TikTok CEO on Capitol Hill and Hindenburg Shorts Block

We break down what's about cash app Unit in particular that it's concerned about as the payments company plunges in trading, Plus lights Camera, Apple, the iphonemaker spending billions to break into show business, more on the company's plans to raise its Hollywood profile, and a low subscribers to streaming service, all that so much more. Coming up meanwhile is Apple and some of the big techs seeming like some sort

of haven on the day. We're currently seeing the naszack up more than two percentage points, even though we continue to worry about some of the solidity in the banks. Today the stock six hundred is actually down on the day largely dragged down by those banking stocks over in Europe, the Pound. Want to keep an eye on Europe still trading, of course, the pound up four tenths of percent as

we do. Indeed, see the Bank of England light the United States Federal Reserve high grates by twenty five basis points. Moving on, that's the macro picture for all of your technology investors out there. I'm looking at what's happening in bitcoin though, because once again is this a haven of choices. It's a move that we see as we still worry and remain cynical around a banking industry. Here in the United States, we're up five percent over the course of

just US trading day alone. But we want to dive into the micro moves that are so important on the day. Let's going over to bring most critic up to Yeah. Well, Carolin, you've covered the macro pretty well with getting to the micro some major movers to your point, and we are seeing a lot of that kind of green on the

screen coming from a technology space. You're more biggest INDESK contributors, Apple, Amazon, and Bidea is really in kind of focus here, and I really want to talk about some of the downside movers here because to your point, Caroline, those crypto stocks are getting hit hard, but not necessarily for the fundamental reasons. Look, I mean the macro reasons. The Block story is fascinating. Hindenburg Research coming out with the short report saying, look,

they are concerned about Block and the financing. They're the Block formerly known as Square, Jack Dorsey's baby, basically that sending the shares down about thirteen and a half percent. We are still, of course waiting for comment from Block as well. We want to talk about coin base getting quite the hit after the SEC yesterday after hours put it on notice when it comes to some of their offerings.

This is really important in the crypto space because one of the big issues has simply been crypto ETFs and whether or not they can actually pass as a real moving vehicle. The upside their story is interesting, Caroline. At the top you mentioned that TikTok hearing over in Congress. You are seeing snapshares rally off that. Remember, Snap is one of the major benefactors. If TikTok isn't the band at least on government devices stay side and around the world.

So snapshares highed by four point four percent and Netflix. Look, there's no fundamental reason here yet for Netflix, but you have to know a nine percent rally is nothing to scoff at one of the biggest heavy volume trades. Who are seeing today some rumors about kind of funding from Apple. But it's really something to keep an eye on. Caroline, pretty good to such a great wrap up. Thank you. Let's get back to the key story of a Day, which is called TikTok CEO show to testifying on Capitol

Hill as lawmakers call for a band. Here's just some of what he's had to say earlier about Chinese access to its user data. I have seen no evidence that the Chinese government has access to that data. They have never asked us. We have not provided well in a way I've asked that I find that actually preposterous. I have looked in I have seen no evidence of this happening.

And in order to assure everybody here and all our users, our commitment is to move day data into the United States to be stored on American soil by an American company, overseen by American personnel. May we go now to Capitol Hill, where not only a show to still being testified, over there. But Alex Sperenca is standing by to bring us anything that actually we've learned that is new, anything in the arguments,

the nuances that we hadn't heard before. So show Chu is really coming in with a lot of what we've heard before, and that doesn't seem to be wooing what we knew to be some skeptical lawmakers. Lawmakers started this testimony which is still on going just behind me in front of a packed room, basically trying to establish the TikTok connection to China. Chu was queried on who prepped him for this testimony. Was it anyone from Mite Dance? How often does he talk to Chinese executives? Has he

heard from anyone from in the Chinese Communist Party? It was basically an establishment from these skeptical lawmakers to try to connect TikTok to China. Now Chu has come back with a lot of the facts we've heard before that he is working on coordinating off user data here in the US, that he does not talk to the Chinese Communist Party. But I will tell you, Caroline, based on kind of him being cut off by a lot of these lawmakers, based on the times that the chairwoman has

not allowed him to respond to questions. It doesn't seem like he's making any headway with this group in the room. It really is notable as we still go to the room and say, we've got a wonderful tea live blog going on the Bloomberg terminal, Alex that I know you're contributing to, as well as some of our other reporters.

Brodie Ford saying that at the moment a Georgia Republican Buddy Carter, once again talking about deadly TikTok challenges, that seems to be really the emotive subject, isn't it children in particular? There it was, and I will tell you the room got very quiet earlier in the day when a number of videos of users talking about suicide were played for the committee, and that seems to be kind of the emotional heartstrings that the lawmakers are pulling on.

What is TikTok doing to protect our children? Now? Sho did come back and say we have strong content moderation policies. We are putting in time limits for users under the age of eighteen. But I will how you those answers as well were responded to by the lawmaker saying that's not enough. I hear what you're doing now, but I need you to commit to more brief recess has been cooled. It's going to get busy in that corridor with you. Alex.

Just set the scene a little bit, because you did a wonderful piece of digging on really the Ventia community in and around the relationship, broader relationship between US and China. There was an important dinner last night with an old coastala there. We understand Peter tale as well, what are lawmakers? Who are lawmakers listening to aside from the leader TikTok?

That's right, literally with an eye shot across the lawn from Capitol Hill, the Hill and Valley Foundation where Peter TiAl spoke last night was again this kind of line of anti China sentiment. Basically, Peter Teal compared TikTok to the US homeless problem, saying it's something that we just can't fix. So there are folks on both sides of the coast here in the US who are definitely not

on TikTok side. And I will tell you in terms of lies here on the Hill, TikTok has had a few We heard Representative Jamal Bowman speak yesterday at a TikTok event on the lawn outside of the Capitol building. But there are not very many voices who are piping up. And we've heard during this hearing from the other House from senators who are also coming out with some strong calls to continue to try to be on TikTok. Alex Brinka, We'll let you get back to trying to speak to

some of those lawmakers. We thank you so much. Meanwhile, we got another one for you right now, Representative Jim Himes of Connecticut, who is on the House Select Committee on Intelligence, so deep knowledge on perhaps some of the data issues at stake here with TikTok, as well as of course the financial services is another area that you oversee, Jim,

and accomplishment is great to have some time with you. Please, can you just talk to us a little bit about in February you said you're not quite there yet about an idea of imposing an outright ban on TikTok. You needed to learn more. Do you feel you've learned more to make a decision yet? No, I haven't. And let's face it, we're not doing a lot of learning today today. As one of those moments the Congress where a witness gets beat up, the witness is not allowed to answer

the questions. You know, this is a moment of people expressing emotion. And I think, look, I've said this before. I work a lot in national security. TikTok is not on my phone, It's not anywhere near my phone, and people in sensitive positions, because of course TikTok is probably more accessible to the Chinese government than most platforms. Shouldn't be on anybody who's a phone who does this stuff.

But look, an outright ban. This is a deep breath moment, right because the American people need to reflect on the equities associated with saying sorry, the federal government is not going to let you use this media. And my question is, where's the limiting principle? What if, all of a sudden we get really angry at Belarost, does that mean that we ban access to Belarusian newspapers. All I'm saying here is that we need to think about what we really

want to do about this. The CEO apparently this morning offered the idea of moving the servers to a non Chinese country, to the United States. I think he said they could contemplate an ownership change. But before we all get on the bandwagon of having the federal government ban Americans access to a particular media, we do need to reflect on what, you know, what's the limiting principle? What does that precedent establish with respect of the power of

the federal government. It feels as though you're aligning yourself in some way with your consistent your constituents. Here one hundred and fifty million people use this app. But how what would you like to see other than moving servers? Is it would a nice balancing app for you be a sell off in some way? And what do you think to China's reaction earlier today the comment secretary, They're saying, well,

that's not going on unless we approve it. Well, I think in this instance, I'm actually not aligning myself with my constituents. I'm drawing on what I know about Chinese capabilities and what I know about the Constitution of United States in the First Amendment. What I can tell you is that the Chinese are pretty darn good at breaking into anything they want to break into. They're not the

only ones that are good at that. But you know, here we are, you know, calling for a ban on TikTok when we actually haven't as a Congress been able to put in place a federal privacy regulation. So, yes, the Chinese Communist Party, we really don't want them to have our data. But guess what you know, Facebook, Instagram, all of these entities have our data. They sell it.

I would suggest that the first thing we ought to do is actually pass some federal privacy legislation and then really get into the details of what a good solution might be with respect to TikTok. Maybe it is moving all of their operations outside of China, maybe it is an ownership change. But again, this is one of those moments. It's a little bit like when we think we've really accomplished something because we rename the French fries in the

cafeteria freedom fries because we're angry at the French. Right. This is again a moment with a lot at stake in which we ought to be maybe a little bit more deliberate than we're being today. Congressman, how optimistic call you that such a deal can get done around privacy on a bipodism basis. Well, look, at the end of the day, this is well, let's let's let's focus on TikTok for a second. You know, TikTok is obviously absorbing

sentiment right now. They might want to think about what they might do with respect to ownership, with respect to where their operations are located, to maybe take this issue off the table. Privacy, Frankly, this is an area where the Congress has been remiss to say the least right.

You know, I have to daughters who live on social media, and it just appalls me to imagine that pretty much anybody out there can buy their data that they see there in some instances, most intimate interactions with commercial retailers and that sort of thing. It should happen, But sadly, and by the way, we had a little bit of progress in the last Congress, but it hasn't happened. So my advice would be, let's continue to study TikTok and

think about the right way to handle it. But for God's sakes, let's get some federal privacy legislation done the way Europe has done, the way lots of countries have done. Until we do that, it's a little hard for us to step onto a soapbox and decide that we're going to take a massive moral high ground on issues of privacy at the moment, the evidence for you TikTok Ceo saying there isn't any evidence that China has had access to the data. Do you believe him? I don't have

any information either way. I can tell you, though, as a member of the Intelligence Committee, that if the Chinese want access to that data, they will get it. They might not tell TikTok, but the Chinese are adept at breaking into pretty much anything they want to break into the way. That's something to think about. Even if all of a sudden the servers were located in the United States, I wouldn't tell you that. I'm one hundred percent confidence

that the Chinese can't get it there too. I can't tell you that the Chinese can't get into Facebook servers. So I don't know the answer to the question. But it's a little more complicated than just simply where their servers are located. Tell you what's also been complicated for technology investors, for technology builders has been the banking system of late Congressman Himes. And I know you've got some expertise their former banko government, of course, on the Select

Committee for Economic Disparity and Fairness and growth. How concerned are you at the moment that companies that are building have access to funds that they need and have well security in the overall banking system here in the United States. I feel very good about the overall banking system. I was a freshman here in two thousand and nine when we really thought that JP Morgan and City Bank and other huge banks were going to fail, and there was a very real risk that they would. The sector itself

is very strong right now. We obviously saw problems at three or four banks. I think that the regulators and the Federal Reserve stepped in in a very competent way to handle. I do think we've got a little bit of work to think about. A world in which you depositors only deposit the guaranteed amount at small and medium sized banks. That of course creates a lot of pressure

for consolidation in the industry. But to answer your question, I think today we may see stock prices move up and down in the coming days and weeks or so, but my sense is that overall the banking system is very, very safe and depositors should not be worried about their about their deposits. Congressman Jim Himes. We thank you so much for your time your expertise across well all areas of technology. Today. Betting against Jack Dulsey, Hindenburgh Research strikes again.

It is a forensic research outfit and a well known short seller. This time it's claiming that the company Block that Jack Dulsey runs was facilitating forsters who will fordulently used government stimulus programs during the pandemic. Block, which owns cash app Tidal, the music streaming companies set up by jay Z, is down twenty percent on the news. Hinnumburg Research claims that after a two year investigation, they've understood

cash app was facilitating billions in government payment forward. Basically, multiple people would use the same bank account to claim government stimulus. Hindumburg says these were brazen red flags of

forward and down to shortcomings in compliance now. Hinneburg also takes issue with other areas of block, saying that cash app is over inflating the amount of users it has, that it doesn't like the way in which it's charging merchants every time you swipe your card, and also it's critical of the twenty nine billion dollar deal that was made to buy Australian buy now, pay later company after Pay.

So far, we're yet to hear from Block's own executives, but we do know that some analysts have weighed in already Bared for example, saying, look, they are worried if there's any criminal activity what that does to invest a sentiment, But from their perspective, the share as a good un Someone's got even more information than this, pretty most Jennys Terrain in London helping break down this story and so thoroughly Jenny. Thus far we've still not heard from Block.

You've reached out many other people have. What do we know in terms of other implications to the business model here, because we know that there's been regulatory concerns shall we say, viruses, paypals, Venmo and the likes. Yeah, I think there's a few different pieces that I think folks are really keying in on with this. I mean, I think any implication that criminal actors are using blocks cash app to facilitate their transactions is you know, really bad news. I think that's

when you get regulators looking at you. They could impose different kinds of penalties, whether that's monetary or you know, different remediation activities. So that's something that investors will really keen on and want to see further proof of and probably hear from the company on you know, I whether or not this is true obviously first, but if it is, you know, how are they what steps are they taking

to try and stop that. So I think that's probably the number one thing folks are keying in on, and a lot of the other stuff that they laid out, it's stuff that was probably a little bit known by the investor community, but seeing it all laid out, and you know, this very lengthy report at the end of a two year investigation, it is sending kind of chills through through not just block stock, but really the entire

payments industry. Well said, interestingly, this is a company that has full of from grace in terms of a market capitalization perspective since the Well area of twenty twenty one, when we were still very much caught up in COVID concerns. Was that to do with some of these warriors around

the broader ecosystem and ultimately governance of it. No, So I think this is it's another example where you know, you've got a macro issue weighing on a stock which is during the pandemic, Block and all of the other big payment processors solve volumes really balloon because folks were trapped inside and suddenly spending a lot more money, you know, online and doing a lot more online shopping and doing a lot more mobile money transfers of cash app has

really taken off in the past few years, but that's slowed down, you know, just it's hard to keep lapping such intense growth and so they've had to lean on new areas and so that has just been a broader overhang on the entire payment sector and it is not

block specific. What is block block specific today is this accusation, you know from Hindenburg that we could be seeing widespread fraudulent use of cash app, and and that's something that you know, it would be very specific to this company, and it's why their stock is down, you know, as much as it is today. And we such targets do tend to see sustained Prussia on their stocks. Jenny Soerine, we thank you so much, coming a love from London for us, coming out from Teshiba to AI to EVS.

We will run you through all the rest that's going on in technology. We're talking Tech Next Discipline book. Nvidia Chief Technology of A Michael Kagan says a new revolution and technology will present multiple opportunities going forward for his own company, especially bring bags, Tom McKenzie. Every every new technology and every new revolutional technology, it's opportunity for doing good things and for opportunity for going bad things, and we definitely need to be aware of this and be

ready to mitigate this. Wet Nvidia, you know, work very closely with the collaborating with the regulations we are making to what to extend that we can make sure that our technology and our products don't get to the beat hands. We can trace it down all the way to the to the end user. But we make sure that people that we sell our things for, our technology for, and our products for are not using them in the way

that will damage the society. Okay, So your comfort that in terms of the framework and a focus on ethics of AI, the end video is doing enough. I think it is doing more than enough. We are on the very extreme case side of this. We are definitely not doing anything in the gray area. It's very black and white. We are we are we are not getting to the gray area. And we're also developing the technologies that will

enable to mitigate cyber attacks in the data center. Actually, now there's people even more dependent on the data center infrastructure, and we are building the technology that will enable the provisioning and mitigating the cyber attack within milliseconds or seconds versus few months that it would it takes. Today, you have two customers, and Video has customers of course all over the world. You're a global company. Some of those customers include Chinese companies Ali, Baba, ten Cent, by To.

How do you serve your Chinese clients and customers given the ban by the US on those high end chips, the A one hundreds, the one hundreds, how do you continue to serve those Chinese clients? Okay, so first of all, you know, if you look at the Chinese Chinese market, it's a big market and they better have the computing accelerating technology so they will use a reasonable amount of energy.

There is a bend on the and the restrictions of sell some type of chips to the to the to chatter market, and we have chips that comply with the regulations. We're definitely not violating any regulations of the of the US government. We have products that we can serve China market within restrictions and within the rules that are imposed by the US government. Video CTO that Michael Cagan. Time now for talking technology and we can stick on the

theme of AI. Startup Character AI, which lets people create their own chatbotses raised one hundred fifty million dollars in funding round led by and Recent Horowitz, notching a one billion dollar valuation from investors. Now Sarah Wang and general partner over At and Reason will join the company's board. As part of the deal, Teshiba accepted buy out an offer from Japanese consortium, moving a step closer to ending years of turbulence for the company. Seventeen Japanese companies and

six domestic financial institutions will participate in this buyout. It's led by the domestic private equity company Japan Industrial Partners. The fifteen billion dollars bid I sent the US listed shares rising more than nine percent in New York, the

most since October. And finally, let's check out Forward because it is predicting losses in the EV business that will grow to three billion dollars this year as it spends big on new models and factories to take on of course, Tesla, the deficit matches and accumulated EV losses over the past couple of years. The company, well, it's keeping its profit forecast for the current year unchanged. Let's get back to

world of technology. Let's get back to TikTok. Of course, CEO giving testimony on the Hill, we're worried about the security concerns around the app will show too. Of course, it's continuing to try and broaden out this conversation not just on TikTok's data privacy, but the intire social media industry at large. He says, the companies Project Texas. Of course, that plan to far wall all US user data in the United States is more than some other companies can promise.

So it's TikTok only app of concern. Ivan Sereny is with us. He is founder and CEO of Ferrut. It's a startup that provides technology solutions for corporate customers dealing with so called data creep, helping them comply with privacy regulation. What's so fascinating, Ivan about the reporting that you've just been doing, is that well a report that you what

was it? Reviewed websites and more than three thousand, five hundred companies and basically you're seeing so called tracking pixels from TikTok's parent company present and even some government websites. Can you tell us about how difficult courtailing data collection will be for TikTok? Yes, thanks for asking. It's a

very great question. That's one of the things that the far Wall is really eye opening is just how many big sourcing trackers are actually collecting sensitive user information without ever asking for consent, and very often without even companies whose websites they are running on being aware of those pixels and truckers being present there, and that it is very very common. It is not just a TikTok concern.

It's broader concerned obviously, because there's it's you know, we've seen Google Matter and there will be Microsoft, all kinds of tech companies being present there. But what is really concerning is that, for example, by Dance and TikTok were bank by executive orders and there were still present on government websites. So if we do see a ban, for example, of TikTok here in the United States, does it do anything well? Band or change of ownership or a band

will not necessarily solve all the problems. Kind of once since for all, what I believe is really concerning is that there is no governance around what actually happens with the data that is being collected. It's less of a band of TikTok, more of having clear rules for all the players to follow and have third party validation, maybe alreading, and accountability and responsibility for bodies who do not follow

their rules and violate them. Can you just for those who not particularly adapt to understanding what embedded pixels really mean? What is it? What is happening? What is being teased out of us in terms of our own data? So what are pixels? It's they're just like meny spy balloons. Remember that giants by balloon a few weeks ago that

air force shout out of the sky. So pixels are like tiny spy balloons that are embedded into a website's role used on every day, like when you book your appointment through the doctor, when you are perhaps renewing your driver's license, or shopping or doing anything else, and they're

watching everything you do or a person does. They can collect and often we see they're actually drabbing everything that you're typing in into the forms like your passwords, your precurret numbers, maybe your diagnosis, your health records, and anything else. So that's a really big concern with pixels and what we've found that they are actually doing. Why if we went to executives at not just TikTok, but as you mentioned, whether it's be other companies, Microsoft, Meta, what would they

say they're using them for in a legitimate manner? So pixels are legitimate business touls because companies need to market, they need to advertise, they need to attract customers, they need to grow. So pixels do have very legitimate rules purpose. What they don't have is clear rules that they need to follow, and very often we've seen that. We've found that pixels are doing way more and collecting way more

information than anyone realizes. Okay, so but how can you put the genie back in the bottle If these things are already out there? And you've said through your three thousand, five hundred companies and organizations that you've looked at, was it websites across twenty seven states of US state governments are being implicated here? What's to be done? Can you clean up the system in any way or is it

more just about disclosure? Well, cleaning up. There's no magic bullet, there's no magic want to say, you know that will solve the problem once all overnight. But there are steps. Definitely, some jurisdictions already have taken clear steps, like in Europe there's GDPR and you know people are being held accountable

for breaking it. So it's it's a continuous in fourth clarity, driving clarity, clarity of what needs to be done, just like what has been done in a financial sector, and we've seen that the financial sector is now a lot more robust because of regulations. I mean, of course you've made this data public. Have any of the US stating governments that manage the websites come to you and said what can be done? Is what are you doing with

the own data that you're managing to now bring to light? Yes, definitely, we've we've been reached out by Department of Justices and teams for various states already. And just like in a ball Suit Journal article published a few days ago, they mentioned that even the states that they have validated where TikTok was present and collecting information, that they quickly went in and remediated to make sure it's not there, and

that removed it. So there is technical measures that can be put in place to prevent this, but it's there's no priority on it or clear variness how common that issue is, but it is solvable. Let's also just bring in our own audience for a moment. Ivan and we went to them sort of ultimately asking to care very much about TikTok and whether or not they should sell off to a US company, whether whether they even use

the app. I have to say, seemingly our audience and technology focused audience, actually half of them basically don't use the app at all. I'm interested in whether you think people care about the data the consumer. How would you say to them that you should care about where your data is ending up. Well, that's a very big question. Well why we care or why to care is? First of all, it's the free freedom. You know, when it's important.

Protecting the freedom to be personally is really important. So I'm based in Toronto, Canada, and right now there are concerns and the talks that there were interference by China in the Canadian elections process, for example, or there's many other topics that are being brought up in the current congressional hearing with the CEO of TikTok, where the data is being collected or has been accessed for spine, for surveillance on members of the military, members of sensitive groups

of people. So there's definitely I see personally, there's a definitely big impact on us as people maybe not felt immediately right away, but over some period of time it will definitely creep in and can impact all of us. Ivan, thank you for bringing us your data. Ivan Thrainy, the CEO and co founder of Furup. We thank him. Meanwhile,

let's get over to another Chinese related company. Ten Cents surging actually more than eight percent and most in about four months, with traders citing unfounded talk that China's new premiere. That's Jijing Ping's top deputy Lequang toward the company's headquarters, though there was a visit from a Communist Party regional representative early today, according to the official weechat account of

a local state media outlet. The rally also comes after the China social media leader, of course, came out yesterday with news of a resumption in revenue growth. I'll be it a tiny bit in its fourth quarter. Coming up, we'll talk all things crypto and regulation and more Hahn Ventures chrys La Haynes with us. Next, of course, we're watching shares a coin base as the company gets SEC notice on and they intent to sue over its offerings. We're going to digest all of that the Shinali Bassac.

Let's bring back let's talk Hollywood for a moment. Apple is trying to raise its profile there and law subscribers into its streaming service while planning to spend big one million dollars a year to produce movies that will be released in theaters. No less, according to sources, Let's bring in Bloomberg's Mark German, who has more and just how big a step is this to be teaming up with Scorsese and they like and actually bringing it to theaters

for us to go see. Yeah, the significance here is that they're upping this budget for theatrical right, for full featured length movies, for movies they want to put in movie theaters pretty significantly. Right. They're in talks with a movie for with Scorskazy for almost a quarter billion dollars. Right, That would probably be the most that they've spent on a movie during this whole tenure of Apple TV, plus since it launched in twenty nineteen. They're thinking bigger and grander.

They've seen how Coda has done, They've seen how their other shows and movies have done, how they're winning awards, Oscars in the like. Right, They're very excited about this. They want to keep buying new content, making new content as a way to keep people buying subscriptions to TV Plus. So this is quite significant, according to the reporting from our Thomas Buckley and Lucas Sean but mark to that point, They've obviously had success awards, but haven't managed to luring

people to the streaming service. They've got twenty to forty million subscribers versus two hundred million more over at Netflix. So why do they think this sort of marketing is going to win out? Yeah? I mean, right now, it's very clear that Apple is getting a lot of its subscribers in Watch on TV Plus on plans like for instance, I have T Mobile as my phone carrier, and my plan comes with Apple TV Plus, so I'm not paying

out a pocket to Apple for TV Plus. They have some sort of agreement that lets me and other T Mobile customers get it for free. Many Apple products these days come with three months free of Apple TV Plus. It used to be a year free, right. There's the Apple one bundles where Apple TV Plus is part of that. So it's unclear how many people are paying the six

ninety nine a month for Apple TV Plus. Clearly Apple wants to widen that, right, and the way to do that is to get better and better content that you're not able to get at competitors like Amazon, Netflix, Hulu, Disney, etc. Obviously, Scorsese's a big name, there's other big names. There's an Idris Elba TV show coming to TV Plus that I saw as I was scrolling through TV plus options last night. There was Schmigadoon that was quite popular, Ted Lasso. Everyone

is talking about severance. Clearly Apple has some cultural hits on its hands, and it has so much cash it wants to do more and more and more. The only pause I have is how do you square that with the budget cuts and across the rest of the business. But I guess you really have to keep investing, and they probably put the bucket for a TV Plus investment in the R and D budget rather than the affects. Interesting nuances there. We thank you. It's helping some of

the Cinema chains today as well. Cinema an AMC doing well on the back of it, Margam and thank you. Let's talk crypto now, with already talked about block earlier in the show, shares sinking after the Hindenberg Research says it took a short position in that company. Now, let's turn to coin Base. It's also under pressure. That's because the crypto Exchange says it received a notice from the SEC formally declaring these security regulators clans to bring an

enforcement action against it. Shares currently off by another twenty percent. Umgazaan Ali Bass helped talk around this news break It analyst Jefferies Mazooo say, basically a food of net revenue of Coinbase could be affected by this. Well what's strange about this Wells notice and what they've heard from the SEC is we've seen the SEC target different companies for different products, but this Wells notice seems to be encompassing

multiple parts of the business at the same time. That is, parts of the exchange business, the wallet business, the staking as a service business. And therefore you have coin Bass executives fighting back and saying that the SEC has been neither fair nor reasonable throughout this process. Remember, we have seen the tones change from coin Base for the last year really be very open and vocal about their coordination

with the SEC and trying to work with them. So things are certainly escalating and coming to a head here when it comes to different parts of their business. As you see, the stock is certainly reacting to this news. But this is a wells notice. This is an intent to take action, but not action yet. I think what's interesting here is that we don't know where this goes from the SEC's perspective, but you do have coin Base saying that they welcome a suit and legal action if

this were to escal eight here. So let's see if the two sides really reached a reasonable solution here. But certainly the direction of travel has been in the direction of fighting about what the meaning of crypto is. Oppenheimer analyst saying that the unhealthy regulatory environment is why they're

currently downgrading the stock. Shinali is gonna be sticking with us, just a full disclosure on my part my husband as a senior manager over at Coinbase, But nevertheless, we're going to dig more into this with Hahn Bench's chief strategy officer, Chris Lahine, because you have expertise, you of course have a focus on coin Base. Now you're someone who used to serve in administrations previously. You understand the conversation that needs to go on between new innovative businesses and politicians

and regulators. I'm interested when coinbas is with the SEC more than sixty times over the last nine months, what is not working here? Yeah, it's a great question, and thanks for having me. I think you guys actually broke this news yesterday Bloomberg did so. A couple thoughts here.

First of all, I do think, just step way back that this is part of the broader journey that I think any innovative company is going to have, particularly one that's trying to ultimately disrupt the status quo of our financial system and dealing with regulators who effectively want to maintain the status quo. So I think just understanding that

this is going to be a long journey. I was particularly struck by the fact, and I think coin Base has made this really clear in their communications yesterday, that they effectively went through an SEC process right there. S one was reviewed. It was part of the process of being able to become a public company, you know, and that s one really laid out their business model, and so now you have the SEC basically coming back on

something that had already gone through a review process. And I think that really does speak to why coin Base has reflected a lot of confidence in terms of where they are on the law of the facts and this process going forward. And we're in an atmosphere and going to your core of your question where you know, basically we're getting regulatory action and clarity to enforcement. That is not the best way to develop policy in this country.

I was around way back when in the mid nineties when Democrats and Republicans work together passed the Telcoact that became the framework for what ultimately became the Internet and why it was based here in the US and not in other places in the world. And policy through enforcement is not the best way to optimize first principle. Yeah, what about just recognizing here that coin base is the

largest US crypto exchange, It's a publicly traded exchange. It has been given the blessing of investors as well as the SEC. To your point, what would happen if it goes down the road of the SEC cracking down in a much more significant way? Do you think that the ultimate goal here is to stifle the crypto industry, because given the publicly traded nature of this company, this would be the way for them to do it. Yeah, well

you have this action. You have a lot of activity taking place with quote unquote the banking where any number of institutions are purported taking steps to make it harder and harder for the crypto sector to do banking in

this country. You had an Electric Capital report. Electric Capital is a venture capital fund here in the valley that just the other day was released showing that there's one million high quality engineering jobs on the table there are going to be created over the next five or six years. The real question is not whether those jobs are going to be created. The real question is do they take place here in the US or do they migrate abroad.

And what is really telling is that if you look around the world, the UK, Caroline, where you were from, the EU, Japan, Australia, Dubai, Brazil, all of these places are moving pretty aggressively to put a regulatory perimeter around crypto to give it a certainty and clarity that folks are looking for, but specifically with the intent, as they

have stated to become crypto hubs. They understand that this technology will play a really critical role in the future rails of financial systems and want to make sure that they actually owned some of that real estate that's really in a sharp contrast to where the US is. And ultimately, those developers, those engineers, those entrepreneurs are going to follow where those countries are going. And I really do fear fear as an American that we are seeding our leadership

role on this. This technology is taking place, it's already happening. There's four hundred million people across the world who use it. One in five Americans question is it here or abroad? We're going to go one minute. Sure they haven't done a good enough job at making people feel confident and comfortable with using this sort of technology. Yeah, look, I think that's a very fair point. I think ultimately a part of this is the cryptospace themselves and making sure

we're demonstrating the utility. The fact that forty percent of those folks who hold crypto in the US do so because they're using it for remittance purposes. The fact that people use stable coins to protect themselves from inflation, to get access to a financial system, that they currently don't have access to where it's hard for them to have access to. So, no question, we need to make the case.

But it's also really important to remember that we're sort of at a phase in this technology that would have been early nineties for the Worldwide Web, for early two thousands for mobile. Some of these same questions would have been posed then as part of the pace of technology. AI was first introduced in nineteen sixty eight. Right now you're finally getting into a place being able to be used Chris lahane Han Ventures, thank you for that. Shinali Bassak,

We thank you for rushing back to do it. That does it for this edition of Bluebeg Technology. Do not forget to check out our podcast. Much more conversation online, Join us on Twitter. This is Blomberg