why the SEC ignored the hawk tuah scam feat. john reed stark

We all know that Haliey "Hawk Tuah" Welch was the face of a memecoin crypto scandal, and most know that the SEC excused it wholesale. What we don't fully know is why it was so easy to get away with it -- in our grand Hawk Tuah finale, Jamie speaks with former SEC enforcement attorney John Reed Stark about how the state of cryptocurrency can do more than sink a fledgling influencer's career, it can tank a whole economy. 

Follow John Reed Stark's work here: https://www.johnreedstark.com/

Come see Jamie on tour for Raw Dog starting next week! https://us.macmillan.com/tours/jamie-loftus-raw-dog/?fbclid=PAZXh0bgNhZW0CMTEAAaf-I3pdBDpG51TvRPCIfkS08847rolEcVNOqDZCUX8Hq9t9sZlX9idj_DI9NQ_aem_niy1HGU3U4vldbC-KP7JsA

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Episode Transcript

Speaker 1 (00:01):
Cool Zone Media.

Speaker 2 (00:05):
Hey everyone, Jamie here with two notes at the top
of this week's episode. First, I am going on my
book tour across the US to celebrate the paperback release
of my book Raw Dog, The Naked Truth about Hot
Dogs next week, and I'm really excited to see everybody. Uh,
please come out if you live in these areas. All

(00:27):
readings are going to be free and hosted by good
friends of mine, and so I will be in Los Angeles,
I'll be in Louisville, Kentucky. I'll be in Cambridge, Massachusetts, Portland, Maine, Harrisburg, Pennsylvania, Richmond, Virginia,
and Pedaluma, California, starting a week from today. Full dates
and details are at the link in the description, and

(00:48):
I would love to see you there. Also, we released
this in a minisode last week, but this is your
last week to send me your stories of times that
you have been the main character or just memories that
you have with the changing Internet. So please send your
stories in voice memo form to me by Friday, May ninth,

(01:10):
that's this Friday, to the following email address small Ice
Resurfacer at gmail dot com, and you just might be
featured on the show. In a couple of weeks. That's all.
And now the grand, grand grand finale of Haley Hawk
to a Welch.

Speaker 3 (01:39):
The sixteen.

Speaker 4 (01:57):
Sixty Welcome back to sixteenth Minute, the podcast where we

(02:29):
talk to the main characters of the Internet to see
how they're a moment in the spotlight affected them and
what that says about us and the Internet.

Speaker 2 (02:38):
And this week we finish our look at Hailey Welch
aka Hawk to a Girl, the main character of twenty
twenty four. After a shockingly fast run in the public eye.
Between the summer and winter of twenty twenty four, Hailey
went from an unknown who was confronted in the street

(02:58):
by wanna be Girls go on Wild style influencers to
the face of a cryptoscam run by Howie Mandel's scumbag
son in law. And whether you like her or not,
that sounds very overwhelming. And if you want to catch
up on what happened with Hailey after this halt to
her career, which was marked by an SEC investigation, a

(03:21):
disastrous digital press conference and.

Speaker 5 (03:24):
Who I'm going to go to bed and I'll see
you guys tomorrow.

Speaker 2 (03:28):
And a long subsequent digital silence, please check out our
previous episode where you'll learn what was happening behind the scenes.
In these months of alleged silence, speculation ran wild that
Haley would go to jail as a result of the investigation.
A few places speculated that she was pregnant or dead,

(03:49):
and many thought she would either voluntarily or just end
up having to return to her normal life in rural Tennessee,
where this time last year, at the time of this recording,
she was working in a local spring factory. And while
it appeared that not just Hailey Welch but her entire
team were careful not to say anything publicly when the

(04:09):
investigation concluded, this didn't stop them from banking phase banking.
One could even say a future episode of Talk toua
while still on Jake Paul's Better Podcast network at this time,
that seemed to want to serve as a what went
wrong kind of thing. I would say calling it an

(04:30):
apology would be a huge stretch, as we unpacked in
our last episode, but more of an attempt to express
some light remorse and get the public back on her side.
Although this episode, as we discussed, still included ads for
cryptosports betting apps and seemed to reach the conclusion that

(04:50):
Haley should be open to trying crypto again, but this
time she should do it smarter. But this episode leaked
in early February by Haley's team nearly two months before
that SEC investigation closed, and it completely blew up in
their faces. Not only is Fayze Banks, a fellow government

(05:13):
investigated cryptogrifter, furious that this episode of Talk to A
came out beforehand. The public was not buying the attempted
mia culpa in the slightest, so Haley and team went
dark online again until late March, the week that TMZ
published the following headline.

Speaker 6 (05:35):
Hawk to A Girl off the hook for hawking mean coin.

Speaker 2 (05:38):
Incredible journalism and that is where you join us today.
So let's hawk back to A. In late March twenty
twenty five, when the second act of Haley Welch's career
was hard launched in the hopes of gaining not just
the forgiveness of the public that her team had defrauded
a few months earlier in an egregious crypto scam, but

(06:00):
also recapture the same excitement that existed around her in
the early days of the Hawk to A meme. She
first teases this in a poorly rendered comedy sketch that
she posts to her Instagram in which she re enacts
all the false rumors that existed around her during the
four months of sec induced.

Speaker 3 (06:21):
Silence breaking news.

Speaker 6 (06:25):
Hailey clearly well to Gosh the hawk To a girl
had died.

Speaker 2 (06:32):
But what is suspiciously missing from this sketch is any
direct mention of said crypto fraud investigation. The only reference
to crypto or a scandal of any sort is a
short monologue joke clip pulled from Stephen Colbert. The results
of the investigation, which were no surprise during a Trump

(06:54):
administration that had literally started selling their own meme coins
pre inauguration, were announced two days later, and the stage
was set for an attempted hawk to a comeback, and
boy were their attempts Hailey and company, which at this
point appears to be somewhat reduced. It is unclear the

(07:17):
size of the team, but definitely consists of her, of
her best friend Chelsea, who was also her co host
on the Talk to A podcast, of a lawyer, and
possibly some managers and publicists. But during this period of
time when they have not been cleared to speak publicly,
they are waiting in the wings to parlay this into

(07:40):
whatever the next chapter is going to consist of. And
what I mean by this is that it was revealed
in late March that they were filming a documentary the
whole time from an Emmy winning streamer documentary factory called Bungalow,
who have released this documentaries about a lot of stuff,

(08:02):
but including some pretty serious topics, Thirteen Days in Ferguson
and Little Richard, I Am Everything being their two most
successful projects. So it's clear that Haley's team cannot wait
to push Hailey, Welch and Hawk to A back into
the public eye after the SEC investigation closes, and so

(08:24):
in the days to come, there are a bunch of
very random feeling announcements made. There's the formal announcement of
the documentary.

Speaker 1 (08:34):
I hope you all been enjoying the crazy stories about
my life unfold on social media. First I was dead,
then pregnant, Now I'm wanted by Interpol and in jail.
Luckily we've been working with Bungalow. Start spilling the tea
and the truth is actually even more bizarre than you think.

Speaker 2 (08:50):
There's also the announcement that the Talk to A podcast
will return with the confirmation of what I had suspected
because of not receiving my talk to A Change My
Life shirt, they had in fact severed ties with Jake
Paul and the Better Network.

Speaker 6 (09:08):
Hailey Welch and Better Holdings Incorporated have mutually agreed to
end their partnership regarding the Talk to A podcast and
wish each other well in their future endeavors. Better and
Welch said in a shared statement the podcast will instead
be produced by Welch's own company sixteen Minutes.

Speaker 2 (09:29):
And as you'll hear, the word produced is quite generous,
but weirdest of all, Team Welch announces that she is
going to have a cameo in an upcoming Glenn Powell project.
I truly do not know any other details about this
and find it very bizarre, but here is a bad

(09:50):
AI generated YouTube celebrity news channel insisting upon it.

Speaker 7 (09:57):
Hallie Welch is reportedly back on the scene and doing
her thing in La La Land. The twenty two year
old meme queen who shot to fame as the Hawk
Tua Girl following a viral TikTok video, filmed a cameo
for Glenn Powell's upcoming show in Hollywood this past weekend
according to TMZ.

Speaker 2 (10:15):
So yeah, Haley's team is really throwing stuff at the
wall here, which, to be fair, isn't incredibly different from
how her career was being run at the peak of
her relevance. But a flash in the pan star making
a cameo in a B movie that's kind of a classic,
that's the tale as old as time. But of these announcements,
the only thing given a date and a guaranteed release

(10:39):
was talk to A And I couldn't help But wonder
I couldn't help it. Wonder what was the new approach
to the podcast going to be and would anyone still
want to listen to it? Because the more time that passes,
And unfortunately this is very common in these stories that

(11:00):
we cover on this show. People were moving on at
the time I'm writing and recording this. Coffee Zilla isn't
making videos about Haley Welch anymore. And while I'm sure
those videos would get decent engagement, my guess is that
he hasn't bothered because algorithmically, when it comes to crypto malfeasance,

(11:21):
he's got bigger fish to fry right now. Here are
just some random clips from the last three months of
his content pumping.

Speaker 3 (11:29):
Dumps, why are they legal?

Speaker 2 (11:31):
Today?

Speaker 8 (11:32):
Elon Musk and Joe Rogan are gonna tell us the answer.

Speaker 3 (11:35):
The whole meme coin thing is, and we're gonna.

Speaker 8 (11:40):
Just jump into it now. I want to say it's
an auspicious day. Not only are the Epstein files about
to be released, we also released Andrew and Tristan Taate.
They're free to leave Romania all because, according to the
Financial Times, the White House and government officials have been
pressuring Romania to let these.

Speaker 3 (12:00):
Poor persecuted influencers go.

Speaker 8 (12:04):
Today I discovered there are AI ads running on YouTube
of me scamming people with AI and crypto. Truly my
worst nightmare reimagined. I thought it couldn't get worse.

Speaker 2 (12:18):
And again, I would genuinely recommend his channel if you're
interested in better understanding how these scams are being pulled off,
and I would also recommend my fellow cool Zone Media
friend ed Zitron on Better Offline. But the point is,
while a really good reporter, coffee Zilla is as beholden
to the algorithm as anybody, and it's possible that with

(12:42):
so much else going on in the world that Hailey
Welch isn't the algorithmic bait that she was six months
ago at the time of this writing. And it feels
horrible to have written that down and to say that
it feels so reductive, and it bums me out. And

(13:02):
I started this show because I think that that is
a very sad tendency. But if you were a person
whose numbers are beholden too relevant current events, pok Tua
didn't carry the same cultural relevance it did by the
time that the SEC and haw Coin settled in March
twenty twenty five, as they had just a couple months earlier.

(13:26):
And that's for a number of reasons. Haley's career burned
bright and fast, and she didn't have a history as
a public figure prior to hawk Tua and didn't have
anything else for people to glom onto. And even less likely,
she went viral, and some might argue went more viral
than usual because it was an election year. And if

(13:50):
the result of that election year is enthusiastically pulling a
scam that someone in the White House would do just
a few weeks later, that's a lot of noise to
yell over. And it's only if you want to. When
I was finishing our first series on Haley and the
Hawk to a saga, she was still, for lack of

(14:12):
a better phrase, taking a nap, and it was intentionally
unclear whether she wanted to forge ahead with a career
in social media or if she was going to take
stock say hey, this year was fucked up, and then
buy a house and pack it in. As soon as
the SEC declared her innocent. A part of me kind

(14:33):
of hoped that she would a lot of people, myself included,
thought it seemed pretty clear that Haley was being used
by some pretty lazy, half assed schemers, whether that be
Howie Mandel's failed musician son in law turned crypto moron,
or Jake Paul, a man who bravely kicked an old

(14:54):
rapist ass on live TV and wasn't even proud of
it for the right reason. The speculation around Haley Welch
was complicated, but by the time Talk to A relaunched
on April eighth, twenty twenty five, people had moved on.
Hailey hadn't gotten any better at interviewing. The set independent

(15:16):
of Jake Paul's Better Network was completely unedited and lo fi,
and while I'd say the only improvement on the show
is fully putting Chelsea in the second chair. Good call.
It is still a really boring show.

Speaker 5 (15:31):
I'm sorry, okay, well, welcome back to another episode of
Talk to Him. It's been a hot minute since we've
been back here. But now where the official owners have
talk to Him and we may or may not have
flowd to London to get a very special guest for you.

Speaker 2 (15:45):
We got Ksi Yo yeall, and as before, the more
experienced in media guests kind of starts to interview Hailey
when she fails to interview them, and unfortunately the guest
whose name you just heard, like Phase Banks, does warrant

(16:05):
some introduction. Ksi or jj Olatunji is one of these
fucking guys too. He started online as a popular gaming
streamer as a history of sexist and racist comments, and
of course eventually parlays the millions of mostly children consuming

(16:26):
his slop into a string of influencer staples. This means
professional boxing, alternative rivalries, and business partnerships with various Paul Brothers.
This means insidiously marketed products to children, and of course
this means promoting a pump and dump crypto scheme. In

(16:48):
early twenty twenty four.

Speaker 9 (16:50):
KSI is one of the world's most popular YouTubers, but
yesterday he accidentally exposed the pump and dump crypto scams
that he promoted. They've been hidden from two years, but
only came out when KSI logged back into his old
Twitter account, saying does this still work?

Speaker 2 (17:08):
And if you're wondering, was that coffee Zilla busting KSI? Yeah?
I don't know how he does it. He's busted everybody,
but crypto scams of any kind don't really come up
in the return of Talk to which, as Haley is
quick to mention, is now owned by her company, not
Jake Paul's.

Speaker 10 (17:28):
This I know is gonna annoy j Poole definitely, but
I'm glad you're free from his grasp. I'm not able
to flourish and be WHOA one of the best podcasts.

Speaker 5 (17:43):
And Butterfly, Yeah, beautiful Butterfly.

Speaker 2 (17:46):
What's the beef with Jake Paul?

Speaker 11 (17:48):
I mean it's been going on for years. Man.

Speaker 2 (17:51):
With all due respect to KSI, and my understanding is
there is very little do The commenters on the new
Talk to A episode on YouTube appear to be in
agreement that his appearing on her show is a sign
that Haley's career may be on its last legs. The
podcast was filmed in London, and the winking in reason

(18:13):
that Ksi as the guest appears to be because he
has a fairly long standing feud with Jake Paul in
spite of the fact that he is in business with
Logan Paul on two of the most disgusting products on
shelves today, those being Prime Energy. Up this morning, there's

(18:33):
a new warning for parents and kids about energy drinks.

Speaker 12 (18:36):
Maybe you've seen Prime Energy on social media.

Speaker 2 (18:39):
Yeah.

Speaker 4 (18:39):
Brandy Smith explains why the drink is getting so much
negative attention.

Speaker 2 (18:42):
Schools are actually banning it and Lunchly the Lunchibles with
mold but.

Speaker 12 (18:48):
Closely because mister Beast is disgusted by his own product, Lunchly.

Speaker 2 (18:53):
And it got worse when this woman bought Lunchley to
try it for the first time and there was mold inside.
This is molded. That's mold and as will become relevant,
gays I is on the similar Paul Brothers path of
starting as a famous gaming streamer. And by the way,
I thought it was funny that he talks about playing

(19:13):
FIFA in a video game as if he is a
professional soccer player himself. Does streamers do that? That was
the first thing you got like really known for.

Speaker 11 (19:25):
Oh FIFA.

Speaker 10 (19:27):
So FIFA is like a football game or soccer game
where you passed the ball around the pitch and then
you put it in the net.

Speaker 11 (19:38):
H No, I did not come home.

Speaker 3 (19:40):
You just played it nice.

Speaker 10 (19:41):
I played the game, yeah, yeah, and then I just
make various videos on it and it just went viral.

Speaker 2 (19:47):
I found that very distracting. What I was saying is
that Gaysi has done celebrity boxing, first against Logan Paul
at the Staples Center in LA in twenty nineteen, but
really outside of knowing that he is also one of
these guys and that it appears that the new strategy
of the podcast is to bring on people who will

(20:10):
not challenge Haley and also do not like Jake Paul,
there's not much to say. The rest of the interview
is about Kosi's career, some awkward flirtation, and Hailey speculating
on what's next for her without addressing why she was
in trouble in her career to begin with. Folks, the

(20:37):
podcast is boring and the episode itself is devoid of
any remaining sponsors, except for surprisingly, Haley's pet rescue nonprofit
PAUS Across America. Honestly surprised they're still going. I hope
they're doing good things. But that is all there is
to report about the returning episode of Talk To. And

(21:02):
worst of all, the episode ends like this, thank you.

Speaker 5 (21:08):
Oh, thank you for coming on.

Speaker 11 (21:09):
Thank you. Of course, is.

Speaker 2 (21:12):
It even talk TOUA if Haley doesn't ask KSI what
he does in bed to make a woman go crazy?
I was not impressed with the return of talk To,
and I was not alone there, because, as I'm writing this,
around a week after the episode launched on YouTube, it
only has about sixty thousand views, compared to the height

(21:34):
of two point eight million views while on the Better
Network just six months ago, or Coffee Zilla's four million
views for criticizing her just two months ago. The episodes
of the podcast that have come out since have done
even worse, and while they do reveal more information about
what Haley and Chelsea were pursuing during those months of

(21:57):
the SEC investigation interim, including a reality show, there's not
much to go on. But as a loyal listener, I
have consumed every goddamn second and I wanted to just
share this sentence that made me laugh so much from
guest Chanelle West Coast, but I really wanted to collaborate
with Drake.

Speaker 13 (22:16):
I just did Drake's dad's podcast like two weeks ago.

Speaker 2 (22:19):
Actually, his dad his dad's a podcast.

Speaker 13 (22:21):
Yes, his dad is the funniest guy ever. You guys
have to meet him.

Speaker 2 (22:25):
That is the worst brag I've ever heard in my life.
But that's about all I have to say about the
podcast outside of that. And that video only got twelve
thousand views in two days. So Hailey's company, which I
will remind you is called sixteen Minutes, now owns the
IP or talk to A. But if this is any indication,

(22:51):
does that mean anything? Honestly, I don't think so. And
so while it's safe to say that Haley has technically
survived the court of public opinion and that she didn't
experience a legal consequence, I'd be surprised if she manages
to get the relevance she had back without the support

(23:11):
of a big internet piece of shit goliath like a
Paul Brother propping her up. While I very much doubted
that the hawkcoin team would get into much trouble given
the administration and the increasing lack of regulation around crypto.
I did want to understand how this was possible, because

(23:34):
for the time being, this is a grift that has
reached the highest levels of government. So are we going
to see more of it? And how, besides staying the
fuck away from crypto, can we protect ourselves when we
come back. Investigator John Reid Stark explains why there was

(23:54):
never a chance in hell that miss Haley was going
to jail. Welcome back to sixteenth minute. I fell asleep

(24:17):
on a plane this morning and was woken up by
the person next to me because I was literally man
spreading what who am I when I go to sleep? Embarrassing?
I am sorry to her. And here is my interview
with John Reid Stark.

Speaker 12 (24:33):
My name's John Stark. I'm an attorney, a cyber attorney.
I've been practicing law for but thirty five forty years now.
Went to Duke Law School, then started working at a
law firm, and then I joined the SEC in nineteen
ninety one, and then I went on a detail to
the US Attorney's Office and did street crimes, guns, drugs,

(24:57):
and domestic violence for a little bit that I came
back to the SEC and started doing cyber in nineteen
ninety four, became the Special Counsel for Internet Projects at
the US Securities and Exchange Commission in the Division of Enforcement,
and then started teaching securities regulation and technology at Georgetown

(25:17):
Law School around that time.

Speaker 3 (25:20):
And after that it just kept growing and growing and growing, and.

Speaker 12 (25:25):
In nineteen ninety eight they decided to create an office,
and I was the founder of the office, the Office
of Internet Enforcement. It was a first specialized group in
the history of the SEC. And that was nineteen ninety
eight and I was made the chief and threw that
office to a great group of attorneys, enforcement lawyers and

(25:47):
ran it for about eleven years, a little more than
eleven years, and then I left there to lead the
Office of Stras Friedberg, which was a data breach response firm,
cybersecurity firm, forensic digital forensic firm, and ran their DC
office for most of the next five years. And then
Stras Freedberg got bought by AON, so I left and

(26:11):
started my own firm, John Reed start consulting in twenty
fifteen sort of does anything.

Speaker 3 (26:16):
I don't have anything to do with crypto.

Speaker 12 (26:17):
I don't have any financial interest in crypto, nothing short,
nothing long. Started writing about it in twenty seventeen because
I was doing a lot of ransomware cases and I realized,
but for bitcoin, there would be no ransomware. Ransomware is
when a firm gets attacked and they have to pay
in order to get to decrypt their data or to
stop a company a cyber attacker from name and shaming

(26:40):
them from publishing their data. So yeah, you realize that
suddenly these payments which were growing. So I started writing
about it in twenty seventeen when President Trump, Maxiine Waters,
and Hillary Clinton had one thing in common. They all
hated crypto and thought it was a terrible thing and ridiculous,
And we're in on the record saying that they didn't
want anything to do with it. So I thought it

(27:02):
was a non partisan issue back then, but it's not anywhere.

Speaker 2 (27:05):
First, well, thank you so much for being on our
hawk Tua. I really appreciate it. In the last couple
of months, you know, as Trump has become you know,
nothing but pro crypto. Of course, it's not really talked
about very much that this is a change. Can you
sort of walk me through what that change looked like
and why it happened.

Speaker 3 (27:24):
Yeah, it was.

Speaker 12 (27:25):
It was something that I predicted a couple of years back,
because the crypto community, it's if not for the fact
that they love crypto. I love the community, and there's
a lot of irony in crypto, which you I think
would appreciate more than more than most people. Is for example, right,
crypto was created to decentralize after the financial crisis of
two thousand and eight. Crypto was said, let's take away

(27:47):
from the power from the big banks and let's find
something where we can go peer to peer ourselves. We
don't need these big banks in the middle. Well, what
do we have today. We've replaced the big banks with
a bunch of big crypto companies.

Speaker 14 (27:58):
So that's right.

Speaker 3 (28:00):
The number two one. The President talks about.

Speaker 12 (28:02):
This new bitcoin reserve, that strategic preserve that the government's
going to have.

Speaker 3 (28:08):
But if you look into.

Speaker 12 (28:10):
The details, what's in that reserve are assets, crypto assets
that have been seized in accordance with asset forfeiture laws,
which any libertarian will tell you asset forfeiture laws are
the most anti libertarian laws you could have, in the
sense that this is crypto taken from people who've been arrested.

Speaker 3 (28:28):
They haven't been convicted.

Speaker 12 (28:29):
Of anything, and their crypto was seized like any other
asset forfeiture. It's never an area, as a former criminal prosecutor,
that I thought was appropriate. So sure, anyway, you can
see lots of different ironies in crypto, but the idea
was that I think initially that this crypto was going

(28:50):
to undermine the dollar, that it was. No private currency
has ever worked, and the intermediary is critical for the
consumer and it's critical for the government. There's about a
dozen or so anti money laundering laws that essentially tell
you that you have no right to financial privacy. And
I don't like that, and you don't like that. No
one likes that. But this is the reality, and the

(29:11):
Anti Money Laundering Act, the Bank Secrecy Act, the USA
Patriot Act after nine to eleven, this is how the
government gets bad guys. They cut off the way that
they can use and spend money. And that means that
you go into the bank and if you withdraw ten
thousand dollars more than ten thousand dollars, that'll trigger a
suspicious activity report.

Speaker 3 (29:30):
If you do something weird, that'll.

Speaker 12 (29:31):
Trigger a suspicious activity report, and your activities will be
reported to the Financial Crimes Enforcement Network and a criminal
prosecutor or the SEC might start looking at all your
financial records because of that. And that's just that might
be something you disagree with, and I respect that. So
you can go to the government and say, hey, let's
change those laws. But those are the laws that are
on the books right now. So crypto essentially bypasses all

(29:55):
of those laws. So, as someone said in one of
my spaces the other day, I love crypto. I can
take five million dollars worth of it and go on
a plane and go anywhere in the world that I
want and no one will know the difference. And so yeah,
well that's not supposed to be allowed. So that's why,
you know. So I think with respect to crypto, most
people were against it. It's created incredible amounts of crime,

(30:17):
drug dealing, child pornography, human sex, trafficking, ransomare attacks. North
Korea has a stolen more than six billion dollars worth
of crypto and is using it to finance their nuclear
weapons operation.

Speaker 3 (30:31):
Why care about it?

Speaker 12 (30:33):
What utility does it have? It went away tomorrow? Would
anyone care?

Speaker 2 (30:37):
You compare this moment with regards to crypto, but just
also with the sec and where the economy is at
in general to the nineteen twenties. Can you tell me
a little bit more about that, because I know that
that sets off alarm bells and virtually anyone who knows
about the stock market cris.

Speaker 12 (30:56):
Sure if you look at any of the financial crises,
whether it was a subprime crisis or the depression after
the twenty nine Here's what happened.

Speaker 3 (31:04):
In the twenties, right, there was everybody everything.

Speaker 12 (31:07):
Was unregulated, and buying socks and bonds was like, you know,
buying clothes at Target.

Speaker 3 (31:13):
There was no nobody protecting you or anything.

Speaker 12 (31:16):
So what happened was there was this terrible crash and
it impacted everyone.

Speaker 3 (31:21):
And created this big depression.

Speaker 12 (31:23):
So the government sort of said, you know what, when
it comes to investments, we're going to be different.

Speaker 3 (31:28):
It's not going to be like buying anything else.

Speaker 12 (31:30):
So they enacted the nineteen thirty three Act, the Securities
Acted in nineteen thirty three, which essentially said, hey, if
you're going to raise money for an investment, you have
to register with the sec. Then they passed the thirty
four Act, the Securities in Exchange Act of thirty four,
and they said Hey, if you're going to create a
platform to transact in these investments, then you have to

(31:50):
register with the SEC, and you have to be subject
to audit, inspection and examination, net capital requirements, all kinds
of disclosure, licensure of your individuals.

Speaker 3 (32:00):
So that's a thirty four accent.

Speaker 12 (32:01):
And then the forty Act said, hey, if you're going
to bundle all this stuff into mutual fund or if
you're going to give people advice about securities and about
investments they should buy, you have to register as well.
So all of these big registration which are credibly onerous.
It's very difficult to register with the SEC. Whether it's
an offering or whether you're a platform or anyone else,
you're going to subject yourself to this financial colunoscopy at

(32:25):
the whenever the SEC wants, either routine or fore cause.
But it's been pretty good, if you generally go back
to all since that time, there have been a few
bumps in the road, but generally the economy has flourished,
and this sort of environment of heavy regulation has kept
most people honest and has also given the consumer, the customer,

(32:45):
all sorts of avenues if they get scammed, you know,
they can reach out to the SEC. They can reach
out to state regulators, they can reach out to the FBI.
Everybody has jurisdiction over these entities who are So if
they wake up in the morning like the Celsius Block
five Voyager FTX investors did, and they can't access their
money anymore, imagine the panic that they felt. And you

(33:07):
can read the Celsius Celsius especially the investors submitted these
affidavits and you can read how terrible it is. That
was what my life was like at the SEC for
the twenty or so years that.

Speaker 3 (33:18):
I was there.

Speaker 12 (33:19):
I talked with investors who'd lost their life savings all
the time, and that you start to realize there's no
standard composite or profile for those kinds of people. They
can be sophisticated, they can be unsophisticated. They've all what
they have in common is that they let their guard down.
Maybe they got greedy, maybe they want to get rich quick.
Maybe like the Madoff investors, they only wanted one percent

(33:39):
over prime.

Speaker 3 (33:40):
They weren't greedy, so they had comforting that.

Speaker 2 (33:43):
So that was something that really struck me about when
I was speaking with Molly and Ed a couple of
months ago about crypto of how you know, the majority
of crypto users, it's not quite an active desperation, but
it's someone with a little bit of pocket cash trying
to turn a little money in to more money because
it's hard to exist. And how many like normal people

(34:05):
end up getting scammed.

Speaker 12 (34:07):
That's the point, Jamie, is it's always the working person
who gets scammed. In the end, everybody else gets away
with it. The best example, you know, i live in Washington,
d C. In the DMV, and I'm a Washington Wizards fan,
and I've been a Wizards fan for whatever thirty or
thirty five years. It's been torture, okay for myself and

(34:27):
my family. But the good news is I know all
the people who work at the Wizards games because I've
been going to these games forever. So my son and
I are in the elevator and we see two of
the security guards and they're like, hey, Sark, I saw
you on sixty Minutes because I was talking about this
stuff on sixty Minutes a few months ago, and I said, yeah, yeah,
did you watch it? And they're like, oh, well, you know,

(34:48):
I didn't see it until the end. It was something
about crypto. What were you talking about I said, well,
you know, it's a dangerous investment. There's nothing to it.
There's no there's no substitute. It's all fear of missing.
And they kind of looked at me, both of them,
and they were like, but we heard it was a
great thing to get into. So we both invested and
I was like, all right, guys, look, I'm not here

(35:09):
to tell you what to invest in.

Speaker 3 (35:10):
Or what not to invest in, but do you understand
what it is? Do you know what it is that
you're buying?

Speaker 12 (35:16):
And they both like, we have no idea, And I said, well,
start with no, right, start with that promise. If you
don't know what it is and you can't articulate what
it is, then don't invest in it. That seems like
a pretty basic notion that people have completely forgotten about
with this emperor has no close, no shit of crypto.

Speaker 2 (35:35):
I'm curious you also write in your editorial about and
something that I'm trying to understand better too, is you know,
just three months ago or three or four months ago,
is having conversations about MS Talktua Haley Welch, who had
a meme coin launched on her behalf. She was the
face of it. She was pushing it and there was
a rug pull. It seems like there has been a

(35:56):
lot that's happened since then, because when I was doing
these interviews, people were like, well, maybe she will be
made an example of by the SEC. You know, like
this could be because it was getting so much press.
Maybe this is a chance for someone to be made
an example of. So I mean, from your perspective, what
has been happening with the SEC in the last couple

(36:20):
of months that's giving you such pause.

Speaker 12 (36:21):
Well, it's really incredible, and I'm not being hyperbolic.

Speaker 3 (36:27):
I'm not exaggerating.

Speaker 12 (36:28):
I'm a bit of an SEC historian, having worked there
for twenty years and taught securities regulation for both at
Georgetown and Duke, and really study the agency. The about
face that the agency has done on crypto and this
radical turnabout is unprecedented in SEC history. So I'll give
you some of the basic things that they've done. First

(36:49):
of all, in the last three or four years, the
SEC has brought over two hundred enforcement actions. The SEC
is like any other civil litigants. They bring cases when
somebody violates the security laws, and their civil actions you
can refer it to criminal authorities. Which in our office
we often did and have parallel actions. The SEC is
a civil agency, so they bring their cases. They bring

(37:10):
them in federal court in front of Article three judges,
which are judges set by the Constitution who have life tenure,
and they get to rule on whether the SEC is
right or wrong about whatever they think, whether they think
something is a security where they have jurisdiction. Those things
all go to judges. So the SEC had filed over
two hundred of those enforcement actions, and in my mind,

(37:31):
they have won every single one of them. Okay, now
that is unprecedented. Now you might say, well, John, I
don't necessarily believe you. Well, I spoke at the SEC
roundtable recently and I put together an eighty nine page
statement and in those eighty nine single space is a

(37:52):
section where I go over every single case the SEC
has litigated with respect to digital assets. I explain what
the ruling is is, I pull out the excerpts, and
I'm telling you the SEC has won every time Telegram, Kick,
Lbry Crack and coinbase Finance, win after win after win
after win, and they'd been and these were filed that

(38:14):
there were eighty or ninety them filed under J Clayton,
who was President Trump's original SEC chair appointz. He's now
the new US Attorney for New York, for the Southern
District of York. But ninety of those cases, eighty or
ninety of them were filed under a Republican administration.

Speaker 3 (38:30):
So then a democratic administrator.

Speaker 12 (38:32):
Came in and they created a crypto unity even they
started bringing these cases in. Oh my gosh, was the
SEC winning. It's one thing to win the cases when
you're at the SEC. We won I think all of
our cases when I was at the SC. But I
never had cases against big law firms who were being
paid tens of million dollars to fight against. But that's
the way it was that the SEC. The SEC would

(38:54):
bring these cases. These people would hire former SEC enforcement directors.
They would litigate these cases with volumes and volumes of motions,
massive discovery, and judges as a result, whether they were
citing a motion to dismiss, which is when the SEC
files the case, someone might say, you know what, no
matter what you say, we didn't violate any laws, so

(39:16):
this case should be dismissed.

Speaker 3 (39:17):
That's the motion to dismiss.

Speaker 12 (39:18):
Then later on after discovery, they say, look, no, matter
what you found, there's been no violation.

Speaker 3 (39:23):
That's summary judgment.

Speaker 12 (39:24):
So the SEC was winning on motions to dismiss and
summary judgment because all these defenders were saying digital assets
are not securities, and judges were all saying, yes they are.
Whether they're initial coin offerings, whether they're simple agreements for
future tokens staffs, whether they're staking products, whether they're lending products,
whether they're celebrity endorsement products, whether they're intermediaries trading digital assets,

(39:49):
whether they all should be registered as exchanges, as broker dealers,
as clearing firms. SEC is winning every single time, and
the judges are these opinions that are one hundred pages long,
like the Krack and decision one hundred pages long.

Speaker 2 (40:19):
Not for nothing. I mean this happening under not just
like a democratic and a Republican administration, but literally under
a previous Trump administration. It just like, yes, I don't know,
so brain, brain, right.

Speaker 12 (40:30):
So here's what happened. So the SEC is on a role.
They're suing everybody. Every day there's a new new decision,
every day, there's a new lawsuit. All of these companies
are running, are fighting back, and it's kind of interesting
because the SEC action used to be.

Speaker 3 (40:47):
A scarlet letter.

Speaker 12 (40:48):
You know, if you were hit by the SEC, don't
expect to do business with anybody ever again because I
think of that kind of thing. Well, they were wearing
it like a badge of honor. Like this rogue SEC
has come after us their regulation through enforcement. They're using
all these strange little catchphrases. But this is how the
SEC brings cases. There's no such thing as regulation by enforcement.
There's just enforcement. You bring cases insider trading, derivatives fraud,

(41:11):
unibond fraud, foreign payments fraud, whatever it is, you bring
it under their anti fraud provision. So the SEC are
winning all these cases. All of a sudden, President Trump
wins reelection. Acting chair Markuaeda takes over at the SEC,
and he and Hester Purse, both of whom I knew
when I was a staff attorney there, especially Hester pers

(41:33):
I knew her pretty well. They had been dissenting on
all these cases the SEC was bringing, but the SEC,
the majority of the SEC commissioners were saying to bring them,
and again they were winning everyone in court. All of
a sudden, Mark you Ada comes in. Three things happen.
Four things happen. Number one, he dismisses all the appeals,
any appeal the SEC had anything like that. Gone number two,

(41:55):
he dismisses or pauses every single crypto related enforced action period.
Gone number three, he closes every major crypto investigation, maybe
even more. I don't know how many he's closed because
it's non public, but the ones that are public, they're all,
you know, so excited because they're all suddenly they've transformed.

Speaker 2 (42:16):
I mean, I think this story we're covering is probably
a part of that wave where it just went away
exactly February.

Speaker 3 (42:23):
Exactly, so Haktua swept up in that wave.

Speaker 12 (42:26):
And then the third the fourth thing, so appeals, appeals,
active litigation, investigations has three different categories, all gone zippo.

Speaker 3 (42:36):
Disappeared as if they never happened.

Speaker 12 (42:38):
Then the crypto unit, which the SEC had beefed up
and celebrated with all kinds of fanfare, is shut down
and is given a new name called the cyber Unit.
The head of that crypto unit, who was the head
of litigation, who had won all these cases, was on
all the litigation. He was transferred to the Office of
Information Technology. I don't know what he's doing there. He's

(42:59):
like fixing prints, are picking out drivers for printers. He's gone,
he's disappeared gone. There was one, There were two co
heads of the crypto unit. One of them disappeared gone.
At least twenty or thirty people in the crypto unit
disappeared gone. I don't know if they've retired. I don't
know what they're doing the new cyber unit. She spoke
at our conference last week, and very nice lady Laura Delandria.

Speaker 3 (43:24):
I think it's her name of Delaired.

Speaker 12 (43:26):
Delaired might pronounce it wrong, and she really spoke about
what they're not doing, which is, you know, we're not
bringing these kinds of cases, we're not doing this kind
of work. We're working towards retail investors. I'm not sure
what she meant by that, but all I can tell you.
And then the SEC started issuing these regulatory pronouncements. Some
of them they just would put on Twitter on X
and they would have said they said. One of them
was mean coins are not securities. Boom overdone so any

(43:50):
meme coin and that was done, you know, you know,
I don't know. A week or two after President Trump
and Milania Trump had launched their Mean coin.

Speaker 3 (44:00):
So the SEC said, are not securities?

Speaker 2 (44:02):
That blows my mind.

Speaker 12 (44:03):
Yeah, let's be clear here though. You know, President Trump
campaigned to be the bitcoin president. He campaigned to throw
out Gary Gensler. He campaigned to make the United States
the crypto capital of the world. And he's he's this
is a promise made and a promise kept. You can't
disagree with that. He was very clear what he was
going to do. These crypto firms, they weren't winning in court,

(44:26):
but they spent about two hundred million to win the
elections and they did.

Speaker 3 (44:30):
They did it brilliantly.

Speaker 12 (44:31):
They destroyed anyone who was anti crypto, just about everyone.
I mean, I think Elizabeth Warren survived. A few of
them survived, but most of them did not survive. And
so this is the president's mandate. You can't disagree with
that notion.

Speaker 3 (44:48):
I don't like it. You know, it's bad for the world.

Speaker 2 (44:51):
Yeah, he's certainly been successful.

Speaker 3 (44:53):
He said this is what he's going to do, and
he's doing it, so, you know, and he's doing it
through the SEC.

Speaker 12 (45:00):
Now, the SEC historically has never done this kind of
turnaround on anything ever, So it's very and mean coins
is a perfect sample now one thing about mean points
that I would say.

Speaker 3 (45:13):
So recently there was an article.

Speaker 12 (45:17):
It was just about everywhere about if you bought the
president's meme coin, and you were one of the top
two hundred and twenty purchasers of his meme coin, then
you would get access to a special party he was
having and get a tour of the White House. Now
you know, here's the irony of this. Again more irony,
which again I've studied you, so I know how much

(45:38):
you love irony. Okay, so this is another great one.
So my view has always been crypto has no utility,
that if it went away tomorrow, blockchain is a bunch
of bunk, a bunch of nonsense. You know, you spoke
with Molly White and Zichron. You read the concern dot
tech letter. The blockchain is just a glorified append only
limited writer spreadsheet. It's not an iPhone. It's not transformative,

(46:02):
it's not innovation. None of this is innovation. However, I
might be wrong about utility because the reality is crypto
is emerging with utility number one. Okay, it has utility
for criminals, but I don't know if that's a bona
fide utility. But the president is now created a utility
because he's saying, hey, buy my mean coin and you're
going to get access.

Speaker 3 (46:22):
Whether that's lawful or not.

Speaker 12 (46:24):
I'm not an expert in any of that, but he's
created a utility for his meme coins now, the hawk
Tua meme coin.

Speaker 3 (46:32):
I don't see every one of these is a facts
and circumstance case. I don't see that having any utility.

Speaker 12 (46:37):
But if she didn't know, if she is said at
the beginning, the top two hundred people will get to
meet me and come and watch my podcast live, then
you can sort of say, I mean, here's the thing, Jamie,
is that the SEC now believes, suddenly, out of nowhere,
that crypto is a collectible. Okay, that it's just like

(47:00):
a collectible. It's not this mathematical computational equation, okay, this
bladder of code, an unsolvable problem of code, is a collectible. Now,
I can tell you. I can give you three quick
reasons why it's not a collectible. Number one because when
I talked about it on sixty Minutes, having no utility,
I was talking about the XRP token. I got death threats.

(47:23):
My family got death threats. They said, they're going to
burn my house down. If I were talking about rolexes
and Pokemon cards, I don't think I would.

Speaker 3 (47:30):
Have gotten that ruction. So that's number one.

Speaker 12 (47:34):
Number two, if you go to your brokerage account, right
whatever it is, Robinhood or wherever you're buying your secure investments,
you'll go to the tab and you'll see you know, stocks, bonds,
maybe options, and then you'll see something that says crypto.

Speaker 3 (47:53):
So you don't see.

Speaker 12 (47:54):
Pokemon cards, Beatie babies, and American girl dolls on that
pulldown screen.

Speaker 3 (47:58):
Okay, So that's the second reason.

Speaker 12 (48:00):
The third reason is is that every single Article three
judge that has ever reviewed this idea of whether a
digital asset is a security and whatever iteration be it, ico,
simple Agreement for future token staking, lending, all those things
I mentioned before, has said it's a security and so
and those Article three judges, the mark uata is acting

(48:21):
SEC chair can't disappear those decisions.

Speaker 3 (48:25):
They're on the books.

Speaker 12 (48:26):
So the SEC has just chosen to ignore them, to abandon,
to abdicate its mission of investor protection.

Speaker 3 (48:34):
I talked about the.

Speaker 12 (48:35):
Crash and the depression that followed in twenty nine and
the SEC was created to protect investors.

Speaker 3 (48:42):
They're not created, they're not supposed to protect collectors.

Speaker 12 (48:45):
So their idea is, hey, these digital assets, they're collectibles.
It's caveat empt tour and it's a it's a walking dead,
post apocalyptic marketplace where there's no protection anything, and it's
all driven by fomo.

Speaker 3 (49:02):
There's no earnings, there's no there's no balance sheet, there's
nothing you can look at.

Speaker 12 (49:07):
You can't get their ten ques or their ten ks
or other SEC filings because.

Speaker 3 (49:12):
There aren't any. So it's just fomo.

Speaker 12 (49:15):
You're just betting that someone else is going to be
dumb enough to buy this and it's going to go up.

Speaker 2 (49:21):
Yeah, that's it, and gosh, that's so so. In short,
crypto is being effectively treated by the SEC right now
as if it's Beanie Baby.

Speaker 3 (49:32):
Yes, or American Crazy.

Speaker 12 (49:35):
I'm not sure Beanie Babies, American Girl dolls, or Pokemon
cards that would be the three categories.

Speaker 2 (49:40):
People are being kind of professionally disappeared from that that
we're working in the Bided administration just a couple of
months ago. Has there been I mean, I know you
have sort of been at the forefront of this, but
has there been a lot of people speaking out and
if not, why you.

Speaker 3 (49:59):
Know, Oh, there's a good reason. This is actually very
easy question.

Speaker 12 (50:03):
Every single SEC lawyer, most of them go out into
private practice when they leave the SEC and they work
for a big law firm, or they work for a
company whatever, But most of the time they go work
for a big law firm. And big law firms make
huge amounts of dollars from all these digital asset companies,
and so you have a fiduciary responsibility to your partners.

(50:25):
So you won't hear a lot of lawyer a lot
of lawyers unless they're law professors or just You've got
to find someone who's independent and objective to hear what
their opinion is on crypto.

Speaker 3 (50:37):
I'm independent and objective.

Speaker 12 (50:38):
You can disagree with me, but I don't make a
nickel from my opinion, not a penny, not a dime.
All I get is grief from having this opinion. Nothing
more right. You called me to ask me to do this,
and I'm always very reluctant. For I'm sure you can
attest I'm always reluctant. It's like, you know, I'm chasing
windmills here and I'm all alone because none of my

(51:00):
former sec colleagues who were perfectly happy to tell me
to whisper in my ear.

Speaker 3 (51:04):
You're absolutely right about crypto.

Speaker 12 (51:06):
None of them are in a situation where they can say,
where they can speak out, So very few lawyers will
speak out against it. And from a political standpoint, it
would be suicide to speak out against crypto. Only if
you're the most one of the strongest politicians will you
survive because the crypto lobby is incredibly well capitalized. They've

(51:28):
already set aside one or two hundred million for the midterms,
So fail not at your peril if you get out
and speak against crypto and your political congress. I mean,
why not just say, hey, if it's innovation, I'm all
for it, and I want it to be done the
right way. That's a that's a way to avoid getting
these people from putting a target on that.

Speaker 3 (51:48):
Yeah, sure, it's so funny you.

Speaker 12 (51:50):
Say it's innovation, but in the rest of the sentence
you say it's an American girl doll or a beanie baby.

Speaker 3 (51:55):
So you can't have it both ways.

Speaker 12 (51:57):
But they want it both ways, and so they'll masquerate
it as innovation and they'll use that as they're sort
of subterfuge to get you thinking. Well, you know, and
and and you know, you can't really blame the president
because he came out and he said he was going
to do this, and he's doing it. So as much
as you might this like what he believes in the

(52:19):
reality is he made it very clear this is what
he was going to do. And these people have been
cut loose and they're running wild in Washington and they
own the city. They really do better than any other
lobbying group in the history of the world. And Molly White,
I know you mentioned her, She's done some very meticulous
studies on all of this and it's it's mind blowing.

(52:40):
But you know, that's the way our political system works.
So again that's not my area of expertise. Maybe that
needs to be fixed. Everyone seems to agree that it
should be. But right now these people are pedal extraordinary
influence and you don't see it if you watch. Patrick
Boyle on YouTube did this really great thing on crypto
where he just went over every campaign that the Crypto
Lobby was supporting and showed how you wouldn't really know

(53:03):
that they were supporting them. So they do this brilliantly.
I mean, they wrote there. They wrote their own playbook again.
You know you got a hand to them. You know,
they wrote their own playbook. They were losing in front
of these judges over and over again, and they found
a way to win. And they won big. They won huge.
They got rid of Shared Brown in Ohio. They spent

(53:23):
forty million dollars.

Speaker 2 (53:25):
If this remains unchecked, if most people who could potentially
speak up against this feel like their hands are tied
or their future is sabotage by speaking up about this,
what are we looking at?

Speaker 12 (53:39):
Well, you know, if you're a financial historian, you know
that all this is crypto is one big Ponzi scheme.
I don't see how anyone can argue against that, because again,
but what.

Speaker 2 (53:50):
If it was an American girl?

Speaker 12 (53:52):
Well, I get it, but in terms of Ponzi schemes,
and a Ponzi scheme is just where you're just buying again,
trying to beat out everyone out, and it's like a
game of musical chairs.

Speaker 3 (54:02):
You don't want to be the last person holding it.

Speaker 12 (54:04):
So if the Ponzi scheme keeps going, sooner or later,
all Ponzi schemes crash. They crash typically when things get bad.
If we were to have a recession, maybe, for example,
because of these tariffs we get the country goes into
a discression, a depression, but the economic needs has been
very good lately. But suppose the country goes into a depression.

(54:28):
People generally this is what I saw a lot at
the SEC When things get bad, people will flee to
safety and they will take you. They will move out
of their most risky alternative investments. And everybody agrees, no
matter what how fanatical you are about crypto, that it's
it's a risky alternative investment. You can't you can't get

(54:50):
anyone to not admit that it's like gambling. So as
soon as things go south with the economy, or the
economy hits a recession, you know, with all the ransomware
attacks growing and growing in sophistication.

Speaker 3 (55:04):
When I taught at Duke Law School and there.

Speaker 12 (55:07):
Was the Colonial Pipeline ransomware attack where the Colonial Pipeline
was shut down, you couldn't get gas in North Carolina.
You couldn't get home from the airport, couldn't get a taxi,
couldn't get an ubercar, couldn't get a rental car.

Speaker 3 (55:18):
There was no gas anywhere.

Speaker 12 (55:19):
And I got to tell you it started to get
a little scary, you know, not just economically, but suddenly
you were thinking, you know, the police can't get to
my house, you know.

Speaker 3 (55:29):
And it just happens just over a few days. So
if these ransomware.

Speaker 12 (55:34):
Attacks hit infrastructure or hit hospitals, when those things kind
of start happening, I think governments like the National Security
Division will wake up at the Department of Justice and say,
we've got to stop the crypto, because that's what doing
it all. If North Korea is able to build these
nuclear weapons facilities purely because of crypto, which it seems

(55:55):
like they are with the six billion dollars that they've stolen,
think about that's the greatest theft in the history of
the world. The banking regulators, the FDIC, the FED, the
Office of the Controller of the Currency have been very
very strict about allowing banks, traditional financial institutions from doing
anything having to do with crypto. The crypto firms called

(56:15):
this operation choke Hold, and I think that's a fair name,
but I think it's what our name because it's exactly
what made sense.

Speaker 11 (56:23):
You know.

Speaker 12 (56:23):
The banking regulators, they didn't prohibit these entities from doing them,
but They said to them, if you do anything involving crypto,
we're going to come in and examine you, and there's
no way to you know, these crypto are such dark markets.

Speaker 3 (56:34):
You don't know who any of these depositors are. You
don't know what's going on in these marketplace, you don't
know where on this pricing. So the choke hold was
perfectly legitimate.

Speaker 12 (56:41):
Now the Trump administration has come in in all of
those guardrails, from the Office of the Controller to the Conrency,
from the FDIC, the Federal Deposit Insurance Corporation, and from
the Federal Reserve have all been lifted. Okay, so suddenly
banks can get in the business of selling crypto Morgan
stand Only. For example, I read an article, I don't

(57:02):
know if this is true, that fifteen thousand of their
brokers are going to be cut loose to sell crypto.
So if you're suddenly like, what can a broker say
to you to buy crypto other than buy this crypto
it's an asset, I don't understand, but it might go
up because a lot of stupid people buy it. Anything
else that's said. If you say it's a store of value,

(57:22):
that's not true. If you say it's got great potential,
that's not true. If you say it's an innovation, that's
not true. If you say it's a great market, that's
not true. But they're going to you know, brokers are
great at selling products to the elderly, to the people
who don't understand, and even to the big institutions. So
these bogus investments are going to be peddled everywhere, just

(57:44):
like subprime derivative instruments, and that can as a contagion,
spread across the global financial marketplace. So those are the
various scenario. It's a big ransomware attack, of financial contagion,
or just a recession. Those three things will trigger a
pendulum swing in the other direction, and maybe the SEC

(58:05):
will wake up and decide not to abdicate its mission
of investor protection because you know, they'll realize that, oh
my gosh, investor, we're here to protect investors. Yet they're
again they've labeled these people as collectors, and that's really
not right. Everybody knows that's not right. It doesn't pass
a straight face test. We have to protect people because

(58:27):
not just to protect them themselves, but it also creates
systemic risks. So you might just say, I was on
a panel just a few weeks ago at George Mason
University and one of the professors is like, go ahead and.

Speaker 3 (58:38):
Do with what your crypto, Go have your fun. I
don't care. It's not going to impact me. And that's
just wrong.

Speaker 12 (58:43):
You know, it will impack you because of the crime
associated with it, and it'll impact you when it all
comes crashing down and your four oh one k is
suddenly work half what it was, or you're five twenty
nine for your kids is worth half what it was,
and you're freaking out because how are you going to
afford to retire? How are you going to afford to
pay for your kids' education? And then you want you

(59:06):
want accountability, and you're going to say where was the SEC?
And you're going to like you say, the SEC was
watching Beatie Baby and Pokemon movies and not considering the
reality of their mission, which is to protect investors. And
that's a sacrisanct mission that they've just abandoned for political

(59:28):
reasons that you know, historically, whether you're publican or Democrat,
it's really unsettling and disturbing to be toast that.

Speaker 2 (59:37):
Thank you so much to John read Stark. You can
follow his work at the links in the description, and
before we get into the concluding thoughts on this second,
hank to a series. This is Jamie from the Future
the day before the podcast comes out, telling you one
last thing somehow, which is that as Hailey Wells continues

(01:00:00):
to hard launch herself back into the mainstream, she's been
doing the rounds in press with a new publicist, not
the one that got her into the cryptoscam, and one
interview came out during the writing of this episode that
I think is worth mentioning. So in addition to the
fact that Haley is indeed returning to celebrity Poker and

(01:00:20):
already has at the time I'm recording this, which there's
that there was an interview published on May second in
Vanity Fair with writer Chris Murphy, an article that even
features a photoshoot of Hailey wearing a little white lace
dress in what I absolutely am certain is an Airbnb

(01:00:41):
rented for the photo shoot. It is the fakest looking
place in the world. And I wanted to share two
bits of this interview that are relevant. So first, Hayley
does do this interview with her new publicist at her
side and appears to be allowed to talk about the
crypto scandal in public for the first time. From that,

(01:01:03):
Chris Murphy asks, what have you learned from that experience?
Do you have anything to say to the people who
lost their money? Hailey replies, I would say personally what
I learned from it. Let's see. I don't know. I
just feel really bad for anybody that lost money. All
my comments, if you read those, people are like, oh,
well I lost a lot of money in this. Now
my kids have to go without stuff.

Speaker 12 (01:01:25):
I don't know.

Speaker 2 (01:01:25):
It makes me feel like really sorry for it. Chris
Murphy asks, after the crypto scandal you went off the grid.
What were you doing for those three months? Where were you?
Hailey replies, Oh, I hate to say this, but this
was a much needed mental health Just what do you
call it? A mental health break? I guess is what
you can call it. Okay, So I think it's interesting

(01:01:49):
that there's a lot of sorris in here, But of
course the sorries don't have to mean anything because the
SEC investigation is closed, no one, including Haley, is required
to make this right on behalf of people who lost money,
So her reply is sawey and the interview closes with

(01:02:09):
Chris Murphy asking why, as someone who is so sowy
about the krypto scam, why Haley Welch is about to
head to Las Vegas to play celebrity poker. Here's that exchange.
Chris Murphy says, you're playing in a celebrity poker tournament
fresh off the crypto scandal. Do you have anything to
say about those optics gambling after some people lost their

(01:02:32):
money on your coin? Haley does not reply here. Her
publicist does, replying, say the question again. Sorry, I'm just confused,
Chris Murphy says, some might say that it's not a
great look to be gambling so soon after a money
related scandal. I'm just wondering if Haley has anything to
say to that or has a response. Once again, Haley's

(01:02:54):
publicist replies, Oh, we're gonna skip over that one. Aye
ya yai. Okay, that's it for future, Jamie. Let's close
out the episode, and that, I promise is the last
you're going to hear of Hailey Welch on this show.
For my own mental health, if nothing else. At this point,
she has made it clear that she is not ready

(01:03:17):
for her fifteen minutes to end, but man if the
best guest for your comeback is the third most successful
co creator of the Lunchables with Mold, and if the
numbers and attention that the return pulled in, it's going
to be a difficult road ahead. So while I do

(01:03:37):
believe that Hailey Welch is very much a sign of
the times, a young woman who had no social media
aspirations or aspirations to fame being launched into prominence against
her will signs that shady ass managers who immediately capitalized
of and disposed of her, defrauding regular people out of

(01:03:59):
hundreds of thousands of dollars in the process. But even
as an individual, there is a kind of desperation to
this comeback that is hard to watch. And call me naive,
and I'm sure that plenty of people on the Reddit
board will, But I still think that this is a
story about class more than anything, because it's hard to

(01:04:23):
deny that Haley is a certified scammer or at best
scammer accomplice at this point, and unfortunately coming from a
low income family in Tennessee, I think the financial security
and not having to return to her job at a
spring factory is just as relevant to the story as

(01:04:44):
the idea that she might be kind of hooked on
the attention and might not be ready for the big
moment to end. There is more than one thing going
on here, and anyone who tells you otherwise is trying
to just get your clicks. But the fifteen minutes are
probably over, and as we talk about on this show

(01:05:05):
every week, the fifteen minutes being over has a way
of breaking someone's brain. But careers have highs and lows,
and I can't say with confidence that Haley doesn't have
a second act in her. We've seen it before and
many people life is long, right, But for the time being,

(01:05:26):
the most depressing part of all of that is, even
with these already diminishing returns, I don't think that Haley
or any of the parasites that remain on her team
are gonna stop chasing whatever the latest influencer grift is.
It seems like they're in too deep. And the reason
I think that is because there's this one part of

(01:05:49):
the KSI interview on the return episode where Haley all
but confirms this, do.

Speaker 5 (01:05:56):
You ever think I could box?

Speaker 11 (01:05:58):
Would you want to box? I?

Speaker 14 (01:05:59):
Actually?

Speaker 11 (01:06:00):
Really?

Speaker 2 (01:06:01):
You gotta give her some tips?

Speaker 5 (01:06:02):
Yeah, I need some tips.

Speaker 6 (01:06:03):
You can just try me.

Speaker 2 (01:06:07):
They brought up bad baby, but that is.

Speaker 3 (01:06:11):
Perfect.

Speaker 5 (01:06:11):
It's like the world's biggest memes against oh my, that
would be personally.

Speaker 15 (01:06:18):
I like her.

Speaker 5 (01:06:18):
I don't think I could. I feel like I have
to have somebody.

Speaker 2 (01:06:20):
I just I just despise a yes, the next attempt
to keep her fingernails wrapped around the right wing grifting
machine sports betting via celebrity boxing. This interaction bummed me
out for a number of reasons, the first being that
this cheeky question from Haley almost exactly mirrors how she

(01:06:45):
foreshadowed that her team was about to pull a massive
crypto scam a few months ago. This is from the
episode of Talk to U with Mark Cuban from back
in November.

Speaker 3 (01:06:56):
Oh yeah, I give you some token?

Speaker 7 (01:07:00):
How do you okay?

Speaker 3 (01:07:02):
I'm sure you're gonna watch. I don't know. I'm not
a big a fan about me coins. I love crypto,
but but you can make some money from it.

Speaker 11 (01:07:08):
There's no doubt, no doubt, Abo.

Speaker 2 (01:07:10):
It's exactly the same. And while the cryptosports betting industry
her former employer better being a pretty solid example of it,
is a firmly modern act of desperation. For a person
who's been professionally disgraced or, as in the case of
many women, professionally disgraced and then humiliated in a very

(01:07:32):
gendered way. Even though that is all true here, celebrity
boxing as a means to hang on to relevance predates
internet culture. And maybe I'm saying this just because I
saw it Tanya in theaters fourteen times, but I really
do believe this.

Speaker 15 (01:07:50):
And her opponent across the ring whiting out of the
blue corner, wearing the stars and the bars, and also
choosing not to disclose her weight to the world class skater,
a two time Olympian, a World bronze medalist, and the
United States trapion, the progismatic and unpredictable Tanya tnt.

Speaker 11 (01:08:13):
Hiding.

Speaker 2 (01:08:15):
This is Tanya Harding, a one time American Olympic figure
skating forerunner who was extremely unbelievably talented, but was thought
to lack the precise femininity associated with figure skating. She
was a little bit rough around the edges and lacked
the money to get the quote unquote right outfits and

(01:08:37):
social graces. She had a difficult life. She was raised
by a single mom and was in an abusive marriage,
one that culminated in her then husband, Jeff Galuley, hiring
the worst hitman of all time to take a crowbar
to who was painted in the media as Tanya's primary

(01:08:57):
figure skating rival at the time, a woman named Nancy Kerrigan,
who by the way, was in the same tax bracket
as Tanya, but was just thought to be better at
being feminine the world as hell. Tanya's involvement in the
planning of this attack was and I don't know, minimal,

(01:09:19):
if anything, but it didn't stop this from ruining her career.
She was banned from competing professionally in figure skating for
the rest of her life, and this affected her ability
to not just live with dignity, but to make a
living at all. To quote my favorite movie I Tanya

(01:09:41):
starring Margot Robbie.

Speaker 13 (01:09:43):
Once I was banned from figure skating for life, I
didn't have a lot of options.

Speaker 2 (01:09:51):
Did what I had to do to just stay in
the public eye. And hey, the bills breeze.

Speaker 13 (01:09:58):
I was the second most person behind Bill Clinton in
the world. That meant something. People still wanted to see me.
So I became the lady boxer.

Speaker 2 (01:10:17):
And so Tanya turned to one of the only ways
that she could make money on that name, because she
was no longer a name that could sell products like
Nancy Kerrigan could, and she wasn't allowed to participate in
figure skating professionally at all, and so she had to
get creative. And there was this show called Celebrity Boxing

(01:10:39):
that started in two thousand and two.

Speaker 3 (01:10:43):
Let's Get Ride.

Speaker 2 (01:10:49):
This was a franchise version of something that had proven
to make for a pretty successful pay per view event
all the way back in the nineties, and would usually
pair up two people who were once very culturally relevant
for some reason, but now were slightly less so a
great example is about between former seventies teen idols Danny

(01:11:12):
Bonaducci and Donnie Osmond. Celebrity Boxing, Not for Nothing, is
a show that started airing on Fox around the same
time that Girls Gone Wild, The show that would provide
a template of humiliating drunk women that would lead to
the Tim and D YouTube channel that Haley Welsh popped
off on, was at its peak of popularity. But celebrity

(01:11:36):
Boxing was a place where, as Tanya's character describes, notorious
figures could take a last pass at monetizing their name
by facing off against either another celebrity or a known boxer,
and more often than not have their ass kicked. And
because most of these figures had been somehow publicly disgriced

(01:11:58):
already does or not, because plenty of these are deserved.

Speaker 16 (01:12:04):
Tonight you will witness an extraordinary boxing match between two
celebrities who, until six weeks ago would never set foot
in a boxing ring. Let me introduce you to our
first fighter tonight in the Red Corner, comedian and star
of the hit BBC two series The Office, mister Ricky Gervais.

Speaker 2 (01:12:22):
This is where Tanya Harding ends up in two thousand
and two, and in a twist that made me so
mad and sad, Tanya is matched up against a woman
named Paula Jones, who was also dragged through the mud
in nineteen nineties tabloid culture because Paula Jones credibly accused

(01:12:42):
Bill Clinton of sexual harassment May ninety one. Bill Clinton
harassed me on the job and then basically told me,
let's keep this between ourselves.

Speaker 11 (01:12:56):
I just pretended that it didn't happen.

Speaker 2 (01:12:58):
And what's worse, La Jones stepping into the ring was
said to be because Amy Fisher aka yet another nineteen
nineties woman who was publicly disgraced in spite of being
a victim of sexual abuse, called the Long Island Lolita,
was not able to attend the.

Speaker 15 (01:13:18):
Winner by technical knockout Kanya Tea and ten. Are you
surprised that Paula, who's never completed at any.

Speaker 2 (01:13:29):
Level like this and has never trained for sports at your.

Speaker 15 (01:13:31):
Level, was able to go into the third drone?

Speaker 7 (01:13:34):
Oh, she did really well.

Speaker 2 (01:13:35):
I knew that both of us would.

Speaker 7 (01:13:36):
Come in and get to know each other a little bit,
and you know, it wasn't a catfite.

Speaker 1 (01:13:40):
It was that it was more like a boxing match,
but have fun all at the same time. And you
know I knocked her down a few times.

Speaker 5 (01:13:46):
That's all I'm happening.

Speaker 2 (01:13:47):
This is a clear pattern. When you look at the
history of celebrity boxing, you're hard pressed to find a
man competing who isn't either trying to recapture relevance, has
been credibly accused or convey did of a sex crime
or both. And with women, you're more likely to find
someone who has just been publicly shamed in an extreme way,

(01:14:10):
whether you think they deserved it or not. Men are
trying to bounce back from something that they did, and
most women are people that others will pay to see
punched in the face. What's clear is that this is
not what Tanya Harding wanted for her life. It was
a choice that she made out of a need to survive.

(01:14:32):
She wanted to not be publicly humiliated in the first place,
just like Paula Jones or Amy Fisher didn't want And
like Hailey Welch, Tanya was from a working class family
and didn't have anyone looking out for her financially or emotionally.
And like Hailey Welch, Tanya Harding did fuck up at

(01:14:52):
different times, unlike Hailey Welch, who was a generational athlete.
But you can talk to me about that, Ata Bar
I love talking about on your herding. And while there
are new venues for celebrity boxing today, I will remind
you how successful the Jake Paul versus Mike Tyson Netflix
match was last year. The gender dynamics kind of remain

(01:15:14):
the same. The men are credibly accused of sex crimes
and washed up. The women have been publicly humiliated, and
their faults are generally connected to survival. But all of
it is out of some desperation. It sucks it is
very American. Hailey is willing to sign up for this

(01:15:38):
not because she is secretly wanted to box for her
whole life, but because it is a way for her
to make money and keep her name out there, and
regardless of whether it works, whether it's humiliating, or whether
it matches up with how she wants her life to go.
And maybe it'll be fun. I hope it is. But

(01:15:59):
from where where I'm sitting, it's just the next grift.
So Haley, welch, I'm gonna take a shot in the
dark here. Your sixteenth minute ends now, and for your
moment of fun. Here is KSI describing Los Angeles as

(01:16:19):
a state, not a city, And there are at least
five people in the room and no one pushes back goodbye.
You've been to the.

Speaker 3 (01:16:28):
US a few times, right, way too many times?

Speaker 5 (01:16:31):
You have a favorite state or anything?

Speaker 11 (01:16:33):
Favorite state? Definitely not La? Definitely I can agree with
you on that.

Speaker 5 (01:16:37):
Agree.

Speaker 11 (01:16:38):
I feel like LA's just gone downhill over the years.

Speaker 14 (01:16:40):
Man sixteenth Minute is a production of fol Zone Media
and iheartwoy Depp. It is written, hosted, and produced by
me Jamie Loftus.

Speaker 2 (01:16:53):
Our executive producers are Sophie Lichtman and Robert Evans. The
amazing Ian Johnson is our supervising producer and our editor.
Our theme song is by Sad thirteen. Voice acting is
from Grant Crater and pet Shout outs to our dog
producer Anderson, my cats fleeing Casper, and my pet rock Bird,
who will outlive us all. Bye.