TRM Talks: A Big Week on the Road to Legal Clarity with Uniswap Chief Legal Officer Katherine Minarik

Ari Redbord

(00:03): I am Ari Redbord, and this is TRM Talks. I'm Global head of policy at TRM Labs. At TRM, we provide blockchain intelligence software to support law enforcement investigations and to help financial institutions and cryptocurrency businesses mitigate financial crime risk within the emerging digital asset economy. Prior to joining TRM, I spent 15 years in the US federal government, first as a prosecutor at the Department of Justice, and then [as a Treasury Department official where I worked to safeguard the financial system against terrorist financiers, weapons of mass destruction, proliferators, drug kingpins, and other rogue actors. On TRM Talks, I sit down with business leaders, policymakers, investigators, and friends from across the crypto ecosystem who are working to build a safer financial system.

(00:51): Today I am joined by Chief Legal Officer for Uniswap Labs, Katherine Minarik, but first, Inside the Lab where I share data-driven insights from our blockchain intelligence team.

(01:04): Today we're spotlighting how blockchain intelligence delivers extraordinary value for government agencies with an ROI that can exceed 10,000%. With the increased focus on government efficiency — think the Department of Government Efficiency — does in the new administration, blockchain intelligence is a great example of how we can leverage technology for a high return on investment and mission critical impact. Blockchain [ intelligence tools enable law enforcement and regulatory agencies to trace illicit funds, connect transactions to criminal networks, and recover stolen assets by leveraging advanced analytics. These tools transform raw blockchain data into actionable insights, helping investigators follow the money with unprecedented accuracy. For example, in a recent case, blockchain intelligence helped dismantle a global ransomware operation. The investigation identified wallet addresses tied to ransom payments, enabling authorities to seize millions in cryptocurrency and disrupt the group's funding. In another case, the technology traced crypto flows from a drug trafficking ring leading to arrests and significant asset recoveries. This is not just about cost saving, it's about mission critical outcomes. For every dollar spent on blockchain intelligence, agents are recovering $100 or more in illicit assets. It's a game changer for combating financial crime, offering governments and unparalleled tool set to protect national security, uphold the rule of law and return stolen funds to victims. Blockchain intelligence isn't just a tool, it's a force multiplier.

(02:43): Now I sit down with Katherine Minarik. Katherine, thank you so much for joining TRM talks.

Katherine Minarik

(02:54): My pleasure. I'm so happy we could finally make this happen.

Ari Redbord

(02:57): So we are talking in a week where there's really been some significant events for you personally, for Uniswap, for Coinbase, where you used to be on the legal team and really for the entire industry. Would you just talk a little bit about that?

Katherine Minarik

(03:10): Yeah, and I guess to set the context, I'm at Uniswap Labs now joined last summer, but before about four years. Before that, I ran litigation for Coinbase, and in this past week there have been a lot of updates to the SEC's enforcement investigations and litigations in the crypto space, and then also in the court separate from the SEC. It kicked off with Coinbase last Friday that the news broke Coinbase and the SEC had reached a resolution in their ongoing litigation, but not the type of resolution that you sometimes see in the middle of litigation, which is a settlement. The resolution was actually that the SEC had agreed to dismiss with prejudice, the entire Coinbase litigation, and it is maybe not entirely a surprise because the Coinbase litigation was in a very unique posture. The district court had just granted Coinbase motion for interlocutory appeal, and so Coinbase was up at the Second Circuit asking the Second Circuit to also hear their interlocutory appeal on a question of law of how to interpret investment contract that part of the statutory language of securities law. And that question is a big question for the SEC, and so it likely was a motivating factor for the SEC to make a decision about what it really wanted to do in the Coinbase case and in crypto cases altogether. So just a week later from that announcement, we've actually seen a dismissal stipulation filed in district court in the case, which is remarkable.

Ari Redbord

(04:47): I think that obviously this entire space, the crypto industry has been following the Coinbase case very, very closely because of the ripple effects that it has for the entire industry. The SEC had charged Coinbase with basically listing unregistered securities, but there's always been this question as there's really never been a definition from the SEC or Congress or anyone else as to what, and were not securities. The entire industry has been follow this so closely, but you were really like you were there. I mean, right. Coinbase litigation. Just tell me about the work, right, the blood, sweat and tears that went into fighting that fight for so many years and how it must felt for you and Paul Gruel and that Coinbase team that had been in the trenches for so long.

Katherine Minarik

(05:27): Yeah, I mean, I'm just so proud of the team. You might get me a little emotional here. I'm not going to lie. When the news broke last Friday, I was truly emotional because I'm just a big believer in justice, and I thought that this case was wrong from the beginning. And even though it was a difficult fight, it's always a difficult fight if the government chooses to file a complaint against you. But even though it's going to be a difficult fight, it was such an important fight to take on. And just as a quick anecdote, I remember the exact date  that Coinbase was sued. It was June 6th, 2023. I remember because I got a call from our outside counsel that the SEC had just called the outside counsel to say, we file litigation and the Southern District of New York, normally a public company would know before that filing happened.

(06:17): So even that I found just a little bit, but what was so interesting about that day is that an hour from when I got that phone call, my old boss Berry Wall, the chief legal officer at Coinbase was scheduled to testify before Congress about the need for a regulatory framework for the crypto industry. So Coinbase, a public company, a good faith actor in this phase, I'm trying to do everything right, begging the SEC for real dialogue, begging Congress for more laws to regulate the industry on the verge of talking to Congress in a public setting, get sued, and it just felt like the wrong way for things to happen, really the wrong way for things to happen. And so that's set us up on a journey. I would definitely encourage folks to go back in time and read calls, blog posts from March, April, 2023 when Coinbase got the Wells notice, because it was really important to us speaking for Coinbase a bit at the time, to be as transparent as possible with the public about that litigation because it shouldn't have. So fast forwarding to today, when I left Coinbase, we had filed the Motion for Interdictory appeal. We had and dus action going in the third circuit, and there have been extraordinary results on those in the month that followed. But fast forwarding to today, to see actual dismissal of a case shouldn't have happened. It's not celebration because it's so many resources wasted, but it's relief that the right thing has happened.

Ari Redbord

(07:49): It speaks to legal leadership as well. And I think you mentioned that with Paul, and obviously you're very much in that same vein since you didn't like to do hard things at Coinbase, you decided to go to Uniswap where nothing hard was happening, but also really amazing news this week as well.

Katherine Minarik

(08:05): Yeah, so Uniswap Labs had been in an investigation from the SEC for three years, and then last April, April, 2024, uni SOP Labs got their own wells notice. Uniswap Labs is a DeFi company, and I think it's safe to say that already the claims that SEC was making against CFI case companies were stretching the of existing securities laws. So it felt even more wrong to be making claims or potential allegations against DeFi. So when the Coinbase news broke, it seemed like an optimistic sign for the DeFi investigations at UNICEF Labs. No complaint was filed and post Wells notice, we had met with the SEC and then waited to hear what their decision was going to be. So we're really relieved to get our own closure letter just a few days later. And that happened earlier this week, and it puts an end to the SEC investigation against Uniswap Labs, which is really good, I think for DeFi as a whole, because DeFi protocols just aren't securities exchanges. And I think now we can have a reset to true dialogue about how to regulate a very different type of technology, which DeFi is, as opposed to having unnecessary fights in court that waste resources.

Ari Redbord

(09:22): I think it's really well said, and I think that a reset is a really, really good description of what we hope is happening right now. We've also seen activity in the court this week vis-a-vis Uni swap. Talk to me a little bit about the Second Circuit decision that came down.

Katherine Minarik

(09:35): Alongside some of these SEC investigations in the crypto industry. We saw some private securities alleged class actions against a few different companies. Uniswap Labs was one of those companies, but one motion to dismiss in full, in our case back in 2023, and so that was also in the Southern District of New York and went up on appeal. The plaintiffs appealed  the dismissal. That appeal was argued in the Second Circuit in the fall of last year, fall 2024. And we just this week back to back with the SEC's closure letter, got a summary order from the Second Circuit affirming the dismissal of all the federal securities law claims. So that also is a really big step forward. And there were some truly nice acknowledgement and thoughtful acknowledgement from the Second Circuit about the unique nature of DeFi and why it just doesn't make sense to try to apply certain parts of the Securities law framework to DeFi.

Ari Redbord

(10:34): Where do you think we go from here towards legal clarity?

Katherine Minarik

(10:38): I mean, I think we need legislation, and it'll probably be multiple pieces of legislation as we build out a full regulatory framework because there are multiple parts of the crypto industry. So we've already seen stablecoin legislation introduced. That's one pillar of the crypto industry. I think there will be a push for market structure legislation and just would love to reinforce that a lot of us in the crypto industry are begging for additional legislation, more rules so that we understand what the rules are as opposed to trying to stretch old rules, which do not actually stretch onto the industry. But we really do want a regulatory framework. So I'm optimistic that there will be some kind of market structure legislation that speaks to crypto platforms more generally. We also will get real dialogue with the new leadership and SEC and the CFTC about the tools they have that do apply to crypto. And there are some tools that they have. I don't want to suggest that either agency has no tools that apply to crypto, just they have been using tools that don't apply to crypto as well in the last few years. So I think that that dialogue might be very productive alongside legislation, which hopefully will come this year.

Ari Redbord

(11:51): Yeah, it's really fun to see mean this is why we do what we do. And there was this narrative in the previous administration around not even offering a meeting or not responding, and now you see this log where this crypto task force from the SEC, the folks they're meeting with, it's like everyone. So yeah. Tell me, look, how did you become a lawyer in this space? How did you get interested in digital assets DeFi blockchain?

Katherine Minarik

(12:16): Well, I've long been a technology lawyer, so I was in private practice where I did all kinds of litigation, but in particular intellectual property litigation. And one of the fun things about intellectual property litigation is that in each case, you're kind of learning a whole new technology and sometimes completely from scratch. Sometimes it's something nothing about walking in the door, but you have to dissect it and then figure out how you're going to teach a judge or a jury about it along the way. And I love that pairing as a lawyer of learning new technology and mapping it on to existing law. And so I was in private practice for 11 years and realized that if I stayed at my old firm, which I loved a few more years, I probably would've stayed there forever. At a certain point in time, you're just doing what you're doing.

(13:06): So I thought I'd make a deliberate choice of do I want to stay here forever or would I like to do something else? And I did a lot of high stakes litigation, which meant I would be in the trenches with my clients for months to years, then we would solve the big problem, but then we would be done with the problem and I wouldn't be hanging out in the trenches with my clients who I loved anymore for a good long while. And I thought, maybe this is a sign that I should be an in-house lawyer so that I'm always in the trenches with my clients. And it's not just that I'm solving the one big problem, but I'm helping to prevent all kinds of problems and shape the future and build things. And so I started exploring potential in-house options. My first in-house job, I was the global general counsel of a small e-commerce technology company. I was there for a couple of years, had a lot of fun. Then I was recruited over to Dyson to be the General Counsel Americas of Dyson. If we want to diverge into vacuum cleaner law, we could talk about that at some time.

Ari Redbord

(14:10): Let's do it. That is a really amazing company. I mean really on the cutting edge of technology and . . .

Katherine Minarik

(14:14): Yes, right. A lot of vision from that company. And so that's where I was when my old boss, Paul at Coinbase called me. He was leaving Facebook at the time where he had run litigation and we had known each other from when he was at Facebook and I was in private practice, so he was leaving Facebook to become the next chief legal officer of Coinbase. And he called me and said, would you ever be interested in working in crypto with me? And I truly did not know a lot about crypto, but I knew the technology and the building around crypto was exploding. And so this summer, 2020, and so I said, sure, I'm definitely interested in having the conversation. I loved everyone that I met at Coinbase, and it just became a really easy decision to go there and to build a litigation function. I ran litigation over time, IP employment, international Legal as the other parts of the legal team for Paul while I was there. And it was like a dream job, building a team, having the most challenging issues in front of you, getting to fight for the future of our financial system. I loved every second of it, even though I don't think I slept for four years.

Ari Redbord

(15:33): I often think to myself right now is one of those moments where it's like you're not sleeping and it's all so crazy and everything's happening. And then I often just go back and be like, maybe that's just a life I've chosen at this point. But that part, that timing where you went to Coinbase, quite frankly, that's when I left the Treasury Department to go to TRM and sort get into this space and try to understand it for the first time. And it's crazy. A lot more nascent than it's today. Only five years later.

Katherine Minarik

(15:55): I think Bitcoin was 11,000 . . .

Ari Redbord

(15:57): Calories. Oh, yeah. Yeah. 11,000. A . . .

Katherine Minarik

(16:01): Different time. A different time . . .

Ari Redbord

(16:02): Different time. When you were at Coinbase, and I think to get your crypto DeFi education, when you were looking around the space, obviously you eventually saw Uniswap, which is going deeper into this, right? I mean into sort of the truly decentralized space. What caused you to be willing to really make that jump?

Katherine Minarik

(16:21): I want to give Coinbase a lot of credit there because it's very easy to fall in love with DeFi at Coinbase, right? Even though Coinbase is probably most known for its centralized platform for crypto trading. Brian Armstrong founder, CEO at Coinbase is a deep, deep believer in DeFi always talk about it as fundamental part of the future for all of crypto. And so there was always investment and thinking and love for DeFi at Coinbase. So I would say that plus in fall of 2021, I was personally banked. I know there's been a lot of talk about banking in our industry, and I don't want to in any way suggest I was important enough that solely because I worked at a crypto company, I was banked. But I do think that I was banked because of some kind of faulty algorithm that all banks are required to run under the Bank Secrecy Act because I'm quite certain there's no legitimate basis to bank me.

(17:19): I'm quite a rule follower. But it was a really scary personal experience. All of my money, all of my family's money was with one bank that we had banked with for more than a decade, and they knew us. And then one day our accounts were not closed, they were frozen, and the bank wouldn't tell us when or if we would get our money back. And after the original panic of that moment subsided, I realized that I did have access to some assets. I had self custody crypto wallet, I had Bitcoin in there, some of which had been purchased at that $11,000 price in 2020. So I had in my own custody, in my own control safe somewhere digital assets and assets digitally stored that were available to me. And it was this very stark reminder of how important it is to protect that technology for all of us. That if you want to have your own custody, your own control of assets, and since we do as a society now have the technology for safe self custody of assets that should be available to everyday people. And I'm really grateful it was available to me, but it never left me from that moment how important DeFi technology is to financial access for everyday people. And so that I think is really at the heart of what led me to say yes when Uniswap Labs recruited me for this role.

Ari Redbord

(18:47): It's extraordinary. Tell us a little bit about Uniswap.

Katherine Minarik

(18:50): So our founder at Uniswap Labs is he is the inventor of the original Uniswap protocol, and that is a DeFi protocol essentially within automated market making function within smart contracts with liquidity pools, but a way that could automate peer-to-peer trading and eliminate the need for traditional market makers in order for there to be liquidity in a market. And the whole concept about it was isn't there a better way for there to be exchange of value? Just exchange of value, right? Isn't there a better way? And it started as an experiment to invent a better way. So that was that protocol version one V one. Along the same time that he had invented that protocol, he started Uniswap Labs, the company. So he and others deployed the Uniswap protocol, but the protocol runs as automated smart contracts. So it's not owned or controlled by or operated by Uniswap Labs.

(19:50): If Uniswap Labs, the company disappeared tomorrow, the protocol would still go on and exist as long as people wanted to use it, which is kind of an awesome and amazing thing about DeFi and the deployment of smart contracts. Uniswap Labs builds tools and DeFi products and services, some of which enable users to more easily connect to the Uniswap protocol. So some of what we do helps users make use of the protocol. Some is building out DeFi much more broadly, but the company and the protocol are distinct, although we do build and have built additional versions of the protocol. So now there are four versions of the protocol. The versions are not updates of an app. All of the versions of the protocol are still out there and used. They have different features and serve different needs. So they're all out there to be used by users. And the majority of activity on the Uniswap protocol actually happens through a direct interaction with the protocol itself, not through interfaces.

Ari Redbord

(20:51): Fantastic. You do a lot in your role as Chief legal Officer, but this is TM talk, so I'm going to ask you a quick compliance question. One of my favorite relationships in the space is frankly the one that we've had with Uniswap really thinking about what can compliance look like in a more decentralized world? And you're obviously such an important piece of that. How do you think of compliance at Uniswap today?

Katherine Minarik

(21:11): Yeah, I think it's a great question because the parameters and the needs of compliance are different for centralized custodial services than they are for decentralized services. Want to be completely explicit that we believe in creating safe compliant products and services no matter what. Compliance is part of our day-to-day operations and safety and security are part of our day-to-day operations at Uniswap Labs, and I expect they always will be

Ari Redbord

(21:40): When we kind of kick things off. And obviously we got ahead of ourselves maybe a little bit on all the amazing things that are going on, whether it's Coinbase or Uniswap and the SEC, but I think of you as a lawyer's lawyer, you love being a lawyer. I do. And whether it's something that you're dealing as CLO of Uniswap or something that maybe is a broader issue that affects the ecosystem, what are the things that you're really thinking about when it comes to the legal issues, whether it's in DeFi or in the broader crypto ecosystem today?

Katherine Minarik

(22:06): Yeah, I think that as we think about what the law should be for any new technology, it's really important to focus on what are the risks and benefits of this technology. And that doesn't mean ignoring all the existing tools and starting from scratch, sometimes existing tools work, but the test for whether existing tools are fit for purpose should be are they addressing the actual risks of the new technology and are they allowing the benefits of the new technology to continue forward? So when I think about what the loss should be for a future state of crypto, that's always the framework that I'm thinking through, and that's really important when you think about CFI versus DeFi, A lot of, let's say, registration requirements that come along with traditional financial services, those are because you have a centralized actor who is taking custody or control of a customer, a user's assets, and there's a risk that comes with handing over of custody or control. That risk doesn't exist, at least not in the same way when you're talking about DeFi or the user never has to hand over custody or control the right framework for regulating. CFI is not necessarily going to be the right framework for regulating DeFi, but you could have really great frameworks for regulating both as long as you stay focused on those risks. So that's a big part of that nerdy lawyer thinking that I spend my time on now and talking about with policymakers and regulators as we think towards the future.

Ari Redbord

(23:52): It's exciting. I think those conversations are going to happen over the course of the next couple of years to be sure. Talk me through, obviously these are really, really important legal issues, but the end game is to enable the technology to really do extraordinary things. When you look at this space, what are you most excited about in terms of outcomes or use cases for the technology?

Katherine Minarik

(24:11): Yeah, I mean, I think having a world where it is much easier for everyday people to participate in a global financial system is the dream. And so that is what I hope that we at Swet Labs are helping to build towards is a better model of financial access, a better model of what a financial system can be. So I hope that is where we're headed. I think that the worry I have that comes with it since I'm a lawyer, I'm always worried is that if we're building a better global financial system, are we accidentally marching towards acceptance of mass surveillance of every single financial transaction, every single human being engages in? I don't think that that is the right future. It certainly sounds very un-American to me to accelerate the surveillance that we already have unnecessarily of the financial system. I think there's a lot of surveillance right now that isn't even working to reduce the risk that it's meant to reduce. And so that's one of my touchstones. I don't want to be building technology for a future to also assume that every human being is more likely than not a criminal, and therefore they have to almost be under surveillance supervision. So that is at the heart advocacy, the legal advocacy that I do for how to responsibly regulate DeFi in particular.

Ari Redbord

(25:49): I think what's so extraordinary about that answer, and quite frankly, your journey right from Dyson to Coinbase and now to DeFi, Uniswap, which is such a perfect place to be doing the work, passionate about the issues that you just talked about, I just love, it's such a perfect fit for the person and the role and the moment, which is awesome. When you are not thinking about existential questions of security and privacy for the future of finance, what are you doing? What are you into? You're obviously really passionate about women in the law. You talked to me a little bit before we jumped on here on actually having your own podcast promoting I think women lawyers and women in the law. I'd love to hear more about that. But then also just like other interests. What are you up to when you're not fighting the SEC?

Katherine Minarik

(26:29): Yeah, I mean, I will say that I think the last almost five years of life, I've been very bad about doing anything apart from work and seeing my family. So that might be why my podcast existed and then stopped existing, although it's still out there. It's called Heels of Justice. But a friend of mine, another lawyer, another tech lawyer, it was kind of a passion project to tell the stories of women lawyers because there just weren't a lot of women in tech lawyers in particular. And so we wanted to record their stories and their voices and their words. But I do spend my limited free time with my family. I like to jokingly refer to myself as a Midwestern mom for crypto. It's maybe an underrepresented demographic,

Ari Redbord

(27:17): That highly underrepresented demographic.

Katherine Minarik

(27:20): I love it. That is who I am. But I also really love to travel. So to see new places, experience new cultures, I love historical travel, seeing the oldest thing wherever I go.

Ari Redbord

(27:33): That's so cool. Katherine, as I said, I've been wanting to do this forever. Thank you so much for joining TRM Talks. This was an amazing conversation.

Katherine Minarik

(27:41): Thank you so much. It was a blast.

Ari Redbord

(27:48): I've never been a huge believer that things happen for a reason. When I was growing up, my mother would always tell me this, and I'm not sure I ever really bought into it. If she's listening, and she probably is, I'm sorry. But Katherine and I sort of went back and forth on scheduling this a few times, and we landed on this week, and it was really, really an important week from a legal standpoint for this space. And Katherine is one of really the most important lawyers. Not only was she a Coinbase where we saw this major SEC dismissal this week, but we also saw the SEC essentially provide a no action letter, meaning there was going to be no further action in the Uniswap case. Two really, really important outcomes, not just for those companies that were really, really important to Katherine, but also to the space.

(28:58): And we're really seeing now a reset. We're seeing now regulators, I think shift towards, alright, how are we going to create legal clarity, sound regulatory frameworks, and go after fraudsters as opposed to sort of the lawful cryptocurrency businesses. So obviously there's so many takeaways, a really extraordinary career as you could hear, just really passionate legal thinker in the space. But I think sort of obviously biggest takeaway was what a week for Katherine, what a week for Uniswap, Coinbase, and overall the crypto ecosystem. So huge honor to have Katherine on to talk about these issues this week.

(29:05): On the next TRM Talks, I sit down with Lazarus Heist's Jean Lee, former AP Bureau Chief in North Korea, and former FBI and TRM, North Korea subject matter expert Nick Carlsen. If you love the show, leave a review wherever you're listening to it and follow us on LinkedIn to get the latest news on crypto regulation, compliance, and investigations.

TRM Talks

(29:32): TRM talks is brought to you by TRM Labs, the leading provider of blockchain intelligence and anti-money laundering software. This episode was produced in partnership with Voltage Productions. The music for this show was provided by Eco X.

Ari Redbord

(29:49): Now let's get back to building.