[00:03:13] Preston Pysh: Talk to us about like what Sam was doing. Like, because this isn’t like, he just made some bad positions. I mean, it, it was fraud. He was doing things that were, that were just really unethical in many different ways. Yeah, but talk to us about it.

[00:03:28] Cory Klippsten: Yeah, fair enough. So, I mean, at, at the end of the day, he was clearly gambling with customer funds. The, the money’s on the exchange and they were trading it, and that’s all you really need to. I think we’ll find out all the details over the coming months, but I think it’s fair to say that even though technically you have to put the alleged around that today.

[00:03:47] Cory Klippsten: I think it’s really clear that’s what happened. Otherwise, he would’ve been able to let people withdraw their funds and instead we see that they’re trying to raise 9.4 billion to cover over the whole, they have in their balance sheet.

[00:03:58] Preston Pysh: Wow. That’s the number right now? 9.4 billion.

[00:04:01] Cory Klippsten: Yeah, like the number first it was a billion, then it was five to six.

[00:04:04] Cory Klippsten: Now it’s actually 9.4.

[00:04:07] Preston Pysh: I mean, that number’s just so massive. Do you think that a number that massive could spill into like traditional markets and start to create contagion in the traditional markets? Is it that big of a number or

[00:04:19] Cory Klippsten: No, it’s not big enough to mess with the regular, the traditional financial system.

[00:04:24] Cory Klippsten: Yeah. It’s just causing mass contagion across the the non Bitcoin crypto ecosystem. Obviously impacting the Bitcoin price. But I think that’s just a short term thing and we, Bitcoiners don’t really.

[00:04:36] Preston Pysh: Do you think that everything that happened in the Luna Celsius, I don’t know how many months ago that probably has been like four or five months ago, was Sam tied into, do you think he was having issues through that and it was the can was just kicked or is this a whole nother manifestation of kind of the same thing?

[00:04:55] Cory Klippsten: That seems the most plausible and I am not a, a sophisticated on chain analyst, but what’s his name? Lucas Nuzzi Is that Nick’s partner over at Coin Metrics. So he put out a thread about 10 days ago and actually did some on, once he saw what had happened and had a hypothesis, it was easier to go and find what he was looking for, and he thinks that he found a transfer of, at the time, a little over $4 billion worth of FTT tokens from FTX to Alameda.

[00:05:24] Cory Klippsten: And that is likely because Alameda actually blew up alongside Three Arrows Capital and everybody else. Wow. Alongside Luna and probably had exposure to Three Arrows Capital, which had a lot of exposure to Luna. We don’t know yet whether Alameda had a lot of direct exposure to Luna, but it wouldn’t be necessary as long as they had a lot of exposure to one of the other desks that were blowing up or funds that were blowing.

[00:05:48] Cory Klippsten: And that probably propped up Alameda and let them claim because again, because of the myth propagated by Sam and his PR machine, nobody really did any diligence on them. So if they could say that they had x dollars worth of collateral, people would lent to them. So even though the vast majority of that collateral was this printed out at Thin Air Token from their sister company that literally was next door in the same building with the same ownership and back doors between them, that Sam and Friends coded so that they could not trigger audit review or even risk committee review as they funneled money back and forth between the two companies.

[00:06:26] Cory Klippsten: Again, allegedly, but it appears this is what happened. All these companies would lent them because they said that they had the collateral.

[00:06:33] Preston Pysh: What I get when I’m, when I’m seeing some of the things that are being posted on Twitter is just a total lack of decency and respect. With so many people in this space and, and let me give you an example.

[00:06:45] Preston Pysh: So like one of the things that you read on Twitter was this engagement where Sam was raising funds from Sequoia and it was this chat log where he was literally Cory, he was playing a video game like some Dungeons and Dragons video game while he was pitching Sequoia on how for the round that they were raising.

[00:07:05] Preston Pysh: I have no idea the amount that they were raising, but I would guess it was in the billion.

[00:07:09] Cory Klippsten: There is a billion, including about 400 million of that from Sequoia.

[00:07:13] Preston Pysh: Four. So this meeting was a $400 million meeting, right? Like Yep. No regard for your employees. No regard for your existing customers. I don’t know how many millions.

[00:07:26] Preston Pysh: I would imagine they had millions of customers. 5 million. 5 million. 5 million customers. No regard for no respect for the amount of work that it takes to earn 400 million like he’s there. And I can only imagine if this is a Zoom call, the Sequoia employees that are sitting on the other end, and they’re probably.

[00:07:49] Preston Pysh: Watching videos or doing their own or on Twitter or whatever while they’re taking the meeting, and then they’re just filling out these chat logs saying, oh, I love him. He’s so brilliant because he said he could integrate bananas into his application on ftx. Like the whole thing just seems like it’s straight out of a, like a really bad horror movie where both sides are, are just total scammers on both sides.

[00:08:11] Preston Pysh: And there’s a question in here somewhere-

[00:08:12] Cory Klippsten: When you, when you, so this gets at the problems with crypto vc, right? And so now I think finally, finally, we bitcoiners and the journalists that care about truth, just like Bitcoiners, care about truth, appear to have enough of a microphone or enough of megaphone to start going after the absolute scam fest that has been going on for the last four or five years in Silicon Valley.

[00:08:39] Cory Klippsten: To people about, I find strong enough to really go out with a hard hitting thread about Andreessen Horowitz that I posted this morning. Oh. So I haven’t talked about this anywhere, but walk us through it. Walk. Yeah, we can talk about that a little bit. But, you know, and, and I’ve talked about these themes and kind of what’s going on, but essentially there’s never been a better industry vertical for the venture capital business model than crypto.

[00:09:06] Cory Klippsten: Meaning non Bitcoin altcoin scamming. Why? Because they can, they benefit from information arbitrage and regulatory arbitrage and at the same time, and basically they can. So any crypto VC deck when they go and raise from LPs only needs two things on it. Really. It’s just literally, one is short time to liquidity, and the second is we make our own.

[00:09:34] Cory Klippsten: And these are the two things that when I came into the space, as lots of people know, I was in Silicon Valley ecosystem advising startups, cutting angel checks. You know, starting in 20 12, 20 13, all the way through going Bitcoin full time in 2018. That first 11 months from like May of getting caught up in the, in the ICO run up and Bitcoin and everything through about April of 2018.

[00:09:57] Cory Klippsten: When I decided Bitcoin was the only thing that mattered, I was heavily immersed in all aspects of, of the, the crypto space, and I heard this said over and over and over again and didn’t see the obvious. The obvious lie in that and just how immoral it is to hinge a business model on short time to liquidity.

[00:10:18] Cory Klippsten: Meaning that you don’t need to have revenue, you don’t need to have product market fit, none of that. It doesn’t need to be real because you can just dump this token on retail or dumb institutional

[00:10:26] Preston Pysh: And there’s no mark or there’s no product, there’s no service,

[00:10:29] Cory Klippsten: There’s no product, it’s, there’s nothing. It’s just self, it’s just self-referential gambling and gambling tools and that’s it.

[00:10:36] Cory Klippsten: On something that has no inherent value or no, no real world use. And then we make our own weather is that they’re all just, they all are just marketers. And so this is where it becomes really important that the genesis of Andreessen Horowitz is in partnership essentially with caa. The, you know, it was basically modeled after caa.

[00:10:56] Cory Klippsten: This is the talent agency down in Los Angeles. So Mike Ovitz, the founder of CAA, was the senior advisor to Ben and Mark when they started the firm, they kind of modeled it after caa. The whole point was that they were going to treat the founders of these companies as talent the same way a Hollywood talent agency would treat their talent and would be kind of in service of.

[00:11:14] Cory Klippsten: What it also came with is in the DNA of that firm from the very beginning, was to make your own weather to put out your own media. So this is where you see them always putting out podcasts and trying to get everybody at their firm to blog all the time, and hosting conferences and just being in the media as much as possible.

[00:11:30] Cory Klippsten: They even created a new media arm a couple of years ago, basically specifically to push their crypto agenda called Future. Essentially they, they push out and market and make their own weather with these crypto scams that get short time to liquidity. And as long as the window is open where these things are unregulated, and you can say whatever you want about magic bean stocks on the blockchain or whatever, that will save the world.

[00:11:57] Cory Klippsten: You can go over and over again and push World Coin Helium, token Ax, the Infinity. You can buy $300 million worth of Solana and get all your friends at CAA and the other agencies down in Hollywood to have all these celebrities go on talk shows talking about their Solana, which happened in the summer of 2021, and then they can dump it as soon as it pumps and, and get outta their cost basis and still let some.

[00:12:21] Cory Klippsten: And as long as that window is open, they’re going to continue doing it. Because you stack these funds, you raise a fund. If you can get out of the J curve where you’ve made your investments and you start to have exits, if you can start to show that you’ve actually returned to the fund, the faster you can do that, the faster you can raise another fund.

[00:12:39] Cory Klippsten: So Ra Mo is on like fund number four now. I think it’s between 12 and 15 billion that they’re collecting 2% on of these crypto funds. It’s so much money that they can hire people outta DC over and over again as partners in these funds deliberately to get around the regulations around lobbying. So if you spend more than 20% of your time in DC lobbying, you have to register as a lobbyist.

[00:13:02] Cory Klippsten: That doesn’t count if you’re a partner in a company. So they just hire people straight outta dc, make them partners of these funds, and they can basically be in DC full time. Arguing for Ethereum matters or whatever it’s that they’re trying to get across. And you know, the, the game that SPF was up to over the past year and a half, two years was essentially trying to rest control of crypto, oversight of crypto away from the SCC and put it into the cftc.

[00:13:32] Cory Klippsten: And they’ve been working on this with Paradigm, which is Fred aso. Brian Armstrong’s, co-founder at at Coinbase. This is in Jason Horowitz. This is ftx. This is also Coinbase. And obviously the entire Ethereum Foundation and Joe Lubin and Novogratz at Galaxy and all these guys essentially trying to have crypto regulated by anyone other than the scc because the SCC obviously knows that this stuff all passes.

[00:13:57] Cory Klippsten: The how we test, and these are all securities. So they’ve basically just been dangling millions and millions and millions of dollars in front of the CFTC and saying, if you regulate us, please charge us tons and tons of money so that we can staff your office. And you guys will get super, super powerful and you’ll be, you know, big swinging dicks out there at the CFTC because you’ll oversee this burgeoning crypto industry.

[00:14:19] Cory Klippsten: Just, just, you know, wink, wink, regulate us with a light hand.

[00:14:23] Preston Pysh: I’m so disturbed. Just hearing like what you’re saying now is just crystal clear, like what the model is, but I’ve never even, I, I mean, I knew there was this perverted incentive structure that was happening up there with and you just named one of many firms I think, that are all in cahoots doing this in the VC crypto space.

[00:14:43] Preston Pysh: Right.

[00:14:44] Cory Klippsten: But then, yeah, the worst actors are like in Drayson Horowitz, multi coin capital. Kyle Somani hasn’t said a true word in probably six years. It’s all just trash marketing, scheming, pumping, dumping, scamming. How do you overcome something like this? Truth helps just exposing it. I think that’s one of the reasons that Bitcoiners and journalists, especially this year, Have increasingly found common cause there are a lot of journalists that actually want to find the truth, including quite a few that actually work for Crypto rags.

[00:15:16] Cory Klippsten: So they’re industry, industry journalists, but they actually have real backgrounds in journalism and kind of like me in my first, you know, almost year in the space going through my shit. Coin Horse. You have like, Hey, there’s Bitcoin. Let’s explore all this other stuff. You know, they’ve been bamboozled by these people with credibility.

[00:15:32] Cory Klippsten: Right? I used to read Andres and Horowitz’s blog Religious. I used to read Fred Wilson’s newsletter, every single issue as soon as it hit. This is the guy that runs union Square Ventures, which has been a big crypto camera. Like I used to read his newsletter every morning, like, and he’s a good guy. I actually think Fred probably just doesn’t get it and just doesn’t understand what’s going on maybe, and Jason Horowitz has no excuse.

[00:15:54] Cory Klippsten: Like they’re very clearly. Like deliberately got 140 of their employees registered as representatives so that they could sell securities in case anybody came hunting for them. They did that back in 2018, so they knew exactly what they were doing this entire time. I’m, I’m totally floored by what you just said.

[00:16:13] Cory Klippsten: I think the way that Bitcoiners are, Have been driving home the message of Bitcoin, not crypto. . for the entire year of 2022. That was literally the mantra of Swan, for instance, and I’ve done this in every media appearance. I’ve stopped interviews live on TV when somebody says crypto, and I don’t care if I use 45 of the 60 seconds for my spot to explain the difference, like that’s the message I’m getting across.

[00:16:36] Cory Klippsten: I think that you’re going to see a great industry of venture capital based in Silicon Valley now reject the scammers and kick them. So you have firms like Kleer Perkins, Cofield buyers that’s been around a long, long time, and they were the top firm in the valley for many, many years. You know, the, the biggest investor in Google, things like that.

[00:16:56] Cory Klippsten: They’ve never done crypto, so it’s in their interest now to separate themselves from the Sequoias and the Andreson Horowitz’s and all of these people that have jumped on the money train and, and basically just taken advantage of this one time opportunity to get super, super rich by scamming the people.

[00:17:14] Cory Klippsten: And I think you’ll see the, I think you’ll see nature healing in Silicon Valley, but it’s going to take a while and it won’t be completely done until the longest con of all Ethereum actually collapses and is exposed.

[00:17:26] Preston Pysh: Talk to us about Ethereum, then I’m curious to hear your, your very candid overview.

[00:17:31] Cory Klippsten: Listen, we’re ethere, we’re, you’ve probably had plenty of people on to talk about Ethereum, and I’m not really, like, that’s not next on my target list.

[00:17:39] Cory Klippsten: Again, like I’m not a coin pi. Yeah. The ones that catch my attention are the ones that that are really close to Bitcoin. . , then have false narratives around Bitcoin. Nicks Abo, I’m paraphrasing here at some point, said that, you know, you basically, it’s more or less like save your bullets for influential ignorance.

[00:17:56] Cory Klippsten: And I take it a step further. I save my bullets for influential ignorance that directly affects my day, essentially what I work on. Yeah. You know, if I saw Luna an obvious coin, Talking a bunch of mess about Bitcoin and how we had common cause. Like my gut says, now let me figure out why and let me expose it, which I did starting back in March.

[00:18:17] Cory Klippsten: And then obviously that resulted their fraud collapsed by May 9th or whatever. And then it was Celsius and you could see right away as Mashinsky started taking to the airwaves after they dumbly tweeted that they had pulled over 500 million of customer funds out of Anchor, which was part of the Luna Ponzi scheme was the key component of Luna Ponzi scheme.

[00:18:39] Cory Klippsten: Obviously I jumped all over that and that was like, why were there customer funds in an obvious Ponzi scheme, you guys are clearly not good stewards of risk and you’re probably in. And then, you know, he put out a video, Masinsky put out a video saying that Bitcoin maximalist are responsible for 30% of Bitcoin being lost because they encourage self custody as he was trying to recruit deposits.

[00:19:01] Cory Klippsten: And it was like, dude, this guy is trying to pay out old investors with new investors money. It’s very clear this is a Ponzi. And so I just started yelling about Celsius. It collapsed June 12th, like a month.

[00:19:15] Preston Pysh: Cory, I couldn’t imagine the number of like dms and just thank yous that you’ve received in the past year because

[00:19:23] Cory Klippsten: Yeah, you know, maybe it’s, it’s probably over a thousand now.

[00:19:25] Cory Klippsten: Like really? I felt letters of saving marriages, saving families, saving finances, saving their mothers, their brothers, their cousins, their coworkers. Yeah, across all of these, it’s just mountains and mountains. Hundreds of millions of dollars.

[00:19:40] Preston Pysh: You know, I’ll say. You had the courage to actually speak up, and although some other people maybe might thought something was going wrong, right?

[00:19:49] Preston Pysh: They’re just like, oh, that looks really ugly over there, but what if I’m wrong? So I’m not going to say anything. You put your neck out there multiple, multiple times in the past year to help people. Well, truly your intention was to help people. And I don’t know that there were really many others that were saying anything, especially with the Luna and Celsius.

[00:20:09] Preston Pysh: Blow up. Like,

[00:20:10] Cory Klippsten: Well, I mean the, the hard thing is like there’s even people that are, you know, known as like Bitcoin influencers. Like I think Anthony Pompano is probably the, the biggest example. I mean, he was actively promoting Dowan and Luna, putting him on his show, talking about how good it was for Bitcoin.

[00:20:27] Cory Klippsten: And this is also somebody that actively promoted block Ffi all these years, you know, and that’s, that’s a company that I had sort of never trusted from meeting the management early on. Didn’t really go after them. Like it’s kind of a neutral actor in the space. But then ftx, I mean Pomp had like so much showing of FTX and so much sort of mythologizing and participating in that.

[00:20:51] Cory Klippsten: He’s not the only one. Obviously a ton of people have have pumped up FTX as being some sort of like wonder Congen. But the guy clearly wasn’t. I think there’s just this thing with people like SPF and Vitalic where people look at someone that acts that way and just kind of like slovenly and awkward and talks like in computer code or something.

[00:21:12] Cory Klippsten: They assume that that’s a genius. I think I dunno, maybe it’s my background having been a journalist before I ever got into business, but that’s how I grew up. I wanted to be a journalist from the time I was eight I found found. I found out what do you want to be when you grow up from 1986? That said, I wanted to be a journalist and I did practice for a while.

[00:21:29] Cory Klippsten: I was in local NBC TV reporter, and I think we, we bring the code of journalism. I went to University of Missouri, the first journalism school in the world, and I think we bring the code of journalism to our work at Swan and we try to be objective and we try to caveat things that we always caveat, things that we aren’t certain of.

[00:21:46] Cory Klippsten: So you’ll notice I’m extremely careful in what I say and what I tweet. Only if I’m certain of something, do I say it. Otherwise I just poke and I ask questions and I poked and asked questions about Sam and FTX from June through 12 days ago. We’re recording here on on the 14th, and it wasn’t until 12 days ago that CoinDesk got in touch because of my constant poking and passed me the balance sheet.

[00:22:12] Cory Klippsten: And we, you know, broke the. I was certain that Luna was a Ponzi. That was obvious. After looking at it for about 14 or 45 minutes back late March. Once I saw that they had this 20% interest on anchor and that that was essentially propping up the ecosystem and that they were back filling it, it was like, oh my God, that is clearly going to collapse.

[00:22:33] Preston Pysh: So I had no problem whatsoever, just telling everyone that was going to collapse. How much more contagion or impairment do you think there is in the space right now? After all of. That hasn’t happened yet or is is still getting churned through right now.

[00:22:46] Cory Klippsten: I mean, my pet number is, I tally up the amount invested in the scam crypto ecosystem over the last 30 months is about 40 billion of money that came into Paradigm and Andreson Horowitz and all these funds.

[00:22:59] Cory Klippsten: So, Mike, you know, I mean, as far as market cap, obviously these are propping up market caps that are complete garbage, but obviously those are, that’s not real money if you have some, I mean, literally a complete fake project like Link. Which is probably still in the top 20 that claims to have solved the Oracle problem.

[00:23:17] Cory Klippsten: When anyone that knows computer science knows that the Oracle problem hasn’t been solved, it’s like, well, that’s actually a complete lie with a multi-billion dollar market cap. Plus, you know, Solana is still hanging out there, obviously a value of zero. It’s completely centralized. Jump Capital controls their Oracles.

[00:23:34] Cory Klippsten: When the Oracle was going to make them lose a lot of money, they just shut down their Oracles. That just happened last week, you know? So it’s just completely fake. It’s not decentralized at all. Yeah, I mean at minimum 40 billion wow. Of real money invested and then whatever, multiple poorly where these crypto funds needs to just wash out, plus all the market cap that created.

[00:23:52] Preston Pysh: So that’s the hard part is like how, how much capitalization or multiple is there on top of that number that has been factored in. Yeah, that still needs to deflate with it. All right.

[00:24:04] Cory Klippsten: I mean, it’s funny too though, right? Because we suffer in the short term, right alongside them as Bitcoiners. It looks pretty dang clear that Alameda Research was running an algorithm on multiple exchanges to essentially create the Echo bubble or the Echo Bowl market in Bitcoin in 2021.

[00:24:27] Cory Klippsten: What do you mean by that? Because they, they saw correctly that it would cost them less money to market, make, and keep on creating the illusion of a second bull market in the second half of 2021, because they knew that there would not be a bull market for Solana. They hadn’t got, they hadn’t pumped Solana enough.

[00:24:47] Cory Klippsten: It was positive. It was positive ROI for them to spend a few bill. To pump Bitcoin because they can make way more billions by dumping their Solana. If they could get Bitcoin to pump and kind of drag the whole market up, Solana would be high beta to that and they’d make 20 billion on that while spending 2 billion to pump Bitcoin.

[00:25:06] Preston Pysh: I’m not sure that, so are you saying that the double pump in the, in the last bull run,

[00:25:11] Cory Klippsten: I’m saying that Alameda created the second pump probably.

[00:25:14] Preston Pysh: Wow. Wow.

[00:25:15] Cory Klippsten: And they did it to pump their Salina bags.

[00:25:18] Preston Pysh: Holy Molly, dude. So, so let’s talk about, let’s go down that path a bit, right? So if they’re able to do something like that, is this something that is, that can be exploited moving forward by other exchanges, like, let’s say Binance?

[00:25:32] Preston Pysh: It doesn’t seem like there’s too many differences between Binance and ftx. Other than maybe the intelligence of CZ versus spf, but what are your thoughts?

[00:25:42] Cory Klippsten: I think what was special, what was special about Solana is so many of the big players were willing to go along with it and essentially pump the bags at the same time.

[00:25:51] Cory Klippsten: So FTX and Sam were completely behind it, and Drayson got completely behind it. Multi Coline was completely behind. CAA and the entire Hollywood apparatus, all the crypto inflected agents and managers were all behind it. And so I think they like the one that’s on the come now that has the same group of people aligning around.

[00:26:11] Cory Klippsten: A new pump is Aptos. Aptos has basically the same group of cockroaches that straight away after dumping Solana, and they’ve kind of like realigned this giant crypto cockroach like you know, Voltron style and they’re getting behind Aptos to try to pump. So we’ll see if they succeed. But yeah, you could see them, whatever trading desk is still around.

[00:26:31] Cory Klippsten: That kind of leads the charge and sets their black box algorithms behind trying to fake a bull market in in Bitcoin before all this stuff washes out so they can try to pump their app dose bags. You could see something like that happening again. Again, all of this is illegal according to the rules on the books, and all of these things are securities and if they were regulated as as such as what they are.

[00:26:53] Cory Klippsten: None of this is legal. None of these exchanges are legal, including Coinbase. Obviously, Binance, ftx, UX is not legal, like none of this stuff is legal according to the rules on the books. And the reason those rules are there, you know, you can certainly have a principled stand and you can say like, the SCC shouldn’t exist, bro.

[00:27:10] Cory Klippsten: You know, or there should be no regulations, and that’s fine if you’re, if you’re out there, you’re in DC and you’ve been banging the table saying like, Strat and Oakmont should be able to like market penny stocks to your grandma at the nursing home and let the market decide, that’s totally fine if that’s your hardcore libertarian.

[00:27:26] Cory Klippsten: But you can’t have it both ways. You can’t not want Ponzi schemes and OTC stock manipulation and fraud on elders and stuff, and then the pro crypto being unregulated. You can’t have your cake. You need it too. You can’t be Coinbase and benefit from all of the credibility that comes with being listed on a major US stock exchange and all of the credibility that grants you around the world knowing that you’re regulated, that you’re audited, that you have analyst coverage, all this stuff, and then on the other hand say, oh, but these other securities that are trading on my platform don’t look there.

[00:28:02] Cory Klippsten: Those aren’t securities. hired some shitty lawyers and they have a framework and they said that they’re not securities, but of course they.

[00:28:11] Preston Pysh: Talk to us about the library ruling that recently happened. Are you dialed in on, on any of that and what the ramifications of it are?

[00:28:19] Cory Klippsten: Yeah, I mean, it’s interesting.

[00:28:20] Cory Klippsten: So it’s not the highest level court, it’s New Hampshire, but there are plenty of examples in the past where, Well reasoned rulings from courts of that level, which is the same level as I, I believe the Southern District of New York, which is probably the one that matters and would set precedent for everybody else if they take up their next case and agree with the ruling on library up in New Hampshire.

[00:28:40] Cory Klippsten: Then I think basically the game is over for these fake decentralized projects in the United States. And the really interesting thing about libraries, you can literally sub Ethereum men for library in all of the findings, and it’s the. There is no fair notice. Granted, they said, no, we didn’t have to tell you before.

[00:29:01] Cory Klippsten: It’s up to you to follow the rules on the books. Nothing changed here. This was a security, you sold it with expectation of creating profit. It passes the Howie test like, and obviously anything south of Ethereum on the on the leaderboard is the same.

[00:29:14] Preston Pysh: So then how would that get applied to the exchange? So if you’re Coinbase and you’re seeing this library case, which I know Gary Ginsler was on CNBC, I think at the end of last week, and he was, he was running around talking about this particular case.

[00:29:30] Preston Pysh: How do, how do the exchanges view that? What do they do differently? Because it seems pretty crystal clear what the SEC’s position in the US government’s position is as to these all being securities at this.

[00:29:42] Cory Klippsten: Yeah. I mean, they’d all have to register as securities and Coinbase would have to register as a securities exchange.

[00:29:47] Preston Pysh: And, and they’re not in the works of doing anything of the sort. Correct.

[00:29:51] Cory Klippsten: I think they’re prepping for that future. There’s too much, too much money involved not to prepare for it.

[00:29:57] Preston Pysh: And, and Bitcoin is the only commodity, correct.

[00:30:00] Cory Klippsten: Yeah, yeah. It’s the only one that’s actually a commodity and obviously the the Ethereum people are trying to line as many pockets in DC as possible and cut as many deals with the bankers as possible.

[00:30:11] Cory Klippsten: Because the natural access of shit coin is banks, government, and shit coins. So they’re trying to get together and do what they can to save this thing. But you know, at the end of the day, it just went proof of stake. This thing is gathering interest. This thing is centrally controlled. It’s getting more centralized every day.

[00:30:31] Cory Klippsten: A small group of people decides its fate, hard forks. It constantly changes its monetary policy all the time. Like this thing is obviously a company. That’s controlled by a small number of people for the benefit of the price of the token that people invest in. Yeah. You know, that ain’t a commodity, obviously.

[00:30:51] Preston Pysh: Cory, I want to talk a little bit about your background. So you used to work at Google, correct? . . And then you came into the space, you said that you went Bitcoin max.

[00:31:00] Cory Klippsten: I got a venture for a long time, first Uhhuh, so I was just doing like normal startup stuff and cutting angel checks and advising startups.

[00:31:07] Cory Klippsten: And it was like the number two guy in an ad tech company from like 2013 to 2015 after leading Google. But yeah, I mean, way back in the day, going back, so I, I did the, the broadcast undergrad, I reported while I was still in school. I was on the local NBC station, decided not to do that, and went interned at Microsoft and went to work for Microsoft instead.

[00:31:26] Cory Klippsten: So that got me out to New York. I was at Microsoft, then I was at Morgan Stanley doing private client marketing, basically. . , . . So putting together all the newsletters and presentations and videos for all of their wealthy clients, including the high end of the dean, wetter clients that had just come over.

[00:31:39] Cory Klippsten: Then I went to B School, university of Chicago. Back then it was the, the other gsb, now it’s Booth, but I was there from oh two to oh four and then I went to McKinsey and Company did management consulting for a couple years outta New York. Private equity was kind of blowing up. I was single for the first time in my adult life and decided to go back to Chicago where I had had a lot of fun in business school.

[00:32:01] Cory Klippsten: Started a private equity consulting firm there and opened up a a 5 million, 12,000 square foot restaurant nightclub on the river. So that was fun for a couple years, which came in handy. The, in the day past week, the , and it came in very handy for the the Pacific Bitcoin Conference. And then, yeah, three more years of management consulting.

[00:32:17] Cory Klippsten: And then I think it was really the the global financial crisis of oh 8, 0 9 that that really made me think, wow, not only having lived through the.com boom and bust at the start of my career, and I think that’s what made me want to get under solid on solid ground and go to B School and, you know, go to consulting and all this.

[00:32:35] Cory Klippsten: Now I’m looking at that and I’m like, oh my God. Like I can’t, I can’t be whipped around. I can’t have my career in my life whipped around by these external factors. Like, I want to have more control. I want to be working in something that’s like, just the where I benefit from the efforts of my labor and my thought and my networking.

[00:32:51] Cory Klippsten: So that made me want to get into early stage startups. I went to Google very much deliberately. First good career decision I ever made. Treated it like internet business school. So I went there in 2011, very much trying to break into the Silicon Valley ecosystem. Networked like crazy from having a Google address.

[00:33:09] Cory Klippsten: Yeah. Everybody would take a coffee or take a call. Met like a thousand founders in VCs in a couple of years outta Chicago and then moving out to LA after getting married. And then, yeah, by summer of 13, I felt comfortable getting into startups full time. So that’s what I’ve been doing. I’m, I’m coming up on almost 10 years now in, in startups full time.

[00:33:27] Cory Klippsten: Been involved with over 65 companies as an investor and advisor, probably pretty intimately with about 30 of those. My sweet spot for about four years straight was being the external advisor directly to a Silicon Valley venture back ceo, working on strategy and fundraising. And so I did that for a long time.

[00:33:48] Cory Klippsten: I helped raise over quarter billion dollars for, you know, seed and a stage startups through about 2019 and I, I started Swan in 2019.

[00:33:58] Preston Pysh: You said in, in 2018 is when you really kind of groked Bitcoin and you realized that yeah, this is different than everything else. What was it that helped you figure that out?

[00:34:09] Cory Klippsten: Well, I mean, I was seeing all the pitches and I was coming from somebody who’d been raising money since 2004 and obviously had had had to sit through a lot of other people’s pitches along the way. And then I’d been investing since 2012 when I was still at Google in startups. And so I’d seen a lot of startup pitches that way, and each time I thought there might be something there as I dug in deeper.

[00:34:31] Cory Klippsten: I realized there was no, there, there that went for, you know, the first thing I did was like one of the first NFT projects and I was like consulting to them after they did their icl. And, you know, they were good guys and they were good technologists and they had all this, all this money and you know, all these smart people around.

[00:34:46] Cory Klippsten: But I just like, when it came down to it, it was like the, it was a business version of my old boss in my bi internship at Vitamin. Darius wouldn’t drink Vitamin Water because it had too much sugar in it. So he just drank Diet Coke. Like the whole executive team just drinks Diet Coke at Vitamin Water,

[00:35:00] Cory Klippsten: And like, I was like, man, there’s the infer has no clothes. And at the end of the day, like when you, when you dig in and you get through all the jargon and, and all the, the dressed up Silicon Valley, Andre Horowits, blogs and the future is crypto and tokenized the world and all the stuff. Like there just wasn’t anything there.

[00:35:15] Cory Klippsten: And then so as my view of what crypto was was like going down, in my estimation, I was starting to get punching through the incredible amount of noise. Because remember in 2017, like there was very little Bitcoin only education out there. It’s not like today. But little by little, I started to find the signal, and I think I’m pretty famous for saying, it started with Jimmy Song at a crypto conference in Santa Monica, I think the beginning of November, or end of October in 2017.

[00:35:43] Cory Klippsten: And it’s kind of a famous story at this point, but I saw this dude on the lawn outside the conference talking to a few people and he had a cowboy hat on. And he was just looking around like with daggers, like he absolutely hated everyone around him. And I found that very attractive. So I went over and got to dome a little bit and you explained to me, you know, the basics of why, you know, none of none of this crypto blockchain stuff meant anything and Bitcoin is the only thing that that matters.

[00:36:07] Cory Klippsten: And started watching him in town and that led to Andreas. And then it led to, you know, obviously SFA and Marty and then Safe’s book came out in like March of 18, I think was. And then there was a big scary gram that came across from Jay Clayton, I think was in March of 18 when he said, yeah, they’re all securities.

[00:36:24] Cory Klippsten: And I was like, bro, I got a family. So then I started going like really deep, and I mean, it was definitely like by the end of March, beginning of April of 2018, that I was like, well, Even from an economic standpoint, it’s clear that Bitcoin matters more than everything else by a factor of like a thousand.

[00:36:41] Cory Klippsten: Yeah. So I think it’s going to be a thousand times bigger than everything else combined in the long run. And then as I just kept on going and going, I just became more and more passionate about Bitcoin and. Tried to like jam a Bitcoin ecosystem fund into the like crypto fund that I was working on at the time.

[00:36:58] Cory Klippsten: And like that just didn’t work. And as always, I go to Turkey for, you know, four to six weeks in the summer. And when I got back from that in August of 18, I was like, yeah, I’m just going to work on Bitcoin full time.

[00:37:10] Preston Pysh: Wow. Wow. That’s awesome. Hey, I want to talk about the conference because I literally just got back yesterday and.

[00:37:18] Preston Pysh: Dude, I had a blast. Like I wasn’t there for more than like halfway through the morning of, of the first day at the conference and I just texted my wife. I was like, oh my God, you gotta come to this conference next year. This is, everything out here is just so cool. Like that’s the only word that I can use to describe the experience was it was just so laid back West coast LA.

[00:37:42] Cory Klippsten: Right.

[00:37:43] Preston Pysh: Just so cool. The basketball court. Dude, the basketball court was so much fun. Like I’m in there, I’m listening to all these amazing speakers. It’s Bitcoin only, which was, you know, that alone just made it amazing. I go out for a break and like the people on the court, it was unbelievable. It was so much fun.

[00:38:04] Preston Pysh: The music, there was smack talking like literally with a microphone. People talking smack as others are playing each one on one. And I was just like, this is the coolest thing ever. So talk to us about the conference, setting it up. Like what were you going for?

[00:38:19] Cory Klippsten: Absolutely. Yeah. I mean, I think we had one, one motto or one mantra for all of 2022 for the company, and it was Bitcoin, not crypto.

[00:38:27] Cory Klippsten: And basically that one theme that you’ll see us drive for all of 2023, and I think this kind of kicked it off at the conference is Bitcoin is cool. Yeah. Like, and it literally is, it’s literally the coolest thing on the planet.

[00:38:42] Preston Pysh: Cory. Everybody that I passed that I talked to, they were like, this conference is just cool.

[00:38:47] Preston Pysh: Like this conference is so much fun. I’m having a blast. I mean, you’re right there in Santa Monica, California, dude. It was like,

[00:38:53] Cory Klippsten: You’re at the airport, there’s private jets, there’s basketball. The Compton Magic is there. There’s NBA players walking around like the music is amazing. You know, it’s, it’s all the little things, you know, it’s, it’s just we have a lot of people that have thrown parties and put on events over the years and I kind of knew that those people kind of gravitate toward us, I think, just because of the beacon signal that we give out, you know, even, even Yan Pritzker, the, our CTO Yeah.

[00:39:19] Cory Klippsten: You know, author of, you know, my favorite book on Bitcoin. Reverb. The company he co-founded was very social and very content driven and very event driven. And it was all about musicians. Talk about a cool company that was a cool company, you know, and they, they sold for 300 Miller whatever a few years ago.

[00:39:37] Cory Klippsten: But it was all about, it’s a marketplace for for used music equipment. But yeah, up and down the company. I mean, Brady Swenson’s been organizing parties since he was in college. Brandon quit him is a leader of men. Been organizing parties for 20 some years. I mean, everybody at the company. I mean, Kristen Thompson who put on this event, I mean, she’s from Hidden Hills, which is like, that’s like, okay, cool, you’re in Calabasas, but like, are you in Hidden Hills?

[00:40:01] Cory Klippsten: Like she grew up there riding horses and stuff, and she used to bartend on the Sunset Strip, like these people know. Cool. I used to throw a Halloween party with some friends in Chicago every year. That was just like completely free. V i p only invite only. And it was bigger than the Pacific Bitcoin Conference.

[00:40:17] Cory Klippsten: Like I met my wife at a party with 1400 people at it and a two story loft in Chicago with name DJs and premium liquor and cops working security and the whole deal, like this is not new for us. But we like it. It’s fun. You could tell, I think it’s, you could tell was we want to celebrate, you know? And so it’s just, it’s a hundred little decisions that you just dial on and you do this instead of that, you do this instead of that.

[00:40:43] Cory Klippsten: When you have to cut something, you cut this, but don’t cut that. And I think we got to something that, that was really cool. And then, I mean, swan is signal in Bitcoin for a certain type of person. And then you throw in probably like, you know, if there were 1200 people there, 200 of them were probably people that got converted to us because we saved their finances earlier this year.

[00:41:06] Cory Klippsten: They were just like, it was like a pilgrimage. There were people from all over the world coming just to try to meet us because we helped them saved their money. Yeah. So, yeah, we’re already gearing up for the next one. We’ve already sold a few hundred tickets for next year, I believe, dude, I believe. Yeah.

[00:41:21] Cory Klippsten: So we’ve we’ve got it up. Sorry to show, but yeah, Pacific Bitcoin 2020 three.com has the tickets both super discount, I think it’s 249 for GA and like 1499 for v i p and that v p section. I kind of wish that I could have just attended because that was just like the coolest way to watch a conference.

[00:41:39] Cory Klippsten: Let me tell you. It was bad couches all over the place that could just sit. And then the networking, like if you wanted to hang out at the bar, you’re still able to watch the speeches, which I think is huge. So, yeah, I just, it was great, dude. It was, that was,

[00:41:55] Preston Pysh: It was great. It was amazing. Yeah, it was amazing.

[00:41:58] Preston Pysh: All right.

[00:41:58] Cory Klippsten: I’m still recovering. You’re the first adult that I’ve talked to in a normal conversation today. I’ve been dealing with my kids all morning, because one’s sick and the other one’s school got closed for the day. So it’s nice to talk to you.

[00:42:09] Preston Pysh: All I can say is bravo. Like I, I left, I walked in the house, you know, my wife was watching the kids and she saw me roll in and I was just like, beaming.

[00:42:17] Preston Pysh: And she’s like, Well, welcome home. Now you can help me out with the kids. I was like, but you don’t understand. I just came back from this conference. It was amazing. She’s like, I’m sure it was Preston. I’m sure it was .

[00:42:29] Cory Klippsten: But uh, yeah, I went through the same thing. Thank, thank goodness. My wife was able to come for a couple of hours on Friday afternoon and kind of see it and then she and the kids were able to join us for the it was nice meeting them, the IP brunch on Saturday.

[00:42:41] Cory Klippsten: So yeah, it was really nice meeting them. We hope to meet your better half next.

[00:42:46] Preston Pysh: I told her, you have to go. We’re going. You know, my parents can come watch the kids and the two of us are going to go. For sure. Because it was awesome. A blast. Yes. Oh and one other thing, the professor, so I go out there, I had no idea who this guy was.

[00:43:01] Preston Pysh: I go out for a break, I’m outside. Just, you know, you just walk, gravitate towards the basketball court because there was always something happening. So I go over there. Mm. And this guy is playing basketball at a level that I like. You could have shown me a video and like, there’s no way, like all that was real that I just watched, but I was there in person watching this guy.

[00:43:20] Preston Pysh: It was unbelievable. Like how can a person possibly play like that? . . And he is not that tall. Like he’s not that big, but like his, and he’s 37.

[00:43:30] Cory Klippsten: He’s 37. Of course he is. He’s quicker than like any 20 year old and he’s 30.

[00:43:36] Preston Pysh: What, what is his, he’s a great guy. What’s his story? What’s, what’s his real story?

[00:43:40] Cory Klippsten: Yeah, so the professor Grayson Bower is his name. He got famous in the late nineties, early two thousands as on the end one mix tape tour. Mm. So this was like Streetball legends and they built a clothing brand around it and the shoe brand around. I think Steph Marbury was was a spokesperson for them back in the day.

[00:43:58] Cory Klippsten: Okay. Anyway, so he got famous from that and then, and one ended up in other hands and they mismanaged it and basically shut it down. And he had to relaunch himself, you know, probably eight, nine years ago as a YouTube and social media personality. Oh, okay. But he loved doing basketball. He absolutely, like he personally loves editing video.

[00:44:19] Cory Klippsten: Aw. And loves social media, so he is really good at it. And he has a great team, mostly made up of like his homies and like his brother and his cousin and stuff like that. And they just go around and, and shoot basketball related content. But he’s gotten super famous. He’s got a bunch of videos with, you know, anywhere from like five to 50 million views.

[00:44:34] Cory Klippsten: I mean, huge, huge, huge numbers. That’s unbelievable. Staff hosts. It was unbelievable. So it’s a, he’s a super nice guy. Very sort of high integrity, very moral, very smart. I’m investing a lot of time in him because I’m trying to orange peel the hell out of him because Yeah, he just has such global reach.

[00:44:50] Cory Klippsten: Basketball is cool. The professor is cool and he is one of those people that I think should be on the mission. Oh, that’d be so awesome. Yeah. Yeah, so, so he’s here. I really like, it didn’t, didn’t really make any, any sense, I guess, unless from like a branding perspective, but there’s not like an roi. He was one of only two people that we paid to come speak at the conference.

[00:45:10] Cory Klippsten: We paid Alex Epstein’s speaker fee, which was totally reasonable. And then, you know, the professor was probably like way over budget for what we should be spending to have somebody come. But like, I just felt it was the right thing to do. It was, it was, like you said, it brought so much energy to it and yeah, it was so fun.

[00:45:25] Cory Klippsten: And, and again, it’s a down payment. If we can get the student to read a few books and listen to some podcasts and become a Bitcoin or like, oh my God, he’s one of those people that could really change it. Because his reach is just so, so big and he’s like, I’ve been talking a lot for the last few months about the shelling points of cool.

[00:45:42] Cory Klippsten: Okay. You know, because we like shelling points in Bitcoin, like obviously Bitcoin’s a shell point of money. But the shelling point. A shelling point of cool is something that everyone thinks everybody else thinks is cool. Yeah. So like NASCAR doesn’t make the cut, but Formula One does. Interesting. Right?

[00:45:57] Cory Klippsten: And baseball doesn’t make the cut, but basketball does. And country doesn’t make the cut, but hip hop does things like that in surfing, obviously. So we had a lot of surf. We had basketball, we had the professor. We’re trying to just identify, we’re always brainstorming on like what are the things that everybody thinks is cool?

[00:46:15] Cory Klippsten: But everybody thinks everybody else will think is cool basically. And I think that’s what we need to associate Bitcoin with. Yeah, I like that. Uh, Firemen are a great example.

[00:46:24] Preston Pysh: I like that. I hope he comes. Cory, I hope he comes back next year. I hope you have him back because my goodness, I’m sure everybody that left that was out there that saw him like, I mean, I can’t tell you how many people I’ve told the story to since I’ve come back of just like how incredible this guy was.

[00:46:42] Cory Klippsten: Did see, did you see Ray Ray from the Compton Magic? I did. He was unbelievable, too. Amazing. He’s an incredible player. And he took the mic and was basically like a guest mc for, you know, probably 30 minutes doing a bunch of stuff right next to Dante and Yusuf while the Compton Magic was out there doing their dunk contest and their knockout tournament and stuff.

[00:47:02] Cory Klippsten: She’s amazing. We’re straight up going to sign him for something for real, like he turns 18 in January and can, you know, name, image like this, you can start getting paid. Wow. I already extended and offered it to him and his mom to have him be one of the MCs for next year. Oh, that’s so awesome.

[00:47:21] Cory Klippsten: Cory. Yeah, he’s on Twitter now. Like he, he joined Twitter. He has a hundred followers. I retweeted him today. I put an amazing picture film, trying to do a crossover on the professor, like he’s going to be out there anyway. We’re going to, we’ve orange peeled to the guy who owns and runs the Compton Magic, so he’s the coach and CEO and he is totally into Bitcoin.

[00:47:40] Cory Klippsten: We’re sponsoring their entire coaching staff through the Bitcoin benefit Plan. So we actually we’re sending the Bitcoin directly to his entire coaching staff every month the same way that Swans do and the IKEA stores and all these other people that participate in the Bitcoin benefit plan. So we’re sponsoring them that way, and he’s just trying to orange pill his kids, who will basically, most of them will become at least college famous and he’s got five lotto picks in the last three years.

[00:48:05] Cory Klippsten: So these kids, a lot of times become big stars in the NBA as.

[00:48:09] Preston Pysh: So Cory, we’re going to have links to the professor. We’re going to have links to the Compton Magic. We’re going to have links to Pacific Bitcoin for next year. Swan. Yeah, what? What else do you want to highlight or anything like that before we wrap things up?

[00:48:22] Preston Pysh: And can’t thank you, you enough for coming on, man. This was, this was awesome.

[00:48:26] Cory Klippsten: Yeah, of course. Long overdue. Glad we’re doing it. Overdue won’t be the last time. And thank you, by the way, for always coming and supporting on Signal Live and you know, hard money in the shows that you’ve done with us. So appreciate you.

[00:48:37] Cory Klippsten: I think a lot of people are looking at Bitcoin now and realizing this is something that they’d like to do professionally. So I think you know, Bitcoin or jobs by far the biggest jobs website in the space is a great one to post in the notes. Obviously SWAN posts all our jobs there, and so do I think 50 or 60 other Bitcoin companies and increasingly companies that are looking for Bitcoiners are getting added to it.

[00:49:02] Cory Klippsten: So companies that are run by Bitcoiners and they’re looking for Bitcoiners. I think it’s just a really interesting niche in the job space because there’s so much that’s already said when a Bitcoiner meets a Bitcoiner.

[00:49:16] Preston Pysh: Absolutely. That’s all I have, man. I really appreciate it, that your, your rundown on everything happening right now to at the start of the show was just phenomenal.

[00:49:25] Preston Pysh: But thank you so much for coming on the show. This was a blast and I look forward to doing it again in the future.

[00:49:31] Cory Klippsten: Sounds good. Thanks Preston.

[00:49:33] Preston Pysh: If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for, we study billionaires. The Bitcoin specific shows come out every Wednesday, and I’d love to have you as a regular.

[00:49:46] Preston Pysh: If you enjoyed the show or you learned something new or you found it valuable, if you can leave a review, we would really appreciate that. And it’s something that helps others find the interview in the search algorithm. So anything you can do to help out with a review, we would just greatly appreciate.

[00:50:02] Preston Pysh: And with that, thanks for listening and I’ll catch you again next week.

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