that kind of came up was, you know, when I do what I do, which is, you know, I look at software systems and I see, you know, the parts that are inflexible. And I basically try to work to find the ways to make those parts flexible, to make it so that you could integrate it, to scale it, whatever, you know, depending on the goals. And with with blockchain, with Bitcoin and at the time, I looked at Namecoin existed as well.

I was a big fan of Namecoin in the early days. And it was interesting because as we were building things, we were learning. And I found a bunch of very interesting angles that no one was looking at. I, for whatever reason, I was definitely interested in, at the time, Bitcoin and how it's marked, what limited there was, how the markets worked and everything else. But I really started to look as much as possible at the things... that weren't financial in nature. How could we apply this for the security, for the identity, for historical use?

And I found that there were several things that you had to do. You had to have it. scalable for one, that we needed to solve the scalability problem. And that includes what I call the economic scalability problem, that even if you can put thousands or millions of transactions on chain, you also have to be able to afford to put them on chain without blowing out a fee market or whatever else there might be. And so started you know, just doing everything I could looking for places to apply it. Um, you know, I worked for, uh, uh, early on, I worked for when, when, uh,

Overstock was doing their, uh, early work and when they then left to Symbiont, I was working with them and, and, all the while everywhere I went, they, it was way, it was too niche. You know, I was trying to do something that was very broad and, um, you know, most of these places were trying to solve a specific problem and, you know, I'm sure it was useful, but it was, wasn't really what I was targeting. And so, um, when Disney called, you know, and they called me for not for the blockchain reason, they called me, uh, or, uh, you know, my, my experience as a, as an architect and, you know, security and scalability and everything. And so I, they moved my family up to Seattle and, um, uh,

I started working on that stuff and very early on, um, one of the people at the Seattle office at Disney, um, you know, pinged the, you know, the, the, the group where, you know, it's kind of like the random group on Slack, right. Where everybody just you know, throws interesting stuff and said, Hey, who wants to, who wants to talk about Bitcoin? I want to learn more about Bitcoin. And I said, like, you know, I said, Hey, you know, I'll be there. Right. And so a bunch of people gathered, we started talking about stuff and, um, it was super interesting. And, um, it, uh, was the beginning of what became the Disney private blockchain, uh, platform and then, uh, dragon chain.

And we started to apply all of those, uh, principles, all the, the things that I had come up with that I needed to test, right. I needed to hit, does this really work where, you know, where, where can it be improved? And, you know, that was in. And we started, uh, just, just building and building and building. And, um, What it came to, though, was that at some point it made sense. And a lot of it was trying to explain to upper management why we needed to look at this. How will it benefit the organization and all of the real utilitarian things? And one of the things that really

rang true that people seemed to get, even if it's hard to really bring it in, especially back then, was that if you look at Bitcoin, and at this time, Bitcoin was still very young, And it was just now that a lot of, you know, Ethereum was, you know, you're starting to come out and a lot of other projects. But the thing that was so interesting was that, you know, if you came down as an alien and you landed on earth and you looked at, you know, what are these earthlings doing? You would notice this odd thing, this decentralized network that for some reason had

gone from zero to crazy in amount of, of energy applied to it on earth right now that's dollars and actual power applied to the bitcoin network for security and it went from nothing without a leader, without someone going around giving TED Talks or actively selling it, it went from zero to being the largest compute concern on earth, where it was outranking all of the supercomputers that all of the governments had put together. And that, in my opinion, was kind of the proof putting that

that this technology, and you could go through a bunch of different reasons why, but this technology can affect human behavior. And that became kind of my real push at Disney was, how can we use this technology? And again, we have to hit the scalability. We have to make it affordable to use. We have to make it flexible. We have to make it so that a normal coder can integrate into it. And, um, you know, it is my theory, uh, since way back then that, um, this technology is very unique because it's a, it's a, uh, uh, you know, it's a self driver, um,

effectively where it, because it's transparent and because it has a mechanism to reward people for doing some behavior. And in Bitcoin's case, the primary behavior that it rewards is mining. You could say that it has a secondary or tertiary effect if you're holding or if you get involved in crypto and you can make gains other than mining, but it all starts there. And that's the thing that drove that energy, attracted all that energy. And I wanted to make that possible so that whatever your business is or whatever you're needing to do in the world. It could be an organization trying to do something that

has nothing to do with financials, but that you could effectively write out your goals and tune the the system to the behaviors and get people to do these things right and it's crazy exciting but it's you know it's still still extremely early um for all of it so you know that's that's kind of the the basis but it's you know it's a very generalized thing we have we do have systems that are that are focused on financial uh activity we do have and we obviously have a lot of systems that are focused on things that have very little to do with uh money right so sorry it's a little long but so you saw applications so so

mining and then holding the uh rewards and then never selling them you saw opportunities beyond that use case yeah yeah yeah isn't that crazy That's amazing. And you saw that early on in twenty twenty. So you're an OG like you are. You're a hardcore OG that that is. Yeah. So so so you're you're CPU mining and then you're seeing the applications of what you can do with with this kind of immutable ledger incentive system that it can just span all kinds of applications. Yes. And it should. So so then so then what happens? So So this idea, yeah, we, we just started building stuff and I think we did, uh, I can't,

I don't know that the actual count on the internals, we, we were, um, allowed to release like twenty or twenty-four some use cases because we were in the, uh, W three C working group. I can't remember the name of it, but there's a blockchain working group and, uh, everyone there, you know, IBM was there. Microsoft was there. There were a bunch of banks there, of course. Um, And they were all interested because we were doing things that were totally different than what they had seen. And, and, uh, They, um, how do I say they, they kept asking me, you know, like the guys from IBM, you know, how are you doing this? Cause you know, we have engineers, but the engineers are, you know,

old school, traditional engineers, you know, we, we can't use them over here. And, um, you know, we were using interns and we were, well, we had, we had, uh, you know, senior techs building stuff and, um, we, You can look online. The list of use cases during Disney's time was crazy. And some of them, we built the systems. Some of them, we designed the systems. Various levels of maturity. But the point is, my goal was to throw it up against the rocks, see where it breaks, see what we need to improve, things like that. we, we got enough attention. You know, I even got to, you know, this is me, a lowly engineer, you know,

nerd in Seattle in a cube, actually able to converse with the CFO at Disney and stuff like that. I got an attaboy and, You know, all that type of thing. And we, you know, I took it to a group. I was already a voluntary member of the Disney's, I can't remember what it was, their open source group. I can't remember what it was called. But we, I brought it in and I said, you know, and I was there because I was able to usually translate between their attorneys and the engineers. I was the guy who would help the engineer figure out, what he needed to say to make sure the attorneys could, uh, approve it and to help the attorneys know what to ask, you know?

And, uh, so I was already well-known enough there and I brought it into the, the guy really smart guy running that, uh, show and, uh, said, I, I think we should open source this because IBM's asking about it. Microsoft's asking about it. We have all these other groups that would help us to figure out how, you know, how, what their feedback would be. And, um, so we started that process and they had, Pixar had open sourced a few you know, things and a couple of other internal groups had, you know, open sourced some libraries. So this, this was the biggest thing they'd ever, um, uh, run through that process. And it was, it was crazy. And, and we've, we've released all the documents, uh,

on that too, but you know, we had to get security approval. We had to get tech approval. We had to get approval from three or four different business units, from three or four different legal units in the company. And I can't remember. There's a whole set of security analysis and things like that because they don't want to be embarrassed and they don't want anybody to sue them, that type of thing. So we made our way through that whole process. They approved it, and part of their model, partially because the legal side of Disney approved this,

was that at arm's length. If it gets released as open source, it has to go and be chartered or given to an external party. we like say my chain of command didn't include our sponsoring VP. So, uh, you know, it went to my hands, but I proposed that we created, you know, a foundation just in case I get hit by a, a bus or something. And so they approved that they chartered it. Um, they, they, they still hold the copyright on that original code. Um, and it was really funny too, because they asked, uh, and it still remains on all of our websites and Twitter and everything else that, uh, you know, basically a disclaimer that,

we don't speak for Disney you know, because they asked to put that on. And, uh, so it was like, I've kept it on. Um, but, uh, they, they handed it over to me and, uh, we, we lived as open source for a full year. you know, and we had a Slack group and it was all Um, very tame. Everybody was very, uh, focused on, you know, uh, open source, uh, ethos and the fact that this new technology is amazing and fun. And then all of the stuff started happening in crypto and we would get people coming in and trying to trick people to send money to them and all that. And so we developed a lot of

really interesting, fun, I should say, things that everybody should be doing in the crypto world, which is if you're going to make an announcement, The entire world needs to know that no announcement of any significance is going to come that isn't cryptographically signed by this key. Right. And so we did a lot of that stuff. No one ever lost any money in that entire period. And a year later, Not all of the team, but quite a bit of the team left Disney to come over and commercialize the product. And we've been building ever since and attacked ever since. But, you know, maybe one in the same, right?

Yeah. For sure. I think there's a grain of truth to Well, the idea that part of what is targeted by all of these entities and by sort of the solution is in fact this whole of government open ethos tied to that original open source idea. One of the best collateral attacks they have is to try to do things like they're doing to Roman Storm, where they're getting vicarious liability on projects that are open source and their developers for what wrongs people commit with the software, which is sort of just a first foray into what's happening with Dragon Chain. They're being very specifically targeted for something else, but but definitely already in

the milieu of targeted things as soon as you're in the open source space and you're dealing with freedom tech. Yeah, that's a common thing that they do. And conspiracy is another thing that they can use. I know in Ian Freeman's case, he was charged with a whole And one of them was money laundering, bunch of things. conspiracy to commit money laundering. and the other was And they ended up dropping the money laundering charge, but the conspiracy charge still exists. this stuff is absolutely ridiculous. I mean, And then they blamed him for the actions of one of his customers. Which, you know, so they do. It's easy to do with open source. And and, you know, again, I don't even know how we

fix this because this isn't even just applied to open source. I actually was in a I think I've mentioned this before. I ended up in a defamation lawsuit for five and a half years. And I was in a defamation lawsuit that went on five and a half years where I made no defamatory statements. where my co-defendant had already lost a lawsuit, but these were separate cases. So I was being sued just simply for conspiracy, even though I'd never made any statements whatsoever about this guy. And this process drug on for... It was originally dismissed, then it went to the Supreme Court, and then the Supreme Court said, no, we're going to reverse it. And so we ended up going to... mediation, but I mean,

five and a half years later on something that's absurd, right? And people have no idea. Most people, this is something that I've found, I don't know if you guys have found this as well, but until you've interacted with the legal system, most people have no idea what it actually is. Like, no idea. I mean, if you come out of I went to public school and it's like, OK, well, this is how the you know, here's a vague understanding if they even have that now with, I think, only twenty two percent of eighth graders passing civics. I don't even know if they have a basic idealized version of how courts work. But but you can't imagine how bad it is until you've actually. Yeah.

that was why I left the practice of it, Well, I mean, actually. When I studied law, I thought it was this beautiful, harmonious thing that I could use to make change in the world, If I could get the powers right? that this education would offer me, then I could turn the system's weapons on it to do justice. And as it turns out... uh you're just participating in this meat grinder this completely inexorable machine that you know is ostensibly on the surface about the law but is ultimately a cost generation mechanism and a time suck mechanism designed uh for the purposes of lawfare when it comes to targeting these these technologies right um they go ahead yeah oh no but you were gonna well I

was gonna say was there a particular moment was there a defining thing that caused you to step away Well, I was always, so in law school, so I went to law school in two thousand seven. Right. So right before the two thousand eight collapse and the law profession changed dramatically then in terms of opportunities for new people coming in. So that was those sort of first instances I trained for. I really wanted to do advanced litigation type, advanced civil procedure for class actions. That was the thing that I found the most passion in was just this heavy procedure mixed with heavy procedural due process constitutional law concerns. I found a lot of... joy just in the puzzles and

I also found a lot of injustice in the way that some of those things were used on people trying to do things that were bigger like um if you wanted to deviate from the norm as a company you were exposing yourself to class action lawsuit risk in a lot of ways in a lot of cases um that right like the the well I didn't get to do market fell out and so I ended up working for a a small time solo practice lawyer at doing just that I became the second straight up contracts work. And I watched as business after business that we defended was just destroyed by all of this litigation. And mostly the thing that destroyed them wasn't that they were losing their cases, but it was that by the time

they got to the end of it, they were out of operating capital. They were drained of their resources. They were drained of their energy and spirit and they'd give up, right? And I didn't even feel good about participating in the defense, even when we won. uh and that was really what drove me away there's a one particular case um that I cannot uh disclose details unfortunately to this day of but um needless to say these folks work on some really cool animation technology that um you know that even professional sports leagues and and like networks were using for professional sports graphic art um and this company just got chewed up and then uh the other probably biggest formative one was the

and I can give details about this because I wasn't part of it. When I was in my second year of law school, I clerked for bankruptcy court judge. And during that time that I was at the federal courthouse there, the University of Kansas sued a t-shirt shop in downtown Lawrence, Kansas, violating their licenses, ostensibly because it was but primarily because they didn't like the mean-spirited t-shirts that they were producing. Like, if you wanted to buy a Muck Fizzu t-shirt at the time, you could go to this store. And AU was dead. They wanted that sort of negativity off of their brand. And they came after these guys with trademark infringement and delusion. And by the end of this case,

they'd gone through like, fifty t-shirts individually, Like, ten of them were found to infringe. The rest weren't. There was no logic or rhyme or reason to the jury verdict. And by the time they were done, this company that largely won its case and could keep selling its best sellers had already gone through so much cost and expense that they couldn't continue to operate. They couldn't afford their lease. Their business relationships were destroyed for being targeted by this. Their reputations were destroyed. The employees didn't want to work there. They didn't want to show their faces. They were embarrassed by it. There's just all of this sort of, it's really the process is the punishment.

And these people use the process like a weapon. And that's when I realized that all I was doing was helping the problem by perpetuance. I would just go through a practice area and be like, I could try this. And then, oh no wait, I'm helping do injustice. And by the time I got to the last thing, You know, I guess the last case that I did with this lawyer that I was working with, he won a pretty decent windfall, and I had shitty contract terms at the time, so I was naive. So he walked away with a windfall, shuttered his doors, and I went on to do whatever the fuck I was going to do as long as it wasn't ask him for money. And I went from there going, okay, well, what the hell do I do now?

Do I start my own practice? Do I even like this enough to do that? Well, no. As it turns out, I wanted to change the way the world worked, and I thought technology, right? Like I was at the time a big fan of Apple and Steve Jobs and what they'd accomplished with phones. I thought this was amazing, right? They redefined the phone. And from there, I just happened to have a friend who – I worked for a company that did legislative software and got, you know, reached out to him, like, get me an interview. I don't have experience with tech, but I do have experience with the law. Surely I can help out in here somewhere. If you can teach me the tech, I can learn fast. And so they gave me a shot.

Actually, my business partner today, both of my business partners today, my two co-founders, Austin Roberts and Beth Van Horn, were with that company. Beth hired me. Austin interviewed me as a developer to see if I had what it took to understand tech. And then together we built the voting system for the Senate and the House in Indiana. Some of the data systems they integrated. Learned all about how that worked and how that tied in and how the technology could actually revolutionize things. There are some things that tech could do to revolutionize and there were some things it couldn't. But it was over the course of that time that I discovered crypto and I discovered Bitcoin and

originally made safe in Ethereum were the other two that I thought were amazing because I was just getting to understand databases and I recognized that blockchains were ultimately just a next generation database tech. And so what you could do with that began to fascinate me. It fascinated Austin. Beth was also fascinated by it because we were all sort of freedom-minded. And we wanted to help build these systems. Now, we didn't want to go directly marching into the crypto part of it. We wanted to provide the core of our expertise, which was at the time the systems and infrastructure that support it. So we built... decentralized exchange order book software first and

stumbled across Rivet, right, as an idea based on the fact that our biggest challenge with OpenRelay was the node infrastructure. And it was around that time that I encountered Joe. And I encountered Joe because I was looking for people who were minded in a way that said, okay, great, finance is a neat use case for this broader technology that could change everything. Who's really thinking about what it can do in the big picture in the long run? Who wants to use it to, for instance, make deeds and titles work better than they do for people, especially in places where warlords can take your land if they have somebody that they can point a gun at in the office that keeps the deeds.

who's going to work on this for international trade where you can do transactions across borders a lot easier and so you can keep track of bills of lading and all this other stuff with trade. All of these use cases I found Dragonchain was doing and I reached out to them, I think, on a form that they had to come on a show they were doing. And that's how we first crossed paths. Incidentally, found out later that we'd actually known each other from way before because he was leaving KU's college system right around the time I was coming to it. And we were both in bands. And he once promoted a show that my band played at the time. Yeah, it's the craziest thing.

He brings it up live on the air saying, it's like... I think that we played this show. And I was like, wait a minute, what? It was kind of crazy. It was pretty nuts. Because it would have been twenty plus years before or something. I don't know. Yeah. Well, and that marked sort of the beginning of our friendship. And then when the SEC stuff hit, like all of my legal background came bubbling back up into my head. And I was just like, this is bullshit. We got to do something about it. And so here we are. So, yeah, so let's get into that. So how did the SEC thing happen and when did it happen? So you start Dragonchain. So how long after you kind of open source this project,

how long from that point until the SEC got involved? And before before you answer that, I do want to say this audience should be familiar with this. If you've watched Roger Ver stuff, this is a classic. Another part of the problem in the lawfare is is horrendous. And one of the aspects of lawfare is you can't speak on your own behalf if you make public statements what are called extra judiciary statements the the prosecution will use it against you so if joe goes and makes a whole bunch of statements and we you know in a certain way uh the sec will like document that and then they'll add it in as in as part of the case and as part of the evidence and so um so this is why we're

gonna you know greg is going to talk about some of this stuff so just so that you understand and Yeah, and I'll say it's really funny because I generally, even when we had, you know, when we start, well, I'll get into that. I'll start with them as you ask, and then I'll tell you the stuff that's interesting about that legal side that, you know, it's a very interesting thing, as you said, the this is my first real experience. I, I'd been a, a, uh, several times a, an expert witness because I, you know, I know tech and I can, I can help, uh, help projects out that way, but I'd never been in the middle of,

of something like this and let alone with, you know, the, the feds, you know, the big guys. And so we come out in October, right. You know, uh, they, you know, they, they pounded the gavel at Disney and said, you're approved to release. So I went and clicked the button on GitHub and we were out there. Right. And, um, We survived in the early, and it was basically a process of trying to get as much feedback as possible, figure out how people outside of Disney wanted to use it. We had to remap some of the concepts for a more general approach. I mean, the original framework was built for inside of a large enterprise. And so there were unique

different aspects. But exactly one year later, and we planned it on purpose, we launched the commercial entity and we released or we opened the sale of the tokenized micro license. And so our model, and this is probably the most boring part to me or probably to your audience too, so I'll make it short, that the model and everything about... dragon chain as everything about any decent elegant software architecture uh is is going to have a reason you can't just throw something in there it's like I want to throw this in there why it it will break things if you just

throw stuff in there you have to have uh it has to have a reason it has to have a meaning and you know when when we left disney all of a sudden you have to have people run your nodes, right? In Disney, you would, in fact, get other business units to run nodes. So they would validate your transactions and vice versa. And it was a trade-off. We didn't have a coin inside of Disney at all. No token. Now, individual projects had their own tokens, but the network itself was token-free, which is pretty weird. And when we came out, know we had to decide if we you know do we need this how does it work why why would we need it and The model that made the most

sense to me and to the team was this approach of a tokenized micro license that instead of it being a, you know, you think through software licensing, again, boring world, but it's a meaningful thing that, you know, older licenses tended to be, oh, you would buy a version of the software, new version comes out, you have to buy it. Later, it became something that you would subscribe. And so I would pay you only pay a hundred bucks a month and I have my license. And, uh, the thing that we were trying to approach was to marry that with the commodity approach of where cloud was going then with AWS and with Google Cloud and others,

Microsoft, where instead of subscribing, I'm going to pay for resources. I'm going to pay as I go with these tokens. And so it made really good sense because number one, the tokens themselves can act as various security mechanisms You know, we know that and you can prove as a as a user of the blockchain that you actually put that transaction in place. How do we know? Because you signed with your with your keys that transaction and the network signed it as well. And the network is signing from the approach of here is the service you're using. Yes, we're signing that you paid. Here's your result. Good. Right. And it's that general mech

and that general model. Right. And we We put it together and because we wanted to make sure that it was historically recorded, we filed a provisional patent on it. And, you know, not that we think that's going to be something that's going to be that patent was going to be, you know, something that we could make a lot of money on. It was more than anything. We want to get it down on paper. We want the government to recognize that it's there. We were later granted that patent, no less. Right. And along with some other patents related and Uh, we put that in place in, uh, it was August or September of. We released, uh, the, the,

we opened up the sales of the tokenized macro licenses on October, second of, exactly one year after we open source that was on purpose is kind of a, you know, our birthday and, um, We rolled it out, and it was a very – and I could go into the details of it because it is very interesting to the psychology of how it worked. But we didn't want to go out. At the time, if you – I don't know if anybody was around then, Brave – uh, came out, uh, with their token. Um, I'm trying to remember, uh, I tried to get into a few token sales that I couldn't say. And I was like, okay, I'm, I'm ready.

I'm, you know, I'm at the ready in the morning and I send in my, uh, my crypto. I can't even remember what I was paying with in some of these cases, usually Bitcoin though. And I would send in my crypto, but yeah, I wouldn't even get on chain or on Ethereum. It's like, I wouldn't even, my transaction wouldn't go through because the, the fees would go up because everybody else was doing the same thing. You'd be getting front run essentially by people who wanted it more than you. And there were cases where you think about it. And I didn't want this for our, for our community, right. Uh, that there were cases where the people who were really enthusiastic about these projects got nothing, right.

They, they couldn't get in. Um, there were some where you would have VCs and, and people who were more, uh, technically adept right that would put in uh forty fifty eighty thousand dollars worth of fees and didn't get on didn't didn't get their transaction uh through and that's something that's like okay we we had you know we came out of disney so we had a lot of people who were absolute noobs uh in crypto and they came in because okay first of all it's very interesting it came out of disney they felt like it was a little more friendly you know our community was not toxic it was very fun and uh philosophically uh

driven right everyone was there for a good reason um and so I didn't want I didn't want to see any of them get screwed over yeah you know by just the model itself. And all of those projects back then would, it would tend to sell in tiers. So, you know, they would sell to their golf buddies at five cents. They would sell to their golf buddies, buddies at ten cents. They'd sell to the wider community at twenty five cents and then to the public at fifty cents or a buck. And everybody, you know, basically getting ready to dump on everybody else. And that it was like, it's just a it's a poor model if you want something sustainable where everybody is. happy and and you know

committed yeah what and to a certain degree it was nuts too because a lot of this was self-imposed on on these projects like they thought oh ultimately they're going to try to regulate us but maybe if we pre-adopt all the things they're likely to shove down our throats Maybe we'll stave off their ire. And so we're going to do stuff like vet your level of income to make sure that you make enough to be qualified to purchase an investment product. And they were playing straight into the hands of the SEC's narrative, right? Because what they were doing was framing the product they were selling in terms of a security already by just doing that stuff. Yep. yeah yeah and yeah and that

that sort of um also set up these outsider projects like like dragon chain that we're going to go ahead and charge into the innovation of it and do stuff like uh software micro licenses right and just say like no we're not we're not selling something that needs to be checked to see if you have over a million dollars in net worth before you buy it this is a software product yeah it's like buying a license in minecraft that that was ours it's like subscribing to right so subscribing to to github premium or whatever Right. It's the same thing. It's just you're buying a little bit at a time and then you can trade your excess capacity on there if you don't need it anymore. Yep. Yep.

And we had our model. And on the one hand, it it hit all the primary points that I wanted to hit, which was nobody got screwed. Nobody paid more than anyone else. In fact, the entire sale and the way we did it and it was kind of there were some drawbacks to it. But The way we did it, we said, OK, from October second to November second, twenty second, twenty seventeen, you can send in as much Ethereum or Bitcoin as you want. And you are when we're going to price Ethereum on the hour. So and everything was based on Bitcoin price that by the end we will have the price of the dragon. There are only

uh, you know, there, there's a set number of dragon and, uh, uh, it was in this sale and, um, essentially, and we had a lot of people come in and say, well, how much are they? And it's like, we don't know. It depends on how much people put in. It's a market thing. And, um, uh, you know, we went through it, it, it, uh, worked out well, we only brought in twelve point seven million. And I a lot of it was largely because people didn't. It was super interesting thing because we've been if you look at the people that that that gripe about us or that, you know, that say things about us, some of them will say that we don't. we don't do any marketing

and uh some of them will say that we are overhyped back then especially right and it was really interesting because that sale because no one wanted anyone else to put money in they wouldn't tell anyone right because the more money came in, the smaller share they would get of those tokens. And so it was an interesting thing that it I think it came to six cents and some fraction of value per token that went out. And as soon as the sale ended, we went through multiple more traditional world audits. But looking at the blockchain transactions, you know, we gave it to four independent auditors to review all of the transactions, make sure

that anybody who got something in within the window of time was counted and make sure we didn't make any mistakes, particularly on the Ethereum price to Bitcoin. And when we finished that, we distributed them. And we have some pretty unique legal guidance where we're not allowed to solicit exchanges. We're not allowed to pay for or ask for a listing or any of that stuff. And someone went out and placed Dragon on Ether Delta. And it went overnight from six cents to twenty five cents. And then everybody and you know, typically, ether delta was a place where projects that would

have a token sale, where it would just crash, because, again, all the golf buddies are just going to dump it, right? Because they got it at, you know, a fraction of the price of anyone else, they're gonna just get out, right. And because they had no utility, they were operating like a Ponzi scheme. Right, and we had a lot of interesting, unique stuff, but also because that sale meant everyone came in at the same price, so there's no reason to dump it, right? Right, and any of them had all of these prospective uses, right? They could look at the Dragon Chain platform and go, if I want to use this, now I have to spend these. Right, and we were really... I mean, that was the thing.

We were catering... to uh groups projects that had a definite intent and had the background to do things right because it's like that's how we expand our community we didn't have vcs you know we didn't have the typical uh crypto chart where all the things were building and all of our partners because we were you know groundswell it was all community and um but we had a lot of groups that uh had already begun building uh before before this knowing what what was coming and um you know we have amazing uh uh feedback and interest then and when it came out like I said it

ballooned on ether delta then uh KuCoin listed it, I think was the next one, and then it blew up into the, you know, multiple dollars and it started, you know, there was... Well, you guys had early like micro liquidity pools sort of developing in the DEX space too, like back before you guys became one of the only coins in the history of coins that Uniswap ever officially banned. there were liquidity to the liquidity pools that people who just had some tokens and had some ETH put up and you guys had nothing to do with it. It was just like it was just somebody who had some wanted to put up a liquidity pool and see what would happen. Right. Yep. Yep. And we and we introduced a

concept at the time. It should be noted because this was a very I mean, I will say this was a unique thing. And we were looking for ways to to scale the network, you know, because we have some very unique aspects that, you know, you can run, uh, these dragon chain nodes in the cloud, meaning you could, you know, if, if we took a traditional, uh, approach to mining, it would be a, uh, a race to the bottom because whoever could afford to put the most infrastructure in place in a cloud would be competing against the next most for, you know, those two spots and no one would be making any money. And you would end up with like calculations and all that bullshit. Yeah. And it all be centralized.

Right. So so we we were looking for this. And what came to came to mind is if you remember in the early days that whenever Bitcoin would move like big, especially old accounts, it was measured as Bitcoin days destroyed. Right. Meaning, you know, they were people at the time especially worried that Satoshi was going to move his coins and crash the market because he might sell some or whatever. Um, and so they had the concept where you could kind of track it and see how much of the old coin is moving and, you know, ratio. And, uh, we, you know, I took that concept and essentially flipped it at least reasonably.

That's how I describe it. Uh, that we called it dragon days of slumber score when it first came out. Right. And it essentially was that. a way to track loyalty or intent or various other things on the network that if you hold one dragon in a wallet for one day, you get one point. If you hold a thousand for a day, you get a thousand points. And if you hold a thousand you get a million points. for a thousand days, And it, became the mechanism for scarcity on chain for the network. And it was an interesting angle and we got a patent on it because

It has a very interesting and unique security aspect because you can use that to see who could compete on the network, and it would be extremely expensive for someone to come in now and try to compete against holding for that long. the people who've been And then the other side of it was on the scalability, that we don't have a scalability based upon how many nodes you can run. Our scalability is based upon that time, which you can't manipulate. As far as we're in understanding, you can't manipulate the time. So it became a super interesting thing. We put that in place, and then In February of twenty eighteen, we get this this letter and

I I get one I get one letter from myself, one for the foundation, one for the Inc. Multiple of the other people, the founders got letters as well. You know, it was a broadcast thing and it was basically, hey, we you know, we're you're under investigation and we're going to, you know, want to talk to you or whatever. And so I, you know, I handed to my lawyer. He's like, what do we do? What is this? And thus began the millions of dollars spent on legal. And again, I'm an engineer. I'm just saying, hey, these are the experts. I'll go to the people we know. We've worked with a few firms and I've learned quite a bit about the law and a lot more about how

law firms operate than I would ever care to know. And how lawyers incentives work in terms of the way that they think about cases and the way they think about, in particular, settling cases. Yep. And how the that revolving door, you know, they were they always have a former SEC person on staff who's able to sit in the meetings and charge you twelve or two thousand dollars. an hour and while they're sleeping, by the way, right. Well, they pre-accept the freaking status quo is the worst part, right? These guys literally look at what you're doing. Look at the previously Chevron doctrine loaded SEC, you know, making speeches that provided their own citations for their own positions.

And, and, and, And then, Yeah. and then basically saying you're the wrongdoer client. Make this right with them. Yeah. Conceptually something else. It's very interesting for someone who is, you know, I'm, I'm far more of an engineer than I, you know, uh, I would never, even if I, uh, were, uh, of the, of the aptitude, um, I would never work for Goldman Sachs, right? I'm not a person who cares about banking or any of that stuff, right? You're not a psychopath. Yes. The thing that's really kind of interesting is that when you get into that, you realize that

There's not a single lawyer on there who understands software. So you have to explain everything to them. And even then, that is not their primary. He's like, sure, Joe, that's great. But this is – you did this, and that looks like X. And I'm like, that is totally misunderstood. And I think that carries through all the way. That's why Congress has not put laws in to clean this stuff up because – They're all too old. None of them understand software any more than their iPhone. that's a step up from the And that's you know, BlackBerry they had before. Right. And so it's like this that that's everything. And we need more we need more engineers and non-lawyers in in government um but you

know you think about all the all of the regulators are attorneys all the all the congress people are attorneys uh all the attorneys are attorneys and we're you know we're here in the middle and two I will tell you too many software people uh let their attorneys, especially in the crypto space, let their attorneys make these decisions. And it's not good for software. Oh, Yeah. and what's even worse is they had like a level of so I remember the early days of crypto, like the, you know, twenty fourteen when Bitcoin was being used to basically without with full impunity by whatever the fuck you wanted to put in your system on dark markets. Right.

back before they got Ross. And that was just this thing where all these, I remember these developers would just be like, yeah, we're hardcore, we're cypherpunks, we're gonna fight the good fight and win. And then the second things get rough, these people roll so fast over for these authorities and the lawyers that are tasked with protecting them just encourage that, right? They'll say stuff like, you know, you're going to lose everything or you're not cut out for prison or whatever, right? Implying you're going to get prison raped as a software developer with all these hardcore dudes or whatever. It's a system designed to railroad you into their framing. It doesn't care about how

the software works or what you might do with the technology differently from how things were done in the past. So I think it's important this because this is really what happens. for people to listen to This is exactly what happens when you interact these losses because if you've got this idea that well it's the legal system and it's all about finding the truth and it's all about you know following you know strictly the law it has absolutely nothing to do with it what they're describing here is replicated everywhere I mean there's in fact it's even set up it's such an adversarial system but but in no way is finding the truth a primary value in this process. And so I think it's

important for people to hear this. But I do want to take one step back to your twenty eighteen when you get your first letter. And I think for people that aren't familiar with this, not that I think people should be able to engage in trade and the SEC regulations are ridiculous to begin with. But nevertheless, there is a distinction between a utility token And, you know, an investment token, I guess. And what you've described is a is a utility token. And if you go to the Dragon Chain website, you can see a list of all the different solutions and ways that you can use these tokens. So it has an actual practical application. But I don't know if either you, Greg or Joe,

do you want to talk about the difference between a utility token and an investment token? Right. Yeah. So and this was interestingly clarified a bit by the Ripple case in the district court ruling in some of those sort of non-binding opinions that came out afterwards. But the upshot is this, right? if you are creating a thing that looks exactly like a securities contract as in we're going to give you these tokens and they're going to represent an investment in this company and we're going to owe a duty to you to make money off of your investment and return some kind of gain to you it looks a lot like an investment contract but If you don't frame it like that and instead you say, actually,

what these digital objects represent are access rights to utilities that we've already built and you can use them for that or, you know, a good metaphor I like to make is like a vending machine right you put a quarter in a vending machine and out pops whatever the heck uh button you push uh that you know you can get like a bubble with a toy in it or a drink or whatever um it's a coin operated device um and we're talking about basically coin operated software where instead of um you know signing up and creating an account and putting in your credit card what you're doing is you're taking your coin that works with this special machine, putting it in and getting

your software response out, right? So that you can individually use these tools without having to go through the process of formally giving over your information, of formally setting up a credit card relationship with them, of, you know, in some extreme cases, sharing your driver's license information and billing address information. You can just have a token on a wallet put the coin in the slot and the software returns. And you've got the benefit of this without having to share all this information that could be personally identified, that could get hacked. It's dangerous. This is ultimately a huge security benefit for a utility token like what Dragon Chain was doing, but they run the gamut.

And any kind of metaphor for how you might put a coin in a particular Rube Goldberger machine and out the other side pops a thing you want, that is a utility token. So this seems pretty clear cut. You have a utility token. There are specific use cases. You're not doing this, you know, typical of what was going on with ICOs where you have bounty hunters that are getting a percentage and you have a tiered system and everybody's making money and you're paying money to exchanges and you're buying articles. This has nothing to do with this. This is a... It's a finite amount of tokens that will be determined by the number of people that actually participate, and those tokens are to be

utilized on the network. This seems like a pretty clear-cut case. Right. And even more than that, just to take it a step further, if you are doing anything that looks like an investment contract, you're typically starting with an idea, a pitch, a white paper, not a fully completed product. You're financing the build of it with your token if you're like every other ICO. But with Dragonchain, they had already documented to death the creation of this open source stack, right? They had spent a year developing these projects before they even released it. There were places to put the coins before they sold the coins. It wasn't funding the creation of the thing. This wasn't something where

we had this great idea. And if you buy all these, then someday you might get the benefit of them or they might go up in value if we actually succeed. This is a built thing that you can take the coin and use on a product right now. Whatever the driver was right now, I've had several theories about why they come after us. You know, I have a little better idea now than I did in the early days. But it was really odd because, you know, we we went through our attorney at the time was an IP attorney. He wasn't a securities. They did have a securities person, so we did have a review to make sure, hey, you don't want to touch anything on that side. But we went... How do I say this?

We went to a larger firm who was... They were just more able to handle, at least we thought, what was going on. And it was interesting because, you know, they, they asked for all the data that, you know, everything, the emails, telegram messages, um, of all the employees, um, everything you can think of. And, uh, you know, like, sure. We want to have, we don't have anything to hide. We, you know, we, we built some real stuff and, um, we go through that whole process and, uh, the, the, uh, How do I even say, um, it, it kind of, it kind of floors me because when they would come in, you know, they, you know, they had me go fly up to Chicago, sit down with them, answer questions. I'm like, okay.

lawyer says probably a good idea. You know, You know, and we you know, I wasn't scared again because I'm a software guy and I can explain to the to the depths of how this thing works and why. And I can tell you every single decision in the architecture and in the implementation, why it's there. And it's really funny because they tried all these little gotcha things. They would pull open the white paper and say, OK, when when you released, you know, when you sold these tokens, how much of this was built, right? it's like all of it. And it was funny, well, And I say, now, if you get to the fifth or sixth page, there are some things there where we describe, you know,

what can be done and, you know, some interesting aspects. That wasn't built, but the whole core of it was built in. Disney would have never let this out the door if that stuff hadn't been built. And what's more, Joe, to your point there too, this is common with open source projects, right? You need an anchor case. When you build an open source project, you need an anchor use case. And that anchor use case oftentimes has to be built by the people who promote the open source repository, right? So if you want to have this tool be used, you need to teach people what it's for. oftentimes the best way is And to do that, to build the tools yourself and sell them. And so the fact that there

were speculative ideas in there had no bearing on, you know, you're funding these speculative ideas. No, you're not. You're being given examples of things you might build. Yeah, and you're thinking, you know, it's still a very, even today, I mean, there's some very abstract concepts that, you know, a lot, a lot of normal people don't understand. And so a lot of, I have always thought a lot of our challenge in this industry is getting to the point where the common person can actually understand a concrete reason why this technology exists. And, um, you know, Right. so you have to show people, you know, you have to, you know, you have to build something or work with someone to get

something built so they can say, Oh, I could, I could do that with my project Right. or whatever. So, so you build something and you analogize it to these other things you might do hoping maybe even that somebody who reads it will build it themselves because you don't have time yeah um and and then they turn around and try to say gotcha with this like um oh you hadn't built this yet you were obviously trying to fund the building of this yeah it's like yeah well no that's actually not at all what we were doing uh let me explain the software again to you while you pretend uh that you're interested in and at the same time take notes of gotchas you can throw me you know like

That's a big part of what it was for you guys. I do want to take a step back because Yeah. Well, I had, and I know we've talked about this on the other five, because I had Steven Nerioff on. He was on the fourth episode of my last season. And I'm not going to go into all the details of his situation, but he claims that uh the doj manufactured a lawsuit against him an extortion lawsuit and then that essentially twelve fbi agents stormed his house in the middle of the night put him in handcuffs threw him in a van and showed him a list of people that and said unless you give us you know information that leads to convictions on you know multiple of these people you'll never see your kids

again and on that list I don't know the full list but I know some of the people on the list roger veer is on that list Bruce Fenton is on that list. Patrick Byrne is on that list. I thought, interestingly, Naomi Brockwell was on this list. That doesn't surprise me. So this was this was twenty nineteen. And so the one thing that I knew about the list and what I saw of it and what he said of it, it was completely an overlap of liberty and crypto. So if you're trying to ask because there are twenty thousand, I don't know how many coins there were, but like there were ICOs that were clear scams. I mean, I used to share this meme where it's like you take one guy and then you change his

hair and you change his name. You give him like a one-word name and you give him a long hair and he's the dev and then you switch it around. And actually, that's not even an exaggeration. Some of these projects were just outright scams. But yet, the ones they tend to focus on were at this intersection of liberty and crypto. Do you have any insight? Have you learned or does that resonate with what you learned about why you were targeted? Yeah. Yeah. I mean, and gosh, this is really hard even to talk about because I don't want to offend anyone. Right. I mean, you know, but but there's early days. I thought it's the banks, you know, because I knew the banks hated Bitcoin or at least

some of the banks ostensibly hated bitcoin they had to pretend to hate it at least yeah to keep bitcoin building what they were doing right and and I witnessed uh you know and I I seen this thing I don't want to be too controversial on this because I want people to support us but the truth um you know I witnessed the block wars and I I you know I was I I was blown away by some of what I saw you know with the censorship is like what of all communities in the world this should not be the community that is censoring people. You know, they should be the one saying, yeah, say anything you want. I'll, I will, I will fight back, but you know, say it. Um, no, they were censoring and it was like, and,

and some of the other things that happened that, uh, in my opinion did not make good engineering sense. The, some of the things they were making were, were obviously bad engineering choices, which is the key and the core of what matters when one of these systems. And, um, That's why I'm a big fan of Bitcoin Cash and I'm a big fan of Litecoin. I'm a big fan of Monero because they were doing things for engineering reasons that matched their goals. I thought, okay, it was an asymmetric attack. It cost probably a few hundred grand for these banks to take down what

they knew was going to be worth trillions. At the same time, when that happened, it was kind of like a hydra. And I was like, holy crap, it's the whole behavioral principle of work that out popped all the dozens and then hundreds and then thousands of other networks and they can't take them all down. Right. And I thought, OK, that's a positive. That's a great thing. The the other side of it were, you know, some of the things that we didn't know were going on behind the scenes where, you know, Hinman meeting with people and, you know, being paid to, you know, essentially get this speech in place to, you know, establish some certain state. And, you know, we didn't know all that.

And I still don't know who or what. And I know by far the majority of the people in those communities are innocent of any of that. But you had all of a sudden something that was very foreign to most open source projects. You know, at some level, open source projects hit the VCs. they hit when, when things, uh, you know, you have IPOs and, and, uh, you know, big money is made, but especially in these early situations, you had venture capitalists coming in. We went, uh, to try to, um, before we decided to do a token sale, we went and said, Hey, let's go talk to some VCs. We, we went and I, I kid you not, we sat down and the first thing out of this guy's mouth was, uh,

so you so this is blockchain I mean don't you don't you think this is evil and we're like what he asked that I'm like he you know I don't know what he thought if he thought it was uh for you know only for drug trade or only you know it's just crazy stuff but um uh I was like no this is software and you can do things with it right you can do good things with it no less and um You know, they didn't want to put money in. None of the VCs wanted to do anything because I think because they didn't have a handle, they didn't you know, they didn't have the origin where they could say, OK, Joe, you're going to do this. You're going to make it look like like it's real. We're going to throw in, you know,

tens of millions in liquidity and we're all going to be rich. Right. Right. There was none of that. It was this was just a software project and we were trying to do do what we are supposed to be trying to do in America. And, you know, innovation and creation and, you know, good stuff. And in the end, I'm just kind of I don't know precisely all of, you know, who pulls what strings. But, you know, you can tell a lot just by looking at the tie ins between certain banks and certain senators and and how how they try to push stuff. And, you know, they got Gensler in there and Clayton wasn't any better. Um, uh, you know, and there's a lot of, I would say there's definitely a lot of foreign

interference in there too, because certain nation states don't want, uh, Americans to innovate. Right. So why not pay off? Uh, and I, you know, I will make this without saying a name, uh, that I, I guarantee to you that there is a ton of money that flows into those regulators pockets. You know, we know some of it, but yeah. Yeah. The other the other piece on that, and I've done a pretty significant amount of research on this exact question that you've talked about, because I've been looking for, like, if you're in the space, you can feel it first off, like you can feel the suppression, especially around the freedom tech portion. If you start working in freedom tech, if you start talking about

freedom tech applications for a thing that you've generally built, it's amazing how fast the reach that you get drops off. It's like that. You know, like if you want to look at X and see things that are still suppressed, anything to do with privacy tech, anything to do with liberatory uses of blockchain, these are exactly the pieces that get suppressed. And the interesting thing to me is that while we had like the Twitter files leaks tell us a lot about how they were going to go after speech on these platforms, They never made the link between speech and mass surveillance. They never made the link between mass surveillance and privacy. These are a lot of the edge case utilities of, like,

if you go back to the original cypherpunk newsletters, right, back in the day when these ideas were very first being created, but the tech wasn't there. you see these people primarily looking for ways to allow for unstoppable transactions to take place between peers. And that was ultimately the core of the freedom argument for crypto is that what we really need is disintermediation and permissionless in a way that can't be suppressed. you see also in privacy tech, like, And just like that, I don't know if you guys remember Spank Chain, right? The guy behind that project was actually Virgil Griffith. And if you remember Virgil Griffith from the early... he was the guy who came up

with that Wikipedia editor monitoring that caught the CIA and the State Department out for favorably editing their own wiki pages. And they had it in for Griffith from the start there. I mean, he was showing people the way they were manipulating Wikipedia. And they never let go of that grudge. And so the second they had something on him, like he shows up at a conference You know, to talk about how to implement a spec chain of all things in North Korea. And because he spoke to North Koreans about how to pay cam girls, they immediately hit him up and come at him. This, I believe, had more to do with the fact that he was involved in exposing and

embarrassing them with the Wikipedia thing, right? You see this vindictiveness carry. They haven't let Snowden go. They didn't let Assange go for decades, right? Anytime anybody does something that strikes a blow against their centralized control, those are the types of projects that get targeted, like Library, right? library was offering a way out of youtube censorship you guys um I mean granted they did they did send that notice right at the last have sent any notice and possible minute they could they were probably just preserving their options uh you guys around that time did also launch the ability to do anonymous posting on den anonymous posts to social media sites is

something they deeply uh deeply dislike um especially when it's protected at a level where like, if they call you up, you can't even unmask them. And something else to note, Right. something else to note that, um, this is on the, this is on the edge. Like this is, um, stuff that I have no way to substantiate, um, uh, whether this is the case or not, but all the points kind of, uh, uh, call it out that, um, We've put in eternal and we put in eternal.report way back as a demonstration of interchain activity. And for people who don't know what this is, this is like a tool that's sort of like archive.org,

but it's backed by a blockchain so that you can't even fake the archive after it's been submitted. And it's free. And before Elon Musk turned on all of his bot charges, it would it would store tweets. So we were we were the only place that you could get a provable copy of several historical deleted tweets. And it was a neat thing. Right. It was all free. And we put it. in place on purpose and uh and at eternalized this was a great thing to add by the way that was a great brand yes yes well that that was by it by the way again that was someone out there wasn't even us right they built the original bot yeah we had our bot was banned because it would quote the

tweet that was stored. And at the same time that John McAfee was banned, we quoted his tweet, so they banned us too. So we never got our bot back, but this community bot was running. And my theory is that, you know, this blockchain, you know, eternal, otherwise, blockchain is... one of the few defenses we have against uh you know orwellian reality that they want to be able to change history and we've seen this several times right and I you know in the early days I was kind of naive about that it was like surely in in america they're not gonna you know try to suppress the recording of history um but uh you know

that very well is another reason that I do in my mind think that that uh you know and Utility is the other because they go after Library. They go after Ripple. They went after us in the States. All the while, they're meeting with Sam Bankman Freed. It's the craziest clown world thing you could – I couldn't – if you were to write a movie of this, people would say that would happen. Although, just to throw this in there, because I still think that we've conceded a point that we shouldn't have with FTX. Those guys were derivative traders who happened to back the derivatives they were trading with. They were not crypto, for sure. Blaming them for being a failure of the crypto

industry would sort of be like going back to two thousand eight and blaming Lehman Brothers for screwing up the building of houses and then going after housing regulations is the problem. The point, though, is that They would rather team up with a criminal and attack the people building things. And that is their mode. That's their MO. That's what they do. And it's obvious now. Yeah. And one more thing I think is worth saying on this piece, too. In the original crypto wars, if you go back to the early nineties, when the original code for pretty good privacy was being suppressed, they did stuff like print it in a paper book. And and then send it overseas in a sale. And the case that they would

have had to take to the Supreme Court would have been a book with the code in it. So we're going to try to ban this book from being traded internationally. And that was how you got to code his speech. They created the code of Right. speech precedent because they let them know that they were coming for them. And so an attitude of operational silence as they attack crypto is critical for not rallying these really smart people who kind of know where to look on the Internet to find everything and will go find it if it's there. I'm going to go out on a limb and say that if we ever get full access to the record, what we'll see is these organizations doing a lot of this verbally.

And a lot and a lot of cryptic references will be found in emails that are one sided and they'll say things like meet me in the lobby. We'll talk about it. These this operational silence kept a movement dangerous from having a rallying point. that they knew was If they gave us a smoking gun, it would it would. warn a big community of privacy and and freedom enthusiasts to line up and start doing clever things like printing code in books right they didn't want to face off against the cypherpunks again they to have reasonably motivated yep didn't want the cypherpunks So it sounds like the target is they're going after Liberty Tech that actually has utility, but they're calling it

investment contracts. So that's the irony of all of this is that they didn't go after so much the very clear investment contracts that had literally no utility or even an intent for utility. I will add one thing, though. I wrote a there's a lengthy Medium article that I wrote in two twenty eighteen, which is I actually think VCs have been a net liability for the crypto industry. I mean, they had nothing to do with Bitcoin and projects like Dragonchain is a perfect example. The VCs aren't interested in utility. But one of the things that I liked about this ICO concept, initial coin offering, is that it disintermediated VCs, which I think they hate it because the whole thing with the SEC

is they claim that, you know, you have to pass all these tests. You basically have to fill out all this paper. You have to spend twenty five thousand dollars in a lawyer to fill out a bunch of paperwork, dot all the eyes, cross all the T's. And then if you're doing it each state, they have these blue sky laws. You have to actually fill out all this paperwork in each state that you're raising money for. from investors, and then they require that they have to be accredited investors. So unless the investor either makes enough money in a year or has a high enough net worth, then you can't invest. So all of this- Right, and of course, not counting your first home,

but you can count your second, third, and fourth homes. Right. Yes, exactly. So all of this is designed to make it so that individual investors, then the small guy can invest in small companies. And this basically protects the venture capital capitalists aren't even industry and venture investing their own money. They raise money from outside sources. Half of that money comes from public sources. The largest single investor in venture capital funds is the California pension system. And what the California pension system, when I find this in the article, what the California pension system does is they put social investing parameters around who they'll invest in. So if you want to know why

all these VCs around Silicon Valley, I mean, yeah, you have Stanford, but there's no other reason that you would actually have this cluster. And a lot of it is because the California pension system says, well, you can only invest in companies that are within this radius. And so I was excited about that. And then it turns out that most of these really big pump and dumps where Joe was talking earlier about, well, you have these different tiers, you know, this golf buddy and then the golf guy and then his buddies and everything else. VCs are horrendous for this. They pre-buy, they get in and they manipulate the entire process. No one has done a greater disservice to the actual

stable funding of crypto projects than venture capital. Do you guys remember when you could get a decent return off of Compound, the project? I do. It lasted about a week and governance votes and the VC then they introduced holders of all those tokens went in there and voted for the rewards to go down and for the staking amounts requirements to have any kind of meaningful power to go up. They dominated it after they got control of all those tokens. And I think the other thing of interest here, too, is they lash out against their like. So we have some great traitor to the venture capitalist system VCs at Rivet. Like they actually we went into the pitches every time we did a pitch and we said

we're going to a destroy our own business model by eventually coming up with a way to decentralize our own service. And B, we're going to go in and we're going to have a strong stance on privacy and we're not going to sell out to the authorities. And one of the things we're customers is that if going to promise to our someone comes at us with a lawful request, that request will be fully vetted by the law all the way through before we roll. facing jailing under We will literally have to be contempt of court before we'll give up your information. And Most VCs didn't want to fucking hear us, but the few that did, these guys have been through the ringer from, from their fellow VCs, just, uh,

getting iced out of conversations, get, um, they, they defended this pretty aggressively. So even from the VC side, if you get a good one, those guys got ostracized. if they turned code for the side of good, If they, I always thought it was, I mean, it was kind of mind blowing to me that, uh, the VCs didn't want in when there was so, it was so obvious, this is going to make money in the very least. Right. And they could help. Um, and instead they, they waited until after and they do all of these ridiculous, uh, you know, rug pull operations, you know, um, and, uh, We you know, when we saw this, you know, if you remember, twenty seventeen money was it was crazy how fast some

of these token sales were were were running through and twenty eighteen. It blew up more. And how do I say the the thing that was. so interesting about it was that, you know, even now you will, you will have people saying, Oh yeah, that was a bubble. It was, you know, ridiculous stuff. It's like, I, I think it was nothing. I think that that was the only reason you saw the, the, uh, the numbers that happened in twenty, seventeen, eighteen was that it was the first time. you think about the And, you know, population that took part in those tiny, you know, tiny part of the world. And yet, uh, It was the first time in human history that anybody anywhere could get in on this new,

these new technologies. without being already a millionaire or having a buddy that you play golf with, uh, you know, Northern California and possibly, yeah, that's why it was so huge. And I, I think if, uh, you know, if you were to open that up now, it's going to be radically bigger and the VCs flipped out. They, they were so freaked out cause they lost their shirt that I guarantee to you that they went and they talked to their buddies at the sec or the lawyers that knew them. We had one of the law firms that we worked with, one of their, One of their guys was an SEC guy, but he was he was pro crypto and he left to, you know, he actually seemed to be on the good side. And right.

Well, some of these guys realize that their system is a huge has huge friction. he he told me that they literally Well, have these cocktail parties and they, you know, it's all all of the SEC commissioners and all of the, you know, all the bigwigs there. then all the the big lawyers and the former sec commissioners and you know that uh there's a handful of them he told me that we're pro-crypto that we could really do some great things in the world with this everybody else is like this is horrible these people are evil because they're the vcs that were funneling money in or that they had gone to work for or the law firms were all against it. Right. Especially the fact that twenty seventeen,

twenty eighteen was probably the first time we'd seen a true. So if you define capitalism classically, what you call it is a free market in capital. Right. And what that means is that the capital goes to where people are actually interested, where the demand is. It's a supply and demand thing. You have capital, these guys have ideas, you go to the ones that are the best, right? That happened for a small window in twenty seventy to twenty eighteen. Last time they saw it, we saw it was actually briefly in twenty twelve, twenty thirteen when Kickstarter pre-SEC regulation Right. And they didn't have quantity like amount caps could be before you had to on how big the projects

get investment from other sources, which they actually implemented against Kickstarter. To me, the twenty seventeen, twenty eighteen boom was like a way to decentralize the thing to get around the Kickstarter assault. Right. Well, there was another brief glimpse that wasn't quite the same, but Barry Silbert, who ended up working on it, ended up, being kind of a bad guy in the I think, crypto space. He got sold out or bought out or scared out or whatever. But he started a company to help provide liquidity for people that own shares in private companies. And this was really cool at the time because if you if you know, the typical model was you go through these venture

capital firms and and, you know, as the as the founder or as an early employee, I mean, it takes on average seven years for a company to actually get to the point where it goes public. So you're sitting there with stock options. So you're you know, you're making like no salary and then you have no ability. You have to wait all this time for the IPO. And so he came up with this idea. I can't remember what it was called, but but to basically create a secondary market. So now you can buy somebody's Facebook stock options. Or at the time, I think there was not Tesla, one of the Tesla competitors. There were the electric cars that were in. Perkins backed company. There was like a Kleiner

This was an opportunity for small investors to get it. He ended up selling that out. I actually worked this up last year to NASDAQ. And of course now it's not what it was. They scavenged what tech they thought was useful and shuttered it. But that was probably the only alternative he had to getting slain in court. for daring to challenge their monopoly on the funding of new ventures, right? This is a great, I mean, this is one of the things that bothers me about venture capital is it's a gatekeeping function. Let's say you wanted to, like one idea that I had for Kickstarter that I literally almost put on it right before those regulations came in. I was like, fuck, I can't do it now because I

can't fund this, was to go ahead and launch a car into space, a DeLorean actually, with a couple of M drives hooked to the back. I was going to build the hypothetical tech that you could use as advanced propulsion. I was going to fly it in front of the moon and let citizen scientists tell me if it worked by flipping it on. If the DeLorean changes trajectory, then M drive works. Scientific debate over. That was the idea. These kinds of big projects scare the shit out of the status quo. They want people doing things like funding nuclear micro reactors and things that they don't want to authorize. They want to authorize it all. They want to steer technology. they don't they don't want

any anything to upset their current way that they do their business which is here's a security that is an equity and ownership in the company so on so on so on and I was at this uh and this was uh right before our uh launch uh I think um it was early anyway and It was at some, you know, like a, I can't remember, it's like Startup Grind or, you know, one of the startup groups that does, they put on these things and you know, they have speakers and stuff. And so I was there and, you know, what was brought up was something about, you know, what is, you know, utility token versus, you know, security token. And, you know, I'm a software guy and the interesting thing to me is that

In my opinion, if I was in the financial world, I would probably be extremely interested in the potential augmentation of my company valuation. Okay, I have my equity. Everybody knows how to do that. But what if instead of the equity, people were interested in the utility, right? The fact that the utility is an independent measure, I think it should probably be more accurate. Now, if you have a shoe company, utility tokens, that's hard to do, right? Well, maybe. You could stick an integrated device in the sole of the shoe that mined a token, right? Especially in the era of cloud. Give you wear and tear information. That was when cloud compute, everybody was trying to get

all of their infrastructure pushed up into AWS or Google or Microsoft. It seemed to make sense that this is probably a better, a more organic way to determine the value of a company and what it's doing, right? If you have a token here and people are actually buying it to do things, And you know what? the SEC brought that in against me I mean, and said, you said this about and I was like, yeah, and I would say it today. It's it's we we have a utility token. And I was trying to describe how it's you know, this is a new world. This is not right. Right. This isn't the thirties. It's the idea of exchange in the more, this is something that's beautiful I think about

blockchain in this sense, right? Is if you look at the idea of exchange, ultimately markets were markets and things and commodities and everything. The freedom to exchange, the freedom to give and receive value is how you create wealth. And ultimately, this idea that financial markets and trading this particular type of instrument that they wanted to classify all crypto tokens as, these were broken systems because they required this archaic oversight. And granted, the archaic oversight hasn't been useful since the days of financial information only being in the Sunday paper and the people who did the actual trading knowing what was going into

that paper before you called them on Monday. All they had to do is miss your phone call and they could front run you. And this was the original meaning of information asymmetry. If you read the PCOR report, it was literally like, well, my broker would dodge my calls after he got me into this thing. He'd go sell his and then come back and take my call and I'd give him the order to sell, but I'd already be in the loss because all the insiders had already traded. Well, if the ledger is public, then the idea of information asymmetry comes down to milliseconds and you can't hide it. It's not that you need someone to come tell you that these assets are trading. All you have to do is have

an automated alert set up independently that this and you can know asshole's dumping. I need to dump too, right? None of this stuff that the SEC was created to stop is a problem of modern technology. In fact, this technology is meant to address the concept of information asymmetry at the base level to where you don't need a lawyer and, you know, fifty million dollars to invest in legal fees before you can do a project. And it was supposed to free it for people. And I don't know if the purpose behind it Is to not free it for people or if because they make so much money at not freeing it for people, they just don't want to let it go.

But the bottom line is this threatened their, you know, their one trick pony of rent seeking. And and ultimately, I think this is what is at the heart of their hatred for it. So this initial letter that you got was in twenty eighteen. So, you know, it takes about seven years to replace all of the cells in the human body. And that's about how long this has been since you got the first notice. So what's been going on for these seven years? I had not thought about that. I could theoretically be Theseus Joe and could just say, hey, that's not me. You're a different person. Exactly. Wow. No. So, you know, we we We did all of the things we're supposed to do.

Um, in fact, at one point, uh, after we got that letter, uh, the SEC put out this thing, Hey, you know, you can come and talk to us. So I reached out, right. And my, I, I blew me away. My, my lawyers were pissed off at me. The guy who I talked to at the SEC says, well, I don't know. He, he, he, he couldn't get words out that he couldn't talk to me or something. And I'm like, yeah, I just, I called to see what I can talk to you about. And, uh, And I got a call from our lawyers, what are you doing? And I'm like, they said we could call. I called, right? And it's just funny. Come in and talk to us, the ultimate trap. Yeah, so we went through that. We tried to get them to understand what the tech

was because it is technology. It's not banker stuff. Right, you gave them a good face. We essentially went through the grind. the meat grinder that the greg uh describes because it's basically I've heard of what is it white shoe lawyer uh law firms is that what uh is that the right way to say it you know yeah the high dollar ones yeah and we went we went from uh the small one that was the ip attorney to a big one um we were with them for uh I don't know how many months I fired them because They I don't even want to say why I don't want to. I fired them. Let's just say a lot of these a lot of these firms will treat you immediately like a bad guy. They're helping escape.

I found out that they were not really Yeah, representing us. I'll just say that. And so fired them. And I at this by this point, I got I got smart. I understood a lot more about it. I would make sure before I fired them. to find out, OK, what's our bill right now? OK. Right. OK. Once I get that number, stop all work. You're not going to bill another dollar. And you're fired. Right. Right. Because otherwise, if you fire them, They're just like, oh, we have to – it's like let us get your bill together for you before we leave. These are real protests, by the way. Take notes. Yeah. We went to another big law firm because they were the ones I probably would have gone with at the beginning.

And this is a weird thing too. I knew the head of – Their firm who was and I'm but they they they were not gonna say who it is, early in crypto They did a lot of useful unique things. I met him at a speech when I gave a speech in Seattle and So we were friendly, you know, he's a good guy smart guy and They you know when we were when we first went out and said, we need an attorney We have to get okay, everything set up They wanted fifty grand right and I'm like I don't have fifty grand on me, right? I can't give you fifty grand. Can you could you do this? you know me and we'll pay you You know, when this happens. So like, nope. So so we went elsewhere and we we came back to them. And I mean,

I will tell you the crazy stuff. And, you know, I probably have more stories than I could tell before midnight tonight. But one of them, as an example, we were told after we had already giving given all of the info, we were told, okay, we need all of your employees' Telegram chats. We need everything, right? So we're like, okay. So we had to figure out, you know, because with Telegram, it's pretty much you own your, you know, we didn't own those accounts. It was our employees' personal accounts that they were using. And so we had to, you know, go through the process and say, okay, are you willing to do this? And We did all of that. But they told us we need to

hire an external firm, you know, because it had to be an independent thing. We paid eighty thousand dollars for this work. Eighty thousand dollars. Right. And I'm like, OK, is this actually you have to do this? I'm like, OK. So we paid it. And by the way, it was it was contracted through them, of course. So I don't know what their cut was. But it also was a law firm, was it? right yeah well yeah you know who knows but but they we delivered it we delivered it and um the funny thing is then a couple years later uh sec comes back and they they want to repeat and you know they want updated info and yet we still have to give them what we already gave them that's happened so

many times I can't tell you um and every time they want it you know they already have it all and uh you know they even have the entire github history of the entire website of dragon right they just want to check to see if you're submitting everything so they can gotcha on well they don't want to do work even though they have unlimited budget they don't want they don't want to do the work so they want us to do all that processing so anyway as it turns out our law firm who had that original uh whatever you call it when we delivered all the telegram data right um they they don't have it anymore and like wait a minute we paid eighty thousand dollars and you guys lost that you know

because we never had it it went straight from that independent auditor they hired through them to pay eighty thousand dollars and I'm saying you you gotta be kidding me and it's like you know you should probably be using uh blockchain to uh to hold your info and prove it right like you were actually interested and um and it's so freaking infuriating right and at that point I said okay screw you guys uh you know first of all we'll fire them but um I'm you know I'm going to deliver the stuff I mean I I can give you an audit I can prove that this was the data I can do all of that stuff I'm an engineer and um You know, that's how we've done it since then. You know,

I've had to put together multiple, you know, whatever you call them. You know, you have to describe here's the source of the data. Here's, you know, me. I'm the one who put it together. Here's the search terms that we used. You know, here's how we filtered out attorney client data, you know, all that stuff. Right. You can imagine it's just it's a big drain. And I think half of that's another part. They want to drain you of the funds, but they also want to take all your time. You know, I lost so much time. And suck your soul with tedious requests, right? A lot of the reason they repeat it is because it's useful for them to make you do something that you know that you've done before

because it takes the wind out of your sails. The stuff that Garlinghouse has said too, you know, if you, you know, I can't remember the quote, but if you know, if you knew what they were doing, you'd be shocked, right? Yeah. And as a lawyer, man, I use these tactics. Yeah. Two things are really important. The fact that they would play those games, that they want to destroy you for whatever reason. One of them is that they told our attorney that, okay, tell you what, we were compensated. By the time we had drained all the funds, some of our people, and we still had some funds, right?

But some of our people said, hey, I'd rather be paid in dragons. Right. And some of them wanted it because they were building stuff. In fact, every single one of them was either building something or was involved in a project in some capacity that was building something. So we had a reason to say it's a legit even if it even if compensation, which it isn't, if compensation were ruled to be an issue. this is purely, uh, uh, you know, a use of the utility token. So we were paying them and they were having us track all those people. And it's like, how, how much are you paying them and why are you paying them and what do they do? And all this stuff, we were delivering that. And, uh,

they told our attorney at one point, he's like, okay, you know, we've been doing this for two years now. And they asked us, so we want you to stop doing that. So he's like, okay, well we have contracts. We're not going to, we're not going to upset the contract, you know? And, but we will, as new people come on, not do that. You know, we'll, we'll, we'll scale it down. And so we, and plus we want to just like, Hey, be friendly, please. You know? But yeah, they told our attorney, as long as, as long as you guys keep doing this, we don't see an issue. We're probably going to just drop this. We're going to, you know, it'll go away. Right. And so our attorney, okay,

so just keep doing this, whatever you do, don't change that pattern. Don't, you know, don't change who you're paying or how much or any of that. And keep your heads down until, until the statute of limitations runs and you'll be fine. Yeah. And, and that's what happens. The statute of limitations ran down until, you know, that last week or whatever. And they, Yeah, they tell, I guess it was, however they did it, they gave us the notice last minute, told us we could either do, I think we could do a recording or a video call of, like, a very short one, or we could do up to forty or fifty pages on in paper. And so we we put together this response that the whole gamut, you know,

it's it's the origin story of Dragon Chain. It's the philosophy. It's the, you know, the history. It's the the innovations, you know, detailed all that the the the actual utility and then the legal arguments. And we put it all in there. And I don't know how they all voted, but they still voted to come after us. I mean, in that, you know, Right. we literally detailed that at that time. This is twenty twenty two. We had five hundred and seventeen million voters. Not just transactions, but they were transactions that were interchain. So every single one of those transactions was proven all the way to Bitcoin and Ethereum and Ethereum Classic. And I think at the time, Binance and a few other.

You guys had a BSC, right? Yeah. Yeah. And it's. it's crazy we put that in we had over at that time over a hundred and fifty million nfts had been minted on dragon shape and so for anybody to say this wasn't a utility we're thinking they have to they have to look at this and say oh okay right and by the way those nfts those aren't just pfps right these aren't these aren't cartoon monkeys these are literally how you own chunks of layers in den right like if you right if you uh work on world blockchain roundtable for long enough uh you develop quite a quantity of of these nfts that specifically give you ownership right and and it's governance and uh yeah and utility it's it's it's

a we just thought okay we give them that they're gonna have you know somebody's gonna have to have some level of honor and intelligence to say wait a minute guys you know hold off this this probably doesn't make sense to go after these guys Right. And a lot of your strategy, too, to my mind, and I don't know if this was intentional or just incidental, was to amplify the amount of utility you got from it over the time you were being investigated so that more and more it became obvious that this wasn't a series of investment coins where what you're doing is you're representing the instrument known as a securities contract in software. You're representing other things.

You're representing everything from uh how much time and attention you give to a community on den uh right down to um uh like I don't know the details of the time token as much but you guys had all these interesting like use case specific things that uh the more and more they accumulated it seemed like the more and more virulently they disliked you yep yep and uh And I will say a lot of that maybe was even less strategic than what you even mentioned. It was more than anything, they are proofs of concept. They are experiments. They are probably the biggest driver for a lot of that was to show people what could be done. Because I'm a firm believer

that you give somebody an abstract concept and they're like, oh, that's cool. But they can't quite... feel it they can't they can't uh associate it uh conceptually with what they do what they care about unless they see a concrete example right of it and then then and we you know we We saw this at Disney, where someone would call me from overseas and say, hey, you're the blockchain guy. It's like, yes. It's like, I think I could do this. At Disney, we had the largest, the number one and the number two educational tracks in the entire enterprise, the entire corporation worldwide, where they had this thing called DLearn.

And people would go and learn different things. And it was a very smart way for them to expand everybody's skills and understanding. But we had a course that was on the technical side and how Dragonchain and blockchain worked, and then one that was on the business side. And we'd have two hundred people attend those every month. And it was really pretty amazing. The beauty is it would draw these people in to say, I think I need this. And they would every time come come to us and say, I think this is a stupid idea, but I think I could use it this way. And we're like, no, that is brilliant. Right. Every single time they were spot on exactly what they

should be thinking about. And it was amazing. Right. And so, you know. when we got out, you know, we're like, okay, we built eternal. We had to build a Dinda social. various things with customers, uh, We had to, you know, that were rolled out and, you know, all, all for not, uh, Every example of you guys building new technical capability into the software was more opportunity for them to say you guys were using the ill-gotten gains of your investment to expand your business rather than see that what they were looking at was proof that their theory was wrong. And that's the other thing too. You saw as further evidence that their theory was right. I have various people in my –

sphere that always tell me because I don't say this enough. You know, we held still forty five percent of the tokens. We use those. We you know, we use them building various things. We've used them for fees for the projects that we built. We've never sold a dragon. You know, that's the weirdest thing, too. And I somewhat think I'm probably you guys probably all think I'm extremely naive. I could have built, you know, we had a market cap in the billions at one point. We had I held and this is a funny story for people who aren't in crypto that that how interesting this is. Our office was a WeWork, and the WeWork in Bellevue

was just all glass, right? Cameras everywhere. You know, I couldn't, for example, initialize a hardware wallet because of the cameras, right? I'd have to go home, get in a closet, you know, with a flashlight or something. And I, at this time, had a hardware wallet where all of the funds and the of the company were that, you know, we had some in the bank and yes, we had multiple banks closed out our accounts without, you know, more than two days notice. But that's for another day. It's really interesting because I wasn't going to leave that hardware wallet at the office,

obviously. I wasn't going to leave that hardware wallet at my home where I have a wife and kids, right? Because there were people being kidnapped at the time, all types of crazy stuff. So I carried that wallet under a concealed carry, permitted. I had to write a permit. But I would carry that that hardware wallet around with me and people who knew me knew that I that I did that because we couldn't leave. I didn't want them going to where's where's the wallet? my house and saying, They have to know they'd have to come through. And at the time we had somewhere near fifty million in Ethereum and Bitcoin before the collapse in twenty eighteen twenty nineteen year was. And I had one point two

something billion in dragons in that wallet, right? I could have I could have cashed out quarter of a million had a war chest and just said, oh, you know, hey, I'll just pay a fine. I'll give you twenty million bucks. Get off, you know, get off my back. We never did that. And, you know, I thought that should be good for the case. I'm not I'm not going to do it because I don't for one thing, I don't want to. Take advantage of the community. I know we're going to want to use these tokens, right? Ultimately, their goal was to destroy your reputation. Even if that got you off the hook, it would have killed your endeavor. And that was really what they were trying to do. I prefer this way.

I prefer doing what I'm supposed to be doing, doing what I say that I'm going to do, and we'll see if... And I'm... I'm pretty radically confident that we're going to win. I mean, they're showing so many signs of weakness now, which, you know, they're going to have. Right. They've already had weakness with their cases, you know, with Ripple, with us, with others. But when the political pressure starts coming from D.C. to, you know, cut cut out this clown show. I think they're, you know, I who knows? I don't want to say this is another actually just just on another point here. This is a really great example of this eleventh hour of bullshit coming out of the current administration that that,

you know, in like literally less than a week and a half, the two primary crypto haters at SEC will be retired. And yet they're pushing litigation against you, you know, trying to get I mean, they fought to try to get this shit into court before Donald Trump took office. Like they were trying to Right. shove it down the throats of the system so that by the time somebody else was in charge of the SEC, the case would already be underway. This is part of the strategy. Right. So things can change now, but these last little days of war being targeted against everybody from what I think they went after the forced sale value of X because they missed a filing by one day or something.

And everybody's out there right now on social media all over the place calling that lawfare. Well, crypto has been under a silent embargo of lawfare like this right up to the edge as well. And Dragonchain is just one example, but a big example of them trying to push right to the edge with the ability to do this assault on the crypto space. So just just to go back a second. Right. So you spent from twenty eighteen until twenty twenty two when they formally filed. Right. So how much money would you say you spent during that time period? I don't know, especially within a window of time, you know, probably two to three million, you know. Yeah, it the legal was.

the largest uh share of all of our expenses you know it was more than what we paid uh for people for equipment for any you know our office space um it it's crazy right well then you count in if you start to count in the havoc that it wreaked on all of your bright minds some of the people that left and yeah business deals that you couldn't get into business deals the amount of value destroyed is immensely greater than the amount of money Early days, and I still want to do this, but whenever it becomes a doable thing, that in the early days, we had an entire mechanism set up that was going to solve and hopefully we're going to work with Congress. We were talking to several

different staff members in Congress that. You know, how do you how do you put gateways in so that you don't have the rug poles and all these issues? And we had some really unique ways to do it. And, you know, there are several different ways to do it, but that we had over four hundred. real applications where legitimate, businesses were coming in wanting to plug something into blockchain. Right. And this was perfect for our platform because one of the platform is it's a hybrid block. big things about our It's the first high operational hybrid blockchain. And that was purposely designed, where,

when you want to be decentralized, you can be decentralized, when you want to not be decentralized, you don't have to be and that you can protect certain data, yet still prove it. So you know, you can have data over here that might be very sensitive, it might be top secret, it might be identity data, it could be personal. Yeah, it can be health data, stuff that would be illegal to put in public. And we have a mechanism that you can have all of that on chain yet it can it can be totally under wraps it can be controlled entirely by you and yet we don't have the problems that you have with uh centralized chains uh like say hyperledger or something where there's no proof behind that with this

um we're actually uh checkpointing into these other and in a very scalable way um right uh and very sustainable way into these other chains so that you can put a dollar value on any bit of data so you know if you were later sued or or you needed to show a customer look this is really the data this is where your employee came in and did this thing that You would be able to put a dollar value on it that would say, you know, it would cost six and a half billion dollars for me to fake this information that I'm showing you. Right. At which case, you know, OK, you're not going to spend dollars to fake this document. six and a half billion Right. That becomes very useful. And this is all for people

who are curious. It can be explained relatively easily. There's a feature of datasets when you run them through hashing algorithms that if they're bit for bit identical to, like if the data that you're committing and saying, this is what we put into this dataset before we, algorithm before we put it on chain, or into this hashing and we go back to the dataset and we hash it again using the same algorithm, you get the same hash, right? This is how you, for instance, fingerprint videos to make sure that they're not copyrighted or that it's not perverts doing illegal stuff. That same technology can be used with any data packet that you can then commit to a blockchain and say, well,

match the hash to this thing I can't fake and then rehash the data. And you don't have to take my word for it. You can prove that what we have submitted to the blockchain is the same thing we're showing you right now. And the blockchain itself is the pointer that you can't fake back to that hash. And that is how that works. And that's one of the neat innovations of Dragonchain that allows for private internal operations to be verified externally without revealing that data. It's a pretty neat thing. Yep. Well, it's a very neat thing. So, so, so now what is the status now that they've, I formally charge you. So where are you now? What is the status of this case?

Um, so we have a date on the, what, twenty, twenty seventh or twenty eighth of this month to, and, and, and Greg can probably explain it a lot better than I can, but essentially to, uh, initiate, okay, here's the schedule and here's how the trial is going to happen. Um, you know, all the while they're talking to us about settlement and, who knows what, so. Yeah, so basically any case, just so you guys know, any case that goes to trial, right before it goes to trial, there's something called a pretrial conference where the opposing counsels get together with the judge and agree to the ground rules about things like evidentiary motions, what evidence shall be included, what shall be excluded,

what you're going to accept in terms of rules for jury selection, a lot of different stuff like that, just the nuts and bolts of how the case is gonna be managed. Sometimes it entails like discovery agreements, but with you guys, the discovery is already done. The twenty seventh was actually a pushed date, right? Was it originally supposed to be the twenty first? I don't actually know. That's that. And again, that's that. I can verify that. Yeah, actually, I can just ask you. I actually followed it on the court's records. They changed the date by like a week. And we needed you guys to pass them. We needed to get some of the legal team, some additions made, and we needed to – and at the time,

it was right before Christmas. was going to be shut down. They thought the government Unfortunately, it wasn't. But one way or another, we're there, and I don't know yet – what that means for when the trial will start and everything else, but it'll be soon. So, right. So this of course assumes that the incoming administration doesn't actually freeze enforcement and freeze litigation and all the cases they're reviewing, which may very well happen. Right. Well, yeah. Yeah. So on that, I want to say, so I, you know, I, if you've been following this or anybody that's in crypto, you know, Gary Gensler has been, an unmitigated disaster. And, you know, I watched his MIT blockchain course,

which I guess that MIT program has ties to. I think Jeffrey Epps like it just it gets worse the more you write, you look through it. And so Gensler has been a disaster. But we do have a new incoming SEC chair by the name of Paul Atkins. So just to give everybody a little bit of background on him, he was The SEC commissioner from two thousand and two to two thousand and eight under President George W. Bush, known for conservative approach to regulation favoring less government oversight with market driven solutions. He's been pro crypto and he supports the idea of integrating blockchain and digital currencies into the financial system. Now, of course, by the way, this can mean a lot of things.

And so it's funny as we've been talking about these a lot of this. When I started my first company, I had this was in nineteen ninety five. I ended up raising money from one hundred and eighty angel investors, which was unheard of at the time. And it was a nightmare. So when I when I say when I talk about how burdensome SEC paperwork is, I mean, literally I had to fill this stuff out in different states and that, God forbid, you have international investors. And so Oh, every time a change comes in, you have to do an updated version with the whole packet. It's freaking nuts. Yeah, I had to do a rescission offer. just because we were And by the way, talking to VCs and VCs were like, oh,

we want to invest, but you have too many shareholders. So I actually had to create another legal structure to put all of my investors in it. I could talk about that for three hours. I won't. But there are a lot of different ways somebody can be pro crypto and pro token. I've been a big advocate. I mean, I actually like this ICO model, the idea of liberating finance, allowing small individuals to invest. My daughter started a business when she was ten on TikTok, of all things, selling slime. And she was actually doing pretty well. it'd be pretty cool if she And I'm like, boy, could raise twenty five thousand dollars as operating capital. And you literally can't do that. And by the way,

they've passed this crowdfunding law. The SEC, they pass these things where, you know, they call it that. What is it? The USA Jobs Act. It was under the Jobs Act. And it was supposed to enable, you know, you can do a crowdfunding under a certain amount. Well, it turns out you have to go through a licensed broker dealer to be able to offer this. And it turns out that the acceptance rate of a broker dealer is, is less than a venture capital firm. So you are less likely to get a broker dealer to be willing to help you raise a small amount of money than you are to raise venture capital, which is very difficult in and of itself. So it's solved no problem. And it turns out the only

people that ended up using this crowdfunding thing, the use case was somebody that was already raising money from venture capital. You could then tack on and allow additional investors to to invest alongside venture capitalists, inevitably not in the very early round. Right. So it didn't solve anybody's problem. Right. It became a cynical application for a market validation tool, essentially. They would use crowdfunding as a way to test the market viability of an idea. Exactly, exactly. So this guy Atkins, so I don't really know that much. So he's been involved, co-founded something called the Token Alliance. He's involved with the Chamber of Digital Commerce, which, you know, again,

there's a fine line here before whether these things are promoting innovation or whether they're promoting, you know... Creating a new status quo and a new technocracy. Exactly. But at least from what I've read, at least it says he's for a lighter touch and he signaled a policy shift. And there was something that came out a couple of days ago about him maybe putting a pause on enforcement action. So hopefully that is the case. Yeah. Yeah. That came from I found that from I think Mike Benz. I don't know if you guys follow him. Yep. At Mike Ben Cyber, by the way, if nobody follows him. That guy used to work for He's been blowing open these the State Department. things for years,

and now people finally paid attention to him after he got on this Joe Rogan episode. That's right. That's right. That's where I've seen him. Yeah, but yeah, this control over the power – The thing that I think is amazing about crypto as it stands right now, just in the finance application, is the ability to pool capital is such a powerful thing, right? You put money together and you work it towards an end, towards a goal, something big, something that changes the world. something magic, And you can do it. If you can get everybody to throw in a little, you can do a lot. And this is a power that has been gate-kept for basically since the

Roosevelt administration brought in the SEC to begin with, it's been gate-kept. And they have never had a mandate to gatekeep technology, but they have more and more increasingly used it for exactly that purpose, right? Because the ultimate insight of the nineties was that technology moves faster than bureaucracy. How do you change that? you can try to beat your head against Well, the wall and make bureaucracy work faster. That doesn't work. Tech will outpace. It's exponential. But if you can kill the exponential growth curve of tech, why, you can slow them down to the pace of bureaucracy. And this is the gatekeeping function that they want to have. They don't want anybody

building anything that they don't first have a chance to kill if they don't like the implications. Well, that's a very good point. And actually, they do that with the patent system, too, with the Invention Secrecy Act. So you file patents, and then if the patent – well, actually, different departments of the federal government can intervene. And if somebody says that it could harm the national security or economic security, which, by the way, could just mean – you know the oil companies are like hey this new inefficient energy technology will cost jobs and therefore it's economic security and this has been used to shelve over five thousand patents and if and you as the inventor if you

talk about it it's an immediate ten to twenty years in prison so this gatekeeping function is it's absolutely crazy all all over the place well let me ask let me ask you this are one have they offered it throughout this process any settlement has there been any kind of negotiation around that Wow. I'll say... Can you talk about that? This would be something that we probably shouldn't talk about yet. I can talk about it because there's Well, some important points, not about the current settlement, maybe. Right, right. Not specifically, but you can talk about the procedure, like how it's gone about. Just don't talk about what's in it and you're fine. Well, just to highlight the...

the gap here in understanding that we were told this would have been two years ago, maybe three years ago, that looks like they might want to settle. We're like, okay, that would be great. We can get on with things. And They came in wanting us to essentially file so that this would be a security. It would be something that isn't, right? They wanted us to take the token and make it a security. And I said, well, wait a minute. I mean, we have shares in our company that are not the token. what is this security represent ownership in? And I kid you not, all the way from the SEC down to our own attorneys are like, well,

I don't know. It secures itself. It is ownership in itself. So they were saying that we were supposed to register that this token represented ownership of the token. And it was like, that is so nonsensical. And so we just said, and I tried back then even to offer here's what we could do technically and still honor what we have and what it is that maybe they would be okay with, you know, but it went nowhere. And, uh, Oh, last thing they wanted you to do is convert your company's actual equity into tokens and then merge them. Uh, that would have proved though to prove the point that they weren't in fact equities to begin with. Yeah. And then the most recent, uh,

it's gone back and forth and, you know, after everything comes out, we'll give it, but it's, it is, The absurdity is immense. And, you know, we have quite a bit of things in that story. And, you know, there are great indicators, too, as to... know what they understand about the project and what they understand about the case their own case that you know it's kind of yeah it's been enlightening some of the stuff one thing I will say about what I've seen so far is it seems like the main thing that they want to be able to do uh is walk away from this a killing future progress for this business they want to make sure that joe and dragon chain are a dead-letter entity that,

just like that t-shirt company in downtown Lawrence, Kansas, may survive the litigation de facto, but loses their ability to do what they want to do in a way that destroys the innovative potential of it. Their aim has never been to right a wrong with the use of the securities laws and has always been about silencing the creative potential of this project. And that's what they've been at. They've been trying to silence the creative potential projects like they got library. you don't hear about, and that was such a, I was blown away by that, that, you know, library was a super interesting project. I've since I've, you know, I've, I've talked to, I've talked to Kaufman a number of times.

He's awesome. There's, he's been around table a couple of times. It's, it's, it's just, it's just crazy to me that, you know and that that was some of you know it's like why would they go after of all it's like well okay it's they they're I mean he's a teddy bear competition that guy's just a nice guy like yeah obviously not to do anything fucking sinister yeah and they built real tech and uh I am for am asked uh you know what what's the biggest takeaway right and and it becomes a very metaphysical thing because it's uh you know about my you know, recognition. I was very naive when I came out. I thought, okay, you know, this is, this is America. This is tech. This is cool. This is fun.

And we're going to do the, we're going to do right by everybody and we're going to build what we say we're And, and, uh, we're going to, uh, you know, going to build. do all these things. And, uh, you know, now I'm, now I'm on the point that I, I've, I've told him I've told our attorneys like, you know, it's like we could do all this stuff. But have you ever considered holy water? Because I think if you bring holy water in one of these meetings, it might actually have an effect. You know, he laughed. He cracked some garlic and silver to write the the thing. The thing that's really interesting to me right now about this case in particular and that Dragon Chain is uniquely

positioned to do for the whole crypto space. with this litigation in July. And it was July or June. I think it was late June, early July, maybe late July, early August. The decision came down in Loper Bright. And Loper Bright was, for anybody who follows regulatory law, a big deal in the sense that they struck down this thing called Chevron deference. And what Chevron deference allowed was for essentially any place where a law is ambiguous. And trust me, these laws are ambiguous, right? When Congress passes the buck to an administrative agency for some dirty work they don't want to do, they write it as broad and nebulous as possible, handing over all this authority to the regulator

to interpret what they really mean. And then the regulator had this Chevron doctrine that allowed them to say, our interpretation of these ambiguities, Whether or not it's the best interpretation of the law is the interpretation of the law that the judge in any case challenging it is required to hew to fully deferently without doing any analysis. So you can have Gary Gensler for three months before he does his first crypto filing, do a series of speeches and open letters in which he cites each one subsequently, making each time the citations look more and more official. The first time they file a case against a crypto company, our justification for our they'll say,

authority to do this is cited here in this opinion letter we wrote, that cited nothing but a speech I gave, that was also citing a speech I gave. And our authority extends always. Essentially under Chevron, they never had to say Chevron, but it extended under Chevron to we interpret the ambiguity of the nineteen thirty three and thirty four acts having no concept of technology, computers, blockchains, digital, anything to to extend to this because I said so. And the courts were not allowed to challenge it. And so all these cases that came down before Chevron got overruled were living under the auspices of Gary Gensler's speeches were a viable source for the SEC's

scoping its authority accordingly, right? And now that's not the case. They haven't had a major case happen since that happened. And I think that that has been by design, but I suspect... that if this were to go to trial that a uh that a chevron based argument that says you have no business doing this that that authority wasn't granted you show me any kind of act of congress that did um the the courts are now required to interpret the best interpretation of law or their ambiguities and they would look at this and go I don't see anything in the nineteen thirty three and thirty four acts or amendments there are two cents that say digital assets are securities and we have the authority

to regulate them. Congress would have to act to give them that, and they haven't. And so, ultimately, the whole crypto space has been suffering under the yoke of Gary Gensler based on his speechifying powers, and now that is no longer there. And I think, ultimately, they're getting saved by the bell if they back out of this litigation. If the SEC, under new leadership, says, we're not touching this with a ten-foot pole, they save themselves a negative precedent. Where, in fact, you win this argument and under Chevron going forward, there is no deference. And if Congress wants to give them the authority to regulate digital assets, then they're going to have to give it to them.

And up to that point, they don't have the authority. And I think that's really the key here. Yeah, that's great. And that applies in a lot of these cases too. I'm hoping that this is the same with Ian and many, many other cases. I mean, this is a, I have one question that I didn't ask. Are you, is this just civil or are you actually facing criminal charges? Is there any jail time possible? Okay. Nope. Yeah, there's no, no fraud, you know, they're making allegations yeah it's all civil it's yeah um yeah pro forma violations of of filing rules for uh filings they did not have a process for people in your position to make if you wanted to basically right I just look at Roger's case where I mean,

it's like twenty twenty years each for mail fraud because they claim that, you know, he signed signed his tax forms and that was fraudulent. And so I just you look at this stuff and it's like, oh, my God. Right. threaten you with anything. And they'll and they'll Again, it's the whole point is clearly, Right. as we've discussed, have a chilling effect. on the entire industry, on the entire space. And to obviously stop you doing and stop anyone else from doing whatever you're from trying to innovate in this way. And it really is effective. I mean, it's been a very effective approach. So I guess, what can we do? What can the audience do? How can we help you with this case?

So we're getting ready to start what I guess would be considered campaigns, because our I guess our strategy is to get to get people to be aware of this, because if if people are aware of this, particularly if it gets up into the new administration, particularly if it gets up into the Doge and and those guys and and frankly, anybody who might be in their network You know, I don't know Musk. I don't know any. I don't know Trump. Right. I don't know any of these people that, given the fact that since the beginning, you know, we were literally our our motto was America's blockchain.

Right. And it was just this this, you know, now it's funny because, man, they really don't like us. But that. I think it will be to the point where as long as we can get attention paid to it, we win because our case is crazy solid. I've been told by multiple independent attorneys that we have – a rock solid case. Um, and you know, we know inside and out how, what the tech does and how it works. And there's none of the, you know, there's no, no place for them to go to embarrass us. Um, yeah. And I wouldn't, if once upon a time, man, I would never have taken this case. Yeah, well, and if we get attention, it's, the new administration coming in you know,

with promises of, you know, the crypto golden age for America and American crypto companies. And here's America's blockchain being attacked. They're going to have to push for it to be. Drop that case. Move on to something else. So the TLDR is tell your friends about this. Share this episode. Teach people about who they are. Share this episode for absolute. We're going to make sure we push this anywhere we can. We're going to be putting out open letters. We're going to be asking anybody if they can sign, especially the first one. They'll be different subjects. The history, the innovation, but the broader... know privacy and all of crypto you know this is uh

this and I'm no lawyer right I'm no attorney but uh the precedent that this would set for coinbase and for all of these other much larger concerns that you know they have the budget to fight and you know we don't I'm I'm paying out of my own pocket for I'm, our attorney right now. Right. So it's, you know, that's what we're doing. And, um, you know, we do have a legal fund and they will accept crypto. You can go to legalfund.dragonshame.com. They do accept, uh, we will accept crypto. Our attorneys will accept crypto. Um, we have a form there. If I think we have twelve crypto, uh, addresses up there, everything from Monero to Litecoin. And, um, bitcoin cash and we um uh if

if we aren't accepting one of them you can tell us hey will you accept this some meme coin it's like yes we will accept that meme coin um you should fill out a form and we'll do it and um they also with uh credit card right uh but but either way the The important thing is that when we start putting these letters out, we need as much attention broadcast from this as possible. We have a couple of other ideas that we think will help bring attention. Not just that, but you avert the ultimate harm if you help us do this, right? If you get the word out and you talk about it, you sign this letter, you get other people to sign it. You keep the thing from dying in the dark. I don't know if you guys

ever watched the Citizen Four documentary. One of the biggest concerns that Glenn Greenwald had for Edward Snowden was getting a name out there, getting his face visible because that would protect him from uh from nefarious actions by the by the authorities uh dragon chain is low profile right not a lot of people have heard of him uh not a lot of people have heard of dent not a lot of people have heard of this thing the more people hear of it the more protected we are from bad action by people who uh recognize the difference between operating in the dark that they currently operate in and operate in the sunlight of attention Yep. Yep. Well, that's great. if you put together a website, I will,

Well, so if you put, I will, I will, obviously I'll sign the open letter, but I'll share it around. I'll send it to my email list. I mean, I, so I travel all over the places as you heard at the, at the intro. And in fact, right now I'm wearing my, I just got my new free Roger day one shirt. And so every, every talk I give, I talk about, unfortunately, but you know, I started this to try to help prevent this. And now, and first it started out with just Ian and now it's Ian. And Roger, and then, you know, I'll add I'll add you as well so that when we're tabling or whatever, we can we can promote this and get the information out there, because I think this stuff is good.

We absolutely have to take a stand on all this and raise awareness. And, you know, to the extent that the challenge that I have is on the one hand, I talked to Vivek, and he read my book, and on the other hand, I'm looking at this Trump administration, and I feel like we could have technocracy crammed down our throat in the next six months. There's a part of me that's like, I'm screaming on this one hand, and on the other hand, it's like, well, we need help on some of these other things. I've thought that too. We have to leverage what we can, and that'll give us the ability when that... That technocracy will come whether or not uh roger bear is is uh pardoned but uh hopefully

he gets pardoned and then we can then we can work on the technocracy well I mean and that's the other piece too right guys if you're if you're looking at the big picture and you're going how do I fight this fight um if you're used if you're a reddit user stop freaking using reddit come over to den.social this is this is the decentralized alternative that uh that's community governed that that dragon chain uh operates um You can go over there and you can get all the benefits and enjoyment that you get on Reddit minus the evil. And you're helping support the cause as well. I think we even won the Reddit scaling pack off. And yeah, we got nothing from it. Alex Ohanian has a firm,

staunch belief against anything that Aaron Schwartz might have still part of the company. appreciated when he was yeah it's too bad right and uh not investment advice but it is interesting I'm looking at the price dragon chains up almost five percent today so I guess maybe it seems like the market likes the change changes coming with the sec that's actually a very that's a very good sign and that certainly will will propel propel things but uh you know this is this is just another this is another tragic situation I mean again Since I've met you and since we've been talking on these podcasts, this is just another clear example of somebody trying to do the right thing,

trying to promote liberty, trying to innovate, and just being completely railroaded and having their life upended. I don't know if you want to talk about this, but what has this done to you personally? What has this whole thing been like in terms of how it's affected your life? Gray hair. I'll tell you, early in the days, I had no idea what where this was leading, you know, and it was always the, you know, the scariest, scariest possibility comes into mind. But, you know, as I've learned is like, I, you know, okay, it's only civil, they don't even have a good case. But, you know, we, you know, we, you know, I have three kids, you know, we, you know, we lived up there in Bellevue, and,

you know, we would have death threats. We would have anonymous people saying stuff to us. Crazy world stuff. you know I think it's all intentional I think it's just part of the mix you know they they they will send people out to try to to you know to and I think a lot of it is to uh to to uh demotivate you to you know to to make you question whether you're supposed to be doing this right in it right you know luckily allies you while they run you out of resources essentially Yeah, and like I said, I'm really stubborn, and I've had cases, you know, like I said, I played in a band, right? I think that if I would have stuck with it, I would have been a famous guitar player,

right? I mean, I'm not even famous, whatever. I would have at least... made it to some level. You could have made a career as a musician. But I got so fed up with it because of the way that industry works that I said, screw this. I'm going to do something that's a little more solid and measurable. And so I go into software. And I had a really successful career in software, starting a few companies. Not blockbuster, Northern California successful, but I did OK. mostly I learned a lot and uh I think I decided not to give up it's like okay this is and this is I've talked to people about this too this is almost like you know if you read and I'm a I was a history major in

college right so I I love ancient history right and if you read any of the uh you know, any of the warriors or notable people, it's, it's a common thing that, you know, it doesn't matter if you win or lose, you need to find your most challenging enemy. You need to find the enemy that is, that is meant for you. And that is how you prove yourself as a human being. And that's what you do. And that's what this is for me. It's like, okay, I found the big boss and, And I have to fight them to beat them. And, you know, even if we lose, we're still ahead, right? Because we've made this case and everyone will know what this technology is about. And that's what it's about.

And if you bloody the other side enough to make sure that they have to tell the story of how they got that scar, then your next project is going to have the benefit of that reputation, right? Hopefully. I think I think one of the one of the key things to that people should keep in mind is this isn't just about the damage it does to Joe and to Joe's family and to his friends and to his business partners. Right. Every company that he ever wanted to do business with, the Dragon Chain could have made a deal with while this was underway. The SEC's litigation poisoned that well. They use the poison of these to destroy the reputations of people creating value. And ultimately,

if you want to see value creating things going to the world, you need to help us fight this fight because, um, whether or not the outcome is a win for the company, it's a loss for the blockchain space. If it comes out, uh, that Joe survives this because he makes a settlement that admits wrongdoing and reframes his software micro licenses as securities. That's, that's a loss for crypto. I, uh, another thing you can do to get more info. I mean, we have, uh, uh, on Dan and you, you know, you can search for it. Um, the Dragonchain response to the SEC, it gives soup to nuts at a, I think a very digestible level for, even if you're not technical, it gives you the history and the meaning behind it.

We also, I have an IMDB listing because I'm the producer, I guess, executive producer of open source money. We put together that with some, some people we were working with, and they're actually customers now, of our technology. And we put that out. It was on Discovery Science Network. And you can watch it now in full on YouTube. And one of the early episodes of it actually goes through our first round. We had several people building on Dragonchain. And the SEC called them all in and literally tried to scare, you know, most of these people were scared them off. Business people, small business people and

or technologists and scared them all. Every one of them just said, oh, we can't we can't do this. You know, and so you can imagine, you know, the amount of of the amount of loss. in destroying all these business relationships was massive. I will tell you, I'm a technologist. The projects that we brought in, we brought in for a reason. They were legitimate and had very unique angles on their various industries. We were excited to build these things because these guys were going to do things that hadn't been done before and reshape history of the way that people think about certain

sectors and certain businesses. Yep. Yep. Well, hey, you know what? The use case is still there, right? The market opportunity is still there. So let's use all of this. You know, all of it's kind of like I was excited that not under the circumstances, but the fact that, you know, Roger could go on Tucker Carlson and talk about privacy coins. You know, that's not quite the way you want to get that venue, but it's still it's kind of like, all right, let's a little jujitsu move. And so let's, you know, I think there's an opportunity here to turn turn all this into a positive and use all this and shove it right back, right back up. You know, you know, so exactly. Well, you know,

the good news is we've got over twenty one hundred live viewers, which is actually pretty good for them for this podcast. So and it's going to go out on, you know, Spotify and all these other things. So hopefully we can get the word out. But do you have any final final thoughts you want to share? Indeed, thank you. I mean, the fact that you're doing this and, you know, it's an amazing thing because a lot of people lose courage when stuff like this happens. And it's always good to see. And, you know, you're across the board, you know, with Roger Ver and with Ian and with Ulbricht. So we're like, the fact that you're helping us, that's the most important thing.

I was like, I really appreciate that. Never forget it. Yeah, right. I would say also, just to add on to that, courage is contagious, guys. Don't just help Dragon Chain. Go out and find other projects. Give them courage. Just your mere participation, your mere seeing through the bullshit of what's happening to anybody being targeted with this lawfare motivates, energizes, revitalizes, and strengthens the fight for things that will ultimately make the world a better place if they win. So your attention, that viewer count right there, you have no idea how much that just deeply elevated both myself and Joe's excitement about the prospects of us potentially

succeeding at changing the world with this tack. Your attention matters. Please give it, is what I would say. Great. Well, I'm grateful to be able to sponsor. It's great to see courage, and I'll support anybody that's fighting the good fight because you're right. Courage is contagious, and it takes such a small percentage of us because at the other end of this, I mean, these people don't care about what they're doing. Do you think that whatever his name is, Eric Phillips, whoever the guy is from the SEC, he's not passionate about this. I mean, the funny thing is these guys take the they take these jobs at the SEC, which, you know, are they really passionate? They don't even understand

They're going through a process. what you're doing. And then at the end, they go work for the private sector. And as defense lawyers, it's actually it's a disgusting revolving door. So, you know, selling other projects down the river by convincing that it's settled instead of fight. so we've got we've got the So, yeah, morality on our side. We've got the right the right motivation here. So. All right. Great. Well, thank you, guys. And I again applaud you for everything you're doing. And I'll help out in any way I can. And I'm going to end this with I'm going to play the Free Ross song one more time just because I'm hoping this is the last time I have to play this song on this podcast.

And I hope more of us will be victorious as we continue throughout twenty twenty five. health of the exam. Thank you very much. Bye. Cheers. where on earth where a man can still be free will he bear the weight alone or will he have to bend the

knee is there no one in this land who grows tired of the game whether we can gather stones and build up prisons in our name Whoa. Whoa. Whoa. Whoa.

And notice it. Turn your face to see the injustice.

He stands in the presence Looking back he sees the boy he was is gone And there's no pretending

There's a fire inside That burns in you and me And the truth denied There's one way out They say I'm awake tonight And your spirit's close to me I can't be polite Said

Russell Brickfield