The Road to the Supreme Court: Civil Liberties, Privacy, and Impact - Marisa Coppel, Jeff Roberts

of our members in on the hill mostly doing federal policy but some State policy too and I'm joined by Jeff John Roberts from Fortune I'm fortunate as crypto editor uh East Denver is a show as usual so thanks for your patience but that's all part of the fun um I guess let's just go right into it um you know Gary ginser have you guys heard of Gary again so you probably have um my take on it is there's a bit of a policy and Regulatory vacuum in Washington DC so you've got this guy named Gary gentzer who is Hillary Clinton's Bag Man he's very ambitious he wants to be treasury secretary and he's kind of out to Nuke crypto that's kind of a simplification obviously some things happened FTX not good and so on but um I'm gonna go to Marissa who's a policy DC expert and just please tell us what is up with Gary Gensler so how many of you okay cool Gary Gensler is the chair of the SEC and um he has gone on a he has a pattern of regulating the industry by enforcement so I'm sure you guys have seen many of the headlines lately or some of his fun videos that he likes to put out comparison okay um but his role is basically to regulate the Securities industry and with crypto you know some assets could be classified as Securities While others could not be but instead of making some sort of rule making or guidance he's just decided that they're all Securities and he's been doing that through the court system so it's I mean it's interesting we are um actively engaged in staying up to date we've written we meaning the blockchain association has written an amicus brief in the Ripple lawsuit and then also in grayscale and most recently in the wahi case which is uh the most in my view egregious example of how the SEC is regulating by enforcement they've named nine token creators in that lawsuit but not named them as defendants in the lawsuit so those token creators have no opportunity to be heard on the issue Marissa is that the um uh the tornado cash case that's the wahi case so it's the case that is um it's an insider trading case uh one coinbase former coinbase employee and two other individuals but the tornado cash one is also very interesting yeah and I mean this is sort of what's going on is that he's sort of at the side saying assuming there are securities but no court has said which is security it's clear Bitcoin is not a security ethereum the SEC earlier said is not but now it seems like dancer is trying to pull everything and Define it as a security even stable coins and you know I'm a former lawyer myself and I just don't understand the stablecoin thing how you get make a profit off stable coins I don't get it but you know is that sort of what's going on yeah I mean it's interesting too because the SEC as an agency they have a notice and comment procedure where the public has an opportunity to engage with the agency and they just aren't doing that so they issued guidance regarding icos uh four years ago I think it was and since then they've been completely silent so it seems like now especially with stable coins they're just trying to grab as much jurisdiction as they can and oftentimes these cases end in settlement so it's like a court basically like rubber stamps the settlement it's there's no it's not presidential in a sense but the SEC is like outlining these rules without going through the lawful process yeah and I want to get to uh tornado cash in a sec but just politically in Washington what's going on it seems strangely that cryptos now a partisan issue which I think is kind of unfortunate it seems the Republicans are more in favor of like giving crypto more space to breathe than the Democrats are trying to curtail it but even though some Progressive Democrats are in favor of crypto because it promotes Financial inclusion but is that's how it's shaping up and it's this crypto now more of a republican Democrat thing than it used to be I think that it's still bipartisan so just the The General partisanship of Washington and I think that is being mirrored in all different Industries not just crypto but there are some really great Advocates on both sides but you know to highlight on the Democrat side there are some so it's not just Republicans and we like at the blockchain association are actively working on educating new members of Congress since the it just switched um so yeah no I I see that too and I'm optimistic long term but obviously short term it's it's perilous um but I mean I guess what advice we might have some Builders or devs or Founders out here like you know what can they do or not do like you know what should they be careful of like in terms of what they're building yeah I suppose you're building a decentralized platform you know like tornado cash right you know to what degree are you going to be exposed to you know the SEC or even criminal law for throwing a piece of Open Source Code out there yeah well I have to give my little disclaimer first I am a lawyer but not your lawyer um I think like decentralization is a key thing to pay attention to I also think it's very important to have good advisors and lawyers on your team who you can ask these tough questions to because it's so fact dependent and like product dependent um so I wouldn't say there's like one or a suite of advice that would apply to everything but stay optimistic and like hopeful I know the landscape right now in the United States seems a little Bleak but I have hope and there are people in Washington who are working on your behalf to make sure that the regulatory landscape continues to Foster Innovation but keep building that's what I would say and where do you look to for resources though too because I know on crypto Twitter you can say what you want the law to be but the law is what the law is and you know you're from you know white shoe Law Firm practice where I know hourly rates can be north of a thousand dollars an hour and if you're a startup that's probably beyond your means like what are good sort of sites or resources to look for for legal guidance on crypto yeah there are some great lawyers to follow on crypto I mean you can follow me but I follow most of the great lawyers like in the industry so if you're like Jake travinsky who's our chief policy officer he has some great summaries um just like case summaries there's also an account called law Toshi and he's created a open source uh database of cases and like case summaries which I just think is really cool um and very like Falls in line with the uh sentiment of our industry generally but I it's also like good to stay up to date with media articles and Jeff writes some great articles so definitely follow his work and Jake travinsky Jake but Jeff this is Jeff but Jeff is great too Jeff is awesome so follow Jeff's work too um I know the title of this panelists a road to the Supreme Court and obviously Supreme Court like lays down the law and stuff however to get a typical case the Supreme Court takes five years or you know typically um and the leading cases out there I see right now are Ripple versus SEC and what's the security and what's not super interesting like likewise grayscale um you know love them or hate them they have this interesting thing of trying to get an ETF um and then of course there's a tornado cash stuff which I promise we'll talk about but what is like the problem is there's no law out there saying what a security is um so which case should you be watching most closely and when are the courts going to start giving us an answer yeah I mean Ripple summary judgment phase which is like the final stage before a trial and the judge has to rule on it so the judge has not ruled yet but that one might be the first that we see like a substantive ruling on but it's possible that one goes to the Supreme Court it's possible grayscales goes to the Supreme Court I think right now the Supreme Court the justices on the Supreme Court are less likely to defer to agencies which means they're more likely to take power away from agencies we saw that in an entirely different context in the EPA related case but regardless of like what your politics are or views on environmental issues which was the issue in that case I think the theme is that the justices are more likely to take power away from the agencies which could be positive in our case when the SEC is really overstepping its Authority yeah I mean for nerds like us who watch this stuff closely it doesn't matter what your politics are it's like how much power should an agency have the SEC is obviously not the only agency there's you know the FCC and the cfcc and all these things and I think you know some conservative jurists are like these agencies have too much power because Congress is the one that's supposed to say the rules are these things aren't accountable so and you know whatever you think of the merits the truth is the Supreme Court has said no we're going to put you in a way shorter leash agencies including possibly you Gary against sir but you know who knows really what judge you get and how long this is going to take um but finally let's go to tornado cash I mean which I find a fascinating case because the broad Strokes are this was you know a mixer they probably don't want us to call it that but you know or you could put your ethereum into get different ethereum out of and it's open source code um and if I go and host that code am I liable or just just break down the legal issues of turning okay cash first please yeah sure so that one is a really good example of agency an agency overstepping its Authority so ofac which is the agency or the department of the treasury that sanctions uh persons and property and they only are able to sanction persons or property so the issue with tornado cash is that tornado cash is a software and this is the first time that they've placed sanctions on a software and that means that if any U.S person interacts with the software and as you guys probably know somebody can send an asset to your wallet and you don't have an opportunity to reject you know the person sending it it just like appears in your wallet so that would constitute interacting with the software which would mean that you're violating sanctions which is a crime in this country so the implications are huge and there are two lawsuits going on right now that were filed last fall one is being funded by coinbase and then the other one is a coin Center lawsuit so we're closely following those but it raises some really interesting legal issues the one I find most interesting is the first amendment issue which is the freedom of speech freedom to freely associate and that freedom to freely associate is like the key part of the case here if somebody wanted to send funds anonymously to Ukraine to help with the Ukrainian relief and they didn't want Putin to know about it they could use tornado cash to disguise the source of their funds yeah but this doesn't seem like a new thing like tour software I'm old so I remember like the idea of swapping music files using a protocol you know and that was you know people saying it's illegal but you know at some point like this you know tour no cash isn't the first example of Open Source peer-to-peer software right so is there any precedent or guidance what might happen no I mean I think it's like totally illegal for them to sanction oh theoretically think about this could mean that if they are allowed to do this they could sanction something like https which it would be crazy like to not be able to interact with that we wouldn't be able to use the internet there's probably probably better analogies I can make but um that's just the one that came to the front of my mind but I don't think that it's legal what they're doing I hope that the cases turn out in that way um they're filed in jurisdictions that are less likely to defer to agencies so I do have hope and you know it's up to the parties to write briefs that explain these issues in a simple way that's easily understood by a judge who most likely is not familiar at all with crypto um and just finally um forgive me we're a bit short on time because we got started late but you know for people who want to get involved in this I mean you know I don't think you know anyone here is you know able to go Dash before The Supreme Court but if you want to sort of get involved in some ways you're interested you know you want to support one of these lawsuits either financially or with your work or just kind of you know contribute what are the options available to you know people in the crypto Community who want to you know care about this and you know you know have an idea about what's at stake legally and to contribute to it I know that's kind of a funny question but you know if you're not like you know super Insider DC person you know and part of the Supreme Court bar what does an ordinary person do coin centers work if you're not familiar with them they're an amazing you can donate to them if you are so inclined but they um they work on a lot of the core constitutional issues that impact our industry like they're the ones that filed This Tornado cash lawsuit so do whatever you can to support them they also write some incredible thought pieces that really break down the legal issues in a easily understood way so that would probably be my best advice yeah and I'll just you know second that coin Center I know the people there they're sort of good hard-working people likewise blockchain Association and while it's kind of dark days with what's going on out there you know I've been doing this for 10 years I can't believe how far cryptos come you know before you know 10 years ago you know they'd be lucky to find one senator who could Define Bitcoin now you've got a layer of sort of sophistication there and you know I know you know crypto is out of California and borderless but the reality is power is power and I think having organizations like the blockchain association and coin Center translating it to our political leaders you know where and you know Washington DC is like in terms of Technology one of the slowest places because it's run by a bunch of 70 and 80 year olds who you know might or might not use email but that's changing so um you know please give a shout out to Marissa for fighting the good fight and um come find us to on talk and then follow all the good lawyers in crypto Twitter so thank you very much thank you