Lawfare Daily: Carla Reyes and Drew Hinkes on the Evolution and Future of Crypto Policy

[Intro]

Carla Reyes: To the extent that disintermediated finance gets rid of the intermediaries, it can actually reduce that type of risk altogether and change the policy concerns more broadly. It's just our laws aren't set up that way at all. Our laws are set up to regulate a heavily intermediated financial industry.

Kevin Frazier: It's the Lawfare Podcast. I'm Kevin Frazier, a contributing editor at Lawfare and Emerging Technology Scholar at St. Thomas University College of Law, joined by Carla Reyes, associate professor of law at SMU Dedman School of Law, and Drew Hinkes, a partner at Winston & Strawn.

Drew Hinkes: The sentiment is that regulators are pulling a reverse course and looking aggressively at ways to embrace the policy that is being kind of imposed on them from top down by Trump, which is, we want to be open for business. We want crypto to be based in the United States. We want to keep things like mining. We want to keep this in the United States.

Kevin Frazier: Today we're talking about crypto policy. In particular, we explore how and why crypto policy has shifted since the Obama administration and what lies ahead as the SEC, CFTC, and White House adopt a pro-crypto stance.

[Main podcast]

Well, let's go ahead and dive in because there is a lot to discuss about cryptocurrency policy in the early days of 2025. Folks commonly discuss the notion of policy experiencing some pendulum swings; well, in the case of crypto, it seems more like a rollercoaster like experience of just loop de loops, crazy turns, and twists that no one expects. I'm really glad Drew and Carla, you were able to join to help make sense of a whole confluence of events.

So Drew, before we dive into some of the more recent twists and turns, I'd love to just get your overview of what crypto policy looked like under the first Trump administration. Folks may recall that back in that initial era, it wasn't uncommon for the president to express some concerns about the volatility of crypto, some questions about whether it was a thing worth going into; of course, things have changed, but we'll get there in a second. Can you flesh out what it looked like during Trump One?

Drew Hinkes: Sure. Thanks, Kevin. To think about really sort of the pendular swings that you suggested with respect to crypto policy, we actually have to go a little bit further back into the prior administration, where in 2012, there was literally nothing from the government about digital assets at all. In 2013, we started to see some of an approach in the form of guidance from FinCEN, at Department of Treasury, determining when, when some folks may need to register as a money service business under federal law and we got some very early tax guidance as well.

The first Trump administration which started in 2017, sort of coincided with the ICO boom, and under Trump, we started to see the SEC really dig in their heels and get involved in digital assets. First they started with a Rule 21 report, which was giving sort of information into the market, and then it started to progress into basically stipulated consent orders where people would stop some activity and then gradually it moved into enforcement actions under Clayton.

We also saw under the first Trump administration, the first tax guidance that in my view was very aggressive and somewhat damaging to the industry. And so, at the tail end of the Trump administration, we saw public tweets. Both from President Trump and from Mnuchin, who was in charge of Treasury at the time, taking a very critical view of digital assets. So that, that's sort of the progression from Trump. It kind of wasn't an issue that hit the presidential radar, and then toward the end of the administration started to be a thing that Trump himself came out on negatively.

Biden's administration started off with some hope primarily because the incoming chair of the SEC, Gary Gensler had taught crypto-related classes at MIT and there was some suggestion from his views expressed as a professor that he was going to take a more moderate view than Clayton. Those hopes were dashed pretty quickly when the SEC under Biden and under Gensler took a very aggressive view, sending out a large number of Wells notices and subpoenas and bringing a large number of enforcement actions, often using novel theories or novel interpretations of a law that hadn't really been suggested.

Likewise, under Biden's presidency, we saw what appears to be some concerted action by banking regulators to make it difficult for businesses that are engaged in digital asset related activities to obtain basic banking services. And we saw a number of other regulators start to weigh in on digital assets, in some cases kind of expressing concern, but not doing much or in other cases, bringing their own enforcement actions.

So under the Biden presidency, we saw some of the skepticism and some of the aggression toward digital assets that we started under the Trump administration really get turned up to 11.

Kevin Frazier: Thinking through the need for regulation in this space, Carla, can you walk through why Chair Gensler became this sort of worst case scenario for pro-crypto folks? What were Chair Gensler's rationales for putting his foot down with respect to these digital assets? What are the concerns here? Why not embrace a more kind of permissionless regulatory scheme or perhaps a regulatory sandbox or something like that?

Carla Reyes: So there are a variety of policy concerns in the capital market space that might be implicated by cryptocurrency blockchain industry. I think Gensler used all of them sort of when it suited him to be honest. Some is about investor protection. Some is about illicit finance and stopping scams. Some is about monitoring transactions. Some is about systemic risk.

And I think the emphasis often was on, outwardly at least, was on consumer protection and systemic risk, a worry about merging the blockchain industry with traditional finance and the risk that that might pose. I think that's why you saw a lot of narrative after the failures of Celsius, FTX, etc. around see, look what we prevented; this could have hit the traditional finance system, but we stopped that systemic risk from interacting, interacting with us.

But I think those are the policy concerns, the concerns from the industry—and not all of them, I mean, most of them are traditional policy concerns that are valid, right? People do worry about consumer protection and systemic risk and illicit finance, like those are real policy concerns.

The problem for the industry under Gensler was that he took the position that every single blockchain related token, cryptocurrency, art, whatever, was and is and probably will always be a security, and then made up terminology to reflect his view, like crypto asset security. And it left everyone in a bit of a bind, trying to figure out how to comply, particularly when it's not clear under the regulations exactly how you do comply if you want to register and make the disclosures. Depending on your technical—the way you've executed the token or cryptocurrency—technically, it might not be possible.

So there was just a lot of confusion and misunderstanding about how the securities law actually applied and then be assuming that it did how you, how you would comply with that when you want it to. And most people want to comply. That's not the issue, despite the narrative pushed under the Gensler administration. But that was not the issue. Not that they didn't want to, just didn't know how.

Kevin Frazier: And what's fascinating is speaking to that narrative, we see headlines regularly about crypto scams. There was a recent report that there were $9.9 billion worth of crypto scams in 2024 alone. We hear about these meme coins coming out. We hear about bad actors evading sanctions through crypto.

So Drew, just for folks who maybe aren't exactly crypto friendly or crypto aware. What is the sort of pro-consumer argument for crypto or pro-innovation argument? Why should we have a mentality of embracing crypto or give voice to that view?

Drew Hinkes: There is a concerning amount of examples of fraudulent activity or bad behavior that has been engaged in using digital assets, and if that's the only thing that you want to hear, then you're going to think that the only thing these assets for are for is for bad activity, but these assets and systems provide us with a bunch of new tools that address long standing problems.

Digital assets provide financial services for those who have traditionally been debanked or unable to access banking services. A 2023 FDIC survey of unbanked and underbanked households found that there are more than 4.5 percent or 4.5, 5.6 million households that were unbanked, meaning that no one had a checking or a savings account at a bank or a credit union. And most of the reasons why people don't do this is either they don't have enough money to meet minimum balance requirements, they don't trust banks, or they don't want to pay fees in order to have to pay for banking services.

There's also according to the FDIC, about one in six households have no mainstream credit, which is down from about 20 percent in 2017. In contrast, 4. 8 percent of households own or use crypto like Bitcoin or Ether. They also said, cited that 14.2 percent of U.S. households, representing 19 million households, were considered underbanked.

So although we don't think about this as a typical U.S. problem, it seems as though it is a problem that—perhaps this isn't a surprise—disproportionately affects minorities in the United States. And for those folks, crypto has been a lifeboat or an effective alternative.

And then you have really interesting governance experiments where there is the opportunity for people using digital assets to collectively act to engage in new types of transactions.

And so really what you start to get is a new kind of financial system that is not subject to the same controls and the same abuse as the existing financial system. You have, you don't have the same risks. You have some new risks, but you are given sort of an alternative to the system, which has generally centrally chosen who the winners and losers are.

If you are interested, or if any of the listeners are interested in seeing other use cases, because right now, so far, we're just talking about financial things. This is not simply financial technology. There is a great website that was prepared by one of our policy leaders in the industry named Rebecca Rettig that catalogs hundreds of use cases that are not expressly financial that are only enabled by, or that use in an important way, digital assets, digital asset technologies.

And so if all you're doing is watching mainstream media, which loves to breathlessly cover the latest crypto failure or the latest hack, all you're going to see is this is for bad guys and it is obscuring a much bigger story.

Carla Reyes: I'm gonna jump in here and say the narrative is also factually incorrect. So TRM Labs just issued their state of crypto report and according to their numbers, the percentage of illicit finance and digital asset transactions is actually sitting around 0.4 percent of overall crypto transaction volume. So 0. 4 percent of all the volume of crypto transactions is what is related to illicit finance.

And so as a factual matter, people don't just use cryptocurrency to launder money or support terrorism. It's used for many other things. Indeed, you know, 96.6 percent of crypto is used for other things. And I think it's important for the facts to actually be out there as well.

Drew Hinkes: That's right. And there was also a report from another one of the often relied upon forensics vendors chain analysis that said that ransomware payments made in digital assets went down about 34 percent over the last year. So the concerns are valid. But the industry understands in many cases that there are things that they can do to try to avoid those becoming the dominant use cases.

Carla Reyes: I also think that the industry views the risks that contribute to the policy concerns in, in capital market space and in financial regulation broadly— I think they view it differently. So for the industry, intermediaries are part of the problem, part of where the risk that causes things like systemic risk happen.

And to the extent that disintermediated finance gets rid of the intermediaries, it can actually reduce that type of risk altogether and change the policy concerns more broadly. If you just think about the financial system slightly differently, it's just our laws aren't set up that way at all. Our laws are set up to regulate a heavily intermediated financial industry.

Kevin Frazier: So Carla, we've heard a little bit about debanking as a potential use case or rationale for greater acceptance of cryptocurrency that cuts against the traditional narrative of crypto is only for Russian oligarchs or something like that.

You actually have another rationale for why everyday Americans might have an interest in crypto being more clearly regulated and available. What's that kind of alternative rationale?

Carla Reyes: So generally speaking we live in a electronic commercial age where the internet has been now—it didn't used to be, but now—has been built up in ways that largely everything you do is surveilled, tracked, and then remonetized through analytics, etc. And now that we transact commercially and with financial tools across the internet that is happening in the finance, for our financial lives as well.

And so if you're a person who values privacy in all aspects of your life, maybe you're the person who says no to all the cookies and you use VPNs and other privacy enhancing tools to navigate your digital life, you might use cryptocurrency for that. Not because it's anonymous and can't be traced, because that's a myth that people misunderstand, but rather because you can take the pseudonymous cryptocurrency.

Which is, if you use it just as it is, lays your financial transactions bare for everyone to see forever, but you can use it through additional privacy enhancing tools—many of which have come under fire under the Biden administration—but you can use those tools to enhance the privacy of your financial transactions online to sort of claw back a little piece of your privacy so that you have a digital equivalent of cash, essentially, where you can, you know.

In real life, you could buy the lawnmower in cash from your neighbor and like no one would trace that transaction and send you ads about lawnmower purchasing. The goal is to have eventually a digital equivalent of cash so you can do something similar in your digital spaces as well.

Kevin Frazier: Cards on the table. I was the guy in high school who my classmate, Brian Damagala, if you're listening, please, please keep me in mind. Brian Damagala says, Kevin, you've got to get in on this crypto thing. I said, Brian, don't you read the headlines? It's not safe. You're going to get scammed. Brian is now sitting on, I'm guessing thousands of dollars worth of money. He's welcome to send me any of those proceeds at any point.

So I'm guessing I'm not the only one listening right now who has a slight degree of skepticism, especially following reports of Bybit recently being hacked and losing about $1.4 billion worth of funds that were on that exchange. Drew, can you help add some nuance to what I'm guessing most folks have just seen a headline, you know, another crypto company hacked, it's just perpetuating that narrative. Why might that not be the most representative story or takeaway from that story?

Drew Hinkes: So a huge headline of a massive hack is not always a great thing, but I think that there are some important nuances for everybody to think about with respect to the Bybit unfortunate incident.

It appears as though there was a social engineering type of attack where a service provider that allowed for certain folks in control of Bybit to sign transactions was hacked, which resulted in the people who were signing the transactions for Bybit seeing one thing on their computer, but the transactions being submitted were actually something different. And the result is a large amount of value apparently going to addresses controlled by apparently Lazarus Group, which is a well known group of hackers that serve North Korea—not our favorite group of people.

Normally, one would expect a massive loss like this to rock markets to cause chaos in the streets and a few surprising things happened. Number one, the assets barely flinched. One would've expected Ethereum to just crash and it, it didn't. This was in part because the folks at Bybit did a lot of very smart things.

They got in front of the problem and they communicated about it immediately. They created bounties for people to, to assist them to track and try to recover assets. Many of the places where the DPRK folks apparently sent the digital assets were places or actors that do respond to law enforcement requests and that have allowed them or will allow the platform hypothetically to recover these assets.

Maybe some of the early messaging by the digital asset world saying that these are immutable transactions and, and no one can interfere really does a little bit of a disservice because at this point there are many critical actors as well in the form of intermediaries exchanges and in many cases stable coin issuers that do comply with law enforcement requests that can freeze assets and that have been quite helpful in recovering from attacks in the past.

The platform itself is apparently not insolvent. It has gone out and it has borrowed assets from third parties and it has allowed for orderly withdrawals. There has not been any issue by any users of the platform withdrawing.

And so what we see here is a few things. We see that there are real risks and that the risks are different than traditional risks. But we also see that a mature actor who's prepared. It can weather this sort of storm and by making some good strategic decisions, not wreak the sort of chaos on the market, as you might expect, if a major bank went down, for instance,

Kevin Frazier: It's good to see an example of, as you noted, the traditional finance or TradFi, right? There are different risks, different responses in these different areas.

Carla, that tees up an interesting pendulum swing we've observed, right? We mapped out Trump one; we saw Biden era crypto; what's happening under Trump two, and why have we seen this pivot to really embracing cryptocurrency? And what are some of those early signs of the Trump administration now being more crypto friendly?

Carla Reyes: Yeah, I think there are a couple of policy concerns that underlie the pendulum shift. One is the privacy concern.

A second is a growing concern that you saw people trying to fight back about in the end of the Biden administration, namely protecting open-source software developers and the freedom to publish code, which actually isn't a new fight, right? There were the 1990 cipher wars around pretty good privacy or PGP, which is now what, what fuels our VPNs every day initially. Back then it was categorized as munitions and releasing it as open-source software was considered a violation of anti-exportation of munitions law, right?

And we saw that kind of a sort of attempt to crack down on open source software developers under the Biden administration as well around things like Tornado Cash, but you saw Van Loon fight back in the courts. We see developer Michael Llewellyn has sued asking for declaratory judgment that publishing code that would enable a decentralized crowdfunding platform to exist isn't a crime, right, because people were worried under, under Biden that being an open source software developer now could subject you to criminal liability for under interpretations of criminal statutes that no one quite expected.

So I think between that push—a push for sort of free speech—and an attempt to claw back privacy rights in a digital age I think those are two things that undergird part of the pendulum shift. I think a shift in economics from the prior four years is a part of that as well.

And I think that in fundamental respects, people should not view changes at, say, the SEC—and I think the SEC said it themselves—it's not a free for all. They're not, not regulating the cryptocurrency space, but rather taking a breath to say, like, if we looked at this from the beginning, like, let's you know, whether we did what we did before—it is what it is. But if we pause and we look at the industry and we look at the technology and we try to understand it at a technical level, how really do our laws apply to the technology and part of that?

And I think part of the shift is recognizing that the technology is not monolithic. There's a lot of variety. We again, we're talking a lot about financial use cases because that's what people talk about. But there's a lot of variety in what you can build on a blockchain protocol, and there's a lot of variety even in the financial use cases of how the technology functions and what traditional or non-traditional risks exist as a result of that function, and whether there is a developer that maintains some kind of control over funds or does not maintain control at all and what that means in a world where our regulations assume an intermediary that controls stuff.

So I think so far we're seeing just like a pause and let's rethink it. And indeed, the executive order primarily regards this, like creating entities or task force to study and consider what the path forward should be along with a little bit of push for privacy.

So the order said something to the effect of like protecting the ability of code of open source software developers to continue to develop. How that happens isn't clear yet, but that was in the order. And a little bit of this economic push for economic prosperity, perhaps through embracing technological innovation, both, I'd say, in blockchain land and in artificial intelligence, right? They were both mentioned. But yeah.

Kevin Frazier: So I have to admit, you two are doing a pretty good job of making me at least more receptive to not just thinking that crypto is going to be used to undercut any future sanctions.

But I am curious, you know, in particular about some of the related efforts that I think folks may also be hearing about and questioning how does this relate to some of the crypto use cases you all have been discussing and some other initiatives of the Trump administration.

So, Drew, one thing that people may have heard about is the idea of creating a national Bitcoin reserve, and I'm guessing most folks see that headline. They keep scrolling because they have no idea what that means, and they just think that sounds weird, I'm probably not going to support that. What is a Bitcoin reserve? What's the traditional case for it? And what is the case against it?

Drew Hinkes: I think we're also trying to figure out precisely what a Bitcoin national reserve would be.

This was an idea that was, it started to float around the Internet and Twitter—or whatever they call Twitter now—over the summer prior to the presidential election. And the basic concept is that the government would buy and hold some amount of Bitcoin or some other digital assets on its books.

To the best of my knowledge, the basic idea is that long ago, U.S. dollars used to be backed by precious metals and that put precious metals in a very privileged place. And it established that our money was hard money, and it also sort of relied upon basic historical underpinnings of value.

And so the idea was maybe we do that, but we do that with Bitcoin and then it sort of causes a lot of really desirable second and third order effects. One is where does the Bitcoin come from? Well, if it's purchased on the market, then hypothetically, there's a lot of demand. And when you have a limited supply like you do with Bitcoin and a lot of demand, that seems attractive to a lot of people.

The next thing that was sort of underpinning this is the concept that maybe people who really like Bitcoin but who are suspicious of government manipulation of currency would find it attractive to have the currency based on Bitcoin. That way there's something that they consider to be harder types of money underlying U.S. dollars. And that could be helpful as well.

So I'm not sure exactly where it came from, but there was this sort of broad discussion of let's have a national Bitcoin reserve. That concept was sort of refined by Trump in some speeches where he said that, or suggested that it would come from holding Bitcoin that was already seized by the government in various enforcement and criminal actions for years and years. Various law enforcement agents or, or in various court processes, digital assets had been seized or forfeited to the government, and generally they go to the possession of the marshals, the marshals have a sale, and the proceeds go back to the government in various ways, but the thought was maybe we can just kind of hang on to the digital assets that we have.

But this, this concept kind of morphed further and Senator Lummis, who was a longtime supporter of digital assets and a crusader in a, in a positive way in the view, in the eyes of industry came up with a, it's called the Boosting Innovation Technology and Competitiveness through Optimized Investment Nationwide, or the Bitcoin Act, which would call for us to reappraise the gold that's held in Fort Knox, sell some of it to finance the purchase of Bitcoin, and then buy $1 billion U.S. dollars worth of Bitcoin, which would result in some part of our government holding about 5 percent of all Bitcoin on our balance sheet.

And to me, the where on the balance sheet is sort of the most interesting question. If the Federal Reserve, which is our central bank, was to hold digital assets on sort of its balance sheet, then that suggests a couple of really interesting things.

The first of which is, are we implying that we're viewing Bitcoin now as a currency on equal dignity to the dollar or other reserve assets? If we hold Bitcoin in reserves at our central bank, does that mean everybody else is going to need to as well? Are we trying to front-run a potential move by BRICS, for instance, to create a competing payment system or payment practice using Bitcoin?

Now, interestingly, Powell—who's the chair of the Fed—came out in, I think, December, maybe January and said that in his view, Bitcoin is not a competitor to the dollar. It's a competitor to gold. So it suggests that or it signals that we're not looking at Bitcoin necessarily as a means of payment or as a competitor to the dollar; it's another reserve asset.

Interestingly, we haven't seen any movement on the Bitcoin Act. Trump's executive order doesn't talk about the Bitcoin reserve at all, but it did come up in the context of another Trump announcement, which is that he intends to create a sovereign wealth fund and that potentially the sovereign wealth fund could purchase digital assets of various kinds.

It's interesting because sovereign wealth funds are usually funded by wealth which is a surplus in the government's production or the country's production, and we run a deficit right now, so it's not really clear exactly where the wealth is going to come from, or which part of the government is going to hold the wealth in the sovereign wealth fund so this remains sort of a unanswered question. So this remains sort of a mushier target, but one that is still definitely on people's radar.

Kevin Frazier: What's really interesting about diving into this idea of a national reserve too is—well first, A+ to the interns who came up with the Bitcoin Act name. That's a tough one, I hoped they used ChatGPT for that because otherwise they were spending too much time on it.

And Carla, I'm keen to get your thoughts on this. Drew, you, you teed this up. So I was doing some homework for this podcast and there are some folks out there who are questioning whether or not Fort Knox actually has any gold, which is a whole other kind of national treasure type question, but Carla, feel free to address that or otherwise add your comments on this national, national reserve idea.

Carla Reyes: Yeah, I'm not gonna comment on the gold conspiracy theory. But what I did want to say is as a Texan, I heard about the idea of a Bitcoin strategic reserve before, like long before the Trump administration was talking or thinking about it in the run up to the election, because it's a thing that states for some time, particularly Wyoming and Texas have been thinking about doing at the state level. And what the way they talk about it goes along with the idea— Drew was saying about it being a reserve asset—is the idea is that the the National Reserve or the state Bitcoin reserve would act as a, they always say a hedge against inflation.

And so at one point I had to, I had to look up what is a hedge against inflation, right, because they just throw it around like everyone knows what they're saying. So in case you don't, dear listeners, an inflation hedge is an investment that protects against the loss of purchasing power due to inflation, which, which can be done by holding or investing in assets that, whose value gains over time.

So the traditional example that Drew mentioned is gold. Another example is real estate or REITs. If you invest in a REIT, the idea is you're investing as a hedge. It's an investment that's a hedge against inflation. And now the suggestion is that Bitcoin could act as a hedge against inflation. And so that's why you would hold some in reserve, right?

It's very interesting. The question about where on the balance sheet it would go, the central bank could be holding it. For state level governments, like the question of where the funds come from to buy the Bitcoin initially. Could it be —so in Texas, they've been, they've thrown around things like you could pay your taxes in Bitcoin and then we just keep it and we would use that bit that any taxes paid in Bitcoin would be sent to the reserve. There's been suggestions like if there were state regulators that had seized Bitcoin, right, you could just shift that Bitcoin into the reserve instead of spending new taxpayer dollars on it, right?

So there are roughly 18 states that currently have bills pending in some stage, including I think South Dakota where it was just sent to committee largely to die, but it's still technically pending. But there are others that have seen it and rejected it. But it's a topic not just in Texas or Wyoming or the states you might expect but across the country, whether they should adopt the state level bitcoin reserve.

And it's an interesting moment to have these conversations both at the state and the national level when the International Monetary Fund just forced El Salvador to decouple their Bitcoin holdings from legal tender, essentially to say it's not legal tender. And so the question becomes, like, if the U.S. moves in this direction, whether it is to simply have it on reserve as a hedge against inflation, or to push towards some other stable coin backed or dollar backed asset use, what impact that will have at the international level, particularly given the IMF's recent stance with El Salvador.

Kevin Frazier: There’s so much for you two to go study, and I don't want to inhibit your further research on all these open questions.

But before we go, we've seen the SEC recently dropped an action against Coinbase, against Robinhood. We've got crypto mom, quote unquote, Commissioner Peirce is playing more of a leadership role, changes in leadership at the CFTC.

Drew, I'll come to you first and then I'll come to you, Carla. What are you looking for in the next 30 days? What do you think we're going to see? What future actions or one future action are you keeping your eyes on?

Drew Hinkes: The sentiment is that regulators are pulling a reverse course and looking aggressively at ways to embrace the policy that is being kind of imposed on them from top down by Trump, which is we want to be open for business. We want crypto to be based in the United States. We want to keep things like mining. We want to keep this in the United States.

Dropping claims against large actors that were based on novel theories, like the suit against Coinbase and Kraken and a few of the other large exchanges, would be a great start. But it's sort of part of the answer, right? Carla did a nice job earlier of laying out we had rules that were not clear, we had enforcement actions based on novel interpretations of law, and simply dropping the claims does not give the industry what it needs in order to figure out how to move forward.

So I'm optimistic that our regulators are going to get us guidance rules, something that starts to direct us forward. And I'm advised that this could be happening very soon, but I believe that stopping enforcement based on non fraud bases is an important step that all of these regulators can and should take.

I think that a across the board clearing out of all non-fraud enforcement actions would be really powerful and help to clear the decks so that people will get a sense of, okay, these theories that were out there are being abandoned and we don't need to be concerned about those.

I am not suggesting that all enforcement needs to stop. I believe that—and everyone would agree—consumer protection is really important. Fraud enforcement absolutely should continue. The really interesting question is which entity, which government actor is the proper fraud enforcer for digital assets? If most of them are in securities, then maybe it's not the SEC. Maybe it's state attorneys general. Maybe it's the Department of Justice. Maybe it's the FTC. There are a number of options out there.

But, you know, the, the Trump executive order that spoke to digital assets actually put together a very aggressive kind of, we can call it shot clock on digital asset policy. Within 30 days, there needs to be a working group. Within 60 days, there needs to be a working group on markets. Within 180 days there needs to be proposals for a market structure bill and for a stable coin bill and for the working group to return a report on a national digital asset stockpile.

So, you know, the president has said he wants things to move quickly. I'm advised that members of Congress are taking these deadlines very seriously and are probably going to be bringing bills to market or to, to the floor of their respective chambers soon.

Kevin Frazier: Lots to look for there. Carla, we'll give the last word to you.

Carla Reyes: I am going to continue to watch the two cases: the Mann and Frye case in Eastern District of Louisiana about an art NFTs and securities law and the Llewellyn case in Fort Worth, federal court in Fort Worth about whether he's permitted to publish code without fear of criminal prosecution.

I think those are important cases to watch for the future development of all open source software. It's not just about crypto. And I, I, I'm hopeful that both the judges—as I think was done in the Fifth Circuit decision in Van Loon—I'm hopeful that the judges will continue to take an approach that separates code from law and that the, our regulator and legislature friends will do the same.

I hope that to the extent Drew's right, and they issue new rules, that these rules are technology neutral, that they focus on function and when function fits the auspices of the law and causes the policy risks they're actually concerned about, because I don't think that's what the approach up to this point has done, it has not done that well

And I'm quite hopeful that the regulators and legislatures will continue to learn more about the technology so that they can understand what the functions are and regulate functions properly where functions require it and leave the code alone where the code does not perform those functions, where the code is just public digital infrastructure that anybody can use, then I think it should be preserved as a common space for open access much like the internet protocol or your email protocol that allows you to send emails all day.

Kevin Frazier: Well, I think we've got a great podcast here and maybe even a better bumper sticker: leave the code alone. Listeners, please, please cite this podcast if you do it.

Carla and Drew, thank you so much for joining. We'll have to leave it there.

Drew Hinkes: Thank you.

Carla Reyes: Thanks.

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