July 25, 2025 • 48 mins
What does ‘tokenization’ of securities mean for the markets? How will artificial intelligence shape the future of investing and what is the future of cryptocurrency policy with Congress passing the GENIUS Act? What’s the future of the market’s relationship with the SEC under the Trump administration? Robinhood’s Chief Legal Officer Dan Gallagher discussed these topics and more when he joined BI’s Elliott Stein and Nathan Dean on the most recent episode of Votes and Verdicts.
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Episode Transcript
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Speaker 1 (00:15):
Hello, and welcome to the Votes and Verdicts podcast, hosted
by the litigation and policy team at Bloomberg Intelligence. Bloomberg
Intelligence is the investment research platform on the Bloomberg Terminal,
with five hundred analysts and strategists working across the globe
and focused on all major markets. Our coverage includes over
two thousand equities and credits, and we have outlooks on
(00:37):
more than ninety industries and one hundred market indices, currencies
and commodities. This podcast series examines the intersection of business
policy and law. I'm Elliott Stein, an analysts with Bloomberg
Intelligence covering financials litigation, and.
Speaker 2 (00:51):
My name is Nathan Dean, and I'm an analyst with
Bloomberg Intelligence covering financials policy.
Speaker 1 (00:56):
So today is a very special episode because we are
recording this almost exactly twelve months since we did our
last episode with our very esteemed guest, Dan Gallagher, Chief
Legal Compliance and Corporate Affairs Officer of Robinhood Markets. Dan,
Welcome back to the Votes and Verdicts podcast.
Speaker 3 (01:17):
Hey guys, thanks for having me. I'm really excited to
be back. We had a lot of fun last time.
Speaker 1 (01:21):
Yeah, agreed, and we're looking forward to doing this episode
as well.
Speaker 3 (01:24):
So for our.
Speaker 1 (01:25):
Listeners, I definitely recommend that you go back and listen
to our last episode with Dan from twenty twenty four.
But and in that episode we went over his credentials extensively.
But given Dan's impressive background, I think it's just worth
highlighting a few of those credentials again. Prior to joining
(01:46):
Robin Hood, Dan was partner and deputy chair of the
securities department at the law firm Wilmer Hale. He also
served as a Commissioner of the US Securities and Exchange
Commission the SEC from twenty eleven to twenty fifteen, and
he held several other positions at the SEC on the
SEC staff prior to being an appointed commissioner. Dan's previous experience
(02:06):
also includes serving as the chief legal officer at Mylin,
a leading global pharmaceutical company, and as a president of
a financial services consulting firm.
Speaker 3 (02:16):
All right, Dan, let's bring you in.
Speaker 1 (02:18):
Normally, we always ask our guests with the first question
to tell us about their work history. But since we
did that last time, and since I sort of just
went over that in brief, why don't we sort of
focus on the last twelve months since you were last on. Obviously,
we're we were just passed the six month mark of
(02:39):
the second Trump administration. So maybe to start off, you
can give us an update on recent developments at robin
Hood over the past year, and you know, maybe more specifically,
how what has changed for the company, what's better, what's
worse over the last six months under the Trump administration.
Speaker 3 (02:57):
Look, I couldn't be more excited to come and give
you guys the update because a year ago, when when
we were talking about the regulatory policy issues that we
were dealing with at Robinhood, it was a pretty bleak, right.
We had I think, as I told you at the time,
five federal rules, all all aimed at our business model
(03:18):
like scud missiles ready to blow us up. We had
SEC enforcement all over us in fin reinforcement. I mean,
it just was a very hostile environment in which to
you know, provide financial services generally, but to be in
at based brokerage and to be robin Hood. Quite frankly,
(03:39):
there was you know, I think there was an actual
prejudice against Robinhood by the prior administration and the agencies
implementing their policies. And you know, I don't think it
was appropriate, but I think there was one, and like
Presto Changoh, since November, things could not be any more different.
(04:00):
You know. We we have a very very knowledgeable and
business friendly SEC chairman and Paul Atkins a good friend
of mine, my my former boss. Uh, that's certainly one
of my mentors.
Speaker 1 (04:11):
You know.
Speaker 3 (04:11):
I worked for him when he was a commissioner. I
worked for him at Potoma Global Partners. And he understands
the issues facing brokerage firms and other players in the
in the capital markets. He's been living them for decades
and and you know, very knowledgeable, but also you know,
a free market guy and and not somebody who thinks
(04:31):
that regulation is always the answer to any problem. So
I you know, it's a an absolute sea change in
the regulatory environment. I joke with my team here at
robin Hood. You know, I have the I have the
government affairs team, I have external affairs. I'm legal, you know,
I've got corporate compliance and I you know, I said
to these teams coming into January, guys, girls like we
(04:54):
need to start thinking offensively. We need to start going
front foot. You know, we got very very good at
the defense at the back foot and that's great, and
you know we're still alive. We weathered this storm largely intact,
which is amazing. But now we have to start thinking,
here's an environment in which we can actually help Robinhood
(05:17):
progress and help Robinhood customers. What are the types of
things we need to be doing to put some WS
on the board, not just to defend, but to put
some WS on the board. And it's just been really
fun to use your brain in a different way.
Speaker 1 (05:31):
And what are some of the areas where you could
see robin Hood sort of going on the offensive?
Speaker 3 (05:35):
Like you mentioned, there's a couple buckets see for me.
One obviously is crypto. As you guys know and I
think we talked about last year, we ran a very
conservative crypto platform during the Biden administration. We didn't list
four hundred coins, we didn't do staking, we didn't do lending,
(05:56):
we didn't do all these things that our competitors in
the crypto space were doing, all with a mind towards
being respectful of what the then leadership at the SEC
was saying, the rules are you know, and Gary was
basically saying everything's a security and come in register. We
disagreed on the everything as a security, but we did
(06:17):
try to come in and register. We didn't do anything flagrantly,
you know, in violation of the securities laws. We actually
pretended like we were regulated. We operated our crypto entity
like it was a broker. You know, we did tax reporting,
we did fee disclosure to customers. We tried to create
(06:39):
best execution in a world in which you know there's
no MBBO. I mean, very hard thing to do, and
we think that was all good for the customers. Could
we have made more money, yeah, if we had listed
more coins and done other allowed other features that the
competitors were doing. We didn't, and you know, looking back
on it, I think it was the right tact. And
you know, we came out, we got a way l letter,
(07:00):
we never got sued by the SEC. And now of
course you have you know, Congress working on on crypto,
and so we're working with Congress, we're working with the SEC.
You know, we've been able to expand the platform with
some clarity coming from the SEC on things like meaning
coins and staking. But there's more to do. So so
crypto is a big one for us. I would say,
(07:22):
you know, market structure. If you remember right after Game Stop,
this whole notion that payment for order flow is somehow
bad and must be. I mean basically the last SEC
was going to kill it with some of the rule
proposals they came out with, you know, recognizing that it's
not bad and it's you know, to the extent that
people think it's a conflict or the other issues with it.
(07:44):
What can we do, you know, proactively to alleviate any
of those concerns. What kind of disclosure or other things
can we do with payment for order flow? You know,
can we work on And so those were thinking about that,
and then you know, we're a public company two, uh,
a big one at this point. You know, the companies
(08:04):
really had a nice run and and you know we
we have issues like other US public companies. It's hard
to be a public company here. And you know Chairman
Atkins has been talking about alleviating some of the burdens
of being public, trying to get the IPO market started,
things like that. All of that is good for us,
right if we can you know, streamline some disclosure requirements
(08:26):
and uh, you know, get more clarity on you know,
accounting rules and other things. Obviously, we are and will
remain a public company. It's good for us if there's
more I pos right, we're not right now, we're not
an EC firm, so we're not you know, taking private
interests in private companies at this point.
Speaker 1 (08:45):
Uh.
Speaker 3 (08:46):
You know, for us, it's good if there's more stocks
trading on the platform, and so we're very interested in
that whole work stream on, you know, streamlining the idea
of being a public company.
Speaker 2 (08:58):
You know, I'd love to come back and talk about crypto,
and I think we will in a minute, But first
I want to talk about tokenization because you know, we've seen,
like you just mentioned, we've seen a tremendous difference between
the Gary Gensler come in and registered mantra to what
we're seeing under the chair, you know, you know, Chair
Paul Ekins, And there was a lot of discussion of tokenization,
(09:19):
and you know, when I was reading about the SEC's
Crypto Task Force and Commissioner Purs's statement and tokenization, I
just thought, this is something that I think is probably
gonna be one of the biggest issues of twenty twenty
five released for the second half. So can we first
start off, can you explain to our listeners how tokenization
of securities works and how is Robinhood thinking about tokenization?
Speaker 3 (09:42):
So, you know, unfortunately right now you don't see a
lot of activity in the US as far as tokenizing
stock trading. We certainly don't have it for public companies
what we call the NMS equities, right, the NASDAC New
York List in stocks. I know there's some limited amount
of private company based blockchain trading going on, but it's
(10:06):
still very nationent tokenization to me, it takes two flavors, right.
It's sort of the current state, which is the idea
that you could trade a token that's basically a mirror
reflection of the underlying equity, right, that gives you the right,
you know, the economic interests in that underlying equity. But
(10:28):
it's a separate instrument, you know, kind of a derivative
kind of not because it's really got the same features.
But it trades on a blockchain, not in the traditional
equity market structure, right, not on an exchange with DTC
clearing it and brokers as intermediaries. That you know, there's
a lot of discussion about that, and you know, the
(10:49):
token versus the security, what rights do you have and
other things like that. You know, under the UCC there's
there's all sorts of debate. That's where a lot of
talk has happened. Now. I think the end state canon
should be where the token is the security, and that
where companies are issuing securities, whether they be bonds or equities,
(11:13):
into the blockchain, and that there's a recognition under state law.
By the way, fun fact because I know you got
a lot of lawyers listening, right the Delaware code. Fun
fact that the Delaware Corporate Code was amended in twenty
seventeen to allow recognition of tokens basically as equity interests
(11:37):
in Delaware corporations. Not a lot of use for it yet,
because you can do an issuance right it. It assumes
that a company's going to do an issuance into the blockchain,
but the secondary market trading side of it hasn't yet
been figured out. And that's the real debate that Nathan's
teed up here. So you can imagine a world though
(11:58):
where you know, Texas, I don't know if they've on
it yet, but they'll certainly if they haven't, they'll do
it soon. Right where all the states are recognizing a
different form and it's kind of like amending your the UCC,
right you're just saying, yeah, that that's token. Is your interests?
Is your security interest in that in that company, that's
your equity position. We're not there yet. I do think
(12:20):
that's where we should get to. So in the in
the current atmosphere, we're talking about, okay, tokens that represent
interests in underlying securities we haven't seen because of the
existing rules. A lot of innovation in the space. Another
fun fact I know you guys, I'll give you another
one of rapid fire fund facts. Uh, there's a company
(12:41):
called Paxos out there. I don't know if you've seen Paxos,
great innovative company, amazing CEO Chad is terrific. They came
in when Jay Clayton was SEC chairman and actually got
a no action letter that allowed them on a very
limited pilot basis to trade NMS equities in a blockchain. Now,
(13:04):
it was very complicated because they had to kind of
reverse the you know, or mirror image the trade into
the DTC at the end of the day, and there
was just a I think ten or so equities and
but it was kind of cool. And if you read
that no action letter, which is up on the SEC website,
Paxos did this amazing job of laying out all the
issues they faced and trying to provide that functionality and
(13:26):
then requesting the relief which they got. And you know,
when you read that list of issues to me, that
just lays out the current impediments to blockchain based tokenized
trading of equities today. You have to there's a requirement
that DTC clear these equities. You've got transfer agent issues,
(13:46):
you've got registration issues. Right. If you have a blockchain
that's just continually processing transactions, there's there's folks acting in
some capacity, right, or you know there's AI acting in
some capacity in the blockchain. Are they acting like a broker?
Are they acting like a transfer region? Are they acting
like an exchange? Are they acting like a clearing agency?
(14:08):
And if so, do they have to be registered with
the SEC? Current law would tell you yes, but it
would also tell you why this is silly, right, Like
some of these registration categories become either redundant or just
sort of superfluous in a blockchain based environment, and so
that type of relief is going to be needed from
(14:30):
the SEC. Right, we need relief from this requirement to
go clear and settle at DTC or at least some
relief where DTC is a node in the blockchain and
you know, validating transactions, something where you know, the government
gets comfortable that the protections that come with that registration
(14:50):
category are still being provided in the blockchain, and we're
not there yet. You know.
Speaker 2 (14:57):
I'm just amazed at the fact that somebody in Delaware
in twenty seventeen had to force Sight to put that
into the code. And if that person ever listens, I
hope they decided to buy bitcoin, because it just amazes
me that just that many years ago they were able.
Speaker 3 (15:11):
To do that. And full props on that one. You know.
A sub fun fact to the maiden fun fact is
that Jack Markell was the governor of Delaware at the
time and just an amazingly great guy. Actually sat on
a board with him of a company, a blockchain company.
He later became the ambassador to I don't know if
(15:35):
it's to the a Vatican or to Italy. I think
it might have been to Italy under Biden, but he
was Italy, it was Italy. Yeah, I mean, just an
amazing guy, great guy, you know, just a fun person,
generally super smart, but had that foresight because were almost
ten years later and that provision sitting there. So I just.
Speaker 1 (15:56):
Got technically it was Italy and San Marino. Oh we
should have him on the podcast.
Speaker 3 (16:01):
I love that. Yeah, you should get Dak Markel. He'd
be a fun one.
Speaker 2 (16:05):
So just one follow up on the tokenization. You you
listed out a lot of things like disclosures and compliance
and you know, things that he certainly excites Elliott and I,
but you know, for certain other you know folks out there,
you know, it may be more of a political handcuff
or more of a detriment towards innovation.
Speaker 4 (16:25):
Do you think as the SEC embarks.
Speaker 2 (16:28):
With this tokenization work that their views, maybe it's a
conditioner or person's view, that tokenization securities are still securities
and so forth like that. Are they going to stave
off any of the perceived benefits or do you think
that the compliance and disclosure aspects will actually just be
able to foster innovation.
Speaker 3 (16:46):
I think the latter, I mean, and it's funny. I
talked to Commissioner Purse after she put her statement out
and I said, I agree with everything you said. I mean,
this should be fully regulated, right and and it should
be you know, Blessed by the SEC. There was this
meme out there that you know, the crypto industry was
coming in and asking the SEC, you know, basically, let
(17:09):
us hokenize stock trading and don't apply any of the
rules to us. Now, if any of them were dumb
enough to actually ask for that, they warranted her notice
about tokens and they shouldn't be in DC. If you
ask me, we would never do that because we're realists.
And also, you know, as I mentioned that a lot
(17:31):
of protections for customers come with these impediments to tokenization,
right the registration categories and the requirement to clear and
settle to etc. Is born of really good rationale. It's
that you want to know that where your securities are.
You want, you know, not to have to trust some
blockchain or some cold wallet or something else that you
(17:52):
can't verify. But how do we replicate that or how
do we give some comfort to the government and therefore
to customers. But you know, what we come up with
on a blockchain is just as good, or quite frankly,
it's going to be even better. That's the challenge. And
I think we can get there, I really do, and
I think we have to get there quickly. I mean,
you know, I'm acting like we have three and a
(18:12):
half years here because we've been living you know, every
four years, we have a different economy and a different
I mean, it's just crazy. So I have to assume
the worst, you know, that we'll get a highly you know,
a repeat of the Biden administration here in twenty eight.
So let's get something together. Let's do it quickly, let's
lock it in. While we have Paul Atkins, you know,
(18:34):
who's a really you know, I would say, a visionary
when it comes to some of this stuff. While we
have hester still around, and while we have you know, folks,
whether it be at Finner A, DTC elsewhere, who are
really interested quite frankly and being part of this. I
actually give DTC a lot of credit.
Speaker 1 (18:51):
Yeah, just one last question on the tokenization. Do you
see any differences between you know, trying to put some
sort of tory framework around tokenization of publicly issued securities
versus private markets.
Speaker 3 (19:07):
Yeah, they're actually pretty big differences. I think. I think
eventually the public companies will just come along because it's
kind of like, what's the difference you know, if I
if I'm my stock is trading on ancient infrastructure now,
and it's clunky and there's a two day settlement cycle.
What do I a is the issue or care if
(19:27):
it's in a more efficient blockchain, real time settlement, you
know all the other benefits that come with that. So
I actually think for them it's just sort of a
commoditized experience and they'll they'll be fine with it. On
the private side, you have, I think each each company's
idiosyncratic and in their view of this, right do they
want the transparency, the liquidity, everything that comes with having
(19:52):
your equities, you know, being traded on a blockchain. Some do,
some don't, you know, you could you know, we had
recently we announced in the EU we had some tokens
on SpaceX and open ai and you know, you know
open Ai I would say, uh, you know, issued a
public statement saying, you know, we had no part of
this or whatever, and and you know I respect that,
(20:15):
And I think, you know, for them, it's less exciting
than it might be for SpaceX or some other even
smaller company to have a market, you know, a more
accessible market in their equity. So we'll see. I do
think I I think it will become a very good
thing eventually for private companies you know right now just
(20:38):
even even uh you know, keeping track of your holders
and vesting events and all these other things. I mean,
you have great services out there like Karta and others,
you know, but I think and you know, even the
blockchain can do the same and more. And I know
even the Kartas of the world are getting involved in
blockchain initiatives and things like that. So yeah, I think
(21:01):
this is all for the good, guys, and I think
it's all for the good for customers and what we
what we're coming up against though, and what you know,
we have to deal with their vested interests. Right. You
have you know, major institutions in the US that that
you know can't innovate quickly, that runs you know, these
mainframes in buildings and you know, that operate on antiquated
(21:26):
infrastructure that the current market structure works for them. And
they're powerful and you know they they're on the boards
of the important institutions. They're in Washington with with big
lobbying forces. So we're gonna have to kind of overcome that.
And I think the advancement of crypto and the legitimization
(21:46):
of crypto, which I know you guys want to talk
about too in Congress is going to help us on
the crypto related which is really just the blockchain innovation
that we're going to have on the equities and fixed
income side.
Speaker 1 (21:59):
And we're going to talkbout crypto a little more, but
before we get there, we'll leave the audience in suspense
on that. Let's talk AI a little because yesterday, which
was July twenty third, the President rolled out his AI
Action Plan, which you know, to summarize, basically encourages eliminating
regulations and barriers that unduly burden innovation in artificial intelligence.
(22:24):
And I know in March, SEC Commissioner Mark Uyada said
something similar that financial regulators should take a technology neutral
approach to AI, and that he was concerned about the
SEC potentially placing unnecessary barriers on artificial intelligence. I wanted
to get your perspective, you know, from your seat, what
(22:44):
do you see, as you know, barriers affecting robin Hood
and your competitors and peers in the financial regulatory space,
and you know, how do they affect Robinhood, how does
it affect robin Hood's customer base, and what are the
policy responses that you'd like to see coming from Washington
to foster AI.
Speaker 3 (23:03):
Yeah, great question, and you know, sort of the macro
answer is that the barrier for us at robin Hood
with our primary regulators right with with the SEC, with FINRA,
I guess CFTC also now since I last talked to
you guys, we registered in FCM with the CFTC and
the States and our and now our international operations. All
(23:26):
the rules and laws are written with human beings in mind,
right and now some you could read to allow for
technology or not. Some might actually speak to human actions
and regulating human actions. But you know, and we've encountered this,
I mean, I would say most specifically with FINRA over
the years, where the rules just have not kept pace
(23:49):
with the advancement of technology. And I give Robert Cook
over at Fenneral a lot of credit. He's on the
you know, this modernization kick where they're going to modernize
the rules. I wish they had done that before they
brought enforcement actions against me for you know, not not
fitting their rules because the rules are from nineteen fifty.
But you know, so really it's this sort of macro
(24:13):
issue of how do we make sure if we're going
to do things with AI that we used to use
humans for How do we make sure the regulators get comfortable,
you know, without amending their rules necessarily to say specifically
that AI can do it? But how do we get
them comfortable that AI can do what humans did yesterday?
(24:34):
They can AI can do it today? And what are
the controls around that? So you know, if I was
running the SEC, if I was running you know, finner
A CFTC, I think I would just start from like
this main thesis that we don't have to go amend
every rule to say AI because once you do that,
then you know the next thing comes along. Right, But
(24:56):
you have to recognize that AI can do everything that
humans can do, probably do it better. But what we
want to see as a regulator is that your AI
does what you think it does right, that that you
understand the code, you understand how it operates, and that
the outputs are consistent with what you say the output
(25:16):
should be. Right. So, if I'm a brokerage firm, make
me have policies and procedures on AI, you know, make
me write my code description in plain English so that
examiners can come in and understand what it does. Let
them test outputs to see if it's actually working right,
But otherwise let it, let it work like a human,
(25:37):
have supervision of it, right, make sure that there's somebody
that's going to ensure it's operating in that way that
tests it. You know, have internal lot of testing whatever
you want to do by way of controls. But that's it.
Don't don't try to get in there and regulate AI. Right.
And a great example it's just use the investment advisory
(25:57):
business right where you're you have a fiduciary reallylationship with
your customer. You guys have seen the rise of robo
advisors over the last twenty years, right, type of AI, right,
I mean, you know, not not very sophisticated in the
early stages. But what can that AI do that or
a human do that the AI can't when it comes
(26:19):
to recommending stocks and bonds and other you know, trading strategies.
The answer pretty soon is, you know, as AI develops,
it's gonna be nothing, right, I mean, the AI theoretically
should be better. It's going to take out the emotion
of it and just get to the bottom line. You know,
this is the best recommendation for you, like this trading strategy,
(26:41):
and so you know, why do you have to write
a whole rule set about that. The rule set today
anticipates that Nathan's on the phone, you know, telling you
Elliott what to do. Who cares if ahis doing it right?
And I think if we get into this mindset of,
oh my god, we have to go in and have
the rule for AI for advisory, it'll never happen. It'll
(27:02):
take three years, right, and it'll be like, oh gosh,
now I'm going to start trying to write a rule
that tells you how to code, or that tells you
what databases the AI can look at, or you know,
whatever it is, and we're just going to go off,
you know, off track. Instead, I think they should just
do a very principles based AI can do what humans do.
(27:24):
We get it, have supervision, have policies and procedures, let
you innovate, and let's see how it goes.
Speaker 1 (27:31):
So and well, I was going to say, I know,
Robin Hood in its policy position website says that you know,
it envisions a regulatory environment that foster's collaboration between the
industry and regulators. Are you seeing advancement in that area,
especially in the last six months.
Speaker 3 (27:49):
I mean, again, it's sort of night and day in
the last six months. I think you heard it from
you know SEC leadership in the last administration. You heard
it from the White House like this fear of AI.
We need to control it, we need to rein it in.
We need And it wasn't sort of a focus on
the positives, right And you saw this report yesterday, the
(28:10):
executive order from this administration. It's all largely focused on
the positives and and you know, eliminating barriers to using
AI and so yes, it's a much more collaborative environment.
I mean, I've had great conversations directly with the senior
folks at FINRA about you know, our intent to to
(28:30):
really start rolling out a lot more AI use cases.
We've got some great stuff going. We have AI c
X agents, you know, doing customer service. We rolled out
AI based we call it core Tex. It's a digest
that can you know, give give our customers more information
about particular stocks, you know, and what's happening with them
(28:53):
and what's moving you know, prices, things like that. I
I want to get to a world in which you know,
in the broker not just for advisory, but you know
in the broker that we're actually making recommendations to customers
using AI. The advisor that we rolled out is not
an AI based advisor. We actually have a you know,
(29:16):
a very experienced person, Steph Guild running that who was
on Wall Street, was at JP Morgan for I think
a couple decades and you know, expert in wealth management.
And that's sort of the value add touched there. But
I do I do think more and more we're going
to see a move to AI on the advisory site.
Speaker 2 (29:36):
So the time has come for what we've all been
waiting for. Let's go back to crypto. You know.
Speaker 4 (29:41):
So we actually saw significant progress in Washington when Congress
passed the Genius Act, the Stable Coin Bill, and the
House passed the Clarity Act, also known as what we've
been calling the.
Speaker 2 (29:53):
Crypto Market Structure Bill. And you know, I'd like to say, like,
so you've got the Genius Act, You've got this Clarity Act,
which defines you know, what cryptocurrencies should fall in more
of the securities bucket versus what falls in the commodities bucket.
Gives the CFTC authority over the spot markets. But you
also have the sec under chair Atkins doing some work.
(30:14):
You'll most likely have the CFTC under future chair Brian
Quinten's doing some work just because I'm going to go
out and Limbs say that Senate's going to confirm him.
You know, how does Robin Hoods think about all these
pieces of the puzzle and if you had your druthers,
what would the best endgame scenario look like for you
in the company.
Speaker 3 (30:33):
Yes, so, look, I'm a genius act. We were super excited.
Blad and Johan Crabat are head of Crypto. We're at
the White House for the signing ceremony that they sat
Blad between Chairman Atkins and Commissioner Purse. I told him,
be careful what you say you're sitting with the sec.
But it was a great moment I think for crypto
(30:54):
and and for the country, you know, to legitimize stable
coins and to really take a big step forward. I
think for cryptover at large. So and look stable coins,
you know it got a lot of bipartisan support. I
think it's gonna be like tokenization, and actually it'll be
intrinsically eyed to tokenization. Once you're in the blockchain, right
(31:17):
and you're using a stable coin to pay for your
Tesla stock, and it settles instantaneously and you know, your
your us DC is traded for your you know, TESLA
token immediately and it's in your account and you see it.
I mean, this is this is the future, right, But
we needed to legitimize stable coins first, because again, the
(31:37):
last administration is super hostile, you know, saying that stable
coins are security, stable coins are mutual funds. You know,
a lot of debate about their status too, which you know,
seemed a little silly to me, but but that's just
what it was. Uh. Clarity is is really where the
gain is, right, Clarity. You know, creating the market structure
(32:00):
for crypto is a huge moment and I don't think
we've seen anything like this guy since Dodd Frank and
derivatives quite frankly. Where Congress has decided we're going to
think about a market that exists, a multi trillion dollar market, right,
which we had with derivatives, which we do have with crypto,
and we're going to create the market structure for it.
(32:21):
We're going to allocate responsibility. We're going to be prescriptive
here and maybe principle there. And you know, I think
it's they've made great progress with it. I think there's
you know, going to be some peaks and changes obviously
to it before it ever gets you know, to the
President's desk for Robinhood. You know, we can pretty much
(32:43):
operate in any environment, I would say. So we're feeling,
from a business model perspective, pretty hedged with respect to
wherever they come out on Clarity. We've got our you know,
CFTC registered, NFA registered at FCM. We've got our broker dealer,
which is obviously you know, the biggest chunk of our
business and and historical business line at robin Hood. We've
(33:05):
got our crypto unit, which is heretofore unregistered but can
be if need be. It's and it's just kind of
fun when we sit back and look at you know, okay, well,
if it's SEC regulated, you know, for whatever purpose the
you know, the Clarity Act. Obviously there's a strong deference
to c FTC, but there's obviously a pathway for SEC registration.
(33:31):
What can we do there, What can we do on
the CFTC side, What do we do with our regulated identities?
I mean, one thing though, is for sure, and this
is where I think, you know, a bunch of folks
in the crypto community are waking up to what regulation
actually means. You know that that even the lightest touch
(33:51):
regulation where you you you're registered as X y Z
entity uh with whatever agency, but you all of a
sudden have reporting obligations, you have books and records requirements,
you get examined, maybe you have some appital requirements. Whatever
comes with it is a hell of a lot more
than existed today right when you have nothing. Right, So,
(34:14):
the the idea of give me regulation, you know, which
you've heard as a mantra from the community versus the
reality of man, this is actually pretty tough, and there's
a lot of programming that needs to be done, a
lot of tech spend, and you know, hiring you know,
experienced compliance professionals, things like that. I don't think that's
(34:35):
fully sunk in yet, but as the debate about clarity
goes on, you're seeing more and more attention paid.
Speaker 2 (34:40):
To that what happens if clarity doesn't pass?
Speaker 3 (34:43):
You know, I hope, I gosh, I hope we don't
face that. But you know, I testified after I talked
to you guys. I testified in the fall last year
in House Financial Services, and I laid out pretty cleanly
that you know, the existing statutory authority. I just agreed
with Gary Gensler when he said the existing securities laws
(35:04):
accommodate crypto. I disagree with that because the existing securities
laws literally didn't from an infrastructure standpoint, you know, all
the things we talked about with tokenization, all that, they
just don't allow for it. Right, They issued disclosure pieces
all this. But the existing securities laws, as modified through
(35:25):
the use of exemptive authority at the SEC, can accommodate crypto. Right,
Maybe not in a way that you'd like. Maybe you'd
prefer Congress to act. I would, given what the current
Supreme Court has said about you know, major issues and
other things like that, Right, I would want a little
more certainty from Congress. But if the SEC used the
(35:48):
exemptive authority that was given to it by Congress in
nineteen ninety six in Ismia, right, which was I mean
a brilliant stroke by Congress at the time and again
hugely bipartisan, where they said, geez, things are moving fast
in markets. Let's give the SEC this exemptive authority that'll
allow it to kind of with a scalpel, exempt people
(36:11):
from certain provisions of the securities laws to accommodate new technologies,
changes in the markets and the like, and people forget that.
Back in ninety seven, the sec under Arthur Levitt used
that authority to create Reggaets. Right. They saw these platforms
that were rising and were great as far as efficiencies,
(36:33):
and we're driving prices down, good for investors, but they
kind of were in exchange. And instead of saying you're
all in exchange and putting them out of business, they
came in creating Reggaets and you know, a thousand ships
sailed from that and so and they cite it. I mean,
it's really great. And the forward to that rule they say,
Congress gave us this authority so we could accommodate new technology.
(36:55):
So section thirty six in the thirty four, which you
know is the exempt of authority from NISMIA, they could
use that. I know there's other provisions in the rest
of the securities laws too that mirror that. And you
go in, you carve it up and you say, okay,
let's create a rule set that accommodates crypto. Recognize that
(37:17):
it's temporary until Congress can finally act, but get something
in place where people are registered and there's some basic
investor protections provided right, some level of transparency, reporting, examination, books,
and records, that sort of thing should be done, could
have been done, could have been done, you know, the
sec could have done it last four years. We showed
(37:37):
them how to do it at Robinhood. When Gary said
coming in register, we said, okay, here do this for us,
and we will because right now we can't under the
securities laws. And we came in asked for no action, relief,
exemptor relief, whatever it was, and showed them where the
rules don't work, and they had no interest none.
Speaker 1 (37:57):
I wanted to shift topics a little bit because this
is another area that's been in the news a lot,
prediction markets, particularly as it relates to sports events, and
how we should think about event contracts in relation to
sports gambling. I know robin Hood and CALCI have both
(38:18):
received cease and desist letters from various states such as
New Jersey and Nevada, you know, concerning event contracts on
sport and events, and some of the states say that
the contracts represent unauthorized sports gambling. I'm following a couple
of cases where CALSI sued New Jersey and Nevada, and
(38:40):
it'd want preliminary rulings, essentially allowing CALS to continue offering
those event contracts at least for now as the litigation
plays out. I think Robinhood sort of took a little
bit of a different approach, and I know in a
couple of instances they removed the event contracts from their
offerings related to March Madness and the Super Bowl. I'm
I really am interested in and your thoughts on how
(39:01):
we should just generally, how should we think about event
contracts when it comes to sports, you know, how is
it different from sports gambling. And I'm curious also why
robin Hood sort of took a different approach than Cal
she did by removing those contracts rather than trying to
contest them in court.
Speaker 3 (39:22):
Yes, so, look at the highest level, I think prediction
markets are incredibly exciting. I think it's an awesome I mean,
it is an asset class I just but I actually
just think it's such a useful tool. You know, we
ran the presidential election contract on our platform. I mean
it was like spot on. I mean, I don't even
know if there was any deviation from the actual results.
(39:45):
It was so much more informative than what you'd read
in the polls. That. You know, it really just proves
the power of the crowd, you know, is is very mighty.
So so at a general level, I think it's it's great.
But you do then get into some pretty thorny issues, right,
what what should the limitations be on what those contracts
(40:07):
can cover? Elections are one thing, and the judge in
the Calcie case in d C said those are not prohibited,
that those those can be you know, covered by the
CEA and and and that was the case against cal Case. Yeah,
and I think that was the right decision by the
court there. And you know there are proscriptions right in
(40:30):
the wall that say you can't you know, national or
you know, you couldn't have like assassination odds or things
like that. That really but that's a slippery slope from
a policy perspective. What's okay and what's not right? There's
the main body of event contracts and prediction is pretty obvious, Right,
is the FED going to raise rates? You know, Uh,
(40:53):
is there going to be a hurricane in the Gulf?
You know in August that those sorts of things, Uh,
you know, elections are another flavor. And then of course,
you know, you get into sports and you know, I
would say, you know, to your question, we're all about
providing access to our customers to everything that is suitable
(41:17):
for our regulated entities to offer. So on the brokerage side,
you know, it's we do the listed equities. We do
three hundred bulletin board stocks that are really mostly eighty
rs of big blue chip companies. We have you know, crypto,
but that's a limited offering, you know, to we choose
what we want to offer on the crypto side, and
(41:37):
that's generally more liquid instruments and the like. And then
on the event contract side, this is still evolving right that.
You saw Russ Benham, who's terrific by the way, you know,
proposed a rule that would have prohibited you know, any
types of sports e end contracts. That that rule is still,
(41:58):
i guess technically pending. So the CFTC has kind kind
of caught midstream right now. They started policymaking, they didn't
conclude it. There was litigation. The litigation muddied it up
a bit, and in the meantime, you know, Calshi and
crypto dot Com I think and ibkr's entity have been
offering the contracts. We got our registration, you know our
(42:21):
FCM registration and we're able to provide access to those
you know, through CALSHI, through others, and you know, have
decided to do it when we were threatened, you know,
with by states saying hey, we think this is illegal.
We've been trying to be very deferential to the states.
I get it, like intellectually, practically speaking, I understand where
(42:45):
they're coming from. Right, you have states like New Jersey
and Nevada that look at the institution of gambling in
those states, right, it's critically important to those states tax revenues,
I mean, the number of people employed. Like it's just
a big deal. And you know, I think at Robinhood,
we've decided to look, so many of our customers are
interested in either sports, betting off you know, using other apps.
(43:11):
You know, they're there have other accounts. Maybe we you know,
instead of them going off Robinhood, we could offer this here.
Whether that be whether a state regulated product or a
CFTC regulated product, you know, is still a bit of
an open question. But in the meantime, since the CFTC
regulated product has become available, and quite frankly, you know,
(43:36):
the courts of affirm that there's preemption we're offering it,
you know, expecting that there'll be more clarity down the road,
right that eventually we already have a built in circuit
split you know in the court that the Supreme Court
will eventually get pulled in and and weigh into it.
So we're trying our best to be respectful of the
interests of the states, the Indian tribes. We're not saying, oh, geez,
(43:59):
you have you know, oh, we totally disregard your interests here.
But at the same time we're trying to balance that
with what the customers want and quite frankly, if it's legal,
we should be able to provide it, and in the
courts of affirm.
Speaker 1 (44:13):
That it is.
Speaker 2 (44:14):
So it's my my pleasure to come in with the
most difficult question of the day. Last year, we asked
you what three pieces of music you would take on
a desert island, and I think you two is the
almost the immediate answer that came out, you know, from
from your answer.
Speaker 3 (44:30):
So I have a different question today.
Speaker 2 (44:31):
Let's say that you're going to go over to your
London office and you've got seven hours on a plane.
What types of television or movies are you bringing with
you have you seen anything recently that really is you know,
you're thinking some great quality work.
Speaker 3 (44:49):
You know. I've been on a little bit of like
a Netflix binge thing, and I'm fortunate. I'm like, I'm
coming up dry. I've seen it all right, and I
and I fly you now you a lot, and so
I'm kind of stuck with whatever. You go to that
box collection thing on United TV, and and I made
it blissfully. I've been flying to some pretty far from places,
(45:11):
so I made it all the way through Landman two
seasons on Netflix, and that was unbelievable. Billy Bob Thorton.
I mean just I had no idea what to expect.
I heard from one of my colleagues, this is great.
I didn't even know what it was about. And I
just it's like, he's so incredible, and it was, you know,
I was I think I landed in Dulles and I
(45:31):
still had like ten minutes left of the last one.
I'm like, oh god, oh god, I hope the gage's
not open, you know, that sort of thing which never
happens the plane. I was like, because I can't watch
it home, I can't pick it back up.
Speaker 1 (45:43):
You know.
Speaker 3 (45:46):
I love Yellowstone and all the prequels and sequel I
just think all of that is so well done. Unfortunately
I've run my course on that one too. I kind
of like, you know, I kind of like, you know,
some of the you know, war movies or you know,
that whole genre, you know, whether it be you know,
(46:08):
some of the you know, World War two movies or
other things. I always get a kick out of those,
the modern, more modern ones, you know. Like I mean,
I sort of got I watch American Sniper like every time.
I can't get past it. Every time I'm like, oh,
maybe I'll just watch a few minutes of it, and
of course two hours later, you know, my head's turned
and I've watched the whole thing again. So but I'm
(46:29):
kind of it's like my you know we talked about
with music, I'm kind of all over the place, you know.
I like taking recommendations from folks, and I kind of
like watching a little bit of a little bit of everything.
But I have a nineteen hour flight coming up on Sunday,
so h Lucas Moskowitz our GC here and I've been
talking about, like God, we got to download some stuff
(46:51):
because I don't think the airline has enough to keep
me interested.
Speaker 1 (46:55):
Yeah, although you'll maybe you'll wind up watching American Sniper
ten times.
Speaker 3 (46:59):
Well, what you guys have any recommendation for me?
Speaker 1 (47:01):
Yeah?
Speaker 2 (47:02):
If I don't know, if you know Star Wars, but
and Or season two was amazing. I mean it's it's
not just a sto Wars, but I really really.
Speaker 3 (47:09):
Like that one on North season two.
Speaker 2 (47:10):
Okay, just watch season one in season two, Okay, Okay.
Speaker 1 (47:13):
We just started watching The Waterfront, which we really enjoy
so far. Oh okay, Unfortunately, I think we're going to
have to leave it there. These were great recommendations, Dan,
and as always, really great insights into our evolving markets
and the evolving regulatory landscape. We really appreciate you coming
back on votes and verdicts and sharing your time and
insights with us. We hope to have you again soon.
(47:36):
You're I believe, only our second repeat guests so far,
so maybe you'll be our first free pet fun. I'll
accept the invitation if you'll have me awesome and our
safe travels on your upcoming flight. And as a reminder
to our listeners, you can read all of our Bloomberg
intelligence research on the Bloomberg terminal at Big With that,
(47:57):
thank you again and have a great day.
Hello, and welcome to the Votes and Verdicts podcast, hosted
by the litigation and policy team at Bloomberg Intelligence. Bloomberg
Intelligence is the investment research platform on the Bloomberg Terminal,
with five hundred analysts and strategists working across the globe
and focused on all major markets. Our coverage includes over
two thousand equities and credits, and we have outlooks on
(00:37):
more than ninety industries and one hundred market indices, currencies
and commodities. This podcast series examines the intersection of business
policy and law. I'm Elliott Stein, an analysts with Bloomberg
Intelligence covering financials litigation, and.
Speaker 2 (00:51):
My name is Nathan Dean, and I'm an analyst with
Bloomberg Intelligence covering financials policy.
Speaker 1 (00:56):
So today is a very special episode because we are
recording this almost exactly twelve months since we did our
last episode with our very esteemed guest, Dan Gallagher, Chief
Legal Compliance and Corporate Affairs Officer of Robinhood Markets. Dan,
Welcome back to the Votes and Verdicts podcast.
Speaker 3 (01:17):
Hey guys, thanks for having me. I'm really excited to
be back. We had a lot of fun last time.
Speaker 1 (01:21):
Yeah, agreed, and we're looking forward to doing this episode
as well.
Speaker 3 (01:24):
So for our.
Speaker 1 (01:25):
Listeners, I definitely recommend that you go back and listen
to our last episode with Dan from twenty twenty four.
But and in that episode we went over his credentials extensively.
But given Dan's impressive background, I think it's just worth
highlighting a few of those credentials again. Prior to joining
(01:46):
Robin Hood, Dan was partner and deputy chair of the
securities department at the law firm Wilmer Hale. He also
served as a Commissioner of the US Securities and Exchange
Commission the SEC from twenty eleven to twenty fifteen, and
he held several other positions at the SEC on the
SEC staff prior to being an appointed commissioner. Dan's previous experience
(02:06):
also includes serving as the chief legal officer at Mylin,
a leading global pharmaceutical company, and as a president of
a financial services consulting firm.
Speaker 3 (02:16):
All right, Dan, let's bring you in.
Speaker 1 (02:18):
Normally, we always ask our guests with the first question
to tell us about their work history. But since we
did that last time, and since I sort of just
went over that in brief, why don't we sort of
focus on the last twelve months since you were last on. Obviously,
we're we were just passed the six month mark of
(02:39):
the second Trump administration. So maybe to start off, you
can give us an update on recent developments at robin
Hood over the past year, and you know, maybe more specifically,
how what has changed for the company, what's better, what's
worse over the last six months under the Trump administration.
Speaker 3 (02:57):
Look, I couldn't be more excited to come and give
you guys the update because a year ago, when when
we were talking about the regulatory policy issues that we
were dealing with at Robinhood, it was a pretty bleak, right.
We had I think, as I told you at the time,
five federal rules, all all aimed at our business model
(03:18):
like scud missiles ready to blow us up. We had
SEC enforcement all over us in fin reinforcement. I mean,
it just was a very hostile environment in which to
you know, provide financial services generally, but to be in
at based brokerage and to be robin Hood. Quite frankly,
(03:39):
there was you know, I think there was an actual
prejudice against Robinhood by the prior administration and the agencies
implementing their policies. And you know, I don't think it
was appropriate, but I think there was one, and like
Presto Changoh, since November, things could not be any more different.
(04:00):
You know. We we have a very very knowledgeable and
business friendly SEC chairman and Paul Atkins a good friend
of mine, my my former boss. Uh, that's certainly one
of my mentors.
Speaker 1 (04:11):
You know.
Speaker 3 (04:11):
I worked for him when he was a commissioner. I
worked for him at Potoma Global Partners. And he understands
the issues facing brokerage firms and other players in the
in the capital markets. He's been living them for decades
and and you know, very knowledgeable, but also you know,
a free market guy and and not somebody who thinks
(04:31):
that regulation is always the answer to any problem. So
I you know, it's a an absolute sea change in
the regulatory environment. I joke with my team here at
robin Hood. You know, I have the I have the
government affairs team, I have external affairs. I'm legal, you know,
I've got corporate compliance and I you know, I said
to these teams coming into January, guys, girls like we
(04:54):
need to start thinking offensively. We need to start going
front foot. You know, we got very very good at
the defense at the back foot and that's great, and
you know we're still alive. We weathered this storm largely intact,
which is amazing. But now we have to start thinking,
here's an environment in which we can actually help Robinhood
(05:17):
progress and help Robinhood customers. What are the types of
things we need to be doing to put some WS
on the board, not just to defend, but to put
some WS on the board. And it's just been really
fun to use your brain in a different way.
Speaker 1 (05:31):
And what are some of the areas where you could
see robin Hood sort of going on the offensive?
Speaker 3 (05:35):
Like you mentioned, there's a couple buckets see for me.
One obviously is crypto. As you guys know and I
think we talked about last year, we ran a very
conservative crypto platform during the Biden administration. We didn't list
four hundred coins, we didn't do staking, we didn't do lending,
(05:56):
we didn't do all these things that our competitors in
the crypto space were doing, all with a mind towards
being respectful of what the then leadership at the SEC
was saying, the rules are you know, and Gary was
basically saying everything's a security and come in register. We
disagreed on the everything as a security, but we did
(06:17):
try to come in and register. We didn't do anything flagrantly,
you know, in violation of the securities laws. We actually
pretended like we were regulated. We operated our crypto entity
like it was a broker. You know, we did tax reporting,
we did fee disclosure to customers. We tried to create
(06:39):
best execution in a world in which you know there's
no MBBO. I mean, very hard thing to do, and
we think that was all good for the customers. Could
we have made more money, yeah, if we had listed
more coins and done other allowed other features that the
competitors were doing. We didn't, and you know, looking back
on it, I think it was the right tact. And
you know, we came out, we got a way l letter,
(07:00):
we never got sued by the SEC. And now of
course you have you know, Congress working on on crypto,
and so we're working with Congress, we're working with the SEC.
You know, we've been able to expand the platform with
some clarity coming from the SEC on things like meaning
coins and staking. But there's more to do. So so
crypto is a big one for us. I would say,
(07:22):
you know, market structure. If you remember right after Game Stop,
this whole notion that payment for order flow is somehow
bad and must be. I mean basically the last SEC
was going to kill it with some of the rule
proposals they came out with, you know, recognizing that it's
not bad and it's you know, to the extent that
people think it's a conflict or the other issues with it.
(07:44):
What can we do, you know, proactively to alleviate any
of those concerns. What kind of disclosure or other things
can we do with payment for order flow? You know,
can we work on And so those were thinking about that,
and then you know, we're a public company two, uh,
a big one at this point. You know, the companies
(08:04):
really had a nice run and and you know we
we have issues like other US public companies. It's hard
to be a public company here. And you know Chairman
Atkins has been talking about alleviating some of the burdens
of being public, trying to get the IPO market started,
things like that. All of that is good for us,
right if we can you know, streamline some disclosure requirements
(08:26):
and uh, you know, get more clarity on you know,
accounting rules and other things. Obviously, we are and will
remain a public company. It's good for us if there's
more I pos right, we're not right now, we're not
an EC firm, so we're not you know, taking private
interests in private companies at this point.
Speaker 1 (08:45):
Uh.
Speaker 3 (08:46):
You know, for us, it's good if there's more stocks
trading on the platform, and so we're very interested in
that whole work stream on, you know, streamlining the idea
of being a public company.
Speaker 2 (08:58):
You know, I'd love to come back and talk about crypto,
and I think we will in a minute, But first
I want to talk about tokenization because you know, we've seen,
like you just mentioned, we've seen a tremendous difference between
the Gary Gensler come in and registered mantra to what
we're seeing under the chair, you know, you know, Chair
Paul Ekins, And there was a lot of discussion of tokenization,
(09:19):
and you know, when I was reading about the SEC's
Crypto Task Force and Commissioner Purs's statement and tokenization, I
just thought, this is something that I think is probably
gonna be one of the biggest issues of twenty twenty
five released for the second half. So can we first
start off, can you explain to our listeners how tokenization
of securities works and how is Robinhood thinking about tokenization?
Speaker 3 (09:42):
So, you know, unfortunately right now you don't see a
lot of activity in the US as far as tokenizing
stock trading. We certainly don't have it for public companies
what we call the NMS equities, right, the NASDAC New
York List in stocks. I know there's some limited amount
of private company based blockchain trading going on, but it's
(10:06):
still very nationent tokenization to me, it takes two flavors, right.
It's sort of the current state, which is the idea
that you could trade a token that's basically a mirror
reflection of the underlying equity, right, that gives you the right,
you know, the economic interests in that underlying equity. But
(10:28):
it's a separate instrument, you know, kind of a derivative
kind of not because it's really got the same features.
But it trades on a blockchain, not in the traditional
equity market structure, right, not on an exchange with DTC
clearing it and brokers as intermediaries. That you know, there's
a lot of discussion about that, and you know, the
(10:49):
token versus the security, what rights do you have and
other things like that. You know, under the UCC there's
there's all sorts of debate. That's where a lot of
talk has happened. Now. I think the end state canon
should be where the token is the security, and that
where companies are issuing securities, whether they be bonds or equities,
(11:13):
into the blockchain, and that there's a recognition under state law.
By the way, fun fact because I know you got
a lot of lawyers listening, right the Delaware code. Fun
fact that the Delaware Corporate Code was amended in twenty
seventeen to allow recognition of tokens basically as equity interests
(11:37):
in Delaware corporations. Not a lot of use for it yet,
because you can do an issuance right it. It assumes
that a company's going to do an issuance into the blockchain,
but the secondary market trading side of it hasn't yet
been figured out. And that's the real debate that Nathan's
teed up here. So you can imagine a world though
(11:58):
where you know, Texas, I don't know if they've on
it yet, but they'll certainly if they haven't, they'll do
it soon. Right where all the states are recognizing a
different form and it's kind of like amending your the UCC,
right you're just saying, yeah, that that's token. Is your interests?
Is your security interest in that in that company, that's
your equity position. We're not there yet. I do think
(12:20):
that's where we should get to. So in the in
the current atmosphere, we're talking about, okay, tokens that represent
interests in underlying securities we haven't seen because of the
existing rules. A lot of innovation in the space. Another
fun fact I know you guys, I'll give you another
one of rapid fire fund facts. Uh, there's a company
(12:41):
called Paxos out there. I don't know if you've seen Paxos,
great innovative company, amazing CEO Chad is terrific. They came
in when Jay Clayton was SEC chairman and actually got
a no action letter that allowed them on a very
limited pilot basis to trade NMS equities in a blockchain. Now,
(13:04):
it was very complicated because they had to kind of
reverse the you know, or mirror image the trade into
the DTC at the end of the day, and there
was just a I think ten or so equities and
but it was kind of cool. And if you read
that no action letter, which is up on the SEC website,
Paxos did this amazing job of laying out all the
issues they faced and trying to provide that functionality and
(13:26):
then requesting the relief which they got. And you know,
when you read that list of issues to me, that
just lays out the current impediments to blockchain based tokenized
trading of equities today. You have to there's a requirement
that DTC clear these equities. You've got transfer agent issues,
(13:46):
you've got registration issues. Right. If you have a blockchain
that's just continually processing transactions, there's there's folks acting in
some capacity, right, or you know there's AI acting in
some capacity in the blockchain. Are they acting like a broker?
Are they acting like a transfer region? Are they acting
like an exchange? Are they acting like a clearing agency?
(14:08):
And if so, do they have to be registered with
the SEC? Current law would tell you yes, but it
would also tell you why this is silly, right, Like
some of these registration categories become either redundant or just
sort of superfluous in a blockchain based environment, and so
that type of relief is going to be needed from
(14:30):
the SEC. Right, we need relief from this requirement to
go clear and settle at DTC or at least some
relief where DTC is a node in the blockchain and
you know, validating transactions, something where you know, the government
gets comfortable that the protections that come with that registration
(14:50):
category are still being provided in the blockchain, and we're
not there yet. You know.
Speaker 2 (14:57):
I'm just amazed at the fact that somebody in Delaware
in twenty seventeen had to force Sight to put that
into the code. And if that person ever listens, I
hope they decided to buy bitcoin, because it just amazes
me that just that many years ago they were able.
Speaker 3 (15:11):
To do that. And full props on that one. You know.
A sub fun fact to the maiden fun fact is
that Jack Markell was the governor of Delaware at the
time and just an amazingly great guy. Actually sat on
a board with him of a company, a blockchain company.
He later became the ambassador to I don't know if
(15:35):
it's to the a Vatican or to Italy. I think
it might have been to Italy under Biden, but he
was Italy, it was Italy. Yeah, I mean, just an
amazing guy, great guy, you know, just a fun person,
generally super smart, but had that foresight because were almost
ten years later and that provision sitting there. So I just.
Speaker 1 (15:56):
Got technically it was Italy and San Marino. Oh we
should have him on the podcast.
Speaker 3 (16:01):
I love that. Yeah, you should get Dak Markel. He'd
be a fun one.
Speaker 2 (16:05):
So just one follow up on the tokenization. You you
listed out a lot of things like disclosures and compliance
and you know, things that he certainly excites Elliott and I,
but you know, for certain other you know folks out there,
you know, it may be more of a political handcuff
or more of a detriment towards innovation.
Speaker 4 (16:25):
Do you think as the SEC embarks.
Speaker 2 (16:28):
With this tokenization work that their views, maybe it's a
conditioner or person's view, that tokenization securities are still securities
and so forth like that. Are they going to stave
off any of the perceived benefits or do you think
that the compliance and disclosure aspects will actually just be
able to foster innovation.
Speaker 3 (16:46):
I think the latter, I mean, and it's funny. I
talked to Commissioner Purse after she put her statement out
and I said, I agree with everything you said. I mean,
this should be fully regulated, right and and it should
be you know, Blessed by the SEC. There was this
meme out there that you know, the crypto industry was
coming in and asking the SEC, you know, basically, let
(17:09):
us hokenize stock trading and don't apply any of the
rules to us. Now, if any of them were dumb
enough to actually ask for that, they warranted her notice
about tokens and they shouldn't be in DC. If you
ask me, we would never do that because we're realists.
And also, you know, as I mentioned that a lot
(17:31):
of protections for customers come with these impediments to tokenization,
right the registration categories and the requirement to clear and
settle to etc. Is born of really good rationale. It's
that you want to know that where your securities are.
You want, you know, not to have to trust some
blockchain or some cold wallet or something else that you
(17:52):
can't verify. But how do we replicate that or how
do we give some comfort to the government and therefore
to customers. But you know, what we come up with
on a blockchain is just as good, or quite frankly,
it's going to be even better. That's the challenge. And
I think we can get there, I really do, and
I think we have to get there quickly. I mean,
you know, I'm acting like we have three and a
(18:12):
half years here because we've been living you know, every
four years, we have a different economy and a different
I mean, it's just crazy. So I have to assume
the worst, you know, that we'll get a highly you know,
a repeat of the Biden administration here in twenty eight.
So let's get something together. Let's do it quickly, let's
lock it in. While we have Paul Atkins, you know,
(18:34):
who's a really you know, I would say, a visionary
when it comes to some of this stuff. While we
have hester still around, and while we have you know, folks,
whether it be at Finner A, DTC elsewhere, who are
really interested quite frankly and being part of this. I
actually give DTC a lot of credit.
Speaker 1 (18:51):
Yeah, just one last question on the tokenization. Do you
see any differences between you know, trying to put some
sort of tory framework around tokenization of publicly issued securities
versus private markets.
Speaker 3 (19:07):
Yeah, they're actually pretty big differences. I think. I think
eventually the public companies will just come along because it's
kind of like, what's the difference you know, if I
if I'm my stock is trading on ancient infrastructure now,
and it's clunky and there's a two day settlement cycle.
What do I a is the issue or care if
(19:27):
it's in a more efficient blockchain, real time settlement, you
know all the other benefits that come with that. So
I actually think for them it's just sort of a
commoditized experience and they'll they'll be fine with it. On
the private side, you have, I think each each company's
idiosyncratic and in their view of this, right do they
want the transparency, the liquidity, everything that comes with having
(19:52):
your equities, you know, being traded on a blockchain. Some do,
some don't, you know, you could you know, we had
recently we announced in the EU we had some tokens
on SpaceX and open ai and you know, you know
open Ai I would say, uh, you know, issued a
public statement saying, you know, we had no part of
this or whatever, and and you know I respect that,
(20:15):
And I think, you know, for them, it's less exciting
than it might be for SpaceX or some other even
smaller company to have a market, you know, a more
accessible market in their equity. So we'll see. I do
think I I think it will become a very good
thing eventually for private companies you know right now just
(20:38):
even even uh you know, keeping track of your holders
and vesting events and all these other things. I mean,
you have great services out there like Karta and others,
you know, but I think and you know, even the
blockchain can do the same and more. And I know
even the Kartas of the world are getting involved in
blockchain initiatives and things like that. So yeah, I think
(21:01):
this is all for the good, guys, and I think
it's all for the good for customers and what we
what we're coming up against though, and what you know,
we have to deal with their vested interests. Right. You
have you know, major institutions in the US that that
you know can't innovate quickly, that runs you know, these
mainframes in buildings and you know, that operate on antiquated
(21:26):
infrastructure that the current market structure works for them. And
they're powerful and you know they they're on the boards
of the important institutions. They're in Washington with with big
lobbying forces. So we're gonna have to kind of overcome that.
And I think the advancement of crypto and the legitimization
(21:46):
of crypto, which I know you guys want to talk
about too in Congress is going to help us on
the crypto related which is really just the blockchain innovation
that we're going to have on the equities and fixed
income side.
Speaker 1 (21:59):
And we're going to talkbout crypto a little more, but
before we get there, we'll leave the audience in suspense
on that. Let's talk AI a little because yesterday, which
was July twenty third, the President rolled out his AI
Action Plan, which you know, to summarize, basically encourages eliminating
regulations and barriers that unduly burden innovation in artificial intelligence.
(22:24):
And I know in March, SEC Commissioner Mark Uyada said
something similar that financial regulators should take a technology neutral
approach to AI, and that he was concerned about the
SEC potentially placing unnecessary barriers on artificial intelligence. I wanted
to get your perspective, you know, from your seat, what
(22:44):
do you see, as you know, barriers affecting robin Hood
and your competitors and peers in the financial regulatory space,
and you know, how do they affect Robinhood, how does
it affect robin Hood's customer base, and what are the
policy responses that you'd like to see coming from Washington
to foster AI.
Speaker 3 (23:03):
Yeah, great question, and you know, sort of the macro
answer is that the barrier for us at robin Hood
with our primary regulators right with with the SEC, with FINRA,
I guess CFTC also now since I last talked to
you guys, we registered in FCM with the CFTC and
the States and our and now our international operations. All
(23:26):
the rules and laws are written with human beings in mind,
right and now some you could read to allow for
technology or not. Some might actually speak to human actions
and regulating human actions. But you know, and we've encountered this,
I mean, I would say most specifically with FINRA over
the years, where the rules just have not kept pace
(23:49):
with the advancement of technology. And I give Robert Cook
over at Fenneral a lot of credit. He's on the
you know, this modernization kick where they're going to modernize
the rules. I wish they had done that before they
brought enforcement actions against me for you know, not not
fitting their rules because the rules are from nineteen fifty.
But you know, so really it's this sort of macro
(24:13):
issue of how do we make sure if we're going
to do things with AI that we used to use
humans for How do we make sure the regulators get comfortable,
you know, without amending their rules necessarily to say specifically
that AI can do it? But how do we get
them comfortable that AI can do what humans did yesterday?
(24:34):
They can AI can do it today? And what are
the controls around that? So you know, if I was
running the SEC, if I was running you know, finner
A CFTC, I think I would just start from like
this main thesis that we don't have to go amend
every rule to say AI because once you do that,
then you know the next thing comes along. Right, But
(24:56):
you have to recognize that AI can do everything that
humans can do, probably do it better. But what we
want to see as a regulator is that your AI
does what you think it does right, that that you
understand the code, you understand how it operates, and that
the outputs are consistent with what you say the output
(25:16):
should be. Right. So, if I'm a brokerage firm, make
me have policies and procedures on AI, you know, make
me write my code description in plain English so that
examiners can come in and understand what it does. Let
them test outputs to see if it's actually working right,
But otherwise let it, let it work like a human,
(25:37):
have supervision of it, right, make sure that there's somebody
that's going to ensure it's operating in that way that
tests it. You know, have internal lot of testing whatever
you want to do by way of controls. But that's it.
Don't don't try to get in there and regulate AI. Right.
And a great example it's just use the investment advisory
(25:57):
business right where you're you have a fiduciary reallylationship with
your customer. You guys have seen the rise of robo
advisors over the last twenty years, right, type of AI, right,
I mean, you know, not not very sophisticated in the
early stages. But what can that AI do that or
a human do that the AI can't when it comes
(26:19):
to recommending stocks and bonds and other you know, trading strategies.
The answer pretty soon is, you know, as AI develops,
it's gonna be nothing, right, I mean, the AI theoretically
should be better. It's going to take out the emotion
of it and just get to the bottom line. You know,
this is the best recommendation for you, like this trading strategy,
(26:41):
and so you know, why do you have to write
a whole rule set about that. The rule set today
anticipates that Nathan's on the phone, you know, telling you
Elliott what to do. Who cares if ahis doing it right?
And I think if we get into this mindset of,
oh my god, we have to go in and have
the rule for AI for advisory, it'll never happen. It'll
(27:02):
take three years, right, and it'll be like, oh gosh,
now I'm going to start trying to write a rule
that tells you how to code, or that tells you
what databases the AI can look at, or you know,
whatever it is, and we're just going to go off,
you know, off track. Instead, I think they should just
do a very principles based AI can do what humans do.
(27:24):
We get it, have supervision, have policies and procedures, let
you innovate, and let's see how it goes.
Speaker 1 (27:31):
So and well, I was going to say, I know,
Robin Hood in its policy position website says that you know,
it envisions a regulatory environment that foster's collaboration between the
industry and regulators. Are you seeing advancement in that area,
especially in the last six months.
Speaker 3 (27:49):
I mean, again, it's sort of night and day in
the last six months. I think you heard it from
you know SEC leadership in the last administration. You heard
it from the White House like this fear of AI.
We need to control it, we need to rein it in.
We need And it wasn't sort of a focus on
the positives, right And you saw this report yesterday, the
(28:10):
executive order from this administration. It's all largely focused on
the positives and and you know, eliminating barriers to using
AI and so yes, it's a much more collaborative environment.
I mean, I've had great conversations directly with the senior
folks at FINRA about you know, our intent to to
(28:30):
really start rolling out a lot more AI use cases.
We've got some great stuff going. We have AI c
X agents, you know, doing customer service. We rolled out
AI based we call it core Tex. It's a digest
that can you know, give give our customers more information
about particular stocks, you know, and what's happening with them
(28:53):
and what's moving you know, prices, things like that. I
I want to get to a world in which you know,
in the broker not just for advisory, but you know
in the broker that we're actually making recommendations to customers
using AI. The advisor that we rolled out is not
an AI based advisor. We actually have a you know,
(29:16):
a very experienced person, Steph Guild running that who was
on Wall Street, was at JP Morgan for I think
a couple decades and you know, expert in wealth management.
And that's sort of the value add touched there. But
I do I do think more and more we're going
to see a move to AI on the advisory site.
Speaker 2 (29:36):
So the time has come for what we've all been
waiting for. Let's go back to crypto. You know.
Speaker 4 (29:41):
So we actually saw significant progress in Washington when Congress
passed the Genius Act, the Stable Coin Bill, and the
House passed the Clarity Act, also known as what we've
been calling the.
Speaker 2 (29:53):
Crypto Market Structure Bill. And you know, I'd like to say, like,
so you've got the Genius Act, You've got this Clarity Act,
which defines you know, what cryptocurrencies should fall in more
of the securities bucket versus what falls in the commodities bucket.
Gives the CFTC authority over the spot markets. But you
also have the sec under chair Atkins doing some work.
(30:14):
You'll most likely have the CFTC under future chair Brian
Quinten's doing some work just because I'm going to go
out and Limbs say that Senate's going to confirm him.
You know, how does Robin Hoods think about all these
pieces of the puzzle and if you had your druthers,
what would the best endgame scenario look like for you
in the company.
Speaker 3 (30:33):
Yes, so, look, I'm a genius act. We were super excited.
Blad and Johan Crabat are head of Crypto. We're at
the White House for the signing ceremony that they sat
Blad between Chairman Atkins and Commissioner Purse. I told him,
be careful what you say you're sitting with the sec.
But it was a great moment I think for crypto
(30:54):
and and for the country, you know, to legitimize stable
coins and to really take a big step forward. I
think for cryptover at large. So and look stable coins,
you know it got a lot of bipartisan support. I
think it's gonna be like tokenization, and actually it'll be
intrinsically eyed to tokenization. Once you're in the blockchain, right
(31:17):
and you're using a stable coin to pay for your
Tesla stock, and it settles instantaneously and you know, your
your us DC is traded for your you know, TESLA
token immediately and it's in your account and you see it.
I mean, this is this is the future, right, But
we needed to legitimize stable coins first, because again, the
(31:37):
last administration is super hostile, you know, saying that stable
coins are security, stable coins are mutual funds. You know,
a lot of debate about their status too, which you know,
seemed a little silly to me, but but that's just
what it was. Uh. Clarity is is really where the
gain is, right, Clarity. You know, creating the market structure
(32:00):
for crypto is a huge moment and I don't think
we've seen anything like this guy since Dodd Frank and
derivatives quite frankly. Where Congress has decided we're going to
think about a market that exists, a multi trillion dollar market, right,
which we had with derivatives, which we do have with crypto,
and we're going to create the market structure for it.
(32:21):
We're going to allocate responsibility. We're going to be prescriptive
here and maybe principle there. And you know, I think
it's they've made great progress with it. I think there's
you know, going to be some peaks and changes obviously
to it before it ever gets you know, to the
President's desk for Robinhood. You know, we can pretty much
(32:43):
operate in any environment, I would say. So we're feeling,
from a business model perspective, pretty hedged with respect to
wherever they come out on Clarity. We've got our you know,
CFTC registered, NFA registered at FCM. We've got our broker dealer,
which is obviously you know, the biggest chunk of our
business and and historical business line at robin Hood. We've
(33:05):
got our crypto unit, which is heretofore unregistered but can
be if need be. It's and it's just kind of
fun when we sit back and look at you know, okay, well,
if it's SEC regulated, you know, for whatever purpose the
you know, the Clarity Act. Obviously there's a strong deference
to c FTC, but there's obviously a pathway for SEC registration.
(33:31):
What can we do there, What can we do on
the CFTC side, What do we do with our regulated identities?
I mean, one thing though, is for sure, and this
is where I think, you know, a bunch of folks
in the crypto community are waking up to what regulation
actually means. You know that that even the lightest touch
(33:51):
regulation where you you you're registered as X y Z
entity uh with whatever agency, but you all of a
sudden have reporting obligations, you have books and records requirements,
you get examined, maybe you have some appital requirements. Whatever
comes with it is a hell of a lot more
than existed today right when you have nothing. Right, So,
(34:14):
the the idea of give me regulation, you know, which
you've heard as a mantra from the community versus the
reality of man, this is actually pretty tough, and there's
a lot of programming that needs to be done, a
lot of tech spend, and you know, hiring you know,
experienced compliance professionals, things like that. I don't think that's
(34:35):
fully sunk in yet, but as the debate about clarity
goes on, you're seeing more and more attention paid.
Speaker 2 (34:40):
To that what happens if clarity doesn't pass?
Speaker 3 (34:43):
You know, I hope, I gosh, I hope we don't
face that. But you know, I testified after I talked
to you guys. I testified in the fall last year
in House Financial Services, and I laid out pretty cleanly
that you know, the existing statutory authority. I just agreed
with Gary Gensler when he said the existing securities laws
(35:04):
accommodate crypto. I disagree with that because the existing securities
laws literally didn't from an infrastructure standpoint, you know, all
the things we talked about with tokenization, all that, they
just don't allow for it. Right, They issued disclosure pieces
all this. But the existing securities laws, as modified through
(35:25):
the use of exemptive authority at the SEC, can accommodate crypto. Right,
Maybe not in a way that you'd like. Maybe you'd
prefer Congress to act. I would, given what the current
Supreme Court has said about you know, major issues and
other things like that, Right, I would want a little
more certainty from Congress. But if the SEC used the
(35:48):
exemptive authority that was given to it by Congress in
nineteen ninety six in Ismia, right, which was I mean
a brilliant stroke by Congress at the time and again
hugely bipartisan, where they said, geez, things are moving fast
in markets. Let's give the SEC this exemptive authority that'll
allow it to kind of with a scalpel, exempt people
(36:11):
from certain provisions of the securities laws to accommodate new technologies,
changes in the markets and the like, and people forget that.
Back in ninety seven, the sec under Arthur Levitt used
that authority to create Reggaets. Right. They saw these platforms
that were rising and were great as far as efficiencies,
(36:33):
and we're driving prices down, good for investors, but they
kind of were in exchange. And instead of saying you're
all in exchange and putting them out of business, they
came in creating Reggaets and you know, a thousand ships
sailed from that and so and they cite it. I mean,
it's really great. And the forward to that rule they say,
Congress gave us this authority so we could accommodate new technology.
(36:55):
So section thirty six in the thirty four, which you
know is the exempt of authority from NISMIA, they could
use that. I know there's other provisions in the rest
of the securities laws too that mirror that. And you
go in, you carve it up and you say, okay,
let's create a rule set that accommodates crypto. Recognize that
(37:17):
it's temporary until Congress can finally act, but get something
in place where people are registered and there's some basic
investor protections provided right, some level of transparency, reporting, examination, books,
and records, that sort of thing should be done, could
have been done, could have been done, you know, the
sec could have done it last four years. We showed
(37:37):
them how to do it at Robinhood. When Gary said
coming in register, we said, okay, here do this for us,
and we will because right now we can't under the
securities laws. And we came in asked for no action, relief,
exemptor relief, whatever it was, and showed them where the
rules don't work, and they had no interest none.
Speaker 1 (37:57):
I wanted to shift topics a little bit because this
is another area that's been in the news a lot,
prediction markets, particularly as it relates to sports events, and
how we should think about event contracts in relation to
sports gambling. I know robin Hood and CALCI have both
(38:18):
received cease and desist letters from various states such as
New Jersey and Nevada, you know, concerning event contracts on
sport and events, and some of the states say that
the contracts represent unauthorized sports gambling. I'm following a couple
of cases where CALSI sued New Jersey and Nevada, and
(38:40):
it'd want preliminary rulings, essentially allowing CALS to continue offering
those event contracts at least for now as the litigation
plays out. I think Robinhood sort of took a little
bit of a different approach, and I know in a
couple of instances they removed the event contracts from their
offerings related to March Madness and the Super Bowl. I'm
I really am interested in and your thoughts on how
(39:01):
we should just generally, how should we think about event
contracts when it comes to sports, you know, how is
it different from sports gambling. And I'm curious also why
robin Hood sort of took a different approach than Cal
she did by removing those contracts rather than trying to
contest them in court.
Speaker 3 (39:22):
Yes, so, look at the highest level, I think prediction
markets are incredibly exciting. I think it's an awesome I mean,
it is an asset class I just but I actually
just think it's such a useful tool. You know, we
ran the presidential election contract on our platform. I mean
it was like spot on. I mean, I don't even
know if there was any deviation from the actual results.
(39:45):
It was so much more informative than what you'd read
in the polls. That. You know, it really just proves
the power of the crowd, you know, is is very mighty.
So so at a general level, I think it's it's great.
But you do then get into some pretty thorny issues, right,
what what should the limitations be on what those contracts
(40:07):
can cover? Elections are one thing, and the judge in
the Calcie case in d C said those are not prohibited,
that those those can be you know, covered by the
CEA and and and that was the case against cal Case. Yeah,
and I think that was the right decision by the
court there. And you know there are proscriptions right in
(40:30):
the wall that say you can't you know, national or
you know, you couldn't have like assassination odds or things
like that. That really but that's a slippery slope from
a policy perspective. What's okay and what's not right? There's
the main body of event contracts and prediction is pretty obvious, Right,
is the FED going to raise rates? You know, Uh,
(40:53):
is there going to be a hurricane in the Gulf?
You know in August that those sorts of things, Uh,
you know, elections are another flavor. And then of course,
you know, you get into sports and you know, I
would say, you know, to your question, we're all about
providing access to our customers to everything that is suitable
(41:17):
for our regulated entities to offer. So on the brokerage side,
you know, it's we do the listed equities. We do
three hundred bulletin board stocks that are really mostly eighty
rs of big blue chip companies. We have you know, crypto,
but that's a limited offering, you know, to we choose
what we want to offer on the crypto side, and
(41:37):
that's generally more liquid instruments and the like. And then
on the event contract side, this is still evolving right that.
You saw Russ Benham, who's terrific by the way, you know,
proposed a rule that would have prohibited you know, any
types of sports e end contracts. That that rule is still,
(41:58):
i guess technically pending. So the CFTC has kind kind
of caught midstream right now. They started policymaking, they didn't
conclude it. There was litigation. The litigation muddied it up
a bit, and in the meantime, you know, Calshi and
crypto dot Com I think and ibkr's entity have been
offering the contracts. We got our registration, you know our
(42:21):
FCM registration and we're able to provide access to those
you know, through CALSHI, through others, and you know, have
decided to do it when we were threatened, you know,
with by states saying hey, we think this is illegal.
We've been trying to be very deferential to the states.
I get it, like intellectually, practically speaking, I understand where
(42:45):
they're coming from. Right, you have states like New Jersey
and Nevada that look at the institution of gambling in
those states, right, it's critically important to those states tax revenues,
I mean, the number of people employed. Like it's just
a big deal. And you know, I think at Robinhood,
we've decided to look, so many of our customers are
interested in either sports, betting off you know, using other apps.
(43:11):
You know, they're there have other accounts. Maybe we you know,
instead of them going off Robinhood, we could offer this here.
Whether that be whether a state regulated product or a
CFTC regulated product, you know, is still a bit of
an open question. But in the meantime, since the CFTC
regulated product has become available, and quite frankly, you know,
(43:36):
the courts of affirm that there's preemption we're offering it,
you know, expecting that there'll be more clarity down the road,
right that eventually we already have a built in circuit
split you know in the court that the Supreme Court
will eventually get pulled in and and weigh into it.
So we're trying our best to be respectful of the
interests of the states, the Indian tribes. We're not saying, oh, geez,
(43:59):
you have you know, oh, we totally disregard your interests here.
But at the same time we're trying to balance that
with what the customers want and quite frankly, if it's legal,
we should be able to provide it, and in the
courts of affirm.
Speaker 1 (44:13):
That it is.
Speaker 2 (44:14):
So it's my my pleasure to come in with the
most difficult question of the day. Last year, we asked
you what three pieces of music you would take on
a desert island, and I think you two is the
almost the immediate answer that came out, you know, from
from your answer.
Speaker 3 (44:30):
So I have a different question today.
Speaker 2 (44:31):
Let's say that you're going to go over to your
London office and you've got seven hours on a plane.
What types of television or movies are you bringing with
you have you seen anything recently that really is you know,
you're thinking some great quality work.
Speaker 3 (44:49):
You know. I've been on a little bit of like
a Netflix binge thing, and I'm fortunate. I'm like, I'm
coming up dry. I've seen it all right, and I
and I fly you now you a lot, and so
I'm kind of stuck with whatever. You go to that
box collection thing on United TV, and and I made
it blissfully. I've been flying to some pretty far from places,
(45:11):
so I made it all the way through Landman two
seasons on Netflix, and that was unbelievable. Billy Bob Thorton.
I mean just I had no idea what to expect.
I heard from one of my colleagues, this is great.
I didn't even know what it was about. And I
just it's like, he's so incredible, and it was, you know,
I was I think I landed in Dulles and I
(45:31):
still had like ten minutes left of the last one.
I'm like, oh god, oh god, I hope the gage's
not open, you know, that sort of thing which never
happens the plane. I was like, because I can't watch
it home, I can't pick it back up.
Speaker 1 (45:43):
You know.
Speaker 3 (45:46):
I love Yellowstone and all the prequels and sequel I
just think all of that is so well done. Unfortunately
I've run my course on that one too. I kind
of like, you know, I kind of like, you know,
some of the you know, war movies or you know,
that whole genre, you know, whether it be you know,
(46:08):
some of the you know, World War two movies or
other things. I always get a kick out of those,
the modern, more modern ones, you know. Like I mean,
I sort of got I watch American Sniper like every time.
I can't get past it. Every time I'm like, oh,
maybe I'll just watch a few minutes of it, and
of course two hours later, you know, my head's turned
and I've watched the whole thing again. So but I'm
(46:29):
kind of it's like my you know we talked about
with music, I'm kind of all over the place, you know.
I like taking recommendations from folks, and I kind of
like watching a little bit of a little bit of everything.
But I have a nineteen hour flight coming up on Sunday,
so h Lucas Moskowitz our GC here and I've been
talking about, like God, we got to download some stuff
(46:51):
because I don't think the airline has enough to keep
me interested.
Speaker 1 (46:55):
Yeah, although you'll maybe you'll wind up watching American Sniper
ten times.
Speaker 3 (46:59):
Well, what you guys have any recommendation for me?
Speaker 1 (47:01):
Yeah?
Speaker 2 (47:02):
If I don't know, if you know Star Wars, but
and Or season two was amazing. I mean it's it's
not just a sto Wars, but I really really.
Speaker 3 (47:09):
Like that one on North season two.
Speaker 2 (47:10):
Okay, just watch season one in season two, Okay, Okay.
Speaker 1 (47:13):
We just started watching The Waterfront, which we really enjoy
so far. Oh okay, Unfortunately, I think we're going to
have to leave it there. These were great recommendations, Dan,
and as always, really great insights into our evolving markets
and the evolving regulatory landscape. We really appreciate you coming
back on votes and verdicts and sharing your time and
insights with us. We hope to have you again soon.
(47:36):
You're I believe, only our second repeat guests so far,
so maybe you'll be our first free pet fun. I'll
accept the invitation if you'll have me awesome and our
safe travels on your upcoming flight. And as a reminder
to our listeners, you can read all of our Bloomberg
intelligence research on the Bloomberg terminal at Big With that,
(47:57):
thank you again and have a great day.
Host
Elliott Stein
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