This Week in Startups
00:03:32 · Jason Calacanis, Lon Harris
[00:03:32] S0: -Yeah. Because I think what happened was CZ was at some point pardoned by Trump. Mhmm. And then before that, he had done something to go to jail. Correct? Like, there was This [00:03:49] S1: was... Binance had been banned in The UK. Barclays, was taking action against them, and Binance was banned in The UK. That was the context here. I do, the CZ conviction that Trump pardoned him on, that was... Guilty plea was 2023, sentencing was 2024, and then they got the pardon in 2025. [00:04:09] S0: Was that a United States thing, or is it outside The United States? I was trying to remember all the CZ stuff. This is one of the interesting things about these pardons and white collar crime or alleged crime. You know? He could have been innocent, and, Trump saw this tremendous injustice and did the right thing. [00:04:32] S1: Was the the US department [00:04:33] S0: something else. [00:04:35] S1: The US department of justice is what it went after him. CZ is a Canadian national. [00:04:40] S0: So did he go to jail in Canada, or did he go to jail in The United States? I I I don't know The United States. Case is... Yeah. There's so many of these that occurred at the same time. Nikola, obviously, the founder of Nikola, and obviously FTC, and Elizabeth Holmes. And two of those people still in jail. The other two got pardons. CZ's worth a $110,000,000,000. Wow.
00:04:40 · Jason Calacanis, Lon Harris
[00:04:40] S0: So did he go to jail in Canada, or did he go to jail in The United States? I I I don't know The United States. Case is... Yeah. There's so many of these that occurred at the same time. Nikola, obviously, the founder of Nikola, and obviously FTC, and Elizabeth Holmes. And two of those people still in jail. The other two got pardons. CZ's worth a $110,000,000,000. Wow. [00:05:06] S1: Yeah. He did go to jail in The United States. He plead plead guilty to The US Bank Secrecy Act violations and failing to maintain an adequate anti money laundering program at Binance. He was sentenced to four months in prison. He served his sentence at a low security facility in California. Oh, Lompoc. Famous California prison. Lompoc.
00:05:26 · Jason Calacanis
[00:05:26] S0: And he owns, 90% of, the company, so this is obviously very personal. I think, you know, I'm gonna... Putting aside whatever happened with CZ previously, he's obviously worth tens of billions of dollars, and this would be a fatality if he hadn't backstopped it. And so you you gotta give him credit for getting on this early and backstopping it. I know he was, on Twitter, like, while this was happening in real time, saying, no problem. No problem. People were dunking on him. But I'm gonna stop for a second and give him some credit. For somebody who's worth tens of billions of dollars to say, this happened in my crypto exchange. I am... He he's... It's not a public company. He owns 90% of it. It's a privately held... Tightly held company. For him to just come out and be like, don't worry. Backstopping it for $3.04, 5,000,000,000, whatever the losses are. That's great. That's significant. That's probably 20% of his net worth or something. But better to keep you up for 80% and pay this. I'm just gonna give CZ, you know, a shout out here for doing that, but I will stand with my comments previously, which is, it's a bit crazy to keep a large amount of your net worth in any one bank account exchange, etcetera, in today's market. We learned this from Silicon Valley Bank, where the FDIC limit is $250,000 per account. I don't know if that's changed at all. And then, a bunch of the, I don't know if it was RAMP or Mercury or Silicon Valley Bank two point zero, other folks started pitching our startups and us on, hey, if you raise a $3,000,000 round, here's an idea for you. We will set up 10 bank accounts for you. Put 300 k in each one, and then the FDIC will backs up $2.50 in each. Your total exposure will be, you know, 500 k instead of this. Whatever. You got to really think of the worst case scenario, and I always tell founders, do not give all your money to one bank. I always maintain multiple banks, multiple bank relationships, spread the money out a little bit in case you get stuck like this. It's a really important concept for people to take to heart, and crypto especially. And then how this stuff got sucked out, we're going to have a big postmortem on it. I do think everybody has to stop what they're doing in terms of developing new features. We should have a holiday or a tradition now that we do... You know how they have...
00:07:50 · Jason Calacanis, Lon Harris
We have Cyber Mondays and stuff like that? We need to have the equivalent of, like, Cyber Septembers. Not that you're trying to sell goods at a discount, but that everybody stops releasing new features for every September and just works on patching, updating. The entire industry, says no releasing of new features. That's the month we're gonna secure everything, and obviously we'll be doing security all over that. [00:08:16] S1: It's no it's no app November, not no fab November. See what [00:08:20] S0: I No app November. Right. Thank you. Just... We we need to take a pause, not on develop new language models because of recursive intelligence. We just need everybody to batten down the hatches. And I think the cyber spend, which my friends from CrowdStrike and Palo Alto Networks, I think people spend 5%, corporations, you know, low single digits on this kind of corporate security, cyber security. I mean, I think it's gotta double now. I think you gotta double it. [00:08:48] S1: Yeah. The youngins don't remember Y2K, but this is what happened. Like, we we... Like, six months, nine months out before y two k, we got all these warnings, and then that really... It really did feel like that's what the industry did. Like, a lot of people just reset their focus, and we gotta fix this problem before planes start falling out of the sky and all the y two k disasters.
00:08:48 · Lon Harris, Jason Calacanis
[00:08:48] S1: Yeah. The youngins don't remember Y2K, but this is what happened. Like, we we... Like, six months, nine months out before y two k, we got all these warnings, and then that really... It really did feel like that's what the industry did. Like, a lot of people just reset their focus, and we gotta fix this problem before planes start falling out of the sky and all the y two k disasters. [00:09:07] S0: And then, you know, listen. What a time for me to make my call that Bitcoin's never gonna hit its all time high. And a week later, this happens. And it goes back down to whatever, 76 or 77. Shout out to all the people who wanna gamble with me Bitcoin's gonna hit in all the time. I don't know if you saw Grant Cardone and [00:09:24] S1: a bunch
00:09:24 · Lon Harris, Jason Calacanis
[00:09:24] S1: a bunch [00:09:24] S0: of other people are trying to bait me into a bet. I'm like, I'm not opposed to taking these bets. Let me just make a little clip here. You can clip this and put it on the Internet. I'm happy to take action on this, but I don't want to take tenure action because, like, I don't know if I'm going to get paid and whatever. And I I do want an escrow company or somebody to adjudicate this, and I want the money to be in a productive asset. So in other words, if I do, let's put the million dollar bet aside. It's like unnecessarily gratuitous. But let's say I did a 100 k bet with Grant. Is there an escrow service I can put it in and say, hey, I just want that 100 in the... Know, put it in the S and P 500 or something, and I'll put a 125 k in case it goes down or whatever. And then this third party settles it for us, has the smart contracts, etcetera. [00:10:08] S1: Great idea for a company, Jason. Like, I... You... [00:10:11] S0: We I gotta think there's companies that do this, but it's a good idea, Lon. Yes. It is. But people don't do it too often. That's the issue. [00:10:19] S1: I've been in wagers that I feel like people would have wanted a third party adjudication service. [00:10:24] S0: I would pay 1% of the bet just for somebody to settle this and just manage it. But that's only like $1,000 or $2,000 or $10,000 I don't know if it's worth anybody's time. [00:10:34] S1: You'd have to scale it up, yeah.