Covering Crypto in America — From Stablecoins to the SEC, Eleanor Terrett Tracks a Shifting Policy Landscape

Ari Redbord (00:02):

I am Ari Redbord and this is TRM Talks. I am global head of policy of TRM Labs. 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 M 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. Today I am joined by Eleanor Tart, former Fox business producer and co-founder of the Crypto and America Podcast.

(01:00):

But first inside the lab where I share data-driven insights from our blockchain intelligence team. Earlier this year, president Donald Trump signed an executive order establishing a strategic Bitcoin reserve. The goal is to leverage Bitcoin assets seized through criminal or civil asset forfeiture without imposing additional costs on taxpayers. The O also establishes a separate digital asset stockpile, which will manage forfeited digital assets other than Bitcoin such as Ethereum A, A and Solana. The US government is among the largest sovereign holders of Bitcoin with assets primarily acquired through law enforcement. Seizures of Ill-gotten digital assets in 2023 alone. US law enforcement agencies, including the F-B-I-R-S-C-I, US Secret Service, DEA, US Postal Inspector Service, Homeland Security Investigations and others reported seizing and or forfeiting over $3 billion in digital assets. The numbers are detailed in annual reports from the DOJ and the US Treasury Department. By utilizing blockchain intelligence tools and trained federal agents, this strategy maximizes efficiency in empowering federal law enforcement agencies to generate billions in seize funds while compensating victims and funding law enforcement initiatives. In fact, simply focusing on the administration's priorities, border security, Chinese money laundering networks and cartels, law enforcement agencies can utilize blockchain intelligence to seize and forfeit funds for much more on this executive order and the strategic bitcoin reserve, read our full report at trm labs.com/resources.

(02:40):

Now I sit down with Eleanor Teret. Eleanor, I'm truly excited to have you on TRM talks and looking forward to the conversation.

Eleanor Terrett (02:52):

Thank you, Ari. Me too.

Ari Redbord (02:53):

There's so much happening. I feel like you are the go-to journalist in this space right now on what's happening in regulation and policy. Tell me a little bit about your journey and how we got to where we are today.

Eleanor Terrett (03:04):

Sure. Yes. So I got here in a sort of conventional and unconventional way at the same time. So I grew up actually in a broadcast family. My dad is a business reporter, my mom is a former traffic reporter. So grew up in that atmosphere and for a long time I thought maybe I wanted to go into PR actually because I've always been a good writer, a good communicator, and the broadcast journalism route, it's tough. So that's a whole career path in and of itself. And when I applied to Fox Business, this was my first job application out of college. And at the time I didn't realize that there were two separate channels. There's the news channel, they have a whole ton now, but Fox Business was the sister channel of Fox News, and I got the call and I said, oh, you're going to be working with Maria Bar Romo and Stuart Varney.

(03:50):

You're going to be a green room production assistant, which means you're going to be running their scripts to them and you're going to be helping their guests to hair and makeup, very foot in the door job. But I was bright-eyed and bushy tailed. I was all for it. And my dad at the time said, Stuart Varney is an excellent broadcaster. Marie Barone was a legend. She was the first female on the floor of the New York Stock Exchange. You're going to have a great time. And sure enough, I did that for six months and then I moved up to be a production assistant on the 5:00 AM morning show. So me coming out of college, that was a perfect time for me because I was working overnight. So I would come into the city at 1:00 AM and leave at 9:00 AM. So coming in, it was like the reverse commute and then they put me down as a field producer at the New York Stock Exchange.

(04:34):

And so I'd kind of been picking up bits and pieces of how to cover business news and how to think about the stock market, but I didn't really get my crash course in business and markets until I went down to the stock exchange. And that was 18 months of my time down there, which was incredible. It was, first of all, if you've been to the New York Stock Exchange, you know how just it's such an institution. And I was on the floor at our Fox Business booth with another reporter for 18 months covering markets in real time. And I remember jobs day, fed day, there were all these days on the calendar that business people, traders they watch so closely because the markets fluctuate so much around it. And I just got to love it. I wanted to be a markets reporter. I wasn't really thinking about crypto at the time.

(05:19):

And then Covid hit, so they brought us all home from the stock exchange and I was doing remote field producing for about a year and a half. And then a position with Charlie Gasparino opened up. Now Charlie was my former boss. He is a veteran financial journalist. He was at the Wall Street Journal, CNBC, Fox Business, and he was my mentor as well. So just someone who is so storied in this industry taught me how to write really well, taught me how to just be the best journalist I can possibly be. And from there we kind of got into crypto reporting because he's covered Wall Street his whole life. So with the SEC, this was four years ago, so this was right as Gary Gensler was coming in. It was right as crypto was being cracked down upon. There were no rules of the road, Ripple was sued, and that's how we got into crypto reporting was the SEC vs. Ripple case. So we looked into it, we conducted a whole bunch of interviews, we talked to people involved and we wrote a 10,000 word opus. We called it on the regulatory riddles surrounding featuring SEC versus Ripple, but talking about the broader problem of there not being a regulatory framework for digital assets. But my experience at Fox Business and everything I learned to get me here today, I credit them and I credit Charlie with everything that I have now. So it's been a really interesting nine years.

Ari Redbord (06:33):

Let's kind of talk a little bit about what are the stories right now that you are sort of most focused on? And I'm happy to go through each of the branches, but on the hill you are covering everyday what is happening with these different legislative activity, stable coins right now? But there's going to be much more, talk me through how you're thinking about these different hot topics.

Eleanor Terrett (06:54):

Yes, so you're right, it's a big team effort I think. And the SEC is probably the one that I'm watching the closest right now in the sense that they are trying to hammer out exactly how to think about where digital assets fit in securities laws. And obviously Congress is going to be a massive part of that too with the market structure bills and the stable coin legislation. Now you might think that those two are relatively different, but actually if you talk to the congressman involved French Hill, Tom Emer actually just told us this on his podcast, there are two sides of the same coin, stable coin and market destruction. You can't pass one without the other. Now does that mean they're going to pass legislatively together? I don't know. But they're related in that way. And I think while they're focusing on getting the legislation through and making the bills the same in both the house and the Senate, the SEC is holding these round tables, and this is something we've never seen before because the other administration, the SEC specifically ignored crypto until they couldn't ignore it anymore. And then they regulated by enforcing the law against all these crypto companies and executives. And now we're having industry players come into the SEC, actually the headquarters going into the SEC building in Washington DC to sit down and talk about how digital assets are may or may not be part of securities laws and how do we think about that going forward, the collaboration there.

Ari Redbord (08:22):

Just coincidentally, I was there with the TRM team on Monday, met with the crypto task force, and that was probably my biggest takeaway is that when Hester took over, when the task force was assembled, when she took over, her first thing was like, Hey, the previous administration didn't engage at all. We're going to engage like crazy. And they've really, really embraced these conversations. They're really looking to us to industry to help inform their work.

Eleanor Terrett (08:49):

And someone else said to me, this should be the norm, not the exception. And if you go to any other country, places in Europe, places in Asia, the collaboration between industry and between regulators is much more open, much more transparent. And that's something else that I've noticed the S sec C has been doing is being super transparent with who they meet with, what those meetings are about. I can go on sec c.com, go to the crypto task force tab, and I can look at what you talked about during your meeting.

Ari Redbord (09:16):

And that's exactly, that's the level of transparency I think they want. It's interesting, I think there's this narrative that they've moved away from enforcement actions, and I think that's because everyone associates enforcement with the cases that we all know over the last few years, Ripple, Coinbase, but that's enforcement actions against lawful crypto businesses that are building the ecosystem. What I've heard from them is that no, we're laser focused on enforcement, but actually fraud and scams and the real bad actors that are presenting a threat to the technology, a threat to sort of growing the ecosystem to innovation. And that's really what we heard. How does that feel to you?

Eleanor Terrett (09:54):

A hundred percent. And I think that’s interesting, if you look back at it in hindsight, what could the SEC have caught that they didn't? If they had been paying attention to companies like FTX companies, like Three Arrows and Celsius, instead they were focusing more on players like Coinbase who all they did was offer these cryptocurrencies that had no legal status that the SEC wouldn't engage to create a status they wouldn't rule make. And then Coinbase actually took them to court over that. They said, well, if you're not going to rule make, we're going to try and make you rule make because we're living in, and this is what Brad Garling House of Ripple calls it, regulatory purgatory. We don't know if we're doing something right. We don't know if we're doing something wrong because you won't talk to us as well. So you're telling us we're breaking the law, but you're also not letting us come in and talk to you about it and try and figure out how to work with you to get around it.

Ari Redbord (10:48):

So is the story right now at the SEC, which is a great place to start because it's really where you started in this space covering the Ripple case, is the task force and sort of the work they're doing, like the story right now out of the SEC

Eleanor Terrett (10:59):

Out of the SEC? I would say yes, I think it plays into the puzzle of what everybody else is doing. We can get into the CFTC, they roll back some restrictive crypto guidance kind of recently the banking regulators as well, we saw much rollback from them in response to the deep banking hearings. The FDIC and the OCC have rolled back old rules that basically said, thanks. If you want to engage in crypto, you have to get our permission first. And while that on the face of it sounds okay, right, if you actually dig into the pause letters, the so-called pause letters and the missives that were going out from the banking regulators to banks saying we would prefer you not to get involved in the space, that's okay. But there was never any follow up. So it just turned into four years of absolutely nothing happening and banks not being able to touch crypto, but also you've got this sort of side narrative of the SEC being like crypto is bad.

(11:53):

So all of a sudden you've just got this entire administration who's telling an industry that you shouldn't engage in crypto. And so they didn't. But I think the banking side of things is going to be very interesting to watch how quickly you'll see the big banks. JP Morgan, I guess JP Morgan is sort of already involved in blockchain technology. I wouldn't say crypto because Jamie Diamond still says that Bitcoin is a pet rock and he would never get involved in that side of things, but the blockchain technology and then you've got Bank of America, you've got Morgan Stanley, you've got Goldman Sachs. It'll be really interesting to see how the banks, especially with the stable coin stuff, that's a whole nother conversation. But how the bank started engaging in crypto and this thing that they just weren't allowed to do for so long.

Ari Redbord (12:34):

It's absolutely coming. When people ask me sort of what's the biggest story today in crypto, they expect me to say something around the policy or regulatory and it's this to me,

Eleanor Terrett (12:43):

That landscape is changing rapidly.

Ari Redbord (12:45):

There's another piece to this. Stable coins are also front and center from a regulatory policy perspective. You had Dante Dee on the show most recently. Talk me through where you see sort of the stablecoin landscape

Eleanor Terrett (12:58):

Mostly on the hill I'd say, but also you're seeing much more interest in stablecoin in the private sector now too. And I would say that we've seen hit the other day, people are saying they want to launch their own stable coins, right? Left and center Wyoming. It's almost like a meme coin. Yes. I was going to say the public sector too. I just think that it's such a cool idea. And when we were doing a press briefing with them, they talked about how they want their stable coin to act like cash. They said that, and I didn't realize this, but for USDC, they will not allow you to buy certain products with USDC, one of those things being guns. And so there's restrictions on, I guess, what you can and can't get with USDC to an extent. I don't think that list is too extensive, but to their point, they said, we want to make it act as cash leg as possible so you can use our stable coin to buy, whether it's guns, whether it's marijuana, whatever the sort of controversial industry may be.

(13:53):

So I thought that was quite interesting. But then you also get into the side of if a state is, or a government body is issuing its own stable coin, how are you veering out of CBDC territory? How are you separating those two things? So I think that's an interesting conversation. And then you're also seeing a lot of the private sector companies wanting to come out with their own stable coins too. I feel like people are launching stable coins now or say they're wanting to launch stable coins in the same way that they wanted to launch meme coins a year or two ago.

Ari Redbord (14:21):

You now have two bills in the house and the Senate. Eventually they're going to have to be reconciled. Where are we and where are we headed there?

Eleanor Terrett (14:29):

So we just saw the stable Act, which is the house's stable coin legislation pass out of the House Financial Services committee following a 13 hour marathon markup. And we'll add that it wasn't just the stable act they were marking up, but it was the bulk of it and many, many, many amendments which didn't pass because obviously Republicans are the majority in the house and the Senate right now. So those amendments didn't make it, many of them. But basically what we have now is we have two bills. We have the Genius Act that passed out of the Senate Banking Committee that's waiting floor time. And then we have the stable act, which I just mentioned that's also waiting house floor time. Now behind the scenes I'm told it's going to be the next couple of weeks will be about making those bills as similar as possible.

(15:15):

And Brian style, who is the co-author of the Stable Act said on stage a couple of weeks ago that the bills are about 80% similar. There's 20% where there could be we want to close the gap. And when I talked to him recently, he said there's some key differences, namely in how we treat the overseas stablecoin issuers and state pathways for being able to be regulated. Those are the two sort of main things. Then he said the others were just a bit like technical language and just little things that we can come on board with, but he said the main priority is to get it done as quickly as possible. So I think what you'll see is a lot of work behind the scenes to make those bills similar. I think time is of the essence because Trump has requested that the both legislation, both market structure and stable coin beyond his desk before the office recess and now that's four months away and you know how fast congress moves a, so it is going to be a heavy lift and I think that Congress is trying to figure out how to thread that needle

Ari Redbord (16:16):

If it's going to be stable coins. Then market structure, anything else that you're sort of tracking that could be maybe not August, but within the next year or so out in terms of the crypto,

Eleanor Terrett (16:27):

So the Bitcoin strategic reserve bill, that is Bitcoin Max's probably favorite piece of legislation that may or may not get passed this year. That's something I'm watching too, only because I think Trump has come out, as you saw in the latest executive order, he mandated that there be a strategic bitcoin reserve and a strategic digital asset stockpile. Now those two things are different and I can get into how they're different, but the strategic Bitcoin reserve, they are not going to sell any of their Bitcoin and it's kind of unclear how much Bitcoin the government owns right now. The strategic Bitcoin reserve bill that has been floated by Senator Cynthia Loomis, who's a big Bitcoin supporter and now has a house companion bill as well. I think it would be a heavy lift to get it through by the end of the year. And even Lamis herself has said she came up with this Bitcoin act to basically have the government buy Bitcoin and put it on the balance sheet as a way to reduce our national debt.

(17:26):

Now she's very passionate about it. There's a companion house bill that has also been introduced, but even Lamis said that it's going to be a heavy lift to get something like that done imminently because there's a lot of education that has to go around it as well. There's a lot of people in Congress unsurprisingly, who aren't as up to speed on the benefits of Bitcoin. I think when it is a question of money and what we're putting our financial budget, what we're putting our national budget towards, is it buying something that a lot of people in Congress don't really understand or is it buying something that they are much more comfortable with? They can touch like gold. It's very 50/50 split. I think people in Congress either love the idea or they hate it. And so that's something I'm definitely watching.

Ari Redbord (18:13):

I thought the executive order was pretty elegant and tried to kind of thread the needle between those two groups that you're talking about, like the touch gold versus sort of the Bitcoin or in making it seized assets basically made up of seized assets. And obviously an area that's really near and dear to my heart because we work with law enforcement, they leverage TRMs blockchain intelligence to track and trace and ultimately seize funds to be used in the strategic Bitcoin reserve. And I'd be remiss not to sort of ask an A MLA elicit finance and national security type question. This is TRM talks. Are you following that space, whether it's US Treasury department and some of the work happening there?

Eleanor Terrett (18:51):

Well, we're watching in Congress right now. I think the legislation, the Stable Act and the Genius Act specifically as it relates to stable coins, I think the market will be a little bit different. But how do we protect investors while also honoring the defi side of it, right? The right to privacy, the right to be able to transact and not feel like you are being surveilled by your government. And then also something else I'm looking at, which is a couple of weeks ago, former CFTC chairman Chris Giancarlo put out an op-ed, I believe it was in CoinDesk, but his writing partner was Chris Perkins who's the head of coin fund, and they wrote this op-ed that said we should kind of go back to privateering, which was this idea that occurred during the Revolutionary War where they would use the citizens to help them fight the war basically and the Revolutionary War. And now they're floating the idea that mobilizing the private sector who arguably have much better infrastructure like you guys over at TRM to be able to police and sort of surveil the bad actors in the space through this blockchain technology, your technology is a lot better than the government. So why not use the private sector to help out?

Ari Redbord (19:53):

Now it's super well said. You on so many of my favorite, most interesting topics. I cannot let you go without hearing about crypto in America. What are you doing? What does it entail?

Eleanor Terrett (20:04):

Yeah, sure. So Crypto in America is a weekly podcast and a newsletter that comes out three times a week, which is a bit ambitious now. I'm actually doing it, but I love it. Okay. Written by me, the newsletter. And basically the premise is following how crypto is coming back to America after four years of being offshored by the regulation by enforcement agenda of the Biden administration. So we're interviewing founders and builders who are making a conscious effort to come back to the United States. That's been a very interesting segment of crypto in America that we've been focusing on. And the other part of it is talking to people who are actually creating the policy like the Tom EMS of the world. The main point here is that crypto is going to be part of the future in the US. It's part of the infrastructure, part of the economic financial system, and we're just highlighting the people who are making that happen and the people who are going to benefit from it. So if your listeners are interested, you guys can find us on Spotify and Apple and YouTube.

Ari Redbord (21:02):

How did you guys decide to do this? How did you come together?

Eleanor Terrett (21:05):

So it's interesting and I think timing is everything in life, and this is a great example of that. So I have been ready to move on from Fox for a little bit only because I just felt like I wasn't able to grow the way I wanted to there. And so I just happened to run into my now co-host Jacqueline Menick at Anthony Pompanos Bitcoin Investor Week, which was about two months ago now. And she said, how are you? What are you doing? What are your thoughts? And I said, well, I'm getting closer and closer to moving on. I'm not entirely sure how that looks yet, but it's coming. And she said, well, what's really funny, I'm actually thinking of launching this podcast called Crypto in America. I actually already have a co-host. He's the general counsel at say blockchain and we're going to call it Crypto in America and it's going to be all about crypto policy, which is basically what you do. That's your thing. Would you like to come on board? And I said, oh my goodness, that would be amazing. Can I think about it? And she said, you've got till Sunday because we're going to have a team call on Sunday. This was Friday.

Ari Redbord (22:05):

That is wild.

Eleanor Terrett (22:06):

I was like, I'll have a decision for you then. And that's kind of how the ball started rolling. And actually it was sort of built out, I'd say three quarters of the way when they brought me on board. So it was nice for someone who has had a structure in corporate America for nine years to kind of go into something that was already structured. I think I bring my own branding and my own sort of pizazz to it as it were. But it's nice to go into something that wasn't just a total startup for me. Obviously I have had no experience in that field until now, and it's been great to have the support of people like Jacqueline who actually has her own podcast on the side as well. So she's been the one who kind of coordinates it. And so that's been very useful.

Ari Redbord (22:47):

That's amazing. When I saw the three of you sort of join forces, that just felt really right to me.

Eleanor Terrett (22:53):

And it's been good in the sense that we all come from different expertise, as I would say. So Gerald's obviously the legal Mind. I'm the policy. And then Jacqueline has her Talking Tokens podcast where she interviews founders and builders, so she's got those relationships. So I think we all bring our own personalities, certainly, but also our own expertises to the interviews that we do on the podcast. So it's been a lot of fun and I love working for myself. It's great. I recommend it to anybody who's thinking about doing it, do it.

Ari Redbord (23:19):

Amazing. I'm going to leave you with this because we're also fun and personal on the TRM Talks podcast. What are you into when you're not covering sort of every policy regulatory legislative, your cat is famous on X for those who aren't sort of following you,

Eleanor Terrett (23:35):

Cats plural.

Ari Redbord (23:36):

Yeah, cats, sorry, cats plural are famous. But what is Ellie Terra doing in the world when you're not covering crypto policy and regulation?

Eleanor Terrett (23:44):

Well, you mentioned my cats. They are a big part of my life. And the reason being is because I got into cat rescue a couple years ago and I found a love for that because I love animals and cats are definitely not everybody's favorite animal, but I have learned to love them. They're a bit destructive, but they love me at the end of the day. So it's okay. I mean, at least I think they do. And I'm part of a rescue group on Facebook, so we go out and there's a lot of stray cats. There's a community cat problem in this, at least in this area, definitely in this country of people who just don't spay and neuter their cats. And so they go out, they get loose, they have kittens, and then there's this horrible stray cat problem, and I'm part of the group that goes out and traps them and gets them fixed and then puts them back out or helps find them homes if they are adoptable.

(24:33):

The cats are fun. And then I also, I love going to the theater. I grew up a theater kid, as it were. I was part of my high school musicals. So I love going to Broadway. I feel very blessed. And I'm not even an hour outside of Manhattan, so I get to do that quite a bit, which is great. And country music is also a thing I love. I love going to country concerts. So I was especially thrilled when the Bitcoin conference was in Nashville this past year. It's in Vegas this summer. But Nashville was great, and that was the first time I'd ever got to see some live country, which was incredible.

Ari Redbord (25:05):

Thank you so much for joining TRM Talks, and honestly, we'd love to have you on again as things develop, whether it's in Congress, whether it's in the executive branch, wow. I mean, things are literally moving at the speed of the internet right now out there.

Eleanor Terrett (25:15):

They really are. Thank you so much, Ari. It is such a pleasure joining you. I'd love to come back anytime. You're right, everything is moving at the speed of light in Washington, so anytime you want me on, it'd be happy to join.

Ari Redbord (25:26):

Should we break into like, do you hear the people singing, sing a song, men love it? That was a really fun conversation. As I mentioned, I'd been trying to get Ellie on the show for really a year and a half or so, and it was because of her ability to cover these really, really complex issues in a really sort of thoughtful way and has really become the leading voice, whether it's sort of what's moving on Capitol Hill, what are regulators like the SEC and CFTC doing, and that expertise really shown through today. And it's really cool that she's obviously taking that experience, taking her success here, and now building her own thing. Couldn't be more excited to have Ellie, but really as a resource for so many people who are trying to understand what exactly is happening with stable coins on Capitol Hill, what is happening with the CFTC task force, what's happening at the White House. To hear her talk about covering that summit was really, really cool. So biggest takeaway is it's really important to have these folks in this age of new media in the space, and great to hear from them on TRM talks.

(26:36):

On the next TRM Talks, I sit down with Binance’s, general counsel Eleanor Hughes and the head of policy, Steven McWhirter. 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 (26:57):

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 ikoliks.

Ari Redbord (27:13):

Now let's get back to building.