BlockFi's Potential Bankruptcy and NY Fed's Digital Dollar

tweets about taking the company private. And we asked the FTC Commissioner Christie Goldsmith Romero, how she suggests the government regulate digital assets, but first a check in on those markets will get to digital markets in just a moment. Let's have a little look what's happening in terms of your nastack. What a day, what a risk on trade?

What a desire to get into technology stocks? Helped of course by some single names and or point out and then as that crushing it up two points seven and really managing to shirk off some of those red screens that we were used to in the rest of the week, so actually ends on a high note and brings the weekly move as four days. Of course, the shortened holiday

trading week into the green. The MSCI or Country World Index was also up on the day, so we saw risk assets rally over in Europe and indeed over in Asia as well. Interesting move that we've seen such lockstep moves in terms of bonds and stocks in fact, all country world innext and your overall global and bond indext they are basically working together. We haven't seen such correlations

going back to the nineties. Today they split direction. Will this be more of a turn of events or the sixty work once again with bonds actually falling, yields higher up almost nine basis points, while of course stocks they lift on the highest side too. It's all about the Federal Reserve, it's all about macro picture, it's all about hoping that they won't be quite so hawkish. Let's look it on because well, what has managed to stay in the risk on rally throughout this week and actually now

hitting the highest in September is bitcoin. We're currently up once again about seven percent on the week, We're up about seven percent on the day, and bitcoin longer the course of the six months. What a torrid time we've been, but we're about more than of those lows hit back in November. Yeah, it's interesting. Over on my side, earning is a big part of the story, and the feel good in public markets. Actually layoffs a big part of the equity feel good story as well. Bear with me

on that one. Going to start with Netflix biggest jumps since November April high Why, well, they really reacted positively, not just to the management changes in read Hastings going upstairs to executive chair Greg Peters becoming co CEO, but a lot of the streets seeing a path forward when it comes to profitability and liking what they're hearing from Netflix about the story for this year despite that change changes and always positive. You see f B Financial my screen.

Carry It's not one you and I talked about often, but this is the parent company of Silicon Valley Bank, and name that lends to a lot of startups important in our world. But it forecast net income of nine hundred to nine fifty five million dollars to the fiscal first quarter, which in this just really cheered. I think it was the biggest jump on the stock since two thousand eighteen, Tesla up five pc. I only point that there because Elon Musk is testifying here in San Francisco

in that take Tesla private tweet trial. Gosh, that was a mouthful. The stock really not trading on that, but interesting to see upward trajectory on that shares highest level in a month. And then this is what I was talking about. Alphabet, the parent company Google, announces it's laying off six percent of staff globally. Investors cheer that. You

always hear me say carry layoffs are not pleasant. But if you're an investor in this company and you look at this chart next to me about the slowing top line growth and the narrative around the tech sector protecting EPs, protecting the bottom line throughout three, that's what investors want to hear. I know it's painful, but if you're an investor in the company seeking returns, this is what you want them seeing, see them doing in a changing and

difficult environment. Yeah, let's talk about, of course, the layoff that will affect six percent of Google's pair and company Alphabet twelve tho jobs. And overall, this is a global layoff from the company, and the tech giant is retrenching like many others are after let's call it, years of abundant growth of abundant hirings. Julia Love is here to talk about more of it, and Julia, we need to

put it in perspective. Twelve thousand is a lot of people, and it hurts individuals, we know, but ultimately they're basically shedding jobs that only take us back to basically kind of a year ago. They just fueled up so much in terms of personnel over COVID. Absolutely, it's really quite tremendous. Google's headcount has been growing about twenty pcent a year since twenty seventeen, and so um investors have really been clamoring for them to start hitting the brakes, and they've

begend to do that with these layoffs. Hey Jude, you know you do such an amazing job covering the Google alphabet beat because it's such a diverse company. Now you know it's not just Google Search. And what was interesting about your reporting is some of the specific areas where Google is cutting back which teams are mo impacted. Absolutely, we're still trying to get to the bottom of that.

It does seem that the cats have been broad based. However, it seems that Area one twenty, the famous New Idea incubator, has been all but shattered um. There are three projects that are graduating that will be folded into Doodle. But it seems that virtually all other employees, with the exception

of the managing director, have been laid us. Of course, investors had in some ways been asking for this, but previous earnings have been talking about needing a focus on on margins and having to look more share buy backs and laying people off. But Julia, what was interesting for me and I think Edwards sort of hinting in this too, is well, actually they're laying off all reorganizing, shall we say,

the AI part of the business. That's quite notable, given everyone SEMs to be so excited about that focus on artificial intelligence. Absolutely, you know, it's a really interesting storyline because Google has given the world, you know, much of the cutting edge technology and artificial intelligence. But the release of chat GPT has really has really cast a lot of concern or really that Google might be left behind

in this technological waves that it helped start. And so the company does really appear to be doing everything it can to droll down and make sure it's not left behind. You heard me at the top of the shows. You you're talking about the reaction, right, Why are these tech companies doing this? And part of it is a changing environment. You've gone very quickly from mega growth to a little

bit slower growth. I'm bringing back up that chart from the Bloomberg terminal year on year revenue gains hit by that advertising slowdown, in particular, the stock rose. What is it that investors like about this? How does this help protect or impact earnings for Alphabet? M hm, Well, it's interesting because Google's search advertising business is pretty resilient, but the last quarters showed that they were no longer immune.

They had disappointing results, and so if the top line is no longer growing, as you said, then the only way for them to give investors the members they want to see is to cut casts. Julia Love, thank you so much keeping us up to speen what's happening over at Alphabet. And it was interesting, wasn't it? Overall? As well? The ways in which companies to protect their own data.

When we spoke about this earlier in the week, Some ways have to act really abruptly, and there was so much on Twitter, in particular about people not having seen the email that was sent earlier this morning. Maybe trying to badge in suddenly realizing they couldn't. It's a really tough navigation, isn't it. But it felt like sin a picture at least really tried to own and take responsibility for the layoffs. Yeah, I mean, as you know, carried.

The question I've had is the timing around all of this in the space of a single week, and it's as if various peers in the sector were waiting and that the other players to go first. You know, it was a strange week in that respect that you take it on aggregate, it's forty odd thousand obbs, you know, confirmed in the space of five days. Pretty astonishing, it really is, in the numbers they rack up. Meanwhile, what's

also racking up is what's happening with Elon Mask. We've just been understanding that he's wrapped up testifying and a multibillion dollar securities forward trial. Of course, it all stems from the claim that he misled shareholders in tweets about taking the company private at four twenty per share. Musk told the jury that he's aware that after heat tweets the stock price move up or down, but that there

is no causal relationship. He then advocated for the value of being a private company, stating that being private doesn't prevent you from raising money. We'll have more on that later this hour. And this is one I know that you keep on following, and the fact that he was there in being examined by his own side. We're going to have to wait for the weekend to see what cross the examination looks like. Yeah, I find this fascinating

because of his character. You know, you and I weren't in the courtroom in San Francisco, but we have colleagues that were. And I cannot wait to hear about st to g because Elon Musk often can't help himself in going to broader issues talking about short sellers, you know, talking about regulators, and that was part of what you know, leagual academics thought would be the strategy to get him

rolled up on the stand. I guess we'll find out Amazon's cloud unit AWS will spend thirty five billion dollars on new data centers in Virginia by wanting to stay ahead of rivals Microsoft and Alphabet, a big win for the state of Virginia. Here's what Governor Glenn Allen youn Kin had to say about that earlier today in an exclusive conversation, m this is big and thirty five billion dollar financial commitments, the largest ever made to the Commonwealth

of Virginia. Our partnership with AWS started back in two thousand and six and has only grown. You know, Virginia is the largest market for data centers in the world. And what's most exciting about this is the long term nature of this commitment. Not only is it thirty five billion dollars, but they're going They're going to expand their

footprint across the Commonwealth of Virginia. It's gonna bring the benefits that come with these jobs, the the multiplier effects that with these jobs, to the ecosystem that's created, the over a hundred businesses that will support the construction of these data centers to localities outside of Northern Virginia directly, and that's great for the Commonwealth of Virginia to see it expand our footprint and data centers and maintain our

market leading position. AWS saying a thousand new jobs created directly from this. What I find fascinating, Governor is if you look at the history of the state's relationship with a WS, as you say, I think between two thousand and eleven, and they had already invested thirty five billion into your state. And yet in end tips through the form of grants and tax exemptions is still at play. Here was this a difficult negotiation, But there's there's a negotiation.

It's never difficult or or easy. There's just a negotiation to represent the taxpayers of Virginia adequately and appropriately. That's my job. And I think I think we have struck a very good deal. UM. I think that the Virginia will benefit mightily. You know, the ecosystems that develop around the data center infrastructure are enormous. UH. There are thousands and thousands of jobs that will be that will be created.

In addition to the direct jobs for aws. UH, there are contractors and and supportive companies UM that will that will be developed in order to support the construction but the operation. UH. And this will add to the locality substantial funding for schools and services and infrastructure. UH. This is this is really important to the long term economic

development of the commonwealth. It's big, as I said, But on top of that, it continues Virginia's leading position in this industry of the future, and it's one that we continue to want to not only lead in but expand our lead in you know, Caro Virginia becoming a real data center, server powerhouse in the East coast. It has been for some time interesting person as well, potential presidential candidate,

you know, it's background Carlisle Group. And I was asking about we'll hold on, why are you doing all these incentives, why jet to work so hard for that deal? And his point is net net great win for the state of Virginia and why they've been having them since two thousand and six. It's a great win, but also what's enticing, Yes, some of the tax breaks, but also the cheap electricity, right, and these things are just so hungry for that sort of power to be able to keep us all connected.

And I think it details nicely with the conversation we're having in terms of layoffs, because of course Amazon's one of them. Of course they having to of eighteen tho, but they're still having to double down on where it makes sense to where to invest. And clearly Bank of America and Story wrote really making clear that this is an area that they're going to continue to spend on in terms of R and D. Yeah, and I asked about the layoffs, and he said, look, I'm always concerned

about any layofs. My understanding is that Amazon did make some small cuts broadly in the state of Virginia, but AWS as a unit, continues to grow. That was the story of the day. The story longer term has been about the governor walking away from a potential deal with Ford and c A t L because essentially he felt that it was not in the best interests of the state. But he went further than that in the interview, carry

take a lesson. We have a great site in in that part of Virginia, and I look forward to bringing a great company there, but it won't be one that it won't be one that uses a kind of a trojan horse relationship with the Chinese Communist Party in order in order to gain m That was kind of fascinating what he was saying about what ultimately this is a Chinese come any that he said, what was it a

trojan horse? Was the turn of phrases. Yes, so you know his logic is that Ford partnering with c at L, the biggest maker of battery cells in the world, is contrary to the spirit of the Inflation Reduction Acts, which looks to establish the US supply chain, and he you know, he called c at L, you know, a puppet of the Chinese Communist Party, a front for the Chinese Communist Party, and that was his whole logic for saying, no, Ford cannot do this deal for the site in our state.

And he said they had many other interested parties. He'd rather do it with something that was not embroadened controversy was the way we put it. It It was a wide ranging but intense but interesting conversation with Governor Young Can. Yeah, fascinating all the ways in which we weave it together with your focus on evs and cars head as well as your love of all things to do with data centers. Mean, while coming up what we've got to return to a

I right with the story of the day. But Google's ARE unit is actually being swept up in the company's twelve thousand job cuts, as we mentioned, even though Pauson Pitcher himself is saying AI is still a key investment area for the company. We're going to discuss all of that, how it's impacting AI research and much more with an expert, an AI expert, Wendy Hall. This is Bloomberg now at a time where AI research is booming. Alphabet's Treasure to

AI unit is actually not escaping the wave of laos. Indeed, it will be reorganized, the company said, as part of the company's swooping job cuts that are announced today. According to a memo scene by Bloomberg, let's bring in about the focus on AI, about the ethics that swept up in that, and indeed how government's oversee it all. Wendy

Hall for her insight on all of this. She has, of course festeral computer Science the University of Southampton, ever in the United Kingdom, so she's staying up late for us because she was the co chair and the UK Government's AI review published back in and I think as a brit that's always what so interested me is that the UK, in many ways, due to deep mind, due to some of the real AI p r s, has thought about the way in which you need to oversee this,

the ethics involved, had government relationships, academics as well such as yourself, and when it ultimately this all stems are exuberance or interest around chat GPT at the heart of it at the moment, are we are you worried or exciting? What can you balance that is one more than the other academic answer, hello, and thank you for inviting me on tonight. It's fine, it's both. Has shown people who don't understand anything about AI what the possibilities are and

what the potentially negative consequences are. So I think it's open a lot of people's eyes to what the issues are around the AI that we, you know, many of us have been talking about for a number of years. We have to get governments to think about how best to regulate this new, very vast, emerging industry. Ultimately, that review that you published back in ten has it turned into anything tangible? Do have to say? The UK political situation has been well, tumultuous at best, but has there

in any movements towards ensuring there is the right overseeing? Well, yes, we actually are about to produce a regulation paper, a white paper will be coming out in this roll. This this spring from the Office Rail which all happen that that was created as a result of the review we did in twenty seventeen. I'm on the A Council which was created as a result of the review seventeen. We've had a lot of money put into AI. You know, a small country, our size. We hit way above our weight.

We can't ever be Google or Stamford or m I T. But you know we we we have found has a university's doing amaintenance and training. We put a lot of money into training people for this new industry. And the AI regulation papers I said, is due out this this quarter, which will be the government's the UK governments take on how we begin to regulate AI. UM. It will be different to the EU Act. We won't go distattory law straightaway, and it will be sector based as well to start with.

Because this well, but it's all very early, you know. We have just GtC has shown people the complexity of what you've got to break it. And it's not just about what governments do, it's what industry does itself. It's very interesting to hear the news from Google because I imagine their open A eyes quite a threat to Google, and I imagine the restructuring big time in that they want different types of people because they're going to have to take that open AI threat very seriously. And because

it's Microsoft that's back in open AY. I now very interesting a I was coming up between the tech companies UM and of course the UK and Europe that we don't want all everything happening outside of our countries. You know, we have all sorts of issues, which would be we need to worry about data sovereignary sovereignty, we need to worry about digital ideas. Um. You know, there's so many

things to think about. Well, Wendy, I wanted to ask you about that point because essentially what the current tools do, if you think about chat, GPT or DALLY, is they take existing content texts or commands. In the case of chat GPT, images and his DALLY. I don't know if you saw it, but there was a deep dive by my colleagues at Bloomberg Law about the first U S copyright lawsuit, and I guess the inference is, how does that limit what you can put in to the language

models in order to get something out? What's your key to that that piece that your your team sent me about an hour ago. It's fascinating because we're going to see a lot more of those types of legal challenges because if you take chat GPT, it is effectively effectively trained on any text that is available on the Internet. So that's anything that you get from Google, from Wikipedia, from anything people have put up on their own sites

and dally in the same in images. Now with what it shows us is that these a I tools at the moment don't create right. They copy, they predict, They very cleverly merge ideas, integrate ideas somatically, which is one of the things I've been interested in. They don't create right. So I think it's absolutely when you think about the effect on the music industry, which has had a lot of bashing from technology generally. Anyway, let to learn the poets, I mean, lots of people have got chat GPT to

write poetry. Well a lot of that is based on styles of poetry that that Jack Gputy has been trained on. And the Internet and the other thing to remember also with things like chap Upoty and Daddy, they are dally very very very expensive to run. They have huge supercomputers and that produced this, um you know, do the the looking over the Internet and do the harvesting of the information on the Internet and doing the natural average personsing and all the work they have to do. This won't

stay free forever. It can't do. It cannot stay free forever. And the really interesting thing I think the chat GBT they were very clever because they've probably driven the prices of the company up with that doesn't make any sense to do. So Microsoft is looking to invest money into it, and I, you know, I sort of like to say there was a time where Mikeson was the bad guy. Laws might trust Microsoft to be careful with what they're doing. They're investing huge amounts of money, um, and it worked

free forever. Wendy Hall, Professor of Computer Science, University of Southampton. We are going to have to get you back on the program. We did need descript to surface this time around. Thank you so much. Welcome back to bloom Bag Technology

and Caroline Hide in New York. And let's turn to the crypto world, because not only is bitcoin on a tear, there's so much more news, in particular Genesis, the lender back by Barry Silbert's Digital Currency Group, of course, while it finally filed for bankruptcy, becoming yet the latest firm to collapse in the aftermath of ft X is Swift Downfall. Now. Meanwhile, former ft x US president Brett Harrison has just raised money, five million dollars of it for a new startup from

some pretty notable names. You know, the notable names across all of this is Snelli Bassek, and she's here to explain staying late for us. We appreciate it after what a week of bank earnings and everything else for you talk to us about Genesis. How important is this that they've finally filed bankruptcy. It's very important because it's another way to get forward in terms of getting people their money back at the end of the day, at least

to some degree in a bankruptcy pricess. Very typically, what's just sit here, as you might not get at all their earlier discussions as you've seen reported in multiple outlets as well as through some of the credit or committee communications, is that maybe there would be a sense of getting

seventy cents on the dollar or so. But listen as you go through this process where you're really gonna want to see some sense of agreement among each of the different creditor groups which have a different set of standings with the company in this process. Now, importantly, three point five billion dollars nearly is owed to the top fifty creditors. Seven hundred sixty million of that is tied to Gemini and Gemini end that Gemini earned business that halted withdrawals

those more than three customers that are owed money. While you watch this progress progress, the relationship with jem and I will be very, very important, especially as you watch them kind of turn the page on this. Lastly, I would say interestingly, and why this is so important is

because there's some sense of containment here. If you look at the bankruptcy filings, it definitely alludes to the relationship between Digital Currency Group, the parent company here run by Barry Sober, as well as its relationship and intercompany loans here intercompany loans to Gemini Genesis I'm sorry, Genesis and

Genesis Global Capital in particular. But the fact that this is contained in a bankruptcy to Genesis Global Capital and doesn't involve, say, the Genesis Trading business shows you that this is contained. Three point five billion dollars is certainly a lot of money. But at the same time, we know where a lot of those creditors are, who they are, and how much they're owed, unlike the st X bankruptcy,

which doesn't feel contained. And what's interesting is actually talk this week of US Space st X becoming in exchange again. I mean, how are people reacting to that there's a lot of mixed feelings about that because the brand itselfs carries a lot of uh toxicity. Yeah, toxic, that's a better word for it. At this point to the point

that I think this struck me. This is a story that came out late last night out of the court papers that have been coming through the lawyers here for Sam Bankman Fried, a car drove into a barricade at his parents home. I thought that was pretty striking. And when the security guard at the home confronted the three men in the car, the men said something to the effect of you will not you won't be able to

keep us out. The reason that this was in filings for Sam big Midfreed was because, uh, there's been a lot of notoriety behind the case, and they're trying to keep the names private of the people who are helping back this bail package. Let's talk about names involved in f t X of old because one has come back to the full. You brought the news with Brett Harrison raising money, and what was striking to me is who he's raising money from. Their thing about how interesting this is.

This story has been so highly anticipated, it's been drips and drips of leaks about his conversations with venture capitalists. Remember he left f t X US months before the implosion. A lot of information has come out between his kind of difficult relationship here between Sam big Midfried and him. He had a Twitter threat over the weekend. We had a conversation with him about what he's trying to accomplish. Here, he says he wants to hire He's five million dollars

through coin based ventures circle Anthony Scaramucci. Remember a lot of these parties here are kind of ft X adversaries, if you will, remember the solved businesses. The Skybridge business that it's associated with had had an investment from the ft X Ventures unit, and I remember being there myself, and it's really bread with the relationship with Scaramucci. So he tried to during the page, he's trying to hire former ft X employees and trying to build trading infrastructure

for institutions. He says he wants to reinstall confidence in the industry. Let's see if you can do it. Well, there's some other people who want to reinstare some confidence in the industry and how it's gonna be regulated. Shannon is gonna be sticking around for this next conversation because our next guest plays a key role in the policy making decisions over digital assets. CFTC Commissioner Christie Goldsmith Romero says that, look, the ft X implosion must lead to

more strutiny of US based crypto companies. Earlier this week said quote, I urged Congress to avoid permitting newly regulated crypto exchanges to self certified products for listing under the

current process that limits the FDC oversight. She also said that CFTC would benefit from greater authority to access certain information on unregulated affiliates of regulated exchanges with appropriate conditions, please to say Commissioner Goldsmith Romero joins us now from d C Commissioner fascinating that ultimately what you're calling for here is your institution to have a bit more power, to be able to have more control. What is it?

Can you explain about the self certification? What is it? So? Where as you what situations you've seen already that that's led to some problems. Yeah, So ultimately what I'm calling for is really like more comprehensive whole of government regulation, very similar to what we have with like traditional finance trad fire right, So it's gonna be multiple government agencies involved. That's gonna have greater customer protections and stronger federal oversight.

So if you know, we have this additional authority that's provided to the CFTC, like over the over the regular bitcoin market or over the spot market, I don't think we could just poured over the rules that we have now that relates to the the futures market that we have, like the bitcoin futures market that we regulate. So I think, you know, we don't. We don't want to fast track assets that are going to be listed on exchanges. The

CFTC should have more authority over that. We want to make sure that someone's not trying to do an end run around the SEC with their jurisdiction. We want to make sure that we can protect the market against manipulation. And you know, at this point, it's going to be very, very difficult for some exchange to self certify that what they put on is not readily susceptible to manipulation, and

there's a lot of issues with that. So it's really kind of coming up with a new process because it would be a new market and it would need strong oversight. What was so interesting was perhaps a lack of oversight and due diligence from some internal players within the system.

As this new urgeoning area of crypto evolved, there was a lot of money, a fomo feel, people pouring investment into now well failed companies, and many of us in the media now somewhere asked, what about those institutional players, what about the due diligence that completely was lacking at certain vcs people have been around for years, for decades that just seemed to lose their head in the situation. Are enough questions being asked of those institutional players about

their accountability? Do you think yeah, I think you hit the nail on the head. There are serious, serious questions about whether they fulfilled there for duce sherry duties to their clients. What kind of due diligence did they did they conduct. Let's just start with the fact that if you are investing hundreds of millions of dollars or tens of millions dollars that in a company a year later or so you have to write it down to zero or close to zero. That's already going to raise questions

about the due diligence here are conducting. But when the new f t X CEO John Ray says in Courton and the bankruptcy filings, there's absolutely no record keeping, right, there's absolutely no controls. We've got an order no one's ever heard of. Then you say, well, how how is that possible? So do they turn a blind eye to it? Were they just distracted by like this promise of innovation? You know, we know that f t X and it's and it's founder Sam Bankman fried really change East trying

to get the public trust. Everything they did, the messaging was worred trustworthy, you can trust in us. We know now that that's not true, right, that they violated the trust. But you know, we have this situation where you know, the market was hot, there was a lot of competition, and there are a lot of a lot of equity to be had, and you know, why did they turn a blind eye to what should have been really flashing red lights when it comes to due diligence? So I

do think there are serious questions there. There might actually be conflicts too. You see this highly interconnected nature. So was there some conflicts that prevented them from really paying attention to the due diligence and the facts that they were uncovering self certifications. Something that's interesting to me too, that whether it's self certifying certain assets that are being listed or just going ahead and providing certain products to clients,

lending products other products. I mean, how much now, whether it's a CEEFTC, the SEC, or the Department of Justice, how much clean up work is there to do? It seems like based on the velocity of cases that are being brought forward, even above and beyond f t X, that there's a lot of enforcement by regulation and there's a lot more conviction in regulators and authorities saying hey, these are new products with the same classifications as some

of the old financial products we've seen. Yeah, I mean I think I think a lot of the products have very similar features and there's a lot of the same risk that you see in that you see in crypto

that you saw in traditional finance. First of all, we've been regulating in the futures space and allowing um trading to happen in bitcoin futures and ether futures as long as it's registered with US, and fd X actually had ledger x, which was one of their entities registered with US, which is not part of the bankruptcy but the fact the matter is, we also have to do enforcement. We have to bring uh you know, trust and confidence to

the American people that we are doing our job. We have this police authority to go in and to bring enforcement actions. We have to do that. That helps keep the market clean and that an important part of our job. And I'm a twenty year federal law enforcement official, so

to me, enforcement is part of regulation. But we're doing both at the CFTC, both trying to supervise it the trading that we can where we have authority and bringing enforcement cases even though we don't have regulatory authority, but we have enforcement authority in the in the cash market commission a sensitive one for you because you talk about confidence. We asked our own audience how confident they were that

regulation would come to bear. We asked them a little while back in the wake of the f t X of f t X, are you confident the right cryptoregulation will come well said, don't hold your breath and actually said no, what can you do now? What can you say? What do you think you're able to get across? That gives people the confidence that it can be brought in and we're not just depending on basically self regulation. Yeah, I think that there's a lot of people in Congress

on a bipartisan basis who want to do something. I mean, when I look at this, you've got a regular of regular people who are getting crushed in these bankruptcies. Think of like Celsius and now you're gonna have Genesis, You've got f t X. You've got a lot of people who need some customer protections. So I think there's a

lot of goodwill and Congress to get something through. I do think it's appropriate to take a pause after f t X for Congress to say, have we made sure that any legislation we're thinking about like addresses all of the lessons learned that we have from f t X. And that's what led me to say, you know what, we shouldn't we we should really think about this idea

of this fast track self certification process. I as a regulator, would want to have more oversight tools over exchanges to be able to say no that's not appropriate, to have some independence, governance, and have some control. So I think I think the possibility is there. But let me just say I understand it's going to take time to do this right in a comprehensive way. But what matters the most is that we get something right that stands the

test of time. You know, it's interesting that you worked in the wake of the financial crisis with the troubled asset relief programs, so you have seen very messy on wind this time around. There is a lot of relief that it wasn't a more systemic problem, to the extent that you're still worried about systemic problems, especially with places that do intersect more seriously with the current financial systems.

Stable coins, How much concern do you still have. So I have a lot of concern about financial stability risk. Let's separate that out from systemic risk. Financial stability risk is not something we take our eyes off. We have to continue to look at that when you look at all these people that are hurt, when you look at the domino effect that happens when all of these different investors come in, and we're gonna we're still seeing the

impact of f t x is collapse right now. Systemic risk is going to come in my mind as you get more links between the traditional financial market and the crypto market. Over the last six months, I've heard more and more of tradfy say that they want to become interested, and that's why I've been warning, well, if you're gonna become interested, you really have to understand kind of how this operates. You really have to understand where there are

some weakness. Is co mingling customer assets with company assets is a big weakness. Lots of conflicts of interest that are not resolved is a big week is a big weakness. Cybersecurity the same, You've got to really have strong cybersecurity issues. So I think you know, as as the as the traditional financial players are sort of looking into this, um, you know, there's still some interest, but hopefully this is going to take everyone make a pause and and do

better due diligence. Speaking of due diligence, speaking of co mingling, I'm kind of curious about your sounds of the difference between what happened at Genesis and what happened over at f t X. Obviously, no one has been accused of anything at Genesis, but there's been a concern from the Winkle Boss twins here about the potential co mingling between the intercompany loans at Genesis now that they're going through a bankruptcy process of their own how does a regulator,

how does the CFTC look at something like that, um in terms of just general corporate behavior. Yeah, so I'm gonna be careful about speaking about any particular company because we are law enforcement office, and so I want to be careful about that. But I will say we are looking across the industry. We are looking to where we're

going to bring cases. We are bringing cases um constantly, you know, bringing cases against a Dow, bringing cases against an oracle manipulator, bringing cases case against Tether about how stable their stable coin is. So I think our job is to sort of look across and say, you know, where is it appropriate to bring the case in a way that not only brings you know, compliance with the law, but also sends a message to others who are in

the market about, you know what, we expect good behavior. Commissioner, great to have some time with you on this Friday. CFTC Commissioner Christie Goldsmith, Rama and Shnati Basek as always, thank you so much for your time. Meanwhile, coming up, you know, Musque could lose billions for that funding secured tweet back in twenty eighteen, we have the latest on the securities CRAL trial from our reporter who is in

that very courtroom. This is bring back. So in the last hour or so, Elon Musk has been testifying and part of the trial over his funding secured tweet back to take test the private at four dollars a share. That tweet could potentially cost him billions of dollars in damages. Joe Rolson Black was in the courtroom, legal reporter for Bloomberg used so what were the takeaways? This was just the early exchanges, the early part of musqus time on

the stand. Yeah, it was. It was very early in the sense that we spent our day hearing from other witnesses, and there was great anticipation in the courtroom. Everybody knew that we we could hurt could hear from Elon Musk, but we weren't sure if we're going to before kind of the time ran out for the day and so he came in and and everybody was very excited. But he spoke for it. He testified for about thirty minutes, uh and meaning that he kind of came and went in,

will return on Monday. How did he feel, Joe like, how did he seem how did his lawyer see, how did other people giving evidence. Seen. Yeah, he seemed nervous, really really quite nervous, I think at first, and he was very quiet, reticent and um, very hesitating in his responses, I think, very careful and calculated in in in waging

what he was being asked and what he said. But he very quickly warmed up then and and got relaxed and even funny in the car room in a in a in a kind of mild way, not not overly humorous, but um, but warmed up and got kind comfortable. Um. His lawyer that the planeifts lawyer, the lawyer represented the shareholders, UM was also nervous. You could, I think he was nervous. Um,

you know, uh asking Elon Musk with Elon Muscat. Understand he's he's British and as you know, that confers great kind of authority and intelligence, especially especially in a backwater San Francisco. Um, but he was. He was unsettled to and it took them a while to kind of get used to each other, is what it felt like. Yeah,

I I've got no comment on that. All I would I would say is let's remind the audience that the plaintiffs, the shareholders basically argued that they lost money due to the price swings on Tesla stock in the days that followed that take private suite. Right, that's the context. What was fascinating for me is even before Muscot anywhere near that courthouse, the judge had made a pre trial uh decision of his own, a pre trial hearing decision about

how those tweets could be should be interpreted. Could you talk to us about that background? Sure, I mean to to kind of cut through it. The judges ruled that the tweets were false and reckless, and those are kind of two big hurdles that the shareholders have to clear in order to win their case. And so it's unusual, if not unprecedented in a in a case like this for a judge to to find that ruling ahead of

time and then furthermore instruct the jury. So the trial it's settled that these are false, these tweets are false, and that they were reckless. The question that they have to determine now is did Elon Musk know that what was his state of mind? Did he know that they were false, and did he know that they were that that what he was saying would impact shareholders and move

move move the price of the stock. Still, it was interesting that he was saying he eventually warmed up, became humorous slightly, and was making an interesting point earlier in the show about perhaps whether the idea, the motivation here is to get him riled up, because we know from Twitter that you know, Musk can be outspoken as a way of politely saying it. Do you think that that's kind of a tactic at play here. I do think

it's a tagic. I think the lawyers, the lawns for the shareolders are done and they're trying to provoke him, and they asked, you know, they asked questions that that I think are heading in that direction, including about I think we probably all recall his response or his tweets about the horrible cave situation with the with the children stuck kind of in a cave in Thailand, and his in his horrible kind of tweets about that, and the and the and the lawyer asked him questions about that,

trying to provoke him to make the point that what he says on Twitter matters to Testla's shareholders, and he made the in that instance, tesla shares draft significantly after he made that. After he made that tweet, Musk was steadfast insisting that there's no link between what he says in Tesla's share basis. He said that repeatedly and kind of really resisted that he did a good job. I think of resisting it, but we're going to see where

there's where there's girls on Monday, Joel fascinating. We thank you just jumped up a room above the court room itself. So thank you so much, Joel Rosenblack for sticking around in that court house. Going viral. The reality behind the tens of thousands of tech workers who've lost their jobs hashtag layoffs was trending on Twitter and Google. His parent company, Alphabet, of course, is shrinking its global workforce by about six percent.

One tweet in particular, it caught our attention even though an email went out to Google employees overnight. We understand and some who actually missed it were allegedly waiting in line to badge into their offices, which ultimately told them whether or not they lost their jobs. I mean, we haven't corroborated this ourselves ed, but it was notable that people seem to be responding to that. People who work there a long time, and we know that it's it's

really tough to get these messages across. Yeah, Google layoffs the number one trend on Google trends that I don't make light of that. That's the reality. We're in a hundred thousands so far since the beginning two. We'll keep you abreast of all that sort of news that doesn't for this addition of Blobo technology. Don't forget podcast I Heeart, Apple, Spotify, wherever you get it. This is Bloomberg