CD99: Paxful Shuts Down with Ray Youssef

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With all that said, I wanna get right into the show. It's an important one. It's an emergency rip,

with good friend, Ray Youssef from Paxful, the cofounder of Paxful.

How's it going, Ray?

It's going awesome, brother. It's an honor and pleasure to be here with my fellow freaks. I've always been a freak, and it's hard for us freaks to feel at home, but this is a bit of respite

indulging it. So thank you.

Well, yes. Thank you for joining us. Unfortunately,

it's on

somber somber ground, somber reasons.

It appears you guys have shut down Paxful as of yesterday.

I don't know where you wanna start.

I guess, just a basic,

when did you launch Paxful?

It's been years.

Yeah. July

15,

2015.

2015.

Wow. Okay. End of an era.

So Paxful was a way for people to buy and sell Bitcoin,

p to p. From each other. Yes. Yeah. From each other.

It was it was really massive in the emergency emerging markets in the global south. We saw it in Africa and Latin America. There was a lot of usage,

and you made the difficult decision of shutting it down yesterday. So where do you wanna start on this?

Well, first, you know, as somber as the news is, brother, you can see the smile on my face. I feel great, actually. I feel like a huge weight has been lifted off my shoulders personally,

and there's a lot of reasons for that. So first off, Paxil was awesome. It's a great experiment. It, did 2 things.

Number 1, and the biggest thing that it did was it proved that Bitcoin

could be useful for real use cases where people need it most, meaning the global South Africa, India, Southeast Asia, Latin America, Central Asia, etcetera.

That was huge. You know, in a world where the bulk of the narrative is dominated by speculation and price, Paxful proved that it was purpose over price.

So I'm very thankful for Paxville for doing that. I'm thankful for the people

that made Paxville. They're the ones that really did this. I just listened. I watched and I learned, and I gave them what they asked for and they built this thing.

Mittances, payments, etcetera, they proved it all, particularly the peoples of Western Africa to give a big shout out to Nigeria. Their hustle and business acumen is absolutely legendary,

and I learned everything I know from them. So that's a huge win right there.

And as peer to peer grows, I believe we will, we will get into that. The narrative will come into

proper, like, focus. It'll be not about speculation, but we've got real use cases and how Bitcoin is the clear and bear

for all world commerce, the promise of unstoppable food markets, the one thing that that

would make it even. That was

The second thing it did was itself

that made these places

for Bitcoin

and allowed us

give of.

How this happened

how do you get Bitcoin

get money

out

those broken systems, corruption, etcetera.

No one wanted to take that challenge up. You know, 8 years ago, I started saying, hey, you know, Bitcoin is is really gonna it's gonna blow up in Africa

in the global south, and everyone laughed in my face and said, I'm gonna

be

able to figure it out. What need do they have for it? Fast forward to the future, Nigeria is leading the entire world in Bitcoin adoption. So how did that happen?

It happened through a hack, and I am a hacker. I've always been a hacker. I've been a serial entrepreneur for over 20 years right now. Started in 1999,

and I got my first computer. Yeah. I'm a I'm a geek, but, started late.

And, basically, what I did was

we had to get Bitcoin into Nigeria. Right? And I focused on Nigeria because

there was tremendous acumen there and hustle amongst the youth, especially.

And I saw that when I went there, and I also learned about the problems that they had. So I had to get Vic and me to the place. How did I do that? I showed them how they could hustle gift cards to just, you know, get paid with a gift card for any work they're doing, virtual assistant work, whatever. And then they could take that gift card and sell it to someone in China

for a discount, but they would get Bitcoin. And $60,000,000

a week started to flow through that one corridor

between Nigeria and China. And from there, it spilled out to the rest of Western Africa, the rest of Africa,

and the rest of the world. So that one hack comes from this task.

Fast forward to now, what happened that passed we had to go down? So I gave two reasons on the website.

I said there are regulatory reasons. Right?

And there is a big part of it. You know, Paxful had

1 fourth of its team was compliance.

Out of 400 people,

we have we had over 90 people that were doing compliance.

Wow. So we were backwards to please these regulators. Because you guys can see, there's really nothing you can do that will appease these people.

They are not about inclusivity.

In fact, American compliance is already racist.

They wanna know what's up with these gift cards? What are these Nigerians doing?

And it's not wasn't just they weren't just viewing things with a bit of suspicion, which is understandable.

They were viewing things with actual disdain and apathy.

And, you know, it's kinda like the matrix. Right? Yep. You know, you talk to these people.

You say, yeah. I'm trying to help people

and help humanity get ahead and you see

it's like some kind of alien. He took them over and they become agent Smith. Right? And they are completely against you. Like, where the hell did that come from?

So you guys know Coinbase is not even able to appease these people. Right? And look at them. And we've been as compliant or more compliant than Coinbase. And you if you look at my Twitter feed, you'll see every single day,

brothers and sisters are complaining.

Why were my funds locked?

You know, you guys have not you didn't even give me a reason. You suspended my funds for no reason.

American compliance, every transaction has to pass through a filter,

and the threshold for something being suspicious is very low. Right?

Everything is considered suspicious, and we have to suspend those funds. We don't touch them. Ray is not on an island sipping martinis. You know, Ray drives a mini Cooper, believe me.

But we have to spend those funds, and we to do all this paperwork, process these suspicious activity reports, and it could take months. And then we have to wait for the regulator to get back to us and say, hey. Can we release these funds? And they often take their sweet time. And meanwhile, a CEO, even a CEO, cannot overrule a compliance decision.

KYC is another huge pain in the butt. Right? How do you case why see someone that has no ID? We can't.

How do you k c KYC someone in Nigeria that only has a paper voter registration card if they're lucky, which none of the KYC providers can read?

This is a huge problem that plagues all fintech companies from serving the global Saba. And Uncle Sam doesn't care.

You know, we spent a fortune. For example, you might have heard early in the year, we released $2,000,000

of suspended funds.

To release that $2,000,000

in suspended funds,

we spent $6,000,000

in compliance fees to process all of that paperwork. Can you imagine?

Can you imagine that?

Spending $6,000,000

in compliance just to release $2,000,000.

That's insane.

It is insane. It makes, like, we had to pull out of Venezuela not because serving Venezuela is technically illegal. They're not OFAC,

And the same reason we had to pull out of Russia, now it's decided to pull out of everything.

But besides compliance and by the way, I could talk about this compliance vector for a while, but just putting it out there

guys, you know, local bitcoins didn't shut down because of crypto winter. They ran a far lean operation than we did. They had, like, 30 people and did half our volume.

Right? So you can guess what their profit margins were. They shut down because they're a Finnish company. They were doing business with Iran.

They were, you know, they were on their way out. The writing was on the wall. They were living on borrowed time. And, indeed, the DOJ has been training local prosecutors in America.

This boss peer to peer traders. You might have heard about how

this one fellow who did a trade on local Bitcoins for a $1,000 sold a $1,000 worth of Bitcoin to a guy

for a bank transfer

to his wife's bank account.

Apparently, that dude he sold the Bitcoin to was involved in some lottery

trend, fraud, several hops down the line.

Right. And

the the man tried to get him and his wife for 35 years.

Thankfully, he only and they had children. Right? Thankfully, he only served 18 months in a correctional facility, but that's the kind of environment we're dealing with. I refuse to put people's freedom

and their funds at risk.

So that was an ethical decision

and a business decision and a regulatory decision. But there's another facet to all of this,

And that's this lawsuit that I got hit with. And this is where it gets really juicy.

And I I'm really debating how much I can share here because, you know,

I think a lot of, legal liability personally doing so, but fuck it, man.

Something never bothered me. If you're a true freak, you don't care about those kinds of things. Right?

So my cofounder sued me and the company.

And the litigation was so nasty. It was full of mudslinging all on his side. Everything you can imagine. Here's what the supplies lawsuit on MLK weekend.

And Is this your cofounder?

Yes. Who is yes. Okay. Continue. Sorry. Yeah. He's my cofounder.

His name is worth mentioning. No one really knows who this guy is. Yeah. It's the first I never heard of the name before before I saw the paperwork.

Yeah. He's a d gen. Total d gen. All this stuff with Celsius, you know, that was all his doom. He tried to get all of these scam tokens on on Paxful, and I had to just feed to him. It's been a constant battle

for the past 5 years with this guy. The ideologies

just did not merge. You know? So I had to undo all of those mistakes,

And it wasn't just that. The guy destroyed our conversions by, like, 10x

unheralded

incompetence.

Absolutely insane.

And he was fired for that extremely toxic behavior.

And then he got angry because he wasn't getting any more money out of the company.

This guy has 2 yachas, sports cars. He's living that kind of life, you know, bottle service. He was a nice guy nice guy in the beginning, but then

he completely went off the wall. He couldn't handle

success. And he lived a lifestyle that just, it wasn't congruent with the values of the company or myself.

I spend my money on helping people, on giving back. He wasn't about that kind of stuff.

And so he was fired. He came back and he sued the company. He sued me. He even sued our general counsel and that he retired out of the just resigned out of disgust.

His litigation was so nasty that all of my chief executives threatened to resign. And in fact, they did.

This Friday, we lost all of our chief executives except for me and one other guy.

He even accused

me of running a completely fake compliance

and engineering operation. You said I was, you said the engineering company was an underwear company,

and it was just an embezzlement operation. He's, nothing's gonna happen if all these engineers go.

Ray is lying. He's actually said this on a board.

And so he had no engineers,

no compliance people, no security personnel, no chief operating staff.

And we went it wasn't more than 24 hours that passed on the weekend

before our wallet went down.

And I had to hold another emergency board meeting because I'm sitting there with no staff to run a company like this,

and I couldn't legally shut it down at that point or even say anything because there was a status quo injunctive relief by the courts where I couldn't do that. So I held an emergency.

I said, look. No one can get their money right now. Deposits, withdrawals aren't working. We have an emergency situation here. All our engineers quit, and they want to they didn't even wanna work with us anymore after you drag their name through the mud.

And finally, he abdicated. He said, okay. Yeah. Please do whatever you can,

and I had to scramble and beg our engineers to come back in whatever capacity I could. I paid them out of my own pocket, offered to pay them double to come back and rectify the situation. If you look at my timeline right now, there's still people send outs that are being delayed by up to 24 hours. I haven't slept for 36 hours trying to get everyone's money

out of free out of, you know, pass through this pipe. It's major clogs right now.

But this is the situation he put us in. And I told the board, hey. There's no way we can continue to run an operation like this. It's not ethical. All we need to do is secure our wallet, make sure everyone can get their funds out and suspend operations. It is a criminal act running a company

where we cannot secure the integrity and security of the system.

Any advocate I managed to do this, I still took re legal risks to do this,

but it's boost on, thankfully.

And the story gets really juicy, guys. He's, gone to the press, and, he wants my side of the story. So you're gonna be seeing some crazy stuff come out.

But, basically, I've been fighting a war to keep everyone's money safe.

And this is what I had to do, and it's it's a huge

blow to to lose Paxful.

But, honestly, I couldn't feel better, and I think the future is gonna be very bright, guys. And I'm happy to tell you what's next. But first, before I, continue monologuing again for another 30 minutes, maybe go ask questions.

Well, we have a lot to unpack here.

Definitely appreciate the transparency.

So, I mean, there's there's a couple people in the comments that have funds that were

apparently frozen

and compliant for compliance reasons over the last 6 months,

7 months.

What what can they expect in terms of that getting their funds back?

Yeah. So

that's a huge problem.

So right now, you know, we have people's funds who have been held up to a year.

Some people's funds have held up to 2 years, actually,

And there's various reasons for that. You know? You know? For example, you know, we use chain analysis.

I don't approve of that, but that's part of the game in America.

Axel's a Delaware corporation. Right? So we have to run all this stuff.

You know, everyone's funds that are held right now, they are not being held for TOS violations. I can't settle that. All those funds. They're all held for regulatory

and compliance reasons. CEO cannot

So some of those funds we have no choice. If someone was dealing with, they'll

Nora Noratell or something, it was an Iranian exchange,

Our chief compliance officer is the last chief left in the company besides me. He bugs them every week. They don't get back to us. There's nothing we can do. I can't overrule that decision.

Our compliance team that has been clearing all of these, you know, finding all this paperwork to unleash these funds, they haven't been paid.

They're owed almost $6,000,000

right now. My cofounder refuses to pay them.

That's true.

So I don't know what's gonna happen with those funds, guys, because the way it's looking right now,

there's gonna be a custodian that comes in

and manages Paxil

and liquidates the assets.

But my

my hard line there is that no matter what, the wallet has to stay up. And I've cut these referral

deals with other companies where you can monetize the outgoing traffic and get passive revenue or password

solely for the purpose of keeping our wallet and website up so everyone can extract their phones. And that's why I've been preaching self custody for so long because I knew this day was in my hands. So that's my situation.

I don't wanna resign as CEO right now because if I do, he'll try to come in

and be interim CEO and bring in his own engineers.

And that for me is a massive red line because, look, it's a it's a custodial wallet. It doesn't matter

who has

who has access to the cold wallets or hot wallets or whatever.

Any engineer can go in and change a Postgres database balance update,

and they can withdraw all the money.

So I'm hanging around to make sure that doesn't happen until this custodian gets in, and hopefully, the situation will be handled. So

that's why I'm around. I really don't want to be CEO of Paxful. I don't want to be on the board of directors. I don't wanna be an employee.

I honestly don't even wanna be a shareholder right now. The only reason I'm

here

is to make sure that things go well. The ship gets completely to harbor and everyone's funds are safe. But I encourage everyone right now, take your money off of Paxful. It's not a place that is for trading. So it's not a place you should be keeping your money in any capacity.

Yeah. I mean, that all makes sense to me.

I mean, you've spoken at length about the compliance hurdles you've dealt with publicly many times.

You've been been very outspoken about it.

I mean, I've had private conversations with you as well where you're very passionate about, the compliance side.

I still remember to this day,

Riga 2019

when you were on stage.

I don't know if you remember talking about aircraft carriers,

and I was you know,

I've I've always been historically very

anti KYC policies and and whatnot, and and

you've always, you know, brought that discussion to the to the limelight, to the front.

I think it doesn't really help people

right now to say not your keys, not your coins,

But that should be the number one lesson with any kind of custodial failure,

that you can avoid this if you hold self custody of your of your funds and you you don't you don't trust a third party.

I would you agree that, hopefully,

however this ends up, those funds that are frozen, are they are they segregated? Like, they're act are they are they actually

exist?

Like, does that money exist?

Of course. Yeah. Of course, it exists.

Segregated.

The regulators decide when those funds are freed up, and the custodian will get

all those funds held up. But then, you know, people will have to go to this custodian

to get their money, which honestly Yeah. Probably never gonna get it.

Well, it depends on uncle Sam at that point. Right. Rick Yeah. Not have You have to depend on uncle Sam. You're probably never gonna get your money.

Yeah. I mean, look. I've made it yeah.

I'm just being straight.

Yeah. So am I, bro. And and you're

you're probably right, especially because a lot of these people are not Americans.

Yep. Right? That's the big part. These people are Africans.

They're they're, you know, they're Indians, etcetera. They're from the global south. I see a lot of people here messaging,

and they don't believe anything I'm saying, But it's the truth, guys. A CEO cannot overrule a compliance decision. Otherwise, I'd go to jail. I can't just say to unlock these funds. You know? I would love to do that, but I can't. We've unlocked $2,000,000

of funds at the beginning of the year. That took a tremendous effort. That $6,000,000

of compliance cost that could have gone in my pocket,

but it didn't. So that's all I can say. If you don't believe me,

I'm sorry, but that's all I have.

So there's a couple of things to unpack here. First of all, before all of this went down, you guys announced that you were refunding people,

that lost money on Paxful Earn, which I guess used Celsius on the back end.

Yeah. Did that still proceed? Like, that still happen?

Yeah. Absolutely. Everyone got their money. Yes. It was 8.8 Bitcoins. It was all credited to their packs of wallets. They've withdrawn the funds. That happened. Yes. Got it.

So

is this

this was this was more of this internal

politics situation that that shut down Paxful more than on the compliance side. Am I correct in that? Like, that it is

I mean, because when I first saw the news, I I thought maybe it was more of a,

a regulatory attack on Bitcoin and and trying to shutter on ramps and off ramps.

But this seems like it's more like a was a stewing internal conflict that kind of finally hit its tipping point?

Yeah. The stewing internal conflict has been going on for the past 3 to 5 years, actually.

But in November,

me and my cofounder

actually agreed

that we had to divest from risky markets because that's the advice we got from all of our compliance people, our legal counsel, everything. So we agreed we divest from gift cards

and risky markets like Nigeria, China, and India.

And because that would destroy our bottom line, that's where most of our revenue came from. We agreed to dissolve the company

and end things on the note gracefully and to dissolve by March.

But then what happened, he came back and he sued me because he realized if we did that,

he wouldn't get his 9 figure exit, and that's even in his court filings.

They believe the company allowed us valuable, which is true.

So he sued me because he wanted to renege

on his decision of the board, and that's why he made all these crazy accusations against

me. And that's why we're here. So we actually made the right decision in November

at a board meeting,

but he wouldn't get his big payout.

So he decided to sue, spend, you know, 1,000,000 in legal costs for himself or the company

and put the co the entire operation in danger. That's what he did

because he wanted his payout, and it didn't work out for him. We still came to the decision that we had to make, and everything he did actually,

you know, furthered the the action that we took in November,

which is quite sad, but we could have had a much more graceful

wind down, but we didn't because it was weak.

So,

yeah. I mean, I first of all, to the freaks in the audience in live chat by the way, you know, I tried to keep my intro very short

on dispatch today because

we had a dispatch yesterday and also because it's an important conversation. So I was just trying to

cut as much of the bullshit as possible.

But you guys are what makes the show unique. I don't know of any other show that streams the live chat directly into

the stream.

So I consider you guys the host as well, and I I see that a lot of you are frustrated.

I want to be very clear,

This is all going to be fought in court. There's gonna be many it's gonna be a long court process.

You can I think you could tell by Ray's face that he's aware of this?

So a lot of this stuff will come out and,

courts will handle it how courts handle it.

But I think it's important that we have an open discussion here now today while all of this stuff is going down, and that's that's what we're doing here.

So, Ray, I mean,

I don't know how to pronounce it, but there's this new app. Is this a No One's app? Is that how it's pronounced? Or is it the Noone's app?

Noone's. Some people say Noone's.

Not Noone's.

Not the h s.

Okay. So the Noone's app,

I have tons of respect for the 3 founders that are involved,

with this.

And

so there's some kind of agreement there between you and them. I don't really quite understand it. Can you can you walk us through that? I mean

Yeah. Just a referral agreement. So we can't serve these markets. We gave them a button,

and we gave, you know,

bid knob a button too. We'll be adding some more,

services there like yellow card, maybe one other, just to monetize the outgoing traffic that we can't, you know, earn revenue on. So it brings a passive revenue stream to Paxil

so Paxil can keep its wallet up for another 2 years.

That's my mission. So if these funds do become available, because uncle Sam says finally, okay. Here here you go. It becomes available, and people can just withdraw it from the wallet directly instead of having to go through some lawyer.

That's what I'm trying to do at this point.

Right. Because when we see,

when we see stuff like Mt. Gox and all that stuff happens, like, what it's been like.

I mean, it's not funny, but it's been almost a decade, and people still haven't gotten their money. Right? So,

I guess that's what you're trying to avoid in that regard.

Yeah. Exactly. And so all the,

held funds on actual,

I think it's about $900,000.

That's how much money is still left held on Paxful in these accounts. So it's not like

it's a lot of money, clearly,

but it's not some, you know, it's not, you know, 100 of 1,000,000 of dollars or anything like that.

Right.

So, I mean,

so a mutual friend, Yousef, is one of the founders of Noone's.

He's he's a founder of Built With Bitcoin,

a a massive Bitcoin charity that you have supported heavily.

I believe Bernard Perraj is a good friend of mine, is also part of the founding team,

and also Nicholas Gregory from Commerce Block, Mercury Wallet.

Those are 3 guys that I have tons of respect for.

So I was actually really excited when I saw the announcement for their app yesterday.

It seems to try and fill a similar role that Paxful filled, which is this idea of a of a marketplace for the global south where they can exchange between each other.

How does that trend but is like, am I correct in that

that trade history and all this other stuff carries over between the two apps? Like, how is that?

Not trade history, but people's reputations

will be imported there. We also signed a deal where their KYC information would be imported as well, so we didn't have to re KYC with the integration.

So that's all. They can just continue trading there. But Nolan's is a lot more than just a peer to peer marketplace. It's also a messenger. In fact, it's primarily a messenger.

So it's a global super app. Super app for the global south. That's really what it is. Think WeChat,

but for Africa, India, China, Latin America, the 6,000,000

considered no ones by the world. Right? But the no ones can join together and become someone's,

and that's the whole prerogative there. The company has a very unique unique remit.

The goal is 1,000,000,000

citizens

in the next 7 years, by 2030.

By citizen, I mean, someone that is daily

engaged.

That is a massive goal. Paxil

had 12,000,000 users,

and about

2.5%

of them were monthly engaged.

So how do you get a 1,000,000,000 daily engaged users?

Bitcoin is not enough. Crypto is not enough. Even Fintech

is not enough. The only way to do that kind of daily engagement is with communications

and media and peer discovery, and that's what they'll be doing.

The plan is to onboard the masses, right, in a way they understand.

And it makes sense. Look at how Zappy on Demus, on Nostra is working out so well.

So all that can be taken to a whole new level, and it's an open platform. Right? Paxful,

we would block ban people's accounts

for trading off escrow.

Right? We banned them for having multiple accounts or using the same IP.

Right. That's not happening anymore in this project. All the wrongs that Paxil had are not gonna happen here, especially because it's not an American company. So there won't be any of this bullshit Where is it based?

It's based out of the United Arab Emirates out of Dubai. Got it.

Yeah. So there's not gonna be any of these blocking and suspending of accounts anymore because on the sand, it doesn't like you or how you trade. But it still uses a does it still use a custodial wallet?

Yes. It does. It uses a custodial wallet, custodial escrow, and the order book is still centralized. Now here's where it gets interesting. Right? This is the big announcement that I'll be making in a few weeks.

Actually, it might drop next week.

It's gonna be a white paper. It's gonna be called the PACSITH kit.

The sith kit, meaning civilization kit, is the next level on top of Bitcoin. There's no token. The token is Bitcoin,

and it's basically the next level after Bitcoin because I don't consider the Bitcoin project complete

unless we have a way for out to out unstoppable free markets

where everyone can have their own decentralized

unstoppable Paxful.

This white paper will be dropping next week, god willing. It's been worked on by a bunch of geniuses. Nicholas Gregory has, you know, a team of absolutely brilliant young masterminds.

This one of them is considered the Satoshi of lightning.

And the premise is it'll be released in 3 phases. Phase 1 will be the marketplace, and it's built on top of Noster, meaning the order book is just on the Noster relayed using a certain protocol.

And if people anyone can start up their own Noster Relay, and they can have whatever offers they want. They can have offers for gift cards or bank transfers like Daxwell or Binance p two b. They can sell goods or services.

They can sell whatever they want on their commodities,

anything.

And no one can stop it because it's, you know, it's it's, the liquidity is on their own wheel. And if they choose to do a trade with each other from their non custodial lightning wallet or any non custodial Bitcoin wallet,

it all happens with lightning escrow contracts.

To be specific, hash time lock contracts or the sweet log contracts where no one ever takes custody of those funds.

Essentially, it's an unstoppable

free market where anyone can trade anything

with anyone else.

And so this is separate of no one's app, or is this,

This is separate. This is an open source decentralized

toolkit.

Right.

No one's will be building on top of it, and I hope every They'll be interoperable with it, basically. Right?

Yeah. They'll be building the Nolan's is just a brand that's being built on top of Bitcoin and the certificate. And I hope everyone will build a brand on top of Nolan's and certificate. I just had a chat with CZ,

and I I asked him, hey. If this thing hits,

I hope you'll build something on top of this too. We want I want as much competition as possible in peer to peer. Our only child right now is peer to peer. The shit on casinos and all of that, that whole dialogue is diminished.

And there is so much room for growth, especially in peer to peer that we need a toolkit that everyone can build on. And I won't just be releasing, you know I'm not just supporting the decentralized toolkit. I'll also be building progressive web apps and giving them out open source as well for the front end user experience

and also for the marketplace admin as well. So everyone will have every single resource they need to spin off their own unstoppable decentralized marketplace just like Paxful.

That is my legacy right now.

Yeah. I mean, that that all makes sense to me.

I mean, most people don't realize with Binance that, you know, people think of Binance as centralized exchange,

where they found real success is the Binance p 2 p product. It's absolutely dominates,

throughout the global south.

And just in general, as we see more crackdowns, as we see more

banking relationships get frozen and closed,

we're gonna move to more p to p world and we're gonna move to more circular economy world where people spend Bitcoin instead of sell Bitcoin and where they earn Bitcoin instead of,

buy Bitcoin.

That seems very obvious to me.

Noster as an interoperable

communication protocol

seems like an ideal fit,

for this kind of market

connection behavior. Right? Or market making behavior.

I could see a lot of different front end services essentially

become interoperable

behind the scenes using something like this. Something like a peach or a huddle huddle or a no one's app, all communicating

across each other using nostr, which was kind of the original vision of TBD out of block. But Nostr is just out there right now. It's iterating. It's free and open source project,

and we're seeing, you know, massive development happen. So maybe it just happens on Nostr instead.

This all makes sense to me.

Yeah. I mean, that's really interesting. Guys that we're talking closely with the guys at tbdext,

especially about the decentralized

ideas with the ION framework and the alpha. So to be able to do this thing, to put this certificate together,

we're gonna need bits and pieces from all these different projects. And I'm talking to everyone right now. We'll be researching everything,

right, to make all this come together. Phase 1, the marketplace.

Phase 2 should be a lightning wallet that is actually mobile friendly, which is extremely chatty challenging because, you know, lightning is a very chatty protocol. And how does someone on Android phone in Zambia,

you know Right. Keep, up to date with all of these lightning nodes all over the world. Right? There needs to be some architecture in between that is still decentralized

and maybe it's not

custodial,

self custody 100% of time, but just enough that this system can actually work. Right? So it's a lightning wallet that is mobile friendly

plus decentralized

IDs.

This is important.

This key look. People complain about KYC all the time.

Yep. We have to make a distinction between KYC, which is a centralized thing, and identity.

Identity is the foundation of banking. If I'm gonna sell you some Bitcoin to buy a car or whatever

and you're gonna send me some money from your bank account, I might wanna know who you are

Just in case my bank comes back to me later and says, who is this dude? I wanna make sure you're not a drug dealer. I'm gonna ask to see your ID.

But you don't wanna give your ID to some company.

But if you ask if I ask to see your ID and you wanna do a trade with me, maybe you'll show it to me. And that's where decentralized IDs come in very handy.

We need KYP.

Know your peer. So the mission is to replace KYC

with KYP.

If we have that, then peer to peer can truly grow. Because peer to peer is an essential part of identity. You know, at Paxful, we're a centralized service. We have to have KYC everyone.

Right.

Sometimes within the trade,

traders will also see each other's k y c as well. That part is good. The centralized part is not. Well, this is why this is why it's important that,

the reputation carries over to no one's. Right? Because the reputation

like, KYC fuck KYC in my opinion.

KYC is a tool of control and surveillance.

But reputation

is essential in free markets because you need to know if you're if the counterparty that you're you're interacting with, you're trading with them, like, you need to know what their reputation is. Otherwise, they might scam you.

Right? And that's that's the that's the dichotomy. That's the dilemma, right, that that needs to be that can be, to a degree, technically mitigated

through different means, whether that's decentralized identifiers, whether it's Nostra Pub keys,

trade history, that type of thing.

But so so right. I mean, to me, the big issue here is the custodial wallets. Right? The custodial wallets represent the central point of failure.

They represent the central point of failure. They're obviously where the pressure happens in terms of any kind of regulatory

pressures.

They're the issues where we have right now. Like, we see the people in the comments saying that their funds are frozen and they're they're they they want to withdraw their money, and they don't know why, and it's completely opaque and they have no fucking clue what's going on.

That all stems from custodial wallets.

I wonder,

and and most people in the world, particularly in Latin America

and Africa,

and the developing world, they don't,

they everything is mobile first. They they use mobile wallet mobile phones for everything.

Lightning is not quite there yet on the mobile side. And I wonder

if, really, it should

be different flavors of multisig, like, different flavors of on chain multisig. And I really should be having this conversation with Yousef or Bernard or or the guys at No One's,

but I haven't talked to them yet.

And I'm like, to me, that's where the future's going. Like, Huddl Huddl figured that out.

Peach figured that out. Like, multisig,

non custodial,

kind of escrow situations where you have 2 or 3 multisig.

What you know, the centralized party holds one of the keys. Would you agree with me on that? Or, like

Yes. We need to have non custodial wallets that need to be easy to use. That's it. However, which way make it easy to use Right. To keep. Look. The truth, running backs will

you know, less than 5% of the user base even uses 2FA.

Yep.

Let let that sink in for a moment.

Right? All of our market makers, they use 2 f because they keep a lot of money out there, but

try convincing a normal person to use 2 f a. It's a huge pain for them. They don't wanna do it. And in fact, so many of them, you know, it just meant keeping their funds safe extremely difficult because they use the same password

for their password as they use for their email

or every other website that they

commerce site in Africa. Right? And, like, literally every single,

website or service in the global south has been hacked. Its database has been leaked, and that's where all these credential polling attacks come in every single day. So making this easy is the challenge. It's a tremendous challenge. Huddl Huddl. Peach has done an amazing job.

I hope that no one's will adopt this and do even better, especially with the SIF kit.

Yeah. That makes sense to me.

There these are hard problems. These are hard problems people don't realize.

I don't think people really appreciate, like, the actual problems people have on the ground, which is,

like you said, like,

you can't even assume someone's gonna have a secure password. Like, if you make that assumption, you're gonna have a bad time.

So, I mean, we have more questions in the chat about these frozen things.

Let me answer some of them. One guy here, he said

delicious deli.

Where do we get more detail while the US government froze the account? Do you provide subpoena?

The answer is you don't Because according to American compliance, we're not even allowed to tell you why we froze your account.

Right? That could be considered us warning you.

Yep. So you get all these audit responses from support, but that's all we can say.

And people ask me what happens, all I can say is a a CEO cannot overrule compliance decision. I can't even really tell them

that they were frozen because of compliance,

because then they're gonna get some you know, it could be considered warning them. The truth is

people might have received a Bitcoin transfer

from someone

that

got some money from someone. They got some money from someone that bought some weed on, you know, on the dark web,

you know, last week. And because of that, check sends us a warning.

Right? And because it also sends us a warning of this guy who was connected to this guy that was connected to this cluster 5 hops down the line.

According to our compliance policy, we have to freeze those funds,

and we can't even tell you why. Does that sound fair to you?

That's the reality.

That's the reality. And you wanna blame me and you say I'm running off with your money? I'm not. I'm not running off with any money, man. I'm driving a Mini Cooper over here, bro. I sit in a restaurant over here and do my work. I'm not a criminal.

I understand why people are mad. And, honestly,

that's one of the reasons why I feel so good right now. I was gonna have to deal with this bullshit anymore of uncle Sam not even allowing me to communicate like a human being with our customers.

And these aren't people these aren't billionaires whose funds are being locked up. These are people that it might be their whole life savings.

Yep.

That's just one of the reasons. I'll go into another reason. A lot of people, they've made mistakes.

They've sent, you know, BSC or Tron to ERC 20 or this to that on the wrong blockchain. Some of them send a a lot of money.

Right? Why can't we like, the array, you stole my funds. Howard, no. Those funds are still on the chain. I don't know how to get to them. Our engineering team, we'd have to, you know, do a whole project, write a bunch of scripts, start harvesting all that money going.

We're not set up to do that, especially now that we don't even have any engineers.

So, no, I am not running away with your money. It's still on the blockchain. You can check it there. You know, these are the operational realities on the ground.

You know, people are look at my timeline. It's really painful when people come out here and call me a crook. I'm taking anyone's money, guys. These are the operational realities.

I don't know of any I would love to, you know, get a bunch of engineers in here, run the script, and go harvest and all of those mistakes on the blockchain and give that money back to the users. That was actually part of the plan

before I lost all our engineers.

Sorry. I don't know what to say, guys, but I am definitely not stealing anyone's money.

This is just the pain of dealing with an American company. In fact, anyone listening here,

I encourage everyone not to start a company based in America

and not to serve American users. So us Americans are shit out of luck. Too bad, man. Time to get a new passport, homies. That's what I say.

I mean, I can definitely confirm that what you said about not being able to tell users why their funds are frozen is absolutely true.

I know many people who run regulated Bitcoin businesses,

and,

it's the very unfortunate reality.

It's quite frankly, it's absolute bullshit,

but it that part is is is completely true. It's

it's criminal, honestly, but it's not me. It's criminal here, guys.

We have

we have Brent droid asking in the comments, did you accept deposits while withdrawals were frozen?

I mean, your deposit someone says money to your Bitcoin address and your account is frozen.

How could we

not accept that? Are we supposed to what he's referring to. I because withdrawals are open right now.

Yeah. Withdrawals are open right now if your account is is not frozen, but your Bitcoin address is still there. If someone sends money there,

what are we supposed to do with that exactly? It gets credited to your account.

Is it supposed to route somewhere else?

Yeah. No. You can't do that. And the Bitcoin protocol doesn't let you do it. It's a push system.

Someone has a Bitcoin address, they can send Bitcoin to it no matter what.

Yeah. Exactly. What am I supposed to do there? I mean,

maybe we could I mean,

yeah, if their account is frozen, someone sends money there, where is this supposed to go instead?

Just send it back to the account that sent it to it? Is that even

I mean, we don't even know the account where it came from, right, technically. Right? So Well, you know the Bitcoin address that it came from, but it could've come from, like, an exchange or something, and that's not even the user's Bitcoin address. So

Exactly. So what are we supposed to do there exactly?

You know, destroy that address,

and then where does it go? I don't know. Right.

These are all operational challenges on the ground, guys. If you can figure out these problems,

please do let me know. Let me be fully transparent about even more problems. If you go on to my Twitter timeline right now, you'll go on there and see all these people screaming that they got ripped. That means they came with a gift card.

Yep. And they tried to sell this gift card to someone, usually someone in China.

And that guy was like, yeah, man. Sorry. The gift card is no good, bro.

Cancel the trade.

But the gift card was

good. But how do we prove that the gift who was right and wrong in that situation?

Because 98%

gift card programs in the world are run by 2 sketchy American companies, Blackhawk and Income, and their ledger is not public.

We've tried our best to try to get that. So how do we know which side is telling the truth, especially if the guy with the gift card is brand new

and the guy who's buying the gift card for Bitcoin

has 10,000 trades.

Well, a lot of these, you know, Chinese vendors, I hate to say,

they do something called brushing

where, you know, they do a 1,000 trades a day and 5 or 10 of them, they'll just selectively scam.

And how do we know who's right and wrong?

It's a huge problem. We've been trying our best to stop it. We even we wanted to get out of the gift card business to do that, but the gift card business has been tremendously

successful in onboarding people without bank accounts to Bitcoin.

So what do we need to do in that case? Cancel gift cards?

Well, we came to that agreement in November, but then I got sued because it was too lucrative and our you know, my cofounder wanted to keep that money. So here I am online. He's, hey, Ray. Your moderators robbed me, Ray. They're in cahoots with the Chinese.

That's not the case. Believe me. But I still get accused of being a criminal, which is why I feel great right now that all this is stopping

because people aren't coming at me and calling me a scammer because I'm not. I'm the only guy in this space that's not a scammer, guys. And I'm trying to do the hard work that no one else, no bank in the world would touch,

and it is messy.

And I'm trying my best to do right here. Even if you don't like me, if you don't like my haircut, you don't like whatever about me, you don't like my face,

at least respect that it is fucking messy hard work to try to do this, and I have been taking the hits for 8 years to try to make this happen. I'm not trying to get anyone to feel sorry for me. Believe me, it's an honor or privilege to be able to do what I do.

But there are, you know, there are punches you have to take, and I take them every single day. You can go on to my Twitter timeline and see that.

No. Look. I mean, it's it's

objectively messy as fuck, specifically on the fiat side.

As far as I'm concerned, Bitcoin fixes this. Most of the issues, it's it's the the the fiat system is broken, and you have to interact with that from Paxful.

The reason we're having this conversation is because of years of mutual respect.

And also because,

I mean, you could just disappear

and not be here right now.

So I applaud you for

being as transparent

as you as you have been.

I mean, I have no idea where you're located. You could just,

you know, I we'll we'll

we'll see what happens with a lot of other people in the space. There you go.

And by the way, Farix, to anyone listening to this, there is some background noise

on Ray's side. We tried our best. It's an important conversation.

He's in

a a a restaurant,

so there is a little bit background noise.

I'm not an audio producer. I do all this my own self, so

I'll try and clean it up as best as possible, but it's an important conversation regardless.

You the gift card side

is a complete cluster.

Like, there's no way to verify if a gift card is spent or when it's spent.

There's no way to easily trade those things.

So that also does not surprise me at all,

with what you're saying. I mean and and and so, basically, what you're explaining with the brushing

is the way to avoid that is as as a reputation system.

So the smart scammers realized as long as they do, like, 95% of their trades, honestly,

they can get a 5%

bump

by scamming that 5%.

And and the reputation system can't protect against that because it looks like they're just a fantastic trade partner. Right?

Yeah. And I wanna talk about the reputation system because this is really exciting. But first, one of these comments, girl, is absolutely savage.

No. They will not. You are a schemer who scheme honest Americans,

citizens to finance war against America.

Bro, that's a little rough right there, man.

What the

hell? Oh, we got some real characters here, bro. Okay. So, yeah. I won't answer that part, but

about reputation,

I don't know what to say. About reputation, that's huge. So let's look at that, guys. And the reason I bring that up is because,

you know, Paxlov's reputation system is very valuable. People sell Paxlov accounts on you. I do that because it's worth money. Right?

Sometimes they'll do it just so they can start up, you know, with an account that has some reputation, and they can do good business. Sometimes people buy tags and scan.

But regardless, reputation is very valid.

So here's what really makes it amazing. With this Zipkit, when it comes out, right,

we have the actual genesis for a true credit score. Right? It's based on your reputation. This is calculated algorithmically

by how many trades you do through web of trust with other people that do a lot of trades. Right?

You can start giving people a credit score.

Right? So someone in Africa,

in Latin America, wherever

that does good business can have a high reputation, and you can use that

to basically give them a credit line. Right? And then once you solve that problem,

it's a simple matter for people to create pools. Right? Here's the Kenyan agricultural pool or the Nigerian Fintech pool or the Zambian, you know,

whatever it is, telco pool.

People can put money in there. People can withdraw money from that based on their credit line,

and there'll be a certain interest rate payment. Right?

You can even extend it out further.

Perhaps

with this SIF kit, we could solve this problem

of these, you know, of the private ledgers, right, of gift cards and we can let anyone

issue their own gift card. Right? So any mom and pop shop could issue their own gift card with essentially an IOU.

Right?

And if we believe public, it could be in a public market as well. So they're not redeeming their gift cards. The value of it will go down.

They could sell a $100 gift card for a 50% discount, and that essentially sets their interest rate. And a reputation score makes that all possible.

That's the beauty here, and that could be phase 3 of the SIF kit. I really want people to rally around this thing

because it is actually possible right now. We can solve every single problem. We know where all the incentivization,

you know, accesses are. We know how, you know, to

we know how to bring in oracles in the right way. Because if you think about it, every KYC provider is an oracle. Every dispute moderator

is an oracle as well. Right? If you wanna have decentralized the moderators, you, Matt, could be a dispute moderator because they held moderate your dispute,

and I'll take, you know, 20 basis points for doing so. And that could be a way you could earn money. 0.2%.

20 basis points. Not bad. I pay. Yeah.

So there's a way to solve every single problem.

That's exciting. Well, no. I mean, I think the fiat side is fucked,

personally. Right?

I think I think it's important that

it's it's important that people try and,

you know, provide tools and services like you did for so many years to allow people to basically exit the fiat system into Bitcoin.

But,

I mean, I don't think there's any fixing the fiat side of the equation. Like, that is the that's the issue. The issue is the dollars, the naira, the yuan. It's it's that side,

because Bitcoin allows you to have trust minimized commerce.

Like, the Bitcoin side works really well.

It does. The escrow is flawless. It's the payment methods that are problem, and every single payment method has its own idiosyncrasies.

Right? Whether it's M Pesa

or PayPal.

And the beautiful thing about a free market is you'll see the market price in the risk. For example, if you wanna buy Bitcoin for PayPal,

like, one fellow here, Master Yang, he'll charge you 30% or more. And that's because he knows

chargeback risk, which he has gotten good at handling. And that's the beauty of a free market.

Once we have an unstoppable free market,

that's when

everything changes.

Everyone can trade with everyone for everything. You know, people from an old fat country can trade with people from another old fat country. People for America can trade with people in Venezuela, and no one can stop it.

Can you imagine the trillions that will be creating value? Look at Africa and India. 3,000,000,000 people between.

2 thirds of them are young. That's 2,000,000,000 young people. More than half of them, that's over a 1000000000 people are unemployed.

Why are they unemployed? Because their governments

cannot create money

to match the amount of potential work that can be done. Because if they do that,

you know, the man, quote, unquote, the central bankers will say, boy, you can't do that. Slow down. You gotta borrow our money

at interest. You can't make your money. Otherwise, we'll make your whole country and you a hell of a lot poorer.

And that's what happens.

All of these economies are strangled. They're all in a deflationary environment. You have all this potential work waiting to be done, but there's no currency,

like real currency on this money to make it happen. And that's why we have to get Bitcoin into these economies.

That has proven a challenge, but peer to peer has already solved that challenge. So, like, sent and shown us the light at the end of the tunnel here. We don't have that much more to go.

Yeah. This makes sense.

I know we're aligned on this.

Right. I mean, I hope I hope you don't think Someone said we need Satoshi to come back.

We do we do not need Satoshi to come back. Satoshi

fucking crushed it walking away. Hey. Satoshi might be here with us today,

under a different nim, and that would be beautiful.

But I do not want Satoshi to come back as Satoshi.

The beauty of the project is that it's

not controlled by any individual or entity. So even if Satoshi came back, they would have no power.

Get sued by Craig Wright immediately.

Yeah. And and and have, like, a 1000000 fucking

missiles pointed at them too. So,

I mean, this should be this should be the opposite lesson, in my opinion. This should be this should be another lesson that we've learned over the last fucking year

that

centralized third parties are security holes.

This is this is a a

a massive vulnerability

of

our society's institutions

in general,

and it spills over into Bitcoin,

because that's the natural way things work. Of course, we're gonna have certain centralized third parties,

because that's that's, you know, how how companies are formed, that's how projects are formed naturally.

But we need to see more distributed alternatives.

And that's why, I mean, the Noster thing is super fascinating to me. That makes sense. That's the complete future.

But I think, ultimately, like, we just go to a circular economy.

Like, ultimately,

it's, you know, a Nigerian developer is helping me on my website or my project or something, and I'm paying him in Bitcoin. And there's no gift cards involved. These are all stop gaps. All this shit is stop gaps.

Important stop gaps

for a lot of people around the world, but but stop gaps nonetheless and and and in the path to hyper Bitcoinization, the path

to a Bitcoin standard.

Ray, you look like you wanna say something. You have something you wanna say?

Don't get me started, brother. I'll slowly log for a whole half hour, bro. I'm ready, bro. I need help. I don't know how shit I got.

I need mine.

Well, I mean

yeah. I mean, let us know how we how like, what we can do to help. I do appreciate that the withdrawals are open.

Obviously

guys. If there's some delays with withdrawals,

they're being worked on right now. Just everyone started taking that out their money at once and the date, you know, the past because you told them to.

Yeah. I told them that it got over. So

we had no engineers, but I promise you, look, I have not slept.

This is being taken care of right now. We had some major wall issues the week before too with BitGo. This time, it's not their fault. It's our fault.

But I promise you all the money is there. With BitGo?

That was last week. We had an issue with BitGo where they helped us, but this week, it's not them. It's all our side, actually. It's a Does our our our big how is BitGo involved in the wallets?

We use Bitco and Fireblocks

for,

for our wallets on us. We use Bitco for the Bitcoin, and we use the Fireblocks with USDT

in the trial. Oh, the shit coins. Yeah.

Well, it's stable coins. Yeah.

Well, the stable coins that run on shit coin networks.

Yeah. Yeah.

Okay. So, I mean, if you're listening to this conversation, I think this should have gone without saying, but

process like, put your withdrawal in at Paxful.

Hopefully, it will get processed

in an orderly manner and soon. It sounds like it will. I think we can all confirm that Ray has not slept. It's pretty obvious from from my point of view over here. Is it was it the hair, bro?

It's it's it's the whole vibe, Ray. It's the whole vibe is is

is is is quite obvious.

I, I apologize for the vaping. I just need the nicotine right now. You're good. Whatever. It doesn't matter. Just get people their money.

Well, I I think we need to bring this up because I'm so

it's interesting,

and, like, we'll see how the cards fall and how everything falls, because this is all gonna get this is gonna be a long court process, especially all those frozen funds that people are talking about. Like, nothing happens quickly in fiat world. Like, this is gonna be a long, long, long process.

But one thing I've noticed, and it's very common on the Internet and our social media age,

is that as soon as there's a little bit of sign of weakness,

there's a lot of calls to cancel individuals and and take down individuals.

And

maybe slander is the wrong word, but go after their reputations, which is let let's be honest. Like, at the end of the day, time is scarce. Like, what do we have besides our reputation? We have our we have our Bitcoin. We have our family. We have our reputation. That is that is the ultimate

that is the ultimate quantification

or way to quantify someone's existence in this world is is their reputation.

And and what I've seen recently is there's this article that is floating around,

about you in Miami. I think it's 2015,

2016,

and I think,

an AR 15 was involved.

There were there were you're on a balcony with an AR 15 or something like that. Do you wanna talk about this, or am I out of line asking you this question?

No. But you just opened up a whole can of worms. Now you're gonna get it, brother. So get ready, bro. Set aside for the time. Let's let's fucking go.

Alright. So it was me and 3 other guys that worked for Paxful. One of them was my cofounder.

One of them was our CTO.

And,

I was sitting there

in,

in in that apartment we rented Airbnb

on Collins Avenue, Miami.

And I was sitting there

reading the science book, man or matter by.

I was having a real powerful moment.

And, you know, all of a sudden, I hear,

snipers position.

I'm like, what?

Some some playing a joke or something, some kid with a walkie talkie. I look around. I gotta forget about it.

Then all of a sudden, I go back I go back to reading my book, and then I hear a knock at the door. It wasn't a knock, actually. It was just a yell. Police open the door.

I'm like, oh, man.

What's going on?

I was actually in my underwear,

and I was wearing these little briefs, American flag briefs.

I

get off and I'm like, okay. I don't think that was a joke.

So I get up real slowly. I put down my book,

and I say, I'm walking towards the door.

So I walk towards the door. My hands are up

because I thought there actually were snipers in position, and, yes, there were snipers in position.

I opened the door with one hand and my hand up I announce I'm opening the door. And what do I see? I see a guy standing in front of me with a SWAT team cap and a gun pointed right in my face,

And he screams, get down. I'm like, yes, sir.

And I get down as slowly as I can with my hands above my head.

Basically naked here except for my little Captain America's videos.

So I get down. They rush in.

Start kicking me from town, which I thought was quite funny. I was like, wow. This is actually fucking happening.

Then they zip tie me and make me crawl on my belly outside

outside the living apartment,

And I screamed the whole time. I I tell them, hey.

There's just a bunch of nerds in here. They're asleep.

And I I yell out to the guys. They were asleep in the other room, the 3 of them. Come out carefully.

I was worried about them

because I was in a very dangerous situation over there, but you have to understand. When that opened the door and that first guy was staring me right in the eyes with a gun.

He had a gun pointed right to me, and that was scary.

Yep. What was

scary was the look he gave me.

He was looking at me

with fear in his eyes.

When a man is pointing a gun in your face and he's afraid, that's a very scary situation to be in. I've had guns pointed at me before.

When someone is scared of pointing a gun at you, you're gonna get shot.

So thankfully, thanks be to god, I did not. Everyone else came quiet.

The Searcy apartment.

They found a legally purchased AR 15, which was purchased because me and these guys were going we did a road trip across America starting in Las Vegas all the way down to Miami.

We went to shooting ranges all around the United States just shooting guns.

Right.

And one of the guys bought a gun, and we were gonna go the next day to be trained to do a shooting range by I forget the guy's name, Mark Cohen or something, former SWAT team officer, actually, and we thought it'd be a good investment.

They confiscated that gun. They took us all to the police station, which is right across the street behind Collins Avenue.

They interrogated us all,

and I was wondering what happened.

So finally, they let us out. That was hell, though, trying to get someone to bail us out of there. We went to this one correctional facility, which is one of the worst in America. We're there for 8 hours.

By some miracle, I managed to get my get through to my friend

to get us out, and it was hard because all we had were these numbers. I didn't remember any numbers in the smartphone age, and I had to beg this bail officer to reach out to my friend on the Internet

and, you need to help us. And I was telling him, yeah. I'm I'm not broke. I can pay you. It's like everyone says that. Anyway, my friend actually got us bailed out. They let us out onto the street with no money, no phones, no computer, no ID. None.

Here's what happened.

My cofounder and the former CTO, the guy with one eye,

these clowns got on the roof.

They were on a penthouse. They were outside walking around posing with the AR 15

with baklavaas

on their head taking Instagram photos.

And someone from a lower floor caught one of the pictures and sent it to the media. And, bro, it looked real scary.

It looked like a guy all we saw from the waist up, a guy with a roof with a nail with a gun like this with a buckle of on his head.

And the and what can you imagine what happened? This got to the cops,

did the background check.

They saw me there with his medic name and a bunch of Russians, you know, and they're like, fuck.

Muslims and Russians with guns. If he came in,

game buster, they shut down 2 city blocks. They actually had snipers in position because these 2 fucking clowns decided to be posing on the fucking roof with an AR 15 and

Baklava's thinking they were fucking Rambo, bro. Holy shit.

And, dude, all the charges were dropped.

It was just a bunch of fucking bullshit. You know? It was the media that started it up. Right. And I've optional a month afterwards.

But, you know, it was, honestly, it was one of the scariest times of my life, and we had to recover from that. And I've been running from one contingency to the next for the past 5 years

with my cofounder and these guys. You have to understand, I probably started Paxful when I was homeless, bro. I had a really hard journey up until then. I'm actually writing a book about it all.

And, you know, I took the talent that I could find, and these guys were some jokers that did stupid shit.

Right. But thanks,

we managed to actually recover from that. So that's just one story, bro. There's other stories like that which are, you know, even crazier, honestly, the shit that I had to deal with. And that's why I feel so free right now because I don't have to deal with any of this bullshit. I feel like a huge weight has been lifted off my shoulders.

I remember one of the Reddit posts

when this thing happened. One of them was so funny. It's like, these guys are living the life, living the American dream. They're heroes.

That wasn't the case, but

there you go, bro. That was the Miami gate incident. And then, by the way, the police after that incident, they were referring to me as captain America

in the police station.

Because the underwear.

There's actually a video of me walking out with the Speedos, and I had a 6 back there too, man. I was looking real good.

There you go, man. You just got Is that video on the Internet?

I can't I can't hear you. I said, is that video on the Internet?

I don't know. Can't hear me?

Sorry. I think my

I don't think that video is on there. I can try to find it. That means I

it's just a question.

Okay. Well, thank you for going into that. I mean, that there was something in that news article about drugs as well, but, they dismissed the whole case, sounds like.

Yeah. They did. They dropped all charges and everything.

I did have some ash on me, which I legally bought from Boulder, Colorado

Right. And some gummy bears.

Fair enough.

Okay. Well, thank you for the transparency on that.

I mean, that I had never seen that story until,

until yesterday when all this stuff was already going down.

Yeah. I I mean, this has been a great conversation. I I appreciate you coming on.

Is there anything else you wanna touch on? I mean, you said there's other stories. You wanna tell us in any other stories? Or

I don't wanna tell you any more stories about these idiots. They're just.

I mean, look, bro. You gotta understand. My cofounder was a fucking moron, and everyone tried to play him against me. And I've been fighting this internal fucking seriously like Game of Thrones for the past 2 years. And for me, it's extremely

draining. You know? This cofounder you talk about this cofounder you talk about in the Miami situation, that was that's the cofounder that's suing you right now. Right? Is it the same guy? Yep. Same guy. It's like Andy something. Right?

I don't really say his name. His name. So I took a shot about that. But we'll search.

He's he's just a d gen.

You know, he Oh, yeah. I got his name wrong.

I just checked. I said his name wrong.

Okay. Well,

I appreciate you coming on.

Do you have any final thoughts before we wrap wrap up this show?

Yeah, brothers. You can see by the look on my face, I'm extremely happy right now. Yeah. The only real bummer here is that

I still have to stay as the CEO of Paxil just to make sure everything is secure and locked down. I would love to just quit now, but, you know, there are customer funds in play. Those frozen accounts

are the only thing that I haven't really figured out right now. You know, we made these 7 buckets,

and none of them we can really release. But, you know, I'm working with our compliance officer trying to do what we can, but we have no compliance resources. So you refuse to pay any of the compliance people keep working on. I think it's just $900,000

of frozen funds that are left. There's

very little I can do about that in this situation. We're just trying to get a custodian in to do that. So

trust me. I'm doing the best I can, guys, but your money is there. I have not touched your money. It is not with me. I hope that one day those funds will be freed up. It might be in there. It will happen, but when it comes to regulators,

I don't know.

But it's not you know, that money is not with me. That money is set aside.

To extend

the charges That's how much is frozen right now over there?

Yeah. They're, like, $917,000

in 7 different buckets ranging from, like, severe old fat stuff to Got it.

Stuff to this little chain analysis, you know, shit. But not a bit I can do the overrule with the seal.

However, onto the bright side, you can see by the smile on my face that I'm very happy right now. We're in a very special time in human history.

Dollar hegemony is on the wane. In fact, it is collapsing before our very eyes. All the BRICS nations are gathering together

to unite

and unite the global south. Our job in this space

is, you know, we've done a great job at huddling.

Right? That's been a huge defense mechanism. It's been worked very, very well, but now we need to make sure those stats flow.

Right? Those stats flow among the people. Unstoppable free markets is the promise. It's the reason why the Internet,

mobile phones, and Bitcoin was created. This is what we need to complete the project.

Free trade creates wealth.

Can't have free trade without free payments. And once people can discover and share liquidity with each other and trade with each other

using, you know, the best form of sound money that humanity has, Bitcoin,

we will have victory.

All the global south, meaning the people, the streets will come together. Now that the governments are coming together, great. But they don't move fast enough. We can move a lot faster.

This SIF kit is coming soon. I will dedicate the rest of my life to be building on top of it. I'll be hopefully soon a free agent as a CEO,

and I will take a job from any company

that is going to be dedicated to building on top of this system and has a hard unstoppable free markets

is right before our eyes, guys. We don't have much more to go. However,

we don't really have much more time either.

This window is closing right now and that's the thing that really bugs me, you know. We don't have much more time, guys. We're in a very special time in human history now

where these small cast of dominant men that rule the world are have gotten so vain

that they believe they can finally pull this switch. And this switch is they're basically gonna drop this mask of guys' tyranny,

democracy,

and they're gonna show us their real face.

They're gonna introduce a system, a matrix where escape isn't just impossible. It's unthinkable.

And we have to race ahead of that. And the more wealth we can create through free trade, through unstoppable free markets, all this stuff that we're building,

the faster we can move and up and up. So the west would just be a decaying zombie trying to take down the whole world with it, and the rest of it will be moving forward.

It's possible,

and it's happening right now. And I'm calling for help. Whoever wants to help me with this can't do it myself. Help a brother out.

I promise you, it'll be a fun ride.

Well said at the end there, Ray.

Yeah. I mean, I just wanna thank you again for joining us.

I wanna thank all the freaks to join joining us in the live audience and who continue to support the show by going to sill dispatch.com/donate,

where you can support with Bitcoin or using podcasting 2.0 apps. Ray, to you, I wanna say,

I wish you luck in this next venture,

this next chapter.

If you wanna come back on dispatch,

as a follow-up at some point in the future, let me know. We would love to have you back on.

I hope everyone at Paxful all the customers at Paxful get their money back, including the people that have their accounts frozen.

Those accounts frozen are gonna those frozen accounts is gonna take quite a while, though, so batting down the hatches.

If you're gonna get your money back, it's, you know, you're gonna have uncle Sam's permission.

That that lines up,

and is unfortunate.

Yeah. So with all that said, I just wanna thank Ray again for joining us and being transparent.

I hope he's able to get some sleep at the end of this week.

And,

to everyone who's had trouble with this whole situation,

I hope you start to realize,

that it's up to you. It's up to you. I know. I'm not trying to victim blame. I don't wanna be the person who's telling people that lost their money,

that they have to figure things out, but but it's up it's up to all of us to take our own

our own future into our own hands and learn how to use Bitcoin

in a freedom oriented way, to learn how to hold your own keys,

learn how to use your own node,

constantly be humble enough to realize that we can improve our skills and get better

at using this new technology,

because no one is gonna save us. There's not no no one out there will save you.

We have to save ourselves.

That is that is the only way forward. Our institutions are corrupt. They are broken.

This whole system is completely fucked up.

And, fortunately, there's FreedomTech to

to give us hope, but you have to use the tools. You have to figure out how to use the lifeboat.

No one's gonna push you on the lifeboat and guide you to to safety. You have to figure it out yourself.

And, if you're ready to figure it out yourself, I'm here to help you figure it out.

And until next time,

I love you all. Thank you, Ray, and stay humble, StackSats. Cheers.

Thanks, Matt. No one's gonna save us.

Appreciate you.