The US is NOT selling $6.5B Bitcoin | Aidan Larkin, Asset Reality

US court greenlights the sale of $6.5 billion and seizes Silk Road Bitcoin. So then the price starts falling. Bitcoin's down a couple of percent. So everyone says, oh, Bitcoin's down because the US government is about to start selling $6 billion into the market. This is wrong, you are saying.

Very, very wrong. Again, in the sense of, will there be a moment in time when they will start the disposal process? The people that crashed the market were Or the crypto folks wildly speculating on news stories. Let's be clear, people saying the government are doing this with no facts. But I just read a tweet from someone saying, this is how efficient the US government is. They want to build a strategic Bitcoin reserve, and now they're starting by selling 6.5 billion Bitcoin. This is someone with tens of thousands or hundreds of thousands of followers, and people just lean into it.

Today's episode is sponsored by Geodnet. They're a leading DePIN protocol that's providing critical location and spatial intelligence services needed for AI-driven robots and drones. Discover how the network's native token, GEOD, is powering the next wave of the robotics revolution by hitting the link in the description of today's episode. What's up, everybody? Welcome back to The Roundup. Um, we haven't— we have a head of podcast at Blockworks finally, so these shows are about to level up, baby. Level up.

Yeah. Oh, for sure. People, uh, I love the comments on YouTube. At some point we're gonna have to go revisit them, but there were some pretty spicy takes in the 2025 predictions.

I mean, basically I think our mics got worse and we just loaded up with ads, so I do understand why people were not stoked.

But anyways, uh, what's going on? I mean, light week, market's tanking, but there's not like a lot of news, uh The market is just doing its thing. So how are you doing?

I'm doing great. I'm having like an amazing start to the year. It's been good. I mean, you got our investor update last night. It's been just like, yeah, things are, things are good. Life is good.

Bedside, bedside reading. It's great. I think you guys are like a leading indicator for everything that's going on in crypto. Like, so certain businesses that if you had like perfect, like perfect information, like you'd want to like, of course, like we interviewed who was it? Oh, the Richard from Binance. Like, and we asked him this question. It's like, hey, from your KPI dashboard, like you probably have like pristine information of where we are in the cycle kind of thing. Like, so people should go listen to that episode. I think it's one of the— it was short and sweet, but I think it was very insightful.

Um, yeah, good episode. So we interviewed Richard, the CEO of Binance, drops on Monday. Uh, the best part of the episode is definitely when Santi keeps pressing him on the fees that Binance takes for listings.

And, uh, you know, he's gonna ask the question.

I think when he didn't answer the first time, I think he enjoyed the conversation except that part. I mean, he definitely did not enjoy it. But to his credit, to Binance's credit, oftentimes people will reach out to us saying, hey, can you take that part out of the episode? We need to cut that part. Obviously, we never actually do that. But, you know, but they didn't reach out. They said, look, run it. It's fine.

So yeah, no, no, it was very good conversation nonetheless.

Yeah.

So what's going on? What do we want to cover this week? We have a special guest.

Yeah, we want to, um, okay. So we're the kind of a light news week, but the big question I think this week was, have we topped? So first off, I think that's a, it's, we definitely have not topped. I'll tell my quick take. We definitely have not topped, but it's actually a good thing to reflect on quickly to just think about like, hey, look, if this was the top, how upset would you be? Was it a successful cycle for you? Would you be pissed off? Would your company, you know, if you're running a company or something, would you make it through the bear market? Um, that I think is why this conversation around like, have we topped? I think it's silly because like there, I really strongly believe we have not topped. And I actually think we're going into like what will be a couple months of just ridiculousness in the markets in a, in a good way. But it's a good thing to think about is like, are you going to be happy? If this was the top, like, are you happy with the cycle? Did you take any profits? Like, it's just a good thing to reflect on.

I thought it was an excellent tweet that you had and it's just sound advice. It was like maybe just for people that— where is it here? Oh, try to pull up your— where is this?

I've been tweeting too much.

Cycle has not— you tweeted this. Cycle is not topped, but if you panic at Ansem, 75%, it's worth thinking because Ansem— this guy Evan said, would you say there's like 20-25% chance the cycle topped? Ansem responds, 75% chance the cycle is topped. And you said, if you believe whatever it is that you believe, A, would you be okay if this was the top? Two, would you end up with profits? Three, would you think that this bull was a success? Four, would your company or fund survive the bear? If you said no to any of those, reflect. And I think it's— oh, there you go. Yeah, fantastic. So for people not viewing this live video, and I think it's just a really good reminder. It just feels— again, we've said it time and time again in the podcast, we said it in the 2025 predictions, like, I'm not, and I don't think you are here either, like, you're building a company, you're super focused, but like, as an investor coming in, like, I've readjusted my frameworks to say I'm not here to capture and shoot to capture 90% of the returns of the cycle, right? At best, I'd be happy if it's 50%. And I tweeted something today, said, listen, day like today, you're seeing a lot of coins go down 25-30% in any given day. I think your assumption when you're in this asset class is that any given day, the price movement of any coin, including Bitcoin, can be upwards of 50%. Yeah. And so you kind of invert and you say, well, what if that's going to be true? I definitely don't want to use leverage.

Yeah. So here's my favorite part about all of this is, A, you need to flush some things out, right? Every once in a while. So it's a healthy thing for the market. The other thing is Trump's inauguration is now a bullish event, not a bearish event. So what I, what I originally thought was going to happen, I was 180 wrong. What I originally thought was going to happen was, you know, there's going to be like a big bull run into the inauguration and then it's kind of a sell the news type of event. Or what is it? Buy the rumor, sell the news, whatever it is. And I thought there was going to be a sell-off around the inauguration. But now, because we got the sell-off before the inauguration, Trump moving into office is actually, I think, a very bullish catalyst. And so I'm— I have flipped very bullish from here is what I will say.

You remember that Reddit post which says everything is priced in?

Yeah. Yeah.

It's like, you know what I mean? Like it is. I just think that like people play and focus so much energy in trying to understand how much of it is priced in. And I've, it's A, I think it's pretty hard. More importantly, yeah, you're going to pull it up.

It's so nice for people to know one of the best copypastas of all time.

The best. Uh, yeah, I remember. Yeah. Anyways. Uh, but it's, uh, you know, during the halving events, is it priced in? Uh, uh, Fire Dancer for Solana, is it priced in? Trump inauguration, is it priced in? I think like, you know, when the market comes down, like, I think you just sort of— there's two kinds of people. I think one that, uh, the point, the longer timeframe and time horizon you have, more patient you are. I think you just naturally think of these moments as like good entry points. The question is, where are you going to pull cash from? So you have to have some sort of dry powder. It never hurts to have dry powder. You know, like, in my entire investing career in crypto, uh, you'd think I learned a thing or two. Uh, I still make a lot of mistakes, but the thing that I've appreciated is anytime you, you're chasing an asset, um, a lot of times, like, you think that, oh my God, FOMO, I'm never going to see this thing below $100K ever again. Everyone on the timeline is calling hyper liquid at $200, Bitcoin at $250. Like, everyone's, you know what I mean? Like, I think it's just, it's a helpful reminder, like, there is a natural gravity to things, right? Uh, like, the mean reversion is very much a thing. And, um, I've always kind of— it's super hard, but I'm like, all right, there's probably— it's almost like I take the inverse. Anytime I feel like I'm never going to see this asset below, you know, whatever, I'm like, no, no, no, like, just be patient. Like, let the market come to you kind of thing. Um, and like DCA into a multi-decade or multi-year kind of, or through cycle kind of trade. Um, because, you know, everyone in the timeline was like, in November, Trump got elected, it's like, we're blue past 100, so much momentum. You're sitting there, you're like, wow, yeah, this is going to 120, 115, like 150, like let's go.

But yeah, you know, All it takes is one Trump tweet saying, you know, the government selling $6.5 billion, we're going to buy it back, right? Boom, back off to the races. Everyone flips bullish. Um, on that note, I actually, I think the news of the week, the theme of the week was definitely, have we topped? The news story of the week was, uh, the government has now has approval and, uh, to sell $6.5 billion of Bitcoin and it's going to start selling Bitcoin. So Um, you and I could pontificate on this all day long, but we are lucky enough that, um, we have Aidan Larkin joining, uh, the episode. We're going to pull him in in a second. Aidan, um, for context, so full disclosure, Santi and I are both investors in a company called Asset Reality. Aidan is the CEO and co-founder of Asset Reality. Asset Reality, I'll, I'll do one sentence on it and then I'll let Aidan actually do it. Um, they basically investigate, manage, and realize seized crypto assets for both the, like, government, like public sector and private sector clients. I, I'm pretty sure Aden was the first seized crypto auctioneer in the world. Um, and so what this actually means in layman terms is if a government seizes Bitcoin, it could be from the Silk Road or could be from somewhere else. Um, they call Asset Reality and they call Aden. So he, he has more experience with this than anyone else in the world. And I messaged Aden, I said, what do you think of the government selling Bitcoin? He said, This is a ridiculous thing that people are blowing way out of proportion. So anyways, wanted to pull Aiden onto the show. So, Aiden, welcome. Hi, folks.

Thanks for having me.

Yeah.

Yeah.

Aiden, I'm just going to ask you, are you, are you the guy that's pressing the big red button for the government to sell the Bitcoin?

I'm the guy with the megaphone saying, stop believing everything that you read on Twitter or X. It's Yeah, there's so much to unpack in this. But the fundamental disclaimer is that the US government has a contractor that manages. We don't. So just to be clear, so we're not in the hot seat with this particular transaction. And you're right, we help governments with managing seized crypto, the actual seizure part itself. But you're right, I've been in this sector for quite some time. And a lot of our team, I mean, they're the guys that actually seized this 69,000 Bitcoin they're talking about. So we're practitioners in this. And when you see these news stories, I mean, for the avoidance of doubt, this is a— it's a nothing story in our world in the sense of this happens every day. Assets get seized. They go through a process called civil forfeiture. This could be a boat. Someone comes along and says, hey, I have an interest in that boat. That's my boat. Don't just forfeit it to the government. They go through a process. So this particular case has been kicked out of court like 2 or 3 times. This has been like a 10-year-old thing. I think 2022 was the first court case they had. And then as recently they get to the Supreme Court and they're like, it's kicked out again. So all that means is from the government's point of view, they are cleared to continue with the next phase of the civil forfeiture process. Now, you can assume that this case was an anonymous individual who hacked Silk Road. So this should be a bit of a slam dunk case for the government. So just like all of the other crypto that's ever been seized before, this should just become a— at some point in the future, it'll just go through the normal government processes. There will be a civil forfeiture application hearing. They will get their green light, and then it will fall into the normal marshals process. Public domain. Coinbase is their contractor. So at some point, Coinbase will then manage, and it'll move on chain, and there'll be a sale But no one's going to push a button on $68,000.

So the news story, right, if people missed it right this week was— I mean, I'll pull up an article from Decrypt: US court greenlights the sale of $6.5 billion and seizes Silk Road Bitcoin. So then the price starts falling. Bitcoin's down a couple of percent. So everyone says, oh, you know, Bitcoin's down because the US government is about to start selling $6 billion into the market. This is wrong, you are saying.

Very, very wrong. Again, in the sense of, will there be a moment in time when they will start the disposal process? Absolutely. But they've been doing this stuff for years now. I mean, everyone wants to get best value for the assets they sell, whether it's a mega yacht or it's crypto assets. We saw the same in Germany, where there was all this wild speculation that the people that crashed the market were the crypto folks wildly speculating on news stories. Let's be clear. People saying the government are doing this with no facts. But I just read a tweet from someone saying, this is how efficient the US government is. They want to build a strategic Bitcoin reserve. And now they're starting by selling 6.5 billion Bitcoin. This is someone with tens of thousands or hundreds of thousands of followers. And people just lean into it. And it just doesn't happen this way. Practically speaking, what will happen is they will go in the EU and Germany, for example, They locked in that price. But when people saw the on-chain move, they then assumed it was happening. It had already been— the government got best value for those assets. It was a stunning result for the German government. The news story— I think you'd mentioned, Jason Yanowitz, the buy the rumor and sell the news, or that— I always get that thing wrong. This is everyone reacting after the fact who are not in the circle of sort of knowledge and just putting 2 and 2 together and getting 7.

When you say they locked in the price, was that an OTC trade for— with a particular— like a few parties?

In the EU, I believe so. So governments have different disposal methodologies. So this is why 10 years ago, you know, the US government would have auctioned, uh, to your point. Um, no, I was involved in a crypto auction because back then there just wasn't the relationships with exchanges. But now you've got, you know, regulated exchanges all around the world with good track records at handling big disposal volumes. So most government agencies would follow a process of giving this across, carrying out a number of sort of small transactions off-chain, getting a good price for it. And then the final move will usually be the execution piece because they precisely don't want the unhelpful speculation affecting their own returns. They don't like companies tracking wallets and saying, oh, it's on the move. It doesn't help anything.

I mean, but to be fair, like, if you do an OTC trade, there's another counterparty there that has needed to hedge and also dispose of that. Like, if it's a market maker, they're going to have to move those coins, right? Because they're market neutral, or they need to lock in a certain— you know, in an OTC trade, there's like some spread and some discount.

And there's always going to be these enormous transactions. But I think— I don't know if it's this particular case, because I don't know if it's in the public domain. I haven't done my research quickly enough. But I know in one of the cases recently, for example, they actually stipulated in the order this must be disposed over multiple dispositions to prevent an impact on the market as well. But now things are getting so modern. 2025. Governments have been seizing crypto assets and selling them for a long time globally. Most of these things, as you say, they have the discretion. It's not a mega yacht. They don't need to do a single portfolio. They could also go— and when we talk about things like strategic reserves, maybe the government could strictly speak in the process. The government can reuse a yacht, can reuse a car, strictly speaking, reuse crypto assets for undercover operations. A whole bunch of things can be done, but there's a federal process that they have to go through to do it as well. You're talking about multiple different government agencies involved, and then there's lots of court orders and instructions and things in the background. So there's also just to put a pin in that, there is no chance for an incoming president or current president to say, hey, I'll take those $6.5 billion Bitcoin and put them over here, thanks. That's just not allowed.

Let's lay some context. Like, this surfaced, uh, I mean, everyone has always been nervous about the 69,370 Bitcoin that the US government has, right? It's, it's very known, uh, they've seized it, like they've had it for years. Uh, I remember in October, and I'm referencing the Decrypt article, um, there was an, um, you know, there was a news story that appeared that said the US government is free to sell the seized Bitcoin This is from the Silk Road-affiliated wallet. Okay, so that's October. But it's really the point that they make in the article, which I think is a good one that I'd like to know. I don't know if you have insight into that. Is it's like unclear why there was a— the judge, um, I think rejected the— or sort of like denied a motion to block the forfeiture of the Bitcoin.

Yeah.

And that cleared the DOJ to presumably be in a position to sell, right? Doesn't mean they're going to sell today, doesn't mean that they're selling. It just is— they can now sell it.

Yeah.

Um, question— couple questions. The first one is, were they in a position, because they've had this for years, to sell it at any given point in time?

No. So there's a very strict process that has to get followed. So let's say the government seizes, uh, crypto assets tomorrow, uh, and it's a, you know, Department of Justice sort of linked law enforcement agency. If in the merits of that particular case they can't identify the particular individual, so they use a mechanism called civil forfeiture. This is like finding a big bag of cash at the airport and no one will claim it. So crypto assets tainted through on-chain activity and blockchain analytic tools, they're very straightforward civil forfeiture cases because you can clearly see where they're from. It's like identifying stolen goods. So the government process will involve a bunch of steps, but fundamentally there is a legal process of forfeiture. That's why you see these descriptions. We actually did a podcast recently ourselves with a guy, Steph Casella. I mean, he's the godfather of asset forfeiture in the US. And he talks about the fact that you see these particular court orders where it's like US government versus 69,370 Bitcoin. That's the same as the US government versus the SS Indianapolis. So it's against the asset itself. And then so that forfeiture has to take place. So in all of the other crypto cases that have gone by, The crypto has been seized. They then put in an application saying, hey, we've got all of this evidence. We want to forfeit these assets. Once they get the forfeiture, then agencies like the US Marshals can then go ahead and execute their own disposition plan based on their internal sort of operating procedures. So this one particular case just had a unique wrinkle that is not reflective of how crypto seizures actually operate. This is a very specific case where an individual or a group have come forward and said, hey, that valuable asset that the government wants to put through the regular forfeiture process, we think we have a claim to it because of like some linked bankruptcy process. I forget the name of the entity. I think it was Battle Born Investments or— so this is just third party laying claim to an asset that is about to go through the regular federal process. And literally because they've been through court so long, like this started— was it pre— was it 2020, 2021? I know the first case I saw was 2022 when it was kicked out. They went somewhere else, it was kicked out. They went to Supreme Court, it's been kicked out. So this has just been sort of circle in the drain in the US government for now. And now it's another one of their cases that'll fall into the forfeiture application bucket. They get a green light, they'll go ahead with disposal. But this could be a year away, it could be 6 months away.

So just so they context overall here, Uh, the government sees these Bitcoins tied to Silk Road many years ago— forget the exact year, like, yeah, 14 years, a decade, yeah, like 10 years ago. They were never in a position to sell because they had to wait this grace period, make sure that, you know, no one came back. And so this process of forfeiture, um, which is just claiming that and just saying, hey, I got this bag of cash in the airport, gonna give it to 10 years, no one shows up. Now Um, so, so that so far so good. The, my question is what are the odds that this particular entity, Battle One Group, that you mentioned actually doesn't have a claim at all, but like, could you, or could anyone randomly just file kind of this, I don't know if it's an injunction or what the, like file court orders to just like delay the forfeiture and you could just keep doing like, it's, it's almost like a DDoS attack on the forfeiture.

It's a very expensive DDoS attack because if you think of the association, but if you have a big bag of Bitcoin. Look, it's true. I think we saw this— this is your world and not mine. Didn't something like this happen with OpenSea, where you could lay claim to an NFT during the auction process, and you could say, hey, that's mine? And they would go and sort of investigate. But if you wanted to strategically attack a competitor, you would just wait until like 3 minutes before the auction and all the hype around it, and then sort of lay claim to it. So you're right. And again, I'm not an asset forfeiture lawyer. But under any sort of traditional asset disposal process, when they'll post a notification to say US government versus X, come forward and plead your case. Because there will be legitimate times when someone, for example, has been associated with a business, they've bought the business and all the proprietary tech, and it turns out that actually all the kit that they bought, they maybe bought options in a company or shares. It happens all the time that people come forward for third parties. And they have to make their claim. What I will say from personal experience, if it's a slam dunk, it's a slam dunk. You get your stuff really quickly. Like, if you turn up and say, hey, government agency has seized my mega yacht because some criminal was driving it, but they had a lease with me for 3 weeks. I bought it legitimately. Here's all my earnings validated. I'm not the crook. You get your asset back straight away. But this looks like on the face of it— again, I wasn't involved in this case— that someone's had an attempt at a claim. On, I think, in 3 or 4 US courts. They failed every time.

So, and who makes the decision at the US government whether or not they should sell?

So it's not a should sell. They don't really get an option. The asset forfeiture process is you have to convert the asset to get the value back, usually for victims. That's sort of the main reason civil forfeiture exists. So it's kind of— if you imagine, you know, uh, take, take out like a big drugs or a big narcotics case big warehouse filled with cocaine and filled with cash. The government goes through a process and says, what do we do with this cash? To legally take that in and put that into the narcotics program to basically tackle more crime and sort of fund more awareness campaigns, they forfeit it to the state. Or if you're the victims of a Ponzi scheme and they find a bank account linked to fucking Bernie Madoff, they can go through a forfeiture process. And then the next step is actually to identify victims, or maybe the victims The identification could be before that, the specifics. But basically, it's does someone own it, have a legal claim to it? If not, it gets forfeited. Once the title gets forfeited, that effectively means it becomes the property of that government agency to do so as they wish. Now, if at that point the government said, hey, there's a really interested incoming president that wants to hoover up all the Bitcoin, is there a way? Then there is a mechanism legally. It's legislation and policy, but there's nothing to stop them. But it'd probably just be easier, um, uh, to basically realize that and put money in the bank. So it happens a lot, but I think that for this particular one, this will just fall into the next stage of forfeiture. But Sandy, your point is strategically someone could be saying, I'm going to come along and delay, delay money.

But I'll, uh, coordinate with, uh, you know, 10 degens. Hey, let's, you know, let's file a motion here to delay claim on it.

Yeah, and it happens a lot. Like, how many forfeited pieces of real estate, for example, that people that have went in— again, it's, it's expensive to get together. I know, obviously, I mean, this is one of the, I think, 3 or 4 high-profile sort of, you know, billion-dollar sort of Silk Road-related seizures. It's specifically this one that was caught up. The other ones sort of sailed through, assets have already been liquidated, and they don't reach the news because unless you're tracking the court dockets Or was that the $2 billion that—

because I did see they did send $2 billion to Coinbase, right, a couple months ago. That did, that did happen, right?

So in October, right?

Yeah. So remember, so Coinbase is the contractor for U.S. Marshals. So every day there'll be transactions taking place, assets getting moved around. It doesn't— and this is where the FUD kicks in— it doesn't signal a disposal. That's just inventory movement. Like someone one day could let's say I'm a police officer and I carry out a seizure and I recover a wallet.dat file, or I recover seed phrases, or I take custody of an account in an exchange overseas. There'll be an initial movement of assets to recover them. There then might be a requirement based on the configuration of that portfolio to move assets around. There could be just evidential requirements and things that have to get done. So it's a dangerous thing to do. The amount of people that now track these wallets as if it's gospel, you don't have all the context. It's like watching a superyacht move from port to port and assume that it's been sold and assume the ownership's changed. It's not the full picture.

So you don't like these, like, like the Arkhams of the world, or maybe it's not that you don't like them, but you think it's, uh, there's a lot more context than just watching the Arkham wallets.

Context. I think it's phenomenal from, from a transparency, civil liberty. I think it's phenomenal that we can track this asset category because you can't track how they're doing with the performance of selling off Epstein's portfolio of assets, for example. You just don't get to see that. But without the additional context of knowing what that movement relates to, you're making a decision or, you know, spreading a rumor on 1% of the story.

Um, so okay, now there— the motion was denied. There are, to your or my knowledge, no other motion there to kind of like claim Supreme Court or something like—

so I think they're pretty much done.

They're pretty much done. They are in a position free and clear to dispose of these assets in some—

no, no, not, not dispose. And again, remember, they're only clear to continue with the forfeiture process. So this was an appeal from— for my quick reading, this was an appeal during the civil forfeiture process. So now the article is— one of the articles I read is correct in the extent— I've just seen one on MSN which is just unforgivably inaccurate. Is that—

it's okay.

I've just seen it pop up because I searched it. But I think that within the context of the civil forfeiture, they have the green light to proceed with the forfeiture. Now, if I'm a betting man, that forfeiture should seal through because now all these outstanding claims have been settled. It's against individual X. It's linked to Silk Road. There's been a criminal conviction on the back of that case. Again, this is like cash in a bag at the airport at this stage. It's administration, it has to go through, but it's still— there's— it's still a long process to follow those.

Yeah, that was my main question, which is obviously, you know, Trump's going to come in office. There's a strategic reserve discussion that is very pertinent to this, which I want to get your take on. I know you're not a forfeiture lawyer, but, um, timeline-wise, if there's like— in what scenario, like, what is the sequence now from here on out?

So the sequence would be there will be a forfeiture, no hearing. They'll go through those steps. But this thing will be measured in quarters. Like, this could be— it wouldn't be shocking if this was still not moved all of this year. Like, this is not going to be something that moves in days or weeks. The only time that would change is if for some specific reason there was a court hearing and there was a date and it was set. And it's a little bit of sort of just potluck with court dates based on the jurisdiction that it's in, based on who's on sick leave, who's available, what the resources are, what other cases come in. If you have a January 6th style incident, for example, then all the court dockets get pushed back. I mean, this is just sitting in amongst all of the other sort of forfeiture applications and things that have to go through the wheels of justice type thing. So we could be sitting here in a year's time and those assets still haven't been liquidated. Similarly, things could be done in months time, but it certainly will not— I mean, You're talking about people like Coinbase, talking about people like the Marshalls who have managed billions of dollars in assets. If they do have the forfeiture permission to proceed, the normal standing operating procedures is governments want to move as quickly post the forfeiture order being granted. It's not a government's job to speculate. So the government normally would just move as quickly as reasonably practicable to execute and actually do the trade. If this was a lower value, What's an interesting wrinkle, as you've said, is about if potentially an incoming president then says, I want to look at taking all of the current assets that is forfeited to the government. That is very different than seized. Something that's seized still hasn't went through its legal process. It's just frozen. But the forfeited assets, that's a much smaller number than the big number that gets kicked around. Everyone talks about the US government having tens of thousands of bitcoins in all of these cases. Yes, they're at the beginning of their process. They're seized, they're not actually forfeited yet. So the actual forfeited cases, they're the ones that will, will take a bit more, a bit more time. But this one certainly is on its way.

Yeah, along. So that's a $6.5 billion of forfeited, assuming it's forfeited, that belongs to the U.S. government. The DOJ has purview over how to go forward with the U.S.

Marshals. They're the response, they're the responsible authority for managing all the DOJ UK sort of.

And ladies and gentlemen, just for context, Aidan, you've worked a lot with these folks over the years, right?

Yeah. Most of our company are the folks that worked in US Marshals. My colleague Joanna Summers, she was the one that actually ran that unit that managed the first Silk Road seizure, the stuff that Tim Draper bought at auction. I think before the intro you mentioned, I ran an equivalent process in the UK and Europe. So I managed some of the first Bitcoin auctions in the UK and in Belgium. So these are standard operating that this isn't a regular day at the office for us. This is just an exceptionally high amount that's caught the public imagination. What there hasn't been talk about globally is the strategic Bitcoin reserve angle. So imagine the US government had $6 billion worth of gold bullion today, and it was about to go through a forfeiture process. If some sort of Federal Reserve decision was made to say, can we take that and transfer that across, then the actual Department of Justice account would have to get its money's worth. There would be a transaction, a notional transaction, to say we're buying that $6.5 billion off you and then moving that across into a Federal Reserve. Because there might be victims in this case that we're not privy to in the public domain. There could be asset sharing agreements with overseas government agencies. We'll never get to see below the sort of waterline.

And that's what I wanted to get to, which is like, you can imagine Trump saying, hey guys, that's $6,000. Come here. Like, but it's, it's, it's like an interagency transaction. There's no selling, there's— it doesn't hit the market, but like it just moves ownership within intergovernment agency, so to speak. It moves from DOJ Marshall— like, it's a DOJ, right?

Yes, the Marshall Center within the DOJ.

So within the DOJ, so the DOJ like as an, as a to fund budget or whatever. Like, it's very enticing because, like, this is gonna— our bonus maybe is tied to it, whatever. And then that—

this is what funds law enforcement. This is what pays victim compensation. This is the— and again, as I mentioned, a really important angle in all of these cases is that we'll not be privy to— if this was an overseas operation, there could be other governments that have asset sharing agreements in place based on the proceeds post-forfeiture. So again, and you would question that if you want to set up a Bitcoin reserve, would you want to have all of the assets that have some of the worst tainted history on-chain? It's like, why would the government— they'd buy a bunch of new police cruisers instead of reusing like the old beat-up cruisers that have been seized off a drug dealer. I mean, these assets have an on-chain history as well. If I was setting up a Bitcoin strategic reserve, I'm just going to place an order with one of the big the big funds or the big entities and get some clean coins.

Actually, we'll say more about that because I would have thought, hey, why not? I mean, we already have this, just transfer it over. You have some sort of record between interagency transactions.

It's entirely doable with the right policy changes and legislation changes. And obviously, I do not know the inner workings of the US government, but logically, it would make common sense that if they wanted to set up a strategic reserve and they already had a balance sheet full of forfeited assets, then I could completely see how that could be— how that could go ahead. That's entirely possible. It happens all the time. When government sees vessels, the vessel gets forfeited, and then the Navy comes along and says the kit on that vessel is really valuable to us for training exercises. And then the naval authorities will make a submission, they'll run through a paper process, and they will have that asset transferred to them. So it happens all the time in asset forfeiture. It just hasn't happened.

And I said, okay, Yeah, go ahead. I would go a step further. I have a feeling when the— I kind of agree with Aiden here. I don't think they would use this Bitcoin for the Strategic Bitcoin Reserve. I, and I would go a step further and say, I think when they announce, or if they announce the Strategic Bitcoin Reserve, they will only buy— I'm putting quotes around this— American-mined Bitcoin. I think there will be a whole— it's an opportunity to say like, we are bringing Bitcoin mining to America. It's in Texas. It's clean, clean energy. Maybe opportunity to do that.

Like, Do you think that the government here— that there's some like conspiracy theory, but like you'll tank the price of Bitcoin with this and then you buy Bitcoin back at $75K or $60K? And you know, someone behind here, I think, uh, I mean, yeah, I don't think it's credible, but like I'm sure someone out there is going to have this type of conspiracy theory, which is like they want to dump the price of Bitcoin with this stuff and then buy on the cheap.

Geodnet is a first-of-its-kind DePIN protocol that's revolutionizing satellite navigation services. They're actively generating on-chain revenue that's growing 500% year over year by providing precision location services that are 100 times more accurate than standard GPS. On Empire, we always talk about finding how crypto can power completely new business models, and they're a perfect example of this. They're already trusted by over 30 enterprise customers across industries including automotive, agriculture, construction, and even robotics. The network is powered by its native token GEOD and easily mined with their satellite miner. By setting up a base station, you can get involved with this, uh, groundbreaking Web3 ecosystem. Learn more by heading over to GEOD. Or just by hitting the link in the description of today's episode. Here's the different conspiracy theory that I think is maybe less of a conspiracy, Santi, is Biden and the Dems just hate crypto so much at this point because arguably crypto helped Trump get elected. So is this the one final thing? I mean, we've got, what, 11 days left? Like, Aiden, I'd be curious to get your take. I don't know. But is this the thing that Biden could do just on the way out, being like, I'm selling the Bitcoin, I'm selling $6.5 billion of Bitcoin?

So I read that again.

I get that it's not Biden clicking sell on a Bitcoin. I do understand that.

But it will—

Biden doesn't have any authority over the court interpretation and dismissal of the case.

So that's what I was going to say. Again, not comment on this case specifically, but asset forfeiture in general. This has nothing to do with any politician. This is a court process that started, like you say, a decade ago in terms of the seizure. This is running through a process. So it wouldn't matter if it was Trump or Biden. No one is stepping in and getting involved in a Supreme Court case or a local case that makes its way through the court. So they're actually— that's the one thing I'm more than happy to sort of make a very strong assumption that there is zero interference. And now the difference would be where the conspiracy theory would kick in. Is that if there was some record express forfeiture granted, a really strong contentious case was suspiciously concluded fast, and all of a sudden the most clumsiest transaction was carried out in conjunction that it ran through the Marshalls and into Coinbase and done, then there would be a— this is so highly irregular, we can only start to draw different conclusions. But me sort of sitting back as someone that works in asset recovery, this is just— this is trundling through the normal processes. You just have a bunch of coincidental interesting facts taking place that you've got no change of president, but it really has zero to do with this case, or that there's an interesting narrative. But I will, Jason, to your point on the Texas Bitcoin is a really valid point. I mean, if you're a political opponent or you're someone sort of fighting against the US talking about this in future, when people go deep and go, you know, I'm thinking like the, the online sort of crypto sleuths whipping out the blockchain analytic tools, and you start to go through these. Would you really want your country's strategic reserve to be, oh look, that wallet was linked to that wallet that was linked to the, you know, welcome to video online child exploitation case, or that was linked to this, or that was linked to that? I mean, this will paint a horrific picture, this particular wallet, because of the nature of the, you know, the seizure that took place and what it was linked to. So again, if you had a ship full of human-trafficked, no-lead gold bar seizures that had this tragic backstory. Would you then want to proudly stand over them and say, hey, these are in our Federal Reserve now? We've brought back gold standard when you could just go and get shiny gold bars somewhere else. So that's why I don't think practically seized Bitcoin will ever make its way across into that, because it's just so much easier to get regular.

Maybe as a last point, how do you think they dispose of this then?

Exactly like they've always done. So the auction— I saw some, again, wild conspiracy theories about they're going to bring back auctions. Going to bring back auctions. Um, no, paintings will be sold at auction and things like that. There's a proven successful model that's been used all around the world now, interacting. Now we sort of fit in this, the peel chain, where we'll sit and help manage the asset, and then it goes off to someone like a Coinbase or some sort of, and sort of liquidation route. So I'll imagine this will be the typical large, you know, multi-day, multi-week, multi-month sort of disposition, and hand it across to their contractor, to Coinbase, and Coinbase I think successfully, um, defended the protest that was against them. There was, I think there was Anchorage and Coinbase obviously were, were fighting it out as the, the recent winner of the US Marshal tender for the Category 1, the, the big Bitcoin of the world. So Coinbase just got that news a couple of weeks ago. So this will just become just another— this will go into the melee of all the other Coinbase Prime activity, and if and when it happens this year.

And just to put it in perspective, $6.5 billion Bitcoin— I'm referencing CoinMarketCap data, um, sorry, CoinGecko— yeah, the 24-hour volume on Bitcoin today is $55 billion. Now Binance alone is $3 billion. Let's look at where they practically would dispose it. That would be like Coinbase or Krakens of the world. Coinbase is like a billion. So, you know, that's like 11%, say, if you believe that full number, that's like 11% of volume. Now, you could just like—

it's—

I know it's like more symbolic than it is like the market can absorb that. Like, it's not— I mean, it's— you can drip out of that. And remember, the government orders and stuff like that. And like, you could— I'm not a market maker specialist, but I've dealt a lot with them. Like, you could reasonably dispose of this within days.

Well, that's what we do at Asset Reality. If we're working with a government agency in a particular jurisdiction, we'll go and find a, you know, a regulated, insured, a reputable sort of provider of those services and say, what's your strategy for us getting the best return for the agency? And if they say, well, we're going to do this in 25 chunks over X amount of time, then that's the decision that comes to— it's always based on how do we get the highest possible return. So what I will guarantee Whenever people see on-chain movement, that is not the sell-off starting. That's after the fact in most cases, or it'll be moved so early. So for example, I would be permitted to send all my seized assets, for example, to someone like Coinbase tomorrow. And at some point in 6 months, they'll get the email to actually start the sale. And you'll see it disappearing in the big omnibus wallet somewhere. Like, so people trying to figure out when this button is going to be hit, only the people that work in the US Marshals and are involved in the court process and the security-cleared sort of sworn-to-secrecy people in Coinbase linked to this, they'll be the only people who know. I won't know. We won't know. The rest is just entertaining FUD.

Very interesting. What else is there noteworthy about this or just the entire forfeiture, seizure, disposal, liquidation process from your standpoint? Anything that hasn't been talked about, we haven't covered, that you find interesting? About this case in particular, or just stuff that people should be more aware of? Because there's just, to your point, just a lot of misinformation and lack of knowledge about how these processes work.

Yeah, it's the fact that globally all of this criminal activity sits under the same legislation set. People always think that because it's their sector, it should be treated specially or differently. Like, governments are literally not allowed to. It's the constitution, it's the law in all these countries. So we have these same discussions in different jurisdictions around the world. People want special permissions for Bitcoin ATMs and forgetting that that just sits under money laundering legislation. Seizing crypto assets sits under asset forfeiture and forfeiture legislation. There's this sort of misconception that people think there's a special lien for digital assets in particular. Digital assets in most countries around the world are seized under, like, 1970s police legislation. It's just an intangible asset. There's no special crypto. People sometimes forget that all of the talk about crypto legislation globally is about regulation. We haven't even fixed that globally. We haven't got into the asset recovery and that specific piece. So I think there's still such a long way to go. And same if someone seizes an NFT, there's no special treatment. It will go down the normal process. It'll be forfeited. It'll go in. And the government agency selling it has the discretion to say, should we just sell it ourselves? Do we go to someone like one of the NFT sale platforms? Again, in our world, whether it's a boat or a Bitcoin, it's just another seized asset in a nice way.

Yeah. With the benefit that you can track exactly what they're doing.

That's the big thing. It's for an entirely sort of— not for your show, a different episode. But asset recovery globally, only 1% of criminals' assets are recovered globally. As a global community, we launder $4 to $5 trillion per year. This was all before crypto came along. The irony is, because of the traceability of crypto, it actually is the white knight in asset recovery. We recover more crypto assets by, like, 100 to 1 globally than we do regular illicit assets. So the youngest industry, but with this really interesting technology, victims are getting money back like they never did before in regular Ponzi schemes.

Like FTX.

Can you go a little deeper on that? Several family members in DC who despise crypto. I would say I think despise is an understatement. And the, the reason is that the like number one sentence that they tell me is because crypto is used for criminals. What would— what do you say to that group of folks?

Yeah, it's— and again, I find myself as agnostic. I'm a former criminal investigator. I used to investigate criminals and seize their assets, and that was my role. I mean, how many centuries do we have of banking in its current form? And we have billions of dollars spent on anti-money laundering and compliance controls, yet traditional financial money laundering is off the charts. So the yardstick by which we're assessing how bad crypto is— illicit crypto is a fraction of a fraction of a fraction, but it sits similarly alongside. For all of the amount of cash in circulation and all of the assets globally, there's always a small fractional percentage that will be involved in illicit activity. Activity. Crypto follows exactly the same pattern. I mean, there's estimates range from anything from sort of 0.1% to 5%. They are absolutely made-up academic estimates. You can take a little bit of on-chain data that's unique to crypto that we can actually track. I can't track a $20 bill, but I can track a Bitcoin transaction. So I can make assumptions on the minimum amount that is illicit in crypto, because I can see it's been used on the dark web or used to do nefarious things. But I also don't know that if you're a money launderer and you've just went and done a Bernie Madoff style, bought a brand new Ledger wallet out of the box, used a Bitcoin ATM somewhere, and then handed that wallet to somebody else, I'll never see on-chain that that's illicit. So I think it's important that people know that the illicit on-chain data needs to be taken with a— it's the minimum. But I also don't subscribe to your family members, respectfully, that it's worse. It's actually much better because of its inherent traceability. If I'm going to run a Ponzi scheme tomorrow, I would be an idiot to do it in crypto assets. But the reason there is so much crypto-related crime is because, sadly, globally, law enforcement just doesn't have the resources and the tools. That's why we exist. It's like people are using and exploiting the state and local government weaknesses because they haven't been given the tools they need to track. Imagine you're a victim of a massive DeFi scam and you turn up at a local police force. That they've just dealt with a mountain bike being stolen, they've just dealt with a DUI, and then you say, hey, I fell victim to, you know, a complex sort of DAO. And it's, it's a forensic sort of accountancy exercise that needs to be undertaken. It's, it's resources.

Yeah, well, to be fair, like, let's just go back to the stat that I find more surprising, which is 1% of all criminal seized assets get recovered.

I just want to make sure. Yeah, so it's a 2015 report. There's so little data, it's never been updated since 2015. Um, let's just— yeah, and you— and but, but the interesting thing about the 1% is that's before crypto activity. So it's like, as a global community, we had a problem before digital assets came along. We were recovering an estimate of 1% of all of the available illicit assets globally.

So when you say that government agencies are underfunded That's not a problem of crypto. That's just a problem of governments being inefficient.

Well, I'm going to be biased and be as ex-law enforcement. What I would say is you can't expect someone to— I can't be the sheriff of a large town or a large village if I've got 10,000 people and I have no 3 deputies. And this is typical. Governments around the world historically underfund. There's a great stat in the UK that is representative globally. Fraud is the biggest reported crime type in the UK. 40% of all crime in the UK is fraud. 1% of policing resources is dedicated to fighting fraud. So the odds of you actually being able to get your case in front of an officer that has the skills and the necessary training to actually take your case— and I guarantee if you run a straw poll of all of your listeners, the vast majority of people that have ever been caught up in a crypto scam, it's— unless it's less than maybe, or under $5 million, they've probably never been able to get their assets back. Or fund the recovery because there's just so many scams, but the amounts are too little for law enforcement to actually jump the fence. So unless you're swept up in a federal case where they do a massive seizure and distribution to individual victims, an average person that falls for a MetaMask scam and loses their wallet and loses their contents and loses a couple of hundred grand, that's gone forever.

What would you say to those? I have a friend who their wallet just got drained earlier this week. Actually two wallets, um, for a total of $350,000. Um, and the, the immediate thought is like, go text ZachXBT and see if he responds. Like, what do you recommend to those people?

There is— the sad reality is there is just so little funding available in law enforcement globally that this is why, you know, so many of these scams exist, because they're just, you know, very, very low risk and high reward. And unless you fund and you go and pay an attorney and actually go and get an investigator and get someone to map it out. Even if they map it out and they say, great, we can see the wallet, we have an IP address, it's in Singapore, it's linked to this exchange, you still have to enact— back to the beginning of the show— these are asset forfeiture or asset— they're just legal cases. So you've got to get that case heard. You've got to get it on a docket. You've got to get an order. And then if it's an international case, you've got to get an international freezing order. That's not being done for anything less than millions of dollars because there just simply isn't the resources to do all of the cases. The example I gave at an FT event was if I had a Rolex stolen in the middle of Piccadilly Circus in London and I ran in and told the police, even though a crime has been committed, I know they're not going to jump the desk. No, close the airports. We can see the guy on CCTV. They're going to say, fill in a form. Like, so when you look at that, that's what happens in regular assets. It's the same thing happening in crypto, unfortunately. So unless they get lucky enough to actually trace it back and connect the on-chain data with some off-chain data, and all of a sudden you've found a person that's in an apartment in Florida somewhere and you can get local law enforcement, you've got a shot. But if it's disappeared overseas and it's a typical sort of Southeast Asian sort of Golden Triangle scam, sadly, the recovery possibilities— but I would insist that people report it to IC3 because at least if you report it and report it to police, a docket is completed, the address is recorded. And if there is a massive seizure in 2, 3, 4, 10 years' time, you're in there and you're in the list and you could get a distribution. And we've seen that in Mt. Gox. People came forward in Mt. Gox and have now been made insanely more than whole. They lost 20 Bitcoin 10 years ago and now they're coming along all getting out in insane amounts.

That's good advice. That's really good advice.

Always file. So always file that. What is that?

I see. So IC3 is the aggregator. I think it's operated by FBI. It's the— for US listeners, every country has an equivalent. Just go to your local sort of fraud authority or local law enforcement. They'll direct you to a national reporting portal. And I would say it means the most in crypto because your Rolex is never going to turn up again. No one's going to call you from Italy and say, hey, we think we have your watch. But in crypto cases, because of on-chain flagging and analytic tools, there's a shot. Yeah, so I would say to your family members, if everyone used crypto, ironically, my job would be a hell of a lot easier. Someone investigates and seizes assets, right? The seizures that are hardest to do are the mega yachts that are sanctioned by oligarchs.

Yeah, I was going to go there. Like, I'm getting— I'm shocked by this 1%. So like, uh, Russia-Ukraine war breaks out, uh, there's a lot of forfeitures of Russian oligarch, uh, yachts around the world.

Seizures. That's a really important seizures.

How does that 1% tie, like, practically speaking?

So the idea is if they successfully— and that again, it's another legal wrinkle— is that they sanctioned all of these assets which aren't seizures. So it's a really silly—

like, circumvent the whole process because it's like—

sanction just slaps a big, like, prohibited sticker on it. They still have to then start the seizure process. So let's imagine even— and this is— there's lots of reported cases right now of, you know, very expensive vessels, hundreds of millions of dollars with $1 million a month marine fees associated with them that are all just depreciating. Once they're sanctioned, they then have to move into the seizure process. Just like our 69,000 Bitcoin, there will be a docket, there will be a case taken applying for forfeiture. People will come forward. And we've seen that in Ukraine. Lots of third-party shell companies that say the Ukrainian-led action has identified oligarch, alleged megayachts. And if you follow the court dockets, it's like offshore jurisdiction, corporate, no shell company is saying, hey, that's my asset. And they're going to be like, well, you're just a front for this guy. And because it's not blockchain, it's very difficult to prove the ultimate beneficial owner. So then the seal gets tied up and these assets are kind of stuck in perpetuity a lot of the times. So that's why there's been very little value unlocked. And this is another reason for the 1%. So when people see billion-dollar seizures, not in crypto, the likelihood of that ever trickling its way back in terms of real money. And the Madoff versus FTX is one of my favorite analogies. Madoff to recovery was nearly 20 years from initial reporting and offense, and FTX was 24 months.

And by the way, I stopped getting checks from Madoff. We lost my— we lost money in Madoff. I stopped getting checks from Madoff only, I think, last year. I like get a monthly check from, from Madoff.

Did you get how many cents on the dollar on your—

Now we're, now we're mostly made whole, I think up to like 90%. What they did with Madoff was they gave tax credits so you didn't have to pay taxes for the first like 5 or 6 years as, as they worked through everything. And then as they started to get the money back, they would send like very small distributions like every single month or every single quarter.

Got it.

Oh, sorry, well, FTX is going to be more than 100.

Yeah, and just this year it's like Mt. Gox and all the— a lot of the crypto cases. But I think, I think, Jason, the— what's interesting about Madoff to the topic of what we're discussing, it does show the art of the possible. There was actually, I believe, legislation change and an actual act that was passed to allow the mechanisms to do a lot of the things that you're talking about. And again, it's taken nearly 20 years. That's not a bad thing in my world. That's still a phenomenal result. With crypto, the possibilities in asset recovery are phenomenal. Again, this is why we all quit our jobs and sort of founded Asset Reality, because it can change the 1% stat. The actual potentials of governments use analytic tools, grab the assets, get expedited court orders. We can grab assets and get things back for people. But I think that Madoff and FTX, the timeline shows the art of the possible. But ironically, the Madoff changes to legislation answer the very first question around, could they create a strategic reserve with seized crypto? They could. They could go and pass a bunch of laws and change— make a lot of changes like they did in Madoff. But I think we should be enthusiastic about the fact that we can change the 1% in asset recovery precisely because of the wider adoption of crypto assets, not illicit crypto. I'm even talking about regular fraudster who steals assets from pensioners, and he puts his money in Bitcoin. The Bitcoin doesn't feature in the actual scam. That's just how he parks his assets. Being able to recover those assets as laundering proceeds, again, is made easier because they're using Bitcoin.

Yeah. Aiden, what do you think of AML and KYC?

It's made easier because of the programmatic way that you can implement it in blockchain-related assets. So trying to do AML and KYC is a very necessary evil. Some people can see it as onerous and laborious. But again, as someone who's been on the other side of the fence, the only way that human traffickers can launder their cash and buy properties— and even as of this year or last year, people could still buy. I saw a news report recently of undercover journalists buying properties in Dubai with cash. I mean, not having AML and KYC programs in place can allow the world's worst criminals to profit and distribute their wealth around the world.

So you believe that AML and KYC, even though a lot gets through the system and it costs a lot of money, billions of dollars every year by banks to spend on it, you think it's a worthwhile system to invest in?

I think it has to be because, again, as someone that's been involved in child exploitation cases, the data collected in KYC and AML— let's say someone has an online identity, but I can trace back and we can see that one time years ago, they had some sort of transaction, an off-ramp with a bank somewhere. That KYC and AML information is the reason I can go after that person off-chain. I completely get, but from a practical point of view, is it always proportionate? Absolutely not. It's never a perfect science. It's the seatbelt argument. It's the— how would—

yeah, I hear— like, I've heard, by the way, two points on that, that real estate is the primary mechanism. You pay cash, then you get your system in— like Miami, for instance, like people go apartments in cash, you know, people would do very lightweight kind of verification. And then once, once you have that in real estate, you can borrow against it, and you— doesn't matter if they seize that asset, the money's free and clear for money. Like, and that's like a primary mechanism for money laundering.

It was a menu. Yeah, crypto was a menu. Yeah.

Oh yeah, you really want to launder, you're going to do it through real estate.

Yeah. Oh, you're going to go set up a shell company, buy a bunch of assets, have shares in other companies. And I think even in the US risk assessment a couple of years ago, most things like art and real estate were still the things identified on the, on the risk register. It is the cliché of the megayacht filled with art, and diamonds, and jewels. It's just that in a diversification of the portfolio, there's now some crypto thrown in. But the actual— there's still the king of all of this is global real estate, global shares, global— if you think that the big oligarchs and criminals are not holding really solid shares in Apple and everywhere else through multiple companies, that's what they're doing. But I think, again, I go back to Crypto, from my perspective, is shooting fish in a barrel in terms of the sloppy criminal that uses crypto assets is easy to find. And that's why in the US alone, tens of billions of dollars are being seized. IRS Criminal Investigation, as one agency, has seized over $15 or $16 billion. That's crazy compared to traditional asset recovery statistics. The entire US government pre-crypto, like $3 or $4 billion was a good year. In the UK, £200 or £300 million was a good year. The UK has one case now that's £4 billion worth of Bitcoin. So for us, it's like the early days of oil and gold. They're looking. They're finding it. And the bounties are huge.

Yeah, that's the takeaway here for everyone that has been critical that Bitcoin, that crypto is used for criminals. One, smart criminals definitely don't want to use crypto. People can go back and listen to Katie Haun when she was at the DOJ saying the only reason they were able to find these people in Silk Road, and she was involved, is because they were using the traceability of crypto. The— and more importantly, crypto might be one of the biggest fund— like, ways that government agencies are funding themselves. Like the CZ case, the recovery of these assets. Like, it's a, it's a great, you know, the biggest point is, yeah, that the ability to recover it and dispose of it and like actually fund these agencies which are grossly underfunded, again, to that 1% number. And the last point I'll make is like, as you see time and time again, like Hamas, the terrorist organization, came out saying, guys, please do not send— if you want to send, do not send crypto because you can trace the IPs. Please, like, send something else. And that tells you everything you need to know. It's just, you know, the smear campaign against crypto will always continue. But it's great to hear from your standpoint as a former person in the government. You know, it's just—

yeah, it is. And I also want to weather it. I want to say that Look, the fact is, all asset categories will be used for money laundering if the controls are not in place. I think the reason that sometimes for— it's the cheesy Spider-Man quote, with great power comes great responsibility— precisely because you can track and trace the transactions. If you want to build your own exchange for the first time, and you choose not to build in KYC and AML just for speed and user experience, you know that the criminals are going to exploit that weakness. If I'm going to smuggle narcotics, and I know of an airport that has has no sniffer dogs, no controls in place, guess where I'm going to go? And it's like, in 2025, if you set up a crypto business and you don't implement this stuff, you better get used to steel bracelets. Because the audit trail is just there. There's no more excuses about running a mixer, running it, and I didn't know, and I set it up, and it wasn't me. These are asset forfeiture 101 cases. If you run a money laundering operation, and other people use it, and you create it, you are going to feel the full force of the law, rightly or wrongly, regardless of what your position is. You're on the hook by using and running those. So I think there's enough lessons learned. But I go back to the initial point of it's because of the potential for recovery and the potential for programmatic safeguards that I think there's been a lot of pressure on the combination of just the FUD, people not understanding what it actually is.

Yeah. One last question, which I want to go back to anything that you would change to the KYC AML process if you had absolute discretion?

Any—

mandatory. Okay, sorry, there's my— so yeah, for me it's really important that because of the scale of the human tragedy associated with some of these money laundering cases, I think it's a price to pay. I think it's a, it's a fair cost to enter If you want to have a legitimate sector worth trillions of dollars, you've got to do the same. You want to be treated like the banks in the trad fi world, then you've got to accept that this is just the—

Would you go as far as taking the position that the Bitcoin, the crypto industry as a whole over the years has become far more transparent, far more, I guess, buttoned up in KYC, AML relative to, as a whole, the banking infrastructure, the banking system? Would you take that position? Or how do you—

Yeah, I would definitely take the position that I think the sector doesn't get the credit it deserves in the sense of the progress that has been made in a relatively short timescale. But we still— I can count on one hand the amount of bankers that have been prosecuted for gross money laundering breaches, and people that have funneled funds for the Sinaloa cartel, and the people that have funneled billions in the Danske Bank case. How many of those cases, if you track them through, did the bank manager, or the owner, or the main shareholder face criminal prosecutions? But I think with crypto, again, as former law enforcement, so many exchanges around the world have law enforcement liaison teams. Many of them have turned over and done incredible things. But I think as well, there's still a lot that aren't. And I think until those bad actors— the industry almost needs to self-cleanse a little bit. But it's phenomenal what's being done in such a short space of time compared to traditional finance.

Last question. In a world where everything happens via stablecoins or cash or the traditional banking system, which one is easier for law enforcement to actually prevent and seize and—

Oh, on-chain, without a shadow of a doubt. If you think everything from benefit fraud, tax evasion in a totalitarian sort of society, if everything was on-chain, it would be infinitely easier. But again, we've all seen the human rights abuses that can go with that sort of state.

Yeah, but USDC, Circle has the authority. This is why a lot of the hacks happen over the weekend, because you need to have like a warrant, uh, I heard. But like, if it's during the week, like, Circle can go very quickly to get a warrant and freeze that ad, like, you know, like, uh, to my— like, um, peel it back, so to speak, because they have in the con— in the smart contract, they're able to do that. They need a warrant, but they're able to do that very quickly.

We've seen some phenomenal headlines recently about the— there, an initiative I think that was set up between one of the blockchain analytic companies between TRM and Tether and others where they're identifying those cases. And I think just freezing the wallet and burning and reissuing. Instantaneously. So again, this is the art of possible in crypto asset recovery that doesn't exist anywhere else. You can't stop someone's $100 bill in their wallet and give it to the person that should have it.

You can't say, hey, my Rolex. Yeah, yeah, yeah, just freeze it, delete it, and go to—

Reprint it again, Star Trek style.

That's the beauty of digitally scarce provable assets in a transparent ledger. You know, and if you're a criminal, I think you will either know it or you will understand it very quickly if all of a sudden you think that you've stolen millions of dollars and it's like, oh no, wait a minute. No, they were able to freeze that. Or MEV, right? There's a lot of times where like, it's, you know, I've heard like a wallet gets compromised, that wallet, those funds are being moved, and then immediately like through MEV, like you just snipe that, you front run that, and then you recover that. Or if it's staked, you know, you have 6 days to actually get that stuff together and there's just— or exchanges halting that, like Binance and Coinbase, like just, you know, intervening at that level and almost immediate recovery. And that, that's a better world, I think.

Aiden, thank you, man. I appreciate your time.

Thanks so much.

We're gonna have to have you again. And I don't know, I didn't want to ask because I didn't ask before, but like, at some point I'd love to hear some crazy stories that you've been a part of, like just seizures. You saw tigers and leopards in a yacht. Like, well, I wanna, I wanna hear all the inside stuff.

I'll leave you with the one line that the most infamous asset recovery story globally, which people should Google. The reason there is a hippopotamus problem in Colombia, like attacking tourists and killing people, is that was a failed asset recovery activity. Oh my god. They released Pablo Escobar's hippopotamus into the wild. They went and repopulated. And they're now on the rampage 30, 40 years later. They should have been seized, and then the process would have been forfeiture, probably to some sort of like, um, like a rescue farm or whatever it's called, when they went to be cared for. But because those seized assets, they were just like, what do we do with hippopotamus? So the hippo was in the wild, he reproduced, multiple hippos were in the wild, like a whole bunch, and they opened the gate, let them go, and all of a sudden now—

so there's a bunch of hippos running around like killing people.

Google Escobar, why they made cocaine bear and they didn't make cocaine hippo. I think they, they missed the huge opportunity there. But we talk about the hippo in the corner versus the elephant in the corner.

Wait, this just needs to be a Netflix series. Can we license the rights to this movie and like create a series or a movie? Wow, thanks so much.

Look at this, there's a whole, there's a whole Wikipedia page, hippopotamuses in Colombia.

Wow, how many of them were they, by the way? 100 individual.

Wow, that's crazy. There's 4 to start and now there's hundreds. That's crazy.

Cocaine hippos.

There we go.

On that point, As we round out this, there's a fantastic book called The Billion Dollar Whale, which is about the Malaysia 1MDB scam. Wolf of Wall Street. There's a whole entanglement. And it just documents— if you really want to understand all of this and like— yeah, it's just great account.

And 1MDB, for example, I was involved in the valuation of some of those seized assets. They're just asset seizure cases globally. I would say that there's a new book, There's No Such Thing as Crypto Crime. Full disclosure, I contribute to a little bit of the book on seized assets. It's my co-founder Nick Furneaux's book. It's his second book. That's a fabulous one at demystifying what actually takes place. And there's a bunch of good books on the topic. So yeah, that's for another day.

Aiden, thank you, man. By the way, I don't know how to make this pivot, but I think, Aiden, you will be at DAS in New York. So people should—

You have an event on St. Patrick's Day in New York?

I got to see you there. We just announced that Michael Saylor is joining us.

Uh, and you're talking to this guy about cocaine hippos, like, things are like, you've got to make sure you plug it on the podcast.

I was like, I don't think there's gonna be like some overlap. So I think I maybe squeaked it.

If you want to hear more about seized assets, we'll see you at DAS.

Yeah, there you go. All right, Aiden, thank you for lighting us about cocaine hippos and everything, everything, all that.

Appreciate it.

Santi, good up.

That might be the title of the episode, Cocaine Hippos. There you go.

Good stuff. Thanks everyone for listening. Appreciate you guys. Um, Monday we have the episode with, uh, Richard, uh, the CEO of Binance, and then we'll see you next week for another roundup.

Thank you, ladies and gentlemen. See you next week.

Hey everyone, just wanted to give a quick thanks to today's title sponsor, Geodnet. By setting up a base station, you can get involved with this groundbreaking Web3 ecosystem. Learn more by heading over to geodnet.com. Podnet.com or just by hitting the link in the description of today's episode.