The charges against Pavel Durov, the future of encryption, and secondaries are heating up | E1998

0:00I think as Americans, we should be very proud of the fact that technology companies and the citizenry and by and large our representatives are in alignment that privacy does matter. I think we can take that win despite Sax's tweet and the pile on that I experienced this weekend. The fact is, we are nowhere near what is going on in the three buckets. You have dictatorships on one side, you have free countries on the other. And then there's a little bit of gray in the middle. You got France clearly is going to be in that middle. You have the monarchies in the Middle East. They believe in some amount of encryption.

0:39Some places don't. And it's just going to be a jurisdiction thing. This Week in Startups is brought to you by Vanta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC 2 report fast. Twist listeners can get$1 ,000 off for a limited time at vanta.com slash twist. Open phone. Create business phone numbers for you and your team that work through an app on your smartphone or desktop. Twist listeners can get an extra 20 % off any plan for your first six months at openphone.com slash twist. And Lemon.io. Hire pre-vetted remote developers.

1:27Get 15 % off your first four weeks of developer time at lemon.io slash twist. Hey, everybody. Welcome back to This Week in Startups. I'm your host, Jason Calacanis. We're about to hit 2 ,000 episodes of this podcast in 14 years. And Alex, I'm not tired. I love doing it. And having you here to do the news of me twice a week, three times a week, has been a fresh air. It's really reinvigorated the show. So here we go. Anything big this weekend, personally? Any big stories breaking that you're watching? Well, the biggest story that's breaking is my next kid's doing seven, eight days. That's pretty big.

2:10Yeah. I'm actually kind of glad we had this one enormous story that's consumed our attention because it's been such a beautiful distraction for me to not be worrying about, like, do I know how to swaddle? Do I recall how to have an infant? Yes. Not that I'm saying I'm in favor of people being arrested, but the Pavl Durov story that we're going to start with has been electrifying. also everyone uh if you want to know what else is on the show today we're talking about a massive new secondaries fund the future of ibm and other tech companies in china but jason clearly clearly the biggest story from the last 24 hours last 36 hours has been the arrest of paul duro best known i think in the west for his helping found uh telegram a mostly encrypted chat application got arrested in france so first of all when did you first uh catch the story in your eyes so i mean over the weekend you know this has been a big uh breaking story because it's dramatic flying into france on a private jet getting picked up for um a lack of moderation which to me is like a very nebulous term i just assume that the french language and english you know there might be something mixed up because and you know in a breaking news situation like this i always like to be thoughtful uh be demure be thoughtful not like these other girls um uh you know who fly off the handle and start you know sharing things uh but in all seriousness like in a breaking news context you and i know uh there's going to be a lot of cards that are going to turn over and in fact the actual charges came out moments ago so we're going to talk about that but this triggers a lot of uh side discussion so i think today you know we should really open up the aperture of this discussion because there's international relations here there's a russia angle because he's russian um and he started his career uh you know in russia and there's a putin connection there's a freedom of speech uh issue here um and then there's this peculiar nature of the french um he's and also the pavel's got a couple of passports he's a pretty larger than life figure right now um and there's a big discussion of which is more important the sovereignty of the individual or the effectiveness of our law enforcement because if you give people the ability to talk privately at scale across the world not just talking to people in the you know around your kitchen table or whispering and somebody's here we're talking about a global network then there's a really important conversation around, you know, some of the most nefarious illegal activities, and how those impact society.

4:58And then does a society want to enable at scale, end to end encryption that cannot be cracked? Or do they want to give a backdoor to law enforcement? So you could do things like, I don't know, stop a terrorist attack, or human trafficking, for fentanyl. So, you know, it's a lot of feelings here, I think. And, and, um, it's a, it's, it's perhaps this will become like one of the main, I think this will be the story of the rest of the year. If I'm being honest, pending the U S election, dropping some sort of, you know, news bomb on the technology industry. I think that's probably right. So to give people a little bit of context before the charges dropped, and we're going to get to those in just one second.

5:39Um, Jean Miguel, I'm going to ruin the French here, everybody. I'm sorry, but Bernegaard, uh who's the general secretary of the office of miners or off men in france said that pavel durov uh this is actually from his linkedin and i'm using a machine translation everybody so if it's slightly off uh blame google pavel durov the founder and ceo of the messaging app telegram was arrested saturday at the heart of this issue is the lack of moderation jason's point and cooperation of the platform particularly in the fight against pedophilia so let's go to the charges jason and these just came out uh before we went live and we have them in both french and english um i'm just going to quickly run through these uh just interrupt me whenever you want to jump in okay yes sir the judicial investigation was opened against person unnamed on charges of complicity web mastering an online platform in order to enable an illegal transaction refusal to communicate this is a relatively long one complicity in the possessing of pornographic images of minors, complicity in distributing, offering, or making available pornographic images of minors, complicity in acquiring, transporting, possessing, offering, or selling narcotic substances, back to the fentanyl point, and then fraud, criminal association, laundering of proceeds, providing cryptology services, aiming to ensure confidentiality without certified declaration, and a whole bunch of other stuff.

7:00Which, Jason, I think, if we boil this down, it is essentially what you said. here's a service that offers encryption and people use it for stuff and it seems that the company's level of cooperation with french authorities was less than was hoped for or expected and so pavel got snared in this and was then arrested when he landed in france because i don't think they're saying pavel is doing each of those individual things but his platform was being used ergo he is um complicit so what we're talking about now is the french rules around encrypted services and the owner of those services so other services like signal i think whatsapp has end-to-end encryption there's other and i message has end-to-end encryption so there is one issue of end-to-end encryption and then there's another issue of giving information at the request when there's a legal issue so he clearly is not cooperating with them everybody knows telegram very good for groups i keep getting added to all kinds of crypto ico spam groups oh my gosh those are the worst the worst um where and my favorite part about them in the peak was they were called pump pump pump and then people would get in there and they would coordinate pumping a coin with absolutely no awareness that the person running the group had probably already bought their coins a week ago and then was clearing them out as you pump pump them and they were telling you hold hold hold while they sold sold sold so my question then becomes how is this different than other encrypted services let's take iMessage and Tim Cook when Tim Cook or Apple executives are in france right now and people are using i message i'm assuming with some level of encryption um or other services are they also going to get picked up next so that that's sort of the next shoe to drop um and why are the french going so yeah that's my first question why are the french going after him well he is a french citizen so to understand pavel and how he built telegram we should probably go back a little bit to his days in russia he's a co-founder of the contact which which is probably the best known Russian-originated social network, I want to say.

9:20And he ran into quite a lot of trouble with the Kremlin. There were takedown requests. Eventually, he sold his stake, was kind of forced out of the company. There was a little bit of nuance there about how he got forced out. We don't have time to go into that. But essentially, back in Russia in 2018, there was a law called the Yarovaya Law. And it meant that you had to store voice and text communications for a certain period of time. and also, critically, store encryption keys with the Russian FSB, which is their security service. He said no, and then had to leave, and then left the country. I think at that point, he became a citizen of St.

9:58Kitts, and since then, he's become a citizen of France, and also the UAE. Now, in the French case, Jason, just because I hated to do a lot of research, this is interesting, did you know that you can get a French passport if you are a, quote, emeritus foreigner? this is a way in which some very powerful and influential people can get French citizenship without having a French background, i.e. in a territory or in the nation itself or parents thereof. So essentially he got a really special passport to France. So recently, as of 2021, he was in good keeping in France, right? And so that's what I kind of struggle with is what changed in the last three years that led to what seems from what I understand now to be a relatively quick reversal of his favor and fortunes in his adopted well one of his adopted home countries i'm a little perplexed by that yeah that was so confusing to me because it's pretty well established that in france um you have to give access you have to maintain the keys the encryption keys as opposed to say the individuals having the encryption keys you have to hand over the keys to authorities and give them a back door essentially if they were requested but if you're running a service where you don't keep the keys as you just explained in the russian example then you can't do that so i guess i don't have the keys if i'm understanding technically what's going on here and the request because we're reading into this in a breaking news atmosphere then he doesn't have he's saying i don't have the keys they're saying you're supposed to have the keys you're supposed to maintain the keys but that's that's not how it works with this end-to-end encrypted encryption and you're supposed to, my understanding was they allowed end-to-end encryption.

11:42So I guess this is perhaps the beginning of the end of end-to-end encryption. I hope not, but it's just worth remembering how long we've been having this conversation. Now, this was called the crypto wars before the invention of cryptocurrency, which has taken the word crypto and kind of taken it onto its own. We could call it the encryption wars, but it's absolutely a long-term push and pull between the public wanting to have secure communications, both for payments and also for chat, and the government wanting to be able to stick its nose into everything. And just, you know, rewinding the clock back to Snowden, I think we all learned just how voracious even countries with relatively strong First Amendment style protections can be when it comes to collecting all this information.

12:27Now, in the case of the European Union, I was surprised to see a report from the EFF from March of this year, there was a quote milestone judgment in which the European Court of Human Rights ruled that weakening encryption can lead to the general indiscriminate surveillance of the communications of all users and violates the human right to privacy. So to me, there seems to be precedent even inside the EU itself that encryption should be allowed, which throws further confusion onto what's going on with Pavel and Telegram and France. Listen, a strong sales team can make all the difference for a B2B startup.

13:06But if you're going to hire sharks, you need to let them hunt and you can't slow them down with compliance hurdles like SOC 2. What is SOC 2? Well, any company that stores customer data in the cloud needs to be SOC 2 compliant. If you don't have your SOC 2 tight, your sales team can't close major deals. It's that simple. But thankfully, Vanta makes it really easy to get and renew your SOC 2 compliance. On average, Vanta customers are compliant in just two to four weeks. Without Vanta, it takes three to five months. Vanta can save you hundreds of hours of work and up to 85 % on compliance costs.

13:39And Vanta does more than just SOC 2. They also automate up to 90 % compliance for GDPR, HIPAA, and more. So here's your call to action. Stop slowing your sales team down and use Vanta. Get$1 ,000 off at vanta.com slash twist. That's vanta.com slash twist for$1 ,000 off your SOC 2. We're going to get to reactions in a second, but jason uh how how closely have you been tracking um the russia ukraine war and i'm not asking that impishly i'm asking that honestly well i mean it comes up uh because one of my besties on the all-in podcast is pretty enthusiastic about uh that topic and so you know to a certain extent i keep up to date on it but um i know that ukraine has made some incursions into russia of late russia has been over 900 days and unable to defeat the proud people of ukraine uh during their illegal invasion murderous yeah you know invasion uh that they uh obviously some people feel like russia was provoked i think that's nonsensical if you're provoked that doesn't give you the right to murder your neighbors and i I believe in the free sovereignty of countries.

14:52So long way of saying I keep probably more up to date to it than the average person, but I've never been to Ukraine. I've never been to Russia. I am not a student of the entire history there. So, you know, some humility as well. Well, we can buy you a copy of Crusader Kings 3 and you can rewrite history as much as you want. um video game jokes aside uh telegram is a very popular channel for uh russian communication and also just for information getting out of uh russia and the ukraine area so if you track military bloggers open source intelligence you end up reading through a lot of telegram materials and i i raised that because france has been a pretty robust ally of ukraine since it was And I wonder, you know, if there's a national security element to this in some way, because it does seem a little bit strange that a encrypted application, of which there are many, including from Meta and Apple and other major tech companies, that the EU does not mind fining billions of dollars when they break the rules, right?

15:55is getting caught up in this. Now, the fact that Pavel had flown in from Azerbaijan, you can read into that, whatever you want. There's other bits of rumor and gossip that haven't been confirmed that I'm not going to share here because I don't feel confident in the sourcing, but I wouldn't be shocked if there was something involving national security. Interesting. So yeah, that's not a tinfoil hat. That's just informed speculation. This is a popular app. France is supporting Ukraine, Russia, obviously. uh and this person is a dual citizen of russia france or quad quad i mean like okay he's got more passports than you know i mean if i lost a finger i'd have the same number of fingers on one hand as he has passports which is an impressive feat all right honestly but then again if my country of origin was russia i also would like to have a second or third passport so we are now in you know a very weird situation one of the i would say maybe it's six or seven major encrypted apps is being penalized in france why because you can be certain that the encryption used in google messaging whatsapp facebook messenger i message signal or skype even i guess has end-to-end encryption i believe you know is similar to telegram therefore is everybody else going to get picked up and i know x formerly twitter was adding end-to-end encryption i believe i'm in the beta of it so in dms i did test it with a couple of friends um and it's in there so this all just looks a little confusing we'll have to cover it over time right yeah i just feel like we're missing something like there's there seems to be some piece in this saga that doesn't quite add up and you know telegram responded to this news by saying that they abide by eu laws including the digital services act which only applies to companies of the largest size they say telegram ceo travels frequently in europe and that it's quote absurd to claim that a platform or its owner are responsible for the abuse of that platform i mean that that is that is exactly how how i see this and so it just it's i wonder what else is going to shake loose but uh there has been some commentary and i want to start let's go let's go around the horn yeah yeah let's start with uh the french president we have um his tweet from earlier today saying that and i'm quoting the english language version here france is deeply committed to freedom of expression and communication to innovation and to the spirit of entrepreneurship and then he goes on to say that in a state governed by the rule of law freedoms are upheld within a legal framework to protect citizens and their fundamental rights and then essentially the arrest of the president's telegram on french side took place as part of an ongoing judicial investigation it is in no way a political decision and then the judges will rule not a lot of new context there but i think it was good for the french president to at least say you know look i'm not doing this because this is a vendetta okay there's an ongoing investigation so that to me means the fact that he felt it necessary to put that out means he wanted to squash the concept that this is a political thing as opposed to simply a legal issue around illegal activity which they pointed out in that press release so either there's a conspiracy at work here as we're sort of looking at or this is just people are using this for some pretty heinous stuff and we want to stop the heinous use of this and we're going to force people who use these and this is the first one we're going to do it to to give us a backdoor now if we were to look at the wider issue of freedom of speech individual sovereignty private communications in the united states which i spent the weekend getting dunked on by david sax's uh followers because i said hey listen it's absurd to think here in the u.s that you know all the services are going to be shut down just because tiktok is and then now people are saying like oh my god look sax got it right um this is france not the united states and in the united states i took a look a long hard look and maybe we could pull up sax's tweet i tried to figure out has there been an instance of any instance of the united states government now we're moving out of france um so yeah here's the tweet you know he said on april 24th that tiktok and he has a line through it then telegram acts rumble the truth is tiktok has not been banned and trump did an executive order to ban tiktok and then biden passed legislation that was voted on and approved to give a window of time before tiktok it needs to divest this seems to me to be completely different than what's happening here with telegram or the freedom of speech issues that were exposed at twitter or at facebook where the fbi and people inside those private companies decided that they would collaborate you know on either silencing voices or getting rid of voices they felt were dangerous let's put that aside for a second in the united states there has there been any instance of the united states government shutting down private communications and encryption and then have there been instances of the united states being extremely frustrated that they cannot get through these encryption services so i'm just putting that up there so we can level set because this is a nuanced discussion now it's there's a bunch of maga lunatics who follow sacks and who love to dunk on me because i have this thing called nuance but i think the nuance here is so important it's so important in the story because this is one instance in france and tiktok is a completely other instance tiktok is the concerns around tiktok are they have spied on americans already and they have government officials on the board and they refuse to divest so this is a very unique situation that we have them our number one foreign adversary is has been spying on americans and it has been proven they have spied on americans right this is just a fact and that there is a bipartisan law for them to divest that has nothing to do with biden or trump it has to do with our government in one of the few bipartisan efforts saying we need to stop i mean we need to stop the russian i'm sorry the chinese from having access to 100 million americans and we know that they're spying already on them and we know the algorithm could bend public views so on a bipartisan basis republicans and democrats agree tiktok no bueno but take us through america here and and what we can look at in terms of how encryption is looked at on american soil yeah so this is a recurring thing and you're right it's not partisan the strong encryption at rest in motion essentially end end encryption has been a point of conflict throughout our history.

23:00Just to pull some things here that I think are pertinent, the FBI director Comey back in 2014 was complaining that, quote, we've gone too far by offering essentially anybody end-to-end encryption. We've also seen in the case of TikTok, two consecutive administrations, to your point, at least at one point in time being in favor of that. And I bring up both of those again because it underscores that the government would like to have more power. The government, And it's an entity. It has incentives. It wants to have access to more information. And there's a lot of people that are on our public payroll who are hired to keep us safe, and they would like to have more information.

23:37And it's hard to say, no, the kids should be at greater risk for us so we can have greater freedom. But that's what it comes down to. You almost get tired of this because it comes up every couple of years. But the way the argument tends to go is something bad happens. There's some data that's protected. and then either we need to, for the case of national security or to protect the kids, we need to have an encryption backdoor. And this always sounds very reasonable to people who don't build encrypted products and services. But as Apple pointed out in the wake of the San Bernardino case, building an insecure system to allow for third-party entrance, even if it's via secure backdoor just for the FBI, creates an insecure system and therefore you either have encryption or you don't.

24:21And consistently here in the US, we have managed to beat back the government and preserve our right to have encrypted products. But as recently as 2020, three US senators, I think it was Cotton, Blackburn, and Graham, put out a bill that would essentially force encryption to be weakened. So this is a recurring issue. I just, again, don't understand why it's this moment in time in which an Indian encrypted chat application got busted by one particular government and not even a supranational government like the European Union bloc. It was just France. So I still feel like we're missing something, but we have defended the right to encryption here in the US.

25:00And without it, we don't have e-commerce, privacy, etc. So to me, we'll do this again in three or four years, Jason, but it's another example of here come the governments, once again, wanting to break down the doors of encryption. There's a specific case of Pavel, we'll figure out as time goes on. Listen, I am sympathetic to law enforcement. They have a tough job. They want to protect people. I think that's the overwhelming majority of the driving force here. you have an fbi agent a cia agent you know local law enforcement and there's a horrific we'll take the most intense uh terrorist attack so we have two instances of that recently there was the pensacola in 2020 florida um and the fbi requested apple's help to unlock two iphones and then there was san bernardino you pointed out i think that was 2015 according to my notes and apple refused and said hey you know if we do a backdoor for this it's going to be a backdoor for everything so either and the the real backdrop here is encryption's gotten easier you used to be able to do this kind of encryption but you had to have keys you needed to be technical to do it and we abstracted away all the technology and you just downloaded signal telegram i message It was built in.

26:19And so then everybody has it by default. I can tell you how humans in the 90 % of cases, if we had San Bernardino, God forbid, or 9-11 on a regular basis, which is to say more than once in a lifetime for 9-11 and more than once every, call it 10 years for something like San Bernardino, know it seems like those happen every 10 years or so if those things happened every year i can guarantee you that 90 of people would say build the back door that's how strongly most people feel about their own privacy and when those things aren't occurring i think 90 of people would say i want my privacy i don't want back doors so i think the public flip-flops on this issue based upon how secure you feel at this very moment i think maybe 10 of people are principled enough to say i would rather have and this is this is you know the long and short of it i would rather have people die in san bernardino like events or god forbid or 9-11 uh you know dozen people or thousands of people i'd rather have that and have my privacy i'd rather have that every year and maintain my privacy and uh i think that's the reality of the situation is most people don't care about their privacy um until uh and would be willing to give it up to be safe just like people were willing to absolutely have everything scanned and have their you know i don't know if you've had this experience going through but you know back in the day when we had some intense uh tsa moments i i have to tell you the sweep up you ever get the sweep up your leg and then the inside kind of whack shit because I'm 53.

28:14They're hanging a little bit lower these days. I hate to make it graphic but I've had my nuts whacked many times and I'm willing to have my nuts whacked to make sure somebody doesn't put a bomb in their shorts and I'm willing to have somebody look at a silhouette of my junk on one of these scanners. So that's the reality of it. How do you feel? I opted out of the new scanners for a couple of years and made them pat me down me too yeah i used to i was a wrestler in high school and middle school so getting getting manhandled doesn't really bother me too much just to be totally honest i people have different preferences they're off but uh i just i was so annoyed by the intrusion into my privacy that i just wanted to make it harder on the system even though i know i'm just making some 14 an hour guy who just wants to make his car payment you know do extra work but it just it felt like the need to stand up a little bit and i i say that because that's my take here.

29:10If we give up on encryption, we are moving towards a world in which every single thing you do is by default public forever. And I just don't think that's exactly the way that I would like to live my life. And Jason, to be honest, I'm an incredibly boring person. If you read my group chats with my friends, you'd be like, I'm bored. Nothing in there is particularly spicy or interesting. We joke a little bit, but that's it. I just think that I have a right to be able to essentially close my door in my house and also to close my digital door and so to your point about are people going to be willing to say i'll take the risk to have more privacy i will say yes to that now and also yes to that in the wake of the next catastrophe that comes along i just think it is the right way to go and i do think that it's one of those if you lose it you'll never get it back type of things so we're fighting this recurring issue and you know just for everyone out there who's listening this is not a partisan issue people on all sides of the american political spectrum occasionally wish to break encryption and they say things like well the tech people should just tech harder you know they should just make it even more secure but also less secure they just want a magic key that does not exist to solve this and it's not how it works folks but i was not how it works right if you use multiple devices and apps to run your business, you need OpenPhone.

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31:04And we love having a shared number for customer support as well. We do a little round robin where different people can pick up the one phone number. So customers have one number, but we can have that phone call go to multiple people on the team. So we, you know, can just have somebody pick up the phone quicker. It's that simple. Answering the phone quickly is a best practice and it makes people love your product or service. open phone is already super affordable at just$13 a month my lord that's affordable but twist listeners can get an extra 20 off for any plan the first six months that's incredibly generous just head over to openphone.com twist and what if you have an existing number with another service that you hate well open phone will port them over at no extra cost easy peasy lemon squeezy so head over to openphone.com twist and get a free trial and get 20 off i think as americans we should be very proud of the fact that technology companies um and the citizenry and by and large our representatives are in alignment that privacy does matter and um i think we can take that win despite sax's tweet and the pile on that i experienced this weekend the fact is we are nowhere near what is going on in the three buckets you have dictatorships on one side you have free countries on the other and then there's a a little bit of gray in the middle you got france clearly is going to be in that middle uh you have the monarchies uh in the middle east they believe in some amount of you know encryption some places don't um you know and it's just going to be a jurisdiction thing just like a lot of topics folks drugs abortion right to choose you know guns yeah i was talking to one of my daughters about guns and she's like I wish we lived in a country that didn't have guns.

32:53I said, me too, but it's not changing. So your choices are move to Australia or the Nordics and have no guns or, you know, be an American and you're going to have guns. Yeah, this is the way it is. You can't get the guns out of the nation. There's too many of them. And the Second Amendment's pretty high up. It's number two. It's kind of hard to change. You start reading the list and you get to it pretty quickly. You had a question for me, though. I just wanted to clear. I wanted to get it off my chest here because I'm actually proud of America. Writ large tech. Everybody has seemed to aligned with privacy.

33:29Good. It's great news. It makes me incredibly happy. Take the win. We still have to beat back the occasional group of senators or house members when they introduce yet another one of these bills, but we'll just keep doing it. We'll keep winning you though. So my stance here is definitely encryption is worth it. It's a human right. You can, you get privacy is a human right. Encryption enables that. So we must have it. where do you stand on the balance between encryption and security because you set it up but then i don't think you gave us your yeah i mean i'm a personal take i'm for encryption i'm for privacy um and i am for law enforcement having uh with subpoenas with judges having other tools in order to make this happen and there are other tools if you look at the january 6th i'm not gonna use the word insurrection i'm just gonna say rioters the oath keepers um the proud boys all of their signal um chats were in their um you know guilty verdicts when they went to court and they said it very clearly they were there to carry out an insurrection they were there to take over the government they were there to overturn the election now they could be dipshits ineffective lunatics you know fine you can have that argument but all of their stuff was uncovered and they their intent was very clear you can't connect it to trump sure fine i don't think trump told them to to do it explicitly but they did want to do it now you have to ask yourself well how did they how do they have their signal how do they have all their encrypted stuff pretty simple folks you have somebody who joined the proud boys who is in law enforcement or you have somebody who's in the proud boys that law enforcement got to and said hey come here buddy we got you we got you on the heroin we got you on the opioids we got you on this we got you on that here's what you're going to do for us you're either going to jail for 20 years for the opioids or you're going to take this phone and you're going to take your other phone and you're going to take a picture of your signal or a screenshot or whatever you know pretty straightforward the comments on the screen it's going to go away in an hour you can just take a picture of it so law enforcement has a lot of opportunities they could put a little camera up there and then three other ones on the bookcase and when you have your phone out it could see over your shoulder pretty clearly so they have lots of ways law enforcement to with a subpoena with a warrant to get your information and your friends in your group chat when you're doing stupid stuff are going to flip.

36:12So law enforcement still has a lot of options. And so I'll go, and by the way, how many terrorist attacks since 9-11 have been thwarted and how many have occurred? The number of people who have died in terrorist attacks on U.S. soil has been less than bee stings today. The number of people who will die with bee stings this week is much bigger than the number of people who've died since 9-11 in a terrorist attack, which means we should be so proud of law enforcement, and they don't actually need to crack signal in order to do their jobs. I don't think they need it. It would be nice, I'm sure, but they don't need it.

36:51Yes, so we can have, to your point, a secure nation and strong encryption. Now, on the point you brought up about someone being part of a group, leaking things and so forth, there was a really interesting article in 2020 from wired and that essentially people were like look i don't know if telegram is compromised or if it's just completely full of uh russian state agents but people were getting picked up um before doing things that they had talked about in telegram so there was some concern about that again so we're speculating we don't we don't have tinfoil hats on but we are speculating here i mean i've always believed the core network um um you know yes is compromised i think it was built by i think bitcoin and tour there is a non-zero chance that those projects satoshi is the cia okay tour was built by the cia or fbi you might think i'm crazy but do can you tell me alex that you think it's a zero percent chance that they have either compromised or created those two things no tour tour tour i i'm not going to cope with at all i'm just in my head imagining how many heads in the world of cryptocurrency would literally explode if it turned out that it was the government or that the government compromised it in year one let's say like let's say that the government knows the this is satoshi these are the two other people they went to them and said hey this is going to be the greatest honeypot of all time we don't need a backdoor we're just going to monitor it we're going to sweep 40 of the coin so if this thing does blow you know anything's possible here And if you look back at the history of the CIA, you know, you look back at the history of Moussa, FBI, everybody in between, MI6, like their capabilities are strong.

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40:02so independent of you know this issue of encryption the united states has done an amazing job law enforcement's done an amazing job the public uh and so have our representatives and you know there's been a couple of failures on the margins i think of private companies and maybe we should talk about private company failures uh i think lava comes up but you had another point perhaps well yeah we'll get to lava a bit in a second but i just i'm annoyed by the the kind of bad faith takes about the situation because people were popping off pretty quickly with their own political priors as the jumping off point about what's going on, what happened without knowing.

40:39And, you know, I get that everyone on social media are not journalists, and so they just kind of do whatever they want, and that's fine. And you could even argue that social media rewards people who are first and wrong if they're allowed. But I do think the conflation of different issues around the world to make a political point that matches up with your own views is a little bit cheap and a little bit hacky especially about an issue that matters so much to me which is freedom of speech so i just i just want to say let's all do our best here you know i've enjoyed coming to your ted talk thank you no i mean partisans will take any piece of information put it into their partisan filter and then try to get a win from it i think what we're trying to do here is maybe have a nuanced discussion the fact is france very different than the united states united states let's go through the instances where the government has actually shut stuff down because i acting in good faith and a person of nuance and somebody was a former journalist said i wonder what i'm missing so i asked chat gpt and i asked the lazy web on twitter two best places for me to go to collect some information and the overwhelming feedback i got of things the government has shut down explicitly were back page and silk road and then i got a couple of people who said lava bit under duress shutdown those are the only three i don't know if you found any in the research of things being shut down but let's talk about those and how those are distinctly different than iMessage or WhatsApp.

42:17Sure. So Silk Road was the, I'll go ahead and say infamous, early crypto marketplace for the buying and selling of various things. It was the place to get drugs for a long period of time. It was also the place you could get a hitman and eventually ran afoul of the law. I mean, to me, if you're running eBay for drugs, you're going to get in trouble. And that's nothing to do with free speech. That has to do with just breaking the law. and i think we learned a lot about back to your point about bitcoin being a honeypot which is that not everything in the world of web 3 is actually entirely anonymous so to me that does not fit into the rubric that you mentioned yes the the silk road was a marketplace on the dark web explicitly to do illegal things there was no legal platform nature to it you could say it was a platform a marketplace is i guess a platform but if it was for legal things it would be etsy and craigslist and ebay those legal things exist in the world or amazon third-party sellers why would you go through the dark web to now if you feel drugs should be legal and decriminalized which i do in almost all cases except for the super drugs fentanyl and meth i think those drugs should be in a different category i think the other one should be regulated decriminalized cleaned up and otherwise made um you know less dangerous for people who are addicted and you know whatever we could have and i think it should all be reclassified as well uh no complaints there yeah the most i mean the dark web people were putting hits on people i think that was proven so and and hacking people so you could go on those and like literally say i want to harass this person put a dead fish on their doorstep for a Bitcoin, you know, and people would do that.

44:11It was a wild time. It was also very early on in the Web3 era, if you will. So not really something that's talked about too much lately. Then there was Backpage, which was essentially prostitution ads. And prostitution is probably illegal in the United States, and it got shut down. Now, there is a lot of arguments to be made from sex workers that, going back into my memory bucket here, that shutting down Backpage led to less safe working conditions for sex workers. And it's a perfectly valid argument to make. But that doesn't have to do with what the law is. And the law says no, and it got shut down.

44:46And again, not really free speech if you're committing felonies. So that to me is not a good example. Lava bit is, I think, the one that does stick out to me as a possible point of weight. so if you go back in time edward snowden he used that service for email so when he dropped all of his documents the ceo of the lava bit email service got a couple of knocks on his door as you might expect lava bit was a secure email service like what's the one that all the journalists use proton mail so if you use proton mail if i have encryption on my side you have encryption, nobody can get that message. Correct?

45:28That's my understanding of how it works and it's why I chose to use it. So I really hope that we have that right. But what happened was he essentially lawyered up and was like, whoa, you know, I'm going to try to figure out what's going on here. And then the sheer weight of government expectation about what he would do, what he had to do, but how do you get to follow up was so great. He said, I'm not going to do it. I'm out. And then later on, I think it was relaunched in some capacity, but essentially the government leaned on a very small company and it decided to just fold and evaporate versus try to comply with the um the demands uh that is that is a disappointment i think because think about the other people on that service and the possible cyber security issues and just freedom of communication and so forth that that makes me sad to go back through and reread um i hope that we do better in the future but there's not a history here to your earlier point of of encrypted applications being banned in the United States.

46:23And so to me, it has not happened. TikTok is not a reasonable example. One tech executive being arrested in France does not mean that this entire experiment in human communication is over. And it means nothing to do with rumble, which was thrown in there for reasons that confuse me. Well, I think they're on the right. I think partisans who care very much about their political party winning on both sides obviously i think on the right feel under assault because of what happened on twitter with the shutting down of a lot of right wing and that's a private company if a private company decides they want to have real names as one example like linkedin does or facebook requires real names um or if they don't want people talking about politics which threads has said any political discussion is going to be downranked by the algorithm and then in other places it might you know x might be upranking uh political discussions uh okay those are just private company choices that hasn't to do with your individual sovereignty um now it is could you could consider it censorship but it's private censorship in the same way a private company might say you're not allowed to come in here and stand up on the restaurant table and i was just about to say yeah you know give your speech about whatever you know um so there's a pizza store near my house and they have a community wall they have um i live near universities there's like join a study and poetry reading and you know a play from some kids and you know local magazines and such uh that's not a free speech forum because they are allowing that space for people who don't abuse it but if they take down requests for hits on that i think if i said i'm gonna kill the mayor of providence and put a poster up that offering 50 i'm pretty sure it wouldn't last they might take it down so you would be censored the man would be censoring you yes there's a conflation of corporate power and private corporate power and public government action that I think is particularly pernicious because people blend the two to confuse people who aren't familiar with the distinction.

48:38And that to me is poor stewardship of an audience. Now, Jason, you and I could say that we think that private companies should have different moderation approaches, that they should have less active algorithms, and that they should let people have more unweighted discourse on their services. But I believe the market would tell us to go build our own dang service as opposed to complaining about what someone else is doing because you know what meta wants to do it wants to make money and lots of it yeah i think that's the beginning and end of it and then you know they this was tried in florida they did this social media censorship law sb 7072 that i think made its way to the supreme court and got a bunch of legal challenges it may have gotten sent down to a lower court but you know they they wanted to define at scale social networks as having a different private company rule set right so once you hit x number of users you can't ban somebody interesting um because you did see people disappear you could take somebody you know independent of how you feel about him i knew him when he was an independent journalist milo yiannopoulos who kind of went he went kind of i mean i knew him when he was like a guardian he might have worked at tech crunch for a hot minute uh back in the day but he i met him once yeah back in london he was a tech journalist in london you know and was considered like you know flamboyant and and effervescent and cheeky then he went like full nazi and was like you know got a little bit strange there towards the end and then somehow wound up with kanye but he was banned across all platforms now there is something to that which i am sympathetic to which is if you could be banned on youtube twitter facebook uh rumble you know linkedin everything sure you have no voice in the world i'm also sympathetic to those platforms not wanting to have somebody putting him aside who's a nazi on their platforms and and substack had to deal with this substack is a free speech platform they really care about free speech but then somebody was like hey i'm going to search for the word nazi or white supremacy and i'm gonna find the long tail of like i don't know five newsletters they found i think casey found like five newsletters that were yeah kind of nazi kind of white supremacist and he took his custom somewhere else i mean he made a business decision based off a business decision private companies deciding when to do business with one another of their own free will based on the rules and policies of the other company is not free speech it is business but how do you feel about the at scale censorship and like nuking of a person this happened trump this you know in the in the most canonical example he was taken off of twitter facebook and youtube i mean that's kind of like a death sentence for a political candidate and you know looking back on that do you have any thoughts on it oh i mean the general concept worries me because one concern that i have and this brings up you and i our favorite topic antitrust and Lena Conn, but it does seem that they're in the hands of just a handful of corporations.

51:42There is an enormous amount of control over what people see and consume. And just to put this into kind of Gen Z, Gen A, is it Gen A? Generation Alpha? Sure. Why not? Sure. Let's go with that. The kids and the younger kids, they use YouTube like television. Yes. So YouTube is essentially cable all in one platform, which means that it has enormous power. and it does concern me that people can be bounced off these platforms because it's not like you can go to youtube and knock on the door and be like hey can we sit down and have a chat about this no you got bounced by an algorithm that just said no to you and there's no customer support so it does seem to be a bit too powerful and that's why you know i like uh more competition in the marketplace more space for ideas i don't know beef with rumble other than the fact that so far it's been a terrible business but um and their martyr complex is pretty frustrating but it's good pr for them so i kind of get it no but it worries me but yeah you know what should what should happen with trump you think if you if you were in charge what would you have done you have january 6 occurs people are pretty scared like hey this could have been you know many people could have died instead of like the one woman who died um you know those police officers well they they kind of died afterwards suicides or or other issues but not in on that day but you know when i talked to a number of law enforcement in my family they said hey you know we should have just unloaded you know like when people start beating up cops you unload the clip i'm amazed that people got away with what they got away with there because i've seen people shot for uh one thousandth of a percent of that you know like literally you'll have people go into their like pocket and the police are like take your hand out of your pocket you refuse to take your hand out of your pocket you get shot pretty straightforward like cops got to protect themselves here you got cops being beaten crushed in the door and they don't unload i was like whoa that is some incredible thank god but like some incredible um you know restraint thank you so i you know i thought the trump thing should have been a temporary ban i think it should have been like a whatever 30 day cool off like let's figure out what happened here and i i don't the permanent ban i thought was weird how do you permanently ban the president or former president you know without a trial or whatever i just thought should have been like hey maybe 30 days we have a cool off and we talk about it 30 days for inciting an insurrection as mitch mcconnell kind of detailed in romney uh 60 days for i mean i don't you end up with a weird hierarchy or if i was in charge of it i would have just said he's very annoying and i don't want him on my service but this goes back to the point of it's a little weird that single points of power have so much control over the discussion and that's why i'm in favor of more free platforms around the internet to prevent corporate powers which we have less redress to telling us what we can and can't say uh because and youtube by the way i mean they're so powerful that i think they had to take a deep look in the mirror when this one mentally disturbed woman got her videos demonetized she bought a gun she drove to the youtube campus in san bruno and she shot the place up and she killed some people so with great power comes great responsibility and this idea that you can just turn people's accounts off turn off their monetization i think that's a big major learning for these platforms which is hey you're kind of turning off an entire person's life if you turn off their account like this and in the case of a mentally disturbed person you know they they might come and do something incredibly damaging and dangerous so it just proves how powerful these platforms are we have to move on but one thing that's also by bipartisan is the people want to diminish section 230 protections for companies this allows them to essentially decide what is possible and not possible on their platforms and ironically it's bipartisan from two different angles but there is a an attempt to limit corporations abilities to make decisions like this to me that's the that that's that's uh a cure that's worse than the illness if that makes sense yeah but um we'll talk about that let's go lightning round we got some good data here to go through as we wrap up.

55:53So first off, we're talking about secondary sales. Jason, the news item is that G Squared has raised$1.1 billion for its new secondary fund, $4 billion under management. The quote that stuck out to me was from Larry Ashbrook. Do you know him? I do not. I do not know G Squared. Oh, all right. Well, we're both learning then. So Larry said that he can, quote, buy shares in the secondary market at about a 30 % discount to a company's value and at 70 to 80 discount to the prices paid back in 2021 basically rolled up a whole bunch of money he's going to go out there and buy stakes from you and other vcs uh soon out to me is the amount of money here at play 1.1 billion dollar funds enormous especially if you're buying discounted stakes so thoughts this is a great sign that the market is in the late stages perhaps even uh past the end of the bottoming out when people see an opportunity like this that they can't and the greed is there you know there's blood in the streets things are marked off 70 from their peak 30 from their recent valuations that means an opportunity has emerged and people want to start buying and you know we saw that two years ago when i started j trading I was like, this makes no sense.