In this episode of Block and Order, hosts Kyle Lawrence and Moish Peltz break down the latest shake-ups in crypto law. They unpack the SEC’s decision to classify memecoins as non-securities and what that could mean for investors and the industry. They also discuss the SEC dropping several cases, Argentina’s President Milei making waves by promoting memecoins, and a massive Ethereum heist from Bybit—allegedly pulled off by North Korean hackers. Plus, they dive into A16Z’s latest take on token classification and President Trump’s plans for a Crypto Reserve.

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Chapter Markers:

00:00 Welcome to Block and Order
02:30 Memecoins
06:55 SEC Case Withdrawals
11:25 The Reserve
15:30 LIBRA
21:42 Token Taxonomy
27:38 Bybit

Show Notes:

SEC says memecoins aren’t securities, but fraud will still be policed
https://cointelegraph.com/news/sec-memecoins-arent-securities-fraud-still-policed

SEC Withdraws Appeal As Crypto Industry Pushes Back
https://cryptocoin.news/news/sec-withdraws-appeal-as-crypto-industry-pushes-back-126303/?

Donald Trump Names XRP, SOL, ADA, BTC and ETH as Part of U.S. Crypto Reserve
https://www.coindesk.com/policy/2025/03/02/trump-to-establish-u-s-crypto-reserve?utm_source=Sailthru&utm_medium=email&utm_campaign=march%203%202025&utm_term=The %20Node

Argentine President Milei Remorseless After Promoting LIBRA Scam
https://thedefiant.io/news/people/argentine-president-milei-remorseless-after-promoting-libra-scam

Defining Tokens
https://a16zcrypto.com/posts/article/defining-tokens/

We Now Know How Bybit Was Hacked for $1.4 Billion in Ethereum
https://decrypt.co/307866/how-bybit-hacked-1-4-billion-ethereum

Watch or listen to the podcast here:

   

Transcript:

**This transcript has been prepared automatically by AI and may contain inaccuracies**

Kyle Lawrence [00:00:00]:
A gentler SEC. Holy hack. And good news, everybody. Memecoins are not securities. All that and more coming up on Block and Order. Welcome to Block and Order, the show that explores the legal issues facing the world of Web3 and beyond. I’m Kyle Lawrence, and with me, as always, he’s one of those, the book is always better than the movie guys. Mr.

Kyle Lawrence [00:00:30]:
Moish Peltz himself.

Moish Peltz [00:00:31]:
But the book is always better than the movie, Kyle.

Kyle Lawrence [00:00:34]:
Off the top of your head, what instance is true of that?

Moish Peltz [00:00:40]:
I got one. I. I mean, almost every instance, but. But look, I’m a huge fan of the Lord of the Rings movie series. I’ve watched all the films. I’ve seen all the extended editions. I’ve even seen the Hobbit films that. Not quite as great.

Moish Peltz [00:00:57]:
That’s actually probably a really good example where the book is way better. As good as the films are, maybe the best fantasy films of all time. Yeah, the. The books are better.

Kyle Lawrence [00:01:07]:
It’s true. The books.

Moish Peltz [00:01:08]:
Now Game of Thrones, I started. I read the books after I started watching the series, and I was like, you know what? These aren’t that good. Because everything cool that happens in the books I already saw in the series.

Kyle Lawrence [00:01:21]:
It’s true.

Moish Peltz [00:01:22]:
Maybe it’s also just a timing thing.

Kyle Lawrence [00:01:24]:
I only read the first one of those and it was almost beat for beat. The same exact thing as the first season of the show. Spoiler alert, everybody, by the way. And I just. I don’t know, I felt disinterested in continuing it. Love the Lord of the Rings books. I read the Hobbit book and. Yeah, the Hobbit movies I’m not a fan of, but in the battle of the five armies, I don’t know what the five armies are.

Kyle Lawrence [00:01:44]:
There’s. There’s the humans as the elves, there’s the dwarves, then there’s the orcs, and then there’s the. The worms. Things that tunnel through the ground. Seriously, I. I’m.

Moish Peltz [00:01:57]:
You lost me like, like 90 seconds ago. Yeah, yeah. No, I mean, I. I’m sure I knew this when I was like 16.

Kyle Lawrence [00:02:04]:
But we have to post the graphics up on the screen of what they actually are because I legit. I saw that movie twice and I legit. Don’t know what the fifth one, The Eagles. I don’t know.

Moish Peltz [00:02:12]:
Yeah, its probably the Eagles then.

Kyle Lawrence [00:02:14]:
So ridiculous. Well, we could talk about Lord of the Rings all day and night, and God knows I’m capable of it, but alas, we have a lot to cover here on the show. Moish, don’t We.

Moish Peltz [00:02:24]:
We always do, Kyle. We always do.

Kyle Lawrence [00:02:26]:
We do. Why don’t you kick us off with the top of the order, the huge story?

Moish Peltz [00:02:30]:
All right, well, top of the order today is the SEC has declared that memecoins are not securities, but we’re still going to police some fraud. But anyways, let’s. Let’s give a little round of applause for the SEC for finally, after four years of us saying. But, Kyle, if only they could say what all of us think. It might just make it a little bit easier for people that participate in this market to both issue and buy stuff tokens without being confused about how the law applies. But here we go. Applaud the SEC’s Crypto Task Force, the SEC’s Division of Corporation finance, which issued a staff statement, this is on last Thursday, February 27, stating that memecoins are akin to collectibles. They do not involve the offer of sales securities and security laws and do not require registration with the SEC.

Moish Peltz [00:03:26]:
So what do you think, Kyle? Did the SEC get it right?

Kyle Lawrence [00:03:30]:
Yes, the SEC absolutely got it right. The crypto task force headed by our good friend Commissioner Hester Peirce. She heads the crypto task force. She clearly had a hand in this because this is codifying a lot of the things that she has been saying all along. This statement doesn’t really. I don’t want to say it changes things. It doesn’t really move the needle because the SEC had been operating like this for really the past couple months, and it was obvious that this is what the guidance was going to be. But the fact that they actually put this down in writing and just told the world that this is how we’re going to be policing or not policing these things is fantastic.

Kyle Lawrence [00:04:07]:
And it’s. It’s definitely a step in the right direction, in a series of steps in the right direction that we’ve been experiencing and then we’re going to continue to talk about on the show. Do you think that. Well, let me back up. What do you think is the next step for them? Because we’re going to talk in a minute about the other things they’ve been doing. But now that they’ve said this about memecoins, what comes next? Is it actual legislation about how to do these things legally, or is it just, go ahead, launch your memecoin, just don’t defraud anybody.

Moish Peltz [00:04:33]:
Well, I mean, I think that’s what this is, right? I mean, so it’s. You got to be a little careful, right? Because this is not a judicial opinion. This is not an opinion of the the full SEC commission. Right. It’s, it’s, it’s just the. It’s not law. It’s regulatory guidance which may or not be correct and is not really binding in any real respect. So it, although I would say if you’re a market participant that’s now relying on this and you’re saying, well, this is what the SEC has said, that memecoins are not securities.

Moish Peltz [00:05:08]:
And the article says, here’s what we define as a memecoin. This kind of memecoin is not a security. So you have to fit within those boundaries to even rely on whatever it’s worth. But yeah, I mean, I think that it’s a great starting point now. The SEC is now convening roundtables and inviting participants to come in and talk about different categories of tokens and whether they should or should not be regulated by the SEC and how so. So I think, I think the idea is like, this is something that’s in the news. It’s low hanging fruit. We can just stand up and say that’s not a security.

Moish Peltz [00:05:45]:
That’s easy for us to do. Now let’s start diving into the issues of the ones which are perhaps a bit more complicated and go from there. So I think that’s great. I think that’s exactly the right approach. That’s how you regulate. Right?

Kyle Lawrence [00:05:59]:
It’s definitely nice to see the regulatory agency accepting these people. And we’ve talked about this a couple times. We talked about it with Commissioner Peirce and the idea that if you’re unsure of how to do this, you should be able to approach the SEC and say, hey, tell me what to do here. The fact that they’re opening their doors, the fact that they’re giving this guidance, it’s just, you know, I don’t want to beat a dead horse, but it’s another just correct move in a series of correct moves that they’re finally making, you know, Operation Choke Point is a thing of the past. Now we have a warmer, friendlier neighborhood SEC that is welcoming innovation and welcoming change and, and fostering these kinds of businesses. So obviously there’s still a lot of riff raff out there. We see it all the time. There’s still people who are, you know, they are committing fraud, let’s call it what it is.

Kyle Lawrence [00:06:42]:
And there’s rug pulls out there. But the fact that you can now in good faith issue a memecoin and not have Sauron’s eye gaze upon you, I think is a wonderful thing.

Moish Peltz [00:06:52]:
Nice callback to Lord of the Rings. I love it.

Kyle Lawrence [00:06:54]:
It all come. It all comes together. More good news from the SEC. We got a lot of dropped actions and investigations and whatnot. Just in the past couple weeks, the SEC has withdrawn cases against Gemini, Kraken, Consensus, the makers of Metamask, Justin Sun and TRON, OpenSea, Ripple, and of course Coinbase, and suspended its investigations into Uniswap, Robinhood and just, yeah, I think yesterday or two days ago as Yuga Labs. And lastly, they paused their lawsuit against Binance for a period of 60 days. Just interesting to note about Consensus and Yuga Labs specifically. Consensus it was.

Kyle Lawrence [00:07:27]:
The SEC was arguing that they had engaged in securities violations, related staking services and some of the swapping features in their platform. And in Yuga Labs, the SEC initiated its probe in late 2022 to determine if the NFTs functioned similarly to traditional stocks and thus fell under US securities laws. Something that we’ve talked about a lot, something that’s come up in the past couple of years with Stoner cats and Impact theory and library. So now that the fact that, you know Yuga Labs, this suit is being dropped, I wonder what those guys are thinking. But, Moish, I mean, I know what you think, but what do you think about this? This is great.

Moish Peltz [00:08:03]:
Yeah, I mean, look, it’s great. These are all cases that, you know, we were scratching our head and like, how is this going to go? I hope this doesn’t, you know, like, who knows what a district court judge is going to do when they see these things and whether they’re really going to understand crypto. And what’s the likelihood that one of these cases results in this kind of crazy adverse result that says something which everyone that’s participating in this market says, I don’t think that’s a security. I don’t think that’s a securities transaction. I don’t think they’re offering anything with the expectation of profit to fit the Howey test. Yet we do have some of these decisions out there, like the Ripple decision, like. And so look, I think it’s great that these cases are being withdrawn. I would just say just because they withdrew a case, in fact, and almost all the dismissals, they’re saying, we’re not withdrawing this case as a concession that what the company is doing or has issued, the tokens they have issued are not securities.

Moish Peltz [00:09:02]:
We’re withdrawing the case because we feel like for whatever reason we want to withdraw the case. There should be no precedential value to the withdrawal of the case. So, I mean, that’s the position they’re taking. And so this is like the flip side of what we were just saying, how they’re working hard to get roundtables together and start defining different kinds of tokens and what they are and how you can issue them and whether they’re securities or something else. But this is not really part of this is like pulling back the enforcement, but it’s not providing real guidance, isn’t it?

Kyle Lawrence [00:09:36]:
But it’s. But in the, to, in that vein, one can make the argument that the very existence of the enforcement action. So we’re saying that they’re not withdrawing the case because they. Saying what they’re doing is okay. They’re not saying that. However, the imposition of the case in the first place, it was almost just presumptively. We don’t understand what you’re doing, but what you’re doing is wrong, and therefore we’re going to haul you into court. It’s.

Kyle Lawrence [00:09:57]:
It’s kind of the inverse of that, which is kind of an interesting way to think about it, because some of these things aren’t securities. It’s obvious they weren’t. Yet they were being forced to spend millions of untold sums to lawyers to fight this cause, these causes of action, which is silly to me. So the fact that. And I, by the way, I agree with you, but it’s just an interesting paradigm to look at these cases and just see the paradigm shift from one administration to the next.

Moish Peltz [00:10:24]:
Well, I think both can be true. Right. It can be ridiculous that they ever brought a suit saying that a Bored Ape is a security like that can be ridiculous. But it still stands that, that their withdrawal of the case doesn’t mean that it’s. It’s a concession that it’s not a security. And, and they were. It was styled as an investigation. Right.

Moish Peltz [00:10:45]:
So it’s like, well, we, we’ve investigated and we’re just not going to bring an action at this time for any one of a million reasons. It could just be, you know, political or I don’t like my hair today or whatever else.

Kyle Lawrence [00:10:56]:
Right. Reminds me of the, the line from the movie thank you for Smoking. A great movie from, I think, 2008, where Aaron Eckhart gets on, you know, gives an interview on national television. He says, you know, if, if Congress has, you know, still my invitation is out there. And they’re like, it’s called the subpoena. Yeah, it’s like it’s on. How you phrase it. We’ll post the link.

Kyle Lawrence [00:11:16]:
We’ll post the actual clip of him saying it. I delivered that terribly. But you Get.

Moish Peltz [00:11:19]:
That’s a good one. That’s a good one. Yeah, it’s. It’s a subpoena. Yeah. It’s not an invitation. All right, next topic on the order is the crypto reserve. So President Trump has finally announced details on, or has announced that they’re planning on launching details for a US Crypto reserve which initially was launched discussing, you know, bitcoin, xrp, Solana, Cardano, and Ethereum.

Moish Peltz [00:11:50]:
There was a bit of controversy over the order of which those five cryptocurrencies were announced and whether that is the first and right five cryptocurrencies that should be part of reserve. A lot of bitcoiners are saying, well, it should just be bitcoin and nothing else, which I kind of agree with. So, Kyle, what do you think? Is that the right first five? Should it only be bitcoin? Is this the right first step by the administration?

Kyle Lawrence [00:12:19]:
Well, we’ve talked a lot about this, and there’s been a lot of scuttlebutt about this. Obviously, we were there in Nashville when he announced it, and Cynthia Lumis announced it as well, about the bitcoin reserve and bitcoin makes sense for a variety of reasons. And you definitely brought up the fact when we talked about it subsequently, about the states introducing legislation to create similar reserves, and you said, well, a national reserve is great, but if everybody has their own reserve and they’re going to treat it differently, what does that mean? That’s going to lessen the effect of what they’re trying to do. And in some of the conversations I’ve had since this news came out the other day, I mean, bitcoin, we all agree that this is a good thing, but when you start introducing some of the altcoins, does that dilute the benefit of what they’re doing, even though they’re different and does this. I don’t know if it carries necessarily the same weight because they’re not as scarce as bitcoin is. And the other world, the rest of the world, doesn’t necessarily treat these assets the same way. It just seems like they’re overplaying their hand a little. I.

Kyle Lawrence [00:13:15]:
I don’t know. It’s. I just. Something smells off to me.

Moish Peltz [00:13:18]:
Well, I think for me, the big distinction is, is bitcoin, as far as we know, has no issuer. It has no promoter, it has no one. There’s no foundation. I mean, at least not driving. It’s a, you know, the backbone of it. Right? There might be people, there might be fans of bitcoin. There’s the bitcoin conference, which, that’s even where Trump made the announcement. Right.

Moish Peltz [00:13:40]:
So he’s, he’s, he’s saying the bitcoin reserve at the bitcoin conference, but here we are and there’s four other tokens attached to it. Whereas Ethereum, Ripple, Solana, Cardano obviously do have promoters, they do have foundations, they do have people that are incentivized to get these tokens into the reserve. So I think that’s for me the big difference. It feels to me like a scary and slippery slope of now you have an incentive for profit motivated actors. Not saying that specifically about any of the, you know, particular foundations here, but if, if you’re, if you’re the sixth or tenth crypto and you want your token included in the reserve now you’re very heavily incentivized to start getting really political and say, here’s why my token’s great. Here’s all the things I’m doing at Mar a Lago. I’m attending, you know, the White House crypto summit that’s coming up and I want my token to be in the next batch of, of reserve assets.

Kyle Lawrence [00:14:39]:
Yeah.

Moish Peltz [00:14:40]:
And that’s where I’m concerned that it’s going to, that’s going to splash back and make the industry look like the whole point is to pump bags and not to have some, some larger, more universal purpose behind the reserve.

Kyle Lawrence [00:14:57]:
Yeah, that’s a great point. I mean, as always and well thought out. You know what’s interesting, and we don’t really talk too much about markets, you know, on the show because we’re a legal show, but as soon as that announcement came out, I mean, all these altcoins shot up 30% and everything was great. And then the next day, Monday morning, everybody got back to their desk and saw the news about tariffs and trade wars and all these things and it just immediately got wiped out in 24 hours.

Moish Peltz [00:15:24]:
It is pretty funny that we’re still.

Kyle Lawrence [00:15:26]:
You know, like, what goes up must come down, I guess.

Moish Peltz [00:15:28]:
Yeah, there we go.

Kyle Lawrence [00:15:30]:
Argentina’s President Milei is under fire for promoting the LIBRA memecoin that resulted in millions of dollars in lost profits for investors who were subject to this alleged rug pull on February 14th. Happy Valentine’s Day. President Milei promoted the LIBRA cryptocurrency through his official social media account. This endorsement caused the token’s value to surge from virtually nothing to $5.20 within about 40 minutes. However, the value plummeted by 85% shortly thereafter as the founders holding 70% of the token sold off their shares, Resulting in approximately 87 million in profits for them and significant losses for around 74,000 investors, including my dear friend, Mr. Moish.

Moish Peltz [00:16:13]:
I’ll, I’ll raise my hand as having lost some money on LIBRA.

Kyle Lawrence [00:16:18]:
And look, the only reason I didn’t get it on it is because I was not at, at home when it, when it was announced. Let’s just be honest. So I would have been right there with you, buddy. You know what? What?

Moish Peltz [00:16:29]:
Not. Not the first, it won’t be the last.

Kyle Lawrence [00:16:31]:
Not the first, and certainly not the last. You know, since then, there’s been a lot of criminal complaints filed against the president, including allegations of fraud, breach of public duty. Opposition parties are calling for his impeachment, and both Argentina and US authorities, including the FBI, are investigating the matter. Is this another Hawk Tuah? I mean, what culpability does he have? Yes, he promoted it, but it did he. Was he subject to bad advice? What happened here?

Moish Peltz [00:16:56]:
I don’t know. That’s what it sounds like. You know, we don’t have all the facts and, and we’ll, you know, reserve judgment until we get them. And, and if, if and when it’s, you know, discussed in a court proceeding. But from the outside looking in it, it sure seems like he just was asked if he wanted to promote a coin like any other influencer, except instead of being any other influencer, he’s the, you know, leader of a sovereign state. And that resulted in a really crazy, I mean, just being around on the market at that time, it’s just the amount of volume and you just feel it in the market is nuts. And then for that to just immediately evaporate is just such an abrupt and insane feeling. Right? So that’s what happened, right? Tens of thousands of people who bought the token got rug pulled.

Moish Peltz [00:17:48]:
And who are they going to look to? The actual legal founders of the project or the president of a sovereign country who promoted on his Twitter account. So I think the answer is probably both. But there’s consequences, right? And so this is something that we talk about all the time, is if you’re just an unwary promoter of someone else’s Token, you got to be careful, right? You don’t need, you don’t know. I mean, this is 40 minutes and there’s billions of dollars of losses. You got to be careful what you promote. You got to be careful how you talk about it. You got to make sure all the legal things are in place, and you got to ultimately be prepared for the blowback if things go awry as they did here.

Kyle Lawrence [00:18:34]:
No, it’s true. It’s a great point. And it’s worth noting that since this incident, the memecoin market has been just absolute garbage for anybody who’s actively or was actively trading. And it’s been really in the dump since. If I can ask you a tricky question, Assuming that the SEC statement from last week is settled law, how would that fit in here to this specific thing? Is this fraud just because he promoted it on his social media channel? Because he could be like, I, I didn’t know. I just work here. I’m, I’m only the president, you know, what do I know? I’d be curious to take your temperature on that.

Moish Peltz [00:19:09]:
It is a tricky question, but I, I like the setup, which is, okay, this is a memecoin that has, it has. Well, is it a memecoin? I mean, the pitch was as a memecoin. They explicitly said this is a memecoin, but there was, I think, some utility inherent in it and that the proceeds were going to be used for development in low income areas in Argentina, which is certainly a worthy cause. Right?

Kyle Lawrence [00:19:37]:
Yeah.

Moish Peltz [00:19:38]:
I think if they said, hey, just like give us money, maybe they would have gotten something like that. I don’t know. Right. But then, but then if Milei is promoting something that let’s just take as an assumption that it’s not a security because it’s a memecoin and he’s promoting a non security memecoin, then yeah, is, is there, is there any, is it just, it’s a non security, you can do whatever you want. Buyer beware. Sorry, you lost a lot of money or is this to the level of fraud where the project was saying, here’s what you can expect in terms of distribution and use of funds of proceeds and what we’re marketing and what Milei is saying and that the, the reality of what happened post launch materially differed from that in a way that was actually fraudulent and I don’t know. Right. I think, I think this is a good point.

Moish Peltz [00:20:33]:
Right. Of even if you say, okay, this is definitely, definitively a memecoin, there’s no registration requirement. Are these guys out of the, out of the, you know, out of the forest here and think the answer is I don’t, I don’t know.

Kyle Lawrence [00:20:46]:
Yeah. Be curious to see how this unfolds in the coming weeks. If there is an impeachment proceeding, if there is more court proceedings and just more information comes to light, maybe this guy was the puppet master behind it all. Who knows? I don’t know, we’ll see.

Moish Peltz [00:20:59]:
Yeah, but you’re right. Either way, this, this ended up being the, the turning point of the entire memecoin market. And almost everything after this has been, I don’t know, a disappointment. What’s the right word?

Kyle Lawrence [00:21:11]:
Not great. The trenches are not a happy place right now.

Moish Peltz [00:21:15]:
The trenches are have gone from a fun, stylish, money making trench to like the World War I. Like you’re up to your knees and like mud trench.

Kyle Lawrence [00:21:25]:
So breathing mustard gas. Yeah, it sucks.

Moish Peltz [00:21:27]:
Yeah, the mustard gas has come out. Someone should write some, some poetry about these memecoin trenches.

Kyle Lawrence [00:21:38]:
Producer Shaun, it’s up to you.

Moish Peltz [00:21:42]:
All right, on to our next order topic. There was recently a, A16Z or Andreessen Horowitz, Cryptos division released a token taxonomy report which the authors, friends of the show, Miles Jennings, Scott Commoners and Eddie Lazarin attempted to categorize tokens, all sorts of tokens, whatever token there might be, into essentially seven distinct types. And we can go through here. But the type, the seven types are network tokens, security tokens, company backed tokens, arcade tokens, collectible tokens, asset backed tokens, and memecoins, which we’ve talked a bit about on the show already. So Kyle, before we even get into the different types of tokens and how they differ, what’s your thoughts on the value of their attempt to try and break up and divide all the different types of tokens out in the sea into these seven types?

Kyle Lawrence [00:22:43]:
I think this is a great distillation of the different ways in which you can create a token like this. We’ve seen different attempts, but this is probably the most concise and the clearest. And we can post a link the article in the show notes, just so everybody can see the chart that they provided. Look, we get calls from clients all the time who say, you know, I’m doing this thing. Is that a security token? And we try to walk through, it’s like, well, it’s kind of a utility token. Or it’s like, well, nah, it’s really just a memecoin. The reality is there are different ways to classify these kinds of tokens. And one of the things that you and I have talked about a lot is the fear that I’ve had that when Congress does ultimately release legislation on these things, it’s just going to be one broad brush and they’re not going to distinguish between different types of assets.

Kyle Lawrence [00:23:28]:
NFTs, stable coins, utility tokens. And now we have this. It’s, it’s a great step in the right direction. I feel like I’m saying that a lot today, but, but that’s what it is. And I think that if we introduce this into the narrative and people start to understand the differences, it’s only going to help us create a better product and help us legislate and define what is, what is not allowed. Depending on what you’re doing. This is great. I love this.

Moish Peltz [00:23:54]:
Yeah. You know, I see what you’re saying. I mean, my first impression was all the, like these distinctions are almost meaningless because any token, it can evolve, it can be, it can be one or two or seven of these different things depending how it’s used in its ecosystem and depending on which technology it relies on, which could even allow like an NFT to convert into a security token, which can convert into an asset backed token, a network, et cetera. Right. So like all these things could be one thing. So that’s why I’m like a little bit like, well, why are we dividing them up? Is it just a distinction that doesn’t really matter? But hearing what you’re saying and hearing you say it and hearing Andreessen Horowitz say it, I think, I think is true, is you really need, I think it’s a useful way to break them up and say these are seven different types of tokens and the regulations need to be different for each different little token. And that a security token which represents a stock or a bond, like on NASDAQ but in tokenized form, should be regulated differently than an nft, which should be regulated differently than an asset backed token, which should be regulated differently than a network token which they’re defining as like a layer one, like Ethereum consensus style token. So that, that makes sense to me and I think it makes sense to break it and distill it into more simple terms.

Moish Peltz [00:25:20]:
And I think part of why they’re doing it now with the, you know, I’m just assuming that with the crypto roundtables of the SEC and the roundtable happening at the White House, it’s, it’s starting to make the conversation about how we’re going to regulate these different tokens, how the legislation that’s pending is going to treat these things so we can have a more, you know, like common ground when it comes to vocabulary.

Kyle Lawrence [00:25:45]:
Sure. That, and, and the fact that you’re seeing a lot of companies and developers and, you know, companies all over the world talk about asset backed tokens and you’re just going to start seeing that kind of push happen more and more in the coming years. So I Think it’s, I think it’s a worthy distinction. I hear what you’re saying, but you know, the fact is that these things are different. You know, a utility token or.

Moish Peltz [00:26:09]:
Well, you’re saying utility token, but the utility token is not their thing. So I think that’s part of the problem is a utility token could be, I think three or four of these. It could be a network token, it could be a company backed token, it could be an arcade token, it could be an asset backed token, it could even be a memecoin. Right. But I think they’re saying let’s drop utility token. That’s just not a useful definition.

Kyle Lawrence [00:26:31]:
Get into like a governance token versus you have a video game and you have an ecosystem and you need tokens to ascend, you know, from level to level in the game. Like that’s not a, you know, that, like that’s a worthy of a distinction. Is much different than a token evidencing an ownership in a real estate fund. You know, it’s, it’s that kind of thing. And I think that’s where the distinction be. I mean, it sounds obvious, but it’s so obvious no one had ever really said it before. Right.

Moish Peltz [00:26:56]:
They were still kind of having these basic building blocks.

Kyle Lawrence [00:26:58]:
Right.

Moish Peltz [00:26:58]:
But I think, I think that’s exactly it. And that’s why when you were saying what you’re saying, I’m like, oh, that makes sense. The market is just saying I want a utility token. I want to. I mean, memecoin. Memecoin is one of the ones in here. But it just, it like the vocabulary is just too big and too unhelpful and so defining new categories that we can use to refer to different styles of regulatory approaches to each style of token, even if in reality it’s more complicated on the back end and they’re all kind of merge into one and evolve and whatever else. At least we have some common vocabulary for how regulation could regulate different uses of different styles of tokens.

Kyle Lawrence [00:27:39]:
Last up on the order, Bybit. Oh my goodness. They were.

Moish Peltz [00:27:43]:
Oh my goodness.

Kyle Lawrence [00:27:44]:
Oh my heavens. Oh my word. Oh, hot dog. North Korean hackers. Oh heavens. Oh heavens. North Korean hackers are suspected in the historic theft of 1.4 billion in Ethereum from Bybit. 1.4 billion with a B.

Kyle Lawrence [00:27:57]:
The hackers exploited a fall, a flaw, excuse me, in the wallet transfer process by focusing on the cold to warm wallet transfer, where funds move between offline and online storage. They allegedly replaced Bybit’s multi sig contract with a malicious one and used blind Signature tactics to bypass security checks. The attack happened very quickly, showing automated fund movements and a predetermined strategy to hide the stolen assets. They also took staked ether tokens, making recovery more difficult. My goodness, Moish. The biggest hack in crypto history. I mean, where to begin? What do you think about this? This is insanity.

Moish Peltz [00:28:33]:
It, It’s. I mean, the scale of. It’s insane. The fact that they exploited a multi sig contract, which everyone’s like, this is safe. We have multiple signers.

Kyle Lawrence [00:28:44]:
Yeah.

Moish Peltz [00:28:45]:
You know, what we’re doing. It’s sophisticated exchange. The fact they bypass that is insane. The fact that they were immediately able to, to, I think, launder and, and clear almost all the funds is, Is insane. I, I’m, I’m. It’s just, it’s unbelievable. I mean, I know here we are, it’s 2025, and the market cap of crypto is $2 trillion. So, like, the market cap is larger.

Moish Peltz [00:29:13]:
The exploits are going to be relatively larger. I get that. But it’s just, it’s, it’s stunning to see all that happen in like, basically a week. And I think the reality is this is going to ask a lot of people. I mean, like, as much regulatory progress as we’ve made, these are the kinds of things, right? North Korea clearing 1 1/2 billion dollars in hacked proceeds is one of those huge setbacks that says, what are we doing here? Why are we regulating you guys so loosely? Why don’t we start cracking down on stuff? That’s the real fear to me.

Kyle Lawrence [00:29:48]:
The most interesting aspect of the fallout from this is the fact that the crypto community was debating whether Ethereum should reverse some of the transactions to recover these stolen funds, similar to the 2016 DAO hack. But opponents of that, saying, well, the rollback would undermine blockchain’s immutability, which is the core principle of decentralization. So, I mean, that’s a pretty interesting argument to be made. You know, it’s. Where do you land on that? I don’t know what’s correct, what’s right and wrong. I mean, people lost their shirt, you know, through no fault of their own.

Moish Peltz [00:30:24]:
Yeah, I mean, I, we’re. Same. Same concept, right? I mean, in 2016 with the DAO hack, and, you know, that that was almost 10 years ago now, we’re in a very different crypto world, and I think the idea that we would just roll back the Ethereum blockchain in the same way is, Is almost unthinkable. I think, you know, maybe it’s. If we do a targeted fork that just deletes the North Korean wallets and. And either freezes or rolls that money somewhere more useful. I guess let’s, like, hear the idea, but I don’t know. It seems complicated.

Moish Peltz [00:31:09]:
It seems like this is really a geopolitical question, not a technology question. But the reality is the technology enabled North Koreans to declare all this money. And that’s. And that’s a problem.

Kyle Lawrence [00:31:23]:
You said 2016 was almost 10 years ago and I wanted to punch you lovingly. But nonetheless, look, as I was saying.

Moish Peltz [00:31:34]:
It, I was like, yeah, someone please punch me in the face. I’ll take it.

Kyle Lawrence [00:31:38]:
I would never do such a thing.

Moish Peltz [00:31:40]:
Don’t.

Kyle Lawrence [00:31:40]:
Don’t say that.

Moish Peltz [00:31:41]:
We don’t condone violence here. Block and order.

Kyle Lawrence [00:31:43]:
No, exactly. Violence is bad. Well, thank you for joining us on this episode of Block and Order. Please don’t forget to like and subscribe to our channel. If you have any comments, please leave them on. Leave them down below. We take those comments very seriously. We try to reply to all of them.

Kyle Lawrence [00:31:57]:
Don’t forget to follow us on all our socials. Links are down below in the show notes. Please note that this show is meant for informational and entertainment purposes only. This is not legal advice except no violence, no punching. Moish, Please hire your own attorney if you’re going to take the plunged down the rabbit hole. Neither the discussion of nor the fact that Moish and I may own any of the assets that we discuss on the show is meant to serve as an endorsement of such assets. Very special thank you to producer Shaun who has homework on this episode based on our discussion prior. So on behalf of Moish Peltz, I’m Kyle Lawrence.

Kyle Lawrence [00:32:25]:
Take care, everybody.

Moish Peltz [00:32:26]:
See you next time.

Please note that this show is meant for informational and entertainment purposes only. This is not legal advice. Please hire your own attorney. The hosts or guests appearing on Block and Order may hold cryptocurrency, NFTs, or other digital assets from companies mentioned during our programming. This possession of digital assets does not constitute a professional endorsement, legal advice, or financial advice. Listeners are encouraged to consult with their own legal and financial advisors for personalized guidance in the blockchain and cryptocurrency space.