1 00:00:02.669 --> 00:00:03.179 Johny Fernandez: All right. 2 00:00:03.179 --> 00:00:06.480 Hey guys, Welcome to deBanked News live. I'm Johny Fernandez. 3 00:00:07.140 --> 00:00:08.340 Sean Murray: I'm Sean Murray with deBanked. 4 00:00:08.729 --> 00:00:17.669 Johny Fernandez: And so we have a couple good, good, very interesting topics to talk about today. So but let's address the fact that it is 5 00:00:17.669 --> 00:00:23.819 actually sunshine outside and snow is melting away. To me. I feel like that means Spring is coming. 6 00:00:23.849 --> 00:00:25.769 Sean Murray: Well, it's also almost 50 degrees. 7 00:00:25.840 --> 00:00:28.240 Johny Fernandez: I know. It's like amazing. Yeah, take 45. 8 00:00:28.330 --> 00:00:31.870 Sean Murray: Oh, it's 45? Okay, that's T shirt and flip flops. 9 00:00:32.200 --> 00:00:32.770 Johny Fernandez: Exactly 10 00:00:32.770 --> 00:00:33.010 Sean Murray: And Shorts 11 00:00:33.010 --> 00:00:35.000 Johny Fernandez: It's funny down south that that's like you're still bundling up. 12 00:00:35.000 --> 00:00:36.930 Sean Murray: Yeah, that's winter for them. 13 00:00:36.930 --> 00:00:49.620 Johny Fernandez: Yeah, but here, it's like, super excited. So big news for New Jersey. We have Governor Murphy signed three legal weed bills into 14 00:00:49.620 --> 00:00:57.180 existence earlier this week. That's a big thing. I know a lot of people were talking about that on social media. And Sean, this is something that I 15 00:00:57.180 --> 00:01:06.210 found out was really interesting, because they almost like the actual deadline was set. And he pretty much almost ran out of time. But he signed 16 00:01:06.210 --> 00:01:15.390 it like within a 20 minute span of it running out of time for actually to come into existence. But it's really interesting, because the breakdown is 17 00:01:15.990 --> 00:01:26.010 recreational users can possess up to six ounces of weed without legal consequence. So I guess that's, that's good for some people in New Jersey. 18 00:01:26.010 --> 00:01:28.920 And if you're a minor under 21, 19 00:01:29.160 --> 00:01:30.510 Sean Murray: I don't actually know how much that is 20 00:01:30.660 --> 00:01:33.630 Speakers: [cross-talk] 21 00:01:33.030 --> 00:01:33.060 Speakers: [cross-talk] 22 00:01:33.630 --> 00:01:43.890 Johny Fernandez: I don't know how the measurements repeated. That's always been an interesting conversation I have with people it's like how much is 23 00:01:43.980 --> 00:01:44.910 you know what it looks like? 24 00:01:44.910 --> 00:01:45.660 Sean Murray: It's lost to me. 25 00:01:46.140 --> 00:01:52.470 Johny Fernandez: It is. But was also was really interesting is I think it's always been looked at something like oh my gosh, like, you know, you have 26 00:01:52.500 --> 00:01:59.670 marijuana, you have weed on you. It's always been like some type of violation and you get a ticket, you go to court. But if you're under 21, 27 00:01:59.670 --> 00:02:07.590 under these new bills, it's only three strikes, it's kind of like a slap on the wrist. You know, the first strike, you know, they tell you not to do it 28 00:02:07.590 --> 00:02:16.650 the second time from what my understanding is the contact your parents, and the third time, they will go ahead and get you into some type of program. 29 00:02:17.820 --> 00:02:25.320 But yeah, like that's it's just like a three strike rule. There's no former consequence. Like there's been in the past where you, people make it a big 30 00:02:25.320 --> 00:02:28.680 deal and whatnot. So yeah. 31 00:02:28.680 --> 00:02:39.090 Sean Murray: That's how it should be, in my opinion. I mean, it's only for the state of New Jersey. Yeah, but I feel like minors facing, you know, 32 00:02:39.120 --> 00:02:50.760 getting criminal convictions and stuff for marijuana possession can ruin your whole life. Right? So I, I don't have a whole lot to say on this 33 00:02:50.760 --> 00:02:57.960 particular particular issue, other than I'm not opposed to this being in place. 34 00:02:57.990 --> 00:03:05.820 Johny Fernandez: Yeah, for sure. And it's something the ACLU says that it's just the beginning of fair and legal drug culture in the Garden State. I 35 00:03:05.820 --> 00:03:15.870 mean, it's something that I guess like you said, like it, they're just kind of making it normal. So in the future, it doesn't ruin people's lives. 36 00:03:15.870 --> 00:03:18.540 Sean Murray: Yeah, And there was something in there too, about underage drinking. 37 00:03:18.990 --> 00:03:19.380 Johny Fernandez: Yeah. 38 00:03:19.380 --> 00:03:28.570 Sean Murray: If I'm not mistaken. If you get caught drinking under age, it's essentially the same. That you get off with a warning or the three 39 00:03:28.570 --> 00:03:32.890 strike system for that, too. That's probably also a good thing as well. 40 00:03:33.640 --> 00:03:41.170 Johny Fernandez: Yeah. And I think like you said, like, when someone's young, and someone's, you know, 18, 19, 17, and they get caught doing these 41 00:03:41.170 --> 00:03:48.730 things, like you said, It ruins their lives. And when you fast forward when you're 27, 37 things that you do in your teenage years is so irrelevant, 42 00:03:48.730 --> 00:03:53.200 because you're not even your mind isn't even fully formed at 17, 18 years old. So. 43 00:03:53.200 --> 00:03:56.170 Sean Murray: Yeah, well, that's where you draw the line if they rob a bank? 44 00:03:56.350 --> 00:03:57.520 Johny Fernandez: Oh, correct. Yeah, 45 00:03:57.520 --> 00:03:58.930 Sean Murray: They're fully informed enough, You know what I mean? 46 00:03:58.930 --> 00:04:06.760 Johny Fernandez: Yeah, to make those type of decisions. But it's interesting, because, you know, one small thing like this can lead to like 47 00:04:06.760 --> 00:04:08.920 a lifetime of troubles, which... 48 00:04:09.110 --> 00:04:18.230 I can tell you from the underwriters perspective on this, if we were gonna just tie this into lending somehow, in that it's not uncommon for an under 49 00:04:18.230 --> 00:04:29.570 if, let's say, you're applying for some type of financing, to a non bank for the most part, and that underwriting analysis reveals some type of 50 00:04:29.690 --> 00:04:41.870 under age conviction for like, you know, marijuana possession, whatever. It's not held. It's typically not held against the applicant. People have 51 00:04:41.870 --> 00:04:51.980 already had sympathy with underage marijuana possession, when they're trying to analyze or assess an applicant for a loan who's well into 52 00:04:52.010 --> 00:05:02.300 adulthood. Because if you apply for financing or or anything, you can be asked, have you ever had a conviction? Write and say, yes, it could just be 53 00:05:02.300 --> 00:05:11.210 like, too bad. You know? I mean? And just in my experience, there are plenty of underwriters out there who will look at the substance of the 54 00:05:11.210 --> 00:05:20.420 conviction and the age and decide it's relevant or was not relevant. This will, you know, this will make it even better for them. But this is already 55 00:05:20.450 --> 00:05:28.340 like, a trend that has been developing where people are feeling a lot more sympathetic to these type of offenses at a very young age in life. 56 00:05:28.400 --> 00:05:37.310 Yeah, do you think it's something we'll probably see nationwide that this will kind of change, just like the drug culture in general, and this is 57 00:05:37.310 --> 00:05:44.990 something that, you know, states are starting to kind of pick up and New Jerseydid it this week. So do you think it's gonna be something that people 58 00:05:44.990 --> 00:05:48.440 are gonna continue to do nationwide, states are gonna continue to do? 59 00:05:50.130 --> 00:05:58.920 Sean Murray: Over time, I think it's gonna take a long time for certain states to adopt the progressiveness of New Jersey model, you know, this is 60 00:05:58.920 --> 00:06:10.860 just more than just legalization. Right? You know, there are working ways to also help minors not get in trouble. And also it ties in underage 61 00:06:10.860 --> 00:06:19.950 alcohol consumption and possession. That's a new one for me, I haven't heard that part being part of it. But, you know, there are two main reasons 62 00:06:19.980 --> 00:06:30.870 to really to evaluate the bill and one of the decriminalization effect on parts of your population. And the other part is, honestly, it's the tax 63 00:06:31.650 --> 00:06:42.930 revenue that the state can earn. Right? There, we're just we just went through a huge deficit creating period of time. And I think, even though 64 00:06:42.930 --> 00:06:48.900 this is not the federal government and the federal government is borne the brunt of a lot of the costs of the pandemic, the states have, as well. And 65 00:06:48.960 --> 00:06:58.440 I think they will look to this as an opportunity to create new tax revenue, and there will almost be pressure to do it, even if you didn't want to do 66 00:06:58.440 --> 00:07:06.240 it. Because if it's easy as driving across the border to a neighboring state, to partake, and that state is, you know, benefit immensely from a 67 00:07:06.240 --> 00:07:13.860 tax revenues generating, eventually, it's gonna, you know, it's going to create pressure for you just to do it from a competitive standpoint, why 68 00:07:13.860 --> 00:07:21.540 would you want to lose out on that opportunity? So I think it will be adopted over time. And I don't know if it'll be as progressive as New 69 00:07:21.540 --> 00:07:29.670 Jersey. But I think I think for sure, this is something we're gonna see more of, and this is not really an aim in an area I'm an expert in, you 70 00:07:29.670 --> 00:07:38.430 know, just watching the trend. We're deBanked, right? So we obviously look, we evaluate the cannabis market, we we report on the cannabis market. And 71 00:07:38.430 --> 00:07:46.710 so and so this is, you know, this is part of part of the whole thing, because, honestly, these cannabis companies are going to need financial 72 00:07:46.710 --> 00:07:52.380 service products, they're going to need banking and stuff. So I do think that over time, we're gonna see more of it. And we'll probably continue to 73 00:07:52.380 --> 00:07:53.370 report on it as well. 74 00:07:53.450 --> 00:07:59.540 Johny Fernandez: Yeah. And it's really interesting, because I think the big question people had is like, or have now is like, when is this actually 75 00:07:59.570 --> 00:08:09.260 going to go into effect? One will, the recreational users be able to follow this specific law, and somethine we did find out was, Governor Murphy, he 76 00:08:09.260 --> 00:08:17.960 so as to set up a special commission. And once that set up, the 13 medical marijuana dispensaries will probably end up having to ramp up production. 77 00:08:18.200 --> 00:08:24.290 So but first, for now, they're just gonna have to wait for the governor to you know, he's put this into place. But now he has to set up a special 78 00:08:24.290 --> 00:08:31.550 commission, a cannabis Regulatory Commission, and then from there, things are going to kind of start going into play a little bit more before, you 79 00:08:31.550 --> 00:08:41.510 know, this actually, you know, come into full fruition. And it's funny because Governor Murphy, he can at least say that he met his goal to 80 00:08:41.510 --> 00:08:51.110 legalize pot. His goal was 100 days it's three years later. So at the end of the day, he did kind of fulfill his promise. But it wasn't, you know, in 81 00:08:51.110 --> 00:08:53.540 his 100 days, first days in office. 82 00:08:53.780 --> 00:08:57.920 Sean Murray: I think he was going by pandemic time, because it's still February 2020, right? 83 00:08:57.920 --> 00:09:02.960 Johny Fernandez: Correct. Yeah, that's true. I mean... 84 00:09:02.960 --> 00:09:05.090 Sean Murray: He didn't know three years had gone by. 85 00:09:10.380 --> 00:09:16.890 Johny Fernandez: So we just keep going a little bit down out of south from New Jersey, we're going to Maryland. Okay. So on Monday, we did talk about 86 00:09:16.890 --> 00:09:26.250 the MCA prohibition. Pretty much that bill that was very similar to New York, and it's gonna limit you know, MCA companies, very similar to what 87 00:09:26.250 --> 00:09:34.950 New York had done. But I know, yesterday there was a Senate hearing, and it definitely was very colorful and creative, to say the least. So let's kind 88 00:09:34.950 --> 00:09:43.980 of talk about that. Let's talk about the fact that when this bill pass it, pretty much it was putting restrictions on MCA companies. So let's talk a 89 00:09:43.980 --> 00:09:44.850 little bit about that. 90 00:09:45.380 --> 00:09:54.410 Sean Murray: Yeah, so not much has changed from last time we spoke about it. We were we were talking about the hearing that took place in the State 91 00:09:54.740 --> 00:10:04.550 House of Maryland. And now the same discussion was taking place in the State Senate. So it's kind of, you know, duplicative, right? It's just the 92 00:10:04.550 --> 00:10:17.030 same type of conversation but with a different set of legislators. But it was quite colorful. And I think that it was, it was a lot more of an 93 00:10:17.030 --> 00:10:28.550 informed discussion versus the last one. I think last time, the one piece of criticism I gave was that it seemed like the those who had written or 94 00:10:28.550 --> 00:10:38.750 supported the bill weren't entirely briefed on what it was they were attempting to regulate. Whereas this conversation appeared to be a lot more 95 00:10:38.750 --> 00:10:47.510 informed. They know what they're doing. Right? So any notion that the legislature doesn't know what they're doing, I think it became evident, at 96 00:10:47.510 --> 00:10:58.010 least from the Senate perspective, that they know what they're doing. And so now it comes down to how does this proceed from here. And you know, that 97 00:10:58.010 --> 00:11:09.500 is to be determined. One thing that did come up was the interest rate cap. And there was a trade association that was part of the small business 98 00:11:09.500 --> 00:11:20.390 finance industry, who was for the most part in favor of the bill itself, except for the interest rate cap that seemed to be one of the main sticking 99 00:11:20.390 --> 00:11:29.720 points for those who would have who it would affect. So if you're a small business finance company, or there was even a payments company there, I 100 00:11:29.720 --> 00:11:39.380 believe, but offers this type of financing on some type of limited basis. And for them, it was about getting past the interest rate cap. And at that 101 00:11:39.380 --> 00:11:48.290 number, and this wasn't talked about last time. But I think we talked about how right now their proposed cap is 24% APR. Even if it's estimated, 102 00:11:48.290 --> 00:11:56.570 whatever, whatever it is, however, you come up with a number. And I think I mentioned that 36% is kind of the fairness threshold that's talked about, 103 00:11:56.570 --> 00:12:04.430 but that's not a real threshold for what's fair. Yeah, I think it's important for everyone to remember, and this was brought up in the Senate 104 00:12:04.430 --> 00:12:12.410 hearing, is that APR is really reflective of the timeframe in which something is repaid. And so if something is paid over a long period of 105 00:12:12.410 --> 00:12:21.230 time, you know, the the APR could go down, versus if it's paid over a short period of time, the APR could go up. That's if the cost is the same. So if 106 00:12:21.230 --> 00:12:30.890 I give you if I give you like, $10,000. I say you don't have to pay me back. 10,100. Might you think that could be a good deal? So if I told you, 107 00:12:30.890 --> 00:12:35.120 you didn't have to pay me that back for four years, you'd probably be like, let's, let's do it. 108 00:12:35.120 --> 00:12:36.620 Johny Fernandez: Let's do it. Yeah, what do I sign? 109 00:12:36.630 --> 00:12:43.530 Sean Murray: Yeah. But if I told you, you have to pay me that back in two days, you might start to think, well, what's the cost of the $100? For me 110 00:12:43.530 --> 00:12:54.540 in two days, right? Now, the cost hasn't changed, the time has changed. That's what impacts the APR and these transactions, right? So the APR on 111 00:12:54.540 --> 00:13:01.560 the two day loan is going to be very, very high versus the APR and the four year loan for the same amount of money, same costs, there's going to be 112 00:13:01.590 --> 00:13:10.650 very low, right. So if you put a cap on the APR, you're not changing the you're not changing the cost of the money, you're just saying that certain 113 00:13:10.650 --> 00:13:20.520 time periods are just not acceptable to us, even if it is to the applicant. And that's, that's where I think people get stuck. I think that some people 114 00:13:20.520 --> 00:13:30.570 are tired or convinced that APR is the cost, and it kind of is, but it's really a reflection of the time period at stake. And so there was 115 00:13:30.630 --> 00:13:40.560 objections to the 24% number, because I think oftentimes, especially in alternative finance, that person, that number is going to be above 24. Very 116 00:13:40.560 --> 00:13:49.530 often. Even even amongst the player that holds themselves up. And you know, the the highest upper echelon of being good citizens, small business is not 117 00:13:49.530 --> 00:13:57.060 uncommon for that number to be above 24%. You know, even credit cards charge higher than 20. I mean, not all. 118 00:13:57.090 --> 00:13:59.790 Johny Fernandez: Yeah, but there's so some Yeah, that charge higher. 119 00:13:59.790 --> 00:14:07.440 Sean Murray: They charge higher than 24%. So it's really not uncommon. And it's also strange to try just from my perspective to try to limit what the 120 00:14:07.440 --> 00:14:16.590 business owner is allowed to decide. Because if one example given during the hearing was if it's if you need money for inventory, because the 121 00:14:16.590 --> 00:14:22.500 holidays are right around the corner in your retail store, and you're going to pay all this money back in like two months or whatever. Yeah. And the 122 00:14:22.590 --> 00:14:31.350 dollar for dollar cost is worth it. But because it's only two months, now you're going to pay it back. For sure. But because it's over two months, 123 00:14:31.350 --> 00:14:41.820 that APR percentage is then calculated to be above 24%. Maybe it's 50%. Maybe it's 80%. Maybe it's triple digits, you know, I don't know. It's kind 124 00:14:41.820 --> 00:14:50.490 of a strange notion to tell that business owner sorry, you're not allowed to take it because we feel that this formula reflects it's not good for you 125 00:14:50.490 --> 00:14:58.650 It's weird to take that choice away from them. And it's not just going to eople always think about mainstream, but these type of deals are made on 126 00:14:58.650 --> 00:15:07.080 hows like Shark Tank, all the time and American celebrates it right? S we kind of have a double standard. In that regard. There was no real sor 127 00:15:07.080 --> 00:15:15.360 of progress made in terms of like, well, there's going to be amended r you know, is the bill not going to go through or they're going to go t 128 00:15:15.360 --> 00:15:21.960 rough this. And people have asked me, what's the status? Nothing really. I 's just the conversation They've had in the house. The conversation was had 129 00:15:21.960 --> 00:15:29.310 in the Senate, it was a more informed discussion than it was before. So I think the legislature Maryland knows what they're doing. And you know, 130 00:15:29.310 --> 00:15:31.620 we'll continue to report on it as it moves forward. 131 00:15:31.740 --> 00:15:39.060 Johny Fernandez: Yeah. Let me ask you this, compared to what New York, you know, was passed and kind of how they went about it. What would you say is 132 00:15:39.060 --> 00:15:48.390 the biggest difference between how the local government and like the state government in Maryland went with went through that process? And how New 133 00:15:48.390 --> 00:15:56.160 York went through the process? Government leader wise, do you think that they could I know, in New York was a little different and things were, you 134 00:15:56.160 --> 00:16:01.890 know, a lot of people were questioning, like, and we still don't have answers here in New York, but in Maryland, it seems like it's a little bit 135 00:16:01.890 --> 00:16:04.290 more well vetted, versus here in New York. 136 00:16:04.330 --> 00:16:13.420 Sean Murray: Yeah, the way it went down in New York. Everyone was aware of the bill, anyone who was paying attention to it. But it kind of got passed 137 00:16:13.450 --> 00:16:21.700 at the last minute. And it caught a lot of people off guard, obviously, not those who are watching it the most, you know, the most closely, but I was 138 00:16:21.700 --> 00:16:32.500 surprised how many people were surprised by our reporting of it. And some people didn't want to believe it. Hey, this can't be right. It is. It is. 139 00:16:32.500 --> 00:16:43.900 Right? Yeah, it passed. And, you know, now is to do the governor signature, it's just done, right? And it's just kind of caught, not just that bill in 140 00:16:43.900 --> 00:16:54.490 New York, it was broad, based it tried to tackle business lending, MCA, factoring, you know, equipment leasing, all at once and say, here's what 141 00:16:54.490 --> 00:17:04.840 we're gonna do for all of them, right? And then in Maryland, sure. It's, you know, obviously, everyone's watching it very closely. So there's not 142 00:17:04.840 --> 00:17:11.440 gonna be any surprise, if it goes through, everyone's gonna know that, you know, it's, it's on, it's on the horizon. But, but what they're doing and 143 00:17:11.440 --> 00:17:19.840 Maryland's different is that they're targeting just MCA, for whatever reason it is, it's not a business loan bill, not a factoring bill. It's not 144 00:17:19.840 --> 00:17:27.610 an alternative finance bill. I think they call it sales based financing, or something to that effect. They don't actually use the word merchant cash 145 00:17:27.610 --> 00:17:33.400 advance in it. But it only impacts that. From my understanding of my non lawyer understanding. 146 00:17:33.430 --> 00:17:42.100 Johny Fernandez: Yeah, that's really interesting. And so I guess, now for Maryland, we head back into New York, and let's talk a little bit about the 147 00:17:42.130 --> 00:17:52.210 Attorney Generals and her move to end virtual currency trading online. You know, specifically for New Yorkers, I know, this has been something that 148 00:17:52.210 --> 00:18:01.360 has been, you know, kind of in the works for quite some time. So the New York Attorney General, you know, she's really pushing these efforts to end 149 00:18:01.360 --> 00:18:09.700 these type of trading online trading. So let's talk a little bit about that about that news. Because I know that is something that will impact 150 00:18:09.700 --> 00:18:16.540 obviously, New Yorkers that are in the atmosphere of, you know, different currency online currency trading. 151 00:18:16.570 --> 00:18:23.140 Sean Murray: So you can actually trade currency in New York or licenses to get that in New York. So what's the news with the Attorney General has to 152 00:18:23.140 --> 00:18:30.970 do with Tether? We talked, we talked, well, we talked about tether sometimes without mentioning Tether. yet. We've talked about a crypto 153 00:18:30.970 --> 00:18:38.950 currencies or digital assets impact, directly or indirectly on the price of Bitcoin. That's always been the thing for me. You've asked me before. You 154 00:18:38.950 --> 00:18:44.590 know, is Bitcoin going to go up? Bitcoin going to go down? I feel like you know, the big elephant in the room has always been well, I think that the 155 00:18:44.590 --> 00:18:55.360 price of bitcoin is being artificially impacted by a digital asset known as Tether. And Tether was under investigation by the New York State Attorney 156 00:18:55.360 --> 00:19:04.030 General. Now there this international, essentially, you know, conglomerate. But they, you know, they ended up in in the crosshairs of the New York 157 00:19:04.030 --> 00:19:12.100 State Attorney General, because some of what they did touched New York, remember last time you were, you know, you had an executive there, somebody 158 00:19:12.100 --> 00:19:20.800 did something there. And the New York State Attorney General, the office and the AG yourself, believe they had jurisdiction, there was an entire 159 00:19:20.800 --> 00:19:30.280 jurisdictional fight, at first, whether or not she even had jurisdiction, and it was determined that she did. And this has been playing out for at 160 00:19:30.280 --> 00:19:37.150 this point about two years. And they settled. So that was the news that came out in New York. So the settlement doesn't end virtual currency 161 00:19:37.150 --> 00:19:45.490 trading in the state, it ends the ability to trade Tether in the state. If New York rather than New York subject, you wouldn't be able to trade Tether 162 00:19:46.570 --> 00:19:53.110 for anyone who doesn't know what Tether is because we haven't gone into the you know, the details of it. It's a cryptocurrency or digital asset, 163 00:19:53.110 --> 00:20:01.450 whatever you want to call it. It's not like Bitcoin because Bitcoin is decentralized, Tether is centralized, and it's pegged One to one with the 164 00:20:01.450 --> 00:20:10.900 dollar. So one tether is always worth $1. And why? Because Bitcoins not always worth $1 coins and up and down all the time, right? But that's kind 165 00:20:10.900 --> 00:20:19.480 of like that's the lore of Tether that you need something to trade Bitcoin against, that's very liquid, you know, and very friendly to a crypto 166 00:20:19.540 --> 00:20:25.750 exchange. It's hard to do that with an actual physical dollar. Like if I want to sell Bitcoins unless they give me the cash, wire money into my bank 167 00:20:25.750 --> 00:20:31.990 account, you have this whole complicated thing. But if I can just move in and out of trades, and a crypto exchange, I need something that essentially 168 00:20:31.990 --> 00:20:41.260 represents the dollar. That's what Tether has done. Now they've come under fire, because so many of these Tethers have been printed this point about 169 00:20:41.350 --> 00:20:52.900 $33 billion worth of Tethers exists on cryptocurrency, the cryptocurrency exchanges. And it's believed that when these are used to, you know, buy 170 00:20:52.900 --> 00:21:00.550 Bitcoin, that that kind of artificially inflates the price or maybe not artificially inflates it, let's just say it inflates the price. It was a 171 00:21:00.550 --> 00:21:07.840 lot of demand to buy something. Right? It sends the price up. But a lot of these transactions are done with Tether. So the whole question becomes what 172 00:21:07.840 --> 00:21:15.340 is Tether? Yeah, all these transactions of Bitcoin being are being are being done with Tether? Let's find out what Tether is? Well, it's worth 173 00:21:15.430 --> 00:21:24.970 it's worth $1. Says who? Says them. Right. And there's and how can that be is because they would claim essentially, that every Tether is backed by $1. 174 00:21:25.000 --> 00:21:34.780 They have in a bank account somewhere? That turned out to not be true. Or the AG has found that it wasn't true there. The settlement agreement 175 00:21:35.110 --> 00:21:42.670 doesn't necessarily go into the entire lawsuit was not about whether or not Bitcoin was manipulated, or the price was manipulated. It wasn't it wasn't 176 00:21:42.670 --> 00:21:50.260 about that at all. So there were no findings on that. But the AG did find in its investigation on the issue that I cared about whether or not New 177 00:21:50.260 --> 00:22:00.130 Yorkers were, you know, trading it and stuff like that was that they didn't always have the money that they claimed to have. Also, at some point, they 178 00:22:00.130 --> 00:22:01.300 didn't even have a bank account. 179 00:22:01.360 --> 00:22:08.410 Johny Fernandez: Yeah. So it was it was essentially like, and she even says that the Tether claims that its virtual currency was fully backed by the US 180 00:22:08.410 --> 00:22:17.320 dollars, at all times was a lie. And that was what that investigation and finding out that Yeah, at the end of the day, they lied. 181 00:22:17.600 --> 00:22:25.760 Sean Murray: Yeah, exactly. So and if you if you read, there's all these different things, everyone's claiming victory, yeah, misalignment, and it's 182 00:22:25.760 --> 00:22:32.930 not uncommon for that to happen for everyone to spin it their own way. But some of the headlines are really trying to make it look like some sort of 183 00:22:32.990 --> 00:22:41.810 vindication for Tether, and I don't, I don't think it is, the $1 amount was settled for was small, like 18 and a half million dollars, that's small 184 00:22:41.810 --> 00:22:48.830 relative to the fact that they printed $33 billion Tethers. So you look at that you're like, Oh, they got all easy. What's 18 million compared to the 185 00:22:48.860 --> 00:23:01.100 $33 billion? Right? It's nothing. And when you look at the substance of the settlement itself, and Tether did not agree to they did not admit or deny 186 00:23:01.370 --> 00:23:10.910 the findings of the AG. So if you read through the AG's findings, these are not admissions by Tether to get the settlement. But they are stated 187 00:23:10.910 --> 00:23:18.980 findings by the AG's the office, and they lay out essentially what their case was. For why they essentially have them, you know, putting dead to 188 00:23:18.980 --> 00:23:27.980 rights and why settlement was warranted. And it went into the fact that they, I mean, I don't know if they ever had, you know, $1 for every Tether 189 00:23:27.980 --> 00:23:35.150 out there, it didn't look too good. I would not have a lot of faith in it. If I was out there, and I don't trade Tethers or anything like that, but I 190 00:23:35.150 --> 00:23:36.110 will be very worried. 191 00:23:36.170 --> 00:23:43.970 Johny Fernandez: Yeah. And like you said, they're they're gonna be required to pay 18.5 million in penalties to the state of New York, which, in 192 00:23:43.970 --> 00:23:46.040 hindsight, you know, is nothing. 193 00:23:46.220 --> 00:23:51.620 Sean Murray: For them it's nothing. For the average person. You're like, oh, my goodness, they got him good. But it compared to the fact that they 194 00:23:51.620 --> 00:23:56.540 printed $33 billion dollars worth of Tethers. I doubt they even noticed. 195 00:23:58.500 --> 00:24:07.020 Johny Fernandez: So that's gonna be interesting to see how that pretty much ends up impacting, you know, the rest of the currency, like online 196 00:24:07.020 --> 00:24:15.480 currency. And I guess what other changes because obviously, it's pretty clear that she's pretty much set on making sure that nothing illegal 197 00:24:15.480 --> 00:24:17.070 similar to this happens again. 198 00:24:17.660 --> 00:24:29.420 Sean Murray: Yeah. Well, she, you know, she is an aggressive AG in general. I think this was the warranted you know, investigation even I mean, like, 199 00:24:30.410 --> 00:24:40.760 Tether is so large that it would be good to have transparency into Tether in the cryptocurrency market is so large, I think people are better off 200 00:24:41.090 --> 00:24:49.610 knowing but crypto went down. It crashed like 15% or whatever Bitcoin at least Bitcoin did went down like 15%. I don't know if it was related to 201 00:24:49.610 --> 00:24:58.100 that news. Yeah, in particular. Square announced that they're buying another $170 million with a Bitcoin yesterday. You have a company called 202 00:24:58.100 --> 00:25:06.170 MicroStrategy saying that they are buying another billion dollars. Yeah, they're apparently not deterred. So Tethered, Tether, they don't care. 203 00:25:06.170 --> 00:25:08.120 They're all in a Bitcoin it seems like no matter what. 204 00:25:09.200 --> 00:25:16.400 Johny Fernandez: Yeah. We'll see what happens with that. That'll be really interesting to see how, what really ends up happening with Tether and 205 00:25:16.400 --> 00:25:26.420 Bitcoin and I feel like that. That's becoming very popular, I think. And we talked about it too like with Elon Musk, how he kind of did his initiative 206 00:25:26.420 --> 00:25:33.590 with Bitcoin, Miami, how he's doing his initiative with Bitcoin and trying to kind of create it into a norm. 207 00:25:34.950 --> 00:25:42.330 Sean Murray: You know, what's interesting, and I don't know how much more time we have left. But it's, it feels different than it than it did in 208 00:25:42.330 --> 00:25:52.590 2017. You remember the big bubble last time? In 2017? Everyone was talking about it? And Bitcoin never even hit $20,000. We never We almost got there, 209 00:25:52.920 --> 00:26:02.730 but I don't think we'd quite got there hit like 19 something, right? And then it crashed. And then eventually went down to like, 3 or $4,000. And 210 00:26:02.730 --> 00:26:08.730 people didn't want to hear about it. Like I lost so much money. Don't talk about don't write about it. You're bringing back painful feelings. you know 211 00:26:08.730 --> 00:26:14.340 what I mean? Like, you're reminding all the people I borrowed money from, you know, that I can't pay them back. And I got everyone hooked on Bitcoin. 212 00:26:14.700 --> 00:26:22.320 And now that has gone up. It's got you know, it's gone back up. It blew past 20K. I think the high was around like 58, 59 thousand. And it's come 213 00:26:22.320 --> 00:26:30.300 down since then. But those same people, at least, to me, they're not talking about it anymore. I don't I don't know that they got back into it. 214 00:26:30.630 --> 00:26:40.440 Or if you're doing it in private. Secret. But they seem to have kind of, I don't know, they must have closed out their positions. I mean, like, bought 215 00:26:40.440 --> 00:26:46.140 it 19,000 sold it for? It's up to 56. Probably, they probably never want to hear about Bitcoin again. 216 00:26:49.410 --> 00:26:54.660 Johny Fernandez: Yeah, I mean, and I asked you, we would have jumped on it back then we would have been okay. 217 00:26:55.230 --> 00:27:02.970 Sean Murray: Well, you know, I don't like a I do I refuse to speculate. It's weird that so many companies are loading it up on their balance sheet. 218 00:27:03.270 --> 00:27:10.770 Because I really don't see that as an investment. And I start to think of these are people who are smarter than I am. Elon Musk is smarter than me. 219 00:27:10.830 --> 00:27:22.620 So when he buys $1.5 billion worth of Bitcoin, he obviously knows what the risks are. Yeah, we can assume so. Because I know he's, he's smarter than 220 00:27:22.620 --> 00:27:33.810 me. Right? Yeah. So as I started thinking, why would he buy so much? That's more than just using Bitcoin as a payment mechanism? And would someone like 221 00:27:33.810 --> 00:27:41.430 him use it just to bet that the numbers can go up higher? That's a lot of money to just throw around and hope it goes up? And and cash out? You know, 222 00:27:41.430 --> 00:27:49.800 it's kind of that's kind of weird for me. And I think it might have possibly could have something to do with Jack Dorsey is doing it too. These 223 00:27:49.800 --> 00:28:02.250 big CEOs are doing it. They could be using it. This is my friend's conspiracy theory. Using it as a hedge for the collapse of the dollar. If 224 00:28:02.250 --> 00:28:12.600 they believe there's a 1% chance of the dollars collapse, and all of your assets, all of your cash reserves are in dollars. Right? Bitcoin is their 225 00:28:12.600 --> 00:28:22.200 hedge. And that would be for me, the reason why a company like that would do it in such enormous amounts, is because they've calculated the risk of 226 00:28:22.260 --> 00:28:31.770 the dollars devaluation to be a real material risk. And I would love to maybe get them on the show sometime, right. 227 00:28:33.180 --> 00:28:48.090 Speakers: [Cross-talk] 228 00:28:48.090 --> 00:28:53.550 Johny Fernandez: So always pleasure speaking with you and just kind of breaking everything down for our viewers because I know a lot of them 229 00:28:53.550 --> 00:28:59.940 they're very interactive and they love watching these videos. So sure. Yeah. So again, I'm Johny Fernandez a deBanked News. 230 00:29:00.450 --> 00:29:02.040 Sean Murray: I'm Sean Murray. Thank you for watching. 231 00:29:02.040 --> 00:29:03.000 Johny Fernandez: And see you next time.