Is Crypto a Security or Commodity? SEC Explained | Daily Crypto IQ 🧠⬆️

Yeah. Heat. I never knew. [music] I never knew. Oh yeah. I never >> [music] >> Hey, [music] hey, hey. [music] >> [music] >> I think that we're just holding [music] on to something. Heat. I think that we're just holding on to something. I think that we're just holding on to something. Just tell me what's over Hey, hey, hey. I think that we just holding on to something. I think that we're just holding on to something. Just tell me what you [music] >> [music] [music] >> Happy [music] morning. [music] >> [music] >> I feel [music] my heart. [music] >> [music] >> Oh yeah. Oh yeah. >> [music] [music] >> All right. All right. Welcome to Underground Crypto. Sorry, just lagging a minute behind here. Trying to get everything perfectly ready and set up for the show that we're going to

do. Let's go. Let's get on camera. There we are. Always good when we're on camera. What's up, guys? Everybody feeling? Thank you, Melissa, for that $2 sticker. You are the best best mod around, I tell you. Always shows up. Always posts the link. even right this moment when I'm forgetting to make sure the link is in the chat and it's pinned doing it now and then even sends a super sticker what more could you ask for look at that 4hour chart guys look at it back above that 4hour [music] 200 day moving average I think I think that might be a pretty important sign guys what do you guys I think and it's Tuesday. I feel like it's been a week between Monday streaming now and it's only been about 24 hours or less. Pretty crazy how that works

out. Let me get to the chat here. Shout out Struggger Heart. Welcome. Welcome in as always. Funky Farret Prime Minister says, "What's up everybody?" Welcome in. Welcome in. And of course, welcome back to Underground Crypto, your daily crypto IQ show. Show designed to help you move beyond crypto headlines and understand how the system actually works and bring you stuff that's actually going to raise that crypto IQ and hopefully make you a better speculator in the market. That is the hope. That is the dream. So, we started yesterday. I felt like yesterday was actually a pretty intense, deep, knowledgeable stream. But this series this week that we kicked off yesterday is called who writes the crypto rules. On Monday, we build a map of the different rulemakers. Right? So before we understand who writes the rules and what all that

means, first we need to know all the players on the field on the board game and then what each one of them does. So, Congress, the SEC, the CFTC, the Treasury Agencies, state regulators, courts, private companies, developers, protocol, governance. Tonight, we move into one of the most important and misunderstood questions in crypto. Is a crypto asset a security, a commodity, or something else entirely? Entirely. For years, people have discussed this question as though every token needs one permanent sticker attached to it. A security, commodity, utility, token, governance tokens, stable coins, NFTts. But many don't quite understand the legal treatment of each token, right? A project cannot escape security laws merely by writing utility token, right? You can't just slap utility token on your website or in the white white paper and just expect the SEC to be like, "Oh,

okay. They're a utility. They're not a security." And at the same time, an asset does not necessarily become a security merely because people buy it hoping the price will increase. Right? The economic structure matters. The rights attached to the assets matter. And the network's functionality matters. The promises made by the issuers matter. And the transactions through which the token was offered of course matter. So get this. In March 2026, the SEC issued a major interpretation joined by the CFTC of course establishing a five-part crypto asset taxonomy and explaining how a nonsecurity crypto asset can still become subject to an investment contract. That gives us much more precise way to discuss this issue. Tonight we are separating two questions that are commonly mixed together. What is crypto asset itself and how that crypto asset offered, marketed or sold? Those questions

can produce different answers. The crypto asset may not itself be a security yet the issuer may have sold it through an investment contract. A token may later separate from the promise surrounding its original sale, but that does not erase possible violations connected to the early offerings. A token may be a commodity, but that token does not mean every company handling the token is, you know, regulated. So, there's a lot to it and we're going to dig and we're going to deep dive and we're going to raise that crypto IQ. The quote of the day, "The map is not the territory by Alfred and I can't even say this person's last name. The map is not the territory." And you'll see why that makes a lot of sense. Now, let's look at this 4hour chart and then let's go to

the hour and stuff. I love to see that we are back above that 4hour 200 day moving average and we are going deep this week. Is that what we're looking at? I don't know. Camsta in the house. Prime Minister wants to know where you been. Cam, he's he's watching you. [snorts] The reason why I really want to do this series this week is because a lot of this stuff is the more misunderstood part of crypto. That is like the really important part of crypto. So, you see how it's like the regulators seems kind of dry, seems kind of boring. Don't really hear a lot of people talk about it, but then they're the ones who kind of decide what the rules are. At least they're one of the major players. There's multiple. So, 1 hour above its 200 21

crossing 21 coming up to meet price action. Where do we go from here? But we'll keep an eye on it. Again, I stay pretty zoomed out. I'm just glad that we're back above that 4 hour, but it's very, very hard to ignore this shoulder head and shoulder pattern potentially forming and then the bigger shoulder possibly head and shoulder pattern. So, it just it really matters your time frame here, right? Like are you trying to figure out what's going to happen in the next 3 days or the next three months? that becomes critically important. And one of my favorite parts that we kick off the show with is the what you may not know segment that we do right before we go to the crypto bubbles. Let's get into it. So, the hallway test wasn't originally about stocks or crypto.

So, the Supreme Court's 1946 Howie case, Howie, that's what I meant to say, involved citrus groves of all things. And we talked about yesterday how agricultural um has a lot to do over perpetuals and things because originally a lot of those perpetuals here in America stuff were all agricultural goods like corn and wheat and stuff like that. So, keep that in mind. Purchasers were offered plots of land alongside service arrangements under which the promoter would cultivate, harvest, and sell the oranges. Purchasers expected profits primarily from the promoter's work. The orange trees were not shares of stocks and the land itself was not inherently a security. The investment arranged surrounding the land was the investment contract. That distinction is extremely important for crypto. Believe it or not, everything built upon the foundation that came before it. Guys, under the SEC's

current interpretation, a crypto asset that is not itself a security can still be offered and sold subject to an investment contract. When buyers invest in a common enterprise based on reputations or promises that essential managerial efforts will produce profit. Hopefully you guys are following. That is why asking only is a token a security can miss the most important part of the whole analysis. The better question is did the issuer sell the token as part [music] of an economic arrangement in which the buyers depended on the issuers's promised work to generate profit. So the people that are offering you the sale or offering you the opportunity, if they are the ones who need to do the work to produce the profit, maybe that's marketing, maybe it's this that or the other. That is more or less where the problem lies.

I'm ready to kick this thing off. Let's go over to the crypto bubbles. Let me get you guys over there. The market's looking decent today. Uh that should mean all my undergrounders showing up to the stream, right? Again, I I've been loving the intros that we do now. It really sets the theme. I hope you guys are got your thinking caps on. You're ready to go. You're ready to learn. You're ready to raise that crypto IQ as we say. So, here's the daily cryptobubbles 1 through 100. Let's go ahead and just toggle the one through 10,000 here. Let's check out what's going on in this chat. Uh, Prime Minister says, "Just been kneede in the market 24/7, lol." Right on. Right on. Uh, how's it going? Trying to decide whether short or long. Need to clear my mind. Well,

you've come to the right place. Prime Minister says, "I'm doing swell today. I'm all rested up." Oh, this was at Prime Minister. This is Melissa says, "I'm doing well today. I'm all rested up and enjoying the stream. How about you?" Glad to hear everybody is doing well. and we will get back to the chat in just a moment. All right, so the biggest winner here honestly looks like 9 to [music] 1,000 900 to 1,000 2.6% to the upside, but it seems like a very common almost two or slightly above 2% across the board here. So, let's break it down. I always click the wrong thing somehow. Oh, it's an ad in this black space right here. Anyways, uh Zcash up 11%. Data up 9.3%. This is streamer. It's up a lot this year. Wow. In the month, it's up

56,000%. I don't know. It has a name like streamer. I don't know if that's a more serious uh a serious project. Okay, one project falls out of the top 100 and another one seems to just appear. That is kind of how that works. Injective uh Canton network up 7% lighter virtuals. Uh there's a project on virtuals that I've been messing with that Melissa pointed out to me. It's a game definitely going to be featured on D5 Friday. It's new [music] and uh I don't we weren't getting a lot of buzz on it, but now that the market's turning around, maybe we're going to get a little bit more buzz. Yep, exactly. Look at all that green. And it's like what we love to see. Although a bunch of red gives us some great prices, too. Sweet up 5% to

a high of 76 cents. Let's drop down another 100 here. And yesterday we did the stream like nonstop, full port, full speed ahead. And uh it still took two and a half hours just to do what we needed to do. Pretty crazy. Dive up 29%. Derive is a decentralized exchange, right? for derivatives. That's kind of where derive comes from there. 29% to the upside, a high of almost 19 cents. Kyio, Katio, however you want to say it, is uh 18.8% to the upside here with a high of about 795. So 79 1.5 cents. And remember tokconomics and things have a lot to do with a lot of this as well. just in the crypto bubbles. We don't go there, but we go there in our next couple of segments. If you need to know more about tokconomics, just drop

a 111 in the chat. Uh Allore was up a good bit yesterday. Looks like it gave it pretty much all back. Let's take a look at that on the weekly. Yeah, up and immediately back down. Allora abstraction. We love chain abstraction, wallet abstraction, abstraction in general. Taking away the complexity of anything in crypto and hiding it from the user, basically making things easier to use and feel smoother is a big deal. I think it's going to bring in a lot more people, but it does hide some of the risk sometimes. Uh, quantum resistant layer up 13%, billion networks 31% to the downside. Anom down another 22%, XPR network is up 18%. This just looks like an interesting project. I've looked at it a bunch of times. Uh, nonplayable coin also up about 13% and Snaps kind of bouncing back.

It was down a good bit yesterday, up 11%. And [music] that is two to 300. So let's keep moving here and refreshes. Look at our price rundown since we got some pumps. It's fun to do the price rundown to me anyway after it's been a little bit right. A little bit of the market being down and then we get a nice little pop. We just want to assess how much of a pop did we really get? And it looks decent. $2.3 trillion in market cap up 3.7% today. all of crypto. That's a good start right here. Bitcoin at 64,776, up 2.6% in 7 days, but it's up 4.4% in 24 hours and a whole percent or two or three or four. And uh Bitcoin is is a quite a bit of a move as far as money inflow. Ethereum

1,879. I mean, this thing's almost back to 1900, up 6.8%. BMB $581. just it didn't catch as much of this swing it doesn't feel like but it still caught some XRP $111 up 4.2% in 24 hours but really just kind of break even there on the 7day we've been down on a lot of things on the 7-day. So, as we scroll through, look at the 7-day, which is the last set of numbers here, um, or set of percentages. If it's red or, you know, green just barely, that's kind of it just kind of flipping what it's been doing for the last week. Salana $7753. Uh, Hyperlid $65.77. Still down 5.4% in the last seven days. Dogecoin kind of up to about 7.5 cents. Zcash $557 up 16.7% in the last seven days. XLM 18, Monero $331, Cardono 16.5, Canton

Network 14, Graham or Toncoin $162. Litecoin $45.15. Sweet 76. Avalanche $6.66. Where's Where did SU go? There it is. 76 cents. Oh, I already did read. Feel like I'm missing something here. Meme Core up 2% today, but still down quite a bit. Of course, I'm waiting to see if this meme core is going to recover. And it is a$123. How's everybody doing tonight? Uh, look at all that green. Melissa says, "I made an account for the Kendra game." Yeah, that's the virtual game. We'll definitely be talking about it on Friday. I'm sure we may show it off tonight if we get to it. Um, members only stream's going to be tonight. Yesterday, I was going to do the members only stream and I had this really weird thing happen where I got like this popup in the back saying

I need to do a review of my YouTube channel. So, I took care of that. It ended up not being a big deal, but uh it seemed like it was important. So, tonight we'll do it. We've been doing a lot of trenches and a lot of If you don't know what trenches are, it's like the memecoin launchpads, pumpf fun, a lot of that stuff. Uh, Prime Minister is very good at directing us through that. It's not what the whole members only stream is going to be about. Members only stream is for the members, right? But that is one of the things that we'll be doing in the members only. So, you might want to come over and check that out. Prime Minister says good inflation data relief rally. Yeah. And prime minister is basically saying that a lot of

this relief rally comes from the good inflation numbers that came out today. Let's go take a look at what is trending over on Coin Gecko. Keep it a pulse on the market. So, right off the bat, you got Arrow. And Arrow doesn't even have a 7-day percentage. That's how new it is. That's, you guessed it, Robin Hood. He had a bow and arrow. You're going to see the bow. You're going to see the ether uh arrow. You're going to see the feather. I try to combine the word uh feather and arrow. It didn't work out. Um, that just happens sometimes when I'm trying to talk at a million miles an hour. So, Arrow is what? I'm not 100% sure even though I know I've looked at it. Just says DeFi. It's finance. This is built on the Robin Hood

ecosystem, which again is a layer two of Ethereum. So, just like base is a layer two on Ethereum, so is the Robin Hood chain. Robin Hood contract. Let's go check out their website real quick. I know we've gone over this already, but it's been a few days. Borrow against whatever you already have, right? Launch a test net. So, we break it down here. What is important about this one? That you know, Arrow is in the Robin Hood that you understand and recognize the branding. Like I said, you have the feather which is on the Robin Hood app. You have Robin Hood itself. Obviously, you should know what Robin Hood is as far as the historical story of Robin Hood. [music] The bow that he had, bows have arrows. So, this is the branding that you would see, right? It

all lines up. But what's really important here is that Arrow is a financial product. The takeaway is that it is still in testnet. So, it's not really fully rolled out as though, you know, and there would be there would be your Robin Hood. And then what sets them apart, right? So, they're financial. We have plenty of financial. Well, they're in a new ecosystem, so they could just pop up and not really do anything new. But maybe they are. Maybe they are innovating. That's what we want to know. So, most holders raise cash by selling, triggering a taxable sale, and giving up every bit of future upside. Supply collateral. So, what are they going to do about that? Selling triggers taxes. Idle collateral. Assets left sitting in wallets earn nothing and back nothing. Locked in a vault. The same collateral

mints AUSD you can actually put to work. So that's the idea. Don't sell it. Make a taxable event. You can stake it right in your wallet. I guess uh fragmented liquidity. Liquidity split across wallets, chains, and venues is hard to deploy. Arrow concentrates into overcolateralized positions backed by real assets. So they're they're very much working on liquidity issues in crypto. You hear things like fragmented liquidity, [music] but a lot of people don't really understand how like actually important that is to the market that the liquidity not be fragmented which just means you know broken apart in different places siloed. Pudgy Penguins, of course. ADI, we took a nice look at yesterday. I've still got it written on my computer desk here because it's got a glass top. [music] Uh, I can just write on it with a whiteboard. It's

kind of nice. I I think I'm going to do a video on uh ADI. I kind of like it. I kind of like what they're doing. I kind of like the mo the the mo What do I want to say? I stopped trying to say three words at one time. I like the momentum that it has. That's the word I was looking for. So Cash Cat is still just up ridiculous numbers, right? Um we've been really monitoring, me and Prime Minister have been really monitoring Robin Hood, the launchpad associated with it, everything going on with that. Uh the liquidity at first looked like a lot of it was going to leave Pump. Fun and go over to other launchpads. Then that launchpad had a bunch of hiccups and problems. Now, it seems like all the liquidity is funneling back

to pump. Fun and what was once going to be a hopefully competitor and a new craze of Robin Hood coins is now not looking so hot. So, they're going to need to figure something out there. It'll be very interesting. We're just watching the progression of it, right? A lot of times it's like we do with technical analysis. We project and then we see if it fills the pattern, right? And so in a way, you can do that with just about anything by speculating and coming up with ideas, but not necessarily deploying capital yet and watching or just being smart and not deploying [music] a ton of capital. Never financial advice here. You do what you want with your money. But um yeah, just wanted to say that we've been kind of heavily monitoring this whole Robin Hood chain, launchpads,

memecoin, stuff like that. and I'll I'll let you guys know everything that I find in real time if you are in the Discord which is linked in the chat. Uh let's see. Oh, mistake. Trenches, check your wallet. Arrow gave free air drops. I have like eight they gave me. Then he says, "Oh, it's a mistake. It was Feather who gave airdrops." Yeah, I'm not sure. I've seen feather uh as is tickling literally a feather emoji. Ticker is literally a feather emoji. Okay, that's interesting. Do you know what you got it for? Like for for holding what that you got feather. I don't know if I got it. You you touch a lot of things that I'm just now getting acquainted with here. Pump.fun is trending today. I just kind of explained that. You know, this all goes hand in

hand. And you might not trade meme coins like that. might not be your jazz. For a long time, I didn't touch them because I didn't understand. I needed a good guide through it. And I knew that like I knew that I needed a lot more information. Didn't know how I was going to get it if I ever touched it. And if I didn't ever get that information, I just wasn't going to touch them. So, it's been a lot of fun to dive into that. But even my point here is even if you don't trade meme coins and things like that, it's still very important to understand where the liquidity is moving in the markets. Is it is it all in pumped up fund? Are they moving to Robin Hood chain? that is important because it does touch a lot

of different things and kind of signal the direction because like if meme coins on Robin Hood chain are hot and liquidity is flowing there then a serious project built on Robin Hood chain might pick up a bunch of liquidity but if it's the reverse and everything goes back what which is what seems like is going on right now everything's going back to pumpf fun because the launchpad and things is like locked and people can't make new coins coins on the Robin Hood chain as far as memecoins and stuff. Maybe that hurts the attention that a serious project would need. So that is the understanding that we want to bring here. Raise that crypto IQ. Salana a dog whiff hat. There was like many versions of this meme coin coming out on Robin Hood was pretty funny. Pith Axi infinity

and reserve rights. So again I just want to touch on ADI right. So 80 879 million in the market cap. Max chart, we are on the max chart. It's at about $7 right now. Does look like it came out about December 8th, 2025. 100 million max supply. Not sure why everything is being so janky. I think it's just Coin Gecko. 100 million max supply. Circulating supply only 125 million. So, you know, if you know your tokconomics, you take 125 million, you divide it by $879, and you would get $7. $71. You want to be real specific. Somebody out there is going to try to call me on it. Uh, let's see. Melissa says, "I have some feather." Chris 333. Let's go. All right. Let's see. We got an Ethereum contract, of course. So, ADI is Ethereum token. ADI Foundation.

It says infrastructure. Let's talk about it though, right? ADI chain is an Ethereum layer 2 developed by the ADI Foundation to support governments, enterprises, and institutional digital infrastructure. The stuff that you know is a big deal right now. Even if retail's not [music] real excited about it, it's still a really big deal. And that is why retail most of the time misses the ball, misses the game, misses the cue that the market is is buying when they think that it's bare market dumping. It is built on Zsync, ZK sync or ZK stack. ZK standing for zero knowledge and powered by air bender prover which is probably their own design here which delivers institutional which delivers GPU accelerated zero knowledge proofs for fast lowcost secure transaction. So you don't even need to know what all that technical stuff is. It'd

be great if you did but if you didn't just understand that it makes it fast, lowcost and secure transactions, right? Trustable transactions. The chain includes modular layer three capabilities. See how this stuff compounds. We've done lessons, whole weeks and and days on layer ones, layer 2, layer three, what that means. Modular by itself, what modular means. So, as we're moving forward, if you didn't think it was important to raise your crypto IQ, you're going to get left in the dust because you're not going to know what stuff is. So, it's time that we all just lock in and continue to raise that crypto IQ because it just becomes so important. And the more we do this show, the more I realize how incredibly on point it was to chase after this crypto education. All right. Capabilities that let nations

and enterprise deploy compliant region specific systems and for payments, right? Uh invoicing land registries and stable coins. I set my light up here to have good lighting and it is like blinding me. Makes it very hard to read if you're wondering why I'm making a lot of mistakes here while I'm trying to read something. So, that is ADI. Matter of fact, I really wanted to touch on their website real quick. Let's do that. I don't want to spend a ton of time on it because we did go over it yesterday, but maybe somebody was not here yesterday. So, the blockchain for real world impact, it launched on December 9th, 2025. It's got Kraken, uh, ZK sync, let's see, can't speed it up. Alchemy Yi chain. So, I thought this was really interesting. We'll just go over this little part

right here, and I'll just do the bulletins and not the whole thing, even though I think it does a slight disservice. Legacy chain fail regulated economy. So, right off the bat, here is why I'm thinking ADI has a chance to be important within infrastructure and ecosystem because it is built in compliance. Before, and I said this yesterday, before regulation was very, you know, speculative. Nobody really knew what was solid, what wasn't solid. The SEC was playing games. They were playing both sides and not really telling us what the heck was, you know, the law and and where we needed to be as crypto projects and then turning around and trying to charge them millions, if not hundreds of millions, if not a billion dollars like they tried XRP, uh, for not complying with rules that they never really told

anybody. Anyways, moving forward now, we're coming into a place of regulation for crypto. So where before this whole built-in regulation might not have really mattered a lot to big companies, it's going to matter now. Then you have ADI, Ethereum security plus layer 3 compliance. This is basically how they're accomplishing this regulation. Ethereum secured settlements, air bender zero knowledge proofs and modular compliance at layer 3, right? L3 layer. And then you of course why [music] now? Digital infrastructure is reshaping which is basically what I just told you. Uh regulation is more important than ever and more big companies or serious players are going to make sure that whatever they touch has all the regulation compliance figured out and that they're not subject to any kind of lawsuit or any kind of thing like that. That's going to be important as

we see institutions and big players come in. That's going to be heavily important. So please understand that. That is the point that I really wanted to make with ADI and ADI serves that purpose. Also, another big point is that I've been saying almost everything that we've been watching come out recently has been a service or geared towards big institutions and stuff like that serving them. Maybe it's security. Maybe it's, you know, uh, you know, being able to read the blockchain and explorers for them and and see if somebody was stealing their money in their own company. it becomes very difficult for these institutions and a lot of these very old school players to understand a lot of that stuff. That service is going to get bought maybe not from the company we were looking at, but it's going to

get bought by like almost every institution they're going to have. like you have a financial auditor right now, but in today's world, if you take your traditional auditor and you pull him into the blockchain explorer, he's going to need a lot of education because he's not going to understand what he's looking at and he's going to miss people stealing money. Okay? And that's no good for somebody who has a lot of money being managed. Fear and greed index at 25, which puts us right in between extreme fear and regular fear, right? [music] Uh yesterday was 22, seven days ago was 20, a month ago was 23. So we've been hanging out in this region. Get into the fear, back in the into the extreme fear. Where do we go from here? We're very much right in between [music] it.

It's worth noting. It's worth always keeping in the back of your head where the fear and greed index is. says they gave it to anyone trading on Robin Hood. You most likely have some. Okay, cool. I'll take it. It's probably like we talked about this one day like uh they do airdrops and stuff and they're like we'll give a million people 23 cents of a coin. It's like that doesn't do anything. Like I just don't think that that's like a really good uh you know if I get 23 cents of a coin it better do like a 1 millionx for that to really matter even a th000x for that to even matter at all. So very interesting. Melissa, did you trade Robin Hood memes? She says yes a few. All right. Well, she's locked in. She might want to

come to that membersonly stream where we're going to get into a lot of that stuff even though I already touched on it. So, where are we at here? We're going to bounce over to our talking points, the crypto IQ raising because I want to keep it nice and in the forefront. Before we would always try to throw the story, which is a story talking points, which is just like a different way of presenting the talking points. So maybe you could lock in before we get to the actual talking points because sometimes they get deep and this is just to introduce you to it. And then now it's even built in into the intro of the show to touch on all of it. And that really really by the time we get to the real deep diving IQ raising part

of the night, you're really already acquainted with the topic and already ready to go deeper into it. And I'm liking the way this is working out. I hope that you are as well. So here's the problem. You always want to start with the problem. Just like any good company, any good product, they should start with a real problem that a large majority masses of people believe is a problem. Right? Solving problems that aren't problems doesn't usually equal success in business. All right. The one word label trap. That is the problem here. Crypto conversations often reduce a complicated legal analysis to one sentence. And this right here is a product of financial illiteracy, right? Which I'll say it again because I feel like this is philosophically and conceptually super important. most of the world for all of historical times the

problem was literacy the ability to read and write and it separated you know the nobility from the peasants okay majority of the world it still exists in some places but majority of the world most people know how to read and write now the next hurdle just like we have had that literacy issue in the globe in the world now we have financial literacy to tackle where most people are still heavily financially illiterate Th this stream is very much pointed towards cryptocurrency, but it's all very much financial. So, it's two birds, one stone, if you ask me. It's it's dialing in directly on the future, where we're going, but also still taking the time to explain some things that have always been the oneword label trap. Things like securities, right? XRP is a security. You hear people saying that or

it's not a security. Ethereum is a commodity. This is this token or that token is a utility token. That NFT cannot be a security or it is a security as the project maybe they bought into is under scrutiny as we've been under the heavy thumb of the regulator in the past. These have been hot topics. But these statements regularly combine the asset, the offering, the transaction, issuer, exchange, and purchaser into one category. And I'm going to run that back because this is really important. The statement is too simplified because it combines the asset itself, which would be the token. The offering of the asset, that's two separate things. The transactions of the off of the offering, right? So the asset was there, they offered it, you bought it, however you purchased it. That transaction is a totally separate topic

legally. The issuer, the person issuing it, that's a different legal uh subject. the exchange itself that maybe was in the middle of all of that that is a different legal framework as well and the purchaser even that has its own legal implications things like taxation and then it puts it all in one category and no wonder why people can't make heads or tails of it because they don't even understand how any of it works I myself for many uh years and years and years of my life of course have been just as guilty of this that is why I do this show very much for myself as well so just to clarify Why? Cuz I haven't said it in a while. This stream is not about me sitting here telling you [music] uh that you're dumb cuz you don't

understand this stuff and I'm so smart cuz I've known it since the day I was born. That is not what we're doing here. We are deep diving and growing together as a community. I just got to lead the charge, right? So, I got to do a little bit of previous research and make sure that I I give you guys solid information. So, suppose a development team creates a token for a network that does not exist yet. So, are you following me? A coin has been created [music] for a network that hasn't really been built yet. Now, the team sells the token to finance the development. Seems like a logical thing to do. You want to build this network. You have a great idea for it. You make a token. You sell that token so that when the money comes

in, you can hire all the developers and do all the things you need to do to make good on what you said you were going to build. It tells the purchasers that the team will build the network. secure partnerships, create demand, obtain exchange listings, and increase adoption. Again, going back to that old 1946 agricultural uh definement, right, of securities is the from the beginning of the show where I was talking about the orange groves. Maybe you understood what I was talking about, maybe you didn't. But the point is that it is the team who is selling the token who is the one responsible to build the network, secure the partnerships, create them and basically make the promise of the network happen on the behalf of the purchaser who gave them the ability, the monetary funds to go make it

happen. A big problem with this that we found in crypto, right, is that you could be a serious team, right, and you're like, "We're going to build this network. It's so cool. We're all about the fundamentals of crypto and blockchain and decentralization. And then you sell the token and you're all excited and $100 million rolls in. Well, what was your incentive for doing all this? A large amount of the team and people, the incentive was just money. They just wanted to make money. There might have been somebody at the top, you know, the CEO, the main guy. He might have really been a a crypto fundamentalist, but the people who were involved around him probably were just hoping that this thing was going to make them a bunch of money and they sell the token and hundreds of millions

of dollars roll in and they sell out and they go off because they don't even need to build anything. You see the point? This is a problem. And that's not so much what this uh teaching is about. I just really wanted to point this out that sometimes your rug pull or sometimes your race to the bottom. It's just the people who were there from the beginning who had good intentions when they first were pitched the idea and came on board. They were already holding tokens. They weren't made to lock them up or they [music] bought some on the market themselves. Now it's done well. There's no point in building anything. There's no point in building a network. You have all the money already, which is what they were in it for. And very few people are usually fundamentalists. That's

why we talked about knowing who is behind your projects that you're involved in as best as you can. It can be very difficult. And making sure that there's somebody like Charles, uh, you know, who created Cardono. A lot of people give him a lot of crap, but he is a crypto fundamentalist. He actually believes in everything as far as I know and how he comes across versus other people in the space who might just be in it for money. Anyways, we're going to move on because I don't want to get too off topic. So, the team sells the token to finance development of the network that [music] they promised everybody, but it's the team's responsibility alone to secure the partnerships, create demands, obtain exchange listings, and increase adoption. So, purchasers are not buying the token because they can use

the network today. Meaning, the token that they're buying right this moment doesn't have any utility yet. The network does not even function. They are buying it because they expect the team's future work to make the token more valuable. So they're buying it on pure speculation without any actual utility. So you can't turn around and say, "Hey, this token is a utility token. Do you understand what I'm getting at here? This is kind of the moment where it clicks or it's going to click for you a little later, I'm sure." But they are selling it as a utility token because it's the native asset of a network. when in fact people are just buying it speculative because they're believing that people are going to build something and that token is going to be worth money. In that example, the token

may eventually become a functional network asset later down the line. And when it does that, then it can be a utility token, but until then, the original sale may still involve an investment contract, right? because you had a contract of investment because purchasers depended upon the team's promise managerial efforts. Now change the facts. So now we're walking into a different example. The network is already complete on the token launch day. The token is required to pay transaction fees. It's already a utility token. Participate in consensus or application. So it's needed for transactions governance which is participating in consensus uh or or use applications. So no central party controls the system. The original promises have been fulfilled and the purchasers are no longer depending on one company to create the network. The asset may now have a very different legal

relationship from the one that existed during the initial fundraising period. The token did not necessarily transform from one physical object into another because it's digital and it's not physical in the first place. But what changed was the economic relationship surrounding it. This is the multiaceted world of crypto and regulation that is honestly quite lost on people. And for much of my experience in crypto was lost on me too. I didn't know any of this stuff. Let's see. Let's see. Plague Dogs in the house. What's up, Plague Dogs? Plague Dogs, how you liking the series this week. That button up though. Smash that like button for me if you would and know that there's a link to our free Discord in the chat. Uh, prime minister, if you would do me a favor and let the good people of God

know that we are live if they wish to come over. Not that we are live streaming uh, you know, God yet, but we will. Usually, venture capitalists get coins at very low prices, then dump it as it's sold to retail all the time. That is why venture capitalist projects can be a double-edged sword. Best to get in and out of those types. Exactly. And also, they can be good projects. You know, one strategy from I'm always messing up his last name, but he's a YouTuber. He's been around for forever, right? His name is Joe Prior Prior, something like that. And he's he's been one of those like pre-sale, how to get in on pre-sales, stuff like that. But that whole world is you get in on the pre-sale and then you sell it when it comes out because it's

probably going to be higher than it's going to be. But if you didn't get in on the pre-sale, where I'm going with this is when it comes out, it usually crashes. But if it's a good project, it's going to rebound over time. That's just your venture capitalist dumping it. Doesn't mean the project's bad at all. Matter of fact, it hurts the project, unfortunately, when it could be a very good project. And but it could be a great time to buy them because if you look at a lot of charts, you'll see it came out, it dumped heavily, and then it rebounded slowly over time [music] and eventually made all newtime highs from where it came out at. I'll show a chart at some point and kind of remind you of what I'm saying here. [cough and clears throat] All

right, let's get back into it. [music] So, the shift here is use a two-layer classification. The first layer asks what the crypto asset is. So, we're giving you the the kind of the calculation, the breakdown, if you will, of how to understand an asset and if it's a security, not a security. And as there's more regulation, this becomes more important. So, the first layer asks what the crypto asset is like. What is it? Is it utility? Is there actually a network like we just talked about? Or is there not actually a network? Cuz it can't be utility for a network that doesn't exist. when the network exists then its utility right the SEC's current framework identifies five broad categories digital commodities digital collectibles digital tools stable coins and digital securities was Gary Gensler just heavily misunderstood poor Gary Gary

the lizard the second layer asks whether a contract transaction or scheme involves involving the asset satisfies the investment contract analysis. First question to ask yourself what the crypto asset is. One of these five things most likely digital commodities, digital collectibles, digital tools, stable coins, or digital securities. I would imagine a digital collectible would be a lot of NFTTS, right? But then you can throw utility and stuff in there. It gets hairy. The second layer asks whether the contract, the transaction or the scheme involving the asset satisfies the investment contract that was given. The second layer examines whether there was an [music] investment of money in a common enterprise with a reasonable expectation of profit [cough and clears throat] based on essential managerial efforts promised by others. Don't let this trip you up. We're talking about the people in charge

actually being able to do what they said they were going to do, what they promised. This means a non-security asset can still be involved in a securities transaction. That's the big takeaway that we're trying to give you here is that you can look at something and say this is obviously not a security, but it doesn't mean that there were no security transactions involved at any point in [music] its sale, especially in its inception getting up off the ground and raising money. So, real estate is not ordinarily a security. orange trees are not securities, but either of those can be sold through an investment arrangement that qualifies as an investment contract. So, another way to put this is that if it can be defined as an investment contract, it can be a security. The same logic can apply to a

crypto asset. That's where we're going. That's why it's relevant to what we're talking about. The analysis follows economic reality rather than a token's label. So it doesn't matter what they slap in their white paper or on their website. It follows the economic reality. So you know what it actually is whenever it was sold. Payoff here. Classifications become a framework, not a guess. So now we're now we're no longer guessing about what something is because we understand the framework. Congratulations, that IQ has been raised. Once we separate the asset from the transaction, the confusion begins to clear up. We can ask, does the token represent equity, debt, revenue, profit sharing, or another traditional security? Does it operate inside a functional blockchain network? Is it primarily a collectible like an NFT or something that doesn't have utility or anything like that?

It's just sold as artwork, if you will. like the original idea of NFTs when they were just pictures of something it was art. Is it a membership, a ticket, credential or identity tool? That's that's speak for utility. Is it designed for payments or settlements at a stable value? Who controls the network? What did the issuers promise? [music] Were buyers depending on future development to bring value to what they bought that investment contract? Have those promises ever been completed? Does the current transaction still depend on the original issuer? This does not make every case easy. Classification remains dependent on facts, rights, promises, and structure, but it gives us something far more reliable than social media claims or a project self- selected label. This is where we pause and we come back to it shortly so that we could break that

up. How was that received out there? How's everybody feeling? Oh, yeah. Yep. You can make good money from them. Just don't marry your tokens. Always good advice. I feel like never financial advice here. So, let's look at the new tokens coming out. Why do we do this constantly? Well, for a couple of good reasons. You get a lot of things here that I don't see on anybody's stream. When [music] I built my idea of a good show, it was what I was looking for that I wasn't finding anywhere else. [music] New coins coming out. We've been on top of some coins that have done really well and we've known about narratives before most people know about them. I'm still just now starting to see a a small trickle of people other crypto influencers and stuff talking about X42 protocol

and stuff like that. We've been talking about it for forever. And if you don't know what X42 protocol is, then I don't know if you've been paying attention to this channel, but it has everything to do with AI and Agentic Networks, AI agents, all of that stuff. And when Amazon and Amazon Web Services is getting into the infrastructure behind AI agents and their own kind of versions to comply with X42 protocols and things which are, you know, micro payments on the internet for AI agents and things like that, giving AI agents the ability to actually be involved in real time with the economy. Uh, that's a big deal. It's a big signal that big players are paying attention and positioning themselves before it's an everyday thing. They're going to own the rails just like they've always done. Where are

you going to be at? Are you going to sleep on it? Cuz it sounded a little bit difficult to try to understand. Many many will strategy which I thought this was interesting. Right. So, this is Michael Sailor Strategy, the you know, publicly traded stock. Why this is on here, I'm not 100% sure, but it's in a funding round, which makes me think it's going to be a token. So, are we're going to get it. Is it going to be is this going to be like a tokenized version of Strategy? Now, Strategy is famous for its holding of Bitcoin in its treasury, but if you're like me, you probably had absolutely no idea that it's been 35 years in the software industry. I wasn't really aware of that. I only know it because we talk about Michael Sailor. He's super

bullish on Bitcoin, but it's easy to have believed that it's just a company who holds a bunch of Bitcoin and that's what they do. Apparently for 35 years they've been a software in industry. I was uh not aware of that. But they're mostly known for their holding of large Bitcoin reserves as part of a corporate strategy. Never know what you're going to learn. But it says it's in a funding round and they've raised $10.1 billion. Now, is this and it easily could be a strategy of Michael Sailors to come up with money to [music] make sure his debt is paid as far as the collateral collateralization for loans that he already has to buy Bitcoin? And on top of that, is uh this going to be where he takes more of this money and buys more Bitcoin? Because that's

pretty much what he's known for doing. He is great for the price of Bitcoin and Bitcoin runs the crypto market. So naturally that is great for all of crypto. Uh what is this? The imperator imperator.co. I don't know why my my brain's not computing that word. It's fun to just read random things on the internet. Uh let's see. is a professional blockchain infrastructure provider operating enterprisegrade validator nodes for proof ofstake networks. So, right off the bat, just reading that really says to me that they are going to operate these nodes on behalf of say maybe institutions because if an institution is like, "Okay, cool. We're going to invest in a you know delegated proof ofstake network like Salana or something." They're probably not going to be the ones running it. they're just going to spend the money to get

it all up and going and then they're going to hire somebody who knows what the heck they're doing. This is just how it's just good to understand how smart money and these big institutions work, especially in a new space where they're investing. If there's technology and things that they're buying into, infrastructure that they're buying into, they're not going to try to run that with the employees that they have, you know, day trading and and looking at data and research. They're going to hire professionals. So again this is infrastructure but this is also you know positioning of companies for services for the big players. Say it over and over and every day there's like three four five new projects uh proving that this is this is real and it's coming. So inator.co Co. I don't know why my brain doesn't

want to say this is a professional proof ofstake validator and blockchain infrastructure provider specializing in the Cosmos ecosystem and interchain network. So this is a specialized I guess in Cosmos. The company operates enterprisegrade nodes to ensure high availability, security and consensus participation for over uh 40 decentralized networks by maintaining a robust bare metal server architecture. The platform supports the fundamental block production and validation process required by modern delegated proofofstake blockchains. exactly [music] where I was going with this. What I speculated off of the short description, that's what they are. Bam. We have another service for institutions and big players. Velocity in its funding round. Velocity is an enterprise financial platform unifying crossber payments and treasury management through real time stable coin infrastructure. Uh, Velocity is an enterprisegrade financial infrastructure platform designed to unify global payments and treasury operations through

stablecoin technology. Founded by traditional finance and payment industry veterans, the company provides multinational corporations and financial institutions with unified ecosystems to manage both fiat [music] currency and digital assets without relying on legacy correspondent banking networks. So again, velocity another new one enterprisegrade financial infrastructures. [music] Now these tokens are trending, right? Why? Somebody's searching them. Somebody is searching these on Crypto Rank because maybe they have some knowledge about them. For whatever reason, they are trending within Crypto Rank search engine, right? They've raised $38 million. And we can come here and we can look at the venture capitalist. I love that they do these tier one, tier three, tier two, you know, to I don't know where it ends. How far down the tiers do they go? But right off the bat, what strikes you is Coinbase Ventures, right? Coinbase Ventures,

whoever is running the venture arm, I'm sure they're fully uh caught up to speed on what's going on in the institutional world, what they're looking at, where they're headed in the next 5 to 10 years, and that makes them position themselves for that, right? Dragonfly, a tier one uh venture capitalist organization, right? When it's a single person, they are known as an angel investor. Right? So, Axon Finance, we talked about this yesterday. They've only raised 2 million. Axon Finance is a AI native layer 1 blockchain providing non-custodial treasury infrastructure and gasless payment routing for autonomous agents. So, this is a gentic network [music] infrastructure. So you have your AI, you have your AI agents and then you have the infrastructure around it. [music] Then you have resources to run that which is your GPU and all of these kind

of things and then you even have the data feeds that are needed. There's a lot of things required to make this thing really work. this whole idea of all these AI agents and everything AI basically there's a lot that goes into making it happen which is good because that means there's a lot of places where you could position yourself to capitalize speculative you know on what is going on prime minister says I remember Ginsler called every coin a security except [music] BTC See, but he was buying crypto himself. What a lar he was. Exactly. I was I was not was not a fan of the Gary Gendler, but I very much believe he was propped up there by people. He played his position for the time. Um there's a there's a lot more real smart people who put people

in places and use them to, you know, kind of get things where they want them. Stall if they want to stall, you know, create fear if they want to create fear. slow down things, speed things up. Like that's the game they've been playing for a very long time, I believe. Uh, Packed Labs, right? Raise $7 million. Only has Tether and what does it say? Does it say lasagna? Okay. I mean, it must be. Their symbol literally looks like lasagna. Uh, that's kind of hilarious. So, Pacted Labs is an onchain credit and RWA protocol providing stable coin infrastructure for assetbased lending venture debt and payroll payments. So, they got the whole payroll uh thing in there as well like ZBCN network, right? Zbecin or Zbec. I don't know why I because they have the in for network. Zbecin just sounds

really cool, but it's actually Zebec network, right? So, let's see. The company provides institutional originators and global enterprise with compliant onchain frameworks to manage loan books, debt facilities and securities, you know, using stable coins. So, regulation and integrated legal templates that align with local regulators. [music] So, packed labs is going to be directed towards financial institutions. Why would they do that? because they know them coming into the game combined with like real world assets that they own because they own a lot of real world assets and real estate and stuff in a lot of these institutions, right? And then bringing all of that into tokenization and then being up to date with the regulator and of course the flow of stable coins. You know, here's a sobering thought for you. The Great Depression. I know I'm laying a lot

of knowledge on you guys on you guys stick tonight. The Great Depression fundamentally because banks were allowed to make markets and they were allowed to profit off of the markets that they make which caused a ginormous bubble, right? Well, after the Great Depression, legal framework made it so, [music] and this is still the way it is today, a bank can make market, but it can't make any profit off of any of the market, right? And by making market, I mean, this applies to stocks. This applies to all kinds of things. Like, they can provide the liquidity and things and the access and stuff like that, but they can't necessarily game it to make any profit. And this was all because of the Great Depression. And you don't I mean it's called the Great Depression. You don't have to be

a historian to understand [music] it was a big deal and it hurt a lot of people in America at the time. Well, with what's being pushed through right now, Clarity Act and all this stuff for kind of the first time again, banks are going to be allowed to make market in altcoins and they're going to be allowed to make as much profit off of it as they want. This is going to be one heck of a ride. Now, if you're somebody like Prime Minister who's already used to being in the trenches and dealing with altcoins, now this is very like memecoin. I don't know that they're going to go, you know, make markets and super super tiny meme coins right away. But when they realize how highly profitable it is, they're probably going to have a guy at a

desk who's real smart handpicked to do that for them, I'm sure. And those guys will become more and more people educated who are doing that till that almost becomes like a normal market even for a bank. Anyways, the point is I think you're going to see a lot more money flowing into those regions because now they're legally allowed to make money on markets that they create that they weren't allowed to do before. It's a big deal. Now, is it fully all the way through and passed and they have this ability already? No. But from everything that we're looking at with the Clarity Act, it looks like it's coming and it looks like it's pretty much guaranteed at this point. But you know how anything guaranteed in life goes. Again, this is sauce. If [music] you don't understand that implication,

why the Great Depression happened and banks making markets and then being legally allowed to profit off of it, then uh you know, you're basically creating the bubble that created the Great Depression on steroids. And that's not necessarily a good thing. How are they going to rain that into check? I don't know. Are they going to fix it before it becomes a big problem? Are we going to wait until we have, you know, the Great Depression 2.0? Food for thought, right? The more you know, the more you can position yourself. But see, now I've told you. So now maybe you slightly understand. Maybe you even go ask some more questions and you find out some more answers. Maybe you pay attention to if the Clarity Act gets amended and these things get pulled out of it or not. If they

don't, you might want to start positioning much much much earlier. Anyways, VA is a Ethereum virtual machine compatible blockchain for users owned private data. Let's see if we get a little bit more information on the daily chart. This thing has been around for a while. token generation event the 16th of December 2024. So all the way back to 2024 it's been as high as a little over a billion all-time high and right now it's only 37 million. So it is peanuts compared to what it's been at one point. In 2024 it was a different market right the end of 2024 was very good for altcoins. The rest of the year not so much. Draared you should know it's over 10 years old. Uh, USX obviously a stable coin, but in what ecosystem? To me, right now I see a

stable coin. All I really need to know is what ecosystem is that? I believe it's Salana. Let's see. Am I right? Bang. How do I do it? Uh, I raise my crypto IQ every day. And even then, there's so much stuff to learn. I can't imagine like, you know, think about it. You're somebody who educates yourself in a very specific category of information daily. And then think of somebody who does it once a week. And then think of somebody who does it like once a month to somebody who who maybe reads something about finances once a year. It's a big deal, guys. In my opinion, I I've again I've told you guys what I feel [music] about, you know, financial illiteracy or financial literacy. And uh I think that that might just be the key to how you change

your life. And I'm not trying to say I'm some kind of like lawyer who understands every bit of legal speak, but I do spend enough [music] time to try to understand those things. Anyways, let's keep going here. New tokens is what we're basically looking for. But this is all what's trending over on Crypto Rank. And I noticed that Crypto Rank has a very specific u kind of purpose. And there's a very specific reason why Crypto Rank is a part of this show that I don't think we've talked about a lot, so I'm going to talk about it. Digubyte is up.3%. Where's that guy who was a developer for Digubyte? Um, he was in here talking about all kinds of stuff that was going on. And we looked it up. Like, we looked up what he was saying and it

was correct. Like it there were states who were going to put Digubyte in their treasuries and stuff. Is that because of how long it's been around? It has been around a really long time. And a lot of the financial world, especially governments and stuff, a lot of times something being around for a really long time signals that I don't know, it's trustworthy or something like that. And I'm sure Digibite is, but it just hasn't ever really been a hot token in a very long time. So anyways, it's interesting to see that getting searched. Is it going to do something? Apparently, it had some upgrades back then when that developer would come in, but notice he doesn't come anymore. So, we don't get that feed of information. Arc Defy or it's just like DeFi with a a thrown in there

uh to signal AI. So, Arc Defy is a protocol combining modular economies and AI supported Dows, a decentralized autonomous organization. 58 million in market cap, 446 in alltime market cap. I love that they give you the team. Uh even if [music] you know, Joy Boy is the founder. Luffy, they got Luffy in here. My son would think this was absolutely hilarious. Um yeah, they're not doxed obviously, but it does probably give you like quick, this is a good example. Like this guy's not doxed, right? But you probably could quickly get to his his ex. You probably could quickly get to his social, which would give you some ideas. This is how you kind of go deep. And we haven't done this very often. Again, this is an example about how a nondoced, right, leadership of a coin is still

you can still get to their Twitter, right? You can still really look and read everything that they say. you can start to get to feel for some things about them, their character, you know, more speculation. Uh, does that make me feel like that is a super serious project? No. Sentism AI, right? Sentient is a totally different project. Don't get these confused. Let's take a look at this real quick. Uh, Sentimism AI is a DeFi for autonomous AIdriven investing and intelligence DeFi workflows and realworld asset management. Why do I feel like somebody is messaging me over on Discord? All right, they are not that I can see. Let's keep moving along. What else do we got? Metadow Orzone Chain been around 2.6 years. I love that they added this age thing here, right? Bitcoin, they say, has been around 16.3

years, so you shouldn't find anything older than 16 years, right? Can you imagine? Bitcoin is about to be 20 years old. Wikiat, which has been around four years. Kite AI, not even a year. Kite AI we used to look at and go over quite a bit. They're still seeming to remain pretty relevant, which is kind of impressive. Same like Allora. Like when we went over Allora, it looked cool cuz it was chain abstraction. Allora came out, if you don't understand, back when we were looking at like Anom, you know what I mean? Which by the way had pumped like 5 10% recently. But anyways, uh Allora came out in that era. And there was a lot of talk about chain abstraction, wallet abstraction, but also a lot of talk about intent, intent layers like the chat GBT of crypto.

Chat GBT is a good example that everybody can understand about intentions, right? You tell it what you want and it does it. You're not really super involved in how it gets you the answer, how it does the research, how it does whatever it does. Maybe you have it connected to Canva and you know, I see all these people online who like have chatbt make like a child's coloring book using the image generator, right? and put it all together using Canva because Canva has templates for coloring books and then put it for sale on Amazon. Speaking about opportunities, it's a beautiful opportunity. It's said a little bit on the internet, but I don't think it's heavily heavily saturated. The name of the game is to come into coloring books and things like that and do something really niche. Maybe you

live in, I don't know, Arizona, and you do like an Arizona wildlife themed coloring book, right? With all the native plants in a tiny description, like a oneliner description for kids. Bam. That might sell heavily in Arizona. You get my point? But that is a good example of intent where you could tell something. So bringing the idea of intention or intent layers basically chat GBT to crypto is really important. My whole point was that Allora came out at that time period and it's staying relevant and it keeps popping back up. I I love to see that it might be really building something. Virtual Protocol again. Virtual Protocol very much tied in AI agents. Um they have a new game. I've been playing it. Melissa apparently just got herself into it today. Uh, have you played it much, Melissa? It's

It's interesting. My whole question here is can we make any of the actual native token? The game is all right. It's a little bit wonky to be honest with you. I need to know, is it really built completely on chain? I believe it is. And can I earn any of the native asset in it? If I can't, it's just another game at that point, right? Nervous Network been around 6.7 years. That's not what we're focusing on. Block Street coming back. Only been around point4 years, but this thing has been up and down and down and up. It is up 28% today. That Block Street, uh, Dogeon Moore's been around for 5.2 years. Unifi Network, Gravity, again, a lot of these not necessarily new projects. Did I make this the top 50? I did instead of the top 20. I'm

like, why is this never ending? Wow. All right. So, of course, a lot of these older projects, Jelly My Jelly, I don't think ever really took off, was supposed to be another social media network. Uh, you know, kind of the way that Zoro was supposed to be an impressive blockchain social media network. I don't think anybody's done a good job so far of building decentralized social media. It just hasn't worked [music] out. I thought Meme Core was doing a pretty good job by basically copying Twitter, right? The the formula that we already all know and making it web 3. Just don't even The reason why I like Memecore a lot is because their idea was like don't reinvent the wheel. Everybody's already used to Twitter and that kind of format. Even Facebook uses that format a lot, right? And

just add web 3 elements to it and upgrade it. It was working for a while. I think it eventually still will. Uh Melissa says a little bit. Yeah, I gotta My main focus on that game, the new virtual games called Kindra. Uh is to basically see if you can actually get any tokens out of it. If not, it's just a game. A crypto asset and its sale are not necessarily the same legal thing, right? If you're still here, if you're still paying attention, pat yourself on the back. Uh to me, these are the type of things educating yourself that is going to really push you forward and your ability to understand what the heck maybe you're even buying. This whole thing that we're going over today might not be the most intriguing memecoin conversation, right? But it might keep

you from buying something that's going to have a bunch of security issues later down the line. So, a crypto asset and its sale are not necessarily the same legal thing. The important concept tonight is the separation between the object and the arrangement. A token can be a non-security asset while [music] being sold as part of an investment contract. Likewise, a commodity can be used inside a regulated derivative. Gold is a commodity but a gold futures contract is regulated as a derivative. Real estate property but pulled real estate investment can be a security. These are the nuances that you have to understand. The legal treatment depends on both the asset itself and the economic transaction built around it. The SEC's current framework has five categories. The first one is digital commodities, right? The SEC's 2006 educational framework identifies. And it's

so funny like whether you find this interesting or not, I find it so uh intriguing because this is the information that I feel like most people completely sleep on. And that's usually the information that is going to put you ahead. assets connected to functional crypto systems whose value comes from programmatic operations, the ability to be programmed, right, of the system and supply and demand dynamics. The SEC currently lists examples including Bitcoin, Ethereum, Salana, XRP, Cardano, Chainlink, Dogecoin, Shibainu, Hashida or Hideera, Stella Networks, XLM, Avalanche, Polka Dot, Litecoin, Tezos, Bitcoin, Cash, and Aptos. Why did they give us all of those? I don't know. It's a long list. Seems like we could have just gone with half of those. Uh these examples are based on their characteristics, terms and functions at the time of interpretation, not a universal endorsement of

every transaction involving them. So all of these things that are listed here are considered digital commodities, but not because every universal every transaction that they have been involved in is free and clear of any kind of scrutiny, but because of the characteristic and terms and functions at the time that they were basically created. Does that make sense? >> Blues Guy in the house. What's up, Blues Guy? How you doing? Happiness is not something you postpone for the future. It's something you design for the present. Absolutely. We have control over ourselves. Now, have a control over a lot of things, but we got control over ourselves. So, happiness a lot of times is a choice based off of all the choices that you made leading up to now. Uh if you put your true passion and your true what's a

good word interests on the sideline for long enough, you will become [music] seriously unhappy. That's why just a side note, just breaking up this this information here. Uh even though my life is extremely busy, I still make the time to do this because I'm extremely passionate about it. And I also am extremely intrigued and want to learn this stuff myself that goes with the passion. And so that is very much a part of my happiness, right? Does that make sense? And that's why I have the ability to show up six days a week and do this. For a long time, we did seven days a week, but you know, still got to make sure the businesses are set proper so we can fund the six days a week that we do this, right? Digital collectibles. So, we talked about

digital commodities. Digital collectibles are assets intended to be collected or used, including artwork, music, trading cards, in-game items, fan tokens, and meme related assets. [music] A collectible's price can increase without automatically making it a security. However, fractional ownership or an investment structure surrounding a collectible can change the analysis. Digital tools, assets performing practical functions such as memberships, tickets, credentials, title instruments, or identity badges. These are often non-transferable and derive value from their function rather than promise manag managerial effort. So the distinction here is that their value comes from their function themselves and not somebody who's offering this opportunity to you investment contract and what they're going to do to make the thing you're buying worth more money. Stable coins. Stable coins, assets designed to maintain a stable value related to a reference asset like the US dollar. Usually permitted

payment stable coins covered by the Genius Act are generally excluded from the definition of a security. Other stable coin structures can receive different treatment depending on their features. Now we get into what is a a digital security, right? a digital securities, traditional securities represented through crypto technology. So just the almost tokenization or just wrapping it in a in a digital sense doesn't change the fact that it's traditionally securities including tokenized stocks, bonds or other instruments carrying the economic characteristics of a security. Putting a security on chain does not stop it from being a security. uh tokenizing something is not a loophole. It's not a loophole for for scrutiny of securities, right, of the SEC. All right. So, we have this howi examines economic reality and Howie is referring to that 1946 court case, right? and I'm sure it'll get

back into it. But in the legal world of lawsuits and judgments in a courtroom, usually you refer back to previous lawsuits and judgments as proof that something is the way that you believe it to be. Does that make sense? The traditional Howy analysis asks whether a contract transactions or scheme involves an investment of money, a common enterprise, a reasonable expectation of profits, which reasonable I think is >> [music] >> uh very speculative and profits derived from the efforts of others. The current SEC, Security Exchange Commission interpretation places particular emphasis on relationships or promises that undertake essential managerial efforts. That includes promises to be build or complete a network, create token functions, utility, develop important products, uh secure major partnerships, right? Manage the ecosystem. Dows may be included in that. generate demand, make business decisions necessary for the success of

the project. Routine maintenance or ordinary contributions may not carry the same weight as efforts essential to creating the expected profit of what they were trying to get you to invest in. A utility is evidence, not a magical word. Real utility matters, but the word utility does not control the outcome. A token may have some functional use while purchases are still primarily depending on a central team's future effort. Questions include, does the function exist today? Can purchasers immediately use the token? Is the network operational? Is the token priced for consumption or speculation? Is it transferable necessary for its function? Is the project emphasizing use or the future price appreciation? Does the token provide passive income or claims on business revenue? A token's function must be examined in practice, not merely described in marketing material. There's a big takeaway. It might

go right over a lot of people's head. So, a token's function must actually be practically examined in actual use case, not just described in its white paper or some kind of marketing material. Number five, decentralization is about control, not node count alone. A network can have many validators while a small group is still in control. So there can be many validators in a network but a small group of them can have primarily all the control. Software upgrades, treasury funds, governance votes, administrative keys, token supply, sequencing, fee structures, and major development decision. We've talked a lot about validators. I hope your IQ is up to date here. The current security exchange commission interpretation describes decentralization in terms of whether any person, entity or coordinated group has operational, economic or voting control. That is more demanding standard than simply having multiple

computers processing a transaction. So this comes into the validator's ability to have control in a business or network because it's decentralized now right it's not centralized but the daily operations the economic aspects [music] and the voting inside of a DAO for example still deems itself as control of a network or of an entity right the entity could be decentralized and the entity could be centralized doesn't necessarily matter. And a validator is more than just multiple computers processing transactions. A token's relationship to an investment contract can end. Right? And I'll say that again. Token's relationship to an investment contract can end at some point. Under the SEC's current interpretation, a non-security crypto asset does not necessarily remain attached to the in the original investment contract forever. So there was a promise. They said, "Hey, buy this coin. We're going to

build this amazing network." You bought the coin. That is an investment contract, right? Later on down the line, that coin might circulate through many different places. The coin might be sold in different places that don't promise you anything of the same relationship, right? And so at that point, it may no longer be tied to that original investment contract. Separation may occur when the issuer fulfills its promise of managerial efforts. So if they said, "Hey, buy this coin. We're going to make it the utility coin of a network using the same example and then at some point the network is made and it's actually put out and the coin that you bought is the utility token for that network as promised. At that point, the contract investment contract is pretty much fulfilled. What they promised you has been done. the

issuer abandons or fails to perform those efforts. That can also be a void of you know investment contract. Purchasers no longer reasonably connect the issuers's promise to the asset. The network becomes functional and operates without dependency on the issuer. However, later separation does not erase an earlier unlawful offering. So if it was unlawfully offered earlier on, you can't just because now it's all sorted out say that somebody's not legally responsible for what happened in the beginning. This is kind of if you're reading between the lines, this is kind of the whole basis of XRP security lawsuit, right? If the original investment contract required registration or exemption, the obligation still applied when the offering occurred. Security does not mean illegal and commodity does not mean approved. Man, let's look at this another way. Security doesn't mean bad and commodity doesn't

mean good. And that was a way that I really felt like a lot of people were interpreting this probably due to a lack of financial literacy when the whole XRP court case. And of course you have just like you have Bitcoin maxis and Ethereum maxis, you had a lot of XRP maxis. Same way you have XLM maxis. I mean at that point the the whole maxi thing becomes heavily redundant. You just have people who are very hyped up and enthusiastic about a very very particular narrative in crypto wrapped around a coin. That makes sense. a security has a legal framework around it. The whole like illegal part and bad interpretation was just that the SEC was going to come after you if you didn't fulfill the obligation to work within the the the framework that they had already given,

right? And commodities kind of got the clear the the clear, right? Because the Security Exchange Commission isn't really involved in going after commodities. that would be at probably the OFTC and we weren't seeing a large uh push by them to go after crypto assets and that's why it became this good and bad thing. It's very interesting to look back on now when I remember kind of being there when all of that was going on. Securities are not illegal products at all. It's quite the opposite. Most things you know are securities, right? Stocks, bonds, investment funds, and many other legitimate financial products are securities. The difference is in today's world, if you launch, you know, or make it to having a stock on the stock market, you're going to do it the right way because they they've been doing it

the right way that the SEC approves of for a very long time. It's very well defined. Sometimes there's hiccups, but for the most part, people don't have trouble navigating the security framework as they become a a publicly traded company. The issue is whether Apple, you know, but but what I want to say here is that crypto well they they didn't necessarily understand how to operate that because they were such a new asset class that had different uh complexities than a bond or a stock would have. The issue is whether um applicable registration, disclosure, exchange, brokerage and investor protection requirements are followed. Did they follow the rules? Basically, likewise, commodity classification is not a government seal of safety by any stretch of the imagination. A digital commodity can still collapse in value, be manipulated, be stolen, be used fraudulently. A

commodity can trade through an unlawful operated platform. Commodity can become part of a regulated derivative and trigger tax sanction, AML, or state law obligations. classifications determines which rule may apply. It does not guarantee quality or safety. So we got to get rid of the idea of security bad commodity good in summary. Right? Classification does not eliminate other regulators. So just because something is classified as a commodity doesn't mean that the SEC has no likelihood of looking at it. And we had talked about this already a lot. So even if a token is not a security, other legal systems can still apply to it. The CFTC can regulate derivatives and pursue fraud or manipulation involving commodities. Uh Fininsson, which is just fun to say, Fininsson can regulate businesses engaged in money transmission. The OFAC sanctions can affect transactions involving restricted

people or addresses. The IRS, a different organization in the government, can impose tax obligations. States can require money transmitter licenses or enforce consumer protection laws. The Federal Trade Commission and State Attorneys General can challenge deceptive marketing. And that's just going back and kind of outlining the different positions of these different organizations. The question is never simply whether the SEC has jurisdiction, right? The complete question is whether authorities regulate the asset transaction, the intermediaries, people involved, third parties and conduct involved. That was the talking points, right? And then we have this weekly topic education section, right? [music] The cryptocl classification lab. And we're going to come back to this in a few moments. But before we do any of that, let's say hello to the great people over here at Gottle. Um, let's see. I can actually chat now. And

I've been having so much fun with this project. So, I'm not going to like reexlain the mines or rush or any of that stuff. If you have questions about it, please feel free to ask. I'll be glad to answer. I really like this. Um, if you kind of pay attention to what you're doing, I think this again everything is speculation. Never financial advice. I personally am very bullish on this. Looking at the format of projects that were just like it or right and basically understanding how high this has been before. So, first of all, it's a lot like ore, and ore went as high as about $1,500 a coin. Now, I don't know how comparable the tokconomics are, but if you just go to the all-time high of God, which I don't know what the all-time high is. Maybe

Prime Minister can tell us, but God basically has been as high as at least 30 bucks before, and it's at $2 now. Um, it's a lot of fun. The community is really good. You know how like community is what makes meme coins [music] pump. Uh this has real function and stuff, but also an amazing community. I I really have enjoyed what has been going. You don't really have a lot of crappy people come in here. Uh it's just been a lot of fun. And like when people win, you know, the big pot. This thing was up to, let's see, they just won right here. It was almost two grand. It was $1,946. Uh it was won by this APB. Uh he he's a legend to me. He bought like 150 shovels to win that lot. Uh that's quite a

bit of money, right? Anyways, basically whoever's the current leader gets the prize pool. If this thing every minute will randomly generate a number. If it hits the the magic number 999, it'll pay out to whoever, right? So that's really cool. Um, but what I like is that I bought chasing after this, wanting to try it out. I bought like $60 worth of shovels, right? And the price goes up and down. Right now it's at about $2. Starts low. With every purchase, it gets higher and higher, right? My point here is I thought for sure I messed up. I spent way too much money on shovels. Uh, I'm cooked. you know, I'm going to lose money because as soon as you have somebody else buy a shovel and you're out of money to buy shovels with, you don't have the

opportunity to win anymore. Or so I thought, because of the derivatives, or not derivatives, I've been saying the talking points way too much. Too much legal jargon. The dividends from shovels, which is a percentage that's allocated to you because you hold shovels, right? Uh because it went so high, I ended up making in total 7576 off of it. And uh of course then you minus what I spent. So I was up like 15 bucks roughly. 13 14 15 bucks. I didn't do the exact math. I didn't lose money. That's a really cool aspect. So I got to buy shovels, right? Like this. You buy a shovel. I'll do one live. Let's see how quick they throw me off here. You got to really wait until it's like 10 seconds. Otherwise, they might get back in there before you get

a chance. How crazy would it be if I just won this right now, right? Let's wait till it says 10. Initiate. Get down. And at five, we will issue. Bang. We get there. Now we have seven. I just bought a shovel at $2. I'm the current leader. If this right now slapped 999, I would have won 4.2 2 or $332 4.2 Salana or $3332 worth of Salana, I would have just won that, but it didn't. And uh this thing ran to 25 soul just earlier. And that's why I I had made a good bit. I made all my money back on shovels and then I even made some profit. It's pretty cool if you ask me. Camsta says, "We still have YouTubers that release XRP updates every day." Yeah. Well, I mean, it's genius because they drumed up such

a very specific group of people, right, on a very specific narrative. Those people like they need somebody to feed them something bullish every day. It's something I noticed about the XRP community. I hold XRP. I love XRP. Don't get mad at me. But a lot of them who are not crypto people and they just have XRP because certain people shield it to them, right? Well, they literally need somebody to tell them what they did was smart every day and come up with these big things for why uh they should keep buying more or they should keep holding or they should not lose faith. Most of them don't really realize any kind of crypto. Man, this guy didn't let me get more than one transaction. It's kind of greedy, don't you think? One of the people in here suggested that

like when you buy a shovel, we should let the person get like five spins before somebody else buys a shovel, especially before the pot gets real big. That seems like a good thing to do. Do you think Lab will ever pump again? I threw a couple bucks in there just in case. So far, it's only going down, way down. Uh yeah, prime minister, you want to answer that? Uh he he says that the team dumped all their tokens. I don't know, but then they're still like posting bullish on social media, so there's that Do I do I dare war with this person? [music] The cool thing is you can click on their thing and you can see how much money they have in their wallet immediately. Now they could have money in other places, right? All right. Do we

buy another shovel live? Throw them off. I'm up to eight shovels. And of course, I didn't think I was going to hit the number, right? Is he going to let me have one spin? And it's like you spend $2. Like you let me have two spins. That would be cool. But again, it's competitive. There's there's no promises here. What is the mining rate? Yeah, the team dumped. I saw that. They did it sneaky. There you go. It there's so many games being played. It could still pump, but that doesn't even mean anything. So if you put tiny amount of money for the fact that there's a huge upside there, understandable. But uh I would not think lab is necessarily going to do anything spectacular. How much you want to bet this guy throws me off at like 10 seconds

or less in that current leader spotlight? I'm not going to sit here and PVP with him either. I don't want to get in $60 to shovels again. There's no guarantee the prize pool [music] is going to go as high as it did. I got I think I got pretty lucky with it. But just because it's been so much fun and the community is so great, I just definitely want to show them off a little bit. I'm having a ton of fun over here. You might too. Uh I have spot so just hold it. Only like 50 bucks. If I get five if it goes back to five bucks. Oh baby. Yeah. Good luck. And he did. Actually, there's a different person that threw me off of here. Nice. And let them PvP over it every time. Like, see, now

I'm not going to bother buying, but I got eight of them. And every time people buy back and forth, a percentage of the purchase of the shovel is distributed between everybody. A dividend, right? It's pretty cool. Let's go to the mines because I'm not mining right now. Where's the mine rate? Where did that go? Let's refresh this. Where's the mining rate? Prime Minister, do you have an answer for this? The mining rate is gone. That's problematic. I quit mining earlier because it was at like 5%. If it goes to five bucks. Yeah. Yeah. And that is like that's what gets people into all kinds of investments. There's just too much upside which can be great and somebody could pump it just for the upside, right? Uh Cam says, "Good night bedtime for me." Okay, have a good night, man.

Thanks for stopping by and gracing us with your presence. As the lifer always says, your greatest asset, your time, you shared it with us. We appreciate you for that. I kind of want to get back into mining. But uh what is the mine rate unless they changed it on me here and we're rolling into two hours of being live. It's amazing that two hours being live happens so fast. It is incredible. Uh, Blues Guy says, "Thank you, God, for everything in my life, the good and the bad. Some were blessings, some were blessings." Exactly. And uh, I echo that for sure. You know, the meaning of life, a lot of people ponder it. If, uh, the meaning of life doesn't involve God, for me, I don't think you really are hitting it on the bullseye. Let's put it that

way. This is really strange. This is the first time it's like not showing for me what the mining rate is. Maybe I'll go look at it on my phone. It's not showing on my phone either. I mean, I kind of want to be mining. Is it at zero? The mine rate is zero and that's why it's not showing. sketching me out. And let's take a look at the portfolio as we build up the portfolio. Right, we've got about 60 Gottle so far. I got all my God through mining, right? And uh and even a little bit of tips. You know, I've I've probably gotten like 25 $30 from this community just tipping me, which is pretty amazing and unheard of. Like, I haven't even been here forever and talked with everybody and they still were tipping me and stuff.

Pretty crazy. Like I said, the person who hit that jackpot for almost two grand, they threw me like 10 bucks and they threw a lot of other people. [music] It's really cool. Uh you just don't see that in a lot of communities, right? And now I know if I ever hit it, I know who I'm I know who's been good to me. Hopefully they're all uh on on chat and easy to find. I [music] I recognize names. I don't have them all written down, but anyways. Uh let's see. Prime Minister, where you at? Throw something in the chat. He's probably talking to the devs of the project right now trying to figure this [music] out. Where the heck Let's see. Maybe it's because I'm not mining. Maybe we get back into mining here. Put it on all want to

go like point. What am I doing wrong? I have stuff in front of my numbers here. 0015, I believe, for 25 rounds. Let's go ahead and launch that. This is very strange. Why am I not able? Oh, it's gone. Okay, there we go. Now I can. And let's deploy. That doesn't seem right. Why is that only 29 cents? That doesn't seem right. Did I put too many zeros? Struggart, what's up? And we're getting ready to switch into the members only live stream. So, >> I hope you have a membership and I hope you come over. I hope you hang out. That is the time for the members. That's where we get even deeper. Did you know that we could get even deeper into the sauce and it becomes See, it's that's this is very structured, right? For my community

members, like this is very structured the stream where I got a plan and a weekly series and stuff like that. staying on top of the market, educating, raising that crypto IQ. The members only stream is for the members where we can get deep, but of course the members have a lot of sway as to where we go and what we look at. Prime Minister must not be here with us. Let's get back in. Oh, the mining. Okay, I think I was right. I think the mining was legitimately less than 1%. Well, it's still less than 1%. This is very interesting. I'm like, I do want to be mining, but like I don't want to mine a lot. So, like, they legitimately aren't letting me mine right now. Is that what's going on? Okay, the mining rate just jumped up.

Now, maybe I can get in. All there we go. Now we can get in. I don't know why it's at 29 cents, but that's okay because we can top up here usually. Something see something seems a little off with this, right? A loop is not on. This has happened to me many times before. >> Does that mean I'm only in for one round? What is going on here? For some reason, this still messes me up all the time. I have Salana in my wallet. I don't think there's any lack of Salana in my wallet. Yeah, I've got $28 worth of soul in my wallet. That's not the issue. I'm like, why am I so lost here? >> Is auto mining turned off. I'm so used to auto mining all the time. Like, do I really have to do this

for every round right now? >> That seems kind of tedious, don't you think? And just shout out again, Melissa. Thank you very much for that super sticker. This is kind of crazy. I'm so used to being able to auto mine. Doing this for every transaction just seems really tedious. But I guess we're here for it. If that motherload hits like even with me mining like 30 cents per round, I'll still probably hit five, six, seven bucks worth of God or five or six7, it's actually more like $15 worth of god. It's pretty dope. I don't really want to miss that to be honest with you. But like when it gets to a certain point, do they like kick everybody off of auto mine? Only 16 people in the pool right now. I got to figure this. I must be

doing Oh, I know. I think I know what it is. Wow. I knew it was user error. I knew it had to be. That's what it is. I didn't put the rounds in. I didn't put how many rounds I wanted to do. Well, that makes a heck of a lot more sense. Now I am in there for 221 rounds. We'll be monitoring closely. We're under 10% mining, but mining power, but if that motherload hits, it's going to be far more profitable that I was mining than not mining. It's so easy to get turned around in different protocols when you're not used to using them. Do I buy another shovel? Do I dare kick uh three IP off the off the top spot? And the crazy thing is this thing can hit at like literally any point. Like it can

just hit whenever, right? So, told myself I wasn't going to buy anymore. I'm I'm not going higher than 10 shovels. Like, I'm not doing it. Dang, he already knocked me off. I didn't even get one spin. All right, I'm done with that. Got my hopes up there for a second. All right, guys. I'm going to issue this into members only live stream in the background. Hopefully, you're going to come along with me. Maybe you are, maybe you're not. So in five minutes it'll start the members only live stream and there we could talk about anything you want to talk about. I hope you guys have enjoyed the show. Stregerart, do you have a membership? If you would like Struggleheart, I would very much like to uh give you a free membership. Now, I I can't gift it like I

can't just go in my settings and like give you a membership that I know of. I'd have to send you like, you know, the four bucks, [music] five bucks, and then you would have to purchase it. So, if I send you the money for the membership, it'd be cool if you bought the membership. Now, if if the stream's already too late for you and you're not going to be able to come to the membersonly live stream, just offering it, then maybe you don't even want the membership if you're not going to actually come to the membersonly stream, but that's completely up to you. And let's go hit some trainers real quick. Such an interesting topic tonight. I'm I'm genuinely learning a lot in this series that we're doing right now. And I've been having a ton of fun myself

learning all of these different nuances about how to know if things are securities and stuff like that. How to understand the different regulatory arms and what they oversee, like what they're specifically in power of, I guess, is one way to put it. I just find that super interesting and maybe you do, maybe you don't. But it's all about opportunity, right? And uh by me showing up, you have the opportunity to learn it. it's not valuable to you, then maybe you're here for the uh you're here for the chainers, right? You're here for the DeFi gaming in the community, which is fine. Fine by me. Just collecting all my stuff here. Look at that. They got like a golden peacock egg. That was wild. And I used to just go in here and sell everything in B&B. And now I'm

like don't really want to do that all the time cuz I need items to make things. Before I never worried about making anything. It was all about extracting all of the B&B always. And it still is. We got two minutes before we switch over to the members only live stream. We seem to have lost the prime minister, so it'll be interesting. And I think most people have already left. because of the fact that we're going over to members only live stream. Blues guy, you still here? Sometimes the numbers are not right on YouTube. I guess it's Tuesday. It's feeling a lot like a Wednesday here. Sometimes when that happens and Wednesday is super lit. Let's see if tomorrow continues to kind of push and be highly uh you know green. We might see a flip of a flip of

sentiment here. It's a very interesting time. Like everything with Iran seemed very negative and then we have some good data come out and everybody's like no we're really bullish. It's like okay I didn't see that coming. 41 seconds to the members only live Melissa's here. Can always count on Melissa. Shout out to you for being so dependable.