Should Stock Tokens Be Limited to KYC'd Users? Or Be Tradeable by Anyone?

0:00So tomorrow is 9-11 and I live in New York. I worked in the World Trade Center in 1993 when it was bombed and I worked a block away at 9-11. So I was a runner in the street when the tower one came down and it's funny because every time I get involved in conversations about permissionlessness, I'm always talking to people about, you know, like I think really care about terrorist financing, right? I care. And so, you know, we may have to make sure that as we get really excited about permissionlessness and what that unlocks, that there's some really other important things and policy issues that have to de-kept in mind and we don't want to unlock things that make it easier for bad things to happen. And I think it's just a really poignant point, especially, you know, today and tomorrow. Everyone, look at Unchained, your know-hey presource for all things crypto. I'm your host, Laura Shin. Thanks for joining the livestream. First, we'll take a quick word from the sponsors who make the show possible. This episode is brought to you by One-inch Aqua,

1:01the shared liquidity layer from One-inch. Back multiple liquidity positions with one wallet balance and keep your tokens in your wallet until a swap fills. See how it works at One-inch.com-aqua. Today's guest is Brett Redfern, president of Securitize. Look him, Brett. Thank you very much for having me, Laura. It's great to be here. Yeah. Thank you for joining us. Oh, thanks. I'm excited to chat about what is a super juicy and kind of controversial topic. Who knew that security's law could be so entertaining as I tweeted during this kind of spat that we've seen this last week. So to set the context last week, Adam Errin, the CEO of AMC, tweeted about what he called Robin Hood's, quote, contemptible outrageous, disgusting, detectable, and excusable, vile AMC tokens, which are actually backed by real shares of AMC, but they're not actually shares. Robin Hood, CEO of Vlad Tenham, tweeted back, what's the concern?

2:05And later on, Robin Hood's CLO, Dan Gallagher, who by the way is also a former SEC commissioner, he tweeted back, quote, we know a little something about the U.S. Securitize laws and will not desist and misspelled it because it was misspelled when Adam Errin told them to cease and desist. And then Dan Gallagher finished, send your lawyers and will educate them. So I know you have a dog in this fight, but I want you to take a step back and try to explain the debate here from a more impartial perspective. So explain why AMC's Errin was so upset and explain what leg Robin Hood is standing on or things that standing on legally. Right. So again, thanks for having me. And this is it's a very important topic because we all have been watching tokenization and blockchain technology coming into traditional financial market services. And as you know, Securitize has been very involved in that in terms of tokenizing funds and private equity and treasuries and the like. And so the stocks really are the next

3:11the next big thing in terms of bringing the stock market on chain. And as you know, you know, this SEC under Paul Atkins and Jamie Selle and others has really been trying to create water sort of the roles of the road and how do we get into that particular spot. But in the meantime, a lot of things have been happening offshore and the offshore regulatory environment is very different than the onshore regulatory environment. So Robin Hood, first of all, they weren't the first to do this. There's a lot of other stock tokens, as you know, that have been issued in offshore markets that are essentially synthetics or rappers. And so Robin Hood did come in. And of course, if it's Robin Hood, right, they're going to come in big, they're going to come in hard and they're going to do it in in a very meaningful way. So look, I think to a certain extent, you know, Kudos to Robin Hood for sort of getting this out there and helping to find the market and sort of looking at what is one of the real use cases of the tokenization of securities. But in so doing it really is opening up a lot of important questions that we have to answer, you know, as investors, as issuers, as participants

4:13in the financial market. So the, you know, what Robin Hood has done is they've issued this sort of debt security, as you mentioned, in offshore markets where people can trade them. And I think, I think it's right, they are doing things within the law. But that's different than like, what is the issue for the issuers of the company? And we have to ask fundamental questions like, what are our capital markets for? Why are we raising money? Is it for issuers? Is it for investors? Or to what extent, you know, is this just really to tokenize and do things where they're not involved in this? And so I think the fundamental point here is as we get into tokenization, there's a very important question about how do we involve issuers? How do we involve companies? The companies are out there raising money in this discussion, in this process. And to what extent should they have a say in what's happening? Okay, so essentially, it's like Robin Hood definitely found a way to do something legally. But you feel like it's raising questions maybe about like the spirit of the law or something like that is that kind of how to frame it? Well, I would say that what they have found is a way of

5:19doing something offshore that is raising issues with issuers. And so that is facilitating a dialogue that really requires some sort of potential regulatory response and how we look at this. And I think there's a very separate parallel thing, which is what's happening in the United States, right? So in the United States, we are in the process of sort of issuing issue response or tokens, which is a little bit of a different model. But that is one where there's a great deal of conversations with issuers and we have them involved in the conversation. I think how this evolves in the United States is going to be a separate question about what's happening offshore. Okay, and I'm so curious because you used to run the SEC division that polices this type of activity. So what is your personal take? Do you find yourself agreeing more with AMC's Erin or more with Robin Hood? Well, I would just say that it's funny. If you give up a job, so I was at JP Morgan for several years and if you give up a very good job to go work for the government,

6:21you're doing it because you really are thinking what is good for the United States, what is good for our capital markets, what is good for issuers, what is good for investors. And so three and a half years or so in that vision and in the SEC, you think a lot about those sorts of questions. And so that always frames my reference on what are we doing in the stock market and what are we doing with tokenization? I believe that when tokenization comes to the stock market, it can be done in a way that unlocks all the efficiencies of blockchain technology, ad utility and ads benefits, but I also believe that when we do this, we still have to maintain investor protections. We still have to pay attention to like, this is the best capital markets in the world, right? It is efficient. It is features a reason why the United States capital markets is as strong and as big as it is. And one thing in this process is we would have preserved that, right? We don't want to potentially sacrifice that by doing things in this process that start to undermine some of that faith and competence in the stock market. So that's sort of my starting premise. When it comes to this issue with AMC

7:23and Robinhood, like, I think they both have good points, right? I think Dan Gallagher was right. Like he knows the securities laws inside and out. Robinhood is just very innovative and they're out there, you know, sort of finding the market and doing things that are within the scope of the law. But that doesn't mean that that Ants and doesn't have a point in terms of like, what about us? Like we should be involved in how, how does this work for our particular companies? So I don't think that there's necessarily a right or wrong here. I think that, you know, Robinhood is showing the market and they're innovating offshore, you know, issuers like them and there's going to be plenty of others because this is happening in other names. They're going to want to know like, what is, you know, what is my role in this? What do I have to say? And how does this affect my company? And honestly, I think that conversation needs to happen in a very meaningful way. Yeah, it's funny actually this notion about how they're allowing people offshore to access the US markets. It is a very like Robinhood type of ethos. So like, anyway, okay. So I do also want to talk

8:26about a moment where I guess the AMC token pair at one point traded at about 60 times the AMC reference price. And I wondered like, if you think that that type of thing is a feature or a bug? Right. So, you know, so what's interesting is like an, and like I'd love to have the conversation with you about the different forms of tokenization because I do think that there's some that are better than others, right? So I think issue-responsive tokens are better than synthetics or custodial tokens that have full pass through of entitlements are better again than synthetics that aren't necessarily passing through all of the entitlements that go to investors. But what's interesting in this particular case is you have a synthetic and then you have mean, mean coins and other things that are even being built off of that. So there's like another derivative. And so in my view, like when I think about what concerns me the most, it's not even necessarily the synthetic product that's been offered off shore. It's all of these other things that are being spun up that

9:29are then paired to that. And the fact is that these are trading in markets that are completely unregulated that are happening over the weekend when there's no underlying market liquidity, where, you know, where people are running trading strategies and look, there's some people who are probably making a lot of money and there's some people who are getting their faces ripped off in the process, right? And so how that is unfolding is a concern of mine. And I think that that sort of pairing in those sorts of dynamics concern me even more than the simple synthetic product, for example, that Robinhood has issued offshore. Okay. So in a moment, we will talk about all these different subcategories within this, like, stock token category. But first, we're going to take a quick word from the sponsors. You make this show possible. 540 million dollars. That's how much concentrated liquidity sat idle in a given week in the first half of this year. About 30% of the DeFi TVL, if you're wondering, that's according to Dune Research commissioned by One-inch. But there's a solution. One-inch Aqua is the new shared liquidity platform. It lets LPs back multiple

10:33positions with the same token balance and keep their tokens in their wallet till a swap comes. Why does that help? Because the LPs don't have to split their tokens across positions. They can cover more market conditions and pairs with their full balance. That means more activity across deeper liquidity. See how it works at One-inch.com slash Aqua. Remember that providing liquidity carries risk and fees aren't guaranteed. Back to my conversation with Brett. So the term stock token, as you alluded to, is kind of casually being used to describe actually multiple products. So why don't you walk through each of the main subcategories and then explain, what it is that you get with each one and even give us a taste of how it's structured on the back end. So there are really three types of stock tokens. That's really important because a token is not a token. When people talk about stock tokens, nobody should assume that this is all the same thing. So the first one, and by the way, these have all been outlined in a document that the trading and

11:36markets division did in fact publish on different forms of stock token. So the first one is issue response or tokenization. This is an area where securities have leaned into quite a bit. That is where we will actually go to the issue where we will talk to the issue about moving the underlying stock out of seeding company or out of the DTCC back onto the register of the transfer agent. And then we will actually tokenize the actual share. So the token that you get is the stock. There's no difference, right? It is not sort of a mirror image of something. It is the stock. And so with that, you pass through full security entitlements. The issuer is involved. The issuer actually knows then can know who the investors are. So if they want to say, these are my retail customers and I want to be able to communicate with them or give them discounts or benefits or even facilitating more efficient voting process, that is all unlocked through issue response or tokenization. The challenging part to that is you have to go issuer to issuer and get them to get involved and

12:37they have to sign up. And then there's some infrastructure work that's done to move tokens out of DTCC back onto the register. But it really does remove that central intermediary. And it really is a kind of a cool web 3 vision for how this can be done. And by moving it out of DTCC, you also unlock portability to sort of non DTC clearing members in the US and you can bring it to foreign markets. And offer this to others where it is actually the token. So one important point to make about that is that you don't need to have synthetics to be able to offer them to offshore investors. And so we can get some port that that sort of offshore market can be done in a way that is actually a sort of a better model. The second model is, you know, I refer to as the third party custodial model of tokenization. And that is where it's sort of one to one back. So every single token that is issued is being held in custody. And it is actually an ownership of that. And with those third

13:38party custodial over tokens, there's actually a couple of versions. Some people will pass through full security entitlements, right? So voting and dividends and the like. And others don't pass sometimes they don't pass through dividends. Sometimes they don't enable voting. And sometimes there's some some other elements to that. I think in the United States, right? So we're expecting an innovation and exemption out of the SEC very soon, possibly as early as next week. And with that, I believe when they talk about the things that are enabled, the third party custodial token will have to pass through full entitlement. So that's going to be I think a very US specific thing and a requirement here. And then the third one is sort of more of the derivative and the synthetic version. And there are different versions of that, right? So special purpose vehicles or as Robinhood talks about a debt instrument, we often just refer to them as sort of rappers or synthetics. And you know, and those are where you don't really have a claim to the underlying security. Again, sometimes dividends are pass through, voting typically isn't. And sometimes they're not.

14:42And depending upon who's doing those, there could be a substantial amount of counterparty risk, right? So when people are buying these, they don't realize that who issued that particular one, because you know, there's like ten of these after, right? So who issued that and what is the kind of party risk and what if they have a problem? And if they do have a problem, I could be completely out of luck. And whatever I just bought, doesn't even exist anymore and has zero value. So they're different models. They have different pros and cons and different risks, certainly to investors. Okay. And so out of the most well-known ones, it seems like so securitized as the first type. It sounds like Robin Hood is the last type. Well, yes, that's right. So securitized is, we are currently we're very focused on issue-responsive tokens. And by the way, Laura, if you know we did that with our own stock, right? So when securitized when public, you know, we're sort of, we want to live by what we're preaching here. So on the day that we went public, we made sure that our stock was available on chain. It is now the largest tokenized stock. You can buy it

15:47through our platform and you can get it with all the regulations in the United States, right? So we can do it while complying with Reagan and S. We can do it while reporting to the consolidated oil trail. So we figured out a way of doing this on chain in the United States within all of the existing security rules. So that's where we've leaned into. I would say that, you know, when the SEC comes out with the innovation exemption next week, if they unlock more in terms of third-party custodial tokens and that's kind of where the market's going to compete, we have to really think about, you know, do we lean into that? Do we try something along those lines where at the same time, we're trying to have a meaningful conversation with issuers? Because we do like the idea of keeping them involved and eventually getting to the point where they're willing to do native tokenization and to see all the benefits that that brings to that company. Okay. And so I would be curious to hear you talk about like the pros and cons of each type of these products because it sort of seems like

16:49for certain investors, each of these types will have pros and cons, but also from the side of the company, maybe the third category from the side of the company is more just a list of cons, but like, I would be curious to hear you parse it that way as well, each category. Right. So first, I think I would like to say that I believe that the issuer sponsored tokenization model brings substantial benefits to issuers. And so it's just a longer process educating them about what those benefits are, but think of it this way, right. So you hear this story, not the bore everybody with the history of this, but we all know like the DTCC was created due to a paper crisis a long time ago when everybody was moving around paper certificates, we are so far away from that world now that the fact that we still have this removal of the ownership of securities from issuers where they don't know who they are, they know the, you know, these are in street name, right. So these are street name where they're holding securities at DTCC. So there's a big D linkage and an intermediation process that happened

17:55for issuers. And that potentially or that should go away with native tokenization where issuers can start to have much more transparency in who their investors are. And that gives them the ability to kind of create this category of sort of the investor customer, right. These are my customers, but they're also my investor. So I see a lot of upsides with that, you know, and there's other dynamics of that, which I won't get into. There's still a substantial build out of the secondary market trading landscape for that. On the third party custodial tokens, like, look, these things could be pretty close, right, because third party custodial tokens, if they're one-to-one backed, and you've actually have an ownership linkage into that underlying share. And if you're passing through voting, and you're passing through dividends, and so on, like, this isn't, this isn't entitlement. And it's worth noting that even in the DTCC world, it's largely an entitlement. Like, when you own a stock, you don't actually own that stock. That's still sitting in DTCC. It's held by seeding company.

18:58It's in street name. So in effect, it's just a different version of a security entitlement, right? So there are some similarities there. I think the issue we have there is that that adds another layer. So instead of, you know, just having like, okay, we have it in seeding company, we have the broker name. Now you have another custodian, right? So whoever the issue is, so if it was Robin Hood or another company, you've been scurried ties, you have another layer that's been added on. So that hasn't removed the layer. It's added a layer, but it has done it in a way where there's an efficient and quick way of spinning up a token that you can then offer out to investors with full entitlements. The synthetic version, I think, is generally the most problematic one. And this is where I'm not sure, like, like, we're testing the markets. So Robin Hood has been testing the market offshore, but is fundamentally, is this a step forward, right? Is this a step forward for markets? Is this adding the investor protections that we have? In some cases,

20:00no, the investor protections aren't necessarily there. You know, are they getting voting? No. So if they're losing some of those entitlements and they're taking a bit of a step back, I'm not sure if it's completely a step forward. On the other hand, I think in early days, it has shown an ability to access, you know, to bring stocks to investors that don't have them. And the last one is sort of these meme tokens that are being built upon these synthetics, right? So now you have this other sort of spin-off group. And this was an anticipated. And I think, I think Vlad Tenev, you know, he also mentioned this in his golden remarks this week, which is like, we didn't necessarily expect to see these, but like, eventually people have to look at, there's a ton of meme stocks that are being created. There's a lot of people who are facilitating this happening. And to me, that sort of the farthest out fringe of the unanticipated consequence, and where most of the potential market noise and the image, you know, potentially happens, the way I summarize it is, it's sort of like,

21:01remember the meme stock kind of craze of 2021? It's sort of like, this is in a way recreating the meme stock craze offshore on-chain all over, right? And so that is where, you know, that is where I think we have to really watch on how that potentially links back to the underlying prices in the actual market. Yeah, I do want to ask though. I mean, it seems like out of all these categories, so for sure, the first one could not be used in DeFi issue or sponsored. I don't know about the third party custodial, but it seems like the synthetic ones are the ones that are most usable in DeFi, or like what's your perspective on that. So actually, that's not true. So, you know, it's secure ties. We believe that you don't tokenize simply for the purpose of tokenizing. You have to create utility for that. And part of the, you know, I think part of the core competency of this company is we're very interested in integrating our offerings into the tokenized ecosystem. So you

22:03will see, you know, we had an announcement recently with our HANK product, which is a new burger, Burmified, and we have it now linked to loop scale. So we're talking to, you know, AVE and Morpho and loop scale and a number of different DeFi platforms where you can, you know, run looping strategies where you can get additional yield. There's no reason why even for issue-responsive tokens, you cannot integrate into the DeFi world. And so, but is this like kind of a KYC version of DeFi? That is a really important point because when we think about the fundamental issues here, right? Number one is, is your consent? Should they be involved? And that's a big debate. But the second key point is, you know, how do we look at permissionlessness and where do we need KYC? And it's like, that debate is, I think, is still percolating up in a big way. And I think with the innovation exception, it will be real because we so far have taken the view that generally, we think that for transferring US securities, having KYC participants in KYC wallets is an important thing

23:10because we believe that under the existing transfer laws, and, you know, if you think about the SEC, some of the rules against manipulation, like, how do you do that if you don't know who people are? How do you know if, if stocks at the US stock market, if we start issuing these things in non-KYC ways, and they start moving to unhosted wallets, and all of a sudden people don't know who they are, and are, you know, is that a revolutionary guard wallet with the Iranians? Like, they don't know. And when you think about the technology that exists to track unhosted wallets, like, it's pretty good, like, they can geolocate, but we also know that illicit actors out there, and this is everything from, you know, Keras financing to, you know, to, to very strong to financial primes, they're very good at hiding. They're very good at spending up things, and there's been a lot of reports about some of these activities. So we have to ask the question, if all of a sudden we've tokenized general dynamic US defense companies, US Silicon about household names, and they're being issued

24:15in a tokenized way, where we don't know who is amassing substantial positions of these, and what potentially that does back to sort of larger geopolitical questions in the United States. Like, those are really meaningful issues that not just the SEC, but like the Treasury Department and the Security apparatus in the United States needs to grapple with. Yeah, I mean, I think like, so my only reaction really to that, I take all your points, is just then it sort of feels like 2015 era, you know, blockchain, not Bitcoin, where we're going to use the technology to make the back end of Wall Street more efficient, and it also reminds me of like the early days of the internet, you know, when I worked at like newsweek.com or wst.com or New York Times.com, and like so much of what we were doing was putting the newspaper on the internet, and so it almost feels like, you know, and I get all your points, so I'm not saying like,

25:18I necessarily disagree, but it still also feels like, wait, so then what changes? Like, what does the innovation bring other than just like, you know, cost savings to Wall Street firms? So, well, okay, so I'll take the other side of that, because, you know, this is, I think we have a very substantial Web 3 vision, right? So, building a marketplace where you can have instant settlement of a, you know, of a tokenized security against the stablecoin, where individuals can access the markets, they don't necessarily always need to go through broker deals. So, it's different between being KYC and having to go through all of the traditional intermediary process. So, instant settlement is a really substantial use case. You know, there, that is inefficiency that unlocks capital. I think that there's going to be markets for stock loan that are going to be really interesting, where the investors actually get a lot more out of what, what is the upside of that as opposed to some of the existing intermediaries and prime brokers and that. I think it unlocks global access,

26:22right? So, in this tokenization vision, we still have the ability to offer these to investors all around the world, right? Because in the IST version, it is free from DTCC. So, unlocks a larger global market. It means that when we look at the market opportunities, they can actually trade on markets around the world, right? In efficient ways. And so, the only difference between, I think, what we're talking about and others isn't sort of all of these other underlying things, like instant settlement 24, 7 global access, you know, greater efficiencies, more disintermediation. All of those things are very real. We just so far have taken the view that we're not sure yet if going fully permissionless and taking away KYC is going to blow back in a bad way, right? So, like, all you need are a couple examples of these things landing in the wrong hands and things going sideways, where it could really be sort of like one step forward, two steps back. And I think this is a conversation that is happening in the Treasury Department with OFAC, with Fenson and elsewhere.

27:26And, you know, we have to say, like, we have a really cool, friendly crypto government right now, particularly with Paul Atkins, but we know that the House is about to flip. We know that the the administration could flip in two years. And SQRITIES has been very focused on dealing for the long term, right? Dilling in a way where whatever we build, we want to be, you know, care forever. We don't want it to be, you know, you know, there's a regulatory rug poll in two years and everything flips back and all of a sudden, you know, people are shutting down business models that otherwise have tons of benefits. Okay, so let's now talk about this question that, you know, has come up a few times, which is, you know, should the issuers get a say in the creation of any of these types of tokens? And it turns out that there has actually been a lot going on behind the scenes about this question. So in July, the Securities Transfer Association filed a petition asking the SEC to reserve any tokenization exemption or framework to products authorized by the

28:31issuers. So, and I know you guys are a member of that organization. So, you know, obviously, in your comments here, it seems like you're aligned with that position. So the next step was that last week, the SEC proposed its first transfer agent overhaul in 40 years. And it actually explicitly cited tokenization as one reason for this move. So, do you feel like token, sure, sorry, stock tokens should only be allowed to exist if the issuers have authorized them or like, do you have, you know, from some of the other categories that we discussed, like, do you have other situations where you could see other types of tokens that would be allowed or like, what's your position there? I think it's a good question and it's a hard question because, you know, are, is every issuer dialed into this discussion and having a conversation about whether or not we should tokenize or not? No, they have other things on their plate. They're kind of watching it for

29:32far. They haven't really been involved. I will say this. Again, I believe the innovation exemption is imminent. And I believe that when the innovation exemption comes out, you know, initially, it was believed that there would be no issuers consent. And as you probably know, there was a lot of pushback, including from the securities transfer association. We have taken a position that we think issuers should be involved. And I believe that the innovation exemption is likely going to do something akin to an issuer opt out. Right. And so, that, you know, sort of the scuttlebot is that when this comes out, people are going to have to notify issuers. They're going to have a certain period of time, I don't know, 30 days or something to like say, yeah, you're nay. And if they don't respond, token people who want to tokenize, they're going to go ahead. And if they say no, then that token is not going to be tokenized. And so I believe that the people who want to do this are going to have to engage with issuers and have meaningful conversations and sell it. Like,

30:32why are we doing this? Why is this good for you? Why does this help with capital formation? Right. You heard Vlad talking to people about we're expanding the market, we're expanding your investor base. These are good things. I think going forward, these conversations are going to have to happen sort of before the fact, not after the fact. And, you know, I will say that like, again, I believe that until, you know, until Aaron and AMC, you know, got loud about this, like most issuers were sort of semi paying attention. I spoke to a near conference, which is a bunch of issuers and I tried to get this on the table with them. But I think this conversation is about to get very real, very fast. And there will be a lot of outreach issuers. And that will happen. Now, if they don't respond, people are going to go ahead. And all of that is a different question than like, what do I believe? Like, you know, like personally and philosophically about this. I also believe that there are substantial benefits to this. And, you know, I think that if the SEC doesn't require issue or involvement,

31:36like we're going to have to compete like everybody else. So we will compete in this market. But in the meantime, we're going to do our best to reach out to as many issuers as we can to educate them about this and try to do something where they see the benefits. And they're happy with it. If for no other reason, they don't try to blow us up on Twitter. And one question, because as far as I understand swaps and CFDs have referenced public stocks, but they haven't needed to ask the issuer, you know, to be created. So like, why do you think that this stock tokens should need consent when, you know, like a total return swap on the same stock doesn't? It's a great point. And people make the same point about ETFs, right? They're also in ETFs. And the issuers aren't involved always in whether they're not, they're being put in ETFs. And so there are very meaningful examples of where there have been products that have been based upon securities where issuers aren't involved, right? Here, I think, you know, so it's a difference. It's a fine

32:39difference. And so I think there's legitimacy to that argument. On the other hand, you're now you're talking about like the actual stock. These are being sold as this is buying a share in XYZ. And so that's, there is a slight difference there, I think, you know, but, you know, that like, it's an interesting legal question. But unfortunately, I think it's a policy question. And like I said, I think the SEC is likely to come out with with some sort of version of an issue opt out on this. But I understand the arguments about why it can be done. Keep in mind again, that is all off sure that's happening off shore, not including all the people who VPN from the US, but for the most part, it's being done off shore. Okay. And last question. So, you know, Robin Hood is holding real shares as collateral across, it's like almost nine, a 200 different public companies. It doesn't, as first I understand, I don't think they've said how they intend to vote with those shares,

33:40but do you have an opinion on what they should do? I believe that if Robin Hood moves and offering to the United States, that the SEC will mandate that it includes full security entitlements, including voting and dividends and corporate actions and the like off shore. Do I think that they should, I think that yes, I think that we should aspire to making sure that the securities that are offered in the market are full sum and offer all of the entitlements. So I think it makes sense to go in that direction. And you probably heard like broad ridges out there trying to offer services to different people tokenizing to facilitate a voting process. But like that also connects to the non-KYC. Right? So like you have to, you have to ask yourself, if you're issuing synthetics and they're going to non-KYC wallets, right? All of a sudden the question is like, I don't know, is is this allocated in Homo, so we're voting my share? Or is it just, you know, like, you know, you know, some individual in another country who's voting the share? So I think for voting,

34:44and even for dividends, like in the United States, you have to know who they are before you issue them a dividend, right? So this is another reason why AMC and I'm sorry, KYC is kind of important. We want to issue dividends. We want people to know who they are. And that way they get that. And if people are like, there's money being left on the table and they're not KYC, and they don't want their dividends or they're not voting, then you got to kind of ask, why do they want to hide so bad? And what are they up to? Which is a separate question. And actually last question, do you have any sense of how many public companies CEOs like, like the idea of these stock tokens or dislike them? Like, do you, do you have any sense of like what the reception is around this? I think it depends on the type of token, right? So I will just say that, you know, as you know, we are doing this today, we have a partnership with computer share and continental, two of the biggest transfer agents, those transfer agents have relationships with companies.

35:47We have done substantial outreach both independently and via computer share webinars, all sorts of information to try to get the word out to these folks. So I would say at this point, there's still an educational process that's in place. And I think that there are some who are really interested in probably on the verge of coming in. There's a little bit of like, who's going to be the first big guy to do this and how's it going to, gonna pan out? But and we're also talking to investment banks, by the way, about doing this as portions of IPOs, right? So when an IPO comes out, we'd like to have, you know, maybe $100 million worth of stock that's tokenized that we can offer out to investors in a tokenized form as part of an IPO. So I think that they're getting there, but I think that it's a little bit early in the learning process. And it's really up to the market to share with them what the benefits are. I think they're going to get there. And I think we're going to start to see a lot more tokenized stocks and a lot more issues saying, hey, this is really cool. I like this. I want to get involved and be part of this. All right, Brian. Well, it's

36:51been so interesting chatting with you and learning about this very fascinating area of security's law. Again, I didn't realize it could be so interesting or entertaining, but here we are. Yeah, I'll just say one last thing, which is, you know, so tomorrow is 9-11. And I live in New York, I worked in the World Trade Center in 1993 when it was bombed. And I worked the block away at 9-11. So I was a runner in the street when the tower one came down. And it's funny because every time I get involved in conversations about permissionlessness, I'm always talking to people about, you know, like, I really care about terrorist financing, right? I care. And so, you know, we have to make sure that is we get really excited about permissionlessness and what that unlocks that there's some really other important things and policy issues that have to de-kept in mind. And we don't want to unlock things that make it easier for bad things to happen. And I think it's just a really poignant point,

37:52especially, you know, today and tomorrow. Yeah, yeah, well taken. All right, well, thank you so much again for coming on on change. Awesome. Thanks so much for having me and really appreciate it. Great job. And thanks to everyone who joined us. We will be back next week. Have a great week and everyone. Now, thinking you're on Unchained is investment advice. This show is for informational and entertainment purposes only. And my guest and I may hold assets discussed on the show. For more disclosures, visit Unchained Crypto.com.