Livestream - Day 1: Wyoming Blockchain Symposium | 2025

2:36 [Music] Hello everyone. Sorry if I'm a little loud. Uh I know everybody's still filtering in, but we don't want to get too far behind schedule because we have some uh major policy speeches from Fed officials uh and things like that that we want to make sure that we're on time. Those are being live streamed to a much broader audience and I think probably going to be newsmaking to a certain extent. So, we want to make sure that we're on I want to get to all the exciting content that we have, but I just want to thank a few people mainly. Uh, but welcome to the second annual Wyoming

3:22 Blockchain Symposium, which is hosted by Salt and Kraken. I really want to thank Kraken when we had the idea to launch this event a couple years ago. We were looking for an anchor partner to to join us in this endeavor and Kraken stepped up to the plate uh and has been an incredible partner for us. Uh, we're also investors in Kraken on the Skybridge side of the house. So that works out really well. And Kraken also recently relocated its headquarters to Cheyenne. So uh they're all in on Wyoming in addition to having the SPDI charter uh and all that. So want to thank a few people. I want to thank just the state of Wyoming or Wyoming Inc. as I call it. A lot of different people in Wyoming who have been very supportive of this event and have allowed us to be successful uh with the symposium. One, Senator Lumis and her team. So Senator Lumis has been a great champion of the

4:07 crypto industry and of Bitcoin in Congress. Um her team is also incredible behind the scenes. Chris Land in particular has has been uh incredibly supportive and helpful in bringing great speakers here to the event and and uh helping us in a lot of different ways. I want to thank a bunch of our Grant Teton sponsors. Avalanche, a global partner of ours uh who we have some exciting announcements coming up today uh relating to uh the Wyoming stable token uh some fund tokenization efforts that we're working on with them and some other stuff which we're really excited about. uh input output uh Charles Hoskinson great champion of Wyoming as well uh Salana Policy Institute um Kea Human Rights Foundation we're really excited to have some content curated by the human rights foundation to talk about uh Bitcoin and its impact uh in

4:54 driving human rights around the world um I'm going to forget a few here Vchain uh driving a lot of sustainability with with their uh efforts which we're we're really excited about. Um, I just want to talk about this event specifically and and you know, we've been doing Salt for 15 years, uh, in different locations. So, we've done it in Las Vegas, we've done it in New York, we've done it in in Tokyo, Singapore. You know, honestly, I got a little tired of going to our own conferences. I thought they were a little bit stale. I think the crypto industry in general, and I'm sorry if there's event hosts around here to say this, but I think we have an events problem in this industry, uh, where we have too many events, they're all the same, you run into the same people, you have the same type of experience. And I think we're talking a lot in echo chambers. And so what I want to do set out to do with this event is create an

5:40 event that I would want to go right before the Federal Reserve's annual economic symposium uh at Jackson Lake Lodge, which is about 45 minutes north of here. And our goal was eventually to get Fed officials, SEC officials, uh you know, people from Treasury, people from the traditional finance world, endowments, foundations, pensions, sovereign wealth funds in the room with hardcore cryptonative people. Uh, and I think our goal was to do that over the course of several years, but I think we're a little bit ahead of schedule on that front. As I mentioned in the opening, we have uh, Vice Chair for Supervision Mickey Bowman giving a speech later this morning that I think is going to make news and and she's a tremendous addition to the the Fed leadership. We have uh, Governor Chris Waller speaking tomorrow. Also going to be, I think, newsbreaking uh, commentary on the industry. And I think this

6:26 industry, yeah, obviously the work of of the Trump administration has accelerated the growth of the industry and and made the United States truly the crypto capital of the world. Uh, and we're excited to advance those conversations and and continue to advance the industry here in what I think is the crypto capital of America. And I think with Kraken relocating, with the Duna framework, with the Wyoming stable token now uh renamed to the Frontier Stable token, uh there was an announcement this morning about that. I think Wyoming is going to continue to cement itself as the crypto capital of America. Uh so very grateful for the warm welcome that everybody in Wyoming has afforded us and we're excited to make this an annual staple on the calendar to help uh drive the industry forward. But thank you all for being here. It's the people that make these events and I think we've been able to convene a very high quality and

7:11 diverse group of people here and we're very thankful for your time and uh and committing to us here. So, uh, with that, I'm going to turn it over to Kristen Smith, Anthony Scaramucci, and Arjent Seth to kick off the formal content program. But thank you all for being here. [Music] Well, good morning everyone. Um, John, thank you for kicking us off. I have to say this is absolutely hands down the best event of the year. This is such an amazing location. Um, but I think most

7:57 importantly a really high level uh group of people that um are always people I want to talk to and uh bump into in the hallways. So um we have a shortened time it looks like. So why don't we dive right in? I think everyone knows Arjent Sati. He is the co-CEO of Kraken and also the chair of tribe capital and of course Anthony Scaramucci who needs no introduction. Um I want to touch on a couple high >> is that good or bad? >> That's a good thing maybe. Um but why don't we uh start with you Arjun? I mean I think you know this is about the state of the digital assets industry. I think the one uh big catalyst has been the change in regulatory environment. Kraken

8:43 had a heck of a time under the prior administration. You've settled with the SEC. You were sued by the SEC. Um how are things looking for you today between the Genius Act and the White House's plan and the uh Chair Atkins speech? But talk about what that change has meant for Kraken and his company. >> Yeah, I don't think it's, you know, relegated to just us. Um, you know, there's headwinds in the industry for for a long time. Protocols, exchanges, uh, everyone was trying to build on crypto rails. So, I don't think it was specific to us, but you know, uh, I don't think I'm saying anything new that people haven't said before is that it's a new administration or protocol level.

9:28 and we can kind of course correct along the way as opposed to um what we've been seeing in you know other countries where they're kind of notching and uh and and you know to their credit outside the United States they they were ahead and I think you're just seeing us catching up and uh you know moving and you know then just kind of like you know you know pun intended no pun intended but like you know trumping ahead of the rest of the the ecosystem. Um, Anthony, you always have stood at the center, at least in my mind, of the institutional world and uh the crypto world and have been very involved in policy. And um I remember last year we both attended a meeting in Washington uh with the Biden administration. They wouldn't let us into the White House,

10:14 but they uh were kind enough to walk across the street and meet a group in a hotel. Uh we've I know, right? It's like look how far we've come. Um but >> blindfolded here. Um uh we've come a long way and I think even you've given credit uh I know this isn't your favorite president but have given credit to him. Um >> he's he's he's everyone's favorite president according to the president. Um but what um how how do you think Wall Street are perceiving these regulatory changes and and what does this mean um for the tribe world going forward? >> I want I want to go back to that moment that Kristen's talking about. So we were in the Willard Hotel, the conference room downstairs. Incidentally, the same

11:01 conference room was used yesterday, President Silinsky. So they recognized the room right away and the the Biden people came. They took notes and they basically said to all of us, "Listen, we hate you guys, but we would like your campaign donations." Okay? And said, "Okay, thank you." Then they left. And then Chris may remember we did a Zoom call with Treasury and uh we said, "Listen, this operation choke point 2.0 is uh wreaking havoc in the industry." They said, "Well, there's no such thing." And then somebody on the call said, "Okay, raise your hand if you've experienced some level of cho choke. 0 and you're chokepoint 2.0." Everybody

11:46 raised their hand. So, it didn't go super well. Uh, and I would just say this is real applaud to the Trump administration for getting it. And again, whatever your opinions are, President Trump, and I've been obviously opinionated related to him, he has phenomenal political instincts. And back in July of 2024, he realized that the future of financial services and the mantle of US financial services leadership is going to include this industry of course include Kraken and you got to give him a lot of credit for that and and I think we've had a a major sea change and I'll go out as far as saying that I think it's a permanent sea change. I don't see the Democrats, at least the ones below the age of 55,

12:32 wanting to go back to a Elizabeth Warren anti-crypto army. There's there's just no anti-crypto voters out there. So, I'm hopeful that this will continue and it will somehow permanentize in Washington. Um, one of the trends that people were talking about last night, um, is, you know, obviously this convergence of crypto and tradi and Arjun, you at Kraken have been looking outside of the traditional crypto world. You're starting to look at tokenization. Can you talk a little bit um about how you're thinking about these two worlds coming together and what the opportunities are? Yeah, I think the if you go back like 10 plus years, the

13:17 whole promise of crypto was let's get as many people um access to capital, access to money um not just trading and speculation. And so this this um the sentiment has been you know talked about year after year after year and and I think for us when we took a look at the exchange global liquidity kind of global demand for assets we saw that with stable coins over the last 5 years which is how do you start thinking about actually putting in uh real real world assets real estate you know tokenized stocks etc. um how could you do it in a way where it's not a u uh you know a um a walled garden and and I think one of the things that we've seen is that um if you go back for any of the exchanges and it's not to put any exchange on notice

14:04 but the the value sets that a lot of these companies have they're kind of a wrapper and they are just trying to extract value and keep the customers within their ecosystem and I think there's some value in that in the short term but what ends up happening is that it goes away from what the core was why a lot of us started over the last 10 years either invested in it or started protocols from scratch which is that decentralization also just meant freedom to be able to do what you want to be able to own your own assets and not have someone uh come in and say well you're a part of my aum or I'm going to rehypothe or you know traditional banking and so we kind of went back to first principles um I kind of say this again and again even to our team is if you take a look at the Kraken culture doc and like what we're striving towards is that we build

14:50 products um and then we drive profits from them to drive it back into what we cared about in crypto. And so tokenized equities or that layer for us was really important so that you could have non-custodial or custodial wallets or exchanges um all over the world um DeFi or not that could you know perpetuate real world assets and and that global liquidity. So for us it's like extremely important. Um, and then on the convergence of the TRA fight, it's more how do we bring those folks along the way to say, hey, you know, like crypto is not nefarious. Um, yes, there was some speculation, but you know, the word meme isn't a bad word. It's just more about like promoting this global liquidity that exists not just in the United States, but all over the world. >> Um, Anthony, how do do you think Wall Street's ready for tokenization? Do they

15:35 see this as an opportunity? Do they see it as a threat? What are what are you hearing and and where are they at in the adoption cycle? >> I would say some I mean obviously Larry Fank is ready for tokenization. He sees the vision of it. I think that the traditional banks are probably going to take regulatory guidance from places like the Fed or the SEC before they move forward. But I think the central question is is the technology better than existing technology? Can we move things more quickly, more efficiently from a cost basis? And can we move things more securely? And I think the the answer to those questions are yes. And I think throughout history, anytime that the technology is better, we typically adopt it, even if there's some resistance. Remember, everyone in this

16:21 room has been in an Uber, but there wasn't one government official in any major city that wanted Uber to exist. So it just the forces are such where these things will happen whether wall street is fully embracing it or not. >> I I think to add to that you see um what what I get worried about is the um wall streetization of crypto right you see the dats you see all these you know corporate treasuries you're seeing spaxs come back into play where they're going to just start you know investing more into the ecosystem. I think that's um well intended in some cases, but it's also what I it kind of reminds me of what we saw in 2020 2021 where you just have a lot of fast money and sort of um uh loose discipline around what's happening in the ecosystem because they're just excited about it and you and you see these similar waves in like

17:07 AI etc. Um the I I think like uh the best thing to think about is like how do we get traditional um uh Wall Street or institutions to adopt and start thinking about building into crypto rails rather than trying to control it in a in a financial way because I think that's when the industry gets better and and one thing that I think everyone kind of forgets about is the billions of people that are trying to transact with these assets today like Xbox for us Um, I was surprised that, you know, it's been out for four to five weeks. I think we're like almost at like, you know, 3 billion in transactional volume. Um, that just means there's a huge amount of demand outside the United States and the United States prospers by just getting these types of products out there.

17:52 >> Yeah. No, I think as more and more products come online and especially I think as it evolves to where people can hold their own assets and transact in DeFi, I think it's gonna unlock a tremendous amount of >> Well, even here in the United States, I want to be able to hold my stocks on my phone. Like I I don't want anyone to control, including Kraken, right? Part of it is um we should be able to help proliferate that. >> Chris, not to disrupt the flow, but I want to ask Arjent a question. Why Wyoming? Why did you guys choose Wyoming to be corporate headquarters? So, um, >> help me out here, Origin. I'm trying to boost this. >> Yeah. Yeah. Yeah. Of course. Um, I mean, so we're we're fans and I'm still looking for a house and I haven't been able to find one that I can afford. Um the um I think it it started so I mean the the real story is um uh Jesse Pal

18:39 who's one of our co-founders had done a uh a sort of a like I don't know if it's a lunch and learn but some sort of Q&A with um with Senator Lumis and she kind of you know maybe got you know pilledled into crypto at that moment or there was a lot of people along the way um but I think her and the team just been a champion of what crypto means and and And I think to a certain extent this might, you know, seem corny, but um I think if you take a look at like sort of the values that um uh what the American values are or sort of our first 10 amendments and like what it means to be like you know part of the American dream, I think like they did a good job of taking what we had said like why we wanted to build sovereignty um and I think they just

19:24 have you know gone to bat more than any other you know um supporter in the ecosystem across across the House and the Senate and so they were first and foremost. They talked to Bitcoin, talked about Bitcoin, they help they helped us with the SPDI here. Um so they've been champions and so I think for us we wanted to make sure that we could reinvest into the ecosystem, bring more people here. Um I think you know Trevor sitting right here is on the the CEO for SPDI as well. Um the point was that like where can we find uh states or folks that can you know be supportive and and we can do vice versa. >> That's a great story. Um, I think we have time for one final question. Um, maybe for you first, Anthony. Um, you were very early with Skybridge and helping provide institutional investors ways to get

20:10 exposure to crypto in a format that they understood. I think we're starting to see um potentially soon new ETFs under a generic listing standard. So, we'll see more tokens uh be available in the ETF format. We're seeing the rapid proliferation of digital asset treasury companies. Um, and we're also seeing a lot of companies either IPO or go public via spa, etc. Um, what what does this mean to you? I mean, to me, it seems like there's a huge demand that people want to invest in this space. Um, but talk about sort of what you're hearing from your your clients. >> I would break it up into a few categories. I think there's a store of value category that I but if you're a bull on bitcoin you think that's going

20:57 to happen and you're certainly you've got a m large group of people at place like black rockck selling that idea to big institutions and I think the second category is related to utility and tokenization and and will these protocols be used to uh you know bypass the third party transaction system. So if you just look at that system, there's approximately seven billion, excuse me, seven trillion dollars of uh third party verifications that go on, credit card fees and etc. So I think if you look at those two separately, you say, "Wow, there's got to be huge demand for both." >> Yeah, I I have a little bit of a different take. um is there's so many people here as well that we're all

21:43 working um towards this ecosystem is that um Bitcoin is a protocol network, right? And I think a lot of people kind of forget that we're still building against that technology. There's a set of folks that are uh they think of it as a store of value and there's a set of folks that are still building on top of it, right? So there's this new meme generation that's happening on Bitcoin, but that also means that there's new types of technologies that can be built on top of it then bridged against it. new sources of liquidity. I I just think that we're we're so so early um in the ecosystem, what's going to happen across not just Bitcoin, but the rest of DeFi. It's really hard to fathom um what's going to happen in six months to a year. It's more about like how can we continue to race to support all that development that's out there. And so when people say

22:29 like oh I think it'll be which is like hey gold is worth this much. Okay. Well, like it could, you know, we could be, you know, 100x, a thousandx more than that in terms of like what the value of all these assets are going to be. >> Um, final one answer, short answer question, Anthony. What are you most excited about uh for this conference? Who's your favorite guest that you might be seeing this week? >> You're well, you're you're my favorite guest. >> Well, okay. You're second. >> Stipulate that right away. And then the thing I'm most excited about is people getting to meet each other and hopefully ending up doing some business together. >> Arjun, >> uh, I came only to see Anthony. >> You could have said I was your favorite guest, origin. I would have been very happy. >> Um, all right. Well, I'm getting the red

23:16 light. So, thank you everyone. I'm really excited about the content today. Come on. Heat. [Music]

24:10 We're early. >> I think I'm in the correct seat here. >> I think you are. Yes. They said go to the center seats. I'm not sure. To me, I'm on the right, so I'm used to the center being on the right, but this is the center today. >> I think you got it. >> Does everyone this work for Senator Scott's seat? >> I think this might be better for me. I'm not Well, maybe I'll just stay here. >> Good morning. >> Great. >> Awesome. Well, thank you so much for being here. It was really looking forward to the conversation. >> Absolutely. >> Um, and Senator Scott, we actually connected last year in Wyoming. who did a podcast talking about crypto market and kind of evolution in US places with uh US's place within that and I was curious to get your perspective. I think 2025 uh we've seen remarkable progress specifically in the Senate.

24:56 >> Yes. >> Uh and I'd love to hear from your perspective what changed and specifically Senate banking you guys have such a broad mandate. So how did you prioritize digital assets? >> I got to tell you I mean thank you to all of y'all for getting rid of shared brown. [Applause] He's running again, by the way. But literally, the industry put Bernie Moreno in the Senate and he's on the banking committee. So, really having the opportunity to have a team that's focusing on the industry because we have passion for people who want to make a profit and help people. This industry does it better than anything I've seen in my adult lifetime. Bless you. Only Only three times, though. That's it. Um, I grew up, as you

25:42 remember last year, we talked about a single mom in poverty, challenged and and this industry offers a woman like that more access to our resources at a lower cost point. Democratization is real because you are here. Focusing on that for me is focusing on my passion, the reason why I'm in public service. So, this makes it easier for me to accomplish the goal that I set out when I was 19 years old to positively impact the lives of a billion people with hope and opportunity. Opportunity is opportunity financially. This industry brings that to life. >> That's awesome. And I was remembering the conversation last year and talking about your passion on the financial inclusion side. Yes. So, I'd love to

26:29 talk about that in a second. One question before then. You mentioned Shared Brown. I believe there were zero hearings on digital assets during his tenure. Now you've been leading the charge. How many have we had? >> I can't even count them to be honest with you. We've had we've had so many hearings, markups, conversations. Just the other day, I had the administration over. We are working as a a hand in a glove because if we're going to make this happen, we have to have make it happen right now. I think this is the most important time in American history for the evolution of this innovative opportunity. U and so I continue to have hearing after hearing after hearing. Uh and frankly we're passing bills. We're not just listening and talking. We're

27:14 actually getting things done. Yeah. >> And that's what this industry deserves because it's what the American people deserve. >> Totally. Yeah. And we were talking about it a little bit backstage, but I think the contrast between 2024 and 2025 is quite remarkable in relation to the US's place within this space, right? Like at Falcon X, we operate a global prime brokerage business where we have offices in the US, Europe, uh, Asia, business in Latin America too. And for the first time in the history of the space, this has been the most interesting market and a market with the most favorable regulatory regime or at least, you know, evolving regulatory regime to really be able to invest locally and build that out. So, thank you for all the work that you've done there. >> Absolutely. Well, I I I last year when we were doing our podcast, I gave a shout out to my nephew. I think my

28:00 nephew's in here somewhere. Uh, little Ben is what I call him. He's actually a rehab doctor at this point, but he went to Georgia Tech. And so back in 2013, he started talking about crypto and Bitcoin. And I hadn't a clue what he was talking about. It took me 10 years to figure out the words coming out of his mouth. Uh he started investing then. I hope he's taking care of my social security, my retirement, by the way, back there. Uh but he's the guy that kept talking to me, Uncle Timmy, you have to get serious about this because folks like you on the banking committee under Sher Brown, we were doing nothing. So I didn't see the reality of it. And then last few years because of Cynthia Lumis >> and her passion for the issue and the

28:46 industry, we had conversation after conversation and and I decided then let's create a vision for what what this will look like by 2028 and then work my way back. Yeah, I' I'd love to actually tap into that vision side, right? Um and like you mentioned, I know you've focused on making the financial system work for more people. Yes. Right. And so if we think through that, I'd be curious blank canvas looking out over the next 50 years or you choose the time period, right? I know that's that's a long time. Um but >> what does the American financial system look like to you and what are those principles that you would want to bring to redesign that and what role does digital assets play? >> Awesome. I have a dream. Okay, you guys, this is all the fun I

29:31 get to have. So, I'm gonna have it for y'all. Okay, I'm gonna walk around if you don't mind a little. >> Yeah, go for it. >> Yeah, I like to I like to stand up. You know, if I had the ability to paint a broad brush of the future of our amazing financial markets, I would suggest number one, competition is a really good thing. And when I think about competition, I think about the impediments to competition. Typically competition does not happen when those who have a monopoly on our financial system, they walk in the door and they lock it behind them and they find ways through a lot of forces, sometimes lobbyists, sometimes uh lawmakers to create this whole intricate scheme, this web that prevents competition from

30:17 seeing the day the light of day. When that happens, we all lose. And so Austin, one of the things I'd like to do is to have more competition by I've said it several times, innovate before you regulate. That's important because competition needs time to grow up. And if you're crawling, you need time to walk. And if you're walking, you need time to to to run. If you're running, you need time to drive and then fly. The only for all that to happen is to create an environment that has made America the greatest place to do business on the planet. It's this notion of capitalism. It's creative destruction. For that to actually happen, we need to empower people to want to take the risk. And to want to take the risk here means we have to attract more capital here. So number one, you got to have the rules of the

31:03 road set. Number two, you have to have the players in place, not just in Congress, but in the administration. And I know you guys have Mickey Bow Bowman in a little little while sometime today or tomorrow. What a fantastic person who understands the importance of democratization. She's been a local small business owner. She her her family started a a bank, a small community bank. I want someone who sees the world as it is, but also sees the world as it could be. And if I have the ability to paint that on a canvas, it starts with competition. It starts with good rules of the road. Then you recruit the right people, the team. And then finally, you

31:49 give people the chance to jump in completely be miserable while they're failing and get better. When I started my small businesses in the insurance industry and real estate business, the one thing I had to do was learn that I wasn't that good at it until I got better at it and then get better at it. And if you if we have that kind of environment, I think that happens. So for us to use this industry as a part of that broader vision, number one, consumer protection, number two, national security, number three is is understanding the pathways forward for this industry, which is a part of the market structure legislation today is we take care of national security, we take care of consumer protection, but we also allow for innovation before overregulation. And then finally because

32:34 see see folks here Chris on the front row we we allow for the the tests that allow for the asset to be defined SEC CFTC ancillary asset because that's an important part of the engagement. So that allows for more resources to flow to our country that will allow that single mother like me to get more of her money faster. >> Totally. First of all, love that vision. And I think it's super compelling to hear that. Yep. And in the context of digital assets for a future set too, right? I think that's why so many people in this room are in this space and see an opportunity to fundamentally innovate within this market and expand financial access uh both on the retail institutional side and globally. I'd love to dive into the

33:21 market structure and genius uh side with you because I'm feel you know guessing a lot of people in the room want to hear about it. So, um, Genius, you were able to get that through, uh, and onto President Trump's desk, uh, in a divided DC with pretty broad bipartisan support at the end of the day. >> Yes. >> I'm curious how you plan on building on that momentum in relation to market structure. >> Well, relationships are so important. My theory is if it's good for the American people, it should be good enough for the banking committee. >> So, I start there. I assume that there are people on both sides of the aisle who care enough about the American people, their constituents, to work together on issues that we have in common. When I sat down with Senator Also Brooks, here's a person who just elected to the uh to the United States

34:08 Senate. She was a county commissioner, chair chairperson of her county commission. I was the chairman of my county council. So, I look for common ground to find common sense and then to build a common vision. She cares a lot about democratization. And so while she's a Democrat and I'm a Republican, I I would look for people who will work together with me. GGO just had a kid in June. And so I looked for ways to connect with him on it on the personal side as well as on the official side. So that as we sat down, there was this really important thing called trust. You may disagree with me, but if you trust me, you'll stay at the table. And so what I've tried to do is to empower my banking team as I call us to work together uh in in hand and glove to make sure that we get things done. We had 18

34:54 Democrats vote for the Genius Act. I believe that we'll have between 12 and 18 Democrats at least open to voting for market structure. a far more complicated piece of legislation and the forces against it. Let me just say it clearly like Elizabeth Warren standing in the way of Democrats wanting to participate. It is a real force to overcome. We did it in the Genius Act because I met with the few Democrats individually. I'm doing that already again and I'm looking for folks off the committee to help provide um cover for those on the committee to vote for it. >> Yeah, that's great. And I mean, similar to I think a lot what a lot of people are doing here in terms of building those relationships and just that fundamental drive to actually get

35:40 something done. Refreshing to see in Washington, right? Especially for this industry. Um, I'd love to talk about the SEC a little bit, right? I think most people here would agree that Gary Gendler was a disaster uh for this industry, right? >> Anybody disagree? >> I need to pray for you wherever you are. Okay, good. >> All right, good. We have consensus on that one at least. um you played a critical role in uh getting Paul Atkins uh nominated and approved through uh Congress. Um and would be curious to get your perspective in terms of what you're expecting from Chairman Atkins. How you plan on working with him? We've seen Project Crypto be released. Really great comments in terms of digital finance revolution overall. What do you hope to see from this SEC? >> Well, I think Chairman Atkins is going

36:25 to do a fantastic job. He's off to a good start. He and I had a roundt discussion with members of the of the Republican Banking Committee just about three weeks ago. I want to make sure that we're always on the same page as close as possible that we're doing all the fighting before we bring it to the to the surface. And I expect him to do a couple things. Number one, he's going to emphasize and prioritize innovation at the SEC in a way that it hasn't been in the past. And that's going to be really good news. Number two, he wants the industry to succeed. Ginster wanted it to fail. So what you'll have coming out of the SACE is clarity. We haven't had that frankly in five years, >> if ever on this topic. And so

37:11 innovation, clarity, and competence. I think Gensler was I asked him to resign because I thought he was incompetent and he proved himself to be. I asked Atkins to lead because he is as smart as a Dickens other than the fact that he chose uh Bill Hagerty to be his roommate in college. But Bill Hagerty on the banking committee working with his former roommate gives this kind of synergy that that we've never seen before. And so when I talked about the team earlier, I know we're running out of time. When I talked about the team earlier, couple really important points. You think about the administration, you got Paul Atkins over there. We have uh Slacks over there. We now have at the Fed Mickey Bowman who's over there and then you have people like me and French Hill in the Senate and the House running

37:56 our committees. We now have a team that's leaning in and we feel like we have to get it done now. Executive action is not enough. Period. If one president hated it, this one loves it. We need a Senate and a House that gets legislation passed. >> Totally. Totally agree. And I know we're close to time. I've got one last one for you. Yes, sir. >> Okay. So, I'm curious. We've made a lot of progress here. From my perspective, we're still very early both in relation to this asset class, but also its uh, you know, path in DC on the legislative side. What advice would you have for people in this room to think through how they're showing up, can work with legislators, educate them, what needs to

38:43 be done? >> Well, number one, fire the legislators that are in your way. You guys did a really good job of that this last election cycle. You you elected some Democrats who are who are good on the issues. You elected a lot of Republicans who are leading on the issue. That kind of e agnostic approach to getting the job done is incredibly helpful. I would recommend you elect more Republicans than Democrats, but at the end of the day, uh getting people who care enough about the future and not just the present makes America the crypto capital of the world. >> Awesome. Senator Scott, thank you so much. Let's have a round of applause. Thank you also. Appreciate it. Great job. Appreciate it. Good. [Music]

39:53 All right, good morning everybody. Good morning. Good morning. Good morning. Welcome to the Bitcoin mining panel sponsored by Aquapana Water. Everybody should have their Aquapana. Just want to thank Salt. Want to thank uh John. Want to thank uh Anthony for having the Bitcoin miners up here. As many of you know, a lot of the industry had given up on Bitcoin miners. Um, but unlike Bitcoin treasury companies, Bitcoin miners can actually create new Bitcoin at a price below the current market price. And actually, the network can't run without Bitcoin miners. Um, so in my opinion, we have four of the very best uh companies, public companies here in the space globally, four of the largest companies, and we have in particular four of the best executives, strategic thinkers in this sector. Um, so let's

40:39 start uh right here next to me with with Matt Schultz, the CEO of CleanSpark, and we'll go down the line. >> Thank you, Mike. Thanks for having me. Uh, my name is Matt Schultz. I'm the uh co-founder, executive chairman, and as of a week ago, uh, returning CEO of the company. Um, we started as an energy company 15 years ago with a portfolio of technologies on energy generation and distributed energy resource management systems. And we've evolved to become uh I would say one of the the the largest Bitcoin miners on US soil. We have 50 xahash of processing capa capacity. We have uh just over a gigawatt of electricity in our contracted pipeline with about 1.2 gawatts behind that. And

41:25 as Mike mentioned, you know, similar to a treasury company, we sit on 12 and a half thousand bitcoin that we mine all of those. So, we've also grown to take opportunities to monetize our Bitcoin through different uh we have a uh a digital asset management trading desk. So, um excited to be here, excited for the conversation. >> Patrick. >> Hi, Patrick Flurry, chief financial officer of Terowolf. We are a power and infrastructure company. Uh we do both bitcoin mining and uh develop high power compute collocation hosting facilities. Uh we have about 250 megawatts of Bitcoin mining today at our Lake Mariner site. We did develop uh the first and I think only Bitcoin mine behind the meter

42:12 at one of the nation's largest nukes a few years ago with Talon Energy. And uh we recently last week signed a deal with Fluid Stack and Google uh to develop 450 megawatts of high power compute at our upstate New York site. uh we have,50 megawatts total in the company and um yeah I think unlike uh some of the other folks up here you know our philosophy from day one has been we love Bitcoin um but we mine it and we make a profit on mining it and then we sell it. So, we do not hodal. I know that'll probably be an unpopular uh commentary up here, but um that's been our fundamental financial strategies from from day one, which uh

42:57 like I said, bit different. Um but big believers in Bitcoin and uh love this ecosystem. So, thank you for having us, >> Ken. Uh Ken Draper, chief commercial officer at Iron. Uh we're a next generation data center company powered by renewable energy. Uh we have been focused from day one on multiple different use cases for our infrastructure. Uh we've got over three gigawatts of secured power in the portfolio. Um currently operating across three different verticals, Bitcoin mining, AI cloud services where we own GPUs and provide GPU as a uh as a service uh style compute as well as AI collocation at our data centers.

43:43 Salman. >> Hi, good morning everybody. Salman Khan, I'm the chief financial officer for Mara Holdings. Mara from an exahash and market cap perspective is the largest one of the largest and uh we have global operations here in the US and partnerships with sovereigns in Abu Dhabi and elsewhere. Our story has evolved over a period of time. Until beginning of last year, we were asset light company which meant that we rented Rackspace and deployed miners and hash and as a result of that we grew very quickly to be one of the largest perspective of having and as a result of that another strategy one amongst many strategies that we've deployed is to own and operate wind farms in Texas where we mine coins uh when the wind blows and uh

44:30 we stop mining when this wind stops blowing and as a Result of that our cost to mine marginal cost is almost zero. There's some cost but it's almost zero which makes it ironclad against any kind of having events. We are thinking very long term. In addition, we have also recently announced an acquisition of Exion which is a wholly owned subsidiary of EDF. EDF is one of the largest utilities in the world uh focused on clean energy based out of France and uh and that that is an interesting uh development on our side. We have been talking and hinting about AI on the edge. We've taken a little bit different approach from our peer peer group when it comes to AI. We believe this is the right strategy for our stockholders and we're very excited about that. Looking forward to talking more about it.

45:16 >> Great. Thanks for the intro guys. Um so Bitcoin mining is often viewed as a very challenging business at the having you know the the rewards get cut in half. Um you've constantly got to be growing right into the cycle. This cycle in particular, the hash price has not risen as much as many of us would have would have liked. Do you view this as sort of a different cycle? Is this something you you sort of expected? And how do you how do you think you need to adjust strategically in order to address the challenges in the space? I'll start with Matt. >> Yeah. So, I would say that the the four-year cycle is effectively broken with the maturation of Bitcoin as a strategic asset with the ETFs and now the um strategic treasury and whatnot. I think the the the adoption is driving

46:01 demand. I mean, if you read anything about the the most recent ETFs, they've consumed infinitely more Bitcoin than have been generated so far this year. So I think effectively that having cycle is broken. Additionally there's there's there's a shift as as all of uh my peers will talk about that the megawws that we own I mean having over a,000 megawatts operational or under contract 800 operational and another you know 1.2 2 gawatts on the come. The demand for electrical infrastructure and the ability to rapidly build that out has shifted dynamically. Um a year ago today we were here um talking about the fact

46:47 that we deployed we now have Bitcoin mining operations here in Wyoming, my home state. And the the reason that we were successful in procuring megawws in Cheyenne was because there's there was a need to rapidly develop and monetize those megawws and a Bitcoin miner can do that much more rapidly than a proper fullcale large language model data center. So we our speed to market with the electricity has created opportunities such that now we can look at ways to monetize power beyond just Bitcoin mining. So it's it's allowed us some flexibility. But I think you know beyond all of that the support that's

47:34 necessary for the Bitcoin network and having the distributed footprint that we have. I mean, with 33 locations, we we now have a great deal more flexibility than we ever did before. >> It's awesome. Patrick, you comment on Bitcoin mining. I know we've got a lot to talk about elsewhere, but >> yeah, look, I I think I may have a different perspective. I think Bitcoin mining is an incredibly difficult business, right? If you just think about Bitcoin mining, like any commodity business in unit economics, 5-cent power costs you 60,000 per Bitcoin roughly today, right? So if Bitcoin's at 115,000, you know, literally half of the price of one Bitcoin today if you have 5-cent power that there you go. Then you add on top of that interest, SGNA, other

48:21 company co operating costs, right? So it's really hard to make a profit mining Bitcoin unless you have really lowcost power. And when I look around, I think the the challenging part to me about where we are as an industry is there's one massive provider out there who we all love and adore and that's Bitmain. And Bitmain will continue producing machines whether any of us buy them up here or not because they're in line with TMSC and they'll get their chips and they'll build their A6 and I think they can probably build those A6 at five six seven bucks um a terraash and if they don't sell them to us at 15 or 16 they

49:06 take them and they plug them in in the US in Africa in Russia in Pakistan and all over the world and that's why network hash keeps going up and up and up even though it might not be extremely profitable for any of us to mine a Bitcoin. And that to me is single-handedly like the the toughest and largest problem with our industry in that you have, you know, if if I'm buying a terraash at $16 a terraash and I can tell you that I think I'm going to get a return on that investment in 18 to 24 months, Bitmain who can produce it at 5 to6 and plug it in is getting that return in nine months and then everything from there is gravy. So it I think that's what makes Bitcoin um mining difficult. If when when you talk

49:53 about Bitcoin price, you can't talk about Bitcoin price without talking about network hash rate. And so, you know, as as I look at it, I think Bitcoin price has to keep going up for it to be profitable because network hash rate is increasing almost parabolically because of that dynamic. But if Bitcoin goes to 200 or 250,000 and network hash rate doesn't rise as quickly, won't the mining business get really good for some period of time? >> Absolutely. But like any commodity business, right, there's periods of time where the oil market overnight. So I think what we've learned and I think all of us have learned up here is you have to have a balance sheet and liquidity that can survive that. And you got to be positioned again to try to be the lowest cost producer so you can survive cycle. >> And that's one of the benefits of laying in AI, right? to have some

50:39 non-correlated revenue stream. So, Kent, uh, iron has a 50xahash Bitcoin mining business. The company signaled that it won't be growing that in the short term. I think the company originally believed effectively that Bitcoin was a great offtake for the energy and a good way to scale the data center business. Is that still the way you view Bitcoin mining today? Has anything changed in your thought process? Yeah, I think um as far as it relates to to the actual Bitcoin mining side of the business and how we think about it, you I'd echo some of the comments there. I think being a lowcost producer uh is fundamentally important and that's how we've always focused our business is having control of our sites, having operational control, being in areas that are lowcost power jurisdictions is

51:25 incredibly important. Having an efficient fleet is very important. But if you can put all of those together, you know, in the way that we think we have, we you Bitcoin mining is actually a highly profitable business. So to, you know, give some direct examples of that, at the moment, um, as, uh, Mike mentioned, we're at 50 x aash. That's a billion dollar annual re revenue run rate at current Bitcoin economics. Our gross margin, so that's revenue less electricity, is 75%. Uh and if you include all of the corporate overheads in SGNA the business, it's an ebida run rate of 650 million. So 65% uh margins overall for the business. Um

52:11 we also like this asymmetric risk profile that you have in the sense that if you're a lowcost producer, if you do get downturns uh with the Bitcoin price, all of the high-cost producers will drop out of the network. Um, and that's literally just a marginal cost decision. If you're operating and your electric uh electricity cost is higher than the revenue you're making, you will just flick the switch and turn your machines off. That reduces the size of the network. And if you're continuing to operate as a lowcost miner, you get a disproportionately higher share of the the Bitcoin rewards. So, we like that downside protection as a lowcost producer. And then when you get these runs in the Bitcoin price that given the

52:58 size of the network now there can't be enough capacity added to normalize the profit. So you can actually earn outsized returns during those periods. Um and and we do see you know as uh was mentioned earlier some increase in global hash rate over time in some of these very lowcost power jurisdictions uh in developing countries but I think it's hard to add really material capacity in those places. It's very hard to raise capital. This is a capital intensive industry. Um there's always a threat of you know regulation and nationalization of operations. So I I don't see that as a major risk over the the long term in terms of size of the network. So you know I think um it can

53:43 be very profitable. Uh as Mike mentioned we have put a pause on that for now but that's really dictated just by the opportunity set that we see on the AI side today. um and the potential to really diversify the revenue streams within our business rather than a you know fundamental view that Bitcoin mining is no longer attractive. >> Salman, are people too negative? Are investors too negative on on Bitcoin mining? >> Look, it's a it's it's an open secret. This is a difficult business to operate period. Right? That's why you're seeing four of us talking about diversification. Having said that, I spent more than two decades in oil industry and this reminds me of those trends in commodity exposed cycle industry. There are some very wealthy

54:30 families in oil oil sector who've made billions and then there are others who have filed bankruptcies and to um to Pad's point you have to have a very strong balance sheet to survive these cycles. The the challenge in this sector is that you have hash price which hasn't improved. it has stayed static or deteriorated over time. And that is what uh is Bitcoin miner depends on hash price. It's not just the Bitcoin price. And that's why we like the strategy of not just having Bitcoin mining at scale and being creative about how we mine Bitcoin, but also hold Bitcoin on the balance sheet. Now, we're not a treasury company. We're not Micro Strategy, but we like to have that hedge. If Bitcoin price escalates like it has for example

55:16 the investment that we made last year by going into full hodddle that has given us rate of return of 30 40 50% depending on the price range that you look at today and that kind of rate of return you won't find with investing in your Bitcoin mining operations or even AI and and the question is uh how can you get that so quick some of those investments are longer horizon so it's a treasury decision for us but it helps us for from our stockholder perspective. It gives them that uh that hedge against against the hash price being low while we continue to hold Bitcoin that creates value for them. Now that's one aspect. The other aspect is look we have to be creative as a sector and we've been quite vocal about for years that uh the traditional Bitcoin mining model after a

56:04 having or so may not be feasible. That's that's the reality at 5 cents 6 4 cents 6 cents kilowatt hour even if miners become much more effective it will plateau over a period of time and we have to be creative about it. So what we have been looking at is marrying intermittent power with with Bitcoin mining. Just a reminder, our return on capital employed, which is one of the most important uh KPIs in my humble view in capital intensive businesses like us um and oil and gas and you know uh any other capital intensive industry. Ours is three times better than our closest competition. And the reason I say that is it's an important element. You have to manage your capital. You have to

56:50 deploy it properly. You have to have the lowest try to get to the lowest cost as Kent mentioned. That's very important. It's it's it has to go you have to be able to survive in all cycle bull or beer. But at the same time, investing has to continue in order for you to have a sustainable scale. Global hash rate keeps growing. If you slow down your growth lower than global hash rate, your your difficulty level goes up, your cost goes up. And that's the reality of the sector. So you either sign off completely and say hey I'm not going to do bitcoin mining I'm AI or to be in the bitcoin mining and continue with the pace and while also uh diversifying your revenues. >> So one of the hottest topics in the entire world right now is the shortage

57:37 of power. You know you hear Elon Musk, Sam Alman, all these guys talking about how power is the real constraint uh to building out you know large scale AI AGI potentially coming in three years. Um, Bitcoin miners, legacy Bitcoin miners, went out and acquired a lot of power cheaply over the last five years. Uh, it seems like that's a pretty incredible opportunity, right, to convert some of that power. I want to start with Patrick on this because Patrick's company, Tarwolf, just announced a $6.7 billion deal with Google as a backs stop on Thursday. Your stock has basically doubled uh over the last three or four sessions. Um, and still cheap. >> Yeah, it's maybe right. Um do you want to talk us through what happened there? I mean that was the first time we've seen this is something I've been saying

58:23 is going to happen for a year or two and you finally validated it but we would see hyperscalers, Google's metas, Amazon's Microsoft coming directly to these guys on this stage because they need the power available tomorrow uh in order to scale their AI platform. So how did that deal come together? to tell us about >> last year when we sold our behind the meter Bitcoin facility uh at Talon's 2.4 gawatt nuke facility to Amazon, right? So Amazon's cost of capital is a lot lower than mine and they wanted that power and they want it for AI. So I think I don't think we'll ever see another Bitcoin mine behind the meter at a nuke as long as Amazon, Google, Microsoft, Meta, Oracle want power for AI um because they have a much lower cost capital than all of us do. But uh yeah, look, Mike, we're really excited.

59:11 You know, these things, as everyone can attest to up here, like electrical infrastructure doesn't move quickly. You know, tech is used to moving quickly and breaking things. Um but these deals take an extremely long time to come together. It took us, you know, from soup to nuts with Google and Fluid Stack, um four to five months of very intense due diligence. uh and then you know getting a I I would break these deals down into two aspects. One is you have to sign a lease and the lease is very complicated in and of itself and then as soon as the lease is signed the team turns to me and Solomon and the rest of us up here and says how do we finance this? Um so for us my job really with this transaction

59:57 was um allowing obviously the technical teams at Fluid Stack Google and Terolf to kind of come together get a design that everyone was comfortable with um which really depends on what you're going to be doing at the site. Um, and that drives cost. But then once we had that, trying to figure out, you know, Terra Wolf just last week was a$ two billion dollar company. Now we're a four billion dollar company, right? And trying to articulate and explain to somebody like Google, right, who's two trillion public market cap and only 30 billion of debt how we're going to do that is difficult. And so I think what I take the most pride in in that transaction was really working collectively with those partners to come up with a new mousetrap that that I I hope now becomes um something that the

1:00:42 industry can duplicate at at other um companies where you know Google is providing 3.2 2 billion of um backs stop lease obligation support to Terow Wolf, which effectively allows me to go out and secure financing at a really efficient cost of capital. Um yesterday we did uh an $850 million convert. Um that's six-year money at 1% coupon. >> Did that start as 400 million? >> It started as 400 million. Um yeah, it's the largest upsized in the convert market in four years. So really proud of that. But again, that's because we got the right mousetrap with Google. And Google now with their 3.2 billion of support to us. Um, you know, that's over

1:01:29 10% of their balance sheet obligations. Two trillion public market cap, but only about 30 billion of debt. So getting a $2 trillion company, right, their management team, their board, everyone to sign off on a new and novel concept is was not easy. But I'm hopeful that we've kind of provided a roadmap here. And now, you know, some of our peers up here will be able to kind of use that uh because I do think the demand for this for AI is insatiable right now. Um and I think all of us are really positioned in a great spot to kind of capitalize on that going forward. >> Well, congratulations and thank you uh because it's a huge validation of everybody's megawws and I've noticed the stocks have been a lot stronger even with Bitcoin trading down. I do expect more decoupling from Bitcoin as more more companies in this sector actually

1:02:16 transition more of their power to AI. Uh let's go to Kent next because Kent's actually running a Neocloud himself. I mean Coree went public few months ago, three, four, five months ago. Stock went up 3x right away. They don't really own a lot of physical infrastructure. You're kind of coming at it from the other side developing the infrastructure first and then plugging in the GPUs. How do you think about collocation versus running your own cloud because very few people in this sector have decided to take that approach? >> Yeah. Well, I think I think we're in a a unique um position in that regard that you know we do have the ability to play it from two different angles. Um and they are vastly different when you look at uh a collocation type model versus a cloud model. um the capital intensity is

1:03:01 very different. If you are owning the GPUs on top of the data center infrastructure, that's 3x the investment of just the data center infrastructure itself. Um if you're thinking about collocation, it's these 10, 15, 20 year contracts. Um very steady revenue stream. Uh effectively, you know, no recontracting risk because they're they're set uh term lengths. um but much longer payback periods. So you typically see you know 7 to 10 year payback periods uh on the underlying infrastructure cost whereas on the cloud side the payback periods tend to be a lot faster uh typically around two years on the on the GPU investment alone and then three three and a half years uh if

1:03:50 you're taking the data center uh investment um into account >> that that assumes the pricing on the GPU hours holds up right >> correct Um but I I think if you you know believe the ultimate thematic which was our original thesis from day one was that the demand for compute moving forward is going to massively increase and you know we're really seeing that play out in the market at the moment. I think both sides uh can be attractive. Um but you know those payback and returns uh that we're seeing on the cloud side today look particularly attractive and I think the demand that we're seeing from customers on both sides is is incredibly encouraging. Uh

1:04:35 and I would say it's a you know there's a a strong variety of players that are that are coming into this space including hyperscalers looking for cloud compute which is an interesting dynamic. Um and you're starting to see a lot more enterprise customers coming into that space as well. They're a little slower adopters and these AI startups that have traditionally driven uh the the growth in AI compute but they are coming more and more and inference is going to play a more and more important role as we move forward and that's where you're seeing some of this enterprise adoption. >> So Solomon Mar said they weren't going to do you said you weren't going to do AI maybe a year ago but here we are things have changed. you did some M&A maybe walk us through your thinking on why you did that transaction what your

1:05:22 kind of longerterm strategy is in terms of addressing AI HBC tap that market and create value for us so we announced this acquisition of Xion we once the transaction closes we will be uh 64 65% owner of that company in partnership with EDF it serves the data centers in in Europe and Canada currently it's got partnerships with Nvidia uh Deote and many other customers it's got recurring revenues. Currently, it's a startup, but it's got recurring revenues uh that that that are out there for the current customers and they're expected to grow over a period of time exponentially. the the the angle that we have on the AI front is uh compute on the edge and we like compute on the edge where you have if you think about it if if I have to

1:06:08 simplify for everybody if you're Exon Mobile Coca-Cola PepsiCo Saudi Aramco or a hospital you don't want your data to be mingled in a third party data center site with everybody else you want security around it you want it closer to your location and that's the piece that we like we like to serve that market which is currently a very small and it's expected to grow up to a 160 170 billion mark in a couple of years and uh that's the piece that we like. We like sovereign uh compute which is uh which allows people to control their data better at clo closer location to them. We like the aspect of recurring revenues that come with that. We also like that there's a software aspect to it and and also the the platform as aspect to it.

1:06:56 So PL platform as a service which can include both GPUs or without GPUs and software. So it's a multiple angle that we're we're we're planning to solve. And

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