How Crypto Became Too Powerful for Washington to Ignore | Coinbase’s Faryar Shirzad

SPEAKER_1 (0:00)

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Scott Melker (0:30)

Nine days from now, Crypto could win the biggest political battle in its history or watch its best chance at legislative clarity collapse. The Clarity Act is heading toward a make or break Senate vote. Regulators are racing ahead without Congress and everything could still be reversed by the next administration. Coinbase chief policy officer Faryar Shirzad is at the center of this fight. Will Crypto finally get permanent rules in America or is this entire victory an illusion? Let's find out.

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SPEAKER_1 (1:35)

No seed phrase at all.

Scott Melker (1:37)

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Faryar Shirzad (2:03)

Yeah, I was at Goldman 15 years and then came over five and a half years ago.

Scott Melker (2:08)

So I'd imagine that you thought you were walking into a golden era of crypto when we were back in the legislative and regulatory clarity and, you know, bright skies were on the horizon. Instead, you walked into FTX, Operation Choke Point 2.0, everybody getting sued for everything and a contentious government. So maybe walk me through the decision to come over from what I would imagine was a very cushy situation in TradFi to the Wild West and then to walk into that absolute storm that we had at that time.

Faryar Shirzad (2:41)

Well, I recall that I joined Goldman in late 2006 So that was a period in which nothing could go wrong on Wall Street and nothing could go wrong at Goldman Sachs. And fast forward 24 months later, we had the greatest financial crisis in a century. And so I've had a bit of a track record of walking into calm waters and then all of a sudden, like a category five storm comes along. But the reason I actually came to Coinbase was I helped Goldman get through the financial crisis and all the global effort to revise the regulatory framework around the financial system. I thought this was actually going to be a lot of fun to do two things. One is to architect the rules around how crypto technology and digital assets were going to be integrated into traditional finance. And two, I thought it was a chance to go back to, I joke to people that it was a chance to go back to 1997 and be the guy that walks around and explains to everybody what the Internet is. And so even though I didn't anticipate the choke point and the intensity of the political attacks that crypto faced, a lot of the hard journey of trying to explain to policymakers what the right regulation is, is something that I went through once before in the traditional sector.

And so it's all very familiar, to be honest.

And to be honest, it's not nearly as emotional as it was in the traditional sector, given the intensity of the politics coming out of the financial crisis.

Scott Melker (4:18)

That's interesting because our industry seems very emotional about the process over the past five years. So it's been half a decade, right? So I don't want to put words in your mouth that your expectation is that it would happen quickly, but has the timeline been faster or slower than you would have anticipated and arriving where we are now, is that how you foresaw it happening?