We are right now packaging up with a company
where you can spend crypto and flying a helicopter
to the Grand Canyon.
And on the way back shoot
machine guns out of it.
So we're making it fun.
And we get this.
It's not a big deal to buy any asset.
Real estate, shares,
yachts, private jets, whatever.
Whatever we want.
You know what can be used for illegal activity and
actually is used for illegal activity more
than anything else in the world?
I do think that 
our government is... quite confused.
This is madness and needs to stop.
So, shame on the U.S.
Сrypto is not illegal in the United States.
The United States of America,
the richest economy in the world.
Where every kind of business activity can
prosper — protected and guided by a well-established
structure of laws and regulations.
So companies are secure, investors are secure,
and everybody understands the rules of the road.
Except when it comes to crypto.
Here confusion and contradiction are rampant.
The federal Securities and Exchange Commission
defines cryptocurrencies as securities.
The Commodities Futures Trading Commission
treats them as commodities, like wheat, or pork bellies.
The Internal Revenue Service
sees cryptocurrency as property.
And the Financial Crimes Enforcement Network
thinks crypto is money.
We decided to travel around the USA to find
out if the people are as confused as the government
– and have met some interesting
characters along the way.
♫ Well, I’m the Naked Cowboy,
I don’t take Bitcoin. ♫
♫ I’m the Naked Cowboy
and I’m swinging my loins ♫
Recently we discovered something interesting.
"The world's first cryptoclub" in Las Vegas.
It was featured in various ads and articles.
Seriously, “the first one in the world.”
The headlines said: “If you own crypto – it's
the only place in the world you can spend
it for something you actually want.”
So, of course, we decided
to go and have a look.
Las Vegas.
The city you either love or hate.
People lose fortunes here in a matter of hours.
They party for days with enough alcohol
and drugs to get a small city high.
Everything here is more — more casinos,
more buildings, more Ferris wheels — and
the Bellagio Hotel.
So we’re here at the Bellagio.
Where inside is apparently the More nightclub,
which is a secret cryptocurrency-taking nightclub
right here in the center of Las Vegas.
So we’re going to go in and check it out
and see if it can redeem the terrible time
we’ve had in this terrible city.
We were asked to wait in front of it.
Everything looks solid – security guards
with headsets dressed in white shirts and
ladies in cocktail dresses.
We are invited inside.
So this is the Hyde club, inside of which
is the mysterious “More” club.
So where’s this crypto club?
It quickly turns out it’s just a small
separated part of a dancefloor.
There’s a couple of tables
behind a golden chain.
It takes us to a special area
that is closed for regular visitors.
It’s a small area opposite
the iconic Bellagio fountains.
Through crypto you can get a suite
in the Bellagio or wherever.
We are greeted by Shawn Chester —
a Las Vegas nightlife industry veteran and president
of MORE Management.
We’ll put you up at the Bellagio
or wherever you’re trying to stay.
You can rent a limousine.
You can rent a Ferrari, a Lamborghini.
Yeah, gotta have a Lambo, right?
We are right now packaging up with a company
where you can spend crypto and fly in a helicopter
to the Grand Canyon.
But what about the world’s
alleged first crypto nightclub?
It might be possible to pay with crypto there,
but most of the guests don’t even know that.
They’re just partying hard.
And all of the prices are in dollars.
They all pay in crypto when they come?
No, you don’t have to.
You can.
It’s always an option.
But we take cash, credit, or crypto.
So why does Shawn Chester need all of this?
“The first crypto club”, which is just
a nightclub, a separate “crypto area”.
Shawn gives us an honest answer:
We're doing our job.
And we love it.
It's part of our lifestyle now.
It's a lifestyle.
Cryptocurrencies lifestyle.
And I'm lucky enough to be able to be a part
of blending get into both worlds.
Lifestyle.
This is why crypto attracts so many people.
Crypto in the US is becoming a lifestyle.
Even lawyers are joining the crypto party.
I think it's the most fascinating
thing I've ever done.
Here's Joshua Klayman, a former corporate
lawyer, who is today the founder of Klayman LLC,
boutique blockchain law firm.
For many years I was a leveraged
finance and corporate lawyer.
I also did other types of law
that all are transactional nature.
There were all types of law, where being creative
was not necessarily a good thing.
Like someone once told me as a junior associate:
“The last thing that any person, any client
needs is a creative securities lawyer.”
And when you look at it in this space –
it's totally the opposite.
Even in terms of definition, the main four
US agencies regulating crypto assets cannot
come to an agreement.
While the SEC defines cryptocurrencies as
securities, the CFTC considers them commodities,
allowing crypto derivatives to be traded publicly.
By contrast, the IRS sees crypto as property.
Finally, the FinCEN defines crypto exchanges
as money exchanges, thus implying that cryptocurrency
is in fact money.
Complicated, huh?
It is a little.
You can call it a coin, but if it
functions as a security, it is a security.
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Due to the unclear and at times contradictory
regulatory framework, it has been extremely
difficult for crypto companies to operate
in the US without incurring in heavy penalties.
And the situation is not getting better: in
2018 alone, the SEC carried out 18 crypto
related legal actions
compared to just five in 2017.
Although all this does not prevent serious
people from doing serious business.
What about people who want to do serious business
in the United States with cryptocurrency?
For a look at that, we traveled to San Francisco,
the home of start-ups and investment companies.
We have already told you about Ripple and,
for example, Blockchain Capital.
Look at those videos on our channel.
But now we want to tell you something else.
Mindrock Capital, became famous for buying
a church that it’s turning into a tech space
they call the Hack Temple.
Roman Sobachevsky is the
managing partner of Mindrock.
Among other things, his company helps people
convert crypto assets into conventional assets
— real estate, yachts, private jets, whatever.
Crypto is not illegal in the United States,
first of all.
People can receive payments in crypto, people
can send payments in crypto, people can transfer
crypto from one person to another, etc.
So it's not prohibited at all.
Even so, there are problems.
When you open a bank account for a crypto-company,
the bank can say no.
And usually banks say no.
If you tried to convert a million dollars
worth of Bitcoin on an exchange and then transfer
that money to a bank account, your account
would most likely be blocked immediately.
The bank would ask you to provide documents
to prove that the money is legal and that
you are not involved in criminal or terrorist
activities or money laundering.
Because of the high volatility.
It's very difficult to build successful business
without proper business planning.
And you cannot do proper business plannings
with underlying currency that fluctuates tens
of percents a day.
When the dollar shows historical rates of
inflation, let's say its average is 3% a year.
So I can be very-very conservative and predictive
in my business modeling, when against dollar,
it's very difficult to use crypto.
So this involves a lot of risk.
So I need to transfer this risk to someone
like customers, but in this case customers
will pay more.
So unless all the people will have benefits
— there is no white adoption.
There are many problems with the way cryptocurrency
and ICO markets are operating, but two are
worth particular attention.
First, the market for these products have
substantially less oversight than our traditional
securities markets.
Second, many ICOs are being conducted illegally.
Their promoters and other participants are
not following our securities laws.
Some say this is because the law is not clear.
I do not buy that for a moment.
There are some technologies that the IRS is
utilizing to be able to track cryptocurrency transactions.
There are a lot of different ways to hide
these transactions, that it's just going to
be another cat and mouse game I'm afraid,
in regards to taxes.
By the way, what topics would you like to
see a documentary about?
Let us know in the comments.
Part of the problem is the association that
many people have between cryptocurrency and
shady or illegal activities.
Oh yes, our parents still think that bitcoin
is only used to buy guns and drugs.
Well, just joking – we’ve explained to
our parents what crypto is.
But many politicians and members of the public
think that we still live in the world of Silk Roads.
You know what can be used for illegal activity
and actually is used for illegal activity
more than anything else in the world?
Jeremy Gardner, a young, well-known “Bitcoin
millionaire”, sat down with us in Las Vegas.
Yes, again in this terrible city.
Jeremy has pointed out how
illogical that preconception is.
Hundred-dollar bills.
Benjamins.
More than 80% of black market activity is
used with American hundred-dollar bills.
Should we go and ban the dollar?
I don’t think anybody in their right mind would argue that
— I would, because Bitcoin would go up.
Come on, I mean, that is just an absurd statement!
While the federal government seemingly runs
in four directions at once, the state of New York,
which is of course the home state for
many major banks and the New York Stock Exchange,
has just created a cryptocurrency task force
to study the regulation, use and definition
of digital currency.
We're happy that the governor Andrew Cuomo
signed into law to put together a cryptocurrency,
what we call it a digital currency task force.
State legislator Clyde Vanel chairs the subcommittee
on internet and new technologies.
News of his actions quickly
spread through the community.
Where we were going to get stakeholders from
around the industry, from phone technologies,
to exchanges, to coins, to investors, to consumers,
to the New York State DFS, could be able to
get in a room to help figure out
what the proper level of regulations are.
Some crypto ventures may thrive on uncertainty
or the gray areas of the law, but most would
be happy if the situation were clarified.
The Securities and Exchange Commission has
been considering proposals to create a Bitcoin
exchange-traded fund.
So far — no decision.
The government has obviously gotten a lot
more interested in cryptocurrencies in the past year.
We met in New York with Candice Ferrington,
who is involved with the development of a
token to pay for porn, and thus is possibly
not the ideal spokesperson at a Congressional hearing.
I don't think they're going to do anything
quickly, because I think they don't want to mess up.
The IRS has recently decided that we have
to pay capital gains taxes on cryptocurrency,
so they don't want to mess that up.
They're getting something out of it, but at
the same time they know that the technology
has the power to completely
disrupt everything that they are.
So they're being very careful with it.
I've not made a dime in fiat
in almost a year now.
I really don't want to either.
I prefer to keep everything out of someone
else's hands, I prefer to keep my money
in my pocket and knowing that it's mine
and not having to trust another entity to hold it
and control my access to it.
Meanwhile, on Capitol Hill, some US senators
are also attempting to improve the crypto
environment in the country.
In December last year, two bills were introduced
aimed at preventing price manipulation and
improve the regulatory framework.
However, the process
is still at an early stage.
According to experts, a possible way out of
this mess would be adopting a flexible approach,
regulating each cryptocurrency
on a case by case basis.
There’s a reason why companies want to go
public on the New York Stock Exchange over
other parts of the world.
Tone Vays, a former Wall Street trader, explains
why many crypto start-ups come to the U.S.
Because they trust that legal system,
they trust it.
I mean if you look, you can go public on the
Russian exchange, you can go public on the
Indian exchange, go ahead and do it!
But most people don’t want to do that.
They want the security of the U.S. legal system.
While the U.S. government figures out exactly
how it wants to proceed, we could do a little
worse than wait things out at the alleged
crypto nightclub in Las Vegas, where Shawn
Chester brought out a couple of patrons to
convince us of the club’s bona fides.
Have you ever heard of Bitcoin?
Yes.
Have you ever heard of blockchain?
No.
How do you think people get bitcoin?
Where does it come from?
Honestly, I have no idea.
Answer: it's mining.
So the reason we’re here is that this club,
a certain section of it, More, takes cryptocurrencies.
Have you ever paid for anything with cryptocurrency,
here or anywhere?
No.
Do you ever plan on it?
No.
Do you ever want to buy Bitcoin?
I actually do have some.
One of the things I've learned recently is
that America's Libraries are a place where
a lot of people go and research Bitcoin.
In fact, they use the library computers one
of the most frequently searched items from
a library computer is Bitcoin.
And so we're teaming up with CFPB to go out
to America's Libraries to educate librarians,
who often get some of the questions asked,
to be able to direct library patrons to use
our resources, our Bitcoin website.
So cryptocurrency has
arrived on American shores.
All it awaits now is a proper response.
Perhaps it starts here after all, but however
it develops, we'll be there to show in our
next episode, so stay tuned.
Stay tuned if you want
to watch more documentaries like this.
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share this video with friends.
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