The Ethics Fight Holding CLARITY Hostage

Prediction Market News EP04

In this episode of Prediction Market News, Kelvin Sparks is joined by Sarah Wynn, The Block’s senior policy reporter, and Adrian Wall, Managing Director of the Digital Sovereignty Alliance, for a full breakdown of the CLARITY Act as it stalls in the Senate.

They walk the live fights: the DOJ–state AG ethics standoff, the BRCA developer-protection battle, the Coldcard exploit landing mid-debate, the SEC and CFTC’s Plan B if Congress fails, and the tribal-gaming and NFL challenges to prediction-market jurisdiction.

OUTLINE

00:00 - Prediction Market Recap
04:40 - CLARITY Slips to September
08:26 - Coldcard Fallout
13:36 - CLARITY: Ethics, BRCA, Consumer Protection
16:06 - Plan B: SEC and CFTC Rules without Congress
21:17 - DOJ-vs-State-AGs
34:51 - Live Odds Check
52:08 - Financial Literacy
59:59 - The Stablecoin Yield War
1:04:55 - Prediction Markets: CFTC, States, & the NFL
1:25:47 - Clarity before Midterms?

TRANSCRIPT

Kelvin Sparks: Hello and welcome to Prediction Market News. My name is Kelvin Sparks and today we'll be chatting with Sarah Wynn, our policy reporter at The Block, and Adrian Wall, Managing Director at the Digital Sovereignty Alliance. So before we get into it, let's take a look at what's going on in the markets. The FOMC is set to meet September 15th and 16th. Traders are pricing in no cuts as the predominant outcome at roughly 58.5%, but it's still quite possible to get a 25-basis-point hike. This market did roughly $18.5 million in volume. Moving on to the Strait of Hormuz, traders appear to have very little confidence in the conflict resolving anytime soon. Traffic returning to normal by August 31st is priced at just 4.8% on $12.1 million in volume. That's a market that appears to have made up its mind and kept up with the consistent shifts in messaging on deal-no-deal from the Trump administration and the government in Iran. Following the Strait of Hormuz, markets are pricing a U .S. invasion before 2027 at 17.5% on $58 million in volume, the largest single geopolitical book on the platform. WTI hitting $85 in August ran to 74%, up 30 points on the week, similarly indicating a lack of confidence in conflict resolution. All right, moving on to traders. Let's see who got paid this week. The top three traders by 30 Day Realize P&L made $19.1 million between them, and two of them made it in just one tournament. This specifically was in the knockouts of the FIFA World Cup, And the trader who got paid the most, 0x09b4, was somebody who made it big on the France-Spain World Cup final. The leader cleared $10.9 million by buying Spain at 65 cents in $400,000 clips. Six markets, 67% win rate, and wow, one impressive P&L. Now on to some esoteric markets. I never thought I'd be talking about streamers on Prediction Market News, yet here we are. everyone's favorite streamer Kai Cenat's likeness made an appearance in the prediction markets this week he and speed beating a minecraft challenge drew in 831 000 in a day and there were definitely some funny clips to accompany it uh you see this viral post of kai and speed uh arguing which resulted in kai crying on live stream uh never a dull moment with the streaming crowd but i digress moving on elon's weekly post count traded 734 000 in volume gamestop acquiring ebay has 2.7 million behind it and there's no deal the weird book is real money now we're seeing the markets for everything thesis play out right before our eyes all right now moving on to hong kong weather markets a polymarket trader going by honda civic turned 37 in roughly 15 and a half thousand in a single temperature contract a 423x payout on hong kong staying below 15 degrees celsius the contract was trading near worthless because almost nobody was pricing in that scenario weather markets are one of the quietest corners of polymarket and that's the exact point thin books low attention and pricing that lags actual forecast data what was he looking at that the rest of the market wasn't not exactly sure but this guy seems like a weather expert as the P&L curve is littered with winds on temperature globally. So maybe I should be befriending more meteorologists. I don't know, but definitely going to be paying attention to Honda Civic going forward. All right, moving on to esports. Someone has been running an automated book on Counter -Strike matches, roughly 25,000 plus positions over 11 weeks at a 63% win rate and about $228,000 in profit. Rather than predicting who wins outright, it's trading the swings between rounds, buying dips and selling spikes as in -match odds whip around. That's a strategy that more closely resembles market -making than betting. And he has proven it's a winning one, at least in this corner of the esports market. And this definitely aligns with some of the anecdotal stories Nick from Polymarket Analytics gave us about the one trader in his community who really bet big on the Knicks winning the final when they were down roughly 30 points, or rather winning the finals game four. I mean, yeah, clearly pays out for it. 298. Definitely going to be following him as he may have some more stories that come up in the next few weeks. But I don't really follow the Counter -Strike market, so we'll see. But without further ado, we have Sarah Wynn, our policy reporter at The Block, and Adrian Wall, managing director at the Digital Sovereignty Alliance, on a very interesting episode on clarity. Without further ado, let's get into it. So, Sarah, obviously we pre -recorded the discussion with Adrian Wall, But there's been some updates on Capitol Hill. So please, you're my like political science quant. Fill us in.

Sarah Wynn: I'm still learning. But yeah, so we spoke with Adrian a few days before Senate Majority Leader John Thune. So Thursday night, he ultimately decided to pull the plug on a vote before the Senate left Washington. They're leaving Washington on August 7th. So on Friday today. So that means that a procedural vote then won't happen until September, until next month when lawmakers come back from their August resets. It's about a month long. So they'll come back in like mid-September, leaving a couple of weeks to get things done. I mean, I think many in the crypto industry were hopeful that something could get done in August. And there's been chatter circulating that the Clarity Act needed a vote this past week in order to get passed into law. But one Senate Democratic staff that I spoke with earlier in the week had said, like, the bill doesn't die in August. That was their belief. And they said that it could they were citing optimism for it to pass in September. But at the end of the day, it's still going to be pretty tough since it's still going to be pretty tough since there's such a small window of opportunity for since lawmakers will be focusing on the November elections. So that's kind of where we're at after speaking with Adrian. And so I guess next line of sight is the next few weeks in September and then kind of seeing if things can get done then before November elections.

Kelvin Sparks: And since crypto isn't likely going to be top of mind for most of the folks going up for either election or reelection, like what are the topics people are paying attention to these days that supersede crypto?

Sarah Wynn: In terms of like since they're focused on elections, like what other stuff? Yeah. Yeah.

Kelvin Sparks: Like what things take priority. I know Jordan, like he talks about the war, like in Iran and everything that being like top of mind. So, yeah, curious what your thoughts are.

Sarah Wynn: Yeah, I mean, I also think I don't know specifically. I mean, they'll be focused on like different authorization bills and stuff in the farm bill that gets done every few years. That includes like just the agricultural focus and stuff. There was talk about at a hearing earlier this week about prediction markets rules being included in the farm bill. But that was kind of like shot down by Senate Agriculture Committee Chair John Boozman. So I think there's a few things I'll be focused on that could take priority over the Clarity Act, which makes sense. Yeah. And affordability, too, has been a huge issue. And that's when it talked about ahead of the election. So it just kind of is like, how does clarity kind of fit in there? So there's going to be a lot of other priorities that is kind of like fighting with clarity, which which totally makes sense.

Kelvin Sparks: All right, so Sarah and Adrian, thank you for taking the time out of your busy schedules to sit down and chat with me on Prediction Market News. So I guess maybe Sarah, as the co-host for today, you want to start, give a little intro on who you are, and then we'll pass it off to Adrian. Then we'll jump right into it.

Sarah Wynn: Sure thing. Yeah, my name is Sarah. I'm a senior reporter with The Block. I've been covering crypto policy and regulation now for a while from everything from FTX to bankruptcies to now legislation, which we'll be talking about a bit today. So it's been really fun and interesting to cover.

Adrian Wall: And I'm Adrian Wall. Great to be here. I am the managing director of the Digital Sovereignty Alliance. My work really is everything from public speaking education to industry folks to banking and finance folks and traditional finance. and also just to the average American consumer so they can better understand what digital assets is all about and how it can work for them. And then, of course, on Capitol Hill with the legislators and regulators, which I imagine is going to be a lot about what we're talking about today. Yeah,

Kelvin Sparks: thank you for that. And before we get into the meat of clarity and what happens if we don't get it, I just want to ask both of you, have you been following the cold card drama in the Bitcoin community? because I was actually over the weekend hanging out, touching grass with one of my friends. He's a maxi, and that was a topic for about 80% of the weekend. So yeah, I want to hear from you guys.

Sarah Wynn: Yeah, if you want to take that one, Adrian, I haven't heard a lot about that, but I'm interested.

Adrian Wall: Oh, well, I was following it with a lot of interest as well. And unfortunately, you know, two things that pop out. But one, what a tragedy for so many people who have lost tremendous amounts of wealth that they had accumulated over time. You know, through no fault of their own, they did everything right. They had their, you know, they had their secret passphrases in storage, you know, they didn't take photos of it. They didn't share with anybody. This was a hardware issue. So on one hand, it's tragic. Now, on the other hand, it could be a wake -up call that the industry needs when it comes to really understanding what the limitations are and where the weaknesses are, where the pain points are. So you would hope, the optimist would hope that out of this pain will come something that will ultimately benefit the industry. The other part of it is, you know, could it possibly derail what the conversations that are going on on Capitol Hill for clarity? Because a huge part of what this new version of clarity is, is about consumer protection. And here we see a huge failure in that consumer protection in real time. So, you know, what does that mean for support on Capitol Hill? And the truth is no one really knows. You know, are Democrats going to point to this and say, see, I told you this is the exact kind of stuff we were talking about. You assured us everything was fine. And here, hundreds of million dollars are gone. And it's the American public that's left holding the bag. Time will tell. My personal feeling, I don't think it's going to be weaponized so much. I think the fallout is still front and center. People are still working on that part.

Kelvin Sparks: Given that we're delaying the actual vote on Clarity itself, it seems like there's a possibility that this could get even more politicized. And shocker to no one who's been paying attention to crypto for like the past two years. But the Trump family basically made a lot of money off of crypto. One of the big things being a meme coin. I mean, we just talked about people getting burned on meme coins and consumer protections there. Meanwhile, at least seems like a lot of Democrats are making the argument that there's this, the president of the United States, this guy who has so much power in the world and he's making money off of these semi not serious crypto dealings as well as DeFi and other things. So with that, since there's such a hard line Democrats are making on the ethics provision in the Trump family dealings, do you think that actually may hurt Clarity getting past in 2026, the fact that it's being delayed?

Sarah Wynn: Definitely. And I think that's already happening now. I mean, I think there's been different Democratic lawmakers. They've been hosting different press conferences in Washington to address what they're calling Trump's crypto corruption. And so I think that's already happening. You'll see as we get closer to the November elections, different lawmakers kind of pointing to just different points where they are seeing corruption within the Trump administration, even like beyond crypto. So they'll definitely use the crypto piece and how much money Trump has made to be a campaign talking point. And so as we get, you know, since the vote on clarity didn't happen, is not happening before the August recess, and then it's getting closer in September to the elections, I think it just makes things a little bit more stressful. And, you know, I think a lot of Republicans probably wanted to have a procedural vote done before August recess because they're, I think, you know, I've been seeing it floating on Twitter too, where the idea is that they want to get all lawmakers to like have a vote. and so that voters know ahead of the November elections, like how their lawmaker is voting on Clarity. And they didn't get that. So it'll be interesting to see how September goes if the Clarity Act doesn't pass. And then, you know, you have huge groups like Stand With Crypto, Fairshake that are really closely watching the elections. So it all kind of comes into play in a very tight like time period.

Kelvin Sparks: Yeah, it's an interesting one because when the news first broke, it seemed like it was a bit underreported. But over the weekend, as the amount strained by the hackers started to increase, obviously going to get more coverage. But I didn't even really think about the second order effects of like the grave dancing from mainstream media and what that could be potentially used against. But hopefully that's not the case. But yeah, thank you for that aside. So Sarah, please, you're the expert on clarity among the two of us at the block. So I'd love to pass it off to you.

Sarah Wynn: Yeah, yeah. And I just had a quick question too, like when you're talking to about cold card, is it something to I know there's been like consumer protections put into the Clarity Act? Is that something that, like, you know, I don't know, Republicans could point to and say, hey, we've got stuff in there that would have, like, blocked our, I guess, is that soon, like, too soon to tell, sort of, or...?

Adrian Wall: No, no, and so as I was just saying, I would classify the changes that have been made to Clarity into a few key buckets. You know, ethics and conflicts of interest is one of them. Software developer protections, the so -called BRCA, is another one. The Senate Ag Committee's sort of, there was a few things that the two sides, the Republicans and Dems had to work out because they weren't worked out in the markup that was done purely on a partisan basis. And then that last thing is really just beefing up consumer protection. And I think that's where this cold card incident could really potentially light a few fires that we may not see coming. The issue there is on one side, are we doing enough for giving the regulative bodies, CFTC, SEC, are we giving Treasury, are we giving them the proper jurisdiction, are we giving them the proper tools, law enforcement, are we giving them the proper tools? I think by and large, clarity, the way it's been written in this latest version has done a lot to improve where we were, you know, three months ago, even one month ago. You've seen law enforcement agencies have come from sort of being on the fence to being vehemently in support of clarity as it stands now. If you hear anything about law enforcement agencies that are not in support of clarity, if you look at the fine print, it's not really law enforcement agencies. It's not like cops or FBI or any of that. It's state prosecutors. It's like the fraternity or sorority of prosecutors, whatever the term is for that around the US, they're the ones against it because it makes their jobs a little bit harder to be able to go after what they say, go after the bad guys. But what Clarity is saying, in so doing, you may get a few of the good people along the way, and we're trying to protect them as much as possible. So at the end, it's really a consumer protection revision. And as I said, this cold card thing highlights some holes, some areas where we may not be doing enough. I don't think it's something that Clarity would be able to address anyway, to be honest. This is more of a, I think, a commercial problem than it is a policy issue. So hopefully it doesn't derail from the conversation and get everybody distracted.

Sarah Wynn: Now too, that the Clarity Act did not get a procedural vote before the August recess. There's been a lot of conversation and talks and I feel like the SEC and CFTC are like gearing up to then start putting their rules forward on crypto. They obviously together have been working on Project Crypto. The one caveat too, which is kind of interesting now to think about is that the Clarity Act would have given the CFTC much broader authority over digital assets. So it's kind of looking at like, well, how does that sort of work now? But it's interesting to see both the SEC and CFTC working together on that. They came out with a taxonomy earlier this year, kind of determining which cryptocurrencies were securities or not. So I'm sure they'll be taking on a lot of action to these next few months, as they're sort of realizing if clarity doesn't get passed.

Kelvin Sparks: And a follow-up there, you said something really interesting on the podcast about the funding that the CFTC applied for. And it looked like there was something like roughly like a 12% increase and like maybe a 13 -person bump in headcount. How do you think they plan to mobilize these forces if it seems like, I don't know, outside looking in, they would be taking a bit of a laissez-faire approach to the market as opposed to someone like the SEC. So, yeah, love your thoughts.

Sarah Wynn: I mean, I think there's so much at play right now. I mean, there's two things that come top of mind for me with the CFTC. Right now, too, and that's been a huge sticking point in passing clarity just off the bat is that there's only one commissioner. There's only Chair Selig. There's supposed to be five. There's supposed to be three, no more than three of one political party. So they're supposed to have a bipartisan commission there. And so, you know, it's just kind of thinking like Selig is probably really busy. Like he's working on crypto prediction markets. You know, there's all these things that now he's saying the CFTC has jurisdiction in. So I think it's interesting that, you know, they're teaming up with the SEC on stuff. And it will just it'll be interesting to see how that goes in the next few years, because the rulemaking guidance and then that kind of stuff is less permanent at the SEC CFTC. Rulemaking has a little bit more permanence that can still be overturned in a new presidential administration. So it'll just be interesting to see how much the SEC and CFTC can get done. And even with budgets and numbers, I mean, I don't have the numbers in front of me, but the SEC has way more people, like by hundreds of people more than the CFTC. How much money they're able to spend, too, is way less than the SEC. So it's just going to be interesting of will they get more funding then? and sort of what happens and where their jurisdiction will be in terms of prediction markets, which is being fought through the courts right now and digital assets.

Kelvin Sparks: And I think there was like a huge spike in some kind of like exchange applications, which is something, I don't know, maybe we can cut this. I may be just completely botching it. But I was speaking to a hedge fund buddy and he basically was telling me that I was like, well, what do you think they're going to use the money for? He's like, well, they just had like a record number of applications for exchanges, which they would oversee. So it seems like they would be really making sure that all these regulated venues are adhering to the proper rules and regulations of the United States. But any additional insight there? I know from your perspective, you probably know better than anyone, how they plan to actually deploy these resources. And is that based on what's going on today or maybe looking forward for the future of the CFTC?

Sarah Wynn: Yeah, I mean, at the CFTC, and I don't know exactly what it would be used for, but Selig has mentioned using AI to look at different forms and that kind of stuff. So that's a possibility. I think he tweeted a while ago that the CFTC is looking to use AI. There's still, he's emphasized that they're still looking to hire people, but definitely put an emphasis on AI of looking at different forms. I don't think they'd be using it for enforcement or anything, but I think they might try to be leveraging AI where they can there too, where they don't have the headcount.

Kelvin Sparks: Yeah, well said. and I recently discovered Mike Selig's Twitter. Very underrated follow, I must say. I like his style of tweeting.

Sarah Wynn: Yeah, no, I feel like anything, like any crypto at Twitter is just so interesting and it's just interesting seeing Selig and then obviously Cynthia Lummis too has always been on, you know, she's been posting about Clarity now for a long time and yeah, it's definitely interesting to see all that kind of play out on Twitter.

Kelvin Sparks: Definitely. Are there any other politicians or political analysts you follow on CT that are very opinionated, bombastic? Or maybe not bombastic. I don't want to slander anyone. But any opinionated people you think I should give them a follow?

Sarah Wynn: Oh, good question. I feel like I can't think of—I mean, top of mind is Senator Lummis because I feel like she just tweets so often. And she's really trying to push the Clarity Act because she leaves. She's not going for another term in the Senate, so she leaves in January. So it's just interesting seeing that. Patrick Witt, I will say, sometimes gets really fiery on Twitter. He's with the White House. Yeah, that's all I can think of for now. But I feel like there's always stuff popping up throughout the day.

Kelvin Sparks: Sounds good. And please, if you find any other folks you think I should follow, ping me immediately. It's a lock.

Sarah Wynn: Got it. Yeah, good to know, too. Yeah, I can dig into clarity, too, if that's cool. And kind of where we're at. There's a lot, like you were just mentioning, there's a lot in there. I think it's what maybe I'm getting this wrong, but 600 pages long. Like it's a big it's a big 16. Yeah, exactly. Yeah. So fun read. And so it has like the versions, the Senate Agriculture Committee, the Senate Banking Committee, they voted their bills out of committee. They did not get Democratic support. There was two Alsobrooks and Gallego out of Senate Banking that said they would support the bill. But with the caveat of before it goes to the Senate floor, it has to have a strong ethics provision in there. And that's kind of been like the sticking point here. Over the weekend, the White House got text from it was bipartisan text from from Senator Gallego and Tillis. We don't know for sure what's in that text, but there's still like that conversation to going on of should it be the DOJ in charge versus state attorney generals? And, you know, Trump signed on previously to ethics language that would put the DOJ in charge and also includes a sunset provision saying that this would expire, you know, in a few years. So there's been a lot of talk, I feel like, on the Hill of kind of what does that sunset provision mean? Who would be in charge? Who should be in charge? And this week, I mean, Senate, the Senate, I think the House already left. The Senate leaves on Friday. So Senate Majority Leader John Thune could decide to have a cloture vote. So that would be a procedural vote that kind of would get everyone on the record to say if they support clarity or not. So just kind of wanted to see, Adrian, what are you sort of looking at this week and what are your where's your optimism? Where's your pessimism kind of at?

Adrian Wall: So I'm looking at ethics more than anything else. So there are all there are a lot of outstanding issues that we kind of talked about over the past couple of minutes. But in my mind, ethics is the one that if it can get passed and the White House, the Republicans and the Democrats, everybody is in support, then I think clarity has a huge chance of getting, I think of it as binary. It's either it gets passed or it doesn't. If we can get past the ethics part, I think clarity can get passed. It will pass cloture and it'll get through the Senate before the recess. Now, we don't know what came out of this weekend's negotiations. Like you said, the White House has a copy of that bipartisan text. My understanding is the original version said the DOJ was in charge of enforcement, right? And the ethics part of it was saying no elected official, whether you're in Congress, whether you're the president or the vice president, neither you nor your spouse or immediate family, I believe, can be involved in self-enrichment when it comes to digital assets. So meme coins, being involved in businesses like exchanges, etc. Now, the DOJ would be in charge of enforcement as it was originally written. The problem for the Democrats is the DOJ is appointed by the president, the head of the DOJ, Right. Or in some cases, there's it, there's just a feeling that the DOJ will answer to that executive branch. So it's not exactly, um, an objective and willing enforcer. So then they offered an alternative. When I say they, I mean, the Democrats, they offer the alternative of, okay, let's let state AGs be in charge of enforcement. for Republicans. That was a non-starter and take the politics aside for just one second. I mean, put yourself in president Trump's shoes, regardless of what you think of the politics, regardless of what you think of the self aggrandizement, there's no way you're going to sign something that will basically allow your enemies who you know are frothing at the mouth to come after you to make it easier, right? There's just, nobody would do that. So he knows that the The Dems are chomping at the bit. He knows, all of us know, that the Dems are likely to take back the house in the midterms. And he knows that what that means is he is likely to face a huge headache when it comes to his involvement with crypto. I

Kelvin Sparks: think that this may have been you or Adrian talked about Dems chomping at the bit to take back the House with midterms and everything. We obviously just spoke about the politicization of crypto. Now, not all Democrats are against this bill. There's a few you could probably name way more than I can. I just know the number was like seven or something like that was what I consistently heard floating around. So these seven Democrats, maybe one or two examples, can you cherry pick and explain why these folks are going against their peers and being supportive of the bill getting over the line?

Sarah Wynn: Yeah, I mean, I think the first person I think of is Senator Angela Alsobrooks of Maryland. I think after the Senate Banking Committee vote on clarity a couple months ago, she mentioned like her daughter. I think she said her daughter was in her 20s, if I remember that correctly, and was talking about innovation and stuff. So I think there is, I mean, people talk to you about like sort of a generational divide in Congress. So I think sometimes even you think of like Richie Torres, right? I know he's, you know, but I think sometimes like the younger lawmakers see that like innovation is at play and that they know they need to like do something about it. So I think that's why they kind of go against the grain a little bit compared to like other Democrats. While other Democrats are just kind of concerned, they don't, I think some don't see like the value in crypto and digital assets. too. And so, yeah, so it's a different, like, it's kind of a split, but there's definitely senators, like you had mentioned to a few, there's like Senators Gallego, Alsobrooks and others too. Senator Mark Warner too has really been pushing. And so, but they definitely still have concerns too, that they want to see addressed in the bill. So it's just interesting to see all of that come at play.

Kelvin Sparks: Yeah. Thank you. And one of the things that we spoke about, and I think Adrian had a really good point on was trying to make regulations fair and trying to protect any like innocent people and still capture the bad actors and i do think what he said makes a ton of sense but why is there i guess why is trump being put at the center of something that's actually supposed to keep innocent people safe and protect bad actors i mean sorry there's no real right answer to this but just something thinking out loud uh when i was looking at the transcript i was hoping you could speak to a bit.

Sarah Wynn: Yeah, I want to get your thoughts too though, but I think, you know, I think just since President Trump has, I mean, he's made a lot of money off of crypto and I think that's something that's pretty hard for a lot of lawmakers to ignore. He's made millions from his meme coins and from World Liberty Financial. So I think, you know, lawmakers want to see that addressed as well because his administration, you know, he's, you know, control of the SEC, CFTC. They're going to writing rules for crypto and if clarity does get passed they'd be the ones that would be putting that all into place um so i think yeah i don't know if that answered your question but i think that's just kind of like an interesting thing to think about too and wanted to get your thoughts on that too

Kelvin Sparks: yeah definitely it did answer my question and it seems like uh there's always this meme in crypto it's like cope see all these other things described just people getting absolutely frustrated with a person. And Trump is someone who is so, I guess, is like, I don't want to say sophomoric to downplay like what this guy is doing, but he can be very immature and knows how to rile up his opponents. So when I think of something like that, it's, well, maybe it's him using some kind of red herring to distract people from what the actual topic at hand is, or it's a one-off joke that means you completely ignored everything that the Fed was saying today and just paid attention to Trump making fun of some guy's ears. Now, sorry, it's like, I don't know if those two were actually connected, but I do remember him like making fun of a guy who went super viral. It was like very playful kind of thing. So I can see how something so serious is something that he's trying to downplay and point fingers at the other side to say, look, these people are the problem. Meanwhile, look, he probably had a part in this as well. If he didn't have his dealings in crypto, would these ethics provisions really be a big issue? I don't think so. And also it's, I don't want to say revisionist history, but Trump likes smacking his name on everything possible. We had like Trump GPUs. We had Trump sneakers. We had Trump trading cards. We had Trump meme coins. We had Trump cologne. And the list goes, Trump hotels. It goes on and on and on. So the guy is very, very good at marketing. And I think that's frustrating with something like crypto and even just our current economy because it's so attention driven. So, yeah, I could rant about this for a very, very long time. I feel like that was a good stopping point. No,

Sarah Wynn: I think that is really interesting. I mean, even to like going back to D .C. and stuff to seeing, you know, Trump has his like photos, you know, everywhere on government buildings and stuff. So he definitely likes to place his name. And it's an interesting thing, too, because my coworker and I, RT, we wrote a story a while ago about like, you know, a lot of the people, you know, many people in the crypto industry were supporting Trump to become president because it was going to be good for the crypto industry. and now seeing that this ethics provision is kind of like the latest, like biggest sticking point. And so it's kind of like, did he get in his own way with that? And sort of what does that mean for the crypto industry going forward? So I think that's really fascinating. And I know, too, I think Adrian brought up to some like conspiracy theories, and I don't know about some of those, too. But I do think it's all really interesting just to kind of think about.

Kelvin Sparks: So speaking about the New York Attorney General's, because Letitia James, I think we were talking about that before we started recording, has been very, very vocal, even going back and forth with Chairman Mike Selig on some of these topics related to not only clarity, but also prediction markets. So when you see all these suits flying around, obviously it seems like it's to slow down these proceedings, but how much of this actually has valid claims to them versus things that are just being done simply to be a thorn in your side to your opponents?

Adrian Wall: Sadly, it's both. And ultimately, from a taxpayer perspective, from a time perspective, the question is almost, not the question is irrelevant, the answer is irrelevant because it's going to take up a lot of both, right? So it's a good question, but I would say there's probably, depending on the state, you would look at the state and that would probably give you an answer of whether this thing is going to be more thorn in the side versus more, you know, really trying to see justice done. And

Kelvin Sparks: to the DOJ point, it seemed like the Dems were a bit unhappy with the agreement that the executive branch made there. But the truth is, I just want to get to the truth of this question is, when you're saying that it's going to undermine state and local authorities' ability to execute and enforce the law, like, how true is that? Because typically with crypto crimes, I feel like oftentimes they just mostly get thrown by the wayside. no matter what it is. I think someone was saying, speaking to Lawrence Day a while ago, he was a guy who got hacked during DeFi summer. And he was like, well, if you told somebody that $10 million just got drained from a protocol, nobody's even getting out of bed. But you'll see on the nightly news that $800 being stolen from a cash register is everywhere. And nobody's ever going to kind of let that go unreported. So sorry, very, very long winded question, but I

Adrian Wall: get your point. And this touches on that a little bit on the BRCA part of it. So that the Blockchain Regulatory Certainty Act and what that is for your listeners who may not be familiar with the acronym is really about protecting software developers so that in case they create some software or some code that then is misappropriated by a bad actor, maybe they create it, do something really good, but a bad actor uses it to do something really bad. Is the original creator liable. And depending on who you talk to, under clarity, the idea is to protect them, to make a carve out so that they are protected from that type of prosecution. Does it make potentially the law enforcement agency's life a little bit harder? Yeah, probably, potentially. But you know, bills and laws that we have are not necessarily designed to make law enforcement's lives easier. If that were the case, you wouldn't have warrants for searches, right? If you were really trying to make life easier for the police, you would allow them just to go in willy -nilly and do whatever they wanted. But no, we need to protect the rights of the American people. So we created some rules around what police can or cannot do, what law enforcement can or cannot do, what is within their jurisdiction and what is not. I look at this as very similar. The clarity is really there to set some rules, which we all on both sides agree that these are the rules we abide by. It's not to make prosecutors' lives easier. It's not to make the FBI or the local sheriff's lives easier in catching the bad guy. At the same time, we're not trying to make it harder. We're trying to make it fair. We're trying to protect innocent people and still catch the bad people, if that makes any sense.

Kelvin Sparks: Definitely. Well said. Yeah, sorry. I was just running around. No, no, for sure. Trying to pull up the Polymarket odds to see what the actual likelihood of

Adrian Wall: clarity passing is. 30%, I believe. Is it 30% or less? I'm checking right now. Let's see. All right. Did it go down? It

Kelvin Sparks: looks like it took a bit of a nosedive. Yeah, going into it. Let me share my screen. It's looking closer now to 26% chance right now. So you may need a bit of a Hail Mary. But what do you make of all the folks who are going down to D .C. and trying to do the lobbying work, meeting with regulators? Is it a means to an ends or I don't know? It doesn't seem like it's working, to be honest. Ever since then, it's been kind of down only.

Adrian Wall: You know, it's one of those things that you can't not do it. You have to do it. But it doesn't necessarily guarantee success. Not doing it doesn't necessarily guarantee failure, but it doesn't hurt. it it could only there's no way it hurts it could only help so i have been and i know a lot of people in dc a lot of people in industry have been encouraging anybody and everybody who cares about this to pick up the phone and call their senator to call their their local legislators and say please we want to see clarity and i don't think there's anybody who um would say that these types of efforts aren't worth it because collectively, we really need to be putting pressure on our respective legislators in the only way we know how. And sometimes pounding the pavement is the best way to do it. And I suspect, by the way, that Polymarket took a little bit of a nosedive this morning simply because it's Monday. We were hoping to see clarity on the docket for the Senate. It's not there today. So those odds probably go down. And every day you don't see it on it probably goes down a bit more one

Kelvin Sparks: of the things we didn't talk about is okay if clarity doesn't pass it seems like we have all these like other uh contingency plans in play between what you spoke with the cftc and the sec but one thing that we didn't talk about is what do you think actually brings demand back to trading digital assets because all throughout this bill we're speaking about how clarity is so important important for like um market structure so on and so forth, but doesn't actually bring demand back to digital assets per se, or even bring volumes back for that matter. So do you think Clarity will play a role in that? Or if not, what do you think that next catalyst will be? And obviously, look, this is pure conjecture. We don't know what's going to happen tomorrow. It's a difficult prediction, but yeah, I want to get your take.

Sarah Wynn: Yeah, I think there was a study too that came out. I want to say it was from CC. I'm going to double check that. But they had said that this was like, I think last week they came out with it, that innovation would be brought back to the U .S. if the Clarity Act was passed. And they pointed to other jurisdictions that have already moved forward, like the U .K., EU, with MICA and everything. So I think if the Clarity Act, though, doesn't get passed, I could see a lot of digital asset companies then going to those areas where there's at least clear rules. Because there is the take that the SEC and CFTC can move forward with their own rulemaking, but the Congress really adds, I think, a permanency to these rules that can last through like different presidential administrations and is harder to like erase if that makes sense. So I think, you know, I don't know exactly how like different crypto companies and innovation and all of that is feeling about the U .S. right now after the Clarity Act kind of got pushed a little bit last night. But I think, you know, they're going to look for, no pun intended, where the clarity is at so um that might that would probably be in other jurisdictions until um until they have more of that clarity here in the us

Kelvin Sparks: yeah from the builders i speak to i think most people are just happy we're not in the anti-crypto army era of things that was like choke point choke point to me that was like really really scary stuff to be building uh in the crypto space especially the united states at that time now it doesn't seem like that as much i mean really consumer adoption is a weird one in crypto because it feels like this the first time we've actually had usable apps and now with all the etfs you have also the uh not just the younger generation who's like mobile friendly playing games on their phone and stuff you also have the passive investor who can now get exposure to the vehicles but uh it seems like we had a bit of an identity crisis so what's actually going to bring us back uh i mean possibly clarity but uh i'm still trying to figure out what that next catalyst is because it's like really unclear to me right now.

Sarah Wynn: Yeah. Like, is it that the SEC or CFTC move forward with rulemaking and that gets put into place and that adds some like reassurance to like developers and stuff? Or is it that doesn't happen? Or I guess it's kind of just an interesting thing of now. I mean, I think clarity has been talked about for so long now that it's like, OK, wait, so what happens now? But no, it's really it's really interesting to think about.

Kelvin Sparks: Yeah, definitely. I don't know. I what's it called? I respect the pump and other assets, as Ivan on tech used to say. Very, very famous meme. You got to respect the pump in your life and it'll come to you. So I'm respecting it everywhere else. Hopefully, maybe one day it comes back. Yeah. I think on the last episode, we had a guy from Polymarket Analytics. And he was saying most of the time, 85% for these binary outcome political markets, they often resolve to no. So I will say it's not looking good for clarity right now, to be quite frank. But

Adrian Wall: who knows? Anything could happen. Look, it's still

Kelvin Sparks: crypto. It's still honestly, even with Trump, there's never a dull moment in this presidency, to be quite

Adrian Wall: honest with you. 100%. Sorry, go ahead.

Sarah Wynn: Oh, sorry. I just wanted to ask to Adrian, like, you know, this is like the final week. There's not a vote yet, you know, set. I guess, where do you see things going from here? Because when they come back, like the focus is really on elections in November. I guess kind of what are you seeing? I mean, it doesn't tell me if I'm wrong. It does not seem likely that there's going to be like a vote vote happening on clarity at all this week because there's just not the days to do it. But kind of what happens next or what do you see sort of going on the next few months?

Adrian Wall: So if we get ethics language back from the White House that everyone can accept, or let's just say the White House countertive, hey, we accept what you sent. We're good to go. If that happens, as I said, I believe we'll see clarity pass. I believe they'll go to cloture maybe on Wednesday. They'll get that 60 because I believe there's a coalition of 15, mostly Democrats, a few Republicans that are waiting for that ethics piece to drop. And if everyone's on board, they'll come in and you'll get over 60 votes. And then they'll go through their procedure, which will take a few, you know, maybe a day and a half or something like that, where they go back and forth on a few amendments and they'll get it passed before recess. Because at that point, it's harder, it's almost harder to get it passed closure than it is to pass the bill. You need more votes, if I'm not mistaken, you need more votes to get past closure, then you actually need to pass the final bill. Um, so let's see what happens with ethics. If it doesn't, if ethics doesn't come down, then I still think you see the cloture vote, most likely this, and this gets into sort of the, the, the, the WWE of politics where you've got the Dems on one side and you got the Republicans and all right, now, if you know, no one's really going to be passing anything, how do I, how do I rile up the crowd? How do I make this entertaining? How do I dunk on my opponent? How do I score points? How do I whip up my base and get everyone excited? So that's when you're going to see a little bit of that tactics and theatrics. So I would bet that the Republicans put it to a boat, they put it down on the floor, it fails, but that allows them to one say, hey, look, the Democrats voted against it. We are, and when I, that allows them to talk to industry and say, look, the Dems voted against it. we are your saviors. We said we were going to vote for it. We're here. Keep funding our campaigns for the midterms. Stop funding Democrats. And meanwhile, they can score political point with their base saying, look, see, we did what we said we would do. Dems could do the same on their side. They'll go to their base and say, look, crypto was terrible the way it was written. I mean, happening. Same thing, you know, support, keep that money coming in for the Dems and, you know, let's take back the House, possibly the Senate. And then you see that kind of going back and forth. Are we going to see this in September when we all come back? I doubt it. I doubt it. I think more optimistic people would say, oh yeah, there's a couple of weeks, maybe two or three weeks where this might come to the floor in September. There's a little bit more time to go back and forth. It's True. And if we don't pass it this week, people like myself will, will be on Capitol Hill in September pounding the pavement again, because we can only help can't hurt. But knowing that, I think the chances are pretty slim. Uh, and then I don't think you see, I could be wrong on this. I'd like to say that the new Congress would pick it up. Um, and we might see a redraft of clarity in the Senate in the, under the new Congress, but if not, I think it'll be a couple of years. It'll be a new administration probably before this stuff comes back.

Sarah Wynn: Got it. And you mentioned too, like ethics is obviously like a big piece, but also the BRCA, that's also been something that's been a huge topic. I guess, is there any sort of scenario where, you know, ethics get solved, but there's still concerns too with, you know, BRCA or other provisions too in the bill?

Adrian Wall: I think there are, but they're, they're easy to address compared to ethics. So, you know, BRCA was in a worse spot last week than it is now, I think, I don't see that as being the sticking point. Cortez Masto's office is leading the way. She's the senator from Nevada. She was previously a DA herself. So I think she's leading the way on this, and her office has been highly engaged in what those definitions are, what those carve -outs could be. Of course, they feel it's currently, it's too broad as written, and they I want it to be more narrow, more prescriptive. But I think some meaningful compromise was already reached last week. And whether or not she supports, I think the coalition that she represents is feeling more comfortable with the language. The Senate Ag side, depending on who you talk to, I've heard different things. So for example, I've heard that Senator Booker, who was leading on the Dem side of the Senate Ag Committee, reached out to Boozman, the Republican senator who was majority on that side, say, hey, look, we really got to get together. This was two weeks ago. We really got to get together and work this stuff out. And the response from Boozman's office was, well, you know, it's kind of beyond us at this point. It's, you know, it's at the executive branch. It's with everybody. Us getting together for a tête-à-tête doesn't really move the needle. I don't know if it's true, just something I heard. But if that's the case, that's a little disappointing. At the same time, the sticking point on the Senate ag piece is, does the CFTC have the resources to really be the lead regulator? Because clarity gives them a lot of control, a lot of power when it comes to the regulation of network tokens that are now being treated as commodities, full stop. Which, by the way, I think we all agree with. That's the right call. But at the same time, you see the CFTC continuing to downsize, and it looks like, it just looks like what they're doing is not, it doesn't match with the amount of authority that they're about to receive, if that makes any sense, right? So I think that gives a lot of Dems some concern. Behind the scenes, honestly, I think if Clarity doesn't pass, and I'm sure people have shared this with you guys before, but I've long said that the SEC and the CFTC are working on their project crypto plan B, meaning Clarity doesn't pass, it's okay. They will have their prescriptive rules of the road for how they regulate. And I think we'll see that come down for publication very quickly after this, after clarity passes or not, if it doesn't pass. And then from there, it'll be two years of non -statutory regulation through these organizations, which worries everybody because it means it's not there forever. When these administration changes, when the powers that be at these two organizations change, the interpretations of the rules could change as well. So it doesn't have that continuity that everyone's looking for. But that's the, I think, what would happen.

Kelvin Sparks: Well, how likely are these things to actually get undone, in your opinion? It seems like we've come a very, very long way since even, like, the Jay Clayton days at the SEC, where he, at least, it seemed like outside looking, he was like, look, I don't really want to be the guy to touch this. It seems like he's going to open a huge can of worms. I'll kick it to the next admin. Then you had Gary Gensler, who was coming down really hard, Operation choke point, choke point 2.0, the anti-crypto army. But now, I mean, seems like we're at the point now where it's a bit of a laissez-faire approach. I mean, I thought Jake Stravinsky, even though he's not a regular in any sense, but does work often with the regulatory bodies and whatnot, the Hyperlocut Policy Center, said, look, these things are digital property. That's what these cryptocurrencies, tokens, digital assets are at the end of the day. So to treat them as property kind of does mean to take a step back, at least in the eyes of the average American, in my opinion. I don't necessarily see it as a bad thing. Now, it's scary when you have people gambling their house away on whatever apps may be. But I mean, is it a bad thing? I

Adrian Wall: believe in choice. I believe in you have the freedom to do what you want to do. Although that's a slippery slope, I know. And that's a debate you and I could see here and we could go back and forth on this all day. I mean, what does that mean for gambling? What does that mean for drugs and drinking and all the all the vices that that we could talk about i i'm always going to be on the side of having the choice because to me that's that's the equation of freedom this is in a country where you have the the option of eating a salad or eating a triple cheeseburger right with extra fries and bacon that's your call it's your body you get to you get to choose what you'd like to do with it um at the same time i mean i i see i see the case i see why people are so riled up about it. I see why this has been such a divisive and controversial topic from the jump. And we get into some real conspiracy theory territory on this, as far as who really wants to see clarity passed, right? At this point, because we're way past crunch time. This is like Hail Mary. This is literally the last play of the game to see if this is going to work. And now you've got all these conspiracy theories coming out and saying, well, you know, did the Republicans really want to pass it from the beginning? Did the Dems really want to pass it from the beginning? Have they been, has it all been smoke and mirrors, political theater? Have some of the bigger industry players been secretly plotting behind the scenes, whispering in the Trump's ear saying, yes, yes, support it on the surface, but we don't want the regulation because we're doing just fine without it, frankly. There's plenty of that to go around. And I think, you know, easy, easy X search or Google search will come up with all of all of these conspiracy theories. Honestly, I think there's merit to some of them because the actions of our legislators on both sides don't really match with the words that come out of their mouths. I think that you can say that about a lot of things, not just clarity, not just crypto. So I think that kind of sadly pertains to the state of our politics in many ways. So having said that, though, there has been a lot of good work done. There have been a lot of good actors. You know, shout out to Senator Lummis, Senator Gillibrand, Senator Booker. These are just some of the offices that we've done some work with at DSA, helping them and helping trying to reach a bipartisan agreement on specific topics. And I know those people have been doing tremendous work and really have a vested interest to see this through. So those three offices in particular, the trade associations have been working really hard, you know, shout out to the digital chamber. You know, they, they have been very vocal about how their members can support and what their members can do on Capitol Hill to, to try to get that message across. So there's a A lot of good work, a lot of good people. But the conspiracy theories are fun. I mean, for sure, at this point, they're fun to think about.

Kelvin Sparks: Maybe we save that for happy hour, because that could be a whole conversation. I

Adrian Wall: will share things that would get me in trouble, but it would be very, very interesting. Oh, yeah, no worries. I hear you, I'm in the same boat.

Kelvin Sparks: But I was curious now, Adrian, you speak about the work that you do around financial empowerment, But below that, or I guess maybe in front of that is probably a better way of putting it, financial literacy. Can you speak about how your mission is kind of aligned or tied to the work being done to get clarity over the line? Absolutely.

Adrian Wall: So, look, I believe those of us working at Digital Sovereignty Alliance, we firmly believe that digital assets are a tool, a powerful tool to help people financially, to help people economically, to help people make better financial decisions so that they can improve their quality of life, that they can improve their financial situation. And as with any sort of financial tool, there's a big part of it that is education, that's education -based. I would say, I think it's fair to say that in the US, we do not do a great job of financial literacy or educating people around just the basics of what it means to manage money in today's society. I certainly don't remember taking any courses on it when I was a kid, and I'm not so sure. and I went to public school in Jersey, I'm not so sure it's national curriculum across. And it really should be, if you think about it, right? Yeah, it's not in New York, for sure. I can tell you that public school kid from New York City. All right, perfect, perfect. I mean, my point exactly, this is important stuff. And for some reason, I think we treat it as if it's an assumption that everyone's just gonna understand it. It goes back a little bit to the freedom part. I said, look, you have the choice and power to spend your money however you want, to save as much as you want, to live your life how you want. Doesn't mean there aren't best practices. And so you have guys like David Ramsey and his seven steps, which I think has helped a lot of people, by the way. Shout out to Dave Ramsey. But I don't think those methods necessarily speak to a younger generation now. A younger generation that is looking at huge amounts of college student loan debt, right, college debt, looking at a job market where they can't find jobs, the jobs they feel underpaid, the salaries don't match the cost of living where they reside. So all of these problems, I think, are a huge amount of stress for a younger generation. A younger generation that feels like, you know what, I can't get married and have children because it's too expensive. That's a terrible situation, right? I mean, that's a situation where a lack of financial freedom is actually taking away your choices, you know, as what you, how you'd like to live your life. So the way I look at it is financial literacy is imperative. It's a prerequisite of being able to use digital assets to improve your situation. There's all this talk about financial inclusion, which I'm all for it. I love it. And I think the idea of giving access to everybody, no matter what strata in society you're coming from. Access to banking, access to financial instruments, access to all those things that traditionally you would need a bank account to have. But DeFi gives you access in a way that allows you to bypass some of the problems that certain, you know, strata society used, would have with traditional banking. But, you know, financial inclusion without financial literacy, it's a bridge to nowhere. It's access without empowerment. It's just another way for you to potentially lose your money, potentially be scammed, potentially make mistakes. So you really have to understand what the technology is. You have to understand how to use the assets in your favor. And so this is a long-winded way of saying that's a lot of the work that we do at DSA. our team and I we are doing a lot of outreach on a state-by-state basis a community-by-community basis we're doing a lot of outreach we are educating on the basics of what the technology is what DeFi is and then hands-on how to use it because let's be honest as much as I love DeFi the exchanges that I like to use are not that user -friendly compared to the bank apps which I also don't think are great. They're terrible, but they're a little bit simpler to understand. So just some of that basic information, we do a lot of that stuff here. On top of that, we actually do a lot of this outreach abroad as well. So we're very active in West Africa. We're very active in South America, very active in Southeast Asia. Granted, their familiarity with the technology is actually far higher than ours because they use it on a day-to-day basis. Those populations are using stablecoin for international remittances, outbound remittances, and inbound. They're using stablecoin as a store of value and a hedge against inflation of their local currency. They're transacting in crypto. So their base case scenario, their knowledge is, we're starting in different positions of, we're starting with different base levels of knowledge. But what they don't necessarily understand is a lot of the DeFi options that are out there for them. how the other ways they can use it besides just holding it as a hedge against the local currency besides just using it for outbound remittances or purchasing or sending money back home to their diaspora you know in in other parts of the world so we educate them on on that stuff the other opportunities that it represents and opportunities for actually making money as well so it's a long window ways out, but I'm very passionate about that part of it because I really think that's the future. The cool part of Clarity is we're just talking about the rules of the road, what market structure is. But once all that stuff is clear, we don't even know what we don't know. I think the future is so bright. All the really cool innovation, the cool things we can do with this technology, we haven't even started having those conversations yet. We're just starting to talk about streaming payments. I like that one a lot because you can really picture what that would be like. Imagine instead of getting paid at the end of the month, you get paid at the end of the day. It's your money. Why are you allowing your boss to hold it for an extra month? You don't necessarily have to. What would you do with that? How would that change your life? How would that change the way you think about your cash flow? How would that change the way you make decisions? so little little things like that that's a more obvious one but there's so many cool things that i think the technology will allow that we haven't even started thinking about

Kelvin Sparks: yeah and i mean education is definitely a big piece of that because to your point just even understanding these front ends for the average person today it's still quite an uphill battle and we're starting to see crypto ux improve but it's nowhere near the level it could be where i can tell my grandmother Hey, here's how you deposit into Aave, for example. Call me a pessimist, but I don't think we're there just

Adrian Wall: yet. I told a friend of mine with an exchange saying, look, just make the fonts bigger as a start. You put so much information, the fonts are so damn small. Even me, you know, my site's pretty good, but I'm like squinting at my phone trying to figure out, you know, what it is I'm looking for. Just make it bigger. And then like six months later, sure enough, they were bigger. I was like, there you go.

Kelvin Sparks: slow and steady wins the race here there you go but exactly adrian i really want to get more of your insight on the stable coins side of things because maybe not as much of a hot topic uh these days with clarity as you said we're focused more so on developer protections and ethics but uh what was that like the early conversations trying to get people just to agree on stable coins and yield because it seemed like that was something that was just discussed ad nauseum for like months at a time.

Adrian Wall: Yeah, 100%. And so to refresh everyone's memory, it was really about the traditional banking industry, the financial institutions pushing back on the crypto industry, particularly stablecoin issuers, saying that they were stablecoin issuers or the exchanges were issuing holders of stablecoin yield that was competing with the bank's direct deposit, right? Um, honestly, shout out to Senator Alsobrooks from Maryland, the work that her office did on reaching a compromise on that was incredible. Think about the financial industry, how big they are, how entrenched they are. Those guys have been doing this since the beginning of time. In my opinion, you can always tell the banking lobbyists, they're the ones in the, in the best suits. They're the ones dressed the best. They have the shiniest shoes roaming the hallways. You can tell the crypto lobbyists because, you know, they might be in sandals. They might be wearing flip -flops. But I mean, they've come a long way. We've gotten better. But the idea is for them to be able to, for Senator Alsobrooks's office to have worked out a compromise between the banking industry and the DeFi industry is incredible. It's such a tough undertaking because the banking industry has so much power, so many resources and time. They could just wait it out, right? And that's one of the conspiracy theories, by the way, that the banking industry was never really in support. They wanted to show some support, show people that, hey, you know, we're not so bad. Here's an olive branch, but secretly they're just biding their time. Last year, I wrote an op -ed that at the time, this is, I think, I want to say it was like last October, last November, that was pretty unpopular with industry, but I was saying that, look, stable coins were not invented for yield. That was not the main purpose, right? They were invented as a hedge against volatility when it came to crypto trading. That was initially the main use case. And then people started to innovate into outbound remittances, generating yield, et cetera, et cetera. But if you remember what it was really there for, and we touched on it earlier, what is really being used for today, for people in Argentina, for people in Nigeria, for people in other parts of the world where their country's local currency is incredibly volatile. Stable coins is an existential solution for their life, right? So they don't have to fear going to bed and then waking up the next morning and say, hey, my money is suddenly worth 50% of what it was last night, right? You don't have to worry about that anymore. That's a huge relief. Us in America, we can't even fathom what that really means. Right. But so what I was trying to say is let's not die on this yield hill. Let's extend the olive branch to the financial industry and say, here you go. Uh, we'll give up the yield. And, um, if it'll make you happy. And I would also tell, um, I would tell the industry because a lot of industry players were saying, well, look, this is a substantial amount of revenue for us as well. So you're asking us to walk away, uh, from significant bucks. And I said, right, right, we'll build in some sort of 18 -month runway. You give it up now. It takes time for the stuff to come into effect. You let the traditional, you let the banks come up with their own stable coin. You let their tech stack catch up. I guarantee you, 18 months or less from now, they'll be back on Congress on Capitol Hill saying, you know what would be a good idea? Yield on stable coin. Guarantee. Guarantee they'll come back and say that for sure. Because that's just, you know, that's just the way they are and that's the way they think. To put a bow on it, the idea is that they came up with this really great compromise that would take away the yield on idle stablecoins, which is what would mimic a deposit. Banks were begrudgingly okay with it. I'm hearing last week that there was some resurgence of that displeasure with Alsobrooks' compromise, and she had to go in there and help retool it a little bit in the background. But I'm not hearing that that's a roadblock, that that's going to be the reason why Dems don't vote yes for clarity. But yeah, it was a really interesting thing that dominated the airways for, at least in our industry for like five, six months.

Kelvin Sparks: Sarah, I know you had some prediction markets questions on. Did you want to take over that topic?

Sarah Wynn: Yeah. Yeah. Prediction markets, I feel like have become like a huge thing following like the 2024 elections. And I know too, we were just talking about how like the CFTC is just like objectively is just a lot smaller of an agency than the SEC in terms of staff funding, even too, I think when they asked for their budget requests too for 2027, the numbers were like drastically different between the SEC and CFTC on what they were asking for. And even to the CFTC was asking for more, I think, than they usually do. So it's just really interesting that with, you know, if Clarity passes, they would have jurisdiction over crypto a lot. They would have broader jurisdiction over crypto and then to prediction markets. And we've seen the whole fight between states and CFTC kind of play out in terms of prediction markets. I guess sort of what do you see happening and sticking with prediction markets of what do you see sort of happening with that. We're seeing a lot of it kind of play out in the courts. But should it be where the CFTC, I mean, the CFTC, Michael Selig has said that his agency has exclusive jurisdiction. I feel like I keep seeing that pop up in like every complaint or what have you. But I guess kind of where does that kind of go from here? You know, prediction markets, I feel like aren't going away anytime soon. So kind of who should be the regulator there between states and the CFTC, do you think?

Adrian Wall: They better not. They're way too much fun. I love the prediction markets. I mean, I mean, they're like trusted news at this point. Um, so it, in my opinion, it's a CFTC jurisdiction for the, for the vast majority. I mean, the one exception is if you bundle a prediction, you know, whether it's on a sporting match or an event or anything, if you bundle it into a investment contract or something that looks like a security fine, then sec can, can step in. And I'm sure the CFTC and the SEC have their own sandboxes created and they're talking about what these things would look like. But I believe that a lot of the, even if clarity doesn't pass, so much of the conversation that we've had over the past couple months about what a network token is, why it's a commodity, and when is it a security, all those things would really inform the conversation around prediction markets. So my hope is that whether clarity passes or not, prediction markets will have an easier time of that regulation discussion. But I don't think it's going to, I mean, would clarity potentially or unintentionally federalize sports betting, you know, through prediction markets? Possibly. um i mean you guys saw that uh indian gaming association getting involved and or if you haven't seen it so the indian gaming association please oh okay so i think it was like a week ago or maybe 10 days ago where basically tribal gaming associations uh you know led by the indian gaming association or just around the country they're trying to make the argument that platforms like Kalshi or Polymarket, they can offer these sports events contracts that under the CFTC basically are effectively bypassing state gaming laws, tribal state gaming, compacts, the exclusivity rights that are around it. That, I think, and by the way, one of the conspiracy theories is tied to this. Like, why did they all of a sudden jump in at this point in the game? And there's a whole conspiracy theory that the banking, it was actually the banking industry, got them involved kind of around through back channels to help derail the clarity conversation and just basically add more noise and more distraction. But at any rate, you know, they're coming in and basically starting this conversation. And I think there's going to be some litigation, not legislation. There's going to be some litigation around this for sure. But that to me is sort of the bigger headache that prediction markets is going to face. But I think the regulatory side of it to me is pretty clear.

Kelvin Sparks: Prediction markets were an interesting one in that I always conflated the two to be a blockchain technology rather than this new type of innovative market structure that can run on top of blockchain, for example. Now you're seeing I think even Robinhood and their earnings reports are making a ton of money off of these things more so than I think they even anticipated when getting into the market. But overall, why is there so much fuss about prediction markets these days? I mean, previously in the news, it felt like you had like the the death markets were like a big thing. You had the insider trading with some like officials connected to whether it be the White House or some kind of military operations, things of that nature. But what are the latest like rumblings these days around how, I guess, regulators feel about not clarity prediction markets?

Sarah Wynn: Yeah, I think the CFTC has been a fight between the CFTC and states now at this point. And that goes back to like how much I don't know how much headcount, how many resources the CFTC has. But Chair Selig has said, you know, definitely prediction markets when it comes especially to sports betting. and that's a huge industry, is within the CFTCs. He keeps saying like, quote unquote, like the exclusive jurisdiction of the CFTC. But states are saying no, like there's been gambling laws they've had in place and also two different like tribal groups and that kind of stuff. There was just a hearing this past week. And I think it was the Senate Indian Affairs Committee talking about that. And there was talk about trying to get something inserted into clarity that would just kind of say, hey, the CFTC, you're not, this is not your jurisdiction here. So yeah, I think that too is going to be something to definitely keep an eye on because there's like billions of dollars now, you know, between Kalshi and Polymarket. And it's just become a huge thing. I keep asking my friends too that are into sports. I'm like, have you heard of prediction markets? And what do you think? And I think it's just a, it'll just sort of depend, I think, how things get played on the courts.

Kelvin Sparks: Yeah, prediction markets were a weird one, because to your point, anecdotally, I had a friend reach out to me he'd always been like kind of crypto curious asked about maybe like a handful like five to ten tokens over spend like five years but he sent me a message about Polymarket like i want to say maybe two years ago and it was really weird he was like hey how can i get money on a polygon i was like how do you know about that what's what's going on here it was it was a really really surreal experience for me uh but i do kind of feel you on the fact that i'm always asking my friends about these things how they feel and even anecdotally i'll hear people on the street in new york just talking about prediction markets so it does have that weird kind of uh we're still early zeitgeist that crypto i mean i think crypto still does have it but not as much as it did back in like 2021 or like 2017 for example yeah

Sarah Wynn: definitely so it'll be interesting to see like if prediction markets grow or become even more mainstream because right now i feel like my friends i think they're i don't know a lot about sports but i think they're kind of sticking to like fan duel or that kind of stuff for now but interesting to see if they go over to like prediction markets or or how that sort of pans out

Kelvin Sparks: yeah from the folks i hear i'm not much of a sports better myself i like thankfully with claude and polymarket was able to like get second place in the world cup bracket so i'll take it that's the length of my experience but i do definitely see that these traditional venues are probably going to dominate but looking ahead it's almost like a stable coin opportunity they see what's around the corner say oh we got to get on top of this and almost like the cma the cme is doing with perps it seems like he's like all right well if we can't out innovate them let's try to squash and stifle whatever they're working on so that we can buy ourselves more time to catch up or even acquire uh one of these smaller players that are dabbling in the space so interesting to see it play out

Adrian Wall: i actually wasn't aware about the tribe stepping

Kelvin Sparks: and i only saw that it was a lot of state gaming commissions i mean famously uh Nevada had huge complaints that they were filing against a college and Polymarket. But I'm surprised how much noise or lack of noise we saw from the sports books, though they're the most likely to get disrupted by this. And to your point to hear from now, these other authorities stepping in and being loud is, I don't know, maybe there's some substance to what you're saying, Adrian, around these conspiracy theories, but I

Adrian Wall: guess only time to I mean, they exist for a reason, right? You know, and they wanted, if I'm not mistaken, the tribal gaming associations wanted some language changed that would exclude specifically sports betting and say that it was not within the CFTC's jurisdiction and could not be offered as prediction market contracts. I don't see how you could enforce that. That would be a huge ask at this point. So that's the angle that the Tribal Gaming Association was coming to attack Clarity, because they wanted this language inserted at the end, and maybe would delay or they would swing some senators to their side, because, you know, they're influential in their state. Who knows? Like you said, time will tell.

Kelvin Sparks: Yeah. On the topic of sports, though, I'm sorry. Like, what do you make of the actual associations, be it like the NBA, the NFL or the leagues rather, working directly with Polymarket to get this language or whatever provisions they'd like in these contracts to make sure that they're airtight and good for, I don't know, speculators as

Adrian Wall: well as fans of the game? I mean, for them, it just increases interest in the game, increases engagement from fans in their particular sport. So I totally get it. And we've already gotten past the idea of gambling as a vice. We've gotten past the idea of being able to put money on sporting events. so now it's just a matter of how do you do it and why would you limit it then to only you know casinos or um you know some of these apps like fan duel and and all of that so you've already opened the door right pandora's box is open at this point it's who can do it best who can do it best fastest and make it the most fun so if you're a sports team why not engage right it'd be silly to sit on the sidelines, particularly if you're from a sport or a team where, you know, maybe traditional modes of engagement were just not working for you, right? And there's a couple teams you could think of in every sport where that team is just, you know, always the kind of, the one that struggles to get fans to their game, even if they're in the finals, for example, you know? My New York Mets, sadly, yeah. Right, exactly. On the baseball topic, yeah. Exactly. And then you've got teams that are terrible, but their fan bases are so loyal. My Buffalo Bills, my dad's from Buffalo. They're good now, but I mean, you have no idea the pain we went through for basically my entire life after Jim Kelly left. so basically you know they it this stands to benefit I think everybody whether you're a you know whether you're a sports enthusiast or you're a hardcore gambler which you know I it's not something I would do and that's not my thing but if that's what you want to do and and for the sports teams in general it's just another way to engage their fan base so for me you know I'm for it

Kelvin Sparks: we did literally just touch on this how at first new markets look like a threat then slowly people realize they're actually a new way to engage customers. And we spoke to a guy from Polymarket Analytics, and they have like an intelligence layer, they have an execution layer, and I think they have a ton of just like prediction markets data as well. One of the things he spoke was actually talking to DraftKings very early on and explaining to them, look, we don't need our traders to lose money for us to make money. It's actually more beneficial to us if they make money, That way they continue to come back to us and want to trade and we make money off the volume basically three times over. On the first execution on them making money and them placing a third trade. So it's interesting. Yeah, it's pretty interesting. Like what's your take on how or maybe you don't really even have opinion, but how these traditional venues view prediction markets versus how these new operators are looking at them?

Sarah Wynn: Yeah, I think I come at it like my background with reporting. I used to cover like very traditional finance, like municipal bonds kind of vibe. So that was much different than crypto. So I think it is just interesting. Like I saw, you know, I remember hearing about different like, you know, municipal bond issuers. I think blockchain was slowly just starting to come onto their radar in terms of like how they could use it for filing things or just for to make their lives easier on the on this city or county level. So I think when it comes to traditional finance, you know, we've seen them get into, you know, separate from municipalities, but seeing traditional firms get into like ETFs and that kind of stuff. So I think in the now we're seeing CME, too, when it comes to like perpetuals and that kind of thing. So I think there's some that are taking like a sidestep, like, you know, kind of like crawling into crypto, I think would be how I kind of envision it sometimes. And then there's some that are like, you know, I think it goes back to like the regulatory clarity there of like we don't really know. And I think there's a lot of, too, of, you know, is this all safe? You know, there's still, like, concerns with everything and, you know, kind of looking at different financial crisis. Like, obviously, a lot of, like, lawmakers turned to what happened, you know, in 2007, 2008. So, yeah, I don't know. I always think of, like, a crawl. Like, I think it depends on, I guess, the municipality or the traditional finance company.

Kelvin Sparks: You definitely phrase it way more eloquently than I would. I tend to think all these people who are staunchly against crypto are like kicking and screaming, getting dragged into this market by force, not by choice. Maybe I should lean on your framing next time because it sounds way more elegant.

Sarah Wynn: It's like a cute like sidestepping. Yeah, exactly. Yeah, it's interesting to think about, though, too, because then if there are like, you know, financial repercussions, like since I don't know, I think about this sometimes. If traditional finance and crypto keep like melding together, you know, what if something happens? And it's like when you combine two things together, will there be like a contagion risk? Or I think, you know, it's just interesting to sort of think about that, too.

Kelvin Sparks: Yeah, definitely. Based on the new Fed chair, Kevin Warsh, seems like they don't want to be in the business of bailing anyone out, be it a crypto business or regular business. So that contagion risk, I think, is going to be a real highlight, maybe not now, but a year from now, 18 months from now, as these things start to scale. only we really see these in innovation or excuse me as we see these integrations like uh in real time uh it's going to be an issue and unfortunately crypto has this weird way of always uh dragging someone into the depths uh so there will be someone sacrificial i don't know who i hope it's not one of my friends or buddies hope it's not me but yeah it tends to be the case thank

Adrian Wall: you for illuminating and shout out the bills yeah

Kelvin Sparks: sarah all you yeah

Sarah Wynn: and i was just looking to i know we were talking about two different sports leagues and stuff and my um my colleague daniel just wrote too last i want to say last week um that the nfl to responded to like the cftc's um prediction markets you know proposed rules and said that i don't know too if you guys saw that but it was saying that there needs to be like more protections in there it sounded like and i know other leagues i think have like signed memorandums of understandings with the cftc which is kind of interesting to see where the different leagues are stacking up and where they think there needs to be more protections put in place and wanted to see if you had any thoughts on that too, Adrian.

Adrian Wall: So I'm not as familiar with the specific teams that have asked you. Could you tell me a bit more about it?

Sarah Wynn: Yeah, sure. So it's the National, I'm just reading too, the National Football League was calling on CFTC chair Michael Selig to curb sports prediction markets. Daniel reported arguing that the proposed rules for revenge contracts fall short in protecting the integrity of the games and consumers. And they sent that in a letter on July 27th. So I just thought that was kind of like an interesting thought process too. I think, you know, the NH, I think, yeah, National Hockey League and the Major League Baseball have partnered with the CFTC. So it kind of seemed like a little bit of a different path, if that makes sense.

Adrian Wall: I mean, it's the opposite of what I was just saying. And I, you know, I'd be interested to hear their arguments as to why they think that's the way to go. you'd have to you'd have to be admitting some sort of guilt on your own part to say that people's betting through prediction markets would somehow sway the outcome of a game assuming you have your house in control and you've got your players in control and you've got your management in control in theory it shouldn't be an option so i would say again this would just be another way to engage uh your fan base and i think there are some specific teams that have gotten, and specific players that have been a bit more pro the prediction market way of going things. And by the way, prediction markets is so much more than just sports betting, right? There's so much more to it, and there's so much more room for creativity around how you package your events and how you package your bets. And that's why that regulatory piece is important. So when is it CFTC jurisdiction, which I would argue is in most cases, when is it an SEC, when there's an investment contract or something that mimics a security, then it should be an SEC. But that aside, I think some compromise can be worked out with the Indian Gaming and the Tribal Gaming Association, with the sports teams. I think everyone needs to get on board at some point. There'll be a little bit of pain between now and then, but keep the communication going, keep it, you know, listen to each other, listen to what their concerns are and, and see if we can get past it. But I think the cat's out of the bag at this point.

Kelvin Sparks: Yeah. I think Sarah, another thing I saw was the NFL actually didn't want leverage in prediction markets. Uh, so that, that may have been part of the complaint if I remember correctly.

Sarah Wynn: Yeah, I can look to to see I just was I remembered that Daniel had wrote that last week and I just thought that was interesting since like the other leagues had like partnered with the CFTC and that just seemed like a little bit like an outlier. So yeah, and I wanted to I know, Adrian, you talked about this too, but like there's been like there was that push to get and I think there is still a bit of a push to get prediction markets legislation within the Clarity Act. And I remember I asked Representative Horsford about it a while ago, like, would that be included? And he was like, no, that's like there's I think the vibe I was getting from him was like, there's so much going on. Like, we can't try to put something else in this bill. This bill is already too long. So I guess, too, do you see Congress taking that? I mean, they've held hearings now on it and stuff. But do you see them taking that up in any legislation or kind of what are your thoughts on that?

Adrian Wall: Certainly not. Not this week. Not in clarity. Oh, gosh, yeah. Not in the way it's written. Personally, I think fundamentally, these are two different tracks. And I think prediction markets is its own thing. And it has, you know, it's not involved, it doesn't use, well, let me say this, it's its own thing, and it needs to be measured against consumer protection that is very different from the way digital assets is used. I mean, digital assets can be used in prediction markets as a means of settlement. But, you know, you just mentioned Kelvin Leverage, for example. You know, if we're talking about setting the rules around prediction markets that would say, you know, put caps on how much an individual could, you know, bet in a certain day or a certain week, or those types of consumer protection and regulations, those conversations I think do need to be had. But that is sort of outside of the scope of where you see clarity. Do I think it's really going to be coming down for the Senate to get involved or, sorry, the Congress to get involved? Probably not. I think this will stay with just the CFTC and the SEC and they will just work it out as regulations that they prescribe in the short term. If there's a huge movement towards national legislation because of some incident or event, I think it'll take something like that for us to really see that sort of legislation, that sort of time and effort come down for Congress to take it up.

Kelvin Sparks: Unfortunately, we are at the top of the hour. I'm going to sneak one last question in, which is you as well as Sarah, I got to put you in the hot seat as well. So Adrian, are you bullish or bearish on clarity passing before midterms?

Adrian Wall: All right, well, like I said, it's binary for me, so it's not even a percentage. Either it passes or it doesn't. I want it to pass. I don't think it'll pass. I

Kelvin Sparks: like the optimism. the tame optimism. Sarah, what about you?

Sarah Wynn: I'm usually pretty, I feel like my friends will say I'm a pretty optimistic person most of the time, but I have to say, I feel like, you know, following this for so long and seeing all the hurdles and just, it takes time. And I just don't think the time is there. And so I just don't think it's going to pass before the midterms. And a lot of the attention is going to turn towards that. And what Adrian was saying too, where that's going to become a part of like, you know, campaigning and the discussions there. So I just don't really see at passing before the midterms.

Adrian Wall: If ethics drops today and the White House has accepted it, I'm at 100% it will pass.

Kelvin Sparks: I like the optimism from both you guys, but I love being the resident doomer. So I'm going to say nothing ever happens. No. And yeah, humor aside, thank you both for taking the time out to chat.

Sarah Wynn: Yeah, I mean, I feel like it was a really interesting conversation and really timely with where everything's at. Right now, I know we were just talking too about like traditional finance and crypto kind of like meshing together. And I think like a lot of people were leaning on clarity getting passed. So there would be like that certainty there and rules in place. And yeah, the SEC and CFTC can still move forward with what they've got going on. But there's a level of permanency that they can't quite like achieve that Congress could. So I think it was a really interesting conversation with Adrian. And we touched on a lot of different things from prediction markets, clarity. So yeah, I thought it was a really great conversation.

Kelvin Sparks: Yeah, definitely. Adrian was a very, very fun guest. I enjoyed getting his insights generally on what's going on in Washington to his wild conspiracy theories as well. Definitely made for a good episode. And I mean, you as well. Thank you for joining and stepping into co-host this one because your insight into what's going on in politics is like much needed for someone who feels like they can barely see their hand in front of their face when it comes to these kinds of topics. So,

Sarah Wynn: yeah, definitely. I'm learning every day. So,

Kelvin Sparks: you know, I appreciate you for admitting that, but some people like me need to learn a lot faster just to even understand half of what you guys are talking about. So, Sarah, really thank you for taking the time out. This is an awesome episode.

Sarah Wynn: Awesome. Thank you so much.