Fireside Chat: Cameron and Tyler Winklevoss - TOKEN2049 Singapore 2023

um good to see everybody again it's good um so we were going to talk today I think about uh crypto friendly jurisdictions and so on around the world um and there's one way to sort of kind of get the conversation started uh you know one one thing I thought a lot about are blockchains as digital governments in the sense that they have a system of property rights and contract law and identity verification and so on and so forth that people can opt out of a current government and opt into that as a government right and so so some governments are okay with that and some are not and some are fighting it and some are with it and so would love to get your thoughts on that and then we'll go through a list of crypto friendly jurisdictions and get your thoughts on pros and cons and so on yeah I mean uh crypto is this money layer on the internet right and so it's really important how it's regulated and how it interacts when it goes into Trad Phi or the Fiat banking system and uh not all jurisdictions view it equally right and you know it's also the we talk about the separation of money in state and as you mentioned uh crypto is very much opt-in it's not forced or coerced or there's no legal obligation to use things like Bitcoin it's all emergent involuntary which is very powerful when you think about it because other forms of Fiat money you're basically forced to to use it and often yeah exactly I mean we're consent as opposed to coercion right like in in Money's been the purview of the state and it's been used to control populations for a very long time and so Fiat is by decree it's by Fiat you must accept our money we pay your taxes in in US dollars if you're a merchant except US dollars or you go to jail if you don't like US Dollars you can talk to our Navy or Air Force and um we'll make you like it whereas of course Bitcoin is organic it's it's free it's supply and demand there's no coercive it's totally consensual money you know it's important that you say that because there's a lot of macroeconomics textbooks about keynesianism and so on but the theorems in them are actually established by you know it's not uh it's it's M16 that backs a dollar and it shot 256 that backs our space right you know and that's just a fundamentally different way of thinking about it right like like whether it's violence or cryptography um the uh you know I wanted to go through a list of jurisdictions just kind of get your views this is useful for people in the audience thinking about where they're going to build their businesses where they might expand them and so on and so we'll maybe start with within the US and then outside it and sure my general mental model and you guys tell me if you disagree is that DC in particular and other large centralized governments are generally negative unfriendly ish to crypto generally but small governments or dissident governments or individuals are often friendly to it right and so for example within the U.S Florida Texas uh why don't we start there I think that they've done fairly well yeah they're Florida Texas are pro-crypto so there there are states that are friendly to crypto Wyoming New York historically um but also the federal level the SEC has been incredibly antagonistic they haven't created rules in a way to comply but they've also gone out and sued people so there's there's no care and it's all stick and there's no Clarity and they'll tell you it's it's actually pretty disingenuous because they'll say coming in register but it's not possible to register um oh yeah right right they do this thing where it the whole thing it's so good that we have our own microphones today that we have our own social media because with traditional media what would happen is the regulator would just say oh all they have to do is fill out a form on the website the journalists would report it and you'd think that it worked kind of like the DMV where you just fill out some forms and you're done yeah yeah but it's not like the DMV it's like a moving obstacle course that moves in front of you whatever you try to do and they try they're very active attackers of the space as opposed to like passive form filling but they mislead the public about that intentionally with like the the patina of bureaucracy uh of dispassion bureauction but the actuality of a very negative take on the entire space they don't want the space to exist like against what they want to right and it's not it's kind of ironic that the regulator can mislead the public without any repercussions but if a company misled the public you you know get into a lot of trouble um but it's as if the SEC has really they've given up they don't actually have a vision on how to regulate the future and so they're just trying to basically slow down the future or stop it right via regulation through enforcement um so it's like you have to ask yourself why aren't they creating rules and regulations and I think it's like they just don't know actually maybe they don't have a vision or a sense of what that should look like and they can't keep up with with uh crypto and Ai and they're being relegated to irrelevance like very very quickly and the cftc is just completely asleep at the wheel Yep they're letting the FCC um you know run all over their Turf and they're just you know nowhere to be seen it it's also totally nonsensical so if you're a company registering as a security the forms if you will on the web don't even make sense if you're ether you don't have a board of directors you don't have audited financials you don't have a business activity that makes sense that you can register so it's way square peg round hole for cryptos to register as Securities and securities can only be bought and sold by broker dealers so peer-to-peer transactions payments all the utilities that cryptos are used would be absolutely useless if they were Securities so it's it's nonsensical it's disingenuous it just doesn't work and it'd be really easy to come up with a framework that did work but why they won't um it's hard to understand it feels like it's completely political it's not about Capital formation investor protection Innovation the consumer none of that's in the dialogue it's all about political Game of Thrones in the swamp of DC which is right really sad we don't think it will last forever but that's the state of play in the U.S right now on the federal level so even if you have a home on the state level the federal level because of federalism the SEC can sue you even if Wyoming says you're good your business is lawful the federal regulator can do it so it's been pretty confusing yes the good news is that with for example other laws like around medical marijuana or sanctuaries they're whether you agree with those or not there are precedence for state level Disobedience of the federal government right and to an increasing extent we're seeing that on many other kinds of issues and that may also be the case here uh for example DeSantis has talked about uh within Florida having State chartered Banks Bank crypto companies right and you know one of your things that you mentioned there and of course there have been so many millions of digital trees felled you know talking about whether is it a security or is it not right and the thing about this is it's like if there's a will there's a way meaning if they wanted to you know legalize this new thing of course they would and in fact there's part of Congress that is working on something that fits it into the current framework and it's not a security right it's like thing is this car a horse you know okay it moves kind of like a horse it does some of the functions of a horse but obviously it's quite different from a horse right it still runs on roads therefore it's a horse you know but if you want to legalize it you will and if you don't then they'll find some stupid reason to try to ban it and it really kind of comes back to that is they in my view think it's not in their interest and therefore they're attacking it but small countries or small states think it is and therefore they're legalizing it and like sometimes that's reductive but I think that's helpful to get beyond the the lawyering of it to does that faction think it's in their interest go ahead right I mean it's the Howie test is is a very like hard to decipher test and you need like a team of lawyers and the SEC is losing yes they're losing like that needs to be stated like in a big way they're losing major cases they're not even winning with the laws that they you know are the experts in um they lost right is it's a I think it's the 1944 ruling yeah Orange Grove it's pre-internet it's pre-crypto it's you know I mean just think about it they are picking the cases they are essentially making up the laws they have home court advantage in terms of they're the government they always file in DC yeah so it's you know it's a jury of their peers and they're still losing yeah right that's like stacking the deck and bouncing the ball off your own backboard or whatever you know and whatever you want go ahead and they're also bringing cases that they know they probably won't win and that's a change for the SEC and the government has like an asymmetric Advantage they should never really be bringing cases they don't feel 100 confident about right especially when you bring it against um a private individual or a corporation that doesn't have the resources and so I think it's just fundamentally wrong what they're doing um the government has the upper hand they should never be Opera trading in that manner they should be creating rules and giving people like a happy path and if people fall outside that and don't comply well then sure bring the full might of the government down and enforce the law but doing that in a way where you know you're going to score losses it just it's a complete waste of resources and taxpayer dollars yeah it's just it's just um deeply Un-American on a fundamental level I I agree with that and you know so now the good thing is the you know most of the world is not American so we have 96 of the world that we can still have a market in as we also fight the battles within the US and of course there's pro-freedom Americans and so on and there's the Wyoming Dow law and the Tennessee law in Texas and Florida but let's talk about the rest of the world right so um we've been talking about how small countries in particular um so Palau Bhutan El Salvador why don't we go through those you know I like Palau did the RNs ID Bhutan is just revealed they're doing Bitcoin mining El salvaders made Bitcoin the national currency what have you seen from those countries from other small countries do you find it and what's interesting biology is I think when we first met over a decade ago yes we talked about what country one of the topics was what country will be the first to adopt Bitcoin as legal tender and back then there was only Bitcoin so it wasn't whether it was Bitcoin or ethereum but but um this is a topic we've been talking about for for over a decade and some countries like El Salvador have already taken that leap and I think it's going to be to their big benefit in the long term what's interesting about it is if we had had a list of Draft picks I remember that exact conversation this is literally 10 years ago when back when it was this crazy think about new currencies is to think about new countries today you know in a sense right so 10 years ago when we had if we had made a list of Draft picks and rank the countries of the world El Salvador would not have been high in the list at that time right uh and it was just being like a random thing it'd be like saying I don't know uh Central African Republic which is also potentially going to do it or Panama was also going to do it and I think that there's something to that which is the guy who's coming from out of nowhere has a higher risk tolerance and so they have less to lose often what are they going to lose you know well they have the world to gain right and uh and so that's why I think these small risk tolerant countries individual entrepreneurs whereas the big centralized bureaucracies that have a lot of power and don't want to give it up to crypto those are the ones that might fight it the most I'm not sure yeah I mean the the administrative state is in business for itself right ultimately and the U.S has gotten really complacent and they think because they won web one and web 2 that of course it's the us is going to win web3 but not so fast um the world is mobile companies are in the cloud um we're decentralized and all over the world and it's it's a different you don't just have to be in Silicon Valley to make it or build build something great um you can be anywhere in the world you could be in Singapore and whatnot um and so it's just you know it's a team that has won a lot and it's just complacent the US and they've been on top since basically World War II won the Cold War um and they think that that's just going to be the status and and think of the people who rule the US yeah the Great Line it was like medals that you carry to your next meet which was that it was uh we did a podcast you said uh gold medals get really heavy if you carry them right right if you're them in your pocket to the next race yeah and I think that the we had a coach who said told us that anecdote right um if you look at the the ruling class in the in the U.S it's it's a you know Boomers oxygenarians who who think of the world through the lens of the Marshall Plan right and that all Global Currency is settled via the US dollar and that's that's under attack in a big way and I think that complacency is really the word to describe that as Tyler was mentioning like the US One web one and web 2 and thinks there's a lot of people that think web3 is just inevitable it's going to happen and it's just not the case because of the cloud and we can all vote with our feet um in web 2 you had to be there because you had to be there you had to physically be around the ecosystems and crypto where is crypto it's decentralized it's everywhere um there's no I don't think there's uh really a natural Hub yet I think Singapore is vying for it and and in a really good spot where a lot of the Innovation is going to be happening here that's why this conference is here it's no coincidence right right yeah I mean I think crypto deeply threatens the power of government which I think we all agree is probably a good thing and we're seeing limiting government limited government right we're seeing um government abuse that power the SEC now the SEC when it sues a company it's like a rite of passage it's it's like oughta if you haven't been sued by the essay at this point it used to be a big deal it used to mean something used to mean like maybe you're doing something wrong now right probably doing something right as an example uh can I get a fire Gary Gensler from the crowd that wasn't that that was you can't get a louder one okay but still pretty good in in many places I'd be like oh my God Regulators but the fact that we actually have a totally parallel conference and a parallel media and a parallel group of people that actually all know that that rule is illegitimate is actually 50 of the way towards defeating them you know because uh you're not supposed to be able to dissent right as you said 10 years ago you're doing something wrong now you're doing something right well yeah and Twitter's so good at this right I mean there's there's clips of Gary gantzer saying there is no regime to regulate crypto and then I don't know six months a year later he's saying oh no we have it come in and register the laws have been around for eight years right so you see that contradiction you know on Twitter wherever and it just loses credibility you know one thing I've been thinking about and uh you know there's just like a group of folks I was just saying with here and I said how many of them are American citizens none of them raise their hands right but you know we've we've talked about okay do people share you know it used to be people would talk about like Europe and European values and and like Christendom and so and so forth then as America Rose and people secularized people will start talking about the West in Western valleys and whatnot and I kind of think that that's actually now 20th century and that now we really are talking about if you're in Dubai you're really talking about Western values no but there is still something in common that we have with them they speak the language of technology and capital and so and so forth and I think what that is is internet values I think that's actually what everybody here shares it's free speech it's free markets it's voluntary it's entrepreneurial it's Global uh it's um you know the right combination of I think meritocratic and diverse or whatever you want to call it right yeah and it's Pro-Tech as opposed to being anti-tac and focused on holding on to the present or rolling rolling it back into the garage you know yeah I almost think of it a little bit like web one values when the way you lay there sort of the the Utopia idea of the open internet of web one and and what people loved about it obviously web 2 is more dystopic and a hellscape of five companies but that's what uh you know web 3 is to do is to bring us back to right web one and you know it's probably it's not it's not happening in in the US right now there is a there is a flipping we're we're leaning in more to our APAC region for growth we think that's the growth of Gemini we're not leaving the us but uh there's so many headwinds that um you know APAC and other regions are really going to be where we're going to grow over the next couple of years so that's we're excited to be here and meet a lot of you folks right and that's I guess that's the other irony of the US and the SEC being against uh crypto because it's sort of it really um resonates with the founding principles Free Speech yep anti-censorship and all of those good things that make the American experiment so unique and special crypto really embodies that it's way more than just technology it's really a movement ideology I think that's what brings us all together here it's not just about you know the actual asset and whatnot um so I think I think America is hopefully going to find its way back but it's definitely taking a bit of a detour um and you know take someone like Elon to purchase Twitter and what he's done for for free speech on the Internet is a remarkable thing um and it's taking it back to those web one ethos and the web was like a happier place back then right yeah I agree and I think now it's kind of like uh we took web one for granted and now we don't we're trying to actually put those values into encryption into code and protect them so right right replace the guns and the violence with math and cryptography that's right yeah awesome Noble idea yeah well uh when we first met you also I think in 2013 we keynoted at Bitcoin 2013 and uh our keynote was built around this Gandhi quote first to ignore you then they laugh at you then they fight you yeah right and then you win right the Gandhi quote and we're in the fight phase back then we were probably in the in between ignore yeah ignoring um yeah so it took us about a decade to get to fight but we kind of always knew we were going to be here we're in the fight we're fighting the good fight and it's important for everyone in this room to continue that the work that you're doing to get to the other side when we win I mean the thing is you know if you think about it every Bank every government every politician every founder and investor has heard of Bitcoin has heard of crypto to have an opinion I mean it's really it's actually kind of remarkable you know 10 trillion dollars like you know BlackRock or whatever is doing an ETF of course you guys guys were first on the ETF you should have had the ETF if I mean some you know I'm not sure you should put this in your suit you ask your lawyers but had you actually been able to launch the Winklevoss ETF in 2013 and it compounded for 10 years it would have probably been the best performing asset out there right like on the public markets Gold's up 26 times I think since the first gold ETF launched and I think the space would be in a diff we'd be further along in the space yeah and I don't think it would prevent it enabled a number odd that happened right it's just unbelief it would have prevented a lot of the big frauds and issues the SEC has protected the U.

S investors from Bitcoin congratulations the greatest investment of all time is not really working yeah it's unbelievable so all right guys great great thanks thank you